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Civil Appeal No. 274 of 1959.
Appeal by special leave from the judgment and order dated July 27,1956, of the Madras High Court, in C.R.P. No. 90 of 1955.
N. C. Chatterjee, R. Ganapathy Iyer and G. Gopalakrishnan for the appellant.
K. N. Rajagopala Sastri, R. Mahalinga Iyer and M. section K. Aiyengar, for respondent No. 1. 1960.
November, 28.
The Judgment of the Court was delivered by WANCHOO, J.
This is an appeal by special leave in an insolvency matter.
The brief facts necessary for present purposes are these.
S.V.N. Nanappa Naicker and his sons were adjudged insolvents on an application of Smt.
Engammal (hereinafter referred to as the respondent).
They had preferred an appeal before the High Court of Madras but it was dismissed on April 17, 1953.
Thereafter the official receiver took steps to sell the property of the insolvents, which consisted of two lots, the first lot comprising 145 acres 10 cents of dry land and masonry house, and the second lot, 8 acres and odd of dry land.
Both these properties were subject to mortgage.
The official receiver fixed September 28, 1953, for sale of the properties by auction.
Fifteen of the creditors were present when the sale by auction took place, including the son of the respondent.
No request was made on that day by anyone for postponing the sale and consequently bids were made.
The highest bid for lot 1 was of 692 Rs. 4500/ and the highest bid for lot 2 was of Rs. 70/ .
Both these bids were made by the appellant who is a brother in law of Nanappa Naicker.
The reason why the two lots were sold for Rs. 4570/ was that there was an encumbrance on the entire property of Rs. 17,200/ .
The official receiver did not close the sale on that day in the hope that some higher offers might be made by the creditors and postponed it to various dates upto October 26, 1953.
On all these dates, the respondent 's son was present but no higher offer was made on behalf of the respondent.
On October 26, 1953, an application was made on behalf of the respondent praying that the sale be postponed for another three months apparently on the ground that there had been drought in that area for some years past and agricultural lands were not fetching good price.
The official receiver, however, saw no reason to postpone the sale, particularly when no higher offer was forthcoming from the side of the respondent and decided to knock down the properties in favour of the appellant.
Later, an application was made on behalf of the respondent on November 18, 1953 under section 68 of the , No. V of 1920 (hereinafter referred to as the Act).
The case of the respondent was that the sale had been made for a very inadequate price and there had been drought in the village for several years in the past and there was very great stringency in the money market and it was hoped that if the sale was postponed for three or four months, the properties would fetch a good price of not less than Rs. 15,000/ , exclusive of the sum due on the encumbrances.
The respondent also stated that if the sale was postponed for three months she would be prepared to bid more than Rs. 7500/ for the properties.
There were some other allegations in the petition suggesting collusion between the official receiver on the one side and the 693 insolvent and the appellant on the other.
The respondent therefore prayed that the official receiver should be ordered not to sell the properties to the appellant at the price bid by him.
The application was opposed by the official receiver as well as by the appellant.
The official receiver contended that he had done his best and that no higher bid could be obtained.
He also denied the allegation made against him in the nature of collusion and also about the manner of conducting the sale.
The Subordinate Judge allowed the application on the ground that the price fetched was low and that the general body of creditors to whom debts to the extent of Rs. 30,000/ were payable would be considerably prejudiced if the sale was allowed to stand.
Thus the only ground on which the application under section 68 was allowed was that the price fetched was low.
Thereupon there was an appeal to the District Judge under section 75 of the Act.
The District Judge allowed the appeal.
He pointed out that there was nothing to show that there was any irregularity in the conduct of the sale.
He also pointed out that there was no reason to hold that the official receiver was in any way in collusion with the insolvent and the appellant.
He also pointed out that the respondent 's son was all along present and if he really thought that the price fetched at the auction sale was low he could offer a higher price on behalf of the respondent.
Finally, the District Judge held that the Subordinate Judge was not right in his view that the property had been sold for a low price and gave various reasons for coming to that conclusion.
The matter was then taken in revision under the proviso to section 75 of the Act, which lays down that "the High Court for the purpose of satisfying itself that an order made in any appeal decided by the District Court was according to law, may call for the case and pass such order with respect thereto as it 694 thinks fit".
The High Court however did not consider the question whether the order of the District Judge was according to law.
It appears that before the High Court an offer was made by the respondent that she was prepared to deposit Rs. 9,000/ if a fresh auction was held and would start the bid at Rs. 9,000/ and also that she would pay Rs. 1,000/ to the appellant for any loss caused to him.
The High Court accepted this offer, though it was of opinion that it could not be said that the price fetched at the auction was unconscionably low; it however held that the price was low considering the extent and nature of the properties, and if Rs. 9,000/ or more could be got for the properties the creditors would receive appreciably more as dividend.
It therefore allowed the revision on the terms offered by the respondent.
It is this order of the High Court which has been brought before us by special leave and the only question that has been urged on behalf of the appellant is that the High Court had no jurisdiction to interfere with the order of the District Judge unless it came to the conclusion that the order was not according to law.
It is contended at the High Court 's order does not show that it applied its mind to the question whether the order of the District Judge was according to law or not and that the High Court seems to have been carried away by the offer made by the respondent to make minimum bid of Rs. 9,000/ for those properties.
It is pointed out however that this offer was made three years after the auction and is no indication that the price fetched in the auction in 1953 was inadequate, for prices may have risen during this period of three years.
On the other hand, it is contended on behalf of the respondent that the court 's power under section 68 in appeal from an act of the receiver is much wider than the power of the court in dealing with 695 auction sales in execution proceedings and therefore the Subordinate Judge was right in setting aside the act of the receiver in knowing down the properties to the appellant and the High Court was consequently right in setting aside the order of the District Judge and resorting that of the Subordinate Judge.
It may be accepted that the power of the court under section 68 in not hedged in by those considerations which apply in cases of auction sales in execution proceedings.
Even so, the power under section 68 is a judicial power and must be exercised on well recognised principles, justifying interference with an act of the receiver which he is empowered to do under section 59 (a) of the Act.
The fact that the act of the receiver in selling properties under section 59 (a) is subject to the control of the court under section 68 does not mean that the court can arbitrarily set aside a sale decided upon by the official receiver.
It is true that the court has to look in insolvency proceedings to the interest in the first place of the general body of creditors; in the second place to the interest of the insolvent, and lastly, where a sale has been decided upon by the official receiver to the interest of the intending purchaser in that order.
Even so, the decision of the official receiver in favour of a sale should not be set aside unless there are good grounds for interfering with the discretion exercised by the official receiver.
These grounds may be wider than the grounds envisaged in auction sales in execution proceedings.
Even so, there must be judicial grounds on which the court will act in setting aside the sale decided upon by the official receiver.
These grounds may be, for example, that there was fraud or collusion between the receiver and the insolvent or the intending purchaser; the court may be also interfere if it is of opinion that there were irregularities in the conduct of the sale which might have affected the 696 price fetched at the sale; again, even though there may be no collusion, fraud or irregularity, the price fetched may still be so low as to justify the court to hold that the property should not be sold at that price.
These grounds and similar other grounds depending upon particular circumstances of each case may justify a court in interfering with the act of the official receiver in the case of sale by him under section 59 (a) of the Act.
The High Court had therefore to see whether the Subordinate Judge 's order was justified on these grounds and whether the District Judge made any mistake in law in reversing that order.
If the Subordinate Judge 's order was not justified on these grounds or if the District Judge made no mistake in law in interfering with that order, the High Court cannot interfere in revision under the proviso to section 75, for the High Court 's jurisdiction to interfere arises only if it is of opinion that the District Judge 's order was not according to law.
If the High Court comes to that conclusion, it can then pass such order as it may think fit.
Let us therefore turn first to the order of the Subordinate Judge and see if it is justified on the ground mentioned above.
Now both the Subordinate Judge and the District Judge found that there was no reason to hold that there was any fraud or collusion on the part of the official receiver in this case.
Further, the Subordinate Judge did not find that there was any irregularity committed by the official receiver in conducting the sale and the District Judge has definitely found that there was no such irregularity.
The only ground on which the Subordinate Judge held that the sale should be set aside was that the price fetched was low.
Now if that ground is justified, the Subordinate Judge would have been right in interfering with the sale proposed by the official receiver.
That matter has been considered by the District Judge and he has 697 held that there is no reason to hold that the properties were being sold for a low price.
The Subordinate Judge in dealing with the question of price has pointed out that the insolvent had valued the properties at Rs. 80,000/ , though he was conscious of the fact that this was properly an exaggeration.
He therefore did not hold that the properties were worth Rs. 80,000/ .
He came to the conclusion that the properties would be worth at least Rs. 40,000/ and the main reason why he said so was that the properties had been mortgaged for over Rs. 20,000/ in 1936.
According to him there seems to be some infallible rule that one must double the mortgaged money in order to arrive at the valuation of the properties mortgaged.
The District Judge has pointed out and we think, rightly that there can be no such rule.
Therefore, the main basis on which the Subordinate Judge held that the properties were worth Rs. 40,000/ and therefore the bid of the appellant was low, falls to the ground as pointed out by the District Judge.
The Subordinate Judge also pointed out that the insolvents were in possession of the properties during the pendency of the insolvency appeal and had been depositing Rs. 2000/ annually on the order of the High Court in order to remain in possession.
The Subordinate Judge however did not calculate the value of the properties on the basis that their annual income was Rs. 2,000/ and rightly so because the amount deposited by a litigant on the order of a court in order to retain possession of some property cannot necessarily lead to the inference that was the annual income of the property.
It seems therefore that the District Judge was right when he held that there was no evidence on the record which would justify the finding of the Subordinate Judge that the price fetched by the sale in this case was inadequate or unreasonable.
We may add that it was open to the respondent to show to the Subordinate Judge by well recognised methods 698 of valuation as to what the value of the properties was.
The Subordinate Judge should have then taken into account the total amount of the encumbrance on these properties.
The mortgage deed is not on the record and we do not know what interest, if any, the mortgage money carried.
Before the Subordinate Judge could come to the conclusion that the price offered by the appellant was low, he had first to find out the price of the properties by some recognised method.
He had then to find what was the total amount of encumbrance on the properties.
If on finding these things it appeared that the difference between the two was much larger than the price bid by the appellant, the Subordinate Judge would have been justified in interfering with the order of the official receiver, even if there was no question of fraud, collusion or irregularity in the present case.
But no such findings have been given by the Subordinate Judge and the District Judge consequently was right when he said that the view of the Subordinate Judge that the price fetched was inadequate and unreasonable is incorrect.
Unfortunately, the High Court did not address itself to the question whether the order of the District Judge was according to law or not.
It seems to have been impressed by the offer made by the respondent, overlooking the fact that the offer of Rs. 9,000/ as the minimum bid and Rs. 1000/ for the appellant was being made three years after the auction during which, for all that we know, the prices might have risen.
Further, the High Court has remarked that the price offered by the appellant was not unconscionably low but it felt that it was still low on a comparison with the offer made by the respondent in 1956.
As the High Court did not consider the question whether the order of the District Judge was according to law or not and did not come to the conclusion that order was not according to law, the High Court would have no jurisdiction to interfere with that order.
699 Learned counsel for the respondent urged that even though the High Court may not have considered the matter from this aspect, we should not interfere with the order of the High Court if we are satisfied that in fact the price offered by the appellant was low, in the circumstances prevailing in 1953.
We agree that if it was possible for us to come to the conclusion that the price offered by the appellant was low, there would be no reason to interfere with the order of the High Court, even though it might not have considered what was necessary for it to do for interfering under the proviso to section 75; but as are have pointed earlier, there is no sufficient material on the record on which we can say that the price offered by the appellant is low.
As we have already pointed out, no attempt was made in the Subordinate Judge 's court to value the properties by any of the well recognised methods by which properties are valued.
Further no attempt was made to show the total encumbrance on the property.
Unless the valuation was properly made and the encumbrance was found out, it is not possible to say that the offer made by the appellant was low, for that would depend upon the difference between the value of the properties and the amount of encumbrance.
In these circumstances, it is not possible for us to say that the order of the District Judge when he held that the Subordinate Judge was not right in holding that the price fetched was inadequate or unreasonable, is not according to law.
We therefore allow the appeal, set aside the order of the High Court and restore the order of the District Judge.
The appellant will get his costs in this Court from the first respondent.
Appeal allowed.
| The official receiver put the properties of the insolvents N and his sons for sale, which were subject to mortgage.
The properties were ultimately knocked down to the appellant whose bid was the highest.
The first respondent made an application under section 68 of the which was allowed by the Subordinate Judge on the ground that the price fetched was very low on appeal under section 75 of the Act the District Judge, inter alia, held that the price fetched was not low.
In revision under the proviso to section 75 of the Act, the High Court did not consider whether the order of the District Judge was according to law but accepted an offer made by the first respondent and allowed the revision petition.
^ Held, that the power of the court under section 68 is a judicial power, and must be exercised on well recognised principles, justifying interference with an act of the receiver which he is empowered to do under section 59(a) , and the court must not arbitrarily set aside a sale decided upon by the official receiver, unless there are good judicial grounds to interfere with the discretion exercised by the official receiver, for example that there was fraud or collusion between the receiver and the insolvent or intending purchaser, or the court is of the opinion that there were irregularities in the conduct of the sale which might have affected the price fetched at the sale, or price was low as to justify the Court to hold that the property should not be sold at that price.
691 The High Court had therefore to see whether the Sub Judge 's order was justified on these grounds and whether the District Judge made any mistake in law in reversing that order otherwise the High Court cannot interfere in revision under the proviso to section 75 of the , for the High Court 's jurisdiction to interfere arises only if it is of opinion that the District Judge 's order was not according to law, and only then it can pass such order as it may think fit.
| The respondent State granted a mining lease to the appellant.
The 5th respondent, whose application was rejected moved the Central Government under rule 54 of the, Mineral Concession Rules, 1960, praying (i) for setting aside the grant in favour of the appellant, and (ii) for grant of the area on lease to him.
The Central Government asked for the comments of the appellant and the State Government and after receipt of these comments, they were passed to the parties for further comments.
The Central Government by an order passed on Sept. 30, 1964 rejected the application of 5th respondent as time barred.
Thereafter, the Central Government on Nov. 5, 1964, under the revisionary powers conferred by r, 55, of the Rules and "all the powers enabling in this behalf," set aside the order granting the lease to the appellant, and further directed regrant after issuing fresh notification.
The appellant, moved the High Court under article 226 of the Constitution for quashing the order of November, 1964, The High Court dismissed the petition.
HELD : The appeal as well as the Writ Petition must be allowed and the order of the Central Government Nov. 5, 1964 must be set aside.
The High Court erred in its approach that the two prayers in the application of the 5th respondent were independent, and that the Central Government by its order of Sept. 30, 1964 had disposed of only the prayer of 5th respondent to grant the area on lease to him, but it had not disposed of his other prayer to cancel the grant in favour of the appellant.
The two reliefs asked for by the 5th respondent were inter connected reliefs.
In the context in which they were mad, they could not be considered as independent prayers.
Further by its order dated September 30, 1964, the Central Government dismissed the entire application of the 5th res pondent on the ground that the same was time barred.
If his application in respect of one part of his prayer was time barred, it was equally, time barred in respect of the other part.
[527 B D] The order of Nov. 5, 1964 of the Central Government does not show that it was made in the exercise of its suo motu powers.
It is purported to have been made on the basis of the application made by the 5th respondent.
[527 E] If the Central Government wanted to exercise its suo motu power it should have intimated that fact as well as the grounds on which it proposed to exercise that power to the appellant and given him an opportunity to show cause against the exercise of suo motu power as well as 5 2 3 against the grounds on which it wanted to exercise its power.
The Central Government had not given him that opportunity.
Failure of the Central Government to do so, vitiates the impugned order.
[527 H]
| The respondent field a suit against the appellant for recovery of possession of a building on the ground of wilful deflault in payment of rent which was Rs. 900 per ;month.
The appellant denied the relationship of landlord and tenant, claiming himself as one of the "associates" or "co sharers" or "co owners" of the building.
The Munsif decreed the suit; and the decree was affirmed in appeal by the first appellate court as also by the High Court.
Hence the present appeal.
During the pendency of the present appeal, cl.
(ii) of section 30 of Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, which exempted from application of the Act premises the monthly rent in respect of which exceeded Rs. 400, and on the basis of which the suit giving rise to the present appeal emanated, was struck down in a judgment by this Court.
** The appellant contended that as a result of the declaration by this Court of the constitutional invalidity of clause (ii) of section 30, of the Act, 311 which excluded from the purview of the Act any building or part thereof let out on a monthly rent of Rs. 400, the decree of the civil court became null and void and of no effect.
On behalf of the respondent it was submitted that the decree passed by the civil court was not a nullity for the Act did ;not bar the jurisdiction of the civil court but only prohibited execution of a decree of eviction otherwise than in accordance with the relevant statutory provision; and that such a decree was not void, but was merely under an eclipse, and would become executable as and when the bar is removed.
Allowing the appeal, this Court, HELD; 1.1 Section 10 of Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 prohibits jurisdiction of the civil court in respect of eviction of a tenant whether in execution of a decree or otherwise except in accordance with the provisions of that section and sections 14 to 16.
The sole circumstance and the condition precedent to the exercise of jurisdiction by a civil court as stated in second proviso to section 10(1) is that the tenant should have denied the title of the landlord or claimed right of permanent tenancy and the Controller, on such denial or claim by the tenant, reaches a decision and duly records a finding that such denial or claim was bona fide and only when these conditions are satisfied jurisdiction of the civil court can be invoked to pass a decree for eviciton on any of the grounds mentioned in section 10 or sections 14 to 16.
Except to this limited extend the jurisdiction of the civil court is completely barred and the same is vested in the tribunals set up under the Act.
Any suit instituted by a landlord for eviction of a tenant from a building falling within the ambit of the Act,otherwise than as stipulated by the section is, therefor, incompetent for lack of jurisdiction of the court and any decree of the court in such a suit is null and void and of no effect.
[317D E, G H; 318 D,G H] Sushil Kumar Mehta vs Gobind Ram Bohra, [1990] 1 SCC page 193, referred to.
1.2 The decision of the Controller is concerned solely with the bona fides, and not the correctness or validity, of the denial or claim, for these difficult questions of title are by the statute reserved for decision by the appropriate civil court which is the more competent forum in such matters.
[318D E] Magiti Sasamal vs Pandab Bissoi,[1962] 3 SCR 673, referred to.
1.3 If the decision of the Controller is that tenant 's denial or 312 claim is not bona fide, the jurisdiction of the civil court cannot be invoked by the landlord and the Controller will then be the competent authority to order eviction, after affording the parties a reasonable opportunity of being heard, on any one of the grounds specified under the statute, including the ground that the tenant has, without bona fide denied landlord 's title or claimed right of permanent tenancy.[318E F] 1.4 Although the Act contains no express bar of jurisdiction of the civil court, its provisions explicitly show that, subject to the extraordinary powers of the High Court, and this Court, such jurisdiction is statute for eviction of tenants "in execution or otherwise".
The provision of the Act are clear and complete in regard to the finality of the orders passed by the special tribunals set up under it, and their competence to administer the same remedy as the civil courts render in civil suits.
Such tribunals having been so constituted as to act in conformity with the fundamental principles of judicial procedure, the clear and explicit intendment of the legislature is that all questions relating to the special rights and liabilities created by the statute should be decided by the tribunals constituted under it.
[317A C] Dhulabhai &Ors.
vs The State of Madhya Pradesh & Anr.
, ; ; Secretary of State vs Mask & Co., [1939 40] IA 222 (PC, Raleigh Investment Co. Ltd. vs Governor General in Council, [1946] 47 IA 50 (PC and Barraclough vs Brown & Ors., , referred to.
In the instant case, the procedure stipulated in the second proviso to section 10 had not been complied with.
At the time of institution of the suite, the building in question did not come within the ambit of the Act, owing to the exclusionary provision contained in cl.
(ii) of section 30, but after leave to appeal was granted, the applicability of the Act was extended to the building by reason of the decision of this Court, declaring the invalidity of cl.
(ii) of section 30 on account of its inconsistency with Article 14 of the Constitution.
Whatever be the consequences of that declaration whether it has rendered the statutory provision null and void and of no effect, or, merely inoperative, unenforceable and dormant to be revitalised on subsequent removal of the constitutional ban in either event, the civil court acting without the aid of the exclusionary provision in cl.
(ii) of section 30, during the period of invalidity,had become coram non judice and its proceedings resulting in the decree a nullity.
[319A D] 313 Ratan Arya & Ors.
vs State of Tamil Nadu & Anr.
, ; , referred to.
Kiran Singh & Ors.
vs Chaman Paswan & Ors., ; relied on.
V.B. Patankar & Ors.v.
C.G. Sastry, ; , held inapplicable.
Behram Khurshed Pesikaka vs State of Bombay, ; Saghir Ahmad vs State of U.P. and Ors. ; ; Bhikaji Narain Dhakras & Ors.
vs The State of M.P.
The State of A.P. & Anr., ; , referred to.
| The High Court allowed the writ petition and quashed the order of the Deputy Director of consolidation.
The appellants filed appeal in this Court against the order of the High Court.
The appeal came up for hearing on May 7, 1987, when it was dismissed for default of appearance, where after an application for restoration was filed on the ground that counsel for the appellants was busy in the High Court at the time of hearing of the appeal.
This Court found no justification for recalling its order, dismissing the appeal, but in view of the fact that the appellants would suffer for no fault of theirs, decided to hear the matter, directing that this practice should not be permitted in this Court any further.
Dismissing the appeal (on merits), the Court, ^ HELD: There is no merit in the appeal.
The High Court was right in holding that the respondents (concerned) were in possession of the land in 1958 when the case started under section 145 of the Cr.
P.C. and their date of occupation could not be later than 8.5.1958, so that the six years ' period of limitation for a suit for their eviction under section 209 of the Zamindari Abolition and Land Reforms Act would start running from July 1, 1958 and expire on June 30, 1964 i.e. before the consolidation operations commenced.
The appellants contended that there was a break in the possession of the respondents concerned between 8.5.1958 and 29.1.60, but during that period the land was in the custody of the Criminal Court which must be deemed to have been holding possession of the land on behalf of the person eventually found to be entitled to possession.
The respondents had matured their title by adverse possession and there could be no warrant for denying them the status of rightful owners.
There was no break in the possession of the respondents and they must be held to have been in continuous occupation at least from May, 1958.
1877A F]
| In the village of Challayapalam, there were six inams, namely, the Challayapalam Shrotriem and five minor inams but there was no information as to when the inams were created and by whom.
In two suits, one filed by the shrotriemdars, against the tenants for a declaration that the tenants did not have occupancy rights in the lands in their occupation, and the other by the tenants for a declaration that they had occupancy rights, the question arose whether the shrotriem was an "estate" within the meaning of section 3 (2) (d) of the Madras Estates Land Act, 1908, as amended by Act 18 of 1936.
The trial court held, on a review of the evidence, that the grant was of the whole village within the meaning of the section and that the tenants had occupancy rights.
On appeal, the High Court held that the evidence on record was inconclusive, that the onus of proving that the ant was of an estate lay upon the tenants, and that, since the tenants had Failed to discharge the onus, the question should be decided against the tenants.
In the appeal to this Court by the tenants, the question was : if there was no evidence justifying an inference that the grant was of a whole village, whether explanation 1 to section 3(2)(d) (added by Act 2 of 1945) gave rise to a presumption in favour either of the shrotriemdars or the tenants.
HELD : The suit of the shrotriemdars must fail, because, the Explanation raises a presumption, where a grant is expressed to be of a named village, that the area which formed the subject matter of the grant shall be deemed to be an estate.
Raising of the presumption is not subject to any other condition.
The legislature has, by the non obstante clause in the Explanation, affirmed that such presumption shall be raised even if it appears that in the grant are not included certain lands in the village, which have, before the grant of the named village been granted on service or other tenure or have been reserved for communal purposes.
The party contending that the grant in question falls outside the definition in section 3(2) (d), has to prove that case, either by showing that the minor inams not comprised in the grant were created, contemporaneously with or subsequent to the grant of the village, by the grantor.
[857 D E; 861 C E] By enacting the Explanation the intention of the legislature was to declare occupancy rights of tenants in inam villages.
It would be attributing to the legislature gross ignorance of local conditions.
if it was held that the legislature intended to place upon the tenant the onus of establishing affirmatively that the minor inams were granted before the grant of the named village and that if he fails to do so his claim is liable to fail.
It is well nigh impossible to discharge such a burden in normal cases.
Nor was it intended that, when the evidence was inconclusive, the person who approached the Court for relief must fail, for, as in the present 842 843 case, if the inamdar as well as the tenant sue for relief, the application of the rule would require the court to adopt the anomalous course of dismissing both the actions.
In cases, which arose after the Amending Act of 1936, reference to the presumption in section 23 of the Act would be wholly out of place, the applicable presumption being the one prescribed by Explanation 1.
The presumption under section 23, that a grant in favour of an inamdar was of the melvaram only, applied only in cases which arose before the Amending Act of 1936.
[857 G; 858 B; 860 B; 862 F G] District Board of Tanjore vs M. K. Noor Mohammad Rowther, A.I.R. 1953 S.C. 446 and Varada Bhavanarayana Rao vs State of Andhra Pradesh, ; , explained.
| These appeals by Special Leave and a petition for Special leave arose out of different judgments of the High Court.
The main issue involved was whether the location of Revenue Mandal Headquarters in the State of Andhra Pradesh under section 3(5) of the Andhra Pradesh District (Formation) Act, 1974, was a purely governmental function, not amenable to the writ jurisdiction of the High Court.
Writ Petitions were filed in the High Court by individuals and gram panchayats questioning the legality and propriety of the formation of certain Revenue Mandals and location of certain Mandal Headquarters notified in preliminary notification issued under sub section
(5) of Section 3 of the Act.
In some cases, the High Court declined to interfere with the location of Mandal Headquarters, holding that the government was the best judge of the situation, or on the ground that there was a breach of guidelines it directed the Government to reconsider the question of location of the Mandal Headquarters.
In some cases, the High Court quashed the final notification for location of the Mandal Headquarters at a particular place, holding that there was a breach of guidelines based on the system of marking and also on the ground that there were no reasons disclosed for deviating from the preliminary notification for location of the Mandal Headquarters at another place.
Allowing Civil Appeal Nos.
1980, 1982, 1985 and 1987 of 1986 and all other appeals and Special Leave Petitions directed against the judgments of the High Court, whereby the High Court had interfered with the location of the Mandal Headquarters, the Court, ^ HELD: It was difficult to sustain the interference by the High Court in some of cases with the location of the Mandal Headquarters and the quashing of the impugned notification on the ground that the Government had acted in breach of the guidelines in that one place or 695 the other was more centrally located or that location at the other place would promote general public convenience or that the Headquarters should be fixed at a particular place with a view to developing the areas surrounded by it or that merely because a particular person who was an influential Member of Legislative Assembly belonging to the party in opposition had the right of representation but failed to avail of it.
The location of Headquarters by the Government by the issue of the final notification under sub s (5) of section 3 of the Act was on a consideration by the Cabinet Sub Committee of the proposals submitted by the Collectors concerned and the objections and suggestions received from the local authorities like Gram Panchayats and the general public, keeping in view the relevant factors.
Even assuming that any breach of the guidelines for the location of the Mandal Headquarters was justiciable, the utmost that the High Court could have done was to quash the impugned notification in a particular case and direct the Government to reconsider the question.
There was no warrant for the High Court to have gone further and direct the shifting of the Mandal Headquarters at a particular place.
[711B E] The guidelines are merely in the nature of instructions issued by the State Government to the Collectors regulating the manner in which they should formulate their proposals for formation of a Revenue Mandal or for the location of its Headquarters keeping in view the broad guidelines laid down in Appendix I to the White Paper issued by the Government laying down the broad guidelines.
The guidelines had no statutory force and they had also not been published in the Official Gazette.
They were mere departmental instructions for the Collectors.
The ultimate decision as to the formation of a Revenue Mandal or location of its Headquarters was with the Government.
It was for that reason that the Government issued preliminary notification under sub s (5) of section 3 of the Act.
Deviation from the guidelines in some of the aspects was usually for reasons of administrative convenience keeping in view the purpose and object of the Act i.e. to bring the administration nearer to the people.
There was nothing on record to show that the decision of the Government in any of these cases was arbitrary or capricious or was one not reached in good faith or actuated with improper considerations or influenced by extraneous considerations.
In a matter like this, conferment of discretion upon the Government in the matter of formation of a Revenue Mandal or location of its Headquarters in the nature of things necessarily leaves the Government with a choice in the use of the directions conferred upon it.
[713A F] It was difficult to sustain the judgments of the High Court in the 696 cases where it had interfered with the location of Mandal Headquarters and quashed the impugned notifications on the ground that the Government had acted in breach of the guidelines in that one place or the other was more centrally located or that location at the other place would promote general public convenience or that the Headquarters should be fixed at a particular place with a view to developing the area surrounded by it.
The location of Headquarters by the Government by the issue of the final notification under sub section (5) of Section 3 of the Act was on a consideration by the Cabinet Sub Committee of the proposals submitted by the Collectors concerned and the objections and suggestions received from the local authorities like the gram panchayats and the general public.
Even assuming that the Government while accepting the recommendations of the Cabinet Sub Committee directed that the Mandal Headquarters should be at one place rather than at another place as recommended by the Collector concerned in a particular case, the High Court would not have issued a writ in the nature of mandamus to enforce the guidelines which were nothing more than administrative instructions not having any statutory force, which did not give rise to any legal right in favour of the writ petitioners.
The petitions filed under Article 226 of the Constitutions before the High Court were dismissed.
[723G H; 724A D] Gram Panchayat, Chinna Madur & Orr.
vs The Government of Andhra Pradesh, [1986] 1 Andhra Weekly Reporter 362; C.J. Fernandez vs State of Mysore & Ors., ; ; Padfield vs Minister of Agriculture Fisheries & Food, ; ; Laker Airways Ltd. vs Department of Trade, at 705; Council of Civil Service Unions and Others vs Minister for the Civil Service, ; ; Secretary of State for Education and Science vs Tameside M.B.C.; , ; Breen vs Amalgamated Engineering Union, at 190; R.V. Criminal Injuries Compensation Board, explain, and Ridge vs Baldwin, ; , referred to.
| The appellant was the assignee of a mortgage dated 14 12 1911, executed by A, which comprised.
lands belonging to the mortgagor and also a mortgage executed by the respondents in his favour on 19 7 1909.
The appellant instituted a suit in the court of the Subordinate Judge of Kakinada, for the recovery of the amount due on the mortgage, dated 14 12 1911, and prayed for sale of the hypotheca.
The respondents were impleaded as defendants but did not appear.
The suit was decreed ex parte, and in execution of the decree, the properties of the respondents, mortgaged to A on 19 7 1909, were brought to sale, and purchased by the decree holder.
The respondents then instituted the present suit in the District Court of East Godavari which then bad jurisdiction over the properties in suit, for a declaration that the decree obtained by the appellant was fraudulent and inoperative and could not affect their title.
The plaint was later on amended and a prayer added that the properties might be partitioned and the respondents put in separate possession of their share.
The trial Judge dismissed the suit and the District Court in appeal affirmed his decision.
Before the High Court in second appeal it was contended for the first time that the decree in question did not direct a sale of the mortgaged properties but a sale of the mort gagee 's rights under the mortgage deed dated 19 7 1909 and as such the sale of the properties was void.
The High Court having called for a finding from the District Court as to what was sold, it was 939 found by that Court that the decree bad really directed a sale of the mortgagee 's rights and not of the properties mortgaged and that there was excessive execution.
It was, however, of opinion that the point should have been taken before the executing court and the suit in so far as it claimed relief on the basis of excessive execution was barred under section 47 of the Code of Civil Procedure.
The High Court declined to entertain the objection that the suit was barred under section 47 as it had not been taken in the written statement and was raised for the first time in second appeal, and decreed the respondent 's suit.
It was contended for the appellant that the High Court should have entertained the objection and held that the suit was so barred.
Held, that the appellant should be permitted to raise the contention.
The point relating to excessive execution had never been specifically raised except before the High Court and the allegations in the plaint were vague and obscure.
It is a pure question of law which requires no further investigation of facts and was understood and debated as such by the parties before the District Court.
That it was well settled that the question whether an execution sale was in excess of the decree and, therefore, not warranted by it could be raised as between the parties only by an application under section 47 of the Code before the executing court and not by a separate suit.
J. Marret vs Md. K. Shirazi & Sons (A.I.R. 1930 P. C. 86), Venkatachalapathy Aiyen vs Perumal Aiyen ([1912] M.W.N. 44), Biru Mohata vs Shyania Charan Khowas ([1895] I.L.R. , Abdul Karim vs Islamunnissa Bibi ([1916] I.L.R. 38 All. 339) and Lakshminarayan vs Laduram ([1931] A.I.R. , approved.
That the court, however, had the power to treat the plaint in the suit as an application under section 47 subject to any objection as to limitation or jurisdiction.
That the application was not barred under article 165 as it ap plied only to applications for restoration to possession by persons other than judgment debtors and bad no application to the present case.
Vachali Bohini vs Kombi Aliassan '([1919] I.L.R. 42 Mad. 753), Batnam Aiyar vs Krishna Doss Vital Doss ([1897] I.L.R. , Basul vs Amina ([1922] I.L.R. and Bahir Das vs Girish Chandra ([1922] A.I.R. 1923 Cal.
287), approved.
Nor could article 166 apply since it had application only where the sale was voidable and not void and had to be set aside.
That the article applicable to a case of a void sale such as the present was article 181 of the Indian Limitation Act.
Seshagiri Rao vs Srinivasa Rao ([1919] I. , Bajagopalier vs Bamanujachariar ([1923] I.L.R. 47 Mad. 288), Manmothanoth Ghose vs Lachmi Devi ([1927] I.L.R. 55 Cal.
96), Nirode Kali Boy vs Harendra Nath (I.L.R. [1938] 1 Cal. 280), and 119 940 Md We Gyan vs Maung Than Byu (A.I.R. 1937 Rang.
126), ap proved.
That the starting point of limitation for an application under article 181 would be the date of dispossession by the purchaser and not the date of the void sale which had no existence in law and the plaint in the present suit, treated as an application, having been filed ,within 3 years of such dispossession was in time.
Chengalraya vs Kollapuri (A.I.R. , approved.
That the District Court of East Godavari to whose jurisdiction the properties had been transferred before the present suit was instituted had by reason of such transfer acquired an inherent jurisdiction over them and if it entertained an application for execution with reference to them such action was no more than an irregular assumption of jurisdiction and no objection to jurisdiction having been taken by the appellant at the earliest opportunity he must be deemed to have waived it and, consequently, there was no legal bar to treating the plaint as an execution application under section 47 of the Code.
Balakrishnayya vs Linga Bao, (I.L.R. , applied.
Case law discussed.
| The non delivery of the goods booked by the respondent on September 5, 1955 to several destinations under "Railway Risk" due to the sinking of "Barge No. 6, carrying the wagons containing the goods" led to the filing of four suits which were dismissed by the Trial Court holding that the accident was not due to the negligence of the Railway employees.
The High Court, accepting the appeal of the respondent by its judgment dated April 13, 1966 held that the sinking of Barge was not due to "inevitable accident" but due to the serious negligence of the Railway employees and their failure of duty to take due care which it was required to take as a bailee as revealed by their own Enquiry Committee held with reference to Ss. 83 and 84 of the Railways Act read with section 2 of the Indian Railways Board Act (4 of 1905) and rule 18 of the Railway Board Rules.
The High Court remanded the suits for determination of the quantum of the decretal amount due to the respondent.
The trial court after remand gave decrees in favour of the respondent on 10th September, 1966 without interest claimed up to the date of filing of the suit and interest "pendent lite".
The High Court, on appeal by the respondent by its judgment dated 3 9 1968 allowed interest "pendent lite" and future interest at the rate of 4 1/2% per annum.
Dismissing the two sets of appeal by the Union, one by Special Leave against the order dated 13 4 1966 determining the liability and another by certificate against the judgment dated 3 9 1968 awarding interest the High Court.
^ HELD: (1) The liability of the Railway was that of a bailee.
The consignments were booked at Railway risk.
The onus of proving that the Railway employees took the necessary amount of care and they were not guilty of negligence rested on the Railway Authorities.
The question of onus is not important when the entire evidence is before the court.
In the instant case there was no legal evidence to prove "inevitable accident" but suppression of important documents and non production of important witnesses in charge of the Barge.
The Barge sank because of the serious and gross negligence of the railway employees and the railways did not take due care which it was required to take as a bailee.
[617B D; 618F G] (II) The Enquiry Committee, in the instant case, is a Joint Enquiry, under the rules and the report is admissible under Ss. 5, 7 and 9 of the Evidence Act.
The claim for privilege is not admissible because no such claim was made before the Courts below and there was no affidavit of the Minister incharge or the Secretary of the Department to support a claim for privilege.
[616G H] (III) One of the principles for award of damages is that so far as possible he who has proved a breach of a bargain to supply what he has contracted to get is to be placed as far as money can do it, in as good a situation as if the contract had been performed.
The fundamental basis thus is compensation for the pecuniary loss which naturally flows from the breach.
Therefore, 615 the principle is that as far as possible the injured party should be placed in as good a situation if the contract has been performed.
In other words, it is to provide compensation for the loss which naturally flows from the breach.
The market rate is a presumptive test because it is the general intention of law that in giving damages for breach of contract, the party complaining should, so far as it can be by money, be placed in the same position as he would have been in if the contract had been performed.
The rule as to market price is intended to secure only an indemnity to the purchaser.
The market value is taken because it is presumed to be the true value of the goods to the purchaser.
In the instant case, the High Court correctly applied these principles and adopted the contract price in the facts and circumstances of the case as the correct basis of compensation.
[619 D]
|
Civil Appeal No. 19 of 1961.
Appeal by special leave from the judgment and order dated April 11, 1957, of Bombay High Court, in Special Civil Application No. 3170 of 1956.
K. R. Bengeri and A. G. Ratnaparkhi, for the appellant.
E. Udayaratnam and section section Shukla, for the respondent.
November 29.
The Judgment of the Court was delivered by GAJENDRAGADKAR, J.
This appeal by special leave arises out of a tenancy case instituted by the appellant against his tenants the respondents in the Court of the Mamlatdar Raver (East Khandesh), in the State of Maharashtra.
The property in suit 702 consists of agricultural lands, Survey Nos. 32 and 38, situated in the village Raipur.
The respondents had executed a rent note in respect of these lands in favour of the appellant on February 5, 1943.
The period for which the rent note was executed was five years and the rent agreed to be paid annually was Rs. 785/ .
In ordinary course the lease would have expired on March 31, 1948.
However, before the lease expired, on April 11, 1946 the Bombay Tenancy Act, 1939 (Bombay Act XXIX of 1939) was applied to the area of the East Khandesh where the lands are situated, and in consequence as a result of section 23 (1) (b) of the said Act the five years period stipulated in the rent note was statutorily extended to ten years; the result was that under the said statutory provision the rent note in favour of the respondents would have expired on March 31, 1953.
During the subsistence of the tenancy thus statutorily extended the Bombay Tenancy and Agricultural Lands Act LXVII of 1948 came into force.
This act repealed the earlier Act of 1939 except sections 3, 3(a) and 4 as modified.
Sections 5 and 14 (2) of this Act are material.
On March 11, 1952 the appellant gave notice to the respondents intimating to them that the period of the rent note executed by them which had been statutorily extended would expire on March 31, 1953 and calling upon them to deliver possession of the lands to him immediately thereafter.
Before the notice could be effectively enforced on the expiration of the period of the lease, however, Bombay Act XXXIII of 1952 came into operation on January 12, 1953.
This Act repealed section 14(2) and amended section 5 and added sub section
(3) to it.
Shortly stated the effect of this amendment was that the tenancy of the respondents, who were till then ordinary tenants as distinct from protected tenants, could not be terminated on the expiry of their tenancy except by giving one year 's notice and that too on the ground that the lands were required by 703 the landlord for bona fide personal cultivation and that the income of the said lands would be the main source of income of the landlord.
The relevant averments about these grounds had to be made by the landlord in issuing the notice to the tenants for terminating their tenancy.
On April 4, 1953 the appellant instituted the present tenancy proceedings for obtaining possession of the lands.
The Mamlatdar who tried the proceedings rejected the appellant 's claim on the ground that he had not terminated the tenancy of the respondents as required by law in that he had not given the statutory notice making the prescribed relevant averments in that behalf.
The appellant then preferred an appeal against the decision of the Mamlatdar but the appellate authority agreed with the view taken by the Mamlatdar and dismissed his appeal.
The dispute was then taken by the appellant before the Bombay Revenue Tribunal by way of a revisional application; and the revisional application succeeded.
The Tribunal held that the relevant amendments on which the Mamlatdar and the appellate authority had relied in dismissing the appellant 's claim were not retrospective and that the appellant was entitled to eject the respondents.
This order of the Revenue Tribunal was challenged by the respondents by a petition filed by them under article 227 of the Constitution in the Bombay High Court.
The High Court has allowed the writ petition and held that the relevant amendments are retrospective in operation and that the appellant is not entitled to eject the respondents.
On that view the order passed by the Revenue Tribunal has been set aside and that of the appellate authority restored.
It is against this decision that the appellant has come to this Court by special leave.
It is necessary at the outset to set out the relevant statutory provisions which fall to be considered in the present appeal.
704 Section 23 (1) (b) of the Bombay Tenancy Act of 1939 which statutorily extended the original contractual five years period of the lease to ten years reads thus: "Every lease subsisting on the said date (that is to say the date on which section 23 came into force) or made after the said date in respect of any land in such area shall be deemed to be for a period of not less than ten years".
We have already noticed that as soon as this act was made applicable to the area where the lands in question are situated the original period of five years agreed to between the parties for the duration of the lease was statutorily extended to ten years.
Then followed the Tenancy Act LXVII of 1948.
Section 5 of the said Act originally stood thus: "5.
(1) No tenancy of any land shall be for a period of less than ten years.
Notwithstanding any agreement, usage or law to the contrary, no tenancy shall be terminated before the expiry of a period of ten years except on the grounds mentioned in section 14: Provided that any tenancy may be terminated by a tenant before the expiry of a period of ten years by surrendering his interest as a tenant in favour of the landlord.
" Section 14, sub section (2) which is relevant reads thus: "In the case of tenant, the duration of whose tenancy is for a period of ten years or more, the tenancy shall terminate at the expiration of such period, unless the landlord has by the acceptance of rent or by any other act or conduct of his allowed the tenant to hold over within the meaning of Section 116 of the ." On January 12, 1953, the amending Act XXXIII of 1952 came into force.
By this amending Act 705 the following proviso was added to sub section
(1) of section 5: "Provided that at the end of the said period and thereafter at the end of each period of ten years in succession, the tenancy shall, subject to the provisions of Sub Sections (2) and (3), be deemed to be renewed for a further period of ten years on the same terms and conditions notwithstanding any agreement to the contrary." The said amending Act repealed section 14 (2) of Act LXVII of 1948 and amended section 5, sub section
(2) in this way: "The landlord may, by giving the tenant one year 's notice in writing before the end of each of the periods referred to in Sub Section (1), terminate the tenancy, with effect from the thirty first day of March in the last year of each of the said period, if he bona fide requires the land for any of the purposes specified in Sub Section (1) of Section 34, but subject to the provisions of Sub Section (2) and (2A) of the said Section, as if such tenant was a protected tenant." A new sub section, sub section
(3) was added to section 5.
This new sub section reads thus: "Notwithstanding anything contained in sub section (1) (a) every tenancy shall, subject to the provisions of sections 24 and 25, be liable to be terminated at any time on any of the grounds mentioned in section 14; and (b) a tenant may terminate the tenancy at any time by surrendering his interest as a tenant in favour of the landlord: Provided that such surrender shall be in writing and shall be verified before the Mamlatdar in the prescribed manner.
" 706 It is common ground that if the provisions of the amending Act XXXIII of 1952 are applicable to the present proceedings the appellant would not be entitled to claim the ejectment of the respondents because he has not given any notice in that behalf as prescribed by the said relevant provisions of the amending statute.
His case, however, is that the technical requirements of a valid notice prescribed by the amending Act do not apply to his claim inasmuch as the relevant provisions of the amending Act are not retrospective in operation.
According to him he has already given notice to the respondents on March 11, 1952, intimating to them unequivocally his intention to eject them from the lands on the expiration of the ten year period of the lease.
The High Court has held that this contention is not well founded and so the appellant 's claim for ejectment has been dismissed.
The question which arises for our decision is whether the appellant is entiled to eject the respondents even without complying with the statutory requirement as to the valid notice prescribed by the amending Act XXXIII of 1952.
It would be noticed that though the lease originally was for five years, before the five years expired the duration of the lease was statutorily extended to ten years by virtue of the provisions of section 23(1)(b) of Act XXIX of 1939.
A somewhat similar, though from the point of view of the appellant a more revolutionary, result followed when a proviso was added to section 5(1) by the amending Act XXXIII of 1952.
By virtue of this amendment the period of the lease gets automatically extended for ten years from time to time.
In other words, before the lease in favour of the respondents could expire on March 31, 1953, by virtue of the proviso to section 5(1) of the amending Act of 1952 it got extended for ten years, and unless it is terminated by a valid notice or a surrender 707 is made by the tenant as specified by the statute the tenancy would be extended from time to time at every stretch for ten years.
Therefore, there can be no doubt that as a result of the amending Act of 1952 the expiration of the lease did not take place on March 31, 1953 as had been anticipated by the appellant when he gave notice on March 11, 1952.
In one sense the amending Act which is undoubtedly a piece of beneficent legislation conferred on the respondents additional rights and these additional rights were conferred on them before the lease in their favour had come to an end.
In order to put an end to the tenancy thus statutorily safeguarded the appellant has to follow the course prescribed by the amending statute and give a valid notice as required by the said statute.
Just as the appellant could not have complained against the extension of the original period of five years to ten years by Act XXIX of 1939 so he cannot complain against the further extensions statutorily granted to the respondents by section 5(1) of the amending Act XXXIII of 1952.
That is one aspect of the matter.
Besides, it is necessary to bear in mind that the right of the appellant to eject the respondents would arise only on the termination of the tenancy and in the present case it would have been available to him on March 31, 1953 if the statutory provision had not in the meanwhile extended the life of the tenancy.
It is true that the appellant gave notice to the respondents on March 11, 1952 as he was then no doubt entitled to do; but his right as a landlord to obtain possession did not accrue merely on the giving of the notice, it accrued in his favour on the date when the lease expired.
It is only after the period specified in the notice is over and the tenancy has in fact expired that the landlord gets a right to eject the tenant and obtain possession of the land.
Considered from this 708 point of view, before the right accrued to the appellant to eject the respondents amending Act XXXIII of 1952 stepped in and deprived him of that right by requiring him to comply with the statutory requirement as to a valid notice which has to be given for ejecting tenants.
In this connection it is relevant to distinguish between an existing right and a vested right.
Where a statute operates in future it cannot be said to be retrospective merely because within the sweep of its operation all existing rights are included.
As observed by Buckley, L. J. in West vs Gwynne retrospective operation is one matter and interference with existing rights is another.
"If an Act provides that as at a past date the law shall be taken to have been that which it was not that Act I understand to be retrospective.
That is not this case.
The question here is whether a certain provision as to the contents of leases is addressed to the case of all leases or only of some, namely, leases executed after the passing of the Act.
The question is as to the ambit and scope of the Act, and not as to the date as from which the new law, as enacted by the Act, is to be taken to have been the law.
" These observations were made in dealing with the question as to the retrospective construction of section 3 of the Conveyancing and Law of Property Act, 1892 (55 & 56 Vict. c. 13).
In substance section 3 provided that in all leases containing a covenant, condition or agreement against assigning, underletting, or parting with the possession, or disposing of the land or property leased without licence or consent, such covenant, condition or agreement shall, unless the lease contains an expressed provision to the contrary, be deemed to be subject to a proviso to the effect that no fine or sum of money in the nature of a fine shall be payable for or in respect of such licence or consent.
It was held that the provisions of 709 the said section applied to all leases whether executed before or after the commencement of the Act; and, according to Buckley, L. J., this construction did not make the Act retrospective in operation; it merely affected in future existing rights under all leases whether executed before or after the date of the Act.
The position in regard to the operation of section 5(1) of the amending Act with which we are concerned appears to us to be substantially similar.
A similar question had been raised for the decision of this Court in Jivabhai Purshottam vs Chhagan Karson in regard to the retrospective operation of section 34(2)(a) of the said amending Act XXXIII of 1952 and this Court has approved of the decision of the full Bench of the Bombay High Court on that point in Durlabbhai Fakirbhai vs Jhaberbhai Bhikabhai.
It was held in Durlabbhai 's case that the relevant provision of the amending Act would apply to all proceedings where the period of notice had expired after the amending Act had come into force and that the effect of the amending Act was no more than this that it imposed a new and additional limitation on the right of the landlord to obtain possession from his tenant.
It was observed in that judgment that "a notice under section 34(1) is merely a declaration to the tenant of the intention of the landlord to terminate the tenancy; but it is always open to the landlord not to carry out his intention.
Therefore, for the application of the restriction under sub section
2(A) on the right of the landlord to terminate the tenancy, the crucial date is not the date of notice but the date on which the right to terminate matures; that is the date on which the tenancy stands terminated".
Mr. Bengeri, for the appellant, fairly conceded that the decision of this Court in Jivabhai 's case was against his contention but he purported to rely 710 on another decision of this Court in Sakharam alias Bapusaheb Narayan Sanas vs Manikchand Motichand Shah.
In that case the Court was called upon to consider the question as to whether the provisions of section 88 of Bombay Act LXVII of 1948 were retrospective in operation or not, and it has been held that the said provisions are prospective.
However, we do not think that the position with regard to the provisions contained in section 88 can be said to be analogous or similar to the position with regard to the relevant provisions of the amending Act XXXIII of 1952 with which we are concerned in the present appeal.
Therefore, we do not think that Mr. Bengeri can make any effective use of the said decision.
In the result the appeal fails and is dismissed with costs.
Appeal dismissed.
| In February 1943 the appellant leased out an agricultural land for 5 years to the respondent.
Before the expiry of the lease, the Bombay Tenancy Act, 1939, was made applicable to the area where the land was situated, and under section 23(1)(b) the period of the lease was statutorily extended to 10 years.
During the subsistence of the tenancy thus statutorily extended, the Bombay Act 67 of 1948 came into force.
In March 1952 the appellant gave notice to the respondents intimating that the statutory period of tenancy expired on 31st March 1953, and called upon them to deliver possession immediately thereafter.
Before the notice could effectively be enforced the Bombay Act 33 of 1952 came into force, the effect of which was that the lease was automatically extended for 10 years from time to time, unless terminated by giving one year 's notice with the averment that the land was required bona fide by the landlord for personal cultivation and that income would be the main source of income to the landlord.
The appellant 's case was that the technical requirements of a valid notice prescribed by the Amending Act do not apply to his claim inasmuch as the relevant provisions of the amending Act are not retrospective in operation.
The question was whether the appellant was entitled to eject the respondents even without complying with the statutory requirement as to valid notice prescribed by the Amending Act 33 of 1952.
^ Held, that by virtue of the Amending Act 33 of 1952 the period of lease was automatically extended for a period of ten years from time to time, unless terminated by a valid 701 notice or a surrender was made by the tenant as specified by the statute, otherwise the tenancy would be extended from time to time at a stretch of every ten years.
In order to put an end to the tenancy, thus statutorily safe guarded, the landlord had to follow the course prescribed by the amending statute to give a valid notice as required by the said statute.
The right of a landlord to obtain possession does not accrue merely on the giving of the notice, it accrues in his favour on the date when the lease expires.
It is only after the period specified in the notice is over and the tenancy in fact had expired that the landlord gets a right to eject the tenant and take possession of land.
Held, further, that there is distinction between existing right and vested right.
Where a statute operates in future it cannot be said to be retrospective merely because within the sweep of its operation all existing rights are included.
The operation of section 5(1) of the Amending Act is not retrospective, it merely affects in future the existing rights under all leases whether executed before or after the date of the Act.
vs Gwynne, [191I] 2 Ch. 1, Durlabhai Fakirbhai vs Jhaverbhai Bhikabhai, (1955) 58 Bom.
L. R. 85, applied.
Jivabhai Purshottam vs Chhagan Karson, [1962]1 section C. R. 568, referred to.
| By an order dated May 25, 1954, the Supreme Court granted the petitioners in the case special leave to appeal against the judgment and order of the High Court at Calcutta.
In accordance with the order, the petitioners furnished the security amounts directed to be deposited within the time specified in the order.
The Registrar of the High Court did not issue any notice of admission of 'appeal to be served by the Appellant 's Solicitor on the Respondents as envisaged in rule 9 of Order XIII, S.C.R. Nor did the Appellant following the practice of the High Court, move that Court for It admission" of the appeal until January 11, 1955.
The Respondents first moved the High Court complaining of default on the part of the appellants in due prosecution of the appeal and latter moved the Supreme Court for action under rule 13 of Order XIII of the Supreme Court Rules.
The application in the High Court was therefore kept pending.
Held: After the grant of special leave under article 136, the Registrar of the Supreme Court transmits, in accordance with the 244 provisions of rule 8 of Order XIII of the Supreme Court Rules, a certified copy of the Supreme Court 's order to the Court or tribunal appealed from, Rule 9 of Order XIII of the Supreme Court Rules enjoins upon the Court or tribunal appealed from to act, in the absence of any special directions in the order, in accordance with the provisions contained in Order XLV of the Civil Procedure Code, so far as they are applicable.
Accordingly the Court or Tribunal to which the order is transmitted receives deposits on account of security for the Respondents ' costs, printing costs, and any other deposits if so ordered by the Supreme Court, and sets about preparing the record of the appeal for transmission to the Supreme Court.
Therefore, action under rule 13 of Order XIII, S.C.R., for rescinding the order granting special leave cannot be initiated unless the Court or tribunal appealed from reports to the Supreme Court that the appellant has not been diligent in taking steps to enable that Court to carry out the directions, if any, contained in the order of the Supreme Court and to act in accordance with the provisions of Order XLV of the Civil Procedure Code so far as applicable to appeals under Article 136 of the Constitution.
In view of rule 9 of Order XIII of the Supreme Court Rules, the application of Order XLV of the Code of Civil Procedure to appeals under Article 136 of the Constitution is restricted.
The Court or tribunal appealed from, no doubt, has to carry out the directions contained in the order granting special leave, and to receive the security for the Respondents ' costs and other necessary deposits, but once the security is furnished and the other deposits are made, the formality of "admission" envisaged by rule 8 of Order XLV of the Civil Procedure Code is unnecessary, because in such cases the order .granting special leave by itself operates as an admission of the appeal as soon as the conditions in the order relating to the furnishing of security or making of deposits are complied with.
Appeals under Article 136 thus stand on a different footing from appeals on grant of certificate by the High Court itself.
In the letter case, the High Court has exclusive jurisdiction over the matter until it admits the appeal under rule 8 of Order XLV of the Civil Procedure Code.
Rule 9 of Chapter 32 of the Original Side Rules of the Calcutta High Court envisages "admission" of appeals to the Supreme Court whether by an order of the Supreme Court or under Order XLV of the Civil Procedure Code.
And when an appeal arising from an order made by the Supreme Court under Article 136 of the Constitution, has been so "admitted", the said rule enjoins upon the Registrar to issue notice of such admission for service by the appellant on the Respondents.
In cases where special leave has been granted by the Supreme Court, it is not necessary for the appellant to move the High Court appealed from for the formal admission of his appeal.
As the order granting special leave itself lays down the conditions to be fulfilled by the appellants, the admission will be regarded as final only when the directions are complied with and as 245 soon as this is done it would be the duty of the Registrar to issue a notice of the admission of the appeal for service upon the respondents.
In default of the issue of such notice, the appellant cannot be held responsible for laches in the prosecution of his appeal with regard to the steps required to be taken after the admission of his appeal.
| This is a land lord 's appeal.
By an agreement in writing between the parties, the second floor of the premises bear ing No. 19/10, Rajinder Nagar, New Delhi was let out to the Respondent for a limited period of three years w.e.f.
June 8, 1980, with the permission of the Rent Controller obtained under section 21 of the Act.
The Respondent tenat having failed to deliver vacant possession of the premises in question, after the expiry of the stipulated period, the appellant moved an application before the Rent Controller for execution of his order by delivery of possession of the premises to him.
The Respondent tenant filed an objection to the said application to which the appellant replied duly.
The Rent Controller rejected the appellant 's application taking the view that the permission granted under section 21 of the Act was invalid and thus the tenant could not be evicted on the expiry of 3 years.
The Rent Controller there by upheld the tenant 's objection that the landlord 's son being aged only 19 or 20 years, on the date of the expiry of the period of limited tenancy while the minimum age pre scribed by law for marriage being 21 years the ground that the premises were needed for the son 's marriage was not tenable.
The Rent Controller accordingly held that creation of limited tenancy amounted to fraud and misrepresantation by the landlord which rendered the permission invalid.
The appellant 's appeal to the Tribunal as also to the High Court having failed, he has filed this appeal after obtaining Special Leave.
The Tribunal and the High Court affirmed the view of the Rent Controller treating the grant of permission by the Controller to be mechanical and without application of mind.
Allowing the appeal, this Court, HELD: The object of enquiring into the validity of the Control 300 ler 's permission under section 21 is only to ensure that essentials of a limited tenancy existed and the same was genuine; and it is not meant to permit raising of frivolous pleas which would frustrate the very object of its enact ment.
This view protects the honest tenants and only curbs the frivolous and vexatious pleas.
[310H; 311A] Controller 's permission when granted to create a limited tenancy under sec.
21 of the Act is presumed to be valid unless declared otherwise.
It is, therefore, for the person assailing its validity to get such a declaration from a proper forum in a proper proceedings.
Unless this is done, the order remains enforceable.
The duty is clearly on the tenant himself to raise the pleas of invalidity and unless the order is declared invalid at his instance, its enforce ability cannot be doubted.
[31lB C] All that has to be seen is whether the period of limited tenancy was indicated by the landlord with reference to a foreseeable future event and the estimate of time of its occurrence was not unreasonable.
[312B] When the period of limited tenancy is stated on the basis of a future event the happening of which is reasonably certain at that time though the precise date of the future event cannot be predicted with precision, the landlord 's estimate of the period after which the event is expected to happen, unless unreasonable must be accepted for this pur pose as genuine.
This would satisfy the test of a genuine limited tenancy if there be no other factor indicating it to be a mere pretence adopted by the landlord.
[312C D] The enquiry contemplated under section 21 in this behalf is not the same as that for determining existence of ground of bona fide need of the landlord for an order of eviction under section 14 of the Act, and section 14 is expressly superseded by section 21.
The scope of enquiry is limited only to the existence of the jurisdictional facts at the time of grant of the permission when its validity is chal lenged subsequently.
[312F] The absence of existence of any jurisdictional fact not having been proved by the respondent tenant even after objecting to recovery of possession on expiry of the period of limited tenancy, there was no ground to refuse restora tion of possession to the landlord.
[313C] S.B. Naronah vs Prem Kumari Khanna, ; ; V.S. Rahi & Anr.
vs Smt.
Ram Chambeli, ; ; Smt.
Dhanwanti vs D.D. Gupta, [1986] 3 SCC 1; Inder Mohan Lal vs 301 Ramesh Khanna; , ; S.K. Lata vs R.C. Chhiba & Anr,, ; and J.R. Vohra vs India Export Hlouse (P) Ltd. & Anr.
, ; , referred to.
| The appellant plaintiff purchased a plot of land.
The respondent defendant accepted the plaintiff as owner on a rent of Rs. 1325 per annum for a period of five years, under a registered rent note.
It was further stipulated therein that the tenant was to pay the municipal tax in respect of the rented land to the plaintiff, that on the expiry of the period of five years the tenant shall remove the constructions thereon at his own expense, and hand over the premises in the condition it was let out and that the premises shall not be let out to anyone else.
The plaintiff called upon the defendant to remove the construction erected on the land, and the vacate the premises and hand over possession.
As the defendant failed, a suit for eviction was filed, on a number of grounds one of which was that the premises had not been used by the defendant for a period of more than six months prior to the date of the suit without reasonable caused and, therefore the defendant was liable to eviction under section 13(1) (k) of the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947.
The trial court dismissed the suit holding that the notice of termination was not valid and that the plaintiff had failed to prove bona fide requirement, and that as defendant No. 2 was admitted as a sub tenant many years before the execution of the rent note by the plaintiff, the plaintiff was not entitled to recover possession on the ground of illegal sub letting.
The plaintiff took up the matter in appeal and the Assistant Judge allowed the appeal partly, holding that the notice of termination was a valid one, that the plaintiff did not 718 require the suit premises reasonably and bona fide for occupation for himself and that the suit premises had not been w ed by the defendant continuously for a period of six months immediately preceding the date of suit without any reasonable cause.
The respondent tenant took up the matter in revision before the High Court, which reversed the finding of the Ist appellate court on the question of user by the defendant, holding that the construction of the super structure on the land itself was a user and, therefore, the courts below had committed a manifest error in holding that the land in question had not been w ed for more than six months prior to the institution of the suit.
In the appeal to this Court, it was contended on behalf of the appellant landlord that the tenant was liable to be evicted under s.13(1)(k) of the Act inasmuch as the premises have not been used for the purpose for which they were let out for a continuous period of six months immediately preceding the date of suit without reasonable cause, and that the tenant would be liable for eviction even if he did not use the premises and kept it locked.
On behalf of the respondent tenant it was contended, that the purpose of letting cannot be assumed, and that it has got to be alleged and proved.
The landlord plaintiff could seek eviction under 8. 13()(k) of the Act only when he proves the purpose for which the premises have been let out and that the same has not been w ed for the purpose for which it was let out.
It was further contended that if the landlord had specifically taken the plea of non user of the premises for the purpose for which it was let out, he would have been able to prove the reasonable caw e for not doing 80 but in the absence of such a plea the defendant tenant had been seriously prejudiced, and that sec.
12 and 13 of the Act are the only two sections which give protection to the tenant and unless the conditions in the two sections are satisfied the tenant cannot be evicted .
Allowing the Appeal, ^ HELD : 1.
The judgment of the High Court is set aside and the plaintiff 's suit stands decreed.
The High Court has gone wrong in holding that the construction of super structure on the land in dispute was itself a user.
The super structures had already been built before the defendant took the land from the plaintiff under rent note, exhibit 61.
As regards sub tenancy, it has 719 been found by the Courts below to have been created long before A the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947 came into force.
There was therefore no question of the eviction of the subtenant as the sub tenancy was not illegal.
[726 B; 725 G 726 A] 2.
The scheme of the Bombay Rents, Hotel and Lodging House Rates (Control) Act, 1947 as it appears from the preamble is to consolidate the law relating to the control of rents and repairs of certain premises, of rates of hotels and lodging houses and of evictions.
The control had to be brought in because of the scarcity of accommodation in the cities.
If this was the preamble of the Act it cannot be accepted that a tenant may take a premises on rent and keep it locked for years together without using it in the absence of a reasonable cause.
The intendment of the legislature could be carried out only when the premises is used and not kept vacant for years together.
[724 H 725 B] 3.
Neither the purpose of letting is indicated in the rent note (Ex.61) nor has it been proved by evidence.
A perusal of the rent note indicates that, there is no specific mention of the purpose for which the premises was rented out to the defendant.
The defendant had taken the premises from the predecessor in interest of the plaintiff and had made certain super structures on the land in question.
There is, however, material on the record to show that the premises had been let out to the defendant for the purpose of business.
Indeed, the premises had been taken in the name of a firm carrying on tobacco business.
The defendant admitted in his deposition that he had shifted his business to Baroda.
He had not used any portion of the land for any purpose for the last three or four years and the plaintiff has produced necessary registers from the Municipality and the Central Excise Department to show the same.
In the reply given by the counsel for the defendant to the notice, of termination given by the plaintiff, it is admitted that the property was taken on rent by the tenant in his capacity as a manager and owner of the registered firm Vora Manilal Chaganlal & Co., carrying in business in Nadiad.
In this situation it cannot be argued that the plaintiff has not been able to establish the purpose for which the premises had been let out to the defendant.
[723 E H] 4.
The stipulation in the rent deed to the effect that; 'even if we use or do not use or keep the said property closed we the tenants are bound to pay the rent as stated above ' only talks of the liability of the defendant to pay the rent even if he does not use the property and keeps it closed.
This, however, does not 720 mean that the defendant can keep the premises closed without using lt for years together before the suit.
This could never have been the intention of the law makers especially in these days of scarcity of accommodation in towns.
If the stipulation made in the rent note is construed to mean that the defendant tenant could keep the premises closed without incurring the liability of eviction, as it sought to be contended for the respondent, it would amount to allowing the parties contracting out of law.
[724 D E] In the instant case, on the own showing of the defendant respondent, the premises had been taken for the purpose of tobacco business and that business had been stopped for a period of 4 to 5 years before the institution of the suit as the business had expanded and the defendant had shifted to Baroda.
Therefore, it can be safely presumed that the land is not being used for the purpose for which it has been proved to have been let out.
[725 F]
| By the operation of section 32 of the Bombay Tenancy and Agricultural Lands Act 1948 the respondent who was recorded as a tenant on the tillers ' day i e. 1st April, 1957 was deemed to have purchased the land from the appellant landlord subject to other provisions of the Act.
The respondent having refused to accept notice u/s 32G for determining the price of the land and failing to appear, the Tribunal declared the sale ineffective.
Subsequently the respondent made an application under section 32 PP that afforded a fresh opportunity to a tenant who had failed to appear before the Tribunal as a result of which the sale was held ineffective, requesting the Tribunal to determine purchase price of the land.
The Tribunal held that the respondent was not a tenant of the land and was not entitled to be declared a deemed purchaser and accordingly it is not necessary to determine the price The Deputy Collector dismissed the appeal preferred by the respondent.
The Revenue Tribunal in a revision petition held that once the notice was issued to a person who is shown to have purchased the land u/s 32 and if the sale is held ineffective because of his absence in the proceeding under section 32G, in a subsequent proceeding u/s 32 PP it is not open to the landlord to challenge that such a person was not tenant.
A petition under Article 227 of the Constitution moved by the appellant landlord was dismissed in limine by the High Court, Dismissing the appeal, ^ HELD: The view of the Revenue Tribunal is not correct.
Section 32 PP confers a right upon a person claiming to be a tenant to make an application for determining the price and the pre condition is that he failed to appear before the Tribunal in a proceeding u/s 32G.
In such a situation, the landlord is a necessary party.
The landlord can and would be entitled to contend that the person claiming to be a tenant and making an application u/s 32 PP was not a tenant on April 1, 1957.
Undoubtedly only that person is entitled to make an application u/s 32 PP who having failed to appear before the Tribunal in a proceeding u/s 32G, the statutory sale was declared ineffective but on that account such person making an application under section 32 PP must be accepted as tenant without further enquiry and without permitting the landlord to challenge the status of the applicant is not warranted by the 993 language of section 32 PP.
The Revenue Tribunal 's view that unless the landlord challenged the order u/s 32G declaring the sale having become ineffective on the footing that a person to whom notice was sent was a tenant on April 1, 1957 and his failure to appear without anything more would clothe him with the status of a tenant overlooks the possibility of a person to whom notice is served not appearing because he had nothing to do with the land.
[996 H, 997 A H] The failure of the landlord to question the sale being declared ineffective on account of the absence of the person to whom notice was sent and who defaulted would not either on the general principle of res judicata or principle analogous to constructive res judicata preclude the landlord from challenging the status in the subsequent enquiry.
There is only one situation which may preclude the enquiry in that if on receipt of notice the tenant did not appear and the landlord appeared and unequivocally admitted that the defaulting person was a tenant on the relevant date and on his failure to appear the sale should be declared ineffective, the landlord in subsequent proceeding under section 32 PP would be estopped from challenging the status of the applicant tenant.
[998 A.C]
| The respondent obtained a lease of land to be allotted to its members for building purposes and advanced loans for construction.
The premium in respect of the land and the loan advanced, together with interest, were repayable in monthly installments.
Through the agency of the society, the appellant completed the construction and occupied the building.
An agreement between the appellant and the society was duly registered which provided that the loan advanced to the appellant should be paid in 366 or smaller monthly installments, and after the entire amount of the loan had been repaid, the society would execute a sub lease in respect of the plot in favour of the appellant.
In the event of default in the payment of an installment, fixed in the agreement, the society hand the right to determine the agreement, and thereupon any amount already paid would be forfeited to the society, and the member was to surrender the property and give vacant possession of the premises to the society.
In view of the default in payment and persistent refusal of the appellant to comply with the terms of the agreement the society referred the dispute to the Registrar, Co operative Societies, for decision by himself or his nominee.
The Committee of Arbitrators, appointed by the Registrar, gave an award in favour of the society asking the appellant to deliver vacant possession of the plot and the house to the society and to pay compensation for unauthorised use and occupation of the premises and to pay costs of the arbitration proceedings.
Against the aforesaid order, the appellant 's revisional application was also dismissed by the Tribunal.
The 965 award was certified and filed in the Bombay City Civil Court for execution.
The appellant, thereupon, took out chamber summons for stay of the execution proceedings on the ground that the Award made by the Arbitrators was without jurisdic tion for the reason that under the agreement between the society and the appellant a relationship of landlord and tenant was created and that under the Bombay Rent Control Act 57/47 the Court of Small Causes was vested with exclusive jurisdiction to decide claim for recovery of rent or possession.
The learned judge made the summons absolute.
On appeal by the society, the High Court set aside the order and directed the execution of the Award to proceed.
On appeal by certificate this Court.
Held, (i) on a proper construction of the agreement as a whole, it was an executory contract and on the appellant fulfilling his obligations to the society, including the payment of the entire dues, the society would execute the sub lease in his favour subject to the consent of the Government who held the first mortgage on the entire land.
Until the sub lease was executed no relationship of landlord and tenant subsisted between the parties.
As the appellant failed to fulfill his part of the agreement, the law laid down in the Act, in order to realise the dues of the society, had to be put into operation.
The Award was, therefore, a valid Award and there was absolutely no justification for the plea that the appellant was a tenant governed by the provisions of the Rent Control Act.
(ii) in order that the jurisdiction of an arbitrator, appointed under the Bombay Co operative Societies Act, be excluded, the proceedings before him must be between landlord and tenant, and relate to the recovery of rent or possession of any premises to which the provisions of Part II of the Act applied.
The exclusion of the jurisdiction of courts other than those named in section 28 of the Bombay Act 1947 arose only if the claim of the applicant or plaintiff was based on the allegation that between him and the respondent or the defendant there was a relationship of landlord and tenant and the relief sought was one that we s referred to in that section.
Babulal Bhuramal vs Nandram Shivram A.I.R. 1958 section C. 677, held inapplicable.
| The respondent, as plaintiff, filed a suit against the appellant, as defendant, in the Original side of the Bombay High Court for the enforcement of its claim for a large amount of over Rs. 40 lakhs.
The appellant not only contested the claim but also made a counter claim.
The appellant made a request that in the event of a decree being passed against them, they may be allowed to pay the decretal amount in instalments.
A single Judge dismissed the counter claim and passed a decree in favour of respondent and allowed the decretal amount to be paid in instalments.
Delivery of Judgment which commenced on 12th December 1980 was concluded on 16th December 1980, upon which the advocates for the appellant addressed a letter to the Prothonotary and Senior Master, High Court, requesting that the accompanying memorandum of appeal be taken on file.
This appeal which was numbered 36 of 1981 26 was filed on 20th January, 1981.
The appeal was directed against the order in respect of instalments.
On 21st January 1981, when the matter was called for admission before a Division Bench the appellant asked for leave to withdraw the appeal and the appeal was allowed to be withdrawn.
A week after the withdrawal of appeal No. 36 the appellant filed an appeal against the judgment taking grounds relating to the merits of the case and also the direction as to instalments.
This appeal was numbered 44 of 1981.
After this appeal was heard on merits for a few days, the respondent raised a preliminary objection that because the appellant had earlier filed appeal No. 36 against the provision regarding instalments and which had been withdrawn, the present appeal No. 44 was not maintainable.
The Division Bench upheld the preliminary objection and dismissed appeal No. 44 on the ground that the appellant had by filing appeal No. 36 against the provision relating to instalments abandoned its right to challenge the decree on merits.
The appellant contended in this Court that the filing of earlier appeal No. 36 or the withdrawal thereof does not affect the right of appellant to prefer appeal No. 44 against the decree on merits.
Appeal No. 36 was filed against the order of the High Court passed under Order 20, r. 11 of the Code of Civil Procedure in regard to instalments only and not against the decree.
Appeal No. 36 had been filed soon after the judgment had been pronounced and long before the decree incorporating the order regarding instalments had been drawn up.
Appeal No. 36 must be considered to be an appeal against the order and not against the decree.
The right to prefer an appeal is a creature of statute.
The order regarding instalments is not appealable under C.P.C. and such an order cannot also be considered to be a 'Judgment ' within the meaning of clause 15 of the Letters Patent.
Appeal No. 36 which was against the order regarding instalments was incompetent and was therefore no appeal in the eye of law and for all legal purposes was non est.
Even if appeal No. 36 has to be considered an appeal against the decree in view of amended provision of Order 20, r. 11 of C.P.C., the said appeal still must be held to be incompetent and no appeal in the eye of law as the appeal was filed without a certified copy of the decree and was even withdrawn before a certified copy of the decree could be filed.
Appeal No. 44 filed against the decree in terms of the provisions contained in the Original Side Rules of Bombay High Court becomes a proper and competent appeal as the earlier appeal No. 36 was not a valid appeal in the eye of law.
The provisions of Order 2, r. 2 and Order 23, r. 1 of C.P.C. do not in any way affect the maintainability and the merits of appeal No. 44 as the cause of action and the subject matter of appeal No. 44 are entirely different from the cause of action and the subject matter of appeal No. 36.
The appellant did not waive his statutory right to file the appeal.
The appellant by his conduct has also not disentitled himself to file Appeal No. 44.
Appeal No. 36 was filed on the advice of lawyer under mistaken belief; mistaken advice of a lawyer cannot be the foundation of a plea of estoppel.
No prejudice has been caused to the respondent by filing and withdrawal of appeal No. 36 by the appellant.
The respondent contended that in view of the amended provisions of Order 20, r. 11, the order regarding instalments which is required to be incorporated in the decree necessarily forms a part of the decree.
In view of the 27 provisions contained in Order 2, r. 2 and Order 23, r. 1 of C.P.C. it was open to the appellant to prefer an appeal against the decree or to appeal against any part thereof.
The appellant preferred to file appeal No. 36 only against the part of the decree relating to instalments and not against the decree as a whole.
The filing of appeal restricted to the directions as to the instalments bars a subsequent appeal against the decree on merits.
The appellant having obtained a benefit or advantage under the decree to the prejudice of respondent cannot now question the correctness of the decree passed.
Allowing the appeal, ^ HELD: The provisions of Order 20, r. 11, Order 41, r. 1 Order 5, r. 2 and Order 23, r. 1 of the Code of Civil Procedure do not deprive the appellant of his right to file appeal No. 44.
[54 D] The right to prefer an appeal is a right created by statute.
A right of appeal may be lost to a party in appropriate cases by the provisions of law and also by the conduct of the party.
The law of limitation may deprive the party of the right he may enjoy to prefer an appeal.
Also in appropriate cases a party may be held to have become disentitled from enforcing the right to appeal which he may otherwise have.
[46 A C] In the instant case the defendant appellant did have a right of appeal against the decree by virtue of the provisions of section 96 read with Order 41 of Civil Procedure.
The appeal has been filed within the period of limitation, The law of limitation, therefore, does not defeat the right of the appellant to file an appeal.
[46 C D] Order 20, r. 11 makes provisions for postponement of payment of money decree and of its payment in instalments and lays down the procedure for directing payment of a money decree in instalments.
The amendment introduced in 1976 to Order 20, r. 11 requires that any provision directing the payment of the amount decreed shall be postponed or shall be made by instalments may be incorporated in the decree.
The direction regarding payment of the decretal amount is an independent order which is required to be incorporated in the decree and it can only be incorporated in the decree when the decree is drawn up.
It retains the character of an order till it is so incorporated in the decree.
The rules of the Original Side of the Bombay High Court make necessary provisions as to the drawing up of a decree.
In view of procedure laid down in the rules for the drawing up of a decree, there is bound to be a time lag between the judgment and the drawing up of a decree, in which the order regarding instalment is to be incorporated.
Appeal against any provision granting instalments or refusing to grant instalments will not be competent if the direction granting or refusing to grant instalments is considered to be an order.
Such an order is not appealable under the Code.
Such an order will also not be a 'judgment ' within the meaning of clause 15 of the Letters Patent and will not be appealable as such if however, the direction with regard to instalments is considered to be a part of the decree, an appeal will undoubtedly lie as an appeal from a decree.
[47 D E, 41 G H, 41 C D, 47 F H] 28 The provisions of Order 20, r. 11 do not deprive the appellant in the instant case of his right to prefer an appeal against the decree.
The earlier appeal No. 36 of 1981 had been filed long before the decree in which the order regarding instalments under Order 20, r.11 of the Code was to be incorporated had been drawn up.
As at the time of filing the earlier appeal No. 36 the order regarding instalments had not been incorporated in the decree, the order retained its character of an order.
The earlier appeal No. 36 at the time when it was filed, should therefore be regarded as an appeal against an order.
The precipe filed for the drawing up of the order, the letter to the Prothonotary and Senior Master of the High Court by the Advocates for the appellant, the memorandum of appeal filed and the amount of stamp furnished on the memorandum are facts which go to indicate that the earlier appeal had been filed against the order regarding instalments treating the same to be an order.
The appeal No. 36 must therefore be held to be incompetent.
If the earlier appeal No. 36 were to be considered to be an appeal against the decree, the appeal would still be incompetent, because the appellant had furnished the amount of stamp necessary for preferring an appeal against the order and the requisite stamp in respect of an appeal against a decree had not been affixed.
[46 E, 48 D E, 48 H, 49 A B, 48 B, 43 D C] Under Order.
41, r.1, every appeal has to be preferred in the from of a memorandum signed by the appellant or his pleader and presented to the court or to such officer as it appoints in that behalf, and has to be accompanied by a copy of the decree appealed from, and of the judgment on which it is founded.
Rule 1 empowers the appellate court to dispense with the filing of the judgment but there is no jurisdiction in the appellate court to dispense with the filing of the decree.
The requirement that the decree should be filed alongwith the memorandum of appeal is mandatory and in the absence of the decree the filing of the appeal would be incomplete, defective and incompetent.
So long as the certified copy of the decree is not filed there is no valid appeal in the eye of law.
Though by virtue of the provisions of the Original Side Rules of the Bombay High Court the earlier appeal could be permitted to be filed without a certified copy of the decree or order, the appeal would not be valid and competent unless the further requirement of filing the certified copy had been complied with.
[49 G H, 50 A, 53 C, F] In the instant case, at the time when the earlier appeal No. 36 had been withdrawn, the certified copy of the decree had not been filed.
The said appeal without the certified copy of the decree remained an incompetent appeal.
The withdrawal of an incompetent appeal which would indeed be no appeal in the eye of law cannot in any way prejudice the right of any appellant to file a proper appeal, if the right of appeal is not otherwise lost by lapse of time or for any other valid reason.
[52 F G] Order 2, r.2, contemplates that at the time of the institution of the suit, the whole of the claim which the plaintiff is entitled to make in respect of the cause of action, has to be made and also deals with the consequences of non compliance with the requirements of the said rule.
It is doubtful whether the principles underlying this rule can be said to be applicable to an appeal.
This rule is applicable only to suits and cannot in terms apply to appeals.
Even if 29 an appeal be considered to be a continuation of a suit for certain purposes, the provision of this rule cannot in terms be made applicable to an appeal in view of the scheme of the said rule and the language used therein.
[53 F G, 53 E F] In the instant case the provisions of Order 2, r.2 of the Code do not stand in the way of the appellant in the matter of filing the subsequent appeal No. 44.
Even if the principles underlying Order 2, r.2 are considered as applicable to an appeal the maintainability of the appeal No. 44 cannot be held to be affected in any way as the cause of action in respect of the present appeal is entirely different from the cause of action on which the earlier appeal was filed.
[23 A B, G] Order 23, r.1 of the Code does not also stand in the way of the maintainability of the instant appeal No. 44.
Apart from the incompetency of the earlier appeal No. 36, the subject matter of the said appeal was entirely different from the subject matter of the present appeal.
[53 H, A B] The provisions of the Code of Civil Procedure contained in Order 20, r.11, Order 2.
r. 2 and Order 23,r.
1 do not in terms deal with any question in relation to the right of appeal or the extinguishment thereof.
These provisions do not by themselves confer any right of appeal on a party or deprive any party of the right of appeal which a party may enjoy.
These are not the statutory provisions which either confer a right of appeal on a party or deprive a party of any such right.
[54 B C] A mere prayer for postponement of payment of decretal amount or for payment thereof in instalments on the basis of the provisions contained in Order 20, r.11 (1) of the Code at a time when the decision in the suit is yet to be announced can never be considered to amount to such conduct of the party as to deprive him his right to prefer an appeal against any decree, if ultimately passed, and to disentitle him from filing an appeal against the decree.
[55 G H] In the matters of litigation the litigant who is not expected to be familiar with the formalities of law and rules of procedure is generally guided by the advice of his lawyers.
The statement of the lawyers recorded by the Division Bench in its judgment clearly goes to indicate that the lawyer had advised filing of the earlier appeal under mistaken belief.
The act done by the defendant appellant on the mistaken advice of a lawyer cannot furnish a proper ground for depriving the defendant appellant of his valuable statutory right of preferring an appeal against the decree.
The filing of an incompetent appeal on the mistaken advice of a lawyer cannot, in our opinion, reflect any such conduct on the part of the defendant appellant as to disentitle him to maintain the present appeal.
[56 C, D; F, G] The present appeal No. 44 had been filed long before the decree had been drawn up, and, there can be no question of execution of any decree at the time when that appeal was filed.
The question of the defendant appellant having obtained an advantage under the decree does not therefore really arise.
[59 A B] 30
| The appellant Corporation assessed the immovable properties of the respondents to property tax for the year 1964 65 and 1965 66 on the basis of the 'flat rate ' method under the Bombay Provincial Municipal Corporation Act, 1949.
The assessments were challenged in the High Court but the petitions were dismissed.
While appeals were pending in this Court, the appellant initiated proceedings for the recovery of the taxes and attached the properties of the respondents.
The respondents challenged the attachment proceedings but their petitions were again dismissed.
In appeals against those orders in this Court the respondents prayed for interim stay, but this Court did not grant stay because the appellant undertook to return the amounts if the respondents succeeded.
This Court thereafter allowed the appeals by the respondents.
Meanwhile an amending Act entitled the Bombay Provincial Municipal Corporation (Gujarat, Amendment) Act, 1968, was passed introducing section 152A into the 1949 Act, but that provision was not brought to the notice of this Court.
However, when.
the respondents demanded refund of the amounts illegally collected from them the appellant did not comply and hence the respondents moved the High Court again.
Those petitions were allowed and the appellant appealed to this Court.
While the appeals were pending, the Bombay Provincial Municipal Corporation (Gujarat Amendment and Validity Provisions) Ordinance, 1969, was passed and sub section
(3) was introduced in s 152A. HELD : Under section 152A before a Corporation can retain any amount collected as property tax, there must be an, assessment according to law.
But in the present case there Were no 'assessment orders in accordance with the provisions of the 1949 Act and the rules as amended by the, Amending Act, 1968.
Therefore, the appellant was not entitled to retain, the amounts collected as the section does not authorise the Corporation to retain amounts illegally collected.
[293 G; 294 D] (2) Sub Section (3) of section 152A, commands the Corporation to refuse to refund the amount illegally collected despite the orders of this Court and the High Court.
It markes a direct inroad into the judicial powers of the State.
The Legislatures under the Constitution have, within prescribed limits, powers to make laws prospectively as well as retrospectively.
By exercise of those powers the legislature can remove the basis of a decision rendered by a competent, court thereby rendering the decision ineffective.
But, no legislature in this Country has power to ask the instrumentalities of the State to disobey or disregard the decisions given by courts.
Therefore, section 152A(3), introduced by the Ordinance is repugnant to the Constitution.
1294 H; 295 A C; 297 F] Shri Prithvi Cotton Mills Ltd. vs Broach Borough Municipality [1970] 1 S.C.R. Mahal Chand Sethia vs State of West Bengal Cr.
No. 75/69 dt.
289 10 9 69 and Janpada Sabha, Chhindwara vs Central Provinces Syndicate Ltd. and State of Madhya Pradesh vs Amalgamated Coal Fields Ltd. ; , followed.
The apart it authorises the Corporation to retain the amounts illegally collected and ' treat them as loans, that is, authorises the collection of forced loans which is impermissible under the Constitution.
State of Madhya Pradesh vs Ranojirao Shinde, [1968] 3 S.C.R. 489, followed.
|
ION: Criminal Appeal No. 195 of 1960.
Appeal by special leave from the judgment and order dated March 11, 1960, of the Bombay High Court in Criminal Jury Reference No. 159 of 1959.
G. section Pathak, section G. Patwardhan, Rajini Patel, Porus A. Metha, J. B. Dadachaji, Ravinder Narain and O. C. Mathur, for the appellant.
M. C. Setalvad, Attorney General of India, C. M. Trivedi, V. H. Gumeshte, B. R. G. K. Achar and R. H. Dhebar, for the respondent.
November 24.
The Judgment of the Court was delivered by SUBBA RAO, J.
This appeal by special leave arises out of the judgment of the Bombay High Court sentencing Nanavati, the appellant, to life imprisonment for the murder of Prem Bhagwandas Ahuja, a businessman of Bombay.
573 This appeal presents the commonplace problem of an alleged murder by an enraged husband of a paramour of his wife: but it aroused considerable interest in the public mind by reason of the publicity it received and the important constitutional point it had given rise to at the time of its admission.
The appellant was charged under section 302 as well as under section 304, Part I, of the Indian Penal Code and was tried by the Sessions Judge, Greater Bombay, with the aid of special jury.
The jury brought in a verdict of "not guilty" by 8: 1 under both the sections; but the Sessions Judge did not agree with the verdict of the jury, as in his view the majority verdict of the jury was such that no reasonable body of men could, having regard to the evidence, bring in such a verdict.
The learned Sessions Judge submitted the case under section 307 of the Code of Criminal Procedure to the Bombay High Court after recording the grounds for his opinion.
The said reference was heard by a division bench of the said High Court consisting of Shelat and Naik, JJ.
The two learned Judges gave separate judgments, but agreed in holding that the accused was guilty of the offence of murder under section 302 of the Indian Penal Code and sentenced him to undergo rigorous imprisonment for life.
Shelat, J., having held that there were misdirections to the jury, reviewed the entire evidence and came to the conclusion that the accused was clearly guilty of the offence of murder, alternatively, he expressed the view that the verdict of the jury was perverse, unreasonable and, in any event, contrary to the weight of evidence.
Naik, J., preferred to base his conclusion on the alternative ground, namely, that no reasonable body of persons could have come to the conclusion arrived at by the jury.
Both the learned Judges agreed that no case had been made out to reduce the offence from murder to culpable 574 homicide not amounting to murder.
The present appeal has been preferred against the said conviction and sentence.
The case of the prosecution may be stated thus: This accused, at the time of the alleged murder, was second in command of the Indian Naval Ship "Mysore".
He married Sylvia in 1949 in the registry office at Portsmouth, England.
They have three children by the marriage, a boy aged 9 1/2 years a girl aged 5 1/2 years and another boy aged 3 years.
Since the time of marriage, the couple were living at different places having regard to the exigencies of service of Nanavati.
Finally, they shifted to Bombay.
In the same city the deceased Ahuja was doing business in automobiles and was residing, along with his sister, in a building called "Shreyas" till 1957 and thereafter in another building called "Jivan Jyot" in Setalvad Road.
In the year 1956, Agniks, who were common friends of Nanavatis and Ahujas, introduced Ahuja and his sister to Nanavatis.
Ahuja was unmarried and was about 34 years of age at the time of his death, Nanavati, as a Naval Officer, was frequently going away from Bombay in his ship, leaving his wife and children in Bombay.
Gradually, friendship developed between Ahuja and Sylvia, which culminated in illicit intimacy between them.
On April 27, 1959, Sylvia confessed to Nanavati of her illicit intimacy with Ahuja.
Enraged at the conduct of Ahuja, Nanavati went to his ship, took from the stores of the ship a semi automatic revolver and six cartridges on a false pretext, loaded the same, went to the flat of Ahuja entered his bed room and shot him dead.
Thereafter, the accused surrendered himself to the police.
He was put under arrest and in due course he was committed to the Sessions for facing a charge under section 302 of the Indian Penal Code.
The defence version, as disclosed in the Statement made by the accused before the Sessions Court under section 342 of the Code of Criminal Procedure and 575 his deposition in the said Court, may be briefly stated: The accused was away with his ship from April 6, 1959, to April 18, 1959.
Immediately after returning to Bombay, he and his wife went to Ahmednagar for about three days in the company of his younger brother and his wife.
Thereafter, they returned to Bombay and after a few days his brother and his wife left them.
After they had left, the accused noticed that his wife was behaving strangely and was not responsive or affectionate to him.
When questioned, she used to evade the issue.
At noon on April 27, 1959, when they were sitting in the sitting room for the lunch to be served, the accused put his arm round his wife affectionately, when she seemed to go tense and unresponsive.
After lunch, when he questioned her about her fidelity, she shook her head to indicate that she was unfaithful to him.
He guessed that her paramour was Ahuja.
As she did not even indicate clearly whether Ahuja would marry her and look after the children, he decided to settle the matter with him.
Sylvia pleaded with him not go to Ahuja 's house, as he might shoot him.
Thereafter, he drove his wife, two of his children and a neighbour 's child in his car to a cinema, dropped them there and promised to come and pick them up at 6 P.M. when the show ended.
He then drove his car to his ship, as he wanted to get medicine for his sick dog, he represented to the authorities in the ship, that he wanted to draw a revolver and six rounds from the stores of the ship as he was going to drive alone to Ahmednagar by night, though the real purpose was to shoot himself.
On receiving the revolver and six cartridges, and put it inside a brown envelope.
Then he drove his car to Ahuja 's office, and not finding him there, he drove to Ahuja 's flat, rang the door bell, and, when it was opened by a servant, walked to Ahuja 's bed room, went into the bed room and shut the door behind him.
He also carried with him the envelope containing 576 the revolver.
The accused saw the deceased inside the bed room, called him a filthy swine and asked him whether he would marry Sylvia and look after the children.
The deceased retorted, "Am I to marry every woman I sleep with ?" The accused became enraged, put the envelope containing the revolver on a cabnit nearby, and threatened to thrash the deceased.
The deceased made a sudden move to grasp at the envelope, when the accused whipped out his revolver and told him to get back.
A struggle ensued between the two and during that struggle two shots went off accidentally and hit Ahuja resulting in his death.
After the shooting the accused went back to his car and drove it to the police station where he surrendered himself.
This is broadly, omitting the details, the case of the defence.
It would be convenient to dispose of at the outset the questions of law raised in this case.
Mr. G. S Pathak, learned counsel for the accused, raised before us the following points: (1) Under section 307 of the Code of Criminal Procedure, the High Court should decide whether a reference made by a Sessions Judge was competent only on a perusal of the order of reference made to it and it had no jurisdiction to consider the evidence and come to a conclusion whether the reference was competent or not.
(2) Under section 307(3) of the said Code, the High Court had no power to set aside the verdict of a jury on the ground that there were misdirections in the charge made by the Sessions Judge.
(3) I here were no misdirections at all in the charge made by the Sessions Judge; and indeed his charge was fair to the prosecution as well to the accused.
(4) The verdict of the jury was not perverse and it was such that a reasonable body of persons could arrive at it on the evidence placed before them.
(5) In any view, the accused shot at the deceased under grave and sudden provocation, and therefore even if he had committed 577 an offence, it would not be murder but only culpable homicide not amounting to murder.
Mr. Pathak elaborates his point under the first heading thus: Under section 307 of the Code of Criminal Procedure, the High Court deals with the reference in two stages.
In the first stage, the High Court has to consider, on the basis of the referring order, whether a reasonable body of persons could not have reached the conclusion arrived at by the jury; and, if it is of the view that such a body could have come to that opinion the reference shall be rejected as incompetent.
At this stage, the High Court cannot travel beyond the order of reference, but shall confine itself only to the reasons given by the Sessions Judge.
If, on a consideration of the said reasons, it will of the view that no reasonable body of persons could have come to that conclusion, it will then have to consider the entire evidence to ascertain whether the verdict of the jury is unreasonable.
If the High Court holds that the verdict of the jury is not unreasonable, in the case of a verdict of "not guilty", the High Court acquits the accused, and in the case where the verdict is one of "guilty" it convicts the accused.
In case the High Court holds that the verdict of "not guilty", is unreasonable, it refers back the case to the Sessions Judge, who convicts the accused; thereafter the accused will have a right of appeal wherein he can attack the validity of his conviction on the ground that there were misdirections in the charge of the jury.
So too, in the case of a verdict of "guilty" by the jury, the High Court, if it holds that the verdict is unreasonable, remits the matter to the Sessions Judge, who acquits the accused, and the State, in an appeal against that acquittal, may question the correctness of the said acquittal on the ground that the charge to the jury was vitiated by misdirections.
In short, the argument may be put in three propositions, namely, (i) the High Court rejects the 578 reference as incompetent, if on the face of the reference the verdict of the jury does not appear to be unreasonable, (ii) if the reference is competent, the High Court can consider the evidence to come to a definite conclusion whether the verdict is unreasonable or not, and (iii) the High Court has no power under section 307 of the Code of Criminal Procedure to set aside the verdict of the jury on the ground that it is vitiated by misdirections in the charge to the jury.
The question raised turns upon the construction of the relevant provisions of the Code of Criminal Procedure.
The said Code contains two fascicule of sections dealing with two different situations.
Under section 268 of the Code, "All trials before a Court of Session shall be either by jury, or by the Judge himself." Under section 297 thereof: "In cases tried by jury, when the case for the defence and the prosecutor 's reply, if any, are concluded, the Court shall proceed to charge the jury, summing up the evidence for the prosecution and defence, and laying down the law by which the jury are to be guided . . . ".
Section 298 among other imposes a duty on a judge to decide all questions of law arising in the course of the trial, and especially all questions as to the relevancy of facts which it is proposed to be proved, and the admissibility of evidence or the propriety of questions asked by or on behalf of the parties, and to decide upon all matters of fact which it is necessary to prove in order to enable evidence of particular matter to be given.
It is the duty of the jury "to decide which view of the facts is true and then to return the verdict which under such view ought, according to the directions of the Jury, to be returned.
" After the charge to the jury, the jury retire to consider their verdict and, after due consideration, the foreman of the jury informs the Judge what is their verdict or what is the verdict of the majority of the jurors.
579 Where the Judge does not think it necessary to disagree with the verdict of the jurors or of the majority of them, he gives judgment accordingly.
If the accused is acquitted, the Judge shall record a verdict of acquittal; if the accused is convicted, the Judge shall pass sentence on him according to law.
In the case of conviction, there is a right of appeal under section 410 of the Code, and in a case of acquittal, under section 417 of the Code, to the High Court.
But section 418 of the Code provides: "(1) An appeal may lie on a matter of fact as well as a matter of law except where the trial was by jury, in which case the appeal shall lie on a matter of law only.
" Sub section (2) therefore provides for a case of a person sentenced to death, with which we are not now concerned.
Section 423 confers certain powers on an appellate Court in the matter of disposing of an appeal, such as calling for the record, hearing of the pleaders, and passing appropriate orders therein.
But sub section
(2) of section 423 says: "Nothing herein contained shall authorise the Court to alter or reverse the verdict of the jury, unless it is of opinion that such verdict is erroneous owning to a misdirection by the Judge, or to a misunderstanding on the part of the jury of the law as laid down by him.
" It may be noticed at this stage, as it will be relevant in considering one of the arguments raised in this case, that sub section
(2) does not confer any power on an appellate court, but only saves the limitation on the jurisdiction of an appellate court imposed under section 418 of the Code.
it is, therefore, clear that in an appeal against conviction or acquittal in a jury trial, the said appeal is confined only to a matter of law.
The Code of Criminal Procedure also provides for a different situation.
The Sessions Judge may 580 not agree with the verdict of the jurors or the majority of them; and in that event section 307 provides for a machinery to meet that situation.
As the argument mainly turns upon the interpretation of the provisions of this section, it will be convenient to read the relevant clauses thereof.
Section 307: (1) If in any such case the Judge disagrees with the verdict of the jurors, or of a majority of jurors, on all or any of the charges on which any accused person had been tried, and is clearly of 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 considers to have been committed, and in such case, if the accused is further charged under the provisions such charge as if such verdict had been one of conviction.
(3) 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 considering the entire evidence and after giving due weight to the opinions of the Sessions Judge and the jury, acquit or convict such accused of any offence of which the jury could have convicted him upon the charge framed and placed before it; and, if it convicts him, may pass such sentence as might have been passed by the Court of Session.
This section is a clear departure from the English law.
There are good reasons for its enactment.
Trial by jury outside the Presidency Towns was first introduced in the Code of Criminal Procedure of 1861, and the verdict of the jury was, 581 subject to re trial on certain events, final and conclusive.
This led to miscarriage of justice through jurors returning erroneous verdicts due to ignorance and inexperience.
The working of the system was reviewed in 1872, by a committee appointed for that purpose and on the basis of the report of the said Committee, section 262 was introduced in the Code of 1872.
Under that section, where there was difference of view between the jurors and the judge, the Judge was empowered to refer the case to the High Court in the ends of justice, and the High Court dealt with the matter as an appeal.
But in 1882 the section was amended and under the amended section the condition for reference was that the High Court should differ from the jury completely; but in the Code of 1893 the section was amended practically in terms as it now appears in the Code.
The history of the legislation shows that the section was intended as a safeguard against erroneous verdicts of inexperienced furors and also indicates the clear intention of the Legislature to confer on a High Court a separate jurisdiction, which for convenience may be described as "reference jurisdiction".
Section 307 of the Code of Criminal Procedure, while continuing the benefits of the jury system to persons tried by a Court of Session, also guards against any possible injustice, having regard to the conditions obtaining in India.
It is, therefore clear that there is an essential difference between the scope of the jurisdiction of the High Court in disposing of an appeal against a conviction or acquittal, as the case may be, in a jury trial, and that in a case submitted by the Sessions Judge when he differs from the verdict of the jury: in the former the acceptance of the verdict of the jury by the sessions Judge is considered to be sufficient guarantee against its perversity and therefore an appeal is provided only on questions of law, whereas in the latter the absence of such agreement necessitated the conferment of a larger power on 582 the High Court in the matter of interfering with the verdict of the jury.
Under section 307(1) of the Code, the obligation cast upon the Sessions Judge to submit the case to the High Court is made subject to two conditions, namely, (1) the Judge shall disagree with the verdict of the jurors, and (2) he is clearly of the opinion that it is necessary in the ends of justice to submit the case to the High Court.
If the two conditions are complied with, he shall submit the case, recording the grounds of his opinion.
The words "for the ends of justice" are comprehensive, and coupled with the words "is clearly of opinion", they give the Judge a discretion to enable him to exercise his power under different situations, the only criterion being his clear opinion that the reference is in the ends of justice.
But the Judicial Committee, in Ramanugrah Singh vs King Emperor(1), construed the words "necessary for the ends of justice" and laid down that the words mean that the Judge shall be of the opinion that the verdict of the jury is one which no reasonable body of men could have reached on the evidence.
Having regard to that interpretation, it may be held that the second condition for reference is that the Judge shall be clearly of the opinion that the verdict is one which no reasonable body of men could have reached on the evidence.
It follows that if a Judge differs from the jury and is clearly of such an opinion, he shall submit the case to the High Court recording the grounds of his opinion.
In that event, the said reference is clearly competent.
If on the other hand, the case submitted to the High Court does not ex facie show that the said two conditions have been complied with by the Judge, it is incompetent.
The question of competency of the reference does not depend upon the question whether the Judge 583 is justified in differing from the jury or forming such an opinion on the verdict of the jury.
The argument that though the Sessions Judge has complied with the conditions necessary for making a references, the High Court shall reject the reference as incompetent without going in to the evidence if the reasons given do not sustain the view expressed by the Sessions Judge, is not supported by the provisions of sub section
(1) of section 307 of the Code.
But it is said that it is borne out of the decision of the Judicial Committee in Ramanugrah Singh 's case(1).
In that case the Judicial Committee relied upon the words "ends of justice" end held that the verdict was one which no reasonable body of men could have, reached on the evidence and further laid down that the requirements of the ends of justice must be the determining factor both for the Sessions Judge in making the reference and for the High Court in disposing of it.
The Judicial Committee observed: "In general, if the evidence is such that it can properly support a verdict either of guilty or not guilty, according to the view taken of it by the trial court, and if the jury take one view of the evidence and the judge thinks that they should have taken the other, the view of the jury.
must prevail, since they are the judges of fact.
In such a case a reference is not justified, and it is only by accepting their view that the High Court can give due weight to the opinion of the jury.
If, however, the High Court considers that on the evidence no reasonable body of men could have reached the conclusion arrived at by the jury, then the reference was justified and the ends of justice require that the verdict be disregarded.
" The Judicial Committee proceeded to state: "In their Lordships ' opinion had the High Court approached the reference on the right 584 lines and given due weight to the opinion of the jury they would have been bound to hold that the reference was not justified and that the ends of justice did not require any interference with the verdict of the jury." Emphasis is laid on the word "justified", and it is argued that the High Court should reject the reference as incompetent if the reasons given by the Sessions Judge in the statement of case do not support his view that it is necessary in the ends of justice to refer the case to the High Court.
The Judicial Committee does not lay down any such proposition.
There, the jury brought in a verdict of not "guilty" under section 302, Indian Penal Code.
The Sessions Judge differed from the jury and made a reference to the High Court.
The High Court accepted the reference and convicted the accused and sentenced him to transportation for life.
The Judicial Committee held, on the facts of that case, that the High Court was not justified in the ends of justice to interfere with the verdict of the jury.
They were not dealing with the question of competency of a reference but only with that of the justification of the Sessions Judge in making the reference, and the High Court in accepting it.
It was also not considering a case of any disposal of the reference by the High Court on the basis of the reasons given in the reference, but were dealing with a case where the High Court on a consideration of the entire evidence accepted the reference and the Judicial Committee held on the evidence that there was no justification for the ends of justice to accept it.
This decision, therefore, has no bearing on the competency of a reference under section 307(1) of the Code of criminal Procedure.
Now, coming to sub section
(3) of section 307 of the Code, it is in two parts.
The first part says that the High Court may exercise any of the powers which it may exercise in an appeal.
Under the 585 second part, after considering the entire evidence and after giving due weight to the opinions of the Sessions Judge and the jury, the High Court shall acquit or convict the accused.
These parts are combined by the expression and subject thereto".
The words "subject thereto" were added to the section by an amendment in 1896.
This expression gave rise to conflict of opinion and it is conceded that it laces clarity.
That may be due to the fact that piecemeal amendments have been made to the section from time to time to meet certain difficulties.
But we cannot ignore the expression, but we must give it a reasonable construction consistent with the intention of the Legislature in enacting the said section.
Under the second part of the section, special jurisdiction to decide a case referred to it is conferred on the High Court.
It also defined the scope of its jurisdiction and its limitations The High Court can acquit or convict an accused of an offence of which the jury could have convicted him, and also pass such sentence as might have been passed by the Court of Session.
But before doing so, it shall consider the entire evidence and give due weight to the opinions of the Sessions Judge and the jury.
The second part does not confer on the High Court any incidental procedural powers necessary to exercise the said jurisdiction in a case submitted to it, for it is neither an appeal nor a revision.
The procedural powers are conferred on the High Court under the first part.
The first part enables the High Court to exercise any of the powers which it may exercise in appeal, for without such powers it cannot exercise its jurisdiction effectively.
But the expression "subject to" indicates that in exercise of its jurisdiction in the manner indicated by the second part, it can call in aid only any of the powers of an appellate court, but cannot invoke a power other than that conferred on an appellate court.
The limitation on the second part implied in the expression "subject", must 586 be confined to the area of the procedural powers conferred on a appellate court.
If that be the construction, the question arises, how to reconcile the provisions of section 423 (2) with those of section 307 of the Code ? Under sub section
(2) of section 423: "Nothing herein contained shall authorise the Court to alter or reverse the verdict of a jury, unless it is of opinion that such verdict is erroneous owing to a misdirection by the Judge, or to a misunderstanding on the part of the jury of the law as laid down by him.
" It may be argued that, as an appellate court cannot alter or reverse the verdict of a jury unless such a verdict is erroneous owing to a misdirection by the Judge, or to a misunderstanding on the part of the jury of the law as laid down by him, the High Court, in exercise of its jurisdiction under section 307 of the Code, likewise could not do so except for the said reasons.
Sub section (2) of section 423 of the Code does not confer any power of the High Court; it only restates the scope of the limited jurisdiction conferred on the could under section 418 of the Code, and that Could not have any application to the special jurisdiction conferred on the High Court under section 307.
That apart, a perusal of the provisions of section 423 (1) indicates that there are powers conferred on an appellate court which cannot possibly be exercised by courts disposing of reference under section 307 of the Code, namely, the power to order commitment etc.
Further section 423 (1) (a) and (b) speak of conviction, acquittal, finding and sentence, which are wholly inappropriate to verdict of a jury.
Therefore, a reasonable construction will be that the High Court can exercise any of the powers conferred on an appellate court under section 423 or under either sections of the Code which are appropriate to the disposal of a, reference under section 307.
The object is to prevent miscarriage of the justice by the jurors returning erroneous 587 or preverse verdict.
The opposite construction defeats this purpose, for it equates the jurisdiction conferred under section 307 with that of an appellate court in a jury trial.
That construction would enable the High Court to correct an erroneous verdict of a jury only in a case of misdirection by the Judge but not in a case affair and good charge.
This result effaces the distinction between the two types of jurisdiction.
Indeed, learned counsel for the appellant has taken a contrary position.
He would say that the High Court under section 307 (3) could not interfere with the verdict of the jury on the ground that there were misdirections in the charge to the jury.
This argument is built upon the hypothesis that under the Code of criminal Procedure there is a clear demarcation of the functions of the jury and the Judge, the jury dealing with facts and the Judge with the and therefore the High Court could set aside a verdict on the ground of misdirection only when an appeal comes to it under section 418 and could only interfere with the verdict of the jury for the ends of justice, as interpreted by the Privy Council, when the matter comes to it under 8. 307 (3).
If this interpretation be accepted, we would be attributing to the Legislature an intention to introduce a circuitous method and confusion in the disposal of criminal cases.
The following illustration will demonstrate the illogical result of the argument.
The jury brings in a verdict of "guilty" on the basis of a charge replete with misdirections; the Judge disagrees with that verdict and states the case to the High court; the High Court holds that the said verdict is not erroneous on the basis of the charge, but is of the opinion that the verdict is erroneous because of the misdirections in the charge; even so, it shall hold that the verdict of the jury is good and reject the reference thereafter, the Judge his to accept the verdict and acquit the accused; the prosecution then will have 588 to prefer an appeal under section 417 of the Code on the ground that the verdict was induced by the misdirections in the charge.
This could not have been the intention of the Legislature.
Take the converse case.
On similar facts, the jury brings in a verdict of guilty"; the Judge disagrees with the jury and makes a reference to the High Court; even though it finds misdirections in the charge to the jury, the High Court cannot set aside the conviction but must reject the reference; and after the conviction, the accused may prefer an appeal to the High Court.
This procedure will introduce confusion in jury trials, introduce multiplicity of proceedings, and attribute ineptitude to the Legislature.
What is more, this construction is not supported by the express provisions of section 307 (3) of the Code.
The said sub section enables the High Court to consider the entire evidence, to give due weight to the opinions of the Sessions Judge and the jury, and to acquit or convict the accused.
The key words in the sub section are "giving due weight to the opinions of the Sessions Judge and the jury".
The High Court shall give weight to the verdict of the jury; but the weight to be given to a verdict depends upon many circumstances it may be one that no reasonable body of persons could come to; it may be a perverse verdict; it may be a divided verdict and may not carry the same weight as the united one does; it may be vitiated by misdirections or non directions.
How can a Judge give any weight to a verdict if it is induced and vitiated by grave misdirections in the charge ? That apart, the High Court has to give due weight to the opinion of the Sessions Judge.
The reasons for the opinion of the Sessions Judge are disclosed in the case submitted by him to the High Court.
If the case stated by the sessions Judge disclosed that there must have been misdirections the charge, how.
can the High Court ignore them in giving due weight to his 589 opinion ? What is more, the jurisdiction of the High Court is couched in very wide terms in sub section
(3) of section 307 of the Code: it can acquit or convict an accused.
It shall take into consideration the entire evidence in the case; it shall give due weight to the opinions of the Judge and the jury; it combines in itself the functions of the Judge and jury; and it is entitled to come to its independent opinion.
The phraseology used does not admit of an expressed or implied limitation on the jurisdiction of the High Court.
It appears to us that the Legislature designedly conferred a larger power on the High Court under section 307(3) of the code than that conferred under section 418 thereof, as in the former case the Sessions Judge differs from the jury while in the latter he agrees with the jury.
The decisions cited at the Bar do not in any way sustain in narrow construction sought to be placed by learned counsel on section 307 of the code.
In Ramanugrah Singh 's case (1), which have been referred to earlier, the Judicial Committee described the wide amplitude of the power of the High Court in the following terms: "The Court must consider the whole case and give due weight to the opinions of the Sessions Judge and jury, and than acquit or convict the accused." The Judicial Committee took care to observe: ". the test of reasonableness on the part of the jury may not be conclusive in every case.
It is possible to suppose a case in which the verdict was justified on the evidence placed before the jury, but in the light of further evidence placed before the High Court the verdict is shown to be wrong.
In such case the ends of justice would 590 require the verdict to be set aside though the jury had not acted unreasonably." This passage indicates that the Judicial Committee did not purport to lay down exhaustively the circumstances under which the High Court could interfere under the said sub section with the verdict of the jury.
This Court in Akhlakali Hayatalli vs The State of Bombay accepted the view of the Judicial Committee on the construction of section 307 of the Code of Criminal Procedure, and applied it to the facts of that case.
But the following passage of this Court indicates that it also does not consider the test of reasonableness as the only guide in interfering with the verdict of the jury: "The charge was not attacked before the High court nor before us as containing any misdirections or non directions to the jury such as to vitiate the verdict.
" This passage recognizes the possibility of interference by the High Court with the verdict of the jury under the said sub section if the verdict is vitiated by misdirections or non directions.
So too the decision of this court in Ratan Rai vs State of Bihar assumes that such an interference is permissible if the verdict of the jury was vitiated by misdirections.
In that case, the appellants were charged under sections 435 and 436 of the Indian Penal Code and were tried by a jury, who returned a majority verdict of "guilty".
The Assistant Sessions Judge disagreed with the said verdict and made a reference to the High Court.
At the hearing of the reference to counsel for the appellants contended that the charge to the jury was defective, and did not place the entire evidence before the Judges.
The learned Judges of the High Court considered the objections as such and nothing more, and found the appellants guilty and convicted them.
This Court, observing that it was incumbent on the High 591 Court to consider the entire evidence and the charge as framed and placed before the jury and to come to its own conclusion whether the evidence was such that could properly support the verdict of guilty against the appellants, allowed the appeal and remanded the matter to the High Court for disposal in accordance with the provisions of section 307 of the Code of Criminal Procedure.
This decision also assumes that a High Court could under section 307 (3) of the Code of Criminal Procedure interfere with the verdict of the Jury, if there are misdirections in the charge and holds that in such a case it is incumbent on the court to consider the entire evidence and to come to its own conclusion, after giving due weight to the opinions of the Sessions Judge, and the verdict of the jury.
This Court again in Sashi Mohan Debnath vs The State of West Bengal, held that where the Sessions Judge disagreed with the verdict of the jury and was of the opinion that the case should be submitted to the High Court, he should submit the whole case and not a part of it.
There, the jury returned a verdict of "guilty" in respect of some charges and "not guilty" in respect of others.
But the Sessions Judge recorded his judgment of acquittal in respect of the latter charges in agreement with the jury and referred the case to the High Court only in respect of the former.
This Court held that the said procedure violated sub section
(2) of section 307 of the Code of Criminal Procedure and also had the effect of preventing the High Court from considering the entire evidence against the accused and exercising its jurisdiction under sub section
(3) of section 307 of the said Code.
Imam, J., observed that the reference in that case was incompetent and that the High Court could not proceed to exercise any of the powers conferred upon it under sub section
(3) of section 307 of the Code, because the very foundation of the exercise of that power was lacking, the reference being incompetent.
This 592 Court held that the reference was incompetent because the Sessions Judge contravened the express provisions of sub section
(2) of section 307 of the Code, for under that sub section whenever a Judge submits a case under that section, he shall not record judgment of acquittal or of conviction 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.
As in that case the reference was made in contravention of the express provisions of sub section
(2) of section 307 of the Code and therefore the use of the word 'incompetent ' may not be in appropriate.
The decision of a division bench of the Patna High Court in Emperor vs Ramadhar Kurmi may usefully be referred to as it throws some light on the question whether the High Court can interfere with the verdict of the jury when it is vitiated by serious misdirections and non directions.
Das, J., observed: "Where, however, there is misdirection, the principle embodied in section 537 would apply and if the verdict is erroneous owing to the misdirection, it can have no weight on a reference under section 307 as on an appeal.
It is not necessary to multiply decisions.
The foregoing discussion may be summarized in the form of the following propositions: (1) The competency of a reference made by a Sessions Judge depends upon the existence of two conditions, namely, (i) that he disagrees with the verdict of the jurors, and (ii) that he is clearly of the opinion that the verdict is one which no reasonable body of men could have reached on the evidence, after reaching that opinion, in the case submitted by him he shall record the grounds of his opinion.
(2) If the case submitted shows that the conditions have not been complied with or that the reasons for the opinion are not recorded, the High Court may reject the reference as incompetent : the 593 High Court can also reject it if the Sessions Judge has contravened sub section
(2) of section 307.
(3) If the case submitted shows that the Sessions Judge has disagreed with the verdict of the jury and that he is clearly of the opinion that no reasonable body of men could have reached the conclusion arrived at by the jury, and he discloses his reasons for the opinion, sub section
(3) of section 307 of the Code comes into play, and thereafter the High Court has an obligation to discharge its duty imposed thereunder.
(4) Under sub section
(3) of section 307 of the Code, the High Court has to consider the entire evidence and, after giving due weight to the opinions of the Sessions Judge and the jury, acquit or convict the accused.
(5) The High Court may deal with the reference in two ways, namely, (i) if there are misdirections vitiating the verdict, it may, after going into the entire evidence, disregard the verdict of the jury and come to its own conclusion, and (ii) even if there are no misdirections, the High court can interfere with the verdict of the jury if it finds the verdict "perverse in the sense of being unreasonable", "manifestly wrong", or "against the wight of evidence", or, in other words, if the verdict is such that no reasonable body of men could have reached on the evidence.
(6) In the disposal of the said reference, the High Court can exercise any of the procedural powers appropriate to the occasion, such as, issuing of notice, calling for records, remanding the case, ordering a retrial, etc.
We therefore, reject the first contention of learned counsel for the appellant.
The next question is whether the High Court was right in holding that there were misdirections in the charge to the jury.
Misdirections is something which a judge in his charge tells the jury and is wrong or in a wrong manner tending to mislead them.
Even an omission to mention matters which are essential to the prosecution or the defence case in order to help the jury to come to a correct 594 verdict may also in certain circumstances amount to a misdirection.
But, in either case, every misdirection or non direction is not in itself sufficient to set aside a verdict, but it must be such that it has occasioned a failure of justice.
In Mushtak Hussein vs The State of Bombay, this Court laid down: "Unless therefore it is established in a case that there has been a serious misdirection by the judge in charging the jury which has occasioned a failure of justice and has misled the jury in giving its verdict, the verdict of the jury cannot be set aside." This view has been restated by this Court in a recent decision, viz., Smt.
Nagindra Bala Mitra vs Sunil Chandra Roy.
The High Court in its judgment referred to as many as six misdirections in the charge to the jury which in its view vitiated the verdict, and it also stated that there were many others.
Learned counsel for the appellant had taken each of the said alleged misdirections and attempted to demonstrate that they were either no misdirections at all, or even if they were, they did not in any way affect the correctness of the verdict.
We shall now take the first and the third misdirections pointed out by Shelat, J., as they are intimately connected with each other.
They are really omissions.
The first omission is that throughout the entire charge there is no reference to section 105 of the Evidence Act or to the statutory presumption laid down in that section.
The second omission is that the Sessions Judge failed to explain to the jury the legal ingredients of section 80 of the Indian Penal Code, and also failed to direct them that in law the said section was not applicable to the facts of the case.
To appreciate the scope of the alleged 595 omissions, it is necessary to read the relevant provisions.
Section 80 of the Indian Penal Code.
"Nothing is an offence which is done by accident or misfortune, and without any criminal intention or knowledge in the doing of a lawful act in a lawful manner by lawful means and with proper care and caution.
" Evidence Act.
Section 103: "The burden of proof as to any particular fact lies on that person who wishes the Court to believe in its existence, unless it is provided by any law that the proof of that fact shall lie on any particular person.
" Section 105: "When a person is accused of any offence, the burden of proving the existence of circumstances bringing the case within any of the General Exceptions in the Indian Penal Code (XLV of 1860) or within any special exception or proviso contained in any other part of the same Code, or in any law defining the offence, is upon him, and the Court shall presume the absence of such circumstances.
" Section 3: "In this Act the following words and expressions are used in the following senses, unless a contrary intention appears from the context: A fact is said to be disproved when, after considering the matters before it, the Court either believes that it does not exist, or considers its non existence so probable that a prudent man ought, under the circumstances of the particular case, to act upon the supposition that it does not exist.
" 596 Section 4: . ."Whenever it is directed by this Act that the Court shall presume a fact, it shall regard such fact as proved unless and until it is disproved." The legal impact of the said provisions on the question of burden of proof may be stated thus: In India, as it is in England, there is a presumption of innocence in favour of the accused as a general rule, and it is the duty of the prosecution to prove the guilty of the accused; to put it in other words, the accused is presumed to be innocent until his guilt is established by the prosecution.
But when an accused relies upon the General Exceptions in the Indian Penal Code or on any special exception or proviso contained in any other part of the Penal Code, or in any law defining an offence, section 105 of the Evidence Act raises a presumption against the accused and also throws a burden on him to rebut the said presumption.
Under that section the Court shall presume the absence of circumstances bringing the case within any of the exceptions, that is, the Court shall regard the non existence of such circumstances as proved till they are disproved.
An illustration based on the facts of the present case may bring out the meaning of the said provision.
The prosecution alleges that the accused intentionally shot the deceased; but the accused pleads that, though the shots emanated from his revolver and hit the deceased, it was by accident, that is, the shots went off the revolver in the course of a struggle in the circumstances mentioned in section 80 of the Indian Penal Code and hit the deceased resulting in his death.
The Court then shall presume the absence of circumstances bringing the case within the provisions of section 80 of the Indian Penal Code, that is, it shall presume that the shooting was not by accident, and that the other circumstances bringing the case within the exception did not exist; but this presumption may be rebutted by the accused by adducing evidence to 597 support his plea of accident in the circumstances mentioned therein.
This presumption may also be rebutted by admissions made or circumstances elicited by the evidence led by the prosecution or by the combined effect of such circumstances and the evidence adduced by the accused.
But the section does not in any way affect the burden that lies on the prosecution to prove all the ingredients of the offence with which the accused is charged: that burden never shifts.
The alleged conflict between the general burden which lies on the prosecution and the special burden imposed on the accused under section 105 of the Evidence Act is more imaginary than real.
Indeed, there is no conflict at all.
There may arise three different situations: (1) A statute may throw the burden of proof of all or some of the ingredients of an offence on the accused: (see sections 4 and 5 of the Prevention of Corruption Act).
(2) The special burden may not touch the ingredients of the offence, but only the protection given on the assumption of the proof of the said ingredients: (see sections 77,78,79,81 and 88 of the Indian Penal Code).
(3) It may relate to an exception, some of the many circumstances required to attract the exception if proved affecting the proof of all or some of the ingredients of the offence: (see section 80 of the Indian Penal Code).
In the first case the burden of proving the ingredients or some of the ingredients of the offence, as the case may be, lies on the accused.
In the second case, the burden of bringing the case under the exception lies on the accused.
In the third case, though the burden lies on the accused to bring his case within the exception, the facts proved may not discharge the said burden, but may affect the proof of the ingredients of the offence.
An illustration may bring out the meaning.
The prosecution has to prove that the accused shot dead the deceased intentionally and thereby committed the offence of murder within the meaning of section 300 of the Indian 598 Penal Code; the prosecution has to prove the ingredients of murder, and one of the ingredients of that offence is that the accused intentionally shot the deceased; the accused pleads that he shot at the deceased by accident without any intention or knowledge in the doing of a lawful act in a lawful manner by lawful means with proper care and caution; the accused against whom a presumption is drawn under section 105 of the Evidence Act that the shooting was not by accident in the circumstances mentioned in section 80 of the Indian Penal Code, may adduce evidence to rebut that presumption.
That evidence may not be sufficient to prove all the ingredients of section 80 of the Indian Penal Code, but may prove that the shooting was by accident or inadvertence, i.e., it was done without any intention or requisite state of mind, which is the essence of the offence, within the meaning of section 300, Indian Penal Code, or at any rate may throw a reasonable doubt on the essential ingredients of the offence of murder.
In that event though the accused failed to bring his case within the terms of section 80 of the Indian Penal Code, the Court may hold that the ingredients of the offence have not been established or that the prosecution has not made out the case against the accused.
In this view it might be said that the general burden to prove the ingredients of the offence, unless there is a specific statute to the contrary, is always on the prosecution, but the burden to prove the circumstances coming under the exceptions lies upon the accused.
The failure on the part of the accused to establish all the circumstances bringing his case under the exception does not absolve the prosecution to prove the ingredients of the offence; indeed, the evidence, though insufficient to establish the exception, may be sufficient to negative one or more of the ingredients of the offence.
599 The English decisions relied upon by Mr. Pathak, learned counsel for the accused, may not be of much help in construing the provisions of section 105 of the Indian Evidence Act.
We would, therefore, prefer not to refer to them, except to one of the leading decisions on the subject, namely, Woolmington vs The Director of Public Prosecutions.
The headnote in that decision gives its gist, and it read: "In a trial for murder the Crown must prove death as the result of a voluntary act of the prisoner and malice of the prisoner.
When evidence of death and malice has been given, the prisoner is entitled to show by evidence or by examination of the circumstances adduced by the Crown that the act on his part which caused death was either unintentional or provoked.
If the jury are either satisfied with his explanation or, upon a review of all the evidence, are left in reasonable doubt whether, even if his explanation be not accepted, the act was unintentional or provoked, the prisoner is entitled to be acquitted.
" In the course of the judgment Viscount Sankey, L. C., speaking for the House, made the following observations: "But while the prosecution must prove the guilt of the prisoner, there is no such burden laid on the prisoner to prove his innocence and it is sufficient for him to raise a doubt as to his guilt; he is not bound to satisfy the jury of his innocence.
Throughout the web of the English Criminal Law one golden thread is always to be seen that it is the duty of the prosecution to prove the prisoner 's guilt subject to what I have already said as to the defence of insanity and subject also to any statutory exception.
If, 600 at the end of and on the whole of the case, there is a reasonable doubt, created by the evidence given by either the prosecution or the prisoner, as to whether the prisoner killed the deceased with a malicious intention, the prosecution has not made out the case and the prisoner is entitled to an acquittal.
" These passages are not in conflict with the opinion expressed by us earlier.
As in England so in India, the prosecution must prove the guilt of the accused, i.e., it must establish all the ingredients of the offence with which he is charged.
As in England so also in India, the general burden of proof is upon the prosecution; and if, on the basis of the evidence adduced by the prosecution or by the accused, there is a reasonable doubt whether the accused committed the offence, he is entitled to the benefit of doubt.
In India if an accused pleads an exemption within the meaning of section 80 of the Indian Penal Code, there is a presumption against him and the burden to rebut that presumption lies on him.
In England there is no provision similar to section 80 of the Indian Penal Code, but Viscount Sankey, L. C., makes it clear that such a burden lies upon the accused if his defence is one of insanity and in a case where there is a statutory exception to the general rule of burden of proof.
Such an exception we find in section 105 of the Indian Evidence Act.
Reliance is placed by learned counsel for the accused on the decision of the Privy Council in Attygalle vs Emperor in support of the contention that notwithstanding section 105 of the Evidence Act, the burden of establishing the absence of accident within the meaning of section 80 of the Indian Penal Code is on the prosecution.
In that case, two persons were prosecuted, one for performing an illegal operation and the other for abetting him in that crime.
Under section 106 of the Ordinance 14 of 601 1895 in the Ceylon Code, which corresponds to section 106 of the Indian Evidence Act, it was enacted that when any fact was especially within the knowledge of any person, the burden of proving that fact was upon him.
Relying upon that section, the Judge in his charge to the jury said: "Miss Maye that is the person upon whom the operation was alleged to have been performed was unconscious and what took place in that room that three quarters of an hour that she was under chloroform is a fact specially within the knowledge of these two accused who were there.
The burden of proving that fact, the law says, is upon him, namely that no criminal operation took place but what took place was this and this speculum examination.
" The Judicial Committee pointed out: "It is not the law of Ceylon that the burden is cast upon an accused person of proving that no crime has been committed.
The jury might well have thought from the passage just quoted that that was in fact a burden which the accused person had to discharge.
The summing up goes on to explain the presumption of innocence in favour of accused persons, but it again reiterates that the burden of proving that no criminal operation took place is on the two accused who were there." The said observations do not support the contention of learned counsel.
Section 106 of Ordinance 14 of 1895 of the Ceylon Code did not cast upon the accused a burden to prove that he had not committed any crime; nor did it deal with any exception similar to that provided under section 80 of the Indian Penal Code.
It has no hearing on the construction of s.105 of the Indian Evidence Act.
The 602 decisions of this Court in The State of Madras vs A. Vaidyanatha Iyer (1), which deals with section 4 of the Prevention of Corruption Act, 1947, and C.S.D. Swami vs The State(2), which considers the scope of section 5(3) of the said Act, are examples of a statute throwing the burden of proving and even of establishing the absence of some of the ingredients of the offence on the accused; and this Court held that notwithstanding the general burden on the prosecution to prove the offence, the burden of proving the absence of the ingredients of the offence under certain circumstances was on the accused.
Further citations are unnecessary as, in our view, the terms of s.105 of the Evidence Act are clear and unambiguous.
Mr. Pathak contends that the accused did not rely upon any exception within the meaning of s.80 of the Indian Penal Code and that his plea all through has been only that the prosecution has failed to establish intentional killing on his part.
Alternatively, he argues that as the entire evidence has been adduced both by the prosecution and by the accused, the burden of proof became only academic and the jury was in a position to come to one conclusion or other on the evidence irrespective of the burden of proof.
Before the Sessions Judge the accused certainly relied upon section 80 of the Indian Penal Code, and the Sessions Judge dealt with the defence case in the charge to the jury.
In paragraph 6 of the charge, the learned Sessions Judge stated: "Before I proceed further I have to point out another section which is section 80.
You know by now that the defence of the accused is that the firing of the revolver was a matter of accident during a struggle for possession of the revolver.
A struggle or a fight by itself does not exempt a person.
It is the accident which exempts a person from criminal liability 603 because there may be a fight, there may be a struggle and in the fight and in the struggle the assailant may over power the victim and kill the deceased so that a struggle or a fight by itself does not exempt an assailant.
It is only an accident, whether it is in struggle or a fight or otherwise which can exempt an assailant.
It is only an accident, whether it is in a struggle or a fight or otherwise which can exempt a prisoner from criminal liability.
I shall draw your attention to section 80 which says:. . (section 80 read).
You know that there are several provisions which are to be satisfied before the benefit of this exception can be claimed by an accused person and it should be that the act itself must be an accident or misfortune, there should be no criminal intention or knowledge in the doing of that act, that act itself must be done in a lawful manner and it must be done by lawful means and further in the doing of it, you must do it with proper care and caution.
In this connection, therefore, even while considering the case of accident, you will have to consider all the factors, which might emerge from the evident before you, whether it was proper care and caution to take a loaded revolver without a safety catch to the residence of the person with whom you were going to talk and it you do not get an honourable answer you was repaired to thrash him.
You have also to consider this further circumstance whether it is an act with proper care and caution to keep that loaded revolver in the hand and thereafter put it aside, whether that is taking proper care and caution.
This is again a question of fact and you have to determine as Judges of fact, whether the act of the accused in this case can be said to be an act which was lawfully 604 done in a lawful manner and with proper care and caution.
If it is so, then and only then can you call it accident or misfortune.
This is a section which you will bear in mind when you consider the evidence in this case.
" In this paragraph the learned Sessions Judge mixed up the ingredients of the offence with those of the exception.
He did not place before the jury the distinction in the matter of burden of proof between the ingredients of the offence and those of the exception.
He did not tell the jury that where the accused relied upon the exception embodied in section 80 of the Indian Penal Code, there was a statutory presumption against him and the burden of proof was on him to rebut that presumption.
What is more, he told the jury that it was for them to decide whether the act of the accused in the case could be said to be an act which was lawfully done in a lawful manner with proper care and caution.
This was in effect abdicating his funtions in favour of the jury.
He should have explained to them the implications of the terms "lawful act", "lawful manner", "lawful means" and "with proper care and caution" and pointed out to them the application of the said legal terminology to the facts of the case.
On such a charge as in the present case, it was not possible for the jury, who were laymen, to know the exact scope of the defence and also the circumstances under which the plea under section 80 of the Indian Penal Code was made out.
They would not have also known that if section 80 of the Indian Penal Code applied, there was a presumption against the accused and the burden of proof to rebut the presumption was on him.
In such circumstances, we cannot predicate that the jury understood the legal implications of section 80 of the Indian Penal Code and the scope of the burden of proof under section 105 of the Evidence Act, and gave their verdict correctly.
Nor can we say that the jury understood the distinction between the ingredients of the offence 605 and the circumstances that attract section 80 of the Indian Penal Code and the impact of the proof of some of the said circumstances on the proof of the ingredients of the offence.
The said omissions therefore are very grave omissions which certainly vitiated the verdict of the jury.
The next misdirection relates to the question of grave and sudden provocation.
On this question, Shelat, J., made the following remarks: "Thus the question whether a confession of adultery by the wife of accused to him amounts to grave and sudden provocation or not was a question of law.
In my view, the learned Session Judge was in error in telling the jury that the entire question was one of fact for them to decide.
It was for the learned Judge to decide as a question of law whether the sudden confession by the wife of the accused amounted to grave and sudden provocation as against the deceased Ahuja which on the authorities referred to hereinabove it was not.
He was therefore in error in placing this alternative case to the jury for their determination instead of deciding it himself.
" The misdirection according to the learned Judge was that the Sessions Judge in his charge did not tell the jury that the sudden confession of the wife to the accused did not in law amount to sudden and grave provocation by the deceased, and instead he left the entire question to be decided by the jury.
The learned judge relied upon certain English decisions and textbooks in support of his conclusion that the said question was one of law and that it was for the Judge to express his view thereon.
Mr. Pathak contends that there is an essential difference between the law of England and that of India in the matter of the charge to the jury in respect of grave and sudden provocation.
The House of Lords 606 in Holmes vs Director of Public Prosecution (1) laid down the law in England thus: "If there is no sufficient material, even on a view of the evidence most favourable to the accused, for a jury (which means a reasonable jury) to form the view that a reasonable person so provoked could be driven, through transport of passion and loss of self control, to the degree and method and continuance of violence which produces the death it is the duty of the judge as matter of law to direct the jury that the evidence does not support a verdict of manslaughter.
If, on the other hand, the case is one in which the view might fairly be taken (a) that a reasonable person, in consequence of the provocation received, might be so rendered subject to passion or loss of control as to be led to use the violence with fatal results, and (b) that the accused was in fact acting under the stress of such provocation, then it is for the jury to determine whether on its view of the facts manslaughter or murder is the appropriate verdict." Viscount Simon brought out the distinction between the respective duties of the judge and the jury succinctly by formulating the following questions: "The distinction, therefore, is between asking 'Could the evidence support the view that the provocation was sufficient to lead a reasonable person to do what the accused did ? ' (which is for the judge to rule), and, assuming that the judge 's ruling is in affirmative, asking the jury: 'Do you consider that, on the facts as you find them from the evidence, the provocation was in fact enough to lead a reasonable person to do what the 607 accused did ? ' and, if so, 'Did the accused act under the stress of such provocation ' ?" So far as England is concerned the judgment of the House of Lords is the last word on the subject till it is statutorily changed or modified by the House of Lords.
It is not, therefore, necessary to consider the opinions of learned authors on the subject cited before us to show that the said observations did not receive their approval.
But Mr. Pathak contends that whatever might be the law in England, in India we are governed by the statutory provisions, and that under the explanation to Exception I to section 300 of the Indian Penal Code, the question "whether the provocation was grave and sudden enough to prevent the offence from amounting to murder is one of fact", and therefore, unlike in England, in India both the aforesaid questions fall entirely within the scope of the jury and they are for them to decide.
To put it in other words, whether a reasonable person in the circumstances of a particular case committed the offence under provocation which was grave and sudden is a question of fact for the jury to decide.
There is force in this argument, but it is not necessary to express our final opinion thereon, as the learned Attorney General has conceded that there was no misdirection in regard to this matter.
The fourth misdirection found by the High Court is that the learned Sessions Judge told the jury that the prosecution relied on the circumstantial evidence and asked them to apply the stringent rule of burden of proof applicable to such cases, whereas in fact there was direct evidence of Puransingh in the shape of extra judicial confession.
In paragraph 8 of the charge the Sessions Judge said: "In this case the prosecution relies on what is called circumstantial evidence that is 608 to say there is no witness who can say that he saw the accused actually shooting and killing deceased.
There are no direct witnesses, direct witnesses as they are called, of the event in question.
Prosecution relies on certain circumstances from which they ask you to deduce an inference that it must be the accused and only the accused who must have committed this crime.
That is called circumstantial evidence.
It is not that prosecution cannot rely on circumstantial evidence because it is not always the case or generally the case that people who go out to commit crime will also take witnesses with them.
So that it may be that in some cases the prosecution may have to rely on circumstantial evidence.
Now when you are dealing with circumstantial evidence you will bear in mind certain principles, namely, that the facts on which the prosecution relies must be fully established.
They must be fully and firmly established.
These facts must lead to one conclusion and one only namely the guilt of the accused and lastly it must exclude all reasonable hypothesis consistent with the innocence of the accused, all reasonable hypothesis consistent with the innocence of the accused should be excluded.
In other words you must come to the conclusion by all the human probability, it must be the accused and the accused only who must have committed this crime.
That is the standard of proof in a case resting on circumstantial evidence.
" Again in paragraph 11 the learned Sessions Judge observed that the jury were dealing with circumstantial evidence and graphically stated: "It is like this, take a word, split it up into letters, the letters, may individually mean nothing but when they are combined 609 they will form a word pregnant with meaning.
That is the way how you have to consider the circumstantial evidence.
You have to take all the circumstances together and judge for yourself whether the prosecution have established their case," In paragraph 18 of the charge, the learned Sessions Judge dealt with the evidence of Puran singh separately and told the jury that if his evidence was believed, it was one of the best forms of evidence against the man who made the admission and that if they accepted that evidence, then the story of the defence that it was an accident would become untenable.
Finally he summarized all the circumstances on which the prosecution relied in paragraph 34 and one of the circumstances mentioned was the extra judicial confession made to Puransingh.
In that paragraph the learned Sessions Judge observed as follows: "I will now summarize the circumstances on which the prosecution relies in this case.
Consider whether the circumstances are established beyond all reasonable doubt.
In this case you are dealing with circumstantial evidence and therefore consider whether they are fully and firmly established and consider whether they lead to one conclusion and only one conclusion that it is the accused alone who must have shot the deceased and further consider that it leaves no room for any reasonable hypothesis consistent with the innocence of the accused regard being had to all the circumstances in the case and the conclusion that you have to come to should be of this nature and by all human probability it must be the accused and the accused alone who must have committed this crime".
610 Finally the learned Sessions Judge told them: "If on the other hand you think that the circumstances on which the prosecution relies are fully and firmly established, that they lead to one and the only conclusion and one only, of the guilt of the accused and that they exclude all reasonable hypothesis of the innocence of the accused then and in that case it will be your duty which you are bound by the oath to bring verdict accordingly without any fear or any favour and without regard being had to any consequence that this verdict might lead to." Mr. Pathak contends that the learned Sessions Judge dealt with the evidence in two parts, in one part he explained to the jury the well settled rule of approach to circumstantial evidence, whereas in another part he clearly and definitely pointed to the jury the great evidentially value of the extra judicial confession of guilt by the accused made to Puransingh, if that was believed by them.
He therefore, argues that there was no scope for any confusion in the minds of the jurors in regard to their approach to the evidence or in regard to the evidentially value of the extra judicial confession.
The argument proceeds that even if there was a misdirection, it was not such as to vitiate the verdict of the jury.
It is not possible to accept this argument.
We have got to look at the question from the standpoint of the possible effect of the said misdirection in the charge on the jury, who are laymen.
In more than one place the learned Sessions Judge pointed out that the case depended upon circumstantial evidence and that the jury should apply the rule of circumstantial evidence settled by decisions.
Though at one place he emphasized upon evidentiary value of a confession he later on included that confession also as one of the circumstances and again directed the jury to apply the rule of circumstantial evidence.
It is 611 not disputed that the extra judicial confession made to Puransingh is direct piece of evidence and that the stringent rule of approach to circumstantial evidence does not apply to it.
If that confession was true, it cannot be disputed that the approach of the jury to the evidence would be different from that if that was excluded.
It is not possible to predicate that the jury did not accept that confession and therefore applied the rule of circumstantial evidence.
It may well have been that the jury accepted it and still were guided by the rule of circumstantial evidence as pointed out by the learned Sessions Judge.
In these circumstances we must hold, agreeing with the High Court, that this is a grave misdirection affecting the correctness of the verdict.
The next misdirection relied upon by the High Court is the circumstance that the three letters written by Sylvia were not read to the jury by the learned Sessions Judge in his charge and that the jury were not told of their effect on the credibility of the evidence of Sylvia and Nanavati.
Shelat, J., observed in regard to this circumstance thus: "It cannot be gainsaid that these letters were important documents disclosing the state of mind of Mrs. Nanavati and the deceased to a certain extent.
If these letters had been read in juxtaposition of Mrs. Nanavati 's evidence they would have shown that her statement that she felt that Ahuja had asked her not to see him for a month for the purpose of backing out of the intended marriage was not correct and that they had agreed not to see each other for the purpose of giving her and also to him an opportunity to coolly think out the implications of such a marriage and then to make up her own mind on her own.
The letters would also show that when the accused asked her, as he said in his 612 evidence, whether Ahuja would marry her, it was not probable that she would fence that question.
On the other hand, she would, in all probability, have told him that they had already decided to marry.
In my view, the omission to refer even once to these letters in the charge especially in view of Mrs. nanavati 's evidence was a nondirection amounting to misdirection." Mr. Pathak contends that these letters were read to the jury by counsel on both sides and a reference was also made to hem in the evidence of Sylivia and, therefore the jury clearly knew the contents of the letters, and that in the circumstances the non mention of the contents of the letters by the Sessions Judge was not a misdirection and even if it was it did not affect the verdict of the jury.
In this context reliance is placed upon two English decisions, namely, R. vs Roberts (1) and R. vs Attfield (2).
In the former case the appellant was prosecuted for the murder of a girl by shooting her with a service rifle and he pleaded accident as his defence.
The Judge in his summing up, among other defects, omitted to refer to the evidence of certain witnesses; the jury returned a verdict of "guilty" on the charge of murder and it was accepted by the judge, it was contended that the omission to refer to the evidence of certain witnesses was a misdirection.
Rejecting that plea, Humphreys, J., observed: "The jury had the statements before them.
They had the whole of the evidence before them, and they had, just before the summing up, comments upon those matters from counsel for the defence, and from counsel for the prosecution.
It is incredible that they could have forgotten them or that they could have misunderstood the matter in any 613 way, or thought, by reason of the fact that the judge did not think it necessary to refer to them, that they were not to pay attention to them.
We do not think there is anything in that point at all.
A judge, in summing up, is not obliged to refer to every witness in the case, unless he thinks it necessary to do so.
In saying this, the court is by no means saying that it might not have been more satisfactory if the judge had referred to the evidence of the two witnesses, seeing that he did not think it necessary to refer to some of the statements made by the accused after the occurrence.
No doubt it would have been more satisfactory from the point of view of the accused.
All we are saying is that we are satisfied that there was no misdirection in law on the part of judge in omitting those statements, and it was within his discretion.
" This passage does snot lay down as a proposition of law that however important certain documents or pieces of evidence may be from the standpoint of the accused or the prosecution, the judge need not refer to or explain them in his summing up to the jury, and, if he did not, it would not amount to misdirection under any circumstances.
In that case some statements made by witnesses were not specifically brought to the notice of the jury and the Court held in the circumstances of that case that there was no misdirection.
In the latter case the facts were simple and the evidence was short; the judge summed up the case directing the jury as to the law but did not deal with evidence except in regard to the appellant 's character.
The jury convicted the appellant.
The court held that, "although in a complicated and lengthy case it was incumbent on the court to deal with the evidence in summing up, yet where, as in the present case, the issues could be simply and clearly stated, it was 614 not fatal defect for the evidence not to be reviewed in the summing up.
" This is also a decision on the facts of that case.
That apart, we are not concerned with a simple case here but with a complicated one.
This decision does not help us in deciding the point raised.
Whether a particular omission by a judge to place before the jury certain evidence amounts to a misdirection or not falls to be decided on the facts of cash case.
These letters show the exact position of Sylvia in the context of her intended marriage with Ahuja, and help to test the truthfulness or otherwise of some of the assertions made by her to Nanavati.
A perusal of these letters indicates that Sylvia and Ahuja were on intimate terms, that Ahuja was willing to marry her, that they had made up their minds to marry, but agreed to keep apart for a month to consider coolly whether they really wanted to marry in view of the serious consequences involved in taking such a step.
Both Nanavati and Sylvia gave evidence giving an impression that Ahuja was backing out of his promise to marry Sylvia and that was the main reason for Nanavati going to Ahuja 's flat for an explanation.
If the Judge had read these letters in his charge and explained the implication of the contents thereof in relation to the evidence given by Nanavati and Sylvia, it would not have been possible to predicate whether the jury would have believed the evidence of Nanavati and Sylvia.
If the marriage between them was a settled affair and if the only obstruction in the way was Nanavati, and if Nanavati had expressed his willingness to be out of the way and even to help them to marry, their evidence that Sylvia did not answer the direct question about the intentions of Ahuja to marry her, and the evidence of Nanavati that it became necessary for him to go to Ahuja 's flat to ascertain the latter 's intentions might not have been believed 615 by the jury.
It is no answer to say that the letters were read to the jury at different stages of the trial or that they might have read the letters themselves for in a jury trial, especially where innumerable documents are filed, it is difficult for a lay jury, unless properly directed, to realise the relative importance of specified documents in the context of different aspects of a case.
That is why the Code of Criminal Procedure, under section 297 thereof, imposes a duty on the Sessions Judge to charge the jury after the entire evidence is given, and after counsel appearing for the accused and counsel appearing for the prosecution have addressed them.
The object of the charge to the jury by the Judge is clearly to enable him to explain the law and also to place before them the facts and circumstances of the case both for and against the prosecution in order to help them in arriving at a right decision.
The fact that the letters were read to the jury by prosecution or by the counsel for the defence is not of much relevance, for they would place the evidence before the jury from different angles to induce them to accept their respective versions.
That fact in itself cannot absolve the Judge from his clear duty to put the contents of the letters before the jury from the correct perspective.
We are in agreement with the High Court that this was a clear misdirection which might have affected the verdict of the jury.
The next defect pointed out by the High Court is that the Sessions Judge allowed the counsel for the accused to elicit from the police officer, Phansalkar, what Puransingh is alleged to have stated to him orally, in order to contradict the evidence of Puransingh in the court, and the Judge also dealt with the evidence so elicited in paragraph 18 of his charge to the jury.
This contention cannot be fully appreciated unless some relevant facts are stated.
Puransingh was examined for the prosecution as P. W. 12.
he was a 616 watchman of 'Jivan Jyot." He deposed that when the accused was leaving the compound of the said building, he asked him why he had killed Ahuja, and the accused told him that he had a quarrel with Ahuja as the latter had "connections" with his wife and therefore he killed him.
At about 5 5 P. M. on April 27, 1959, this witness reported this incident to Gamdevi Police Station.
On that day Phansalkar (P. W. 13) was the Station House Duty Officer at that station from 2 to 8 P.M.
On the basis of the statement of Puransingh, Phansalkar went in a jeep with Puransingh to the place of the alleged offence.
Puransingh said in his evidence that he told Phansalkar in the jeep what the accused had told him when he was leaving the compound of "Jivan Jyot." After reaching the place of the alleged offence, Phansalkar learnt from a doctor that Ahuja was dead and he also made enquiries from Miss Mammie, the sister of the deceased.
He did not record the statement made by Puransingh.
But latter on between 10 and 10 30 P. M. on the same day, Phansalkar made a statement to Inspector Mokashi what Puransingh had told him and that statement was recorded by Mokashi.
In the statement taken by Mokashi it was not recorded that Puransingh told Phansalkar that the accused told him why he had killed Ahuja.
When Phansalkar was in the witness box to a question put to him in cross examination he answered that Puransingh did not tell him that he had asked Nanavati why he killed Ahuja and that the accused replied that he had a quarrel with the deceased as the latter had "connections" with his wife and that he had killed him.
The learned Sessions Judge not only allowed the evidence to go in but also, in paragraph 18 of his charge to the jury, referred to that statement.
After giving the summary of the evidence given by Puransingh, the learned Sessions Judge proceeded to state in his charge to the jury: 617 "Now the conversation between him and Phansalkar (Sub Inspector) was brought on record in which what the chowkidar told Sub Inspector Phansalkar was, the servants of the flat of Miss Ahuja had informed him that a Naval Officer was going away in the car.
He and the servants had tried to stop him but the said officer drove away in the car saying that he was going to the Police Station and to Sub Inspector Phansalkar he did not state about the admission made by Mr. Nanavati to him that he killed the deceased as the deceased had connections with his wife.
The chowkidar said that he had told this also to sub Inspector Phansalkar.
Sub Inspector Phansalkar said that Puransingh had not made this statement to him.
You will remember that this chowkidar went to the police station at Gamdevi to give information about this crime and while coming back he was with Sub Inspector Phansalkar and Sub Inspector Phansalkar in his own statement to Mr. Mokashi has referred to the conversation which he had between him and this witness Puransingh and that had been brought on record as a contradiction." The learned Sessions Judge then proceeded to state other circumstances and observed, "Consider whether you will accept the evidence of Puransingh or not.
" It is manifest from the summing up that the learned Sessions Judge not only read to the jury the evidence of Phansalkar wherein he stated that Puransingh did not tell him that the accused told him why he killed Ahuja but also did not tell the jury that the evidence of Phansalkar was not admissible to contradict the evidence of Puransingh.
It is not possible to predicate what was the effect of the alleged contradiction on the mind of the jury and whether they had not rejected the evidence of Puransingh 618 because of that contradiction.
If the said evidence was not admissible, the placing of that evidence before the jury was certainly a grave misdirection which must have affected their verdict.
The question is whether such evidence is legally admissible.
The alleged omission was brought on record in the cross examination of Phansalkar, and, after having brought it in, it was sought to be used to contradict the evidence of Puransingh.
Learned Attorney General contends that the statement made by Phansalkar to Inspector Mokashi could be used only to contradict the evidence of Phansalkar and not that of Puransingh under section 162 of the Code of Criminal Procedure; and the statement made by Puransingh to Phansalkar, it not having been recorded, could not be used at all to contradict the evidence of Puransingh under the said section.
He further argues that the alleged omission not being a contradiction, it could in no event be used to contradict Puransingh.
Learned counsel for the accused, on the other hand, contends that the alleged statement was made to a police officer before the investigation commenced and, therefore, it was not hit by section 162 of the Code of Criminal Procedure, and it could be used to contradict the evidence of Puransingh.
Section 162 of the Code of Criminal Procedure reads: "(1) No statement made by any person to a Police officer in the course of an investigation under this Chapter shall, if reduced into writing be signed by the person making it; nor shall any such statement or any record thereof, whether in a police diary or otherwise, or any part of such statement or record, be used for any purpose, save as hereinafter provided, at any inquiry or trial in respect of any offence under investigation at the time when such statement was made: 619 "Provided that when any witness is called for the prosecution in such inquiry or trial whose statement has been reduced into writing as aforesaid, any part of his statement, if duly proved, may be used by the accused, and with the permission of the Court, by the prosecution, to contradict such witness in the manner provided by section 145 of the (1 of 1872), and when any part of such statement is so used, any part thereof may also be used in the re examination of such witness, but for the purpose only of explaining any matter referred to in his cross examination." The preliminary condition for the application of section 162 of the Code is that the statement should have been made to a police officer in the course of an investigation under Chapter XIV of the Code.
If it was not made in the course of such investigation, the admissibility of such statement would not be governed by section 162 of the Code.
The question, therefore, is whether Puransingh made the statement to Phansalkar in the course of investigation.
Section 154 of the Code says that every information relating to the commission of cognizable offence if given orally to an officer in charge of a police station shall be reduced to writing by him or under his direction; and section 156(1) is to the effect that any officer in charge of a police station may, without the order of a Magistrate, investigate any cognizable case which a court having jurisdiction over the local area within the limits of such station would have power to inquire into or try under the provisions of Chapter XIV relating to the place of inquiry or trial.
The evidence in the case clearly establishes that Phansalkar, being the Station House Duty officer at Gamdevi Police station on April 27, 1959, from 2 to 8 P. M. was an officer in charge of the 620 Police station within the meaning of the said sections.
Puransingh in his evidence says that he went to Gamdevi Police station and gave the information of the shooting incident to the Gamdevi Police.
Phansalkar in his evidence says that on the basis of the information he went along with Puransingh to the place of the alleged offence.
His evidence also discloses that he had questioned Puransingh, the doctor and also Miss Mammie in regard to the said incident.
On this uncontradicted evidence there cannot be any doubt that the investigation of the offence had commenced and Puransingh made the statement to the police officer in the course of the said investigation.
But it is said that, as the information given by Puransingh was not recorded by Police Officer Phansalkar as he should do under section 154 of the Code of Criminal Procedure, no investigation in law could have commenced with the meaning of section 156 of the Code.
The question whether investigation had commenced or not is a question of fact and it does not depend upon any irregularity committed in the matter of recording the first information report by the concerned police officer.
If so, section 162 of the Code is immediately attracted.
Under section 162(1) of the Code, no statement made by any person to Police officer in the course of an investigation can be used for any purpose at any inquiry or trial in respect of any offence under investigation at the time when such statement made.
But the proviso lifts the ban and says that when any witness is called for the prosecution in such inquiry or trial whose statement has been reduced into writing, any part of his statement, if duly proved, may be used by the accused to contradict such witness.
The proviso cannot be invoked to bring in the statement made by Phansalkar to Inspector Mokashi in the cross examination of Phansalkar, for the statement made by him was not used to contradict the evidence of Phansalkar.
The proviso cannot obviously apply to the oral 621 statement made by Puransingh to Phansalkar, for the said statement of Puransingh has not been reduced into writing.
The faint argument of learned counsel for the accused that the statement of Phansalkar recorded by Inspector Mokashi can be treated as a recorded statement of Puransingh himself is to be stated only to be rejected, for it is impossible to treat the recorded statement of Phansalkar as the recorded statement of Puransingh by a police officer.
If so, the question whether the alleged omission of what the accused told Puransingh in Puransingh 's oral statement to Phansalkar could be used to contradict Puransingh, in view of the decision of this Court in Tahsildar Singh 's case(1), does not arise for consideration.
We are, therefore, clearly of the opinion that not only the learned Sessions Judge acted illegally in admitting the alleged omission in evidence to contradict the evidence of Puransingh, but also clearly misdirected himself in placing the said evidence before the jury for their consideration.
In addition to the misdirections pointed out by the High Court, the learned Attorney General relied upon another alleged misdirection by the learned Sessions Judge in his charge.
In paragraph 28 of the charge, the learned Sessions Judge stated thus: "No one challenges the marksmanship of the accused but Commodore Nanda had come to tell you that he is a good shot and Mr. Kandalawala said that here was a man and good marksman, would have shot him, riddled him with bullets perpendicularly and not that way and he further said that as it is not done in this case it shows that the accused is a good marksman and a good shot and he would not have done this thing, this is the argument." The learned Attorney General points out that the learned Sessions Judge was wrong in saying that 622 no one challenged the marksmanship of the accused, for Commodore Nanda was examined at length on the competency of the accused as a marksman.
Though this is a misdirection, we do not think that the said passage, having regard to the other circumstances of the case, could have in any way affected the verdict of the jury.
It is, therefore, clear that there were grave misdirections in this case, affecting the verdict of the jury, and the High Court was certainly within its rights to consider the evidence and come to its own conclusion thereon.
The learned Attorney General contends that if he was right in his contention that the High Court could consider the evidence afresh and come to its own conclusion, in view of the said misdirection, this Court should not, in exercise of its discretionary jurisdiction under article 136 of the Constitutions interfere with the findings of the High Court.
There is force in this argument.
But, as we have heard counsel at great length, we propose to discuss the evidence.
We shall now proceed to consider the evidence in the case.
The evidence can be divided into three parts, namely, (i) evidence relating to the conduct of the accused before the shooting incident, (ii) evidence in regard to the conduct of the accused after the incident, and (iii) evidence in regard to the actual shooting in the bed room of Ahuja.
We may start with the evidence of the accused wherein he gives the circumstances under which he came to know of the illicit intimacy of his wife Sylvia with the deceased Ahuja, and the reasons for which he went to the flat of Ahuja in the evening of April 27, 1959.
After his brother and his brother 's wife, who stayed with him for a few days, had left, he found his wife behaving strangely and without affection towards him.
Though on that ground he was unhappy and worried, he did not 623 suspect of her unfaithfulness to him.
On the morning of April 27, 1959, he and his wife took out their sick dog to the Parel Animal Hospital.
On their way back, they stopped at the Metro Cinema and his wife bought some tickets for the 3 30 show.
After coming home, they were sitting in the room for the lunch to be served when he put his arm around his wife affectionately and she seemed to go tense and was very unresponsive.
After lunch, when his wife was reading in the sitting room, he told her "Look, we must get these things straight" or something like that, and "Do you still love me?" As she did not answer, he asked her "Are you in love with some one else?", but she gave no answer.
At that time he remembered that she had not been to a party given by his brother when he was away on the sea and when asked why she did not go, she told him that she had a previous dinner engagement with Miss Ahuja.
On the basis of this incident, he asked her "Is it Ahuja ?" and she said "Yes" When he asked her "Have you been faithful to me ?", she shook her head to indicate "No." Sylvi in her evidence, as D. W. 10, broadly supported this version.
It appears to us that this is clearly a made up conversation and an unnatural one too.
Is it likely that Nanavati, who says in his evidence that prior to April 27, 1959, he did not think that his wife was unfaithful to him, would have suddenly thought that she had a lover on the basis of a trivial circumstance of her being unresponsive when he put his arm around her affectionately ? Her coldness towards him might have been due to many reasons.
Unless he had a suspicion earlier or was informed by somebody that she was unfaithful to him, this conduct of Nanavati in suspecting his wife on the basis of the said circumstance does not appear to be the natural reaction of a husband.
The recollection of her preference to attend the dinner given by Miss Mammie to that of his brother, in the absence 624 of an earlier suspicion or information, could not have flashed on his mind the image of Ahuja as a possible lover of his wife.
There was nothing extraordinary in his wife keeping a previous engagement with Miss Mammie and particularly when she could rely upon her close relations not to misunderstand her.
The circumstances under which the confession of unfaithfulness is alleged to have been made do not appear to be natural.
This inference is also reinforced by the fact that soon after the confession, which is alleged to have upset him so much, he is said to have driven his wife and children to the cinema.
If the confession of illicit intimacy between Sylvia and Ahuja was made so suddenly at lunch time, even if she had purchased the tickets, it is not likely that he would have taken her and the children to the cinema.
Nanavati then proceeds to say in his evidence : on his wife admitting her illicit intimacy with Ahuja, he was absolutely stunned; he then got up and said that he must go and settle the matter with the swine; he asked her what were the intentions of Ahuja and whether Ahuja was prepared to marry her and look after the children; he wanted an explanation from Ahuja for his caddish conduct.
In the cross examination he further elaborated on his intentions thus : He thought of having the matters settled with Ahuja; he would find out from him whether he would take an honourable way out of the situation; and he would thrash him if he refused to do so.
The honourable course which he expected of the deceased was to marry his wife and look after the children.
He made it clear further that when he went to see Ahuja the main thing in his mind was to find out what Ahuja 's intentions were towards his wife and children and to find out the explanation for his conduct.
Sylvia in her evidence says that when she confessed her unfaithfulness to Nanavati the latter suddenly got up rather excitedly and said that he wanted to go 625 to Ahuja 's flat and square up the things.
Briefly stated, Nanavati, according to him, went to Ahuja 's flat to ask for an explanation for seducing his wife and to find out whether he would marry Sylvia and take care of the children.
Is it likely that a person, situated as anavati was, would have reacted in the manner stated by him? It is true that different persons react, under similar circumstance, differently.
A husband to whom his wife confessed of infidelity may kill his wife, another may kill his wife as well as her paramour, the third, who is more sentimental.
may commit suicide, and the more sophisticated one may give divorce to her and marry another.
But it is most improbable, even impossible, that a husband who has been deceived by his wife would voluntarily go to the house of his wife 's paramour to ascertain his intentions, and, what is more, to ask him to take charge of his children.
What was the explanation Nanavati wanted to get from Ahuja ? His wife confessed that she had illicit intimacy with Ahuja.
She is not a young girl, but a woman with three children.
There was no question of Ahuja seducing an innocent girl, but both Ahuja and Sylvia must have been willing parties to the illicit intimacy between them.
That apart, it is clear from the evidence that Ahuja and Sylvia had decided to marry and, therefore, no further elucidation of the intention of Ahuja by Nanavati was necessary at all.
It is true that Nanavati says in his evidence that when he asked her whether Ahuja was prepared to marry her and look after the children, she did not give any proper reply; and Sylvia also in her evidence says that when her husband asked her whether Ahuja was willing to marry her and look after the children she avoided answering that question as she was too ashamed to admit that Ahuja was trying to back out from the promise to marry her.
That this version is not true is amply borne out by the letters written by Sylvia to 626 Ahuja.
The first letter written by Sylvia is dated May 24, 1958, but that was sent to him only on March 19, 1959, along with another letter.
In that letter dated May 24, 1958, she stated: "Last night when you spoke about your need to marry and about the various girls you may marry, something inside me snapped and I know that I could not bear the thought of your loving or being close to someone else." Reliance is placed upon these words by learned counsel for the accused in support of his contention that Ahuja intended to marry another girl.
But this letter is of May 1958 and by that time it does not appear that there was any arrangement between Sylvia and Ahuja to marry.
It may well have been that Ahuja was telling Sylvia about his intentions to marry another girl to make her jealous and to fall in for him.
But as days passed by, the relationship between them had become very intimate and they began to love each other.
In the letter dated March 19, 1959, she said : "Take a chance on our happiness, my love.
I will do my best to make you happy; I love you, I want you so much that everything is bound to work out well.
" The last sentence indicates that they had planned to marry.
Whatever ambiguity there may be in these words, the letter dated April 17, 1959, written ten days prior to the shooting incident, dispels it; therein she writes "In any case nothing is going to stop my coming to you.
My decision is made and I do not change my mind.
I am taking this month so that we may afterwards say we gave ourselves every chance and we know what we are doing.
I am torturing myself in every possible way as you asked, so that, there will be no surprise afterwards".
627 This letter clearly demonstrates that she agreed not to see Ahuja for a month, not because that Ahuja refused to marry her, but because it was settled that they should marry, and that in view of the far reaching effects of the separation from her husband on her future life and that of her children, the lovers wanted to live separately to judge for themselves whether they really loved each other so much as to marry.
In the cross examination she tried to wriggle out of these letters and sought to explain them away; but the clear phraseology of the last letter speaks for itself, and her oral evidence, contrary to the contents of the letters, must be rejected.
We have no doubt that her evidence, not only in regard to the question of marriage but also in regard to other matters, indicates that having lost her lover, out of necessity or out of deep penitence for her past misbehavior, she is out to help he husband in his defence.
This correspondence belies the entire story that Sylvia did not reply to Nanavati when the latter asked her whether Ahuja was willing to marry her and that was the reason why Nanavati wanted to visit Ahuja to ask him about him intentions.
We cannot visualize Nanavati as a romantic lover determined to immolate himself to give opportunity to his unfaithful wife to start a new life of happiness and love with her paramour after convincing him that the only honourable course open to him was to marry her and take over his children.
Nanavati was not ignorant of the ways of life or so gullible as to expect any chivalry or honour in a man like Ahuja.
He is an experienced Naval Officer and not a sentimental hero of a novel.
The reason therefore for Nanavati going to Ahuja 's flat must be something other than asking him for an explanation and to ascertain his intention about marrying his wife and looking after the children.
628 Then, according to Nanavati, he drove his wife and children to cinema, and promising them to come and pick them up at the end of the show at about 6 p. m., he drove straight to his ship.
He would say that he went to his ship to get medicine for his seek dog.
Though ordinarily this statement would be insignificant, in the context of the conduct of Nanavati, it acquires significance.
In the beginning of his evidence, he says that on the morning of the day of the incident he and his wife took out their sick dog to the Parel Animal Hospital.
It is not his evidence that after going to the hospital he want to his ship before returning home.
It is not even suggested that in the ship there was a dispensary catering medicine for animals.
This statement, therefore, is not true and he did not go to the ship for getting medicine for his dog but for some other purpose, and that purpose is clear from his subsequent evidence.
He met Captain Kolhi and asked for his permission to draw a revolver and six rounds because he was going to drive to Ahmednagar by night.
Captain Kolhi gave him the revolver and six rounds, he immediately loaded the revolver with all the six rounds and put the revolver inside an envelope which was lying in his cabin.
It is not the case of the accused that he really wanted to go to Ahmednagar and he wanted the revolver for his safety.
Then why did he take the revolver? According to him he wanted to shoot himself after driving far away from his children.
But he did not shoot himself either before or after Ahuja was shot dead.
The taking of the revolver on false pretext and loading it with six cartridges indicate the intention on his part to shoot somebody with it.
Then the accused proceeded to state that he put the envelope containing the revolver in his car and found himself driving to Ahuja 's office.
At Ahuja 's office he went in keeping the revolver in the car, and asked Talaja, the Sales Manager of 629 Universal Motors of which Ahuja was the proprietor whether Ahuja was inside.
He was told that Ahuja was not there.
Before leaving Ahuja 's office, the accused looked for Ahuja in the Show Room, but Ahuja was not there.
In the cross examination no question was put to Nanavati in regard to his statement that he kept the revolver in the car when he entered Ahuja 's office.
On the basis of this statement, it is contended that if Nanavati had intended to shoot Ahuja he would have taken the revolver inside Ahuja 's office.
From this circumstance it is not possible to say that Nanavati 's intention was not to shoot Ahuja.
Even if his statement were true, it might well have been that he would have gone to Ahuja 's office not to shoot him there but to ascertain whether he had left the office for his flat.
Whatever it may be, from Ahuja 's office he straightway drove to the flat of Ahuja.
His conduct at the flat is particularly significant.
His version is that he parked his car in the house compound near the steps, went up the steps, but remembered that his wife had told him that Ahuja might shoot him and so he went back to his car, took the envelope containing the revolver, and went up to the flat.
He rang the doorbell; when a servant opened the door, he asked him whether Ahuja was in.
Having ascertained that Ahuja was in the house, he walked to his bedroom, opened the door and went in shutting the door behind him.
This conduct is only consistent with his intention to shoot Ahuja.
A person, who wants to seek an interview with another in order to get an explanation for his conduct or to ascertain his intentions in regard to his wife and children, would go and sit in the drawing room and ask the servant to inform his master that he had come to see him.
He would not have gone straight into the bed room of another with a loaded revolver in hand and closed the door behind.
This was the conduct of an enraged man who had gone to wreak vengeance on a person who did him a 630 grievous wrong.
But it is said that he had taken the loaded revolver with him as his wife had told him that Ahuja might shoot him.
Earlier in his cross examination he said that when he told her that he must go and settle the matter with the "swine" she put her hand upon his arm and said, No, No, you must not go there, don 't go there, he may shoot you.
" Sylvia in her evidence corroborates his evidence in this respect: But Sylvia has been cross examined and she said that she knew that Ahuja had a gun and she had seen it in Ashoka Hotel in New Delhi and that she had not seen any revolver at the residence of Ahuja at any time.
It is also in evidence that Ahuja had no licence for revolver and no revolver of his was found in his bed room.
In the circumstances, we must say that Sylvia was only attempting to help Nanavati in his defence.
We think that the evidence of Nanavati supported by that of Sylvia was a collusive attempt on their part to explain away the otherwise serious implication of Nanavati carrying the loaded revolver into the bed room of Ahuja.
That part of the version of the accused in regard to the manner of his entry into the bed room of Ahuja, was also supported by the evidence of Anjani (P.W. 8), the bearer, and Deepak, the Cook.
Anjani opened the door of the flat to Nanavati at about 4 20 p. m.
He served tea to his master at about 4 15 P. M. Ahuja then telephoned to ascertain the correct time and then went to his bed room.
About five minutes thereafter this witness went to the bed room of his master to bring back the tea tray from there, and at that time his master went into the bath room for his bath.
Thereafter, Anjani went to the kitchen and was preparing tea when he heard the door bell.
He then opened the door to Nanavati.
This evidence shows that at about 4 20 P.M. Ahuja was taking his bath in the bath room and immediately thereafter Nanavati entered the bed room.
Deepak, the cook of Ahuja, also heard the ringing of the 631 door bell.
He saw the accused opening the door of the bed room with a brown envelope in his hand and calling the accused by his name "Prem"; he also saw his matter having a towel wrapped around his waist and combing his hair standing before the dressing table, when the accused entered the room and closed the door behind him.
These two witnesses are natural witnesses and they have been examined by the police on the same day and nothing has been elicited against them to discredit their evidence.
The small discrepancies in their evidence do not in any way affect their credibility.
A few seconds thereafter, Mammie, the sister of the deceased, heard the crack of the window pane.
The time that elapsed between Nanavati entering the bed room of Ahuja and her hearing the noise was about 15 to 20 seconds.
She describes the time that elapsed between the two events as the time taken by her to take up her saree from the door of her dressing room and her coming to the bed room door.
Nanavati in his evidence says that he was in the bed room of Ahuja for about 30 to 60 seconds.
Whether it was 20 seconds, as Miss Mammie says, or 30 to 60 seconds, as Nanavati deposes, the entire incident of shooting took place in a few seconds.
Immediately after the sounds were heard, Anjani and Miss Mammie entered the bed room and saw the accused.
The evidence discussed so far discloses clearly that Sylvia confessed to Nanavati of her illicit intimacy with Ahuja; that Nanavati went to his ship at about 3.30 P.M. and took a revolver and six rounds on a false pretext and loaded the revolver with six rounds; that thereafter he went to the office of Ahuja to ascertain his whereabouts, but was told that Ahuja had left for his house; that the accused then went to the flat of the deceased at about 4 20 P.M.; that he entered the flat and then the bed room unceremoniously with the loaded revolver, closed the door behind him and a few 632 seconds thereafter sounds were heard by Miss Mammie, the sister of the deceased, and Anjani, servant; that when Miss Mammie and Anjani entered the bed room, they saw the accused with the revolver in his hand and found Ahuja lying on the floor of the bath room.
This conduct of the accused to say the least, is very damaging for the defence and indeed in itself ordinarily sufficient to implicate him in the murder of Ahuja.
Now we shall scrutinize the evidence to ascertain the conduct of the accused from the time he was found in the bed room of Ahuja till he surrendered himself to the police.
Immediately after the shooting, Anjani and Miss Mammie went into the bed room of the deceased.
Anjani says in his evidence that he saw the accused facing the direction of his master who was lying in the bath room; that at that time the accused was having "pistol" in his hand; that when he opened the door, the accused turned his face towards this witness and saying that nobody should come in his way or else he would shoot at them, he brought his "pistol" near the chest of the witness; and that in the meantime Miss Mammie came there, and said that the accused had killed her brother.
Miss Mammie in her evidence says that on hearing the sounds, she went into the bed room of her brother, and there she saw the accused nearer to the radiogram than to the door with a gun in his hand; that she asked the accused "what is this?" but she did not hear the accused saying anything.
It is pointed out that there are material contradictions between what was stated by Miss Mammie and what was stated by Anjani.
We do not see any material contradictions.
Miss Mammie might not have heard what the accused said either because she came there after the aforesaid words were uttered or because in her anxiety and worry she did not hear the words.
The different versions 633 given by the two witness in regard to what Miss Mammie said to the accused is not of any importance as the import of what both of them said is practically the same.
Anjani opened he door to admit Nanavati into the flat and when he heard the noise he must have entered the room.
Nanavati himself admitted that he saw a servant in the room, though he did not know him by name; he also saw Miss Mammie in the room.
These small discrepancies, therefore, do not really affect their credibility.
In effect any substance both saw Nanavati with a fire arm in his hand though one said pistol and the other gun going away from the room without explaining to Miss Mammie his conduct and even threatening Anjani.
This could only be the conduct of a person who had committed a deliberate murder and not of one who had shot the deceased by accident.
If the accused had shot the diseased by accident, he would have been in a depressed and apologetic mood and would have tried to explain his conduct to Miss Mammie or would have phoned for a doctor or asked her to send for one or at any rate he would not have been in a belligerent mood and threatened Anjani with his revolver.
Learned counsel for the accused argues that in the circumstances in which the accused was placed soon after the accidental shooting he could not have convinced Miss Mammie with any amount of explanation and therefore there was no point in seeking to explain his conduct to her.
But whether Miss Mammie would have been convinced by his explanation or not, if Nanavati had shot the deceased by accident, he would certainly have told her particularly when he knew her before and when she happened to be the sister of the man shot at.
Assuming that the suddenness of the accidental shooting had so benumbed his senses that he failed to explain the circumstances of the shooting to her, the same cannot be said when he met others at the gate.
After the accused had come out of the flat of Ahuja, 634 he got into his car and took a turn in the compound.
He was stopped near the gate by Puransingh, P.W. 12, the watchman of the building.
As Anjani had told him that the accused had killed Ahuja the watchman asked him why he had killed his master.
The accused told him that he had a quarrel with Ahuja as the latter had "connections" with his wife and therefore he killed him.
The watchman told the accused that he should not go away from the place before the police arrived, but the accused told him that he was going to the police and that if he wanted he could also come with him in the car.
At that time Anjani was standing in front of the car and Deepak was a few feet away.
Nanavati says in his evidence that it was not true that he told Puransingh that he had killed the deceased as the latter had "connection" with his wife and that the whole idea was quite absurd.
Puransingh is not shaken in his cross examination.
He is an independent witness; though he is a watchman of Jivan Jyot, he was not an employee of the deceased.
After the accused left the place, this witness, at the instance of Miss Mammie, went to Gamdevi Police Station and reported the incident to the police officer Phansalkar, who was in charge of the police station at that time, at about 5 5 P.M. and came along with the said police officer in the jeep to Jivan Jyot at about 7 P.M. he went along with the police officer to the police station where his statement was recorded by Inspector Mokashi late in the night.
It is suggested that this witness had conspired with Deepak and Anjani and that he was giving false evidence.
We do not see any force in this contention.
His statement was regarded on the night of the incident itself.
It is impossible to conceive that Miss Mammie, who must have had a shock, would have been in a position to coach him up to give a false statement.
Indeed, her evidence discloses that she was drugged to sleep that night.
Can it be said that these two illiterate 635 witnesses, Anjani and Deepak, would have persuaded him to make a false statement that night.
Though both of them were present when Puransingh questioned the accused, they deposed that they were at a distance and therefore they did not hear what the accused told Puransingh.
If they had all colluded together and were prepared to speak to a false case, they could have easily supported Puransingh by stating that they also heard what the accused told Puransingh.
We also do not think that the two witnesses are so intelligent as to visualize the possible defence and before hand coached Puransingh to make a false statement on the very night of the incident.
Nor do we find any inherent improbability in his evidence if really Nanavati had committed the murder.
Having shot Ahuja he was going to surrender himself to the police; he knew that he had committed a crime; he was not a hardened criminal and must have had a moral conviction that he was justified in doing what he did.
It was quite natural, therefore, for him to confess his guilt and justify his act to the watchman who stopped him and asked him to wait there till the police came.
In the mood in which Nanavati was soon after the shooting, artificial standards of status or position would not have weighed in his mind if he was going to confess and surrender to the police.
We have gone through the evidence of Puransingh and we do not see any justification to reject his evidence.
Leaving Jivan Jyot the accused drove his car and came to Raj Bhavan Gate.
There he met a police constable and asked him for the location of the nearest police station.
The direction given by the police constable were not clear and, therefore, the accused requested him to go along with him to the police station, but the constable told him that as he was on duty, he could not follow him.
This 636 is a small incident in itself, but it only shows that the accused was anxious to surrender himself to the police.
This would not have been the conduct of the accused, if he had shot another by accident, for in that event he would have approached a lawyer or a friend for advice before reporting the incident to the police.
As the police constable was not able to give him clear directions in regard to the location of the nearest police station, the accused went to the house of Commander Samuel, the Naval Provost Marshal.
What happened between the accused the Samuel is stated by Samuel in his evidence as P.W. 10.
According to his evidence, on April 27, 1959, at about 4.45 P.M., he was standing at the window of his study in his flat on the ground floor at New Queen 's Road.
His window opens out on the road near the band stand.
The accused came up to the window and he was in a dazed condition.
The witness asked him what had happened, and the accused told him "I do not quite know what happened, but I think I have shot a man.
" The witness asked him how it happened, and the accused told him that the man had seduced his wife and he would not stand it.
When the witness asked him to come inside and explain everything calmly, the accused said "No, thank you, I must go", "please tell me where I should go and report".
Though he asked him again to come in, the accused did not go inside and, therefore, this witness instructed him to go to the C.I.D. Office and report to the Deputy Commissioner Lobo.
The accused asked him to phone to Lobo and he telephoned to Lobo and told him that an officer by name Commander Nanavati was involved in an affair and that he was on the way to report to him.
Nanavati in his evidence practically corroborates the evidence of Samuel.
Nanavati 's version in regard to this incident is as follows: "I told him that something terrible had happened, that I did not know quite what 637 had happened but I thought I had shot a man.
He asked me where this had happened.
I told him at Nepean Sea Road.
He asked me Why I had been there.
I told him I went there because a fellow there had seduced my wife and I would not stand for it.
He asked me many times to go inside his room.
But I was not willing to do so, I was anxious to go to the police station.
I told Commander Samuel that there had been a fight over a revolver.
Commander Samuel asked to report to Deputy Commissioner Lobo.
" The difference between the two versions lies in the fact that while Nanavati said that he told Samuel that something terrible had happened, Samuel did not say that; while Nanavati said that he told Samuel that there had been a fight over a revolver, Samuel did not say that.
But substantially both of them say that though Samuel asked Nanavati more than once to get inside the house and explain to him everything calmly, Nanavati did not do so; both of them also deposed that the accused told Samuel, "I do not quite know what happened but I think I have shot a man.
" It may be mentioned that Samuel is a Provost Marshal of the Indian navy, and he and the accused are of the same rank though the accused is senior to Samuel as Commander.
As Provost Marshal, Samuel discharges police duties in the navy.
Is it probable that if the deceased was shot by accident, the accused would not have stated that fact to this witness? Is it likely that he would not have stepped into his house, particularly when he requested him more than once to come in and explain to him how the accident had taken place ? Would he not have taken his advice as a colleague before he proceeded to the police station to surrender himself ? The only explanation for this unusual conduct on the part of the accused is that, having committed the murder, he wanted to surrender himself to 638 the police and to make a clean breast of everything.
What is more, when he was asked directly that had happened he told him "I do not quite know what happened but I think I have shot a man".
When he was further asked how it happened, that is, how he shot the man he said that the man had seduced his wife and that he would not stand for it.
In the context, two answers read along with the questions put to him by Samuel only mean that, as the deceased had seduced his wife, the accused shot him as he would not stand for it.
If really the accused shot the deceased by accident, why did he not say that fact to his colleague, particularly when it would not only be his defence, if prosecuted, but it would put a different complexion to his act in the eyes of his colleague.
But strong reliance is Placed on what this Witness stated in the cross examination viz., "I heard the word fight from the accused", "I heard some other words from the accused but I could not make out a sense out of these words".
Learned counsel for the accused contends that this statement shows that the accused mentioned to Samuel that the shooting of tho deceased was in a fight.
It is not possible to build upon such slender foundation that the accused explained to Samuel that he shot the deceased by accident in a struggle.
The statement in the cross examination appears to us to be an attempt on the part of this witness to help his colleague by saying something which may fit in the scheme of his defence, though at the same time he is not willing to lie deliberately in the witness box, for he clearly says that he could not make out the sense of the words spoken along with the word "fight".
This vague statement of this witness, without particulars, cannot detract from the clear evidence given by him in the examination in chief.
What Nanavati said to the question put by the Sessions Judge under section 342 of the Code of Criminal Procedure supports Samuel 's version.
The 639 following question was put to him by the learned Sessions Judge : Q.
It is alleged against you that thereafter as aforesaid you went to Commander Samuel at about 4 45 P.M. and told him that, something terrible had happened and that you did not quite know but you thought that you shot a man as he had seduced your wife which you could not stand and that on the advice of Commander Samuel you then went to Deputy Commissioner Lobo at the Head Crime Investigation Department office.
Do you wish to say anything about this? A.
This is correct.
Here Nanavati admits that he told Commander Samuel that he shot the man as he had seduced his wife.
Learned counsel for the accused contends that the question framed was rather involved and, therefore, Nanavati might not have understood its implication.
But it appears from the statement that, after the question were answered, Nanavati read his answers and admitted that they were correctly recorded.
The answer is also consistent with what Samuel said in his evidence as to what Nanavati told him.
This corroborates the evidence of Samuel that Nanavati told him that, as the man had seduced his wife, he thought that he had shot him.
Anyhow, the accused did not tell the Court that he told Samuel that he shot the deceased in a fight.
Then the accused, leaving Samuel, went to the office of the Deputy Commissioner Lobo.
There, he made a statement to Lobo.
At that time, Superintendent Korde and Inspector Mokashi were also present.
On the information given by him, Lobo directed Inspector Mokashi to take the accused into custody and to take charges of the articles and to investigate the case.
640 Lobo says in his evidence that he received a telephone call from Commander Samuel to the effect that he had directed Commander Nanavati to surrender himself to him as he had stated that J he had shot a, man.
This evidence obviously cannot be used to corroborate what Nanavati told Samuel, but it would only be a corroboration of the evidence of Samuel that he telephoned to Lobo to that effect.
It is not denied that the accused set up the defence of accident for the first time in the Sessions Court.
This conduct of the accused from the time of the shooting of Ahuja to the moment he surrendered himself to the police is inconsistent with the defence that the deceased was shot by accident.
Though tho accused had many opportunities to explain himself, he did not do so; and he exhibited the attitude of a man who wreaked out his vengeance in the manner planned by him and was only anxious to make a clean breast of everything to the police.
Now we will consider what had happened in the bed room and bath room of the deceased.
But before considering the evidence on this question, we shall try to describe the scene of the incident and other relevant particulars regarding the things found therein.
The building "Jivan Jyot" is situate in Setalvad Road, Bombay.
Ahuja was staying on the first floor of that building.
As one goes up the stairs, there is a door leading into the hall; as one enters the hall and walks a few feet towards the north he reaches a door leading into bed room of Ahuja.
In the bed room, abutting the southern wall there is a radiogram; just after the radiogram there is a door on the southern wall leading to the bath room, on the eastern side of the door abutting the wall there is a cupboard with a mirror thereon; in the bath room, which is of the dimensions 9 feet x 6 feet, there is a commode in the front along the 641 wall, above the commode there is a window with glass panes overlooking the chowk, on the east of the commode there is a bath tub, on the western side of the bathroom there is a door leading into the hall; on the southern side of the said door there is a wash basin adjacent to the wall.
After the incident the corpse of Ahuja was found in the bath room; the head of the deceased was towards the bed room and his legs were towards the commode.
He was lying with his head on his right hand.
This is the evidence of Miss Mammie, and she has not been cross examined on it.
It is also not contradicted by any witness.
The top glass pane of the window in the bath room was broken.
Pieces of glass were found on the floor of the bath room between the commode and the wash basin.
Between the bath tub and the commode a pair of spectacles was lying on the floor and there were also two spent bullets.
One chappal was found between the commode and the wash basin, and the other was found in the bedroom.
A towel was found wrapped around the waist of the deceased.
The floor of the bath room was blood stained.
There was white handkerchief and bath towel, which was blood stained lying on the floor.
The western wall was found to be blood stained and drops of blood were trickling down.
The handle of the door leading to the bath room from the bed room and a portion of the door adjacent to the handle were bloodstained from the inner side.
The blood on the wall was little a over three feet from the floor.
On the floor of the bed room there was an empty brown envelope with the words "Lt. Commander K. M. Nanavati" written on it.
There was no mark showing that the bullets had hit any surface.
(See the evidence of Rashmikant, P.W. 16) On the dead body the following injuries were found : (1) A punctured wound 1/4" X 1/4" X chest cavity deep just below and inside the inner 642 end of the right collar bone with an abrasion collar on the right side of the wound.
(2) A lacerated punctured wound in the web between the ring finger and the little finger of the left hand 1/4" X 1/4" communicating with a punctured wound 1/4 X 1/4" on the palmer aspect of the left hand at knuckle level between the left little and the ring finger.
Both the wounds were communicating.
(3) A lacerated ellipsoid wound oblique in the left parietal region with dimensions 1 1/3" X 1/4" X skull deep.
(4) A lacerated abrasion with carbonaceous tatooing 1/4" X 1/6" at the distal end of the proximal interphalangeal joint of the left index finger dorsal aspect.
That means at the first joint of the crease of the index finger on its dorsal aspect, i.e., back aspect.
(5) A lacerated abrasion with carbonaceous tatooing 1/4" X 1/6" at the joint level of the left middle finger dorsal aspect.
(6) Vertical abrasion inside the right shoulder blade 3" X 1" just outside the spine.
On internal examination the following wounds were found by Dr. Jhala, who performed the autopsy on the dead body.
Under the first injury there was: "A small ellipsoid wound oblique in the front of the piece of the breast bone (Sternum) upper portion right side centre with dimensions 1/4" x 1/3" and at the back of the bone there was a lacerated wound accompanied by irregular chip fracture corresponding to external injury No. 1, i, e., the punctured wound chest cavity deep.
Same wound continued in the contusion in area 3" x 1 1/4" in the right lung upper lobe front border middle portion front and back.
Extensive clots were seen 643 in the middle compartment upper and front part surrounding the laceration impregnated pieces of fractured bone.
There was extensive echymosis and contusion around the root of the right lung in the diameter of 2" involving also the inner surface of the upper lobe.
There were extensive clots of blood around the aorta.
The left lung was markedly pale and showed a through and through wound in the lower lobe beginning at the inner surface just above the root opening out in the lacerated ground in the back region outer aspect at the level between 6th and 7th ribs left side not injuring the rib and injuring the space between the 6th and 7th rib left side 2" outside the junction of the spine obliquely downward and outward.
Bullet was recovered from tissues behind the left shoulder blade.
The wound was lacerated in the whole tract and was Surrounded by contusion of softer tissues.
" The doctor says that the bullet, after entering "the inner end, went backward, downward and then to the left" and therefore he described the ground an ellipsoid and oblique".
Ho also points out that the abrasion collar was missing on the left side.
Corresponding to the external injury No. 3, the doctor found on internal examination that the skull showed a haematoma under the scalp, i.e., on the left parietal region ; the dimension was 2" X 2".
The skull cap showed a gutter fracture of the outer table and a fracture of the inner table.
The brain showed sub arachnoid haemorrhage over the left parieto occipital region accompanying the fracture of the vault of the skull.
A description of the revolver with which Ahuja was shot and the manner of its working would be necessary to appreciate the relevant evidence in that regard.
Bhanagay, the Government 644 Criminologist, who was examined as P.W. 4, describes the revolver and the manner of its working.
The revolver is a semi automatic one and it is six chambered.
To load the revolver one has to release the chamber; when the chamber is released, it comes out on the left side.
Six cartridges can be inserted in the holes of tho chamber and then the chamber is pressed to the revolver.
After the revolver is thus loaded, for the purpose of firing one has to pull the trigger of the revolver; when the trigger is pulled the cartridge gets cocked and the revolver being semi automatic the hammer strikes the percussion cap of the cartridge and the cartridge explodes and the bullet goes off.
For firing the second shot, the trigger has to be pulled again and the same process will have to be repeated each time it is fired.
As it is not an automatic revolver, each time it is fired, the trigger has to be pulled and released.
If the trigger is pulled but not released, the second round will not come in its position of firing.
Pulling of the trigger has a double action one is the rotating of the chamber and cocking, and the other, releasing of the hammer.
Because of this double action, the pull must be fairly strong.
A pressure of about 20 pounds is required for pulling the trigger.
There is controversy on the question of pressure, and we shall deal with this at the appropriate place.
Of the three bullets fired from the said revolver, two bullets were found in the bath room, and the third was extracted from the back of the left shoulder blade.
F 2 and F 2a are the bullets found in the bath room.
These two bullets are flattened and the copper jacket of one of the bullets, exhibit F 2a, has been turn off.
The third bullet is marked as EX.
With this background let US now consider the evidence to ascertain whether the shooting was intentional, as the prosecution avers, or only 645 accidental, as the defence suggests.
Excepting Nanavati, the accused, and Ahuja, the deceased, no other person was present in the letter 's bed room when the shooting took place.
Hence the only person who can speak to the said incident is the accused Nanavati.
The version of Nanavati, as given in his evidence may be stated thus: He walked into Ahuja 's bed room, shutting the door behind him.
Ahuja was standing in front of the dressing table.
The accused walked towards Ahuja and said, "You are a filthy swine", and asked him, "Are you going to marry Sylvia and look after the kids?" Ahuja became enraged and said in a nasty manner, "Do I have to marry every woman that I sleep with ?" Then the deceased said, "Get the hell out of here, otherwise, I will have you thrown out." The accused became angry, but the packet containing the revolver down on a cabinet which was near him and told him, "By God I am going to thrash you for this." The accused had his hands up to fight the deceased, but the latter made a sudden grab towards the packet containing the revolver.
The accused grappled the revolver himself and prevented the deceases from getting it.
He then whipped out the revolver and told the deceased to get back.
The deceased was very close to him and suddenly caught with his right hand the right hand of the accused at the wrist and tried to twist it and take the revolver off it.
The accused "banged" the deceased towards the door of the bath room, but Ahuja would not let go of his grip and tried to kick the accused with his knee in the groin.
The accused pushed Ahuja again into the bath room, trying at the same time desperately to free his hand from the grip of the accused by jerking it around.
The deceased had a very strong grip and he did not let go the grip.
During the struggle, the accused thought that two shots went off: one went first and within a few seconds another.
At the first shot the deceased just kept 646 hanging on to the hand of the accused, but suddenly he let go his hand and slumped down.
When the deceased slumped down, the accused immediately came out of the bath room and walked down to report to the police.
By this description the accused seeks to raise the image that he and the deceased were face to face struggling for the possession of the revolver, the accused trying to keep it and the deceased trying to snatch it, the deceased catching hold of the wrist of the right hand of the accused and twisting it, and the accused desperately trying to free his hand from his grip; and in the struggle two shots went off accidentally he does not know about the third shot and hit the deceased and caused his death.
But in the cross examination he gave negative answers to most of the relevant questions put to him to test the truthfulness of his version.
The following answers illustrate his helpful attitude in the court: (1) I do not remember whether the deceased had the towel on him till I left the place.
(2) I had no idea where the shots went because we were shuffling during the struggle in the tiny bath room.
(3) I have no impression from where and how the shots were fired.
(4) I do not know anything about the rebound of shots or how the shots went off.
(5) I do not even know whether the spectacles of the deceased fell off.
(6) I do not know whether I heard the third shot.
My impression is that I heard two shots.
(7) I do not remember the details of the struggle.
(8) I do not give any thought whether the shooting was an accident or not, because 647 I wished to go to the police and report to the police.
(9) I gave no thought to this matter.
I thought that something serious had happened.
(10) I cannot say how close we were to each other, we might be very close and we might be at arm 's length during the struggle.
(11) I cannot say how the deceased bad his grip on my wrist.
(12) I do not remember feeling any blows from the deceased by his free hand during the struggle; but be may have hit me.
He gives only a vague outline of the alleged struggle between him and the deceased.
Broadly looked at, the version given by the accused appears to be highly improbable.
Admittedly he bad entered the bedroom of the deceased unceremoniously with a fully loaded revolver; within half a minute he came out of the room leaving Ahuja dead with bullet wounds.
The story of his keeping the revolver on the cabinet is very unnatural.
Even if he had kept it there, how did Ahuja come to know that it was a revolver for admittedly it was put in an envelope.
Assuming that Ahuja had suspected that it might be a revolver, how could he have caught the wrist of Nanavati who had by that time the revolver in his hand with his finger on the trigger? Even if he was able to do so, how did Nanavati accidental pull the trigger three times and release it three times when already Ahuja was holding his wrist and when he was jerking his hand to release it from the grip of Ahuja ? It also appears to be rather curious that both the combatants did not use their left hands in the struggle.
If, as he has said, there was a struggle between them and he pushed Ahuja into the bath room, how was it that the towel wrapped around the waist of Ahuja was intact ? So too, if there was a struggle, why there was no bruise on the body of the accused ? Though Nanavati says that 648 there were some "roughings" on his wrist, he had not mentioned that fact till he gave his evidence in the court, nor is there any evidence to indicate such "roughings".
It is not suggested that the Clothes worn by the accused were torn or even soiled.
Though there was blood up to three feet on the wall of the bath room, there was not a drop of blood on the clothes of the accused.
Another improbability in the version of the accused is, while he says that in the struggle two shots went off, we find three spent bullets two of them were found in the bathroom and the other in the body of the deceased.
What is more, how could Ahuja have continued to struggle after he had received either the chest injury or the head injury, for both of them were serious ones.
After the deceased received either the first or the third injury there was no possibility of further struggling or pulling of the trigger by reflex action.
Dr. Jhala says that the injury on the head of the victim was such that the victim could not have been able to keep standing and would have dropped unconscious immediately and that injury No. 1 was also so serious that he could not stand for more than one or two minutes.
Even Dr. Baliga admits that the deceased would have slumped down after the infliction of injury No. 1 or injury No. 3 and that either of them individually would be sufficient to cause the victim to slump down.
It is, therefore, impossible that after either of the said two injuries was inflicted, the deceased could have still kept on struggling with the accused.
Indeed, Nanavati says in his evidence that at the first shot the deceased just kept on hanging to his hand, but suddenly he let go his grip and slumped down.
The only circumstance that could be relied upon to indicate a struggle is that one of the chappals of the deceased was found in the bed room while the other was in the bath room.
But that is consistent with both intentional and accidental shooting, for in his anxiety to escape from, the line of 649 firing the deceased might have in hurry left his one chappal in the bed room and fled with the other to the bath room.
The situation of the spectacles near the commode is more consistent with intentional shooting than with accidental shootings, for if there had been a struggle it was more likely that the spectacles would have fallen off and broken instead of their being intact by the side of the dead body.
The condition of the bed room as well as of the bath room, as described by Rashmikant, the police officer who made the inquiry, does not show any indication of struggle or fight in that place.
The version of the accused, therefore, is brimming with improbabilities and is not such that any court can reasonably accept it.
It is said that if the accused went to the bedroom of Ahuja to shoot him he would not have addressed him by his first names "Prem" as deposed by Deepak.
But Nanavati says in his evidence that he would be the last person to address the deceased as Prem.
This must have been an embellishment on the part of Deepak.
Assuming he said it, it does not indicate and sentiment of affection or goodwill towards the deceased admittedly he had none towards him but only an involuntary and habitual expression.
It is argued that Nanavati is a good shot Nanda, D.W. 6, a Commodore in the Indian Navy, certifies that he is a good shot in regard to both moving and stationary targets and therefore if he had intended to shoot Ahuja, he would have shot him perpendiculary hitting the chest and not in a haphazard way as the injuries indicate.
Assuming that accused is a good shot, this argument ignores that he was not shooting at an inanimate target for practice but was shooting to commit murder; and it also ignores the desperate attempts the deceased must have made to escape.
The first shot might have been fired and aimed at the chest as 650 soon as the accused entered the room, and the other two presumably when the deceased was trying to escape to or through the bathroom.
Now on the question whether three shots would have gone off the revolver accidentally, there is the evidence of Bhanagay, P.W. 4, who is a Government Criminologist.
The Deputy Commissioner of Police, Bombay, through Inspector Rangnekar sent to him the revolver, three empty cartridge cases, three bullets and three live rounds for his inspection.
He has examined the revolver and the bullets which are marked as Exs.
F 2, F 2a and F 3.
He is of the opinion that the said three empties were fired from the said revolver.
He speaks to the fact that for pulling the trigger a pressure of 28 pounds is required and that for each shot the trigger has to be pulled and for another shot to be fired it must be released and pulled again.
He also says that the charring around the wound could occur with the weapon of the type we are now concerned within about 2 to 3 inches of the muzzle of the weapon and the blackening around the wound described as carbonaceous tattooing could be caused from such a revolver up to about 6 to 8 inches from the muzzle.
In the cross examination he says that the flattening of the two damaged bullets, Exs.
F 2 and F 2a, could have been caused by their hitting a flat hard surface, and that the tearing of the copper jacket of one of the bullets could have been caused by a heavy impact, such as hitting against a hard surface; it may have also been caused, according to him, by a human bone of sufficient strength provided the bullet hits the bone tangently and passes of without obstruction.
These answers, if accepted we do not see any reason why we should not accept them prove that the bullets, Exs.
F 2 and F 2a, could have been damaged by their coming into contact with some hard substance such as a bone He says in the cross examination that one 'struggling ' will not cause three automatic firings and tha 651 even if the struggle continues he would not expect three rounds to go off, but he qualifies his statement by adding that this may happen if the person holding the revolver "co operates so far as the reflex of his finger is concerned", to pull the trigger.
He further elaborates the same idea by saying that a certain kind of reflex co operation is required for pulling the trigger and that this reflex pull could be either conscious or unconscious.
This answer is strongly relied upon by learned counsel for the accused in support of his contention of accidental firing.
He argues that by unconscious reflex pull of the trigger three times by the accuses three shots could have gone off the revolver.
But the possibility of three rounds going off by three separate reflexes of the finger of the person holding the trigger is only a theoretical possibility, and that too only on the assumption of a fairly long struggle.
Such unconscious reflex pull of the finger by the accused three times within a space of a few seconds during the struggle as described by the accused is highly improbable, if not impossible.
We shall consider the evidence of this witness on the question of ricocheting of bullets when we deal with individual injuries found on the body of the deceased.
This witness is not a doctor but has received training Forensic Ballistic Identification of Fire Arms) amongst other things in London and possesses certificates of competency from his tutors in London duly endorsed by the covering letter from the Education Department, high commissioner 's office, and he is a Government Criminologist and has been doing this work for the last 22 years; he says that he has also gained experience by conducting experiments by firing on mutton legs.
He stood the test of cross examination exceedingly well and there is no reason to reject his evidence.
He makes the following points: (1) Three used bullets, Ers.
F 2, F 2a and F 3, were shot from the revolver exhibit B. (2) The revolver can be fired only by 652 Pulling the trigger; and for shooting thrice, a person Shooting will have to give a deep pull to the trigger thrice and release it thrice.
(3) A pressure of 28 pounds is required to pull the trigger.
(4) one "struggling" will not cause three automatic firings.
(5) If the struggle continues and if the person who pulls the trigger co operates by pulling the trigger three times, three shots may go off.
(6) The bullet may be damaged by hitting a hard surface or a bone.
As we have pointed out the fifth point is only a theoretical possibility based upon two hypothesis, namely, (i) the struggle continues for a considerable time, and (ii) the person holding the trigger Go operates by pulling it thrice by reflex action.
This evidence, therefore, establishes that the bullets went off the revolver brought by the accused indeed this is not disputed and that in the course of the struggle of a few seconds as described by the accused, it is not possible that the trigger could have been accidentally pulled three times in quick succession so as to discharge three bullets.
As regards the pressure required to pull the trigger of exhibit B, Trilok singh who is the Matter Armorer in the Army, deposing as D.W. 11, does not accept the figure given by the Bhanagay and he would put it at 11 to 14 pounds.
we does not know the science of ballistics and he is only a mechanic who repairs the arms.
He has not examined the revolver in question.
He admits that a double action revolver requires more pressure on the trigger than single action one.
While major Burrard in his book on Identification of Fires and Forensic Ballistics says that the normal trigger pull in double action revolvers is about 20 pounds, this witness reduces it to 11 to 14 pounds; while Major Brrard says in his book that in all competitions no test other than a dead weight is accepted, this witness does not agree with him.
His opinion is based on the experiments performed 653 with spring balance.
We would prefer to accept the opinion of Bhanagay to that of this witness.
But, on the basis of the opinion of Major Burrard, we shall assume for the purpose of this case that about 20 pounds of pressure would be required`to pull the trigger of the revolver exhibit B.
Before considering the injuries in detail, it may be convenient to ascertain from the relevant text books some of the indications that will be found in the case of injuries caused by shooting.
The following passage from authoritative text books may be consulted: Snyder 's Homicide Investigation, P. 117: "Beyond the distance of about 18 inches or 24 at the most evidence of smudging and tattooing are seldom present." Merkeley on Investigation of Death, P. 82: "At a distance of approximately over 18" the powder grains are no longer carried forward and therefore the only effect produced on the skin surface is that of the bullet." Legal Medicine Pathology and Toxicology by Gonzales, 2nd Fdn., 1956: "The powder grains may travel 18 to 24 inches or more depending on the length of barrel, calibre and type of weapon and the type of ammunition.
" Smith and Glaister, 1939 Edn., P. 17: "In general with all types of smokeless powder some traces of blackening are to be been but it is not always possible to recognize unburnt grains of powder even at ranges of one and a half feet.
" Glaister in his book on Medical Jurisprudence and Toxicology, 1957 Edn.
J makes a statement that at 8 range of about 12 inches and over as a rule there will not be marks of carbonaceous tattooing or 654 powder marks.
But the same author in an earlier book from which we have already quoted puts it at 18 inches.
In the book "Recent Advances in Forensic Medicine" 2nd Edn., p. 11, it is stated: "At range beyond 2 to 3 feet little or no trace of the powder can be observed." Dr. Taylor 's book, Vol. 1, 11th edn., p. 373, contains the following statement: "In revolver and automatic pistol wounds nothing but the grace ring is likely to be found beyond about two feet.
" Bhanagay, P.W. 4, says that charring around the wound could occur with the weapon of the type exhibit
B within about 2 to 3 inches from the muzzle of the weapon, and the blackening round about the wound could be caused from such a weapon up to about 6 to 8 inches from the muzzle.
Dr. Jhala, P.W. 18, ways that carbonaceous tattooing would not appear if the body was beyond 18 inches from the mouth of the muzzle.
Dr. Baliga, D.W. 2, accepts the correctness of the statement formed in Glaister 's book, namely, when the range reaches about 6 inches there is usually an absence of burning although there will probably be some evidence of bruising and of powder mark, at a range of about 12 inches and over the skin around the wound does not as a rule show evidence of powder marks.
" In the cross examinations witness says that he does not see any conflict in the authorities cited, and tries to reconcile the various authorities by stating that all the authorities show that there would not be powder marks beyond the range of 12 to 18 inches.
He also ways that in the matter of tattooing, there is no difference between that caused by smokeless powder used in the cartridge in question, and black powder used in other bullets, though in the case of the former there may be greater difficulty to find 655 out whether tho marks are present are not in a, wound.
Having regard to the aforesaid impressive array of authorities on Medical Jurisprudence, we hold, agreeing with Dr. Jhala, that carbonaceous tattooing would not be found beyond range of 18 inches from the mouth of the muzzle of the weapon.
We also hold that charring around the wound would occur when it is caused by a revoler like exhibit within about 2 or 3 inches from the muzzle of the revolver.
The presence and nature of the abrasion collar around the injury indicates the direction and also the velocity of the bullet.
Abrasion collar is formed by the gyration of the bullet caused by the rifling of the barrel.
If a bullet hits the body perpendicularly, the wound would be circular and the abrasion collar would be all around.
But if the hit is not perpendicular, the abrasion collar will not be around the entire wound(See the evidence of Dr. Jhala and Dr. Baliga).
As regards the injuries found on the dead body, two doctors were examined, Dr. Jhala, P. W. 18, on the side of the prosecution, and Dr. Baliga, D. W. 2, on the side of the defence.
Dr. Jhala is the Polio Surgeon, Bombay, for the last three years.
Prior to that he was a Police Surgeon in Ahmedabad for six years.
Ee is M. R. C. P. (Edin.), D.T. M. and H. (Lond.).
He conducted the postmortem on the dead body of Ahuja and examined both external and internal injuries on the body.
He is therefore, competent to speak with authority on the wounds found on the dead body not only by his qualifications and experience but also by reason of having performed the autopsy on the dead body.
Dr. Baliga is an F. R. C. section (England) and has been practising as a medical surgeon since 1933.
His qualifications and antecedents show that he is not only on experience surgeon but abo has been taking 656 interest in extra surgical activities, social, political and educational.
He says that he has studied medical literature regarding bullet injuries and that he is familiar with medico legal aspect of wound including bullet wounds.
He was a Causality J. Medical officer in the K. E. M. Hospital in 1928.
The had seen bullet injuries both as Causality Medical officer and later on as a surgeon.
In the cross examination he says: "I have never fired a revolver, nor any other fire arm.
I have not given evidence in a single case of bullet injuries prior to this occasion though I have treated and I am familiar with bullet injuries.
The last that I gave evidence in Medico legal case in a murder case was in 1949 or 1950 or there about.
Prior to that I must have given evidence in a medical legal case in about 1939.
I cannot off hand tell how many cases of bullet injuries I have treated till now, must have been over a dozen.
I have not treated any bullet injuries case for the last 7 or 8 years.
It was over 8 or 9 years ago that I have treated bullet injuries on the chest and the head.
Out of all these 12 bullet injuries cases which I have treated up to now there might be 4 or 5 which were bullet injuries on the head.
Out of these 4 or 5 cases probably there were three cases in which there were injuries both on the chest as well as on the head. .
I must have performed about half a dozen postmortems in all my career.
" He further says that he was consulted about a week before he gave evidence by Mr. Khandalawala and Mr. Rajani Patel on behalf of the accused and was shown the post mortem report of the injuries; that he did not have before him either the bullets or the skull; that he gave his opinion in about 20 minutes on the basis of the post mortem 657 report of the injuries that the said injuries could have been caused in n struggle between the accused and the deceased.
This witness has come to the Court to support his opinion based on scanty material.
We are not required in this case to decide upon the cooperative qualification or merits of these two doctors of their relative competency as surgeons, but we must have that so far as the wounds on the legal body of the deceased are concerned, Dr. Jhala, who has made the post mortem examination, is in a better position to help us to ascertain whether shooting was by accident, or by intention than Dr. Baliga, who gave his opinion on the basis of the post mortem report.
Now we shall take injury No.1.
This injury is a punctured one of dimensions 1/4" x 1/4" chest cavity deep just below and inside the inner end of the right collar bone with an abrasion collar on the right side of tho wound.
The internal examination showed that the bullet, after causing the punctured wound in the chest just below the inner end of the right collar bone, struck the sternum and after striking it, it slightly deflected in it course and came behind the shoulder bone.
In the course of its journey the bullet entered the chest, impacted the soft tissues of the lung tho aorta and tho left lung, and ultimately damaged the left lung and got lodged behind the seapula.
Dr. Jhala describes the wound as ellipsoid and oblique and says that the abrasion collar is missing on the left side.
On tho injury there is neither charring nor carbonaceous tattooing.
The prosecution version is that this wound was caused by intentional shooting, while the defence suggestion is that it was caused when accused and deceased were struggling for the possession of the revolver.
Jhala, after describing injury No. 1, says that it could not has been received by the victim during a struggle in which both the victim and the assailant were us each othor 's grip.
Ho gives reasons 658 for his opinion, namely, as there was no carbonaceous tattooing on the injury, it must have been f caused by the revolver being fired from a distance ra of over 18 inches from the tip of the mouth of the muzzle.
We have earlier noticed that, on the basis of the authoritative text books and the evidence, there would not be carbonaceous tattooing if the target was beyond 18 inches from the mouth of the muzzle.
It is suggested to him in the cross examination that the absence of tattooing may be due to the fact that the bullet might have first hit the fingers of the left palm causing all or any of injuries Nos. 2, 4 and 5, presumably when the deceased placed his left palm against the line of the bullet causing carbonaceous tattooing on the said fingers and thereafter hitting the chest.
Dr. Jhala does not admit the possibility of the suggestion.
He rules out this possibility because if the bullet first had an impact on the fingers, it would get deflected, lose its direction and would not be able to cause later injury No. 1 with abrasion collar.
He further explains that an impact with a solid substance like bones of fingers will make the bullet lose its gyratory movement and thereafter it could not cause any abrasion collar to the wound.
He adds, "assuming that the bullet first hit and caused the injury to the web between the little finger and the ring finger, and further assuming that it had not lost its gyrating action, it would not have caused the injury No. 1, i e, on the chest which is accompanied by internal damage and the depth to which it had gone." Now let us see what Dr. Baliga, D. W. 2 says about injury No. 1.
The opinion expressed by Dr. Jhala is put to this witness, namely, that injury No. 1 on the chest could not have been caused during the course of a struggle when the victim and the assailant were in each other 's grip, and this witness does not agree with that opinion.
He further ways that it is possible that even 659 if the bullet first caused injury in the web, that is injury No. 2, and thereafter caused injury No. 1 in the chest, there would be an abrasion collar such as seen in injury No. 1.
Excepting this of this suggestion possibility, he has not controverted the reasons given by Dr. Jhala why inch an abrasion collar could not be caused if the bullet had hit the finger before hitting the chest.
We will presently show in considering injuries Nos. 2, 4 and 5 that the said injuries were due to the hit by one bullet.
If that be so, a bullet, which had caused the said three injuries and then took a turn through the little and the ring finger, could not have retained sufficient velocity to cause the abrasion collar in the chest.
Nor has Dr. Baliga controverted the reasons given by Dr Jhala that even if after causing the injury in the web the bullet could cause injury No. ], it could not have caused the internal damage discovered in the post mortem examination.
We have no hesitation, therefore, to accept the well reasoned view of Dr. Jhala in preference to the possibility envisaged by Dr. Baliga and hold that injury No. 1 could not have been caused when the accused and the deceased were in close trip, but only by a shot fired from a distance beyond 18 inches from the mouth of the muzzle.
The third injury is a lacerated ellipsoid wound oblique in the left parietal region with dimensions and skull deep.
Dr. Jhala in his evidence says that the skull had a gutter fracture of the outer table and a fracture of the inner table and the brain showed subarachnoid haemorrhage over the left parieto oocipital region accompanying the fracture of the vault of the skull.
The injury was effect ed in a "glancing way", that is, at a tangent, and the injury went upward and to the front.
He is of the opinion that the said injury to the head must have been caused by firing of a bullet from a 660 distance of over 18 inches from the mouth of the muzzle and must have been caused with the back of the head of the victim towards the assailant.
When it was suggested to him that the said wound could have been caused by a ricocheted bullet, he answered that though a ricocheted bullet coming from the same line of direction could have caused the said injury, it could not have caused the intracranial haemorrhage and also could not have cause the fracture of tho inner table of the skull.
He is definite that injury No. 3 could not have been inflicted from "front to back" as the slope of the gutter fracture was from the back to the front in the direction of the "grazing" of the bullet.
He gives a further reasons on that as a rule the fracture wound be broader in the skull where the bullet has the first impact and narrower where it emerges out, whishes the case in respect of injury No 3.
He also relies upon the depth of the fracture it the two points and its slope to indicate the direction in which the bullet grazed.
He further says that it is common knowledge that the fracture of both the tables accompanied by haemorrhage in the skull requires great force and a ricocheted bullet cannot cause such an injury.
He opinion that, though a ricocheted bullet emanating from a powerful fire arm from a close range can cause injury to a heavy bone, it cannot be caused by revolver of the type exhibit B. Another suggestion made to him is that the bullet might have hit the glass pane of the window in the bathroom first and then ricocheting causing the injury on the head.
Dr. Jhala in his evidence says that if the bullet had hit glass pane ,first ,it would have caused a hole and fallen on the other side of the window, for ricocheting is not possible in the case of a bullet directly hitting the glass.
But on the other hand, if the bullet first hit a hard substances and then the glass pane, it would act like a pebble and crack the glass and would 661 not go to the other side.
In the present case, the bullet must have hit the skull first and then the glass pane after having lost its velocity, and fallen down like a pebble inside the bath room itself.
If, as the defence suggests, the bullet had directly hit the glass pane, it would have passed through it to the other side, in which case four bullets must have been fired from the revolver exhibit B, which is nobody 's case.
The evidence, of Dr. Jhala is corroborated by the evidence of the ballistics expert Bhanagay, P.W. 4, when he says that if a bullet hits a hard substance and gets flattened and damaged like the bullets Exs.
F 2 and F 2a, it may not enter the body and that even if it enters the body, the penetration will be shallow and the injury caused thereby will be much less as compared to the injury caused by a direct hit of the bullet.
Dr. Baliga, on the other hand, says that injury No. 3 could be caused both ways, that is, from "front backward" as well as from "back forward".
He also contradicts Dr. Jhala and says "back that in the type of the gutter fracture caused in the present case the wound is likely to be narrower at the entry than at the exit.
He further says that assuming that the gutter fracture wound was caused by a ricocheted bullet and assuming further that there was enough force left after rebound, a ricocheted bullet could cause a fracture of even the inner table and give rise to intra cranial haemorrhage.
He asserts that a bullet that can cause a gutter fracture of the outer table is capable of fracturing the inner table also.
In short, he contradicts every statement of Dr. Jhala; to quote his own words, "I do not agree that injury No. 3, i.e., the gutter fracture, cannot be inflicted from front to back for the reason that the slope of the gutter fracture was behind forward direction of the grazing of the bullet; I also do not agree with the proposition that if it would have been from the front then the slope of the gutter wound would have been from the front backward; 662 I have not heard of such a rule and that at the near end of the impact of a bullet the gutter fracture is deeper than where it flies off; I do not agree that the depth of the fracture at two points is more important factor in arriving at the conclusion of the point of impact of the bullet.
" He also contradicts the opinion of Dr. Jhala that injury No. 3 could not be caused in a struggle between the victim and the assailant.
Dr. Baliga has been cross examined at great length.
It is elicited from him that he is not a ballistics expert and that his experience in the matter of direction of bullet injuries is comparatively less than his experience in other fields.
His opinion that the gutter fracture injury could be and was more likely to be caused from an injury glancing front backwards is based upon a comparison of the photograph of the skull shown to him with the figure 15 in the book "Recent Advances in Forensic Medicine " by Smith and Glaister, p. 21.
The said figure is marked as exhibit Z in the case.
The witness says that the figure shows that the narrower part of the gutter is on the rear and the wider part is in front.
In the cross examination he further says that the widest part of the gutter in figure exhibit Z is neither at the front and nor at the rear end, but the rear end is pointed and tailed.
It is put to this witness that figure exhibit Z does not support his evidence and that he deliberately refused to see at it correctly, but he denies it.
The learned Judges of the High Court, after seeing the photograph exhibit Z with a magnifying glass, expressed the view that what Dr. Baliga called the pointed and tailed part of the gutter was a crack in the skull and not a part of the gutter.
This observation has not been shown to us to be wrong.
When asked on what scientific principle he would support his opinion, Dr. Baliga could not give any such principle, but only said that it was likely he puts emphasis on the word "likely" that the striking end was likely to be 663 narrower and little broader at the far end.
He agrees that when a conical bullet hits a hard bone it means that the hard bone is protruding in the path of the projectile and also agrees that after the initial impact the bullet adjusts itself in the new direction of flight and that the damage caused at the initial point of the impact would be more than at any subsequent point.
Having agreed so far, he would not agree on the admitted hypothesis that at the initial point of contract the wound should be wider than at the exit.
But he admits that he has no authority to support his submission.
Finally, he admits that generally the breadth and the depth of the gutter wound would indicate the extensive nature of the damage.
On this aspect of the case, therefore, the witness has broken down and his assertion is not based on any principle or on sufficient data.
The next statement he makes is that he does not agree that the fracture of the inner table shows that the initial impact was from behind; but he admits that the fracture of the inner table is exactly below the backside of the gutter, though he adds that there is a more extensive crack in front of the anterior end of the gutter.
He admits that in the case of a gutter on the skull the bone material which dissociates from the rest of the skull is carried in the direction in which the bullet flies but says that he was not furnished with any information in that regard when he gave his opinion.
Coming to the question of the ricocheting, he says that a ricocheting bullet can produce depressed fracture of the skull.
But when asked whether in his experience he has come across any bullet hitting a hard object like a wall and rebounding and causing a fracture of a hard bone or whether he has any text book to support his statement, he says that he cannot quote any instance nor 664 an authority.
But he says that it is so mentioned in several books.
Then he gives curious definitions of the expressions "likely to cause death", "necessarily fatal " etc.
He would go to the extent of saying that in the case of injury No. 3, the chance of recovery is up to 80 per cent.
; but finally he modifies that statement by saying that he made the statement on the assumption that the haemorrhage in the subarachnoid region is localised, but if the haemorrhage is extensive his answer does not hold good.
Though he asserts that at a range of about 12 inches the wound does not show as a rule evidence of powder mark, he admits that he has no practical experience that beyond a distance of 12 inches no powder mark can be discovered as a rule.
Though text books and authorities are cited to the contrary, he still sticks to his opinion; but finally he admits that he is not a ballistics expert and has no experience in that line.
When he is asked if after injury No. 3, the victim could have continued the struggle, he says that he could have, though he adds that it was unlikely after the victim had received both injuries Nos. 1 and 3.
He admits that the said injury can be caused both ways, that is, by a bullet hitting either on the front of the head or at the back of the head.
But his reasons for saying that the bullet might have hit the victim on the front of the head are neither supported by principle nor by the nature of the gutter wound found in the skull.
exhibit Z relied upon by him does not support him.
His theory of a ricocheted bullet hitting the skull is highly imaginary and cannot be sustained on the material available to us: firstly, there is no mark found in the bath room wall or elsewhere indicating that the bullet struck a hard substance before ricocheting and hitting the skull, and secondly, it does not appear to be likely that such a ricocheted bullet ejected from exhibit B could have caused such an extensive injury to the head of the deceased as found in this case.
665 Mr. Pathak finally argues that the bullet exhibit F 2a has a "process", i.e., a projection which exactly fits in the denture found in the skull and, therefore, the projection could have been caused only by the bullet coming into contact with some hard substance before it hit the head of the deceased.
This suggestion was not made to any of the experts.
It is not possible for us to speculate as to the manner in which the said projection was caused.
We, therefore, accept, the evidence of the ballistics expert, P. W. 4, and that of Dr. Jhala, P. W. 18, in preference to that of Dr. Baliga.
Now coming to injuries Nos 2, 4 and 5, injury No. 4 is found on the first joint of the crease of the index finger on the back side of the left palm and injury No. 5 at the joint level of the left middle finger dorsal aspect, and injury No. 2 is a punctured wound in the web between the ring finger and the little finger of the left hand communicating with a punctured wound on the palmer aspect of the left knukle level between the left little and the ring finger.
Dr. Jhala says that all the said injuries are on the back of the left palm and all have corbonaceous tattooing and that the injuries should have been caused when his left hand was between 6 and 18 inches from the muzzle of the revolver.
He further says that all the three injuries could have been caused by one bullet, for, as the postmortem discloses, the three injuries are in a straight line and therefore it can clearly be inferred that they were caused by one bullet which passed through the wound on the palmar aspect.
His theory is that one bullet, after causing injuries Nos. 4 and 5 passed between the little and ring finger and caused the punctured wound on the palmar aspect of the left hand.
He is also definitely of the view that these wounds could not have been received by the victim during a struggle in which both of them were in each other 's grip.
It 666 is not disputed that injury No. 1 and injury No. 3 should have been caused by different bullets.
If injuries Nos. 2, 4 and 5 were caused by different bullets, there should have been more than three bullets fired, which is not the case of either the prosecution or the defence.
In the circumstances, the said wounds must have been caused only by one bullet, and there is noting improbable in a bullet touching three fingers on the back of the palm and taking a turn and passing through the web between the little and ring finger.
Dr. Baliga contradicts Dr. Jhala even in regard to these wounds.
He says that these injuries, along with the others, indicate the probability of a struggle between the victim and the assailant over the weapon; but he does not give any reasons for his opinion.
He asserts that one single bullet cannot cause injuries Nos. 2, 4 and 5 on the left hand fingers, as it is a circuitous course for a bullet to take and it cannot do so without meeting with some severe resistance.
He suggests that a bullet which had grazed and caused injuries Nos. 4 and 5 could then have inflicted injury No. 3 without causing carbonaceous tattooing on the head injury.
We have already pointed out that the head injury was caused from the back, and we do not see any scope for one bullet hitting the fingers and thereafter causing the head injury.
If the two theories, namely, that either injury No. 1 or injury No. 3 could have been caused by the same bullets that might have caused injury No. 2 and injuries Nos. 4 and 5 were to be rejected, for the aforesaid reasons, Dr. Baliga 's view that injuries Nos.
2,4 and 5 must have been caused by different bullets should also be rejected, for to accept it, we would require more than three bullets emanating from the revolver, whereas it is the common case that more than three bullets were not fired from the revolver.
That apart in the cross examination this witness accepts 667 that the injury on the first phalangeal joint of the index finger and the injury in the knuckle of the middle finger and the injury in the web between the little and the ring finger, but not taking into account the injury on the palmar aspect would be in a straight line.
The witness admits that there can be a deflection even against a soft tissue, but adds that the soft tissue being not of much thickness between the said two fingers, the amount of deflection is negligible.
But he concludes by saying that he is not saying this as an expert in ballistics.
If so, the bullet could have deflected after striking the web between the little and the ring finger.
We, therefore, accept the evidence of Dr. Jhala that one bullet must have caused these three injuries.
Strong reliance is placed upon the nature of injury No. 6 found on the back of the deceased viz, a vertical abrasion in the right shoulder blade of dimensions 3"x1" just outside the spine, and it is said that the injury must have been caused when the accused pushed the deceased towards the door of the bath room.
Nanavati in his evidence says that he "banged" him towards the door of the bath room, and after some struggle he again pushed the deceased into the bath room.
It is suggested that when the accused "banged" the deceased towards the door of the bath room or when he pushed him again into the bath room, this injury might have been caused by his back having come into contact with the frame of the door.
It is suggested to Dr. Jhala that injury No. 6 could be caused by the man 's back brushing against a hard substance like the edge of the door, and he admits that it could be so.
But the suggestion of the prosecution case is that the injury must have been caused when Ahuja fell down in the bath room in front of the commode and, when falling, his back may have caught the edge of the commode or the bath tub or the edge of the door of the bath room 668 which opens inside the bath room to the left of the bath tub.
Shelat, J., says in his judgment: "If the abrasion was caused when the deceased was said to have been banged against the bath room door or its frame, it would seem that the injury would be more likely to be caused, as the deceased would be in a standing position, on the shoulder blade and not inside the right shoulder.
It is thus more probable that the injury was caused when the deceased 's back came into contact either with the edge of the door or the edge of the bathtub or the commode when he slumped.
" It is not possible to say definitely how this injury was caused, but it could have been caused when the deceased fell down in the bath room.
The injuries found on the dead body of Ahuja are certainly consistent with the accused intentionally shooting him after entering the bed room of the deceased; but injuries Nos. 1 and 3 are wholly inconsistent with the accused accidentally shooting him in the course of their struggle for the revolver.
From the consideration of the entire evidence the following facts emerge: The deceased seduced the wife of the accused.
She had confessed to him of her illicit intimacy with the deceased.
It was natural that the accused was enraged at the conduct of the deceased and had, therefore, sufficient motive to do away with the deceased.
He deliberately secured the revolver on a false pretext from the ship, drove to the flat of Ahuja, entered his bed room unceremoniously with a loaded revolver in hand and in about a few seconds thereafter came out with the revolver in his hand.
The deceased was found dead in his bath room with bullet injuries on his body.
It is not disputed that the bullets that caused injuries to Ahuja emanated from the revolver that was in the hand of the accused.
After the shooting, till his 669 trial in the Sessions Court, he did not tell anybody that he shot the deceased by accident.
Indeed, he confessed his guilt to the Chowkidar Puransingh and practically admitted the same to his colleague Samuel.
His description of the struggle in the bath room is highly artificial and is devoid of all necessary particulars.
The injuries found on the body of the deceased are consistent with the intentional shooting and the main injuries are wholly inconsistent with accidental shooting when the victim and the assailant were in close grips.
The other circumstances brought out in the evidence also establish that there could not have been any fight or struggle between the accused and the deceased.
We, therefore, unhesitatingly hold.
agreeing with the High Court, that the prosecution has proved beyond any reasonable doubt that the accused has intentionally shot the deceased and killed him.
In this view it is not necessary to consider the question whether the accused had discharged the burden laid on him under section 80 of the Indian Penal Code, especially as learned counsel appearing for the accused here and in the High Court did not rely upon the defence based upon that section.
That apart, we agree with the High Court that, on the evidence adduced in this case, no reasonable body of persons could have come to the conclusion which the jury reached in this case.
For that reason also the verdict of the jury cannot stand.
Even so, it is contended by Mr. Pathak that the accused shot the deceased while deprived of the power of self control by sudden and grave provocation and, therefore, the offence would fall under Exception 1 to section 300 of the Indian Penal Code.
The said Exception reads: "Culpable homicide is not murder if the offender, whilst deprived of the power of 670 self control by grave and sudden provocation, causes the death of the person who gave the provocation or causes the death of any other person by mistake or accident".
Homicide is the killing of a human being by another.
Under this exception, culpable homicide is not murder if the following conditions are complied with : (1) The deceased must have given provocation to the accused.
(2) The provocation must be grave.
(3) The provocation must be sudden.
(4) The offender, by reason of the said provocation, shall have been deprived of his power of self control.
(5) He should have killed the deceased during the continuance of the deprivation of the power of self control.
(6) The offender must have caused the death of the person who gave the provocation or that of any other person by mistake or accident.
The first question raised is whether Ahuja gave provocation to Nanawati within the meaning of the exception and whether the provocation, if given by him, was grave and sudden.
Learned Attorney General argues, that though a confession of adultery by a wife may in certain circumstances be provocation by the paramour himself, under different circumstances it has to be considered from the standpoint of the person who conveys it rather than from the standpoint of the person who gives it.
He further contends that even if the provocation was deemed to have been given by Ahuja, and though the said provocation might have been grave, it could not be sudden, for the provocation given by Ahuja was only in the past.
On the other hand, Mr. Pathak contends that the act of Ahuja, namely, the seduction of Sylvia, gave provocation though the fact of seduction was communicated to the accused by Sylvia and that for the ascertainment of the suddenness 671 of the provocation it is not the mind of the person who provokes that matters but that of the person provoked that is decisive.
It is not necessary to express our opinion on the said question, for we are satisfied that, for other reasons, the case is not covered by Exception 1 to section 300 of the Indian Penal Code.
The question that the Court has to consider is whether a reasonable person placed in the same position as the accused was, would have reacted to the confession of adultery by his wife in the manner in which the accused did.
In Mancini vs Director of Public Prosecutions (1), Viscount Simon, L. C., states the scope of the doctrine of provocation thus: "It is not all provocation that will reduce the crime of murder to manslaughter.
Provocation, to have that result, must be such as temporarily deprives the person provoked of the power of self control as the result of which he commits the unlawful act which causes death. .
The test to be applied is that of the effect of the provocation on a reasonable man, as was laid down by the Court of Criminal Appeal in Rex vs Lesbini, so that an unusually excitable or pugnacious individual is not entitled to rely on provocation which would not have led an ordinary person to act as he did.
In applying the text, it is of particular importance to (a) consider whether a sufficient interval has elapsed since the provocation to allow a reasonable man time to cool, and (b) to take into account the instrument with which the homicide was effected, for to retort, in the heat of passion induced by provocation, by a simple blow, is a very different thing from making use of a deadly instrument like a concealed dagger.
In short, 672 the mode of resentment must bear a reasonable relationship to the provocation if the offence is to be reduced to manslaughter." Viscount Simon again in Holmes vs Director of Public Prosecutions elaborates further on this theme.
There, the appellant had entertained some suspicions of his wife 's conduct with regard to other men in the village.
On a Saturday night there was a quarrel between them when she said, "Well, if it will ease your mind, I have been untrue to you", and she went on, "I know I have done wrong, but I have no proof that you haven 't at Mrs. X. 's".
With this appellant lost his temper and picked up the hammerhead and struck her with the same on the side of the head.
As he did not like to see her lie there and suffer, he just put both hands round her neck until she stopped breathing.
The question arose in that case whether there was such provocation as to reduce the offence of murder to manslaughter.
Viscount Simon, after referring to Mancini 's case(2), proceeded to state thus : "The whole doctrine relating to provocation depends on the fact that it causes, or may cause, a sudden and temporary loss of self control, whereby malice, which is the formation of an intention to kill or to inflict grievous bodily harm, is negatived.
Consequently, where the provocation inspires an actual intention to kill (such as Holmes admitted in the present case), or to inflict grievous bodily harm, the doctrine that provocation may reduce murder to manslaughter seldom applies.
" Goddard, C. J., Duffy 's case defines provocation thus "Provocation is some act, or series of acts, done by the dead man to the accused 673 which would cause in any reasonable person, and actually causes in the accused, a sudden and temporary loss of self control, rendering the accused so subject to passion as to make him or her for the moment not master of his mind. .
What matters is whether this girl (the accused) had the time to say : `Whatever I have suffered, whatever I have endured, I know that Thou shall not kill. ' That is what matters.
Similarly,. . .circumstances which induce a desire for revenge, or a sudden passion of anger, are not enough.
Indeed, circumstances which induce a desire for revenge are inconsistent with provocation, since the conscious formulation of a desire for revenge means that the person has had time to think, to reflect, and that would negative a sudden temporary loss of self control which is of the essence of provocation.
Provocation being,,. . .as
I have defined it, there are two things, in considering it, to which the law attaches great importance.
The first of them is, whether there was what is sometimes called time for cooling, that is, for passion to cool and for reason to regain dominion over the mind. . .
Secondly in considering whether provocation has or has not been made out, you must consider the retaliation in provocation that is to say, whether the mode of resentment bears some proper and reasonable relationship to the sort of provocation that has been given." A passage from the address of Baron Parke to the jury in R. vs Thomas (1) extracted in Russell on Crime, 11th ed., Vol.
I at p. 593, may usefully be quoted : 674 "But the law requires two things : first that there should be that provocation; and secondly, that the fatal blow should be clearly traced to the influence of passion arising from that provocation." The passages extracted above lay down the following principles: (1) Except in circumstances of most extreme and exceptional character, a mere confession of adultery is not enough to reduce the offence of murder to manslaughter.
(2) The act of provocation which reduced the offence of murder to manslaughter must be such as to cause a sudden and temporary loss of self control; and it must be distinguished from a provocation which inspires an actual intention to kill.
(3) The act should have been done during the continuance of that state of mind, that is, before there was time for passion to cool and for reason to regain dominion over the mind.
(4) The fatal blow should be clearly traced to the influence of passion arising from the provocation.
On the other hand, in India, the first principle has never been followed.
That principle has had its origin in the English doctrine that mere words and gestures would not be in point of law sufficient to reduce murder to manslaughter.
But the authors of the Indian Penal Code did not accept the distinction.
They observed : "It is an indisputable fact, that gross insults by word or gesture have as great tendency to move many persons to violent passion as dangerous or painful bodily in juries ; nor does it appear to us that passion excited by insult is entitled to less indulgence than passion excited by pain.
On the contrary, the circumstance that a man resents an insult more than a wound is anything but 675 a proof that he is a man of peculiarly bad heart." Indian courts have not maintained the distinction between words and acts in the application of the doctrine of provocation in a given case.
The Indian law on the subject may be considered from two aspects, namely, (1) whether words or gestures unaccompanied by acts can amount to provocation and (2) what is the effect of the time lag between the act of provocation and the commission of the offence.
In Empress vs Khogayi, a division bench of the Madras High Court held, in the circumstances of that case, that abusive language used would be a provocation sufficient to deprive the accused of self control.
The learned Judges observed : "What is required is that it should be of a character to deprive the offender of his self control.
In determining whether it was so, it is admissible to take into account the condition of mind in which the offender was at the time of the provocation.
In the present case the abusive language used was of the foulest kind and was addressed to man already enraged by the conduct of deceased 's son.
" It will be seen in this case that abusive language of the foulest kind was held to be sufficient in the case of man who was already enraged by the conduct of deceased 's son.
The same learned Judge in a later decision in Boya Munigadu vs The Queen upheld plea of grave and sudden provocation in the following circumstances: The accused saw the deceased when she had cohabitation with his bitter enemy; that night he had no meals; next morning he went to the ryots to get his wages from them, and at that time he saw his wife eating food along with her paramour; he killed the paramour with a bill hook.
The learned 676 Judges held that the accused had sufficient provocation to bring the case within the first exception to section 300 of the Indian Penal Code.
The learned Judges observed : ". .
If having witnessed the act of adultery, he connected this subsequent conduct as he could not fail to connect it, with that act, it would be conduct of a character highly exasperating to him, implying as it must, that all concealment of their criminal relations and all regard for his feelings were abandoned and that they purposed continuing their course of misconduct in his house.
This, we think, amounted to provocation, grave enough and sudden enough to deprive him of his self control, and reduced the offence from murder to culpable homicide not amounting to murder.
" The case illustrates that the state of mind of the accused, having regard to the earlier conduct of the deceased, may be taken into consideration in considering whether the subsequent act would be a sufficient provocation to bring the case within the exception.
Another division bench of the Madras High Court in In re Murugian held that, where the deceased not only committed adultery but later on swore openly in the face of the husband that she would persist in such adultery and also abused the husband for remonstrating against such conduct, the case was covered by the first exception to section 300 of the Indian Penal Code.
The judgement of the Andhra Pradesh High Court in In re C. Narayan adopted the same reasoning in a case where the accused, a young man, who had a lurking suspicion of the conduct of his wife, who newly joined him, was confronted with the confession of illicit intimacy with, and consequent pregnancy by another, strangled his wife to death, and 677 held that the case was covered by Exception 1 to section 300 of the Indian Penal Code.
These two decisions indicate that the mental state created by an earlier act may be taken into consideration in ascertaining whether a subsequent act was sufficient to make the assailant to lose his self control.
Where the deceased led an immoral life and her husband, the accused, upbraided her and the deceased instead of being repentant said that she would again do such acts, and the accused, being enraged struck her and, when she struggled and beat him, killed her, the Court held the immediate provocation coming on top of all that had gone before was sufficient to bring the case within the first exception to section 300 of the Indian Penal Code.
So too, where a woman was leading a notoriously immoral life, and on the previous night mysteriously disappeared from the bedside of her husband and the husband protested against her conduct, she vulgarly abused him, whereupon the husband lost his self control, picked up a rough stick, which happened to be close by and struck her resulting in her death, the Lahore High Court, in Jan Muhammad vs Emperor, held that the case was governed by the said exception.
The following observations of the court were relied upon in the present case : "In the present case my view is that, in judging the conduct of the accused, one must not confine himself to the actual moment when the blow, which ultimately proved to be fatal was struck, that is to say, one must not take into consideration only the event which took place immediately before the fatal blow was struck.
We must take into consideration the previous conduct of the woman. . . . . . . . . . . . .
As stated above, the whole unfortunate affair 678 should be looked at as one prolonged agony on the part of the husband which must have been preying upon his mind and led to the assault upon the woman, resulting in her death." A division bench of the Allahabad High Court in Emperor vs Balku invoked the exception in a case where the accused and the deceased, who was his wife 's sister 's husband, were sleeping on the same cot, and in the night the accused saw the deceased getting up from the cot, and going to another room and having sexual intercourse with his (accused 's) wife, and the accused allowed the deceased to return to the cot, but after the deceased fell asleep, he stabbed him to death.
The learned Judges held : "When Budhu (the deceased) came into intimate contact with the accused by lying beside him on the charpai this must have worked further on the mind of the accused and he must have reflected that `this man now lying beside me had been dishonouring me a few minutes ago '.
Under these circumstances we think that the provocation would be both grave and sudden.
" The Allahabad High Court in a recent decision, viz., Babu Lal vs State applied the exception to a case where the husband who saw his wife in a compromising position with the deceased killed the latter subsequently when the deceased came, in his absence, to his house in another village to which he had moved.
The learned Judges observed : "The appellant when he came to reside in the Government House Orchard felt that he had removed his wife from the influence of the deceased and there was no more any contact between them.
He had lulled himself into a false security.
This belief was shattered 679 when he found the deceased at his hut when he was absent.
This could certainly give him a mental jolt and as this knowledge will come all of a sudden it should be deemed to have given him a grave and sudden provocation.
The fact that he had suspected this illicit intimacy on an earlier occasion also will not alter the nature of the provocation and make it any the less sudden.
" All the said four decisions dealt with a case of a husband killing his wife when his peace of mind had already been disturbed by an earlier discovery of the wife 's infidelity and the subsequent act of her operated as a grave and sudden provocation on his disturbed mind.
Is there any standard of a reasonable man for the application of the doctrine of "grave and sudden" provocation ? No abstract standard of reasonableness can be laid down.
What a reasonable man will do in certain circumstances depends upon the customs, manners, way of life, traditional values etc.
; in short, the cultural, social and emotional background of the society to which an accused belongs.
In our vast country there are social groups ranging from the lowest to the highest state of civilization.
It is neither possible nor desirable to lay down any standard with precision : it is for the court to decide in each case, having regard to the relevant circumstances.
It is not necessary in this case to ascertain whether a reasonable man placed in the position of the accused would have lost his self control momentarily or even temporarily when his wife confessed to him of her illicit intimacy with another, for we are satisfied on the evidence that the accused regained his self control and killed Ahuja deliberately.
The Indian law, relevant to the present enquiry, may be stated thus : (1) The test of "grave 680 and sudden" provocation is whether a reasonable man, belonging to the same class of society as the accused, placed in the situation in which the accused was placed would be so provoked as to lose his self control.
(2) In India, words and gestures may also, under certain circumstances, cause grave and sudden provocation to an accused so as to bring his act within the first Exception to section 300 of the Indian Penal Code.
(3) The mental background created by the previous act of the victim may be taken into consideration in ascertaining whether the subsequent act caused grave and sudden provocation for committing the offence.
(4) The fatal blow should be clearly traced to the influence of passion arising from that provocation and not after the passion had cooled down by lapse of time, or otherwise giving room and scope for premeditation and calculation.
Bearing these principles in mind, let us look at the facts of this case.
When Sylvia confessed to her husband that she had illicit intimacy with Ahuja, the latter was not present.
We will assume that he had momentarily lost his self control.
But if his version is true for the purpose of this argument we shall accept that what he has said is true it shows that he was only thinking of the future of his wife and children and also of asking for an explanation from Ahuja for his conduct.
This attitude of the accused clearly indicates that he had not only regained his self control, but on the other hand, was planning for the future.
Then he drove his wife and children to a cinema, left them there, went to his ship, took a revolver on a false pretext, loaded it with six rounds, did some official business there, and drove his car to the office of Ahuja and then to his flat, went straight to the bed room of Ahuja and shot him dead.
Between 1 30 P.M., when he left his house, and 4 20 P.M., when the murder took place, three hours had elapsed, and therefore there was sufficient time for him to 681 regain his self control, even if he had not regained it earlier.
On the other hand, his conduct clearly shows that the murder was a deliberate and calculated one.
Even if any conversation took place between the accused and the deceased in the manner described by the accused though we do not believe that it does not affect the question, for the accused entered the bed room of the deceased to shoot him.
The mere fact that before the shooting the accused abused the deceased and the abuse provoked an equally abusive reply could not conceivably be a provocation for the murder.
We, therefore, hold that the facts of the case do not attract the provisions of Exception 1 to section 300 of the Indian Penal Code.
In the result, conviction of the accused under section 302 of the Indian Penal Code and sentence of imprisonment for life passed on him by the High Court are correct, and there are absolutely no grounds for interference.
The appeal stands dismissed.
Appeal dismissed.
| Appellant Nanavati, a Naval Officer, was put up on trial under sections 302 and 304 Part I of the Indian Penal Code for the alleged murder of his wife 's paramour.
The prosecution case in substance was that on the day of occurrence his wife Sylvia confessed to him of her illicit intimacy with Ahuja and the accused went to his ship, took from its stores a revolver and cartridges on a false pretext, loaded the same, went to Ahuja 's flat, entered his bed room and shot him dead.
The defence, inter alia, was that as his wife did not tell him if Ahuja would marry her and take charge of their children, he decided to go and settle the matter with him.
He drove his wife and children to a cinema where he dropped them promising to pick them up when the show ended at 6 p.m., drove to the ship and took the revolver and the cartridges on a false pretext intending to shoot himself.
Then he drove 568 his car to Ahuja 's office and not finding him there, drove to his flat.
After an altercation a struggle ensued between the two and in course of that struggle two shots went off accidentally and hit Ahuja.
Evidence, oral and documentary, was adduced in the case including three letters written by Sylvia to Ahuja.
Evidence was also given of an extra judicial confession made by the accused to prosecution witness 12 who deposed that the accused when leaving the place of occurrence told him that he had a quarrel with Ahuja as the latter had 'connections ' with his wife and therefore he killed him.
This witness also deposed that he told P. W. 13, Duty Officer at the Police Station, what the accused had told him.
This statement was not recorded by P. W. 13 and was denied by him in his cross examination.
In his statement to the investigation officer it was also not recorded.
The jury returned a verdict of 'not guilty ' on both the charges by a majority of 8: 1.
The Sessions Judge disagreed with that verdict, as in his view, no reasonable body of men could bring that verdict on the evidence and referred the matter to the High Court under section 307 of the Code of Criminal Procedure.
The two Judges of the Division Bench who heard the matter agreed in holding that the appellant was guilty under section 302 of the Indian Penal Code and sentenced him to undergo rigorous imprisonment for life.
One of them held that there were misdirections in the Sessions Judge 's charge to the jury and on a review of the evidence came to the conclusion that the accused was guilty of murder and the verdict of the jury was perverse.
The other Judge based his conclusion on the ground that no reasonable body of persons could come to the conclusion that jury had arrived at.
On appeal to this Court by special leave it was contended on behalf of the appellant that under section 307 of the Code of Criminal Procedure it was incumbent on the High Court to decide the competency of the reference on a perusal of the order of reference itself since it had no jurisdiction to go into the evidence for that purpose, that the High Court was not empowered by section 307(3) of the Code to set aside the verdict of the jury on the ground that there were misdirections in the charge, that there were no misdirections in the charge nor was the verdict perverse and that since there was grave and sudden provocation the offence committed if any, was not murder but culpable homicide not amounting to murder.
^ Held, that the connections were without substance and the appeal must fail.
Judged by its historical background and properly construed, section 307 of the Code of Criminal Procedure was meant to confer wider powers of interference on the High Court than 569 in an appeal to safeguard against an erroneous verdict of the jury.
This special jurisdiction conferred on the High Court by section 307 of the Code is essentially different from its appellate jurisdiction under sections 410 and 417 of the code, section 423(2) conferring no powers but only saving the limitation under section 418(1), namely, that an appeal against an order of conviction or an acquittal in a jury trial must be confined to matters of law.
The words "for the ends of justice" in section 307(1) of the Code, which indicate that the Judge disagreeing with the verdict, must be of the opinion that the verdict was one which no reasonable body of men could reach on the evidence, coupled with the words 'clearly of the opinion ' gave the Judge a wide and comprehensive discretion to suit different situations.
Where.
therefore, the Judge disagreed with the verdict and recorded the grounds of his opinion, the reference was competent, irrespective of the question whether the Judge was right in so differing from the jury or forming such an opinion as to the verdict.
There is nothing in section 307(1) of the Code that lends support to the contention that though the Judge had complied with the necessary conditions, the High Court should reject the reference without going into the evidence if the reasons given in the order of reference did not sustain the view expressed by the Judge.
Section 307(3) of the Code by empowering the High Court either to acquit or convict the accused after considering the entire evidence, giving due weight to the opinions of the Sessions Judge and the jury, virtually conferred the functions both of the jury and the Judge on it.
Where, therefore, misdirections vitiated the verdict of the jury, the High Court had as much the power to go into the entire evidence in disregard of the verdict of the jury as it had when there were no misdirections and interfere with it if it was such as no reasonable body of persons could have returned on the evidence.
In disposing of the reference, the High Court could exercise any of the procedural powers conferred on it by section 423 or any other sections of the Code.
Ramanugarh Singh vs King Emperor, (1946) L.R. 73 I. A. 174, Akhlakali Hayatalli vs State of Bombay, ; , Ratan Rai vs State of Bihar, , Sashi Mohan Debnath vs State of West Bengal , and Emperor vs Ramdhar Kurmi, A. I. R. 1948 Pat.
79, referred to.
A misdirection is something which the judge in his charge tells the jury and is wrong or in a wrong manner 570 tending to mislead them.
Even an omission to mention matters which are essential to the prosecution or the defence case in order to help the jury to come to a correct verdict may also in certain circumstances amount to a misdirection.
But in either case, every misdirection or non direction is not in itself sufficient to set aside a verdict unless it can be said to have occasioned a failure of justice.
Mustak Hussein vs State of Bombay [1953] section C. R. 809 and Smt.
Nagindra Bala Mitra vs Sunil Chandra Roy, ; , referred to.
There is no conflict between the general burden that lies on the prosecution in a criminal case and the special burden imposed on the accused under section 105 of the Evidence Act where he pleads any of the General Exceptions mentioned in the Indian Penal Code.
The presumption of innocence in the favour of the accused continues all through and the burden that lies on the prosecution to prove his guilt, except where the statute provides otherwise, never shifts.
Even if the accused fails to prove the Exception the prosecution has to discharge its own burden and the evidence adduced, although insufficient to establish the Exception, may be sufficient to negative one or more of the ingredients of the offence.
Woolmington vs Director of Public Prosecutions, L. R. ; , considered.
Attygalle vs Emperor, A. I. R. 1936 P. C. 169, distinguished.
State of Madras vs A. Vaidyanatha Iyer, ; and C. section D. Swamy vs State, ; , referred to.
Consequently, where, as in the instant case, the accused relied on the Exception embodied in section 80 of the Indian Penal Code and the Sessions Judge omitted to point out to the jury the distinction between the burden that lay on the prosecution and that on the accused and explain the implications of the terms 'lawful act ', lawful manner ', 'unlawful means ' and 'with proper care and caution ' occurring in that section and point out their application to the facts of the case these were serious misdirections that vitiated the verdict of the jury.
Extra judicial confession made by the accused is a direct piece of evidence and the stringent rule of approach to circumstantial evidence has no application to it.
Since in the instant case, the Sessions Judge in summarising the circumstances mixed up the confession with the circumstances while directing the jury to apply the rule of circumstantial evidence and 571 it might well be that the jury applied that rule to it, his charge was vitiated by the grave misdirection that must effect that correctness of the jury 's verdict.
The question whether the omission to place certain evidence before the jury amounts to a misdirection has to be decided on the facts of each case.
Under section 297 of the Code of Criminal Procedure it is the duty of the Sessions Judge after the evidence is closed and the counsel for the accused and the prosecution have addressed the jury, to sum up the evidence from the correct perspective.
The omission of the Judge in instant case, therefore, to place the contents of the letters written by the wife to her paramour which in effect negatived the case made by the husband and the wife in their deposition was a clear misdirection.
Although the letters were read to jury by the counsel for the parties, that did not absolve the judge from his clear duty in the matter.
R. V. Roberts, and R. vs Affield, , held inapplicable.
The commencement of investigation under section 156 (1) of the Code of Criminal Procedure in a particular case, which is a question of fact, has to be decided on the facts of the case, irrespective of any irregularity committed by the Police Officer in recording the first information report under section 154 of the Code.
Where investigation had in fact commenced, as in the instant case, section 162 of the Code was immediately attracted.
But the proviso to that section did not permit the eliciting from a prosecution witness in course of his cross examination of any statement that he might have made to the investigation officer where such statement was not used to contradict his evidence.
The proviso also had no application to a oral statement made during investigation and not reduced to writing.
In the instant case, therefore, there could be no doubt that the Sessions Judge acted illegally in admitting the evidence of P. W. 13 to contradict P. W. 12 in regard to the confession of the accused and clearly misdirected himself in placing the said evidence before the jury.
Exception 1 to section 300 of the Indian Penal Code could have no application to the case.
The test of "grave and sudden" provocation under the Exception must be whether a reasonable person belonging to the same class of society as the accused, placed in a similar situation, would be so provoked as to lose his self control.
In India, unlike in England, words and gestures may, under certain circumstances cause grave and sudden provocation so as to attract that Exception.
The mental background created by any previous act of the victim can 572 also be taken into consideration in judging whether the subsequent act could cause grave and sudden provocation, but the fatal blow should be clearly traced to the influence of the passion arising from that provocation and not after the passion had cooled down by lapse of time or otherwise, giving room and scope for premeditation and calculation.
Mancini vs Director of Public Prosecutions, L.R. (1942) A.C.
I, Holmes vs Director of Public Prosecutions, L. R. Duffy 's case, [1949]1 All.
E. R. 932 and R. vs Thomas, ; , considered.
Empress vs Khogayi, Mad. 122, Boya Munigadu vs The Queen, Mad. 33, In re Murugian I. L. R. , In re C. Narayan, A.I.R. 1958 A. P. 235, Jan Muhammad vs Emperor, I. L. R. , Emperor vs Balku, I. L. R. (1938) All 789 and Babu Lal vs State A. I. R. 1960 All.
223, referred to.
Semble: Whether a reasonable person in the circumstances of a particular case committed the offence under grave and sudden provocation is a question of fact for the jury to decide.
Holmes vs Director of Public Prosecution, L. R. , considered.
| This appeal by special leave was directed against the order of the High Court asking the Income tax Appellate Tribunal under section 66(4) Of the Income tax Act to submit a supplementary ' statement of case on points, which were never raised by the parties nor decided by the Income tax Authorities or the Tribunal.
The only question canvassed before them was whether certain cheques, which were received by the assessee at Bhavnagar having been cashed in British India, the monies in respect of them could be said to have been received in British India.
The Tribunal held that the monies related back to the receipt of the cleques and were as such received at Bhavnagar.
The question was whether the receipt of the cheques at Bhavnagar amounted to receipt of the sale proceeds at Bhavnagar. ' The High Court held that the mere receipt of the cheques by post at Bhavnagar was not conclusive in absence of a further finding as to whether the cheques were sent by post without any request, express or implied, having been made by the assessee and observed as follows " But we cannot shut out the necessary inquiry which even from our own point of view is necessary to be made in order that we should satisfactorily answer the question raised in the Reference.
It must not be forgotten that under sec.
66(4) of the Income tax Act we have a right independently of the conduct of the parties to direct the Tribunal to state further facts so that we may properly exercise our advisory jurisdiction.
" Held, that the High Court had misconceived its powers under section 66(4) of the Act and its decision must be set aside.
Section 66(4) of the Indian Income tax Act, which must be read with sections 66(1) and 66(2) Of the Act, did not empower the High Court to raise a new question of law which did not arise out of the Tribunal 's order or direct the Tribunal to investigate new and further facts necessary to determine the new question which had not been referred to it under s 66(1) or section 66(2) of the Act and direct the Tribunal to submit supplementary statement of case.
Such additions and alterations in the statement of case as section 66(4) of the Act empowered the High Court to direct, could 250 relate only to such facts as already formed part of the record but were not included by the Tribunal in the statement of the case.
Craddock (H. M. Inspector of Taxes) vs Zevo Finance Co. Ltd., ; Commissioner of Income tax, West Bengal vs State Bank of India, ; Industrial Development and Investments Co., Ltd. vs Commissioner of Excess Profits Tax, Bombay, [1957] 31 I.T.R. 688; Vadilal Ichhachand vs Commissioner of Income tax, Bombay North, Kutch and Saurashtra, Ahmedabad, and Commissioner of Income tax vs Bhurangya Coal Co. [195S] , referred to.
Commissioner of Income tax, Bihar & Orissa vs Visweshwar Singh, and Sir Sunder Singh Majithia vs Commissioner of Income tax, C. P. and U. P. [1942] 10 I.T.R. 457, considered.
| The appellant was convicted under section 302 of the Indian Penal Code and sentenced to imprisonment for life by the High Court for the offence of the murder of his wife.
He was granted special leave to appeal by this Court.
During the pendency of the hearing of this appeal the appellant died.
After his death his sons and daughter applied to this Court for permission to continue to prosecute the appeal.
It was pleaded by the legal representatives of the appellant that though that sentence of imprisonment could no longer be executed, it still affected the property of the deceased and the legal representatives were, therefore, interested in the appeal and should be permitted to continue it.
The appellant, who held a high office in the Government of Andhra Pradesh had been suspended during the investigation of the charge against him and he was dismissed from service under certain service rules on his conviction.
During this time the appellant had only been given a small allowance.
On these facts it was pleaded that if the conviction was set aside, the estate of the deceased would be entitled to receive the full salary from the Government.
Held (Per Sarkar, J.): (i) Neither section 431 nor the cases men tioned can be said to apply to the present case proprio vigore, for the present is not an appeal under the code of criminal procedure which is dealt with by section 431 nor is it a revisional application like the one which came up for consideration in Pranab Kumar Mitra 's case, while as for the English case, it is only of persuasive value.
Pranab Kumar Mitra vs The State of West Bengal, [1959] Supp. 1 S.C.R. 63 and Hodgson vs Lakeman, , distinguished.
(ii).The principle on which the hearing of a proceeding may be continued after the death of an accused would appear to be the effect of the sentence on his property in the hands of his legal representatives.
If the sentence affects that property, the legal representatives can be said to be interested in the proceeding and allowed to continue it.
This principle applies in appeals, revisions, and in petitions under article 136 of the Constitution.
A sentence of fine no doubt affects the property.
In the present case, however, the sentence was not of fine but of imprisonment which on the death of the accused has become infructuous.
In the present case the effect of the sentence imposed in this case being set aside would not directly entitle the legal representatives to the salary.
They will have to obtain necessary orders from the Government for the purpose.
252 Held (Per Hidayatullah, J.): (i) This was an appeal against a sentence of imprisonment and an appeal of this character would normally abate on the death of the appellant because a criminal prosecution is concerned primarily with the punish ment of an offender and not with the trial of an abstract issue about the truth or falsity of a prosecution case.
The same principle must apply to appeals after conviction, except in so far as a judgment already rendered touches assets which would come to the legal representative.
In so far as personal punishment (other than a fine) is concerned that stands dissolved by the death of the offender and an appeal to get that punishment set aside becomes infructuous and abates.
Pranab Kumar Mitra vs The State of West Bengal, [1959] Supp. 1 S.C.R. 63, Pritam Singh vs State, ; , distinguished.
Hodgson vs Lakeman, [1943] L.R.K.B. 15, Baghis vs Rowes , referred to.
(ii).The principle laid down in Pranab Kumar Mitra vs The State of.
West Bengal and Another and in Pritam Singh vs The State has.no application to the present matter because there is no analogy between an appeal by special leave and a revision under the code.
The present case is not a case where the legal representatives after the death of the offender have to meet the liability of a fine or are required to protect the assets which they claim should reach them.
In the present case no claim of the petitioners is jeopardized directly, by the judgment.
Their claim is dependent upon the administrative action of Government which may not proceed upon the result of criminal prosecution.
This appeal was only concerned with the correctness or otherwise of the conviction and not with any monetary claims depending upon the result of the appeal.
In such a situation the ordinary rule that a criminal proceeding against a person comes to an end on his demise must apply also to special appeals in this court, such as this, even though the provisions of the Criminal Procedure Code may not be directly applicable.
Held (Per Mudholkar, J.): (i) The decision of this court in Pranab Kumar Mitra vs The State of West Bengal has no, bear ing upon an appeal brought to this court by special leave.
It is no doubt true that the power confer red by section 435 of the Code on the High Court and certain other courts and by Article 136 of the Constitution on this Court is discretionary.
Under section 439 of the Code the High Court can exercise any of the powers conferred on a court of appeal by sections 423, 426, 427 and 428 or on a court by section 338 and has also the power to enhance the sentence.
Under Section 435 of the Code, the High Court can suo motu call for the record of any inferior court but this power cannot be exercised by this court under article 136 of the Constitution.
Therefore there is a fundamental difference between the power of the High Court in revision and the power of this Court in article 136 of the Constitution.
Pranab Kumar Mitra vs The State of West Bengal, [1959] Supp. 1 S.C.R. 63, distinguished.
(ii).In a criminal matter the issue is personal between the accused person and the State and the right of appeal is also personal to the appellant.
There is admittedly no express provision permitting the substitution of legal representatives of a decreased appellant in a criminal appeal brought to this Court by 253 special leave.
The policy of the law discernible from section 431 of the Code has to be borne in mind.
The policy under section 431 of the Code is that every criminal appeal under chapter XXXI will abate except an appeal from a sentence of fine.
There is no provision which prescribes the continuation of the appeal on the death of the appellant in cases where the sentence is of imprisonment.
The interest of the legal representatives in the present case is not a direct interest in the sense that it cannot arise out of the decision of this court even if it is in favour of the appellant.
The only interest which the applicants have is a contingent one and is not one which could flow directly out of the ultimate decision of this Court.
Hodgson vs Lakeman, (1943) L.R.K.B. 15, Regina vs Rowe, , Hesketh vs Atherton, Leach vs Wanstead School Board, Siberry vs Connolly, Constantine vs Illingworth, Jones vs Gallowfield, Rivers vs Glasse, (all cited in Short and Mellor, Practice on the Crown Side of the King 's Bench Division 2nd Ed.
at p. 425), United States vs Mook, , The State of Kerala vs Narayani Amma Kamala Devi, [1962] Supp.
3 S.C.R. 943 and Imperatrix vs Dongali Andaji, , referred to and discussed.
(iii). .The
Legislature has by limiting in section 431 of the Code the survival of appeals to appeals against sentences of fine has chosen to recognise only one kind of interest and no other.
This Court in exercise of its inherent powers or discretionary powers would not be acting according to correct legal principles in recognising a kind of interest which the legislature has not chosen to recognise.
In the circumstances the applicants ought not to be granted special leave to prosecute the appeal.
| Allowing the appeal, the Court.
^ HELD: 1.
The trial of a chid under the provisions of the Haryana Children Act, 1974 for the offence of murder was not barred.
The appellant here was a child within the meaning of that term under clause (d) of section 2 of the Act.
[689 A, C] 2.
A perusal of section 22 of the Central (Act LX of 1960) which is in pari materia with section 21 of the Haryana and other provisions of the State and Central Children Acts shows that the procedure for trial, conviction and sentence under the Children Acts are simple humane and by Courts manned with persons with knowledge of child psychology and child welfare; but not so under the Criminal Procedure Codes of 1898 and 1973.
The intention of the State Legislature of Haryana and of the Parliament in enacting the Children Acts was to make provisions for trial of delinquent children and dealing with them in accordance with such procedure so that the delinquent children do not come in contact with accused persons who are not children and but are hardened criminals.
The purpose undoubtedly was to reclaim delinquent children and rehabilitate them in such a way that they become useful citizens later in life.
[691 G H, 692 A B] 3:1.
The purpose of the Haryana Legislature as well as of the Parliament in enacting the Haryana and the Central respectively was to give separate treatment to delinquent children in trial, conviction and punishment for offences including offences punishable with death or imprisonment for life [693 C D] 3:2.
Section 27 of the Criminal Procedure Code, 1973 is not 'a specific provision to the contrary ' within the meaning of section S of the Code the intention of the Parliament was not to exclude the trial of delinquent children for offences punishable with death or imprisonment for life, inasmuch as section 27 does not contain any expression to the effect "notwithstanding anything contained in any passed by any State Legislature".
Parliament 687 certainly was not unaware of the existence of the Haryana coming into force a month earlier or the Central coming into force nearly fourteen years earlier.
What section 27 contemplates is that a child under the age of 16 years may be tried by a Chief Judicial Magistrate or any court specially empowered under the .
It is an enabling provision and has not affected the Haryana in the trial of delinquent children for offences punishable with death or imprisonment for life.
[693 C, D G] 4:1.
If there be any conflict between any provisions of the Act and the Criminal Procedure Act, in view of Article 254(1) of the Constitution, the provision of the Haryana repugnant to any provision of the Criminal Procedure Code will be void to the extent of repugnancy [692 B C] 4:2.
Criminal Procedure appears in Item 2 of the Concurrent List of the Seventh Schedule of the Constitution.
One of the circumstances under 'which repugnancy between the law made by the State and the law made by the Parliament may result is whether the provisions of a Central Act and a State Act in the Concurrent List are fully inconsistent and are absolutely irreconcilable.
In the case in hand the relevant provisions of the Criminal Procedure Code and the Haryana can co exist.
Their spheres of operation are different.
[693 G H, 694 A] Dev Singh and 2 Ors.
vs State of Madhya Pradesh, Madhya Pradesh, overruled.
| The appellant filed a complaint against the respondent and another under ss 385, 389, 500/109 of the Indian Penal Code.
The Trial Court found that there was no conspiracy to defame the appellant or to extort money from him and a charge under section 500 Indian Penal Code only was framed against the respondent.
It was found that the facts mentioned in the charge were not stated in the complaint.
The Trial Court holding that a separate complaint should have been filed in respect of the offence with which the respondent was charged, acquitted him.
The High Court rejected the appellant 's application for revision of the order of the Trial Court with the remark " rejected as no offence The appellant appealed by special leave.
Held, that the offence charged was a separate offence, although of the same kind, from the offence in respect of which the facts had been stated in the complaint.
For this separate offence a separate complaint should have been filed in accordance with the provisions of section 198 of the Code of Criminal Procedure.
The Provisions of section 198 of the Code of Criminal Procedure are mandatory.
In appeal the Supreme Court could do what the High Court could have done The order of acquittal of the respondent was a nullity, and the proper order should be one of discharge.
| The respondent 's appeal against an order of assessment was rejected by the Appellate Assistant Commissioner and he, thereafter appealed to the Appellate Tribunal.
The Tribunal, after having granted some adjournments, dismissed the appeal for default in appearance On a day fixed for the hearing, purporting to do so under rule 24 of the Appellate Tribunal Rules, 1946.
The High Court directed the Tribunal to refer two questions to itself one relating to the merits and the other to the effect whether rule 24 of the Appellate Tribunal Rules, 1946, in so far as it enables the Tribunal to dismiss an appeal in default in appearance, is ultra vires.
A special bench of the High Court took the view that under section 3 3 (4) the Tribunal was bound to dispose of the appeal on the merits, whether the appellant was present or not.
On appeal to this Court, HELD : It follows from the language of section 33(4) and in particular the use of the word "thereon" that the Tribunal has to go into the correctness or otherwise of the points decided by the departmental authorities in the light of the submissions made by the appellant.
This can only be done by giving a decision on the merits on questions of fact and law and not by merely disposing of the appeal on the ground that the party concerned had failed to appear.
[824 C D] The provisions contained in section 66 about making a 'reference on questions of law to the High Court would be rendered nugatory if a power is attributed to the Appellate Tribunal by which it can dismiss an appeal, which has otherwise been properly filed, for default, without making an order thereon in accordance with section 33(4).
So far as the questions of fact are concerned the decision of the Tribunal is final and reference can be sought to the High Court only on questions of law.
The High Court exercises purely advisory jurisdiction and has no appellate or revisional powers.
The advisory jurisdiction can be exercised on a proper reference being made and that cannot be done unless the Tribunal itself has passed a proper order under section 33(4).
[824 E H] Rule 24 clearly comes into conflict with section 33(4) and in the event ,of repugnancy between the substantive provisions of the Act and a rule, it is the rule which must give way to the provisions of the Act.
[825 H] Shri Bhagwan Radha Kishen vs Commissioner of Income tax, U.P. ; Ruvula Subba Rao & Ors.
vs Commissioner of Income tax Madras, ; Mangat Ram Kuthiala & Ors.
vs Commissioner of Income tax, Punjab, ; Hukumchand Mills Ltd. vs Commissioner of Income tax, Central Bombay, ; Commissioner of Income 819 tax Madras vs Mtt.
section Ar.
Arunachalam Chettiar, and Commissioner of Income tax, Bombay vs Scindia Stearn Navigation Co. Ltd. ; , referred to.
| The appellant was tried for causing the death of his mother by inflicting injuries with a spear.
The Sessions Judge convicted the appellant of the offence of culpable homicide not amounting to murder, and sentenced him to suffer rigorous imprisonment for seven years.
An appeal preferred by him from jail was summarily dismissed by the High Court.
Thereafter the State filed an 'appeal against the order acquitting the appellant of the offence of murder.
The High Court issued notice to the appellant and after hearing counsel on both sides, convicted the appellant of the offence of murder, and in substitution of the sentence imposed by the Court of Session, sentenced him to suffer rigorous imprisonment for life.
Appeal was filed in this Court by special leave.
On behalf of the appellant it was urged that the judgment of the High Court dismissing summarily the appellant 's appeal against conviction under section 304 became final, and that the judgment of the Court of Sessions got merged into the judgment of the High Court and thereafter the High Court was incompetent in an appeal filed by the State to modify that order and convict the appellant for the offence of murder.
Reliance was placed on sections 369 and 430 of the Code of Criminal Procedure.
HELD: (i) The right to appeal against the order of acquittal is expressly conferred upon the State by section 417 of the Code and section 369 does not purport to place any restriction upon the exercise of that right.
Section 369 ' occurs in Chapter XXVI and prima facie applies to judgments of the courts of first instance.
[571] (ii) Finality of the judgment of the Appellate Court disclosed by section 430 is subject to two restrictions i.e. the judgment may be set aside or modified in an appeal under section 417 of the Code by the High Court and in exercise of the power conferred upon the courts under Ch.
XXXII which deals with the exercise of power to entertain references and revisions.
Judgment of a High Court in appeal is not subject to the exercise of any appellate or revisional power exercisable under the Code.
The exception declared in section 430 therefore only applies to judgment of a court subordinate to the High Court exercising appellate power.
[571 G] (iii) There is no warrant for the argument that when an appeal preferred by a person convicted of an offence is dismissed summarily by the High Court under section 421 of the Code of Criminal Procedure.
the judgment of the trial court gets merged in the judgment of the High Court and cannot thereafter be modified.
The summary dismissal of the appeal of the person accused, binds the accused but not the State which has not been heard.
[572 A, D] If after the appeal of the accused is summarily dismissed the State or the complainant seeks to prefer an appeal against the order of acquit 570 tal, the High Court is not prohibited by any express provision or implication 'arising fro.m the scheme of the Code from entertaining the appeal.
When, however, the High Court issues notice to the State in an appeal by the accused against the order of conviction and the appeal is heard and decided on the merits all questions determined by the High Court either expressly or by necessary implication must be deemed to be finally determined, and there is no scope for reviewing those orders in any other proceeding: The reason of the rule: is not so much the principle of merger of the judgment of the, trial court into the judgment of the High Court, but that a decision rendered by the High Court, after hearing the parties on a matter in dispute is not liable to be reopened between the same parties in any subsequent enquiry.
[572 E, F] (iv) The fact that at the earlier hearing the High Court called for the record of the ease from the court of session in exercise of the power under section 421(2) and after persuing the record dismissed the appeal, was not relevant in determining the legal effect of the order of the High Court.
[575 D] U.J.S. Chopra vs State of Bombay, ; , applied.
Pratap Singh vs State of Vindhya Pradesh (Now Madhya Pradesh) ; , distinguished.
State vs Babulal and Bherumal, A.I.R. 1956 Raj. 67, State vs Kalu, A.I.R. 1952 M.B. 81 and State vs Mansha Singh Bhagwant Singh, I.L.R. (1958) Punjab 1475, referred to.
| The accused petitioners were charged under section 302 and 307 read with Sections 147, 148 and 149 of the Indian Penal Code and Section 37 of the Bombay Police Act, 1951.
Subsequently they were also charged under section 3 of the Terrorist and Disruptive Activities (Prevention) Act.
They moved the Designated Court for grant of bail contending that the provisions of the 1987 Act were wrongly and mali ciously invoked and the Designated Court held that section 3 of the Act was inapplicable.
The State of Maharashtra has preferred an appeal to this Court against the said order of the Designated Court.
Since the accused were directed to approach the regular court, they moved bail applications before the Sessions Judge, Ahmadnagar which were rejected.
Thereafter, they approached the High Court and during the pendency of their bail applications before the High Court, the prosecution submitted a charge sheet against them in the Designated Court under section 3 of the 1987 Act.
Conse quently the High Court rejected their bail applications and the accused again approached the Designated Court for bail.
The Designated Court again held that the material 634 placed before it and the statement recorded by the Investi gating Officer did not disclose the commission of an offence under section 3 of the Act.
Accordingly, it discharged the accused under section 227 of the Code of Criminal Procedure, 1973 and transferred the case to court of Sessions for trial of other offences under the Penal Code and the Bombay Police Act.
Against this order of the Designated Court, two appeals have been filed in this Court; one by the deceased 's father and the other by the State.
After transfer of their case to the regular court.
the accused persons approached the High Court for bail which was rejected.
The accused persons have filed a Special Leave Petition in this Court against the High Court 's order refusing the bail.
Dismissing the appeals and disposing of the petition, this Court.
HELD: 1.
A mere statement by the accused persons to the effect that the show of violence would create terror or fear in the minds of the people and none would dare to oppose them cannot constitute an offence under section 3(1) of the Act.
That may indeed be the fail out of the violent act but that cannot be said to be the intention of the perpetrators of the crime.
[646H; 647A] 1.1 While invoking a criminal statute, such as the Terrorist and Disruptive Activities (Prevention) Act,1987, the prosecution is duty bound to show from the record of the case and the documents collected in the course of investiga tion that facts emerging therefrom prima facie constitute an offence within the letter of the law.
[644F] 1.2 In the instant case it is clear from the statement of the accused persons that their intention was to liquidate rivals and thereby achieve the objective of gaining suprema cy in the underworld.
The consequence of such violence is bound to cause panic and fear but the intention of commit ting the crime cannot be said to be to strike terror in the people or any section of the people.
Therefore, the Desig nated Court was fully justified in taking the view that this was a case of inter gang rivalry only and that the material placed on record and the documents relied on did not prima facie disclose the commission of the offence punishable under section 3(1) of the Act.
[647D E] 2.
Section 12(1) of the Terrorist and Disruptive Activi ties (Prevention) Act, 1987 empowers the Designated Court to try any offence punishable under any other statute along with the offence punishable under the Act if the former is connected with the latter.
That, however, does not mean that even when the Designated Court comes to the con 635 clusion that there exists no sufficient ground for framing a charge against the accused under Section 3(1) of the Act it must proceed to try the accused for the commission of of fences under other statutes.
Thai would tantamount to usurp ing jurisdiction.
Section 18, therefore, in terms provides that where after taking cognizance of any offence the Desig nated Court is of the opinion that the offence is not tri able by it, it shall, notwithstanding that it has no juris diction to try such offence, transfer the case for the trial of such offence to any Court having jurisdiction under the Code, Therefore, when the Designated Court came to the conclusion that there was no prima facie evidence to frame a charge under section 3(1) of the Act, it was justified in transferring the case to the Court of Sessions, which alone had jurisdiction under the Code.
The course adopted by the Designated Court in transferring the case to the Sessions Court for trial of offences under other statutes is clearly in keeping with section 18 of the Act.
[647F H; 648A C] 3.
Statutes which impose a term of imprisonment for what is a criminal offence under the law must be strictly con strued.
[644C] Usmanbhai Dawoodbhai Memon & Ors., vs State of Gujrat, ; referred to.
3.1 When a statute provides special or enhanced punish ments as compared to the punishments prescribed for similar offences under the ordinary penal laws of the country, a higher responsibility and duty is cast on the Judge to make sure there exists prima facie evidence for supporting the charge levelled by the prosecution.
Therefore.
when a law visits a person with serious penal consequences extra care must be taken to ensure that those whom the legislature did not intend cover by the express language of the statute are not roped in by stretching the language of the law.
But that does not mean that the judicial officer called upon to decide whether or not a case for flaming a charge under the Act is made out should adopt a negative attitude.
He should frame a charge if the prosecution shows that the material placed on record and the documents relied on give rise to a strong suspicion of the accused having committed the crime alleged against him.
[644G H; 645A] 4.
The Court while considering whether to discharge the accused or to frame a charge against him i.e. at the stage of sections 227 228 of the Code of Criminal Procedure, 1973 is required to evaluate the material and documents on record with a view to finding out if the facts emerging therefrom taken at their face.
value disclose the existence of all the ingredients constituting the alleged offence.
Since the Trial Court is 636 at the stage of deciding whether or not there exists suffi cient grounds for framing the charge, its enquiry must necessarily be limited to deciding if the facts emerging from the record and documents constitute the offence with which the accused is charged.
At that stage it may sift the evidence for that limited purpose but it is not required to marshal the evidence with a view to separating the grain from the chaff.
All that it is called upon to consider is whether there is sufficient ground to frame the charge and for this limited purpose it must weigh the material on record as well as the documents relied on by tile prosecu tion.
[643E; 641F G] State of Bihar vs Ramesh Singh, ; ; Union of India vs Prafulla Kumar Samal & Anr., ; and Supdt. & Remembrancer of Legal Affairs, West Bengal vs Anil Kumar Bhunja & Ors., ; , referred to.
|
Civil Appeals Nos.
258 259 of 59 and 404 of 60.
Appeals by special leave from the judgment and orders dated July 2, 1956, January 9, 1957 and June 16,1958 of the Bombay High Court in Special Civil Applications Nos. 1471, 1527 and 2990 of 56 and 1431 of 1958 respectively.
V.M. Limaye, V.L. Narasimha Moorthy, E. Udayaratnam and S.S. Shukla, for the appellants.
B.C. Kamble and A.G. Ratnaparkhi, for respondents Nos. 1 and 3 (in C. section No. 258/59).
S.G. Patwardhan, B.C. Kamble and A.G. Ratnaparkhi, for respondent No. 1 ( in C. A. No. 259/59) and the respondent in (C.A. No. 404 of 60).
Rameshwar Nath, for the respondent (in C.A. No. 9 of 60).
December 1.
The Judgment of the Court was delivered by SARKAR, J.
These four appeals are by landlords whose applications to the authorities under the Bombay Tenancy and Agricultural Lands Act, 1948 for possession of the lands held by their tenants, on the grounds had that the tenancy had been terminated by due notices on the tenants ' failure to pay rents for three years, were dismissed.
741 These authorities refused in three of these cases to make an order for possession either because the tenants had paid up all rent which had fallen in arrear or because the authorities thought it proper on the facts of the case to give them time to pay up.
They felt that the tenants were entitled to relief against forfeiture on equitable principles.
In the fourth case, which is covered by Civil Appeal No. 259 of 1959, it was held that there had not been on the facts of the case, default in payment of rent for three years and, therefore the tenant was entitled to statutory relief against eviction under section 25(1) of the Act which we shall later set out.
The High Court at Bombay by a summary order, without stating any reasons, refused to interfere when moved under article 227 of the Constitution.
The landlords have therefore filed these appeals with leave of this Court.
We shall now deal with the first three cases and later take up the fourth case.
In these three cases relief was granted to the tenants on the basis of certain observation of the High Court at Bombay in Sitaram Vithal Chitnis vs Gundu Satyappa Dhade, Special Civil Application No. 1695 of 1955, unreported, which we quote here: "Every court of equity will be extremely reluctant to enforce an order of ejectment against a tenant when the only ground on which the landlord seeks ejectment is failure to pay rent.
Therefore, if the tenant is willing to pay all arrears of rent, in our opinion, it would be inequitable to turn these tenants out when they are prepared to make good the arrears of rent.
" With great respect to the learned Judges of the High Court, we are unable to assent to the proposition so broadly put.
We now set out the relevant provisions of the Act.
742 section 5 (1) No tenancy of any land shall be for a period of less than ten years: Provided that at the end of the said period and thereafter at the end of each period of ten years in succession, the tenancy shall, subject to the provisions of sub secs.
(2) and (3), be deemed to be renewed for a further period of ten years on the same terms and conditions notwithstanding any agreement to the contrary.
(2) x x x x x x x x x x x x x x x x x x x x x x (3) Notwithstanding anything contained in sub sec.
(1): (a) every tenancy shall, subject to the provisions of sections 24 and 25, be liable to be terminated at any time on any of the grounds mentioned in section 14.
x x x x x x x x x x x x x x x x x x x x x x x x section 14(1) Notwithstanding any agreement, usage, decree, or order of a court of law, the tenancy of any land held by a tenant shall not be terminated unless such tenant: (a)(1) has failed to pay in any year, with in fifteen days from the day fixed. the rent of such land for that year.
x x x x x x x x x x x x x x x x Provided that no tenancy of any land held by a tenant shall be terminated on any of the grounds mentioned in this sub section unless the landlord gives three months ' notice in writing intimating the tenant his decision to terminate the tenancy and ground for such termination.
743 section 25(1)Where any tenancy of any land held by any tenant is terminated for non payment of rent and the landlord files any proceeding to eject the tenant, the Mamlatdar shall call upon the tenant to tender to the landlord the rent in arrears together with the costs of the proceeding within fifteen days from the date of order, and if the tenant complies with such order, the Mamlatdar shall, in lieu of making an order for ejectment, pass an order that the tenancy had not been terminated, and thereupon the tenant shall hold the land as if the tenancy had not been terminated: Provided that if the Mamlatdar is satisfied that in consequence of total or partial failure of crops or similar calamity the tenant has been unable to pay the rent due, the Mamlatdar may, for reasons to be recorded in writing, direct that the arrears of rent together with the costs of the proceedings if awarded, shall be paid within one year from the date of the order and that if before the expiry of the said period, the tenant fails to pay the said arrears of rent and costs, the tenancy shall be deemed to be terminated and the tenant shall be liable to be evicted.
(2) Nothing in this section shall apply to any tenant whose tenancy is terminated for non payment of rent if he has failed for any three years to pay rent within the period specified in section 14.
section 29(1) A tenant or an agricultural labourer or an artisan entitled to possession of any land or dwelling house under any of the provisions of this Act may apply in writing for such possession to the Mamlatdar.
x x x x x x x x x x x x x x x x x x x x x x x x 744 (2) No landlord shall obtain possession of any land or dwelling house held by a tenant except under an order of the Mamlatdar.
For obtaining such order he shall make an application in the prescribed form and within a period of two years from the date on which the right to obtain possession of the land or dwelling house, as the case may be, is deemed to have accrued to him.
(3) On receipt of such application under sub section (1) or (2) the Mamlatdar shall, after holding an enquiry, pass such order thereon as he deems fit.
We are not concerned in these three cases with section 24 mentioned in section 5(3)(a).
The "date fixed" mentioned in section 14(1)(a)(i) is it may be stated the 20th of March of each year.
It is not in dispute in these cases that the tenants were in default in paying rents for three years within section 14(1)(a)(i) and due notices had been served by the landlords terminating the tenancies as required by the proviso to section 14(1).
By section 5, therefore, a tenancy under the Act is made to have indefinite duration being renewable for ten years at the end of every ten years and the landlord cannot put an end to the tenancy except under the provisions of the Act, one of which is section 14.
This is irrespective of any contract between the parties.
Under section 14 on the default in payment of a year 's rent occurring, the landlord may, if he so chooses, bring the tenancy to end by giving the prescribed notice.
If the tenancy is terminated, the tenant has, of course, no right to hold the land.
The landlord would then be entitled to recover possession of the land from him.
In view however of section 29(2), the landlord cannot do so except by an application made to a Mamlatdar for the purpose.
Now when such an application is made in case where the tenant has been in default for not 745 more than two years, section 25(1) would have to be applied and the Mamlatdar would have to give the tenant a chance to pay up and thereby annul the termination of the tenancy brought about under section 14.
In these three cases there is no controversy that the tenancies have been terminated under section 14.
There is also no dispute that the tenants are not entitled to be relieved against that termination under sub section
(1) of section 25 because of the provisions of sub sec.
(2) of that section, as in these cases the rent had not been paid for three years.
They however claim relief on the principle on which equity grants relief against forfeiture of tenancies.
The authorities under the Act have granted them the relief by applying this equitable principle.
In our opinion, the authorities were clearly in error in thinking that they could grant relief in these cases on equitable principles.
In equity relief may be granted to a tenant who has incurred a forfeiture under the terms of the tenancy, that is, his contract with the landlord.
Here, that is not the position.
The tenancies have been terminated in these cases under a statutory provision.
In the circumstances that have happened, the landlords have in our opinion acquired a statutory right to the possession of the lands and, therefore, to eject the tenants, the reasons for which view we shall discuss in some detail later.
In such a case, no relief can be granted to the tenants on equitable principles.
Equity does not operate to annul a statute.
This appears to us to be well established but we may refer to white and Tudors Leading Cases in Equity (9th ed.) p. 238, where it is stated, "Although, in cases of contract between parties, equity will often relieve against penalties and forfeitures, where compensation can be granted, relief can never be given against the provisions of a statute.
" 746 The order of the authorities taking away the landlords ' statutory right to possession by application of rules of equity cannot be supported.
It was then said that section 29(3) gives ample power to the authorities to refuse to make an order for possession in the landlord 's favour if the tenant pays up the arrears and the justice of the case requires that the tenant should not be deprived of the land.
That sub section no doubt says that the Mamlatdar "shall. pass such order thereon as he deems fit".
We are however wholly unable to agree that this provision warrants the making of any order that the authority concerned thinks in his individual opinion that the justice of the case requires.
We may here refer to R. vs Boteler where a statute which conferred power upon Justices to issue a distress warrant "if they shall think fit" was considered.
In that case the Justices had refused to issue the distress warrant.
Cockburn C. J. observed, "They went upon the ground that the introduction of this extra parochial place into the union was a thing unjust in itself; in other words, that the operation of the act of parliament was unjust.
I think, therefore it amounts virtually to saying, 'We know that we ought upon all other grounds to issue the warrant, but we will take upon ourselves to say that the law is unjust, and we will not carry out the law '.
That is not such an exercise of discretion as this Court will hold, in accordance with the authorities cited, to be one upon which it will act.
The Justices must not omit or decline to discharge a duty according to law.
" We think that is what the authorities in the three cases before us have done.
They have 747 refused to carry out the Act because they felt that it worked hardship.
They have refused to give to the landlords the relief which the Act said they should have.
Now, we feel no doubt that the Act provided that a tenant should be granted relief only in a case where he had not been in arrears with his rents for more than two years; in other words, if he had been in arrears for more than two years he was not to be given any relief against ejectment and the landlord would be entitled to an order for possession.
First, we have to point out that the tenancy having been terminated in terms of the statute, the statute would necessarily create a right in the landlord to obtain possession of the demised premises.
The tenancy having been terminated, the tenant is not entitled to remain in possession and the only person who would then be entitled to possession would be the landlord.
The statute having provided for the termination of the tenancy would by necessary implication create a right in the landlord to recover possession.
The statute recognises this right by providing by section 29(2) for its enforcement by an application to the Mamlatdar.
Indeed, section 29(2) itself mentions this right expressly for it says that the application shall be made within two years from the date on which "the right to obtain possession of the land" accrued to the landlord.
We repeat that this is a statutory right because it is the statute which fixes the term of the tenancy and also provides for its termination; it is not a contractual right which may be made subject to an equitable relief.
We turn now to section 25.
Under sub section
(1) of this section the tenant has a right to an order continuing the tenancy inspite of its termination by notice under section 14 for non payment of rent.
Sub section (2) however provides that sub section
(1) shall not be available to a tenant if he has failed for any three years to pay rent.
The result is that the statute itself 748 provides for relief to a tenant where such a termination has taken place and prescribes the conditions on which relief would be available.
It would follow that the statute indicates that the tenant would not have the relief in any other circumstances.
The result of this would inevitably be that the statute confers a right on the landlord to recover possession where the right under section 25(1) is not available to the tenant, which right he can enforce in the manner indicated.
That being so, section 29 (3) cannot be read as conferring on the authorities a power to annul this intendment of the Act.
The words "in lieu of making an order for ejectment" in sub section
(1) of section 25 support the view that the Act intends that except in the circumstances mentioned in it, the landlord is entitled as of right to get an order for possession from the Mamlatdar.
This view is further strengthened by the proviso to section 25 (1) which says that if the default in payment of rent had been caused by failure of crops or similar reasons, the Mamlatdar may give the tenant a year 's time to pay up and shall then provide in the order to be made by him that on the tenant 's failure to pay within that year, "the tenancy shall be deemed to be terminated and the tenant shall be liable to be evicted".
In such a case the Mamlatdar could not by virtue of his supposed powers under section 29(3) give further relief if the tenant failed to pay as directed, for the Act makes it incumbent on him to pass the conditional order of ejectment.
There, of course, is possession for the Act to have treated the cases under sub section
(1) and the proviso to it, differently.
This again is another reason for saying that the Act provides that apart from the circumstances mentioned in sub section
(1) of section 25 and the proviso to it, the landlord has on a termination of the tenancy, a right to obtain an order for possession in his favour.
It would be anomalous if the general words in s 29 (3) were to be construed as conferring power on the authorities to deprive him 749 of the right which the other provisions in the Act give him.
We think, therefore, that section 29 (3) only confers power to make an order in terms of the statute, an order which would give effect to a right which the Act has elsewhere conferred.
The words "as he deems fit" do not bestow a power to make any order on considerations dehors the statute which the authorities consider best according to their notions of justice.
Obviously, the provision has been framed in general terms because it covers a variety of cases, namely, applications by landlords and tenants in different circumstances, each of which circumstances may call for a different order under the Act.
One other argument under a similar head as dealt with previously, was that the tenants were entitled to relief against forfeiture under section 114 of the Transfer of Property Act.
Section 3 of the Act provides that "the provisions of Chapter 5 of the shall in so far as they are not inconsistent with the provisions of this Act, apply to the tenancies and leases of land to which this Act applies".
The present contention of the tenents is based on this section.
It may be pointed out that ch.
5 of the includes sections 114 and 117.
The last mentioned section provides that nothing in ch.
5 shall apply to leases for agriculture purposes except in so far as the State Government by notification declare them to be applicable.
No such notification had been issued by the State Government.
Therefore, the landlords contend, section 114 does not apply to the present leases which are for agricultural purposes and the tenants are not entitled to relief under it.
It does not seem to us necessary to decide the question so raised.
In our view, the provisions in section 114 of the are inconsistent with the provisions of the Bombay and cannot, 750 therefore, under section 3 of the latter Act govern the tenancies to which it applies.
We have earlier stated that the Bombay Act clearly intended that relief against termination of tendency for non payment of rent would be given only in the cases mentioned in section 25(1) and in no others.
Under section 114 of the relief may be given in other circumstances.
Therefore, the provisions of this section are inconsistent with the provisions of the Bombay Act.
For this reason we do not think that the tenants in the cases before us are entitled to claim any relief under section 114 of the .
We think, therefore, that the tenants were not entitled to the relief which the authorities below granted them.
Before we pass on to the other appeal raising a different question, we have to refer to the case of Raghuvir Vyasaraya Acharya vs Gobind Mogre Bandekar were it had been held by Chagla C.J., that section 29 (3) justifies an order granting relief to the tenant and refusing to make an order for possession in favour of the landlord even where the tenant has not paid rent for more than two years.
We think that this case was wrongly decided.
Chagla C.J., held that section 25 did not confer any substantive right on the landlord to obtain possession and that section 29(3) conferred on the Mamlatdar a discretion to pass any proper order that he thought fit.
We think, for the reasons earlier stated, that on both these matters the learned Chief Justices was in error.
We repeat that under the Act the landlord gets a right to obtain possession of the demised premises on the termination of the tenancy under section 14 and that section 25 as also section 29 clearly recognises that right.
We turn now to the remaining appeal, namely Civil Appeal No. 259 of 1959.
The question raised here is whether for the purposes of section 25(2) a tenant 751 is to be considered as having failed to pay rent for any year in respect of which he had been granted relief under section 25(1).
The Revenue Tribunal, following a decision of the High Court at Bombay in Special Civil Application No. 2073 of 1955, unreported, held that where a landlord made an application for possession of the demised land on the failure of the tenant to pay rent for a year within the time prescribed in section 14, and the Mamlatdar granted relief to the tenant under section 25(1), the default was merged in the order of the Mamlatdar and could not thereafter be relied upon for the purposes of section 25(2).
We did not have the original judgment of the High Court placed before us and are not aware of the reasons which persuaded it to the view that it took.
In our opinion, that view is clearly incorrect, Section 25(2) says that nothing in section 25 which of course only means sub section (1) of that section shall apply to any tenant whose tenancy is terminated for non payment of rent if he has failed for any three years to pay rent within the period specified in section 14.
We are unable to appreciate the contention that when a tenant has been granted relief under section 25(1) in respect of any year 's default, the default merged in the order granting relief and deceased to be a default.
How can the default for the year merge in an order? No doubt relief has been given against the consequence of the default for the year, but that does not wipe out the default itself; it only prevents the termination of the tenancy, if any, consequent thereon, becoming effective.
Inspite of the relief granted under section 25(1), the tenant remains a tenant who made default in paying rent for the year within the period specified in section 14 and that is the tenant mentioned in section 25(2).
We find nothing in section 25(2) to justify the view that in such a case the year of default cannot be taken into account in computing the 752 three years there mentioned.
It is of some significance to point out that section 25(2) does not require three successive years of default but it is satisfied where the tenant has been in default for any three years.
If the interpretation put by the High Court were to be accepted, then a landlord wishing to recover possession of his land would have to wait till the tenant has committed default for three years, for if he took steps earlier and relief was granted to the tenant, he would not be able to recover possession after two more years of default by the tenant.
We see no justification for thinking that the Act intended to put so much difficulty in the way of landlords.
We, therefore, come to the conclusion that these appeals must succeed.
We set aside the orders of the High Court in the cases in which that Court had been moved and of the Revenue Tribunal and other authorities under the Bombay Act refusing to make an order for possession in favour of the landlords.
We direct that the respondent tenants make over possession of the lands held by them to their respective landlords.
The appellants will be entitled to costs throughout.
Appeals allowed.
| In the first three appeals the tenants were in default in paying rents for three years and due notices had been served by the landlords terminating the tenancies.
The landlords thus acquired statutory rights to eject the tenants and applied to the Mamlatdar, as required by section 29 of the Bombay Tenancy and Agricultural Lands Act, 1948, for possession over the lands.
The Mamlatdar refused to make an order for possession on the ground that the tenants were entitled to relief against forfeiture on equitable principles.
In the fourth appeal also the tenants had defaulted in paying rents for three years.
In respect of the default in the first year the tenant had been granted relief against forfeiture under section 25(1) of the Act.
The tenant contended that the default in the first year had merged in the order under section 25(1) and could not be relied upon far holding that he had defaulted for three years.
^ Held, that the landlords were entitled to orders for possession in all the four cases.
Upon default in payment of rent for three years a statutory right accrued to the landlords under section 25(2) to terminate the tenancy and to obtain possession.
There was no provision in the Act for granting relief against forfeiture in such a case; the provision in section 29(3) that the Mamlatdar "shall pass such orders as he deems fit" did not give him such a power.
The Act merely empowered him to grant relief where the tenant was not in arrears for more than two years.
No relief against forfeiture could be granted to the 740 tenants on equitable grounds; relief on equitable grounds could only be granted in cases of contractual rights and not in cases of statutory rights.
Nor could relief be granted under section 114 Transfer of Property Act as that provision was inconsistent with the provisions of the Bombay Act and was therefore inapplicable.
R. V. Boteler, (1864) 33 L. I. M. C. 101, referred to.
Raghuvir, Vyasaraya Acharya vs Govind Mogre Bandekar, , disapproved.
Held, further, that in the fourth appeal the default in the first year could also be taken into consideration in computing of three years inspite of the tenant having been relieved against forfeiture for that year.
The order granting the relief did not wipe out the default, it only prevented the termination of the tenancy for that default alone.
| The appellant was registered as a dealer under the various Sales Tax Acts in force in Bombay from time to time i.e. Bombay Acts 5 of 1946, 3 of 1953 and 51 of 1959.
In the course of its assessments to sales tax for the periods from 1st April, 1948 to 31st March, 1950, and from 1st April 1950 to 31st March, 1951, the appellant claimed exemption from tax, inter alia, in respect of certain despatches of goods from its head office in Bombay to its branches in other States.
The Sales Tax Officer rejected these claims but, in appeal, the Assistant Collector accepted the claim in respect of the despatches to various branches though he rejected all other claims for exemption.
He also directed a refund of the excess 'tax collected from the appellants.
While revision petitions filed by the appellant against these orders were pending, a notice was issued to him on January 7, 1963 by the Deputy Commissioner of Sales Tax in Form XXIV under section 31 of the Bombay Sales Tax Act, 1953, intimating the appellant that he proposed to revise suo motu the orders passed by the Assistant Collector in so far as he had allowed deduction in respect of the entire goods despatched to the appellants ' branches outside Maharashtra because, in so doing, he had overlooked certain provisions of law which were specified in the notice.
Tile appellant filed a petition under article 226 of the Institution seeking to quash the notice dated 7th January, 1963 but his petition was dismissed by the High Court.
In the appeal to this Court it was contended on behalf of the appellant, inter alia (i) that in exercise of the revisional powers, the Deputy Commissioner, whether acting under the Sales Tax Act of 1946, or of 1953, or of 1959, could only proceed to take action on the basis of the material already present on the record and was not entitled to act on conjecture or to institute any enquiry so as to include additional material nor to judge the correctness of the order sought to be revised; (ii) that the notice in question was issued on 7th January, 1963, when the Act of 1959 had already come into force and the Act of 1953 had been repealed; so that any revisional jurisdiction could only be exercised by the Deputy Commissioner under the Act of 1959 and not under the Act of 1953 , as the power under section 57 of the Act of 1959 could only be exercised within five years from the date of the order sought to be revised; the notice issued by the Deputy Commissioner was time barred; and (iii) that the proceedings to be instituted were barred by time, because limitation of a reasonable time; within which the revisional Powers are to be exercised must be implied in the statute itself.
493 HELD : The proceedings initiated by the Deputy Commissioner of Sales Tax against the appellant were not incompetent and the High Court was right in refusing the writ sought by the appellant.
(i) Whenever a power is conferred on an authority to revise an order, it is entitled to examine the correctness, legality and propriety of the order and to pass such suitable orders as it may think fit in the circumstances of the particular case.
The proceedings for revision, if started suo motu, must not be based on a mere conjecture and there should be some ground for invoking the revisional powers.
Once these powers are invoked, the actual interference must be based on sufficient grounds and, if it is considered necessary that some additional enquiry should be made to arrive at a proper and just decision, there can be no bar to the revising authority holding or directing a further enquiry and thereafter admitting additional material.
[496 A C] The State of Kerala vs K. M. Cheria Ahdulla and Company, ; , explained and followed.
State of Andhra Pradesh vs T. G. Lakshmnaiah Setty & Sons, 12 S.T.C. 663; disapproves.
In the present case,.
the notice issued by the Deputy Commissioner, on the face of it, disclosed the reasons which led him to take proceedings for exercising his revisional powers suo motu, and it could not be said on those facts that he was acting merely on conjecture.
There was no reason to think that, when proceeding with his inquiry, he would not keep within the limitations indicated by this Court in K. M. Cheria Abdullas case.
(ii) The effect of section 77(1) (a) of the Act of 1959 is to continue in force the Act of 1953 as well as: the Act of 1946 to the extent to which they were in force when the Act of 1959 came into force for the purposes of levy, assessment, reassessment and collection of sales tax.
Fur thermore, by virtue of section 7(e) of the Bombay General Clauses Act, 1904, which was made applicable to the repeal of the Act of 1953 by section 77(3) of the 1959 Act, any legal proceeding in respect of levy, imposition or recovery of tax is to continue and any fresh investigation, legal proceeding or remedy could be instituted as if there had been no repeal by the Act of 1959.
Consequently, the repeal of the Act of 1953 did not in any way affect the power of the Deputy Commissioner to institute proceedings for revision suo motu against the appellate order of the Assistant Collector which had been Passed in exercise of his power under the Act of 1946.
[499 C 500 B] Although the Deputy Commissioner, in seeking to exercise revisional powers should have proceeded under section 22 of the Act of 1946 and not under section 31 of the 1953 Act, this fact was immaterial as the provisions of the two Sections were similar.
[500 D E] (iii) Section 22 of the Act of 1946 and section 31 of the Act of 1953 do not lay down any period of limitation for the exercise of the power of revision by a Deputy Commissioner suo motu and no such limitation could be read in the two Acts.
[500 G] The State of Orissa vs Debaki Debi and Others, 15 S.T.C. 153.
Commissioner of Income tax, Bombay City 1 vs Narsee Nagsee & Co., , Manordas Kalidas vs V. V. Tatke, 11 S.T.C, 87.
Disesar House vs State of Bombay, 9 S.T.C. 654, distinguished.
494 Maharaj Kumar Kamal Singh vs C.I.T., Bihar and Orissa, , referred to.
| On suo motu enquiry conducted against the appellant with regard to the nature of the properties in question, the Deputy Charity Commissioner held that the properties were of a public trust.
The appellant 's appeal before the Charity CommissiOner was dismissed.
An application filed under section 72 of the Bombay Public Trust Act, 1950 was also dismissed by the City Civil Court.
The First Appeal filed in the High Court was dismissed by a Single Judge.
In the Letters Patent Appeal on behalf of the appellant it was contended: that section 72(1) speaks only of an applica tion to the Court to set aside the decision of the Charity Commissioner, and it does not speak of an appeal; that while section 70 and 71 use the word "appeal" and that the proceedings under section 72 were not in the nature of an appeal and that, therefore.
when the District Court exercised its jurisdic tion it did not exercise an appellate jurisdiction but a special jurisdiction under 'the section.
The High Court dismissed the appeal holding that it was not maintainable since the requisite certificate under clause 15 of Letters Patent Appeal was not obtained by the appellant, that though the well known word "appeal" was not used in section 72, the absence of that word cannot be regarded as determinative of the nature of the proceedings, and that the jurisdiction that the District Court is exercising under section 72 was appellate jurisdiction.
Dismissing the appeal.
1084 HELD:1.1 The power of the District Court in exercising jurisdiction under section 72 of the Bombay Public Trust Act, 1950, is a plenary power.
It is true that the Commissioner is not subordinate to the District Court but the District Court has powers to correct, modify, review or set aside the order passed by the Commissioner.
All the characteristics of an appeal and all the powers of an appellate Court are available to the District Court while deciding an applica tion under section 72.
[1089D E] 1.2 The proceedings before the District Court under section 72(1) are in the nature of an appeal and that District Court exercises appellate jurisdiction while disposing of a matter under section 72(1).
[1089E F ] 1.3 The absence of the word "appeal" in section 72(1) does not make any difference.
[1089C] Hiragar Dayagar vs Ratanlal, ; and [1986] 58 Bombay Law Reporter 894 approved and AIR 1974, Bombay 40, disapproved.
Consequently, the Single judge of tile High Court while deciding the appeal from the order of the District Court deals with a matter made by the District Judge in the exercise of a appellate jurisdiction by a Court subject to the superintendence of the High Court and hence clause 15 of the Letters Patent Appeal is directly attracted.
[1089F G]
| In the Civil Suit No. 203 of 1955, on the original side of the Bombay High .
Court, filed by the decree holder/respondent against the appellant/judgment, debtor for recovery of certain amount of money, summons were served on the judgment debtor who after filing his written statement absented himself, and did not take any further part in the proceedings of the Court resulting in a decree dated 29 6 1960 for Rs. 65,953.79.
On 20 12 1961, Goa became a part of India and was made a Union Territory of India by the Constitution (Twelth Amendment) Act, 1962 passed on 27 3 1962.
The decree holder applied to the Bombay High Court for transferring the decree to Goa Court for execution and by an order dated 28 8 1963 the decree was transferred to the Goa Court for execution.
The execution application before the Executing Court at Panjim filed on 21 1 1964 was dismissed on 26 4 1965, holding that the decree transferred to it by the Bombay High Court was not executable.
An appeal was preferred to the Additional Judicial Commissioner on 1 6 1965 and the appellant Judgment debtor filed his reply.
During the pendency of the appeal, the Code of Civil Procedure was extended to Goa on 15 6 1966 by the Goa, Daman and Diu Extension of the Code of Civil Procedure and Arbitration) Act (30) of 1965 and repealing the Portuguese Code.
The Additional Judicial Commissioner by its order dated 28 6 1967 held that in view of article 261(3) of the Constitution, the decree passed by the Bombay High Court could not be treated as nullity and, was therefore, executable.
On appeal by certificate, the appellant/judgment debtor contended (1) that the decree passed by me Bombay High Court qua Goa Court was a nullity being a decree of a foreign court.
Even if the decree was not a nullity it could be executed by a Goa court if the original decree had been approved by the Goa Court under section 50 of the Portuguese Code; (2) that`the Bombay High Court transferring the decree for execution to the Goa Court under sections 38 and 39 of the C.P.C. was without jurisdiction inasmuch as the C.P.C. had not been applied to Goa when the order of transfer was passed.
(3) that as the provisions of the C.P.C. were applied to Goa after the order of the Execution Court was passed and a vested right had accrued to the appellant/judgment debtor the 'J decree continued to be inexecutable and could not be validated by article 261(3) of the Constitution.
The respondent/decree holder contended (1) that inasmuch as the judgment debtor had appeared and participated in the suit for some time the decree passed by the Bombay High Court could not be said to be a nullity (ii) that as the C.P.C. was made applicable while the appeal was pending before the Additional Judicial Commissioner, Goa the decree became clearly executable and the order of transfer of the decree by the Bombay High Court stood validated.
and (iii) that in view of the provisions of article 261(3) of the Constitution of India, there was no bar to the execution of the decree, which was passed by a court which was in the territory of India.
150 Dismissing the appeal, the Court, ^ HELD: (1) Where a party appears before the court, the decree of the court, even mf it is a foreign court is not a nullity.
[154 D] Raj Rajendra Sardar Maloji Marsingh Rao Shitole vs Sri Shankar Saran and others; , , distinguished and held not applicable.
Shaligram vs Daulat Ram, ; and Lalji Raja & Sons vs Firm Hansraj Nathuram, ; , applied.
(2) The right of the judgment debtor to pay up the decree passed against him cannot be said to be a vested right, nor can the question of executability of the decree be regarded as a substantive vested right of the judgment debtor.
A fortiorary, the execution proceedings being purely a matter of procedure it is well settled that any change in law which is made during the pendency of the cause would be deemed to be retrospective in operation and the Appellate Court is bound to take notice of the change in law.
The Additional Judicial Commissioner was competent to take notice of the change in the law.
[154 E F, 155 G] Mohanlal Chunilal Kothari vs Tribhovan Haribhai Tamboli, ; , 715 716.
Gummalapura Taggina Matada Kotturswami vs Setra Veerava and others, A.T.R , 579 and Jose De Costa and another vs Bascora Sedashiva Sinai Naroornin and others, A.I.R. 1975 S.C. 1843, 1849, followed.
(3) The proposition adumbrated viz., that the executability of the decree was a vested right which could not be taken away by the applicability of the Code of Civil Procedure to Goa during the pendency of the appeal is wrong, since the executability of the decree could not be considered to be a vested right [155F G] Lalji Raja and Sons.
vs Firm Hansraj Nathuram ; , followed.
(4) The contention that as the Code of Civil Procedure was not applicable to Goa at the time when the Bombay High Court passed the order transferring the decree to the Goa Court, the order of transfer was absolutely without jurisdiction was wrong.[156 C D] As the decree was passed by the Bombay High Court, section 38 of the Code of Civil Procedure would clearly apply and the decree passed by the Bombay High Court was not a foreign decree.
It is true that at the time when the Bombay High Court passed the order of transfer, the Code of Civil Procedure had not been applied to Goa.
But, that does not put the respondent/decree holder out of Court.
The decree could be transferred and was valid and executable.
But, because of infirmity, it could not be executed so long as the C.P.C. was not made applicable to Goa.
Thus, the only bar which stood in the way of the execution of the decree was the non applicability of the provisions of the C.P.C. to Goa.
This was, however, not an insurmountable bar or an obstacle and the bar or the obstacle disappeared the moment the Code of Civil Procedure was applied to Goa on 15 6 1966.
[156 D F] HELD FURTHER: (5) The instant case is a fit case in which the doctrine A of eclipse would apply and the wall or the bar which separated Bombay from Goa having disappeared, there was no impediment in the execution of a decree.
The decree lay dormant only so far as no bridge was built between Bombay and Goa but as soon as the bridge was constructed in the shape of the application of the provisions of the Code of Civil Procedure to Goa the decree became at once executable.
[156 F G] (6) In the instant case, the decree passed by the Bombay High Court having been passed by a Court of competent jurisdiction and not being a nullity because the judgment debtor had appeared and participated in the proceedings of the Court to some extent, and the order of transfer under section 38 of the Code of Civil Procedure also not having suffered from any inherent lack of jurisdiction, the decree became enforceable and executable as soon as the Code of Civil Procedure was applied to Goa.
[157 E F] 151 Bhagwan Shankar vs Rajaram Bapu Vithal, A.I.R. 1951 Bom.
125, 127, approved.
(7) article 261(3) of the Constitution enjoins that a decree shall be executable in ally part of the territory of India, according to law.
In the instant case, the decree was passed by the Bombay High Court after the Constitution came into force and article 261(3) would apply to the decree passed by the Bombay High Court.
The Article would also apply to Goa because at the time when the application for execution was made in Goa Court, the Constitution had already been made applicable to that State also.
[158 C D] (8) It is true that at the time when the Executing Court dismissed the suit of the decree holder/respondent, the Code of Civil Procedure had not been applied and the Portuguese Code continued to apply but after the application of the Code of Civil Procedure by virtue of the Goa, Daman and Diu (Extension of the Code of Civil Procedure and the Arbitration) Act, 1965.
the Portuguese Code which was in force in Goa was clearly repealed and the present case does not fall within any of the clauses mentioned in the saving provisions of section 4 of the Act.
Thus, when the Civil Procedure Code was made applicable to Goa during the pendency of the appeal, the appellate Court, namely, the Additional Judicial Commissioner was bound to decide the matter in accordance with the law that was in force.
Hence, the contention the matter in accordance with the law that was in force.
Hence, the contention that the words "according to law" in article 261(3) would mean that the decree would be executable only in accordance with the law in force in the Portuguese Code is not correct.
[158 B F] [Jose De Costa and another vs Bascore Sadashiva Sinai Narcornin and others, A.I.R. 1975 S.C. 1843, 1849 followed.]
| When the appellant did not pay rent for September and October, 1972, the respondent filed a petition for its eviction from the premises in question under section ll(l)(d) of the Bihar Building (Lease, Rent and Eviction) Act, 1947 which provided that on failure to pay two months ' rent a tenant was liable to be evicted from the premises taken on lease.
The appellant 's defence was that it had paid two months ' rent in advance at the inception of the tenancy with an understanding that it could be set off against the rent whenever necessary or required and, further, that since under section 3 of the Act it was not lawful for the landlord to have received any sum exceeding one month 's rent in advance, it could not be considered as a defaulter in payment of rent for purposes of section ll(l)(d) as, at least one month 's rent which had been paid in excess of what was permitted under section 3 was liable to be adjusted towards the arrears.
The Trial Court dismissed the suit, and his appeal against the same having been rejected by the Additional Subordinate Judge, the respondent approached the High Court by a Second Appeal.
Although it accepted the plea that the appellant had paid two months ' rent in advance at the inception of the tenancy, the High Court arrived at the finding that the appellant had failed to pay the rent for the months of September and October, 1972, on the ground that the appellant had not requested the respondent to adjust it towards the rent due for the aforesaid two months.
Observing that the rule of in pari delicto did not help the appellant in this case, the High Court set aside the concurrent judgments of the two courts below and directed eviction.
Allowing the appeal by special leave, 415 ^ HELD: The appellant could not be treated as a defaulter who had A failed to pay rent for two months.
[418E] (i) The High Court approached the entire case in a technical fashion.
The respondent was not entitled to receive more than one month 's rent by way of advance.
Yet, the respondent had received in advance the rent for two months.
The receipt under which the said advance was received does not state that the amount received was liable to be adjusted towards the arrears of rent only on the appellant informing the respondent orally or in writing that such adjustment is to be made.
In the written statement, however, the appellant pleaded that the amount paid by way of advance could be set off by way of rent whenever necessary or required.
This is not a case where there was any agreement to the effect that such adjustment could be made only on the tenant asking the landlord to make such adjustment.
Nor is this a case where the tenant was liable to the landlord on any other account.
The only transaction between them was the lease in question and the amount in question had been paid as rent in advance.
There was also no agreement that the amount was liable to be adjusted at the termination of the lease.
It was, therefore, open to the respondent to appropriate the said sum towards the arrears even without any option being exercised as regards such adjustment by the appellant.
[418A D] (ii) The High Court was also wrong in coming to the conclusion that the appellant could not rely on the provisions of section 3 of the Act on the ground that if the parties were in pari delicto the court would not come to the rescue of either.
[418E] Mohd. Salimuddin vs Misri Lal & Anr., [1986] 1 S.C.R. 622, relied on.
Gulab Chand Prasad vs Budwanti & Anr., A.I.R. 1985 Pat.
327, referred to.
Budhwanti & Anr.
vs Gulab Chand Prasad.
, ; , distinguished.
| The Settlement Officer under the Madras Estates (Abolition and Conversion into Ryotwari) Act, 1948 suo motu made an inquiry as to whether a particular village notified by the State Government was an estate or not within the contemplation of section 9(2) of the Act and held that it was not an "inam estate" within the meaning of section 2(7) of the Abolition Act but that the village became an estate by virtue of Madras Estates Land (3rd Amendment) Act, 1936.
Ther appellants unsuccessfully appealed to the Estate Abolition Tribunal.
The appellant then instituted a suit (O.S. 47 of 1953) against the State Government for a declaration that the village was not an "estate" under section 3(2)(d) of them Madras Estates Land Act, 1908 and consequently Madras Estate (Reduction of Rent) Act, 1947 and the Abolition Act were not applicable to it.
The trial court decreed the suit.
The State Preferred an appeal.
During the pendency of the appeal the appellant filed a suit (O.S. No. 101 of 1954) against the respondents for recovery of certain amount as rent or damages in respect of lands cultivated by them in the village in dispute.
The respondents contended that the village was an estate within the meaning of the Act and that it had been so held by the Settlement Officer.
Ultimately both the parties filed a joint memo on 26th March, 1958 that they would abide by the decision of the High Court or the Supreme Court in the appeal or revision arising out of the suit (O.S. 47/53) on the question whether the village was or was not an "estate" under, section 3(2)(d) of the Madras Estates Land Act.
The High Court (in A.S. No. 668 of 1954 which was an appeal arising out of O.S. 47 of 1953) confirmed the decree of the trial court that the village in dispute was not an 'estate '.
The State did not appeal, with the result that the High Court 's decision became final and the decree dated 28th March, 1958 became, effective.
Against the decree of 28th March, 1958 the appellants preferred an appeal (A.S. 239 of 1961) to the High Court.
The appeal related only to the extent of the land in the possession of the respondents and the quantum of rent or damages.
The appellants ' claim was that the entire land was under cultivation of the respondents and so the lower court was wrong in not decreeing the appellants ' claim for rent or damages in toto.
The respondents raised a preliminary objection at the time of hearing of the appeal that the suit itself was incompetent as the Civil Court had no jurisdiction to decide whether the suit village was an estate or not and, therefore, any (decision given by the High Court would not bind the parties and the decree in O.S. 101 of 1954 would be without Jurisdiction rendering it null and void and that the Settlement Officer was the competent authority to decide the tenure of the village and his deci sion had become final in view of the introduction of section 9A by Act 20 of 1960.
The High Court upheld the preliminary objection of the respondents and rejected the contentions of the appellants that since section 9A was inserted by an amendment which came into force on 23rd June, 1960, it could not affect the compromise decree of the court passed on March 28, 1958 or the decree of the High Court by which both the parties agreed to abide by the decision of the High Court or the Supreme Court in appeal or revision arising out of O.S. 47 of 1953.
The High Court held that the Civil Court was not the forum for the suit as framed by the appellants and the questions raised in the suit L748SuP CI/74 656 including the claim for arrears of rent or damages, were outside the jurisdiction of the Civil Court, and so dismissed the appeal.
Allowing the appeal, HELD:1 (a) There is no doubt that the question was within the competence of the Civil Court.
Under the Abolition Act, as it stood at the material date, the inquiry of the Settlement Officer could legitimately be confined to the ascertainment of only two disputes of fact, viz., (i) Was the village an "inam village"? (ii) If so, was it an 'Inam Estate ' as defined in section 2(7) of the Abolition Act ? Once issue (ii) was determined, the inquiry would be complete and the limits of his exclusive jurisdiction circumscribed by section 9(1) reached; if he went beyond those limits to investigate and determine something which is unnecessary or merely incidental or remotely related to issue No. (ii), 'then such incidental or unnecessary determination could be questioned in a Civil Court.
[668FG] (b) Any finding recorded by the Settlement Officer regarding the property in question being an 'inam village ' or not, ' is not final or conclusive it being a finding of a jurisdictional fact only, the Preexistence of which is a sine qua non to the exercise of his exclusive jurisdiction by the Settlement Officer.
[668H] (c) The legislature must have visualised that under the cloak of an erroneous finding as to the existence or nonexistence of this prerequisite, the Settlement Officer may illegally clutch at jurisdiction not conferred on him or refuse to exercise jurisdiction vesting in him.
Perhaps that is why the statute does not leave the final determination of this preliminary fact to the Settlement Officer/Tribunal and his erroneous finding on that fact is liable to be questioned in a Civil Court.
Once it is held that determination of this fact is not a matter of the exclusive jurisdiction of the Settlement Officer, the appellants cannot be debarred on the basis of any doctrine of res judicata from getting the matter fully and finally adjudicated by a court of competent jurisdiction.
[669B C; E] Addanki Tiruvenkata Tata Desika Charyulu vs State of Andhra Pradesh A.I.R. 1964 S.C. 807 followed.
District Board, Tanjore vs Noor Mohammed, (1952) 2 MJ.
586 (S.C.) referred to.
(2) It is well settled that ordinarily when the substantive law is altered during the pendency of an action, rights of the parties are decided according to law, as it existed when the action was taken unless the new statute shows a clear intention to vary such rights.
A plain reading of the impugned Act would show that there was nothing of this kind which expressly or by necessary intendment affects pending actions.
[67OC D] (b) There is no non obstante clause in the amending Acts 17 and 18 of 1957 with reference to pending or closed civil actions.
These amending Acts ' were published in the government gazette of December 23, 1957 and will therefore be deemed to have come into force from that date only.
They could therefore be construed as having prospective operation only.
[67OG H] (c) In the Amending Act 20 of 1960 also no back date for its commencement has been mentioned.
It will, therefore, be deemed to have commenced on June 23, 1960 which is the date on which it was published in the Government gazette.
[674E] Section 9A takes in its retrospective sweep only those decisions of the Settlement Officer or the Tribunal which at the commencement of 'the Amending Act 20 of 1960 were subsisting and had not been totally vacated or rendered non est by a decree of a competent court.
[675 F] In the instant case the decision of the Settlement Officer dated September 2, 1950 was not such a decision.
It had ceased to exist as a ' result of the inter linked decree in O.S. 47 of 1953 and O. section 101 of 1954 passed before the enactment of the Amending Act.
The Amending Act of 1960, therefore, does not in any way affect the finality or the binding effect of those decrees.
[675G] 657 (d) Order 23 rule 3 C.P.C. not only permits a partial compromise and adjustment of a suit by a lawful agreement, but further gives a mandate to the court to record it and pass a decree in terms of such compromise or adjustment in so far as it relates to the suit.
If the compromise agreement was lawful the decree to the extent it was a consent decree was not appealable because of the express bar in section 96(3) of the Code.
[672E] Raja Sri Sailendra Narayan Bhanja Deo vs State of Orissa ; , Shri Prithvi Cotton Mills Ltd. vs Broach Borough Municipality and Reid vs Reid at 408, followed.
(e) In any suit the parties, in order to avoid unnecessary expenses and botheration, could legitimately make an agreement to abide by a determination on the same point in issue in another pending action in an advanced stage There was nothing unlawful and improper in such an arrangement particularly when the interests,of the respondents were sufficiently safeguarded by the State.
By no stretch of reasoning it could be said that the agreement was collusive or was an attempt, to contract out of the statute.
In the instant case as soon as the parties made the agreement to abide by the determination in the appeal (A. section 668) and induced the court to pass a decree in terms of that agreement the principle of estoppel underlying section 96(3) C.P.C. became operative and the decree to the extent it was in terms of that agreement became final and binding between the parties.
It was as effective in creating an estoppel between the Parties as a judgment on contest.
[672F C & 673C] In the instant case that part of the decree in suit No. 101 of 1954 and the appeal from that decree could not be said to be a continuation of that part of the claim which had been settled by agreement.
The combined effect of the two integrated decrees was to completely vacate and render non est decision dated September 2, 1950 of the Settlement Officer.
[673F] Raja Sri Sailendra Narayan Bhanja Deo vs State of Orissa ; applied.
Per Krishna Iyer, J. concurring Courts have to be anchored to well known canons of statu tory construction and if they are out of tune With the law maker 's meaning and purpose the legitimate means of setting things right is to enact a new Interpretation Act.
[678B] The Indian Constitution, adopting the fighting faith of equal I protection of the laws to all citizens, necessarily contemplates a new jurisprudence where vested rights may be, and often times are, extensively interfered.
with for achieving the founding fathers ' social goals.
Legislative exercises directed towards distributive justice as in the present case, cannot be considered in the light of dated value system, though sanctified by bygone decisions of Courts.
[677H] In the present case the Act in question is clear about its intent and its application gives little difficulty.
| Section 12(1) of the Madhya Pradesh Accommodation Control Act, 1961, enacts that notwithstanding anything to the contrary contained in any other law or contract no suit shall be filed in any civil court against a tenant for his eviction from any accommodation except on one or more of the grounds given in the section.
The ground given in cl.
(a) is that the tenant has neither paid nor tendered the whole of the arrears of the rent legally recoverable from him within two months of the date on which the notice had been served on him by the landlord and the ground in cl.
(f) is that the accommodation let for non residential purpose is required bona fide by the landlord for the purpose of continuing or starting his business.
The appellants brought a suit under section 12(1)(a) and (f) of the Act for ejectment of their tenants.
The suit was dismissed by the trial court on the ground (i) that since the dispute as to the amount of rent payable by the tenants had not been determined during the pendency of the suit under section 13(2) no order for eviction could be made; (ii) that there was no bona fide requirement of the premises by the appellants for their own business and (iii) that the refusal by the appellant to accept the arrears of rent by cheque was valid because tendering by cheque was not valid tender in the absence of an agreement to that effect.
The first appellate court decreed the suit.
During the pendency of the second appeal in the High Court the tenants died.
The High Court allowed substitution of their legal representatives over ruling the appellants ' objection that the deceased tenants were mere statutory tenants and that the right to resist ejectment on the basis of the Rent Control Act was merely a personal right which was not heritable.
On merits, the High Court held that (i) offer of rent by cheque amounted to valid tender by the tenant and (ii) the appellants had failed to prove their case of bona fide requirement of the premises for their own use.
Dismissing the appeal, ^ HELD: There is no force in the contention that the defendants who were statutory tenants had no heritable interest in the demised premises and on their death the right to prosecute the appeal in the High Court had not survived to their heirs and legal representatives.
The predecessors in interest of the respondents had a heritable interest in the premises and consequently the respondents had the right to prosecute the appeal in the High Court.
[655A] (1) (a) The concept of statutory tenancy under the English Rent Acts and under the Indian statutes rests on different foundations.
The term statutory tenancy which is used for referring to a tenant whose tenancy has been terminated and who would be liable to be evicted but for the protecting statute, is 646 borrowed from the English Rent Acts.
Courts in England have held that a statutory tenant has no estate or property in the premises he occupies because he retains possession by virtue of the Rent Acts and not as being entitled to a tenancy.
But in this country it is not possible to proceed on the basis that a tenant whose contractual tenancy has determined but who is protected against eviction by the statute, has no right of property but only personal right to remain in occupation without ascertaining what his rights are under the statute.
[654H: 653A C] Anand Nivas (Private) Limited vs Anandji Kalyanji Pedhi vs Sri Kishan & Anr.
, ; ; Roe vs Russel, ; Haskins vs Lewis ; Keeves vs Dean (207) and Boyer vs Warbey , referred to.
(b)Tenancy has its origin in contract.
A contracual tenant had an estate or property in the subject matter of the tenancy and heritability is an incident of tenancy.
It cannot be assumed that with the determination of the tenancy, the estate must necessarily disappear and the statute can only preserve his status of irremovability and not the estate he had in the premises in his occupation.
[653D] (c) The definition of a tenant contained in section 2(i) makes a person continuing in possession of a premises after the determination of his tenancy a tenant, unless a decree or order for eviction had been made against him, thus, putting him on par with a person whose contractual tenancy still subsists.
[653] (d) Section 14 which deals with restrictions on sub letting read with the definition contained in section 2(i) makes it clear that the so called statutory tenant has the right to sub let in common with contractual tenant and this is because he also has an interest in the premises occupied by him.
[654D] (2)(a) The High Court rightly held that the cheques sent to the appellants amounted to valid tender of rent.
It is well established that a cheque sent in payment of a debt on the request of the creditor, unless dishonoured, operates as a valid discharge of the debt and if the cheque was sent by post and was met on presentations the date of payment is the date when the cheque was posted.
[655B D] (b) Rent is payable in the same manner as any other debt and the debtor has to pay his creditor in cash or other legal tender, but there can be no dispute that the mode of payment can be altered by agreement.
In the contemporary society it is reasonable to suppose payment by cheque as implied unless the circumstances of a case indicate otherwise.
[655C] (3) The High Court was within its jurisdiction in setting aside the finding of the lower appellate court and restoring that of the trial court on the question of bona fide requirement of the premises by the appellants.
The lower appellate court overlooked a very material part of the evidence bearing on the question.
It is well established that if a finding of fact is arrived at ignoring important and relevant evidence the finding is bad in law.
[651B C] Radha Nath Seal vs Haripada Jana & Ors.
AIR 1971 S.C. 1049, followed.
Madan Lal Puri vs Sain Das Berry AIR 1973 S.C. 585; Mattulal vs Radhey Lal AIR 1974 S.C. 1956; and Sarvate T. B. vs Nemi Chand , refered to.
| The respondent sought special leave to appeal to the High Court under section 417(3) of the Code of Criminal Procedure, 1898 against the acquittal of the petitioner by the trial court.
The application was made beyond the period of limitation but the High Court condoned the delay under section 5 of the .
In their application for special leave to appeal to this Court the petitioners contended that the time limit of 60 days prescribed under section 417(4) was mandatory and as such the High Court had no jurisdiction to extend the time limit by resort to section 5 of the .
Dismissing the special leave petitions, ^ HELD: (1) The order granting special leave was not an order outside the power of the High Court.
In a case where an application for special leave to appeal from an order of acquittal is filed after the coming into force of the , section 5 would be available to the applicant and if he can show that he had sufficient cause for not preferring the application within the time limit of 60 days prescribed in sub section
(4) of section 417, the application would not be barred and despite the expiration of the time limit of sixty days, the High Court would have the power to entertain it.
[265B C] (2) Since under the section 5 is specifically made applicable by section 29(2) it could be availed of for the purpose of extending the period of limitation prescribed by a special or local law if the applicant can show that he had sufficient cause for not presenting the application within the period of limitation.
It is only if the special or local law expressly excludes the applicability of section 5 that it stands displaced.
Section 29(2) (b) of the Limitation Act, 1908 specifically excluded the applicability of section 5 while section 29(2) of the 1963 Act in a clear and unambiguous terms provides for applicability of section 5.
[264F, E] Kaushalya Rani vs Gopal Singh ; , explained.
|
Civil Appeal Nos.
524 to 539 of 1961.
Appeals by special leave from the judgment and order dated July 5, 1961, of the Patna High Court, in Misc.
Judicial cases Nos. 670 to 675 of 1959.
WITH Civil Appeal No. 434 of 1961.
Appeal by special leave from the judgment and order dated August 8, 1960, of the Patna High Court, in Misc.
Judicial Case No. 334 of 1960.
A.V. Viswanatha Sastri and B.P. Jha, for the appellants.
(in C. As.
534 to 538 and 434 of 1961).
B.P. Jha, for the appellant (in C.A. No. 539 of 1961).
Lal Narain Sinha, L.S. Sinha and S.P. Verma, for the respondents.
December 1.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
The judgment in Civil Appeal No. 534 of 1961 will dispose of Civil Appeals Nos. 535 to 539 of 1961.
In these appeals, private operators of omnibuses challenge the orders of the Appeal Board of the State Transport Authority, by which it set aside the renewal of the permits on certain routes granted by the South Bihar Regional Transport Authority, Patna.
The appellants held 730 previously stage carriage permits over certain routes and which were due to expire in December, 1958 or in January, 1959.
They had applied for renewal of their permits under section 58(2) of the Motor Vehicles Act.
Under a scheme framed and notified on July 8, 1957, vide Notification No. P 2 203/57T/4794, the route, Gaya to Khijirsarai, was notified under section 68D of the Motor Vehicles Act.
The Rajya Transport, Bihar, was exclusively allowed to operate on that route.
In Civil Appeals No. 535 to 538 of 1961, the Rajya Transport, Bihar, filed objections against the renewal of the permits.
In Civil appeals Nos. 534 and 539 of 1961, no objections were filed.
The route, Gaya to Khijirsarai, which may be called conveniently route 'AB ' formed part of routes, on which the appellants were operating and in respect of which they had asked for renewal of their permits.
The south Bihar Regional Transport Authority, however, renewed the permits of the appellants, holding that route 'AB ' was different from the routes, for which renewal was demanded.
Against the orders of the Regional Transport Authority, appeals were filed by the Rajya Transport, Bihar in all the cases, that is to say, in those cases in which the Rajya Transport, Bihar, had objected, and those in which it had not objected.
While these appeals were pending, the State of Bihar, acting under section 3 of the (64 of 1950) notified on April 20, 1959 as follows: "No. R.T. Cor.
1/59 3090 In exercise of the powers conferred by section 3 of the Road Transport corporation Act, 1950 (LXIV of 1950), the Governor of Bihar is pleased to establish with effect from the 1st May, 1959 a Road Transport Corporation, for the State of Bihar, to be called, the Bihar State Road Transport Corporation '.
731 2.
The said Corporation shall with effect from the said date, exercise all the powers and perform all the functions which are at present being exercised and performed by the Rajya Transport, Bihar.
By order of the Governor of Bihar.
K. B. Sharma, Dy.
" At the hearing of the appeals, the Government Advocate, Mr. Lal Narain Sinha, appeared for the Road Transport Corporation.
Objection was taken to the competency of the appeals on two grounds.
In those cases in which the Rajya Transport, Bihar, had not objected to the renewal of the permits before the Regional Transport Authority, it was contended that it had no locus standi to file appeals.
In those cases in which it had so objected, the ground was that the Road Transport Corporation could not, in law, represent the Rajya Transport, Bihar, in the appeals filed by the latter.
On merits, it was contented that the order of the Regional Transport Authority that route ' AB ' though part of the routes for which renewal was asked, was a different route, and the State Corporation had an exclusive right to ply omnibuses on routes 'AB ' did not affect the rights of the appellants to ply their omnibuses on routes, which were entirely different.
The Government Advocate contended that, on the analogy of the principle underlying O. 22, Re. 10 of the Civil Procedure Code, the Road Transport Corporation on which devolved the powers and functions of the Rajya Transport, Bihar, could prosecute the appeals.
He also contended, in the alternative, that he was representing also the Rajya Transport, Bihar, and that the appeals were not defective.
The Board accepted the argument of the Government Advocate, and set aside the orders of renewal passed by the Regional Transport Authority.
The appellants then filed petitions 732 under articles 226 and 227 of the Constitution challenging the order of the Board on many grounds.
The High Court, by its judgment dated July 5, 1961, dismissed all the petitions.
In the order under appeal, the High Court considered the competency of the appeals, and held that the Rajya Transport, Bihar, was competent to prosecute the appeals before the Appeal Board.
In dealing with the question whether the Appeal Board was entitled to interfere with the order of the Regional Transport Authority at the instance of the Rajya Transport in those cases, where the Rajya Transport had not filed objections under the Motor Vehicles Act, the High Court held that it was not necessary to express an opinion on the correctness of the argument, because the Regional Transport Authority was not competent to grant a renewal, inasmuch as such a grant was a direct violation of the scheme approved by the State Government and published in the Official Gazette.
On the merits, the High Court was of opinion that under section 68F(2) (c) (iii), the Regional Transport Authority could curtail the length of the route covered by the permit, and exclude the portion, which overlapped a notified route.
The present appeals have been filed against the order of the High Court, with the special leave of this Court.
These appeals thus fall into two groups.
In one group are Civil Appeals Nos. 534 and 539 of 1961 and in the other are Civil Appeals Nos.
535 to 538 of 1961.
In the former, the grant of renewal of the permits has been made without any objection, and in the latter, in spite of the objections filed by the Rajya Transport.
The competency of the appeals before the Appeal Board is involved in both the groups, though on different grounds.
The answer to the different objections is, however, the same.
733 In Abdul Gafoor vs State of Mysore, the effect of notifying a scheme was considered by this Court, and it was there stated that when a scheme has been notified under Chap.
IVA of the Motor Vehicles Act, and an application is made for the grant of a permit on a route notified under the scheme by a private operator, the Regional Transport Authority has no option but to refuse the permit to the private operator, if the State Transport Undertaking has either applied for a permit or has already been granted one.
In all the present cases, the State Transport Undertaking had already been granted a permit over route 'AB ', and if the private operators, that is to say, the appellants, were not entitled, in law, to the renewal of their permits for routes which embraced also route 'AB ', then the Regional Transport Authority could not but refuse to renew the permits.
It was observed in Abdul Gafoor 's case that the duty of the Regional Transport Authority was merely mechanical, and that it was required to take note of routes which had been notified and to adapt its orders so as to be in conformity with the notified scheme.
In view of the fact, therefore, that the scheme had been notified and route 'AB ' had already been granted to the Rajya Transport and/or the State Transport Undertaking, the Regional Transport Authority was incompetent to renew a permit over a route embracing route 'AB '.
The Regional Transport Authority not having done its duty under the law, the Appeal Board was entitled, when the record was before it, to revise the order of the Regional Transport Authority, even if the appeal was incompetent, in view of the vast powers of revision under section 64A.
That section, omitting the provisos, reads: "The State Transport Authority may, either on its own motion or on an application made to it, call for the record of any case in which an order has been made by a Regional 734 Transport Authority and in which no appeal lies, and if it appears to the State Transport Authority that the order made by the Regional Transport Authority is improper or illegal, the State Transport Authority may pass such order in relation to the case as it deems fit." The High Court came to the conclusion that it should not interfere, in its discretionary powers under articles 226 and 227, with the order of the Appeal Board, because even if the appeal for some reason was incompetent, the Appeal Board had the record before it, and gave effect to the correct legal position arising from a notified scheme.
The same view was expressed also in Samarth Transport Co. vs Regional Transport Authority, Nagpur.
In our opinion, we should not interfere on this ground either.
In this connection, the difference between the two sets of cases arising from the fact whether the Rajya Transport, Bihar, had objected or not, completely disappears.
We are now concerned with the merits of the contention that where the scheme notifies, as a route, a part of a larger route operated by a private operator, the two routes must be regarded as different, and the private operator cannot be prevented from running his omnibuses on that portion of his route which is a different route, although notified.
Reliance is placed upon a decision of the Privy Council in Kelani Valley Motor Transit Co., Ltd., vs Colombo Ratnapura Omnibus Co., Ltd. There, the Privy Council was concerned with two Ordinances promulgated in Ceylon intituled the Motor Car Ordinance (No. 45 of 1938) and the Omnibus Service Licensing Ordinance (No. 47 of 1942).
By the first schedule, para I of the latter Ordinance, it was provided that if applications were made by two or more persons for road service licences in respect of the same route, preference should be given to (a) an 735 application from a company or partnership comprising the holders of all the licences for the time being in force under the Motor Car Ordinance No. 45 of 1938, authorising the use of omnibuses on such route, and (b) an application from a company or partnership comprising the holders of the majority of the licences referred to in (a) above.
Section 7, sub section 1, provides: "The issue of road service licences under this Ordinance shall be so regulated by the Commissioner as to secure that different persons are not authorised to provide regular omnibus services on the same section of any highway: Provided, however, that the Commissioner may, where he considers it necessary to do so having regard to the needs and convenience of the public, issue licences to two or more persons authorizing the provision of regular omnibus services involving the use of the same section of a highway, if, but only if (a) that section of the highway is common to the respective routes to be used for the purposes of the services to be provided under each of the licences, but does not constitute the whole or the major part of any such route." The real question in the case was whether the appellant there could take into account for the purpose of the first schedule, six omnibuses which had been licenced for the route, Panadura to Badulla via Colombo and the low level road.
Panadura is 16 miles along the coast to Colombo and thence from Colombo to Ratnapura is 50 miles and from Ratnapura to Badulla, a further 80 miles.
It was clear that the route from Panadura to Badulla was not the same or substantially the same route as the route, Colombo to Ratnapura; but if a licence for an omnibus on the route, Panadura to 736 Badulla, was one authorising the use of the omnibus on the route, Colombo to Ratnapura, then six omnibuses plied by the appellant could be taken into account to turn the scale between the parties.
Sir John Beaumont in expounding the meaning of the word "route" observed as follows: "If 'route ' has the same meaning as 'highway ' in the Ordinance this argument must prevail, since admittedly an omnibus running on the highway from Panadura to Badulla will pass over the whole of the highway between Colombo and Ratnapura, but in their Lordships ' opinion it impossible to say that 'route ' and 'highway ' in the two Ordinances are synonymous terms. .
A 'highway ' is the physical track along which an omnibus runs, whilst a 'route ' appears to their Lordships to be an abstract conception of a line of travel between one terminus and another, and to be something distinct from the highway traversed.
" This distinction between "route" and "road" is relied upon by the appellants to show that the notified route, which we have called 'AB ' was a different route from the routes for which renewal of permits was demanded, even though route 'AB ' might have been a portion of the "road" traversed by the omnibuses of the appellants plying on their "routes.
" The distinction made by the Privy Council is right; but it was made with reference to the words used in the Ordinances there under consideration.
The question is whether a similar distinction can be made in the context of the Motor Vehicles Act.
Mr. Viswanatha Sastri appearing for the appellants took us through sections 42 to 57 of the Motor Vehicles Act and drew our attention to those in which the word "route" has been used, contra distinguished from the word "area", and contended that everywhere the word "route" is used in the sense of a notional line between two 737 termini running a stated course, and is used in contradistinction to what may be conveyed by the word "area ".
In Kondala Rao vs Andhra Pradesh State Road Transport Corporation, this court, in dealing with the scheme of the Motor Vehicles Act, declined to make any such distinction between "route" and "area".
This Court, speaking through Subba Rao, J., observed at p. 93: "Under section 68C of the Act the scheme may be framed in respect of any area or a route or a portion of any area or a portion of a route.
There is no inherent inconsistency between an 'area ' and a 'route '.
The proposed route is also an area limited to the route proposed.
The scheme may as well propose to operate a transport service in respect of a new route from point A to point B and that route would certainly be an area within the meaning of section 68C." In any event, under section 68C it is provided that a scheme may notify a route or an area or a portion of a route or a portion of an area, and the exclusion of the private operators from the whole route or the whole area or a part of the route or a part of that area, as the case may be, may be either complete or partial, and under section 68F(2) (c) (iii), the Regional Transport Authority may modify the terms of any existing permit so as to "curtail the area or route covered by the permit, in so far as such permit relates to the notified area or notified route ".
This means that even in those cases where the notified route and the route applied for run over a common sector, the curtailment by virtue of the notified scheme would be by excluding that portion of the route or, in other words, the " road " common to both.
The distinction between " route " as the notional line and " road " as the physical track disappears in the working of Chap.
IVA, because you cannot curtail the route without curtailing a portion of the road, 738 and the ruling of the Court to which we have referred, would also show that even if the route was different, the area at least would be the same.
The ruling of the Judicial Committee cannot be made applicable to the Motor Vehicles Act, particularly Chap.
IVA, where the intention is to exclude private operators completely from running over certain sectors or routes vested in State Transport Undertakings.
In our opinion, therefore, the appellants were rightly held to be disentitled to run over those portions of their routes which were notified as part of the scheme.
Those portions cannot be said to be different routes, but must be regarded as portions of the routes of the private operators, from which the private operators stood excluded under section 68F (2)(c)(iii) of the Act.
The decision under appeal was, therefore, correct in all the circumstances of the case.
This leaves over for consideration Civil Appeal No. 434 of 1961.
There, the question which arose was decided in the same way in which we have disposed of the other appeals on merits.
Ramaswami, C.J., and Kanhaiya Singh, J., referred to an earlier decision (M.J.C. No. 354 of 1960 decided on May 13, 1960) given by the Chief Justice and Chaudhuri, J., in which they had applied the Privy Council case, and made a distinction between a route which was longer than the notified route, though running for part of the way along the notified route and the notified route.
In the judgment from which Civil Appeal No. 434 of 1961 arises, the learned Chief Justice has declined to follow his earlier ruling which, he considers, was given perincuriam, because the provisions of section 68 F(2)(c)(iii) of the Motor Vehicles Act were not taken into account.
After considering the matter in the light of that section, the Divisional Bench has reached the same conclusion as we have, and along almost the same line of reasoning.
In view of what we have said in Civil Appeal No. 534 of 1961, Civil Appeal No. 434 of 1961 must also fail.
739 In the result, the appeals are dismissed, but in the circumstances of the case, we make no order about costs.
Appeals dismissed.
| Under a scheme framed and notified under the Motor Vehicles Act a certain route was notified under section 68D of the Act and the Rajya Transport, Bihar was exclusively allowed to operate on that route.
The said notified route formed part of routes on which the appellants were operating, and in respect of which they had asked for renewal of their permits.
The Rajya Transport, Bihar filed objections against the renewal of the permits in some cases but in other case no objection was filed.
The question which arose for decision was whether the permits of the appellant could be renewed by the Regional Transport Authority.
The appellants contended that as the notified route formed part of a larger route operated by a private operator, the two routes must be regarded as different route, and the private operator could not be prevented from running his omnibuses on that portion of his route, which was a different route, although notified.
^ Held, that as decided by this Court in Abdul Gafoor 's case, the Regional Transport Authority had no option but to refuse the permit to the private operator, if the State Transport Undertaking had either applied for a permit or had already been granted one.
Abdul Gafoor vs State of Mysore, A.I.R. 1961 S.C. 1956, followed.
If the Regional Transport Authority did not do its duty under the law the Appeal Board was entitled, when the record was before it, to revise the order of the Regional Transport Authority under its revisional powers as provided in section 64A of the Act, even if the appeal was incompetent.
Samarth Transport Co. vs Regional Transport Authority Nagpur, ; , followed.
729 In the present case the appellants were not entitled to run over those portions of their routes which were notified as part of the scheme.
Those portions could not be said to be different routes, but must be regarded as portions of the routes of the private operators, from which the private operators stood excluded under section 68F (2) (c) (iii) of the Act.
Kelani Valley Motor Transit Co. vs Colombo Ratnapura Omnibus Co., and Kondala Rao vs Andhra Pradesh State Road Transport Corporation, A.I.R. 1961 S.C. 82, considered.
| The appellant who was the holder of a permit to run a stage carriage, which was about to expire, made an application to the State Transport Authority for its renewal for a further period.
The respondent made a representation against the renewal of the appellant 's permit and also applied for the grant of the permit to himself.
The State Transport Authority made an order in the terms " Renewed for three years " in respect of the appellant 's permit but no express order was made on the respondent 's application for the grant of the permit to him.
On appeal by the respondent, the Appellate Tribunal cancelled the appellant 's permit and granted the permit to the respondent.
The appellant then moved the judicial Commissioner, Vindhya Pradesh, for a 693 writ of certiorari quashing the order of the Appellate Tribunal on the ground that it disclosed an error on the face of it because under the Act no appeal lay from the order that was passed by the subordinate authority.
The learned judicial Commissioner held that the appeal was competent and dismissed the application for the writ.
It was contended for the appellant that the respondent 's appeal to the Appellate Tribunal was not maintainable on the grounds (1) that no express order was made against the respondent by the State Transport Authority, and so section 64(a) of the Act did not give him a right of appeal and (2) that in view Of sections 47, 57 and 58 Of the Act, the State Transport Authority had no jurisdiction to consider the respondents application or to make an order in respect of it after the appellant 's permit was renewed, and therefore could not make an order rejecting it.
It was also contended that section 64 of the Act did not provide for an appeal by a person aggrieved by the renewal of a permit unless he was one of those mentioned in cl.
(f) of that section which the respondent was not, and therefore even if an appeal by the respondent was competent under section 64(a) in such an appeal, the Appellate Authority could not set aside the order of renewal.
Held: (1) that the order made by the State Transport Authority in the present case did amount, infact, to a refusal to grant the permit to the respondent.
The respondent 's appeal to the Appellate Authority was therefore maintainable under section 64(a) of the Act.
section Gopala Reddi vs Regional Transport Authoyity, North Arcot,[1955] , approved.
V. C. K. Bus Service Ltd. vs Regional Transport Authoyity,Coimbatore, , distinguished.
(2) that section 58(2) Of the Act shows that an application for the renewal of a permit and a fresh application for the same permit have to be heard together, and that there was nothing in sections 47 and 57, indicating a contrary course.
(3) that cl.
(f) of section 64 Of the Act does not in any way restrict the power of the Appellate Tribunal to grant all reliefs in an appeal under cl.
(a) of the section.
Consequently, the order of the Appellate Tribunal setting aside the order of renewal was valid.
Dholpur Co operative Transport Etc.
Union Ltd. vs The Appellate Authority, Rajasthan, A.I.R. , in so far as it decided to the contrary, disapproved.
| The respondent was appointed as a Sub Inspector of police in a temporary post in 1955.
He was discharged from service on July 13, 1957.
A Writ Petition filed by him in the Allahabad High Court was allowed on August 4, 1959 and consequently he was re instated in service on December 15, 1959.
Thereafter, on January 21, 1960 his services were terminated on the ground that they were no longer required by the State.
A suit for declaration that the said order of termination was null and void was decreed in his favour by the trial court which was affirmed in appeal and also by the High Court in second appeal.
Allowing the State appeal by special leave the Court, ^ HELD: 1.
The considerations which prevailed with the High Court in reaching its findings on the application of Article 311(2) of the Constitution and the bona fides of the superior authority in making the impugned order of termination simpliciter are not warranted in law.
[1130D] 2.
The order terminating the services was order of termination simpliciter passed in accordance with the rules applicable to temporary Government servants.
After the original order of discharge was quashed by the High Court, the respondent was reinstated, allowed increment in pay and one month 's salary in lieu of notice under the 'general rules for termination of services of temporary government servants was also given.
[1128F G] 3.
It was open to the superior authority to terminate the respondent 's services on the ground on which it did so.
And the evidence disclosed no personal motive had influenced the order or that it was passed by way of punishment.
A departmental enquiry is not required under the law.
Instead of instituting disciplinary proceedings against the government servant, the suitability for retention in service could be decided.
[1128H, 1129A, E] State of U.P.v.
Ram Chandra Trivedi; , ; Champaklal Chimanlal Shah vs The Union of India, , Jagdish Mitter vs Union of India, A.I.R. 1964 S.C. 449 and State of Punjab & Anr.
vs Shri Sukh Raj Bahadur, ; ; referred to.
Union of India & Ors.
vs R. section Dhaba, , State of Bihar & Ors.
vs Shiva Bhikshuk Mishra and R. section Sial vs The State of U.P. and Ors., ; applied.
The State of Bihar vs Gopi Kishore Prasad, A.I.R. 1960 SC 689 and Madan Gopal vs The State of Punjab, [1963] 3 SCR 716; distinguished. 1127
| The appellant instituted a suit for the recovery of money against the respondents in a Court in Gwalior State in May 1947.
The respondents who were residents in U. P. did not appear before the court and in November 1948 the Gwalior Court passed an ex partc decree.
On September 14, 1951, the Gwalior Court transferred the decree for execution to Allahabad, and on October 16, 1951, the appellant filed an application for execution of the decree before the Allahabad Court.
The respondents contended that the decree being a decree of a Foreign Court to whose jurisdiction they had not submitted was a nullity and the execution application in respect thereof was not maintainable.
Held, that the decree was not executable at Allahabad.
Per Kapur, Ayyangar and Mudholkar, JJ.The decree of the Court in Gwalior State sought to be executed was a foreign decree which not change its nationality inspite of subsequent constitutional changes or amendments in the Code of Civil Procedure.
On the day on which it passed the decree the Gwalior Court was a foreign Court within the meaning of section 2 (5) of the Code.
None of the conditions necessary to give its judgment extra territorial validity existed (i) the respondents were not the subjects of Gwalior; (ii) they were not residents in Gwalior at the time the suit was filed, (iii) they were not temporarily present in gwalior when the process was served upon them, (iv) they did not select the forum which passed the decree against them, (v) they did not voluntarily appear before the court, and (vi) they had not contracted to submit to the jurisdiction of the 579 by the Indian Code, was a different court from that which passed the decree under the Local Code, and was not the court.
which passed the decree within the meaning of section 39.
Sections 37 to 42 of the Code deal with execution of decree., passed by the courts governed by the Indian Code.
The decree could not be executed under the provisions of section 43 of the Code at any time.
After its adaptation in June 1950, section 43 applied to "a decree passed by a Civil Court in a Part B State".
There were no Part B States at the time when the decree was passed and these words could not be read as "a decree passed by a civil court in what became a Part B State".
Nor could the decree be executed under section 44 as that section was also inapplicable to this decree.
Article 261 (3) which provides that the final judgments or orders of Civil Courts in any part of the territory of India shall be capable of execution anywhere within that territory is inapplicable to the decree of the Gwalior court as the, provision is prospective and not retrospective.
Per Sarkar and Das Gupta, JJ.
Even in the decree passed by Gwalior Court was not a foreign decree the Allahabad Court had no power to execute it either under section 38 or under sections 43 or 44 of the Code of Civil Procedure.
Section 38 provides that a decree may be executed either by the court which passed it or by the court to which it is sent for execution.
The Allahabad Court was not the court which passed the decree.
Section 39 empowers the court which passed the decree to transfer it for execution to another court.
The word "court" in the phrase "court which passed the decree" in section 39 contemplates only courts governed by the Indian Code of Civil Procedure.
The Gwalior ,.Court which was governed by the Gwalior Code when it passed the decree had a distinct identity from the court at Gwalior after it came to be governed by the Indian Code.
The Court which transferred the decree was accordingly not the court which passed the decree and the order of transfer was not a valid order.
Section 43 of the Code provided for the execution of decrees passed by the Civil Courts in places where the Indian Code did not extend.
The decree of the Gwalior Court did not fall within this section as it stood before the Constitution.
A, After the adaptation in 1950 the section applied to a decree passed "by a Civil Court in a Part B State".
These words could not be read as "by a civil court in an Indian State which has later been included in a Part B State".
The Gwalior Court which passed the decree was not a Civil Court in a Part B State. 'Section 44 was equally inapplicable to the decree,.
The section after adaptation in 1950 580 applied only to decrees of revenue courts.
Before the adap tation it could apply only if there was a notification issued by the U. P. Government but no such notification was issued.
| % Civil Appeal Nos. 2049 and 3129 of 1979 were filed in this Court by special leave against the judgment of the High Court in a Writ Petition filed by respondents 6 to 51 of Civil Appeal No. 2049 of 1979.
One appeal was.
by the employees and the other, by the State of Bihar, etc., against the judgment of the High Court above said.
There were three different wings of Engineers in the Department of Agriculture, viz., Irrigation, minor Irrigation and River Valley Projects.
On January 9, 1969, the State Government amalgamated the cadres of engineers and other employees of the Irrigation and the River Valley departments.
Engineers and other employees of the minor Irrigation wing were not amalgamated.
Later, the Directorate of minor Irrigation was made permanent and a distinct and permanent cadre of overseers termed as Junior Engineers, was created.
191 permanent posts of overseers were sanctioned.
Thereafter, the minor Irrigation wing was also amalgamated with the other two wings, and a combined final gradation list prepared on the basis of the status of the overseers as obtaining on.
January 9, 1969, was issued.
On the Writ Petition of the respondents 6 to 51 above mentioned, the High Court quashed the orders contained in the various annexures viz 11.11/1, 12, 13, 13/1, 15 and 16 directed the State Government to prepare a fresh combined gradation list in accordance with the principles laid down by the High Court.
Allowing the appeals in part, the Court, ^ HELD: The three wings though under the administrative control of the Agricultural Department, were separate before amalgamation.
Permanent posts had been sanctioned in the minor Irrigation wing to 411 which the petitioners before the High Court belonged and they were appointed on permanent basis.
When integration takes place and officers in different cadres are merged into one, there is bound to be some difficulty in the matter of adjustment.
That has occurred in this case.
The approach of the High Court has been that if within the cadre earlier confirmation gives seniority why should that basis be not extended to the combined gradation list.
That may not be applicable in every situation particularly when there is a merger of cadres and the combined gradation list is proposed.
[414C D,FJ] Seniority would ordinarily depend upon the length of service, subject, of course, to the rules holding the field.
This view has been taken by this Court in several cases.
The High Court recorded a finding that there is no applicable rule in the matter of fixing inter se seniority in a situation of this type.
In the absence of rules, the more equitable way of preparing the combined gradation list would be to take the total length of service in the common cadre as the basis for determining the inter se seniority The Court does not agree with the High Court that confirmation should be the basis and would substitute it by the length of service test, but the Court upholds the direction that in fixing the combined gradation list the inter se seniority of incumbents in their respective departments would not be disturbed.
The gradation list as published by the Government has to be modified.
The conclusion of the High Court that Annexures 11, 11/1, 12,13, 1311, 15 and 16 should be quashed and a fresh combined gradation list has to be published, is confirmed.
The test for fixing the seniority inter se generally, is altered, but the direction of inter se seniority in their own departments to be respected is approved.
The respondent State directed to prepare and publish the fresh combined gradation list keeping these directions in view.
[4t4G; 4t5C F] A. Janardhana vs Union of India and Ors., ; and K.S. Vora and Ors.
vs State of Gujarat and Ors.
, ; , referred to.
| The appellant originally joined the service of the State of Junagadh in 1934 and was after the merger of that State in Saurashtra confirmed in September, 1956 as an executive engineer in the service of the latter State.
Rule 3(i) of the Saurashtra Covenanting States Servants (Superannuation age) Rules 1955 provided : "A Govt.
servant shall, unless for special reasons otherwise directed by Govt.
retire from service on his completing 55 years of age.
" After the merger of Saurashtra in the bilingual State of Bombay the old Bombay Civil Service Rules were applied to Saurashtra area with effect from January 7, 1957.
On July 1, 1959 the Bombay Civil Service Rules, 1959 were promulgated.
Accord ing to r. 161 (c) (2) (ii) (1) the age of retirement for class 1 Engineers in the State Service was fixed at 55 years but it was further laid down that they "may be required by the Government to retire on reaching the age of 50 years, if they have attained to the rank of Superintending Engine.
" On the formation of the State of Gujarat the appellant 's 'services were transferred to that State but the Bombay Rules continued to apply.
Under the Bombay Rule aforesaid, namely, r. 161(c)(2)(ii)(1) the Government of the State of Gujarat retired the appellant at the age of about 53 years.
The appellant filed a writ petition in the High Court.
The High Court took into account section 115(7) of the but held that since the Saurashtra Rule 3(i) also empowered the 'State Government to retire the appellant at an age earlier than 55 years there was no variation of conditions of service to his disadvantage under the Bombay Rule and therefore the latter rule was not invalid for want of Presidential assent.
The High Court took the view that the expression "unless for special reasons otherwise directed by Government" in r. 3 (i) of the Saurashtra Rules meant that the Government could for special reasons retire a Government servant before he had attained the normal superannuation age of 55 years.
Against the High Court 's judgment dismissing his writ petition the appellant came by special leave, to this Court.
HELD : Rule 3(i) of the Saurashtra Rules, if construed of interpreted in the manner in which it had been done by the High Court, would bring it into direct conflict with Moti Ram Deka 's case as well as other cases decided by this Court.
In Moti Ram Deka 's case it was laid down that if any rule permitted the appropriate authorities to retire compul sorrily a civil servant without imposing a limitation in that behalf that such 245 civil servant should have put in a minimum period of service.
that rule would be invalid and the so called retirement ordered under the said rule would amount to removal of the civil servant within the meaning of article 311(2) of the Constitution.
The principle is that the rule relating to compulsory retirement of a Government servant must not only contain the outside limit of superannuation but there must also be a provision for a reasonably long period of qualified service which must be indicated with sufficient clarity.
For example if 55 years have been specified as the age of superannuation and if it is sought to retire the servant even before that period it should be provided in the rule that he could be retired after he has attained the age of 50 years or he has put in service for a period of 25 years.
[248 G 249 G] On the above principle rule 3 (i) of the Saurashtra Rules would have to be declared invalid if the expression "unless for special reasons otherwise directed by Government" is so construed as to give a power to order compulsory retirement even before attaining the 'age of 55 years.
A statutory rule, however, should be so interpreted as to make it valid and not invalid.
The correct interpretation of Rule 3(i) is that it gives power to the Government to allow a Government servant to remain in service even beyond the age of 55 years for special reasons; so construed the Rule would not be invalid and the appellant could not under it have been retired before be had attained the age of 55 years.
By applying the Bombay Rule his conditions of service were varied to his disadvantage because he could then be compulsorily retired as soon as he attained the age of 50 years.
As the previous approval of the Central Government was not obtained in accordance with the proviso to section 115(7) of the , the Bombay Rule could not be made applicable to the appellant.
[249 G 250 C] The appellant was thus entitled to remain in service until he attained the age of 55 years and the impugned order directing his retirement was invalid and ineffective.
[250 E F] Bholanath J. Thaker vs State of Saurashtra, A.I.R. (1954) S.C. 680, referred to.
Moti Ram Deka etc.
vs General Manager N.E.F. Railways Maligaon, Pandu etc.
; , State of Bombay vs Saubhag chand M. poshi; , , P. Balakotaiah vs Union of India; , , Dalip Singh vs State of Punjab, and Gurdev Singh Sidhu vs State of Punjab & Anr. ; , applied.
| Under Rule 2 of the Bihar Public Works Department Code, the Governor of Bihar took a decision on 7.4.1958 providing that 25% of the posts of Assistant Engineers in the Bihar Engineering Service, Class II (the Service) were to be filled by promotion, subject to availability of suitable hands, from Overseers in the Bihar Subordinate Engineering Service (Irrigation Department) and 75% of the posts were to be filled by direct recruitment to the Service.
Respondents No. 1 to 5 in both these appeals were appointed as Assistant Engineers in the Service on the recommendation of the Bihar Public Service Commission in the year 1961; and the appellants (in Civil Appeal No. 233 of 1978(respondents No. 6 to 23 in Civil Appeal No. 232 of 1978), who had been working as Overseers in the Bihar Subordinate Engineering Service (Irrigation Department) were promoted to the posts of Assistant Engineers in the Service in 1962 and thereafter.
However, by orders dated 12.7.1975, 20.1.1976 and 9.4.1977, the Government changed the date of promotion of the appellants to the dates prior to the appointment of respondents No. 1 to 5 in the Service, making the former Senior to the letter.
Respondents No. 1 to 5 filed writ petition before the High Court challenging the seniority conferred on the appellants from the retrospective date and contended that the orders giving promotions to the appellants from a date earlier to date of their promotion in the Service purported to affect prejudicially respondents No. 1 to 5 's right inasmuch as they were appointed to the Service earlier to the promotion of the appellants; and that the seniority had to be reckoned amongst the officials working as Assistant Engineers in the Service from the date of their appointment or promotion to the said Service.
The appellants contended that they were entitled to be promoted retrospectively on the 411 basis of reservation of 25% of the Cadre posts in the Service till 1958.
The High Court.
holding that the orders promoting the appellants with retrospective effect were bad, quashed the same and allowed the writ petition.
Hence the present appeals.
On consideration of the legality and validity of the orders of the Government giving promotions to the appellants from a date earlier to the date of their entry into the Service as Assistant Engineers, and its effect on the inter se seniority amongst the appellants and respondents No. 1 to 5, who were directly appointed as Assistant Enginers in the Service before the appellants entered in the said Service.
Dismissing the appeals, this Court, HELD: 1.
The Government Orders dated 12.7.1975, 20.1.1976 and 9.4.1977 which purported to give promotion to the appellants retrospectively were arbitrary, illegal and inoperative inasmuch as these seriously affected rspondents No. 1 to 5.
The appellants were not borne in the cadre of Assistant Engineers even in officiating capacity at time when rspondents No. 1 to 5 were directly recruited to the post of Assistant Egineer.
As such, the promotee appellants could not be under any circumstance given seniority over the directly recruited respondents No. 1 to 5.
The judgment of the High Court in quashing the impugned Government Orders was, therefore, unexceptionable.
[418F H; 420A] 2.1 No person can be promoted with retrospective effect from a date when he was not borne in the Cadre so as to adversely affect others; and amongst members of the same grade, seniority is reckoned from the date of their initial entry into the service.
[419F] 2.2 Seniority inter se amongst the Assistant Engineers in Bihar Engineering Service, Class II would be considered from the date of the length of service rendered as Assistant Engineers.
Therefore, the appellants could not be made senior to respondents No. 1 to 5 by the impugned Government Orders as they entered into the said Service in 1962 and thereafter by promotion subsequent to respondent No. 1 to 5 who were directly recruited in the quota meant for them.
There was nothing to show that the appellants could be deemed to be recruited in 1958 quota and that these vacancies were carried forward.
[419G; 418E F] A.K. Subraman and Ors.
vs Union of India and Ors., , relied on.
412 V.B. Badami vs State of Mysore and Ors., [1976] 1 SCR 815 and Gonal Bihimappa vs State of Karnataka, [1987] Supp.
SCC 207, held inapplicable.
D.K. Mitra and Ors.
vs Union of India and Ors., [1985] Supp.
SCC 243, referred to.
| The petitioner was the owner of a bus being run as a stage carriage.
On 24.7.78 while carrying passengers this bus met with an accident, as a result of which one passenger died.
The Motor Accident Claims Tribunal held that the accident took place due to the negligence on the part of the driver and awarded compensation of Rs.56,800 to the legal representatives of the deceased.
It further held that the liability of the insurer to indemnify the petitioner was limited to Rs.5,000 as the policy specifically limited the insurer 's liability to what had been provided by section 95(2)(b)(ii)(2) and (4) of .
The appeal filed by the Petitioner was dismissed by the High Court.
In the Special Leave Petition before this Court, it was contended on behalf of the petitioner that the insurer was liable to indemnify the petitioner upto a limit of Rs.75,000 under section 95(2)(b)(ii)(2) of the and that the further limit mentioned in section 95(2)(b) (ii)(4) was inapplicable to the case of the petitioner.
Dismissing the Special Leave Petition, this Court, HELD: 1.
Having regard to the as it stood prior to the amendments by Act 47 of 1982.
the insurer was liable to pay upto Rs.10,000 for each individual passenger where the vehicle involved was a motor cab and upto Rs.5,000 for each individual passenger in any other case.
[1161F] 2.1 Section 95(2)(b) as it existed before its amendment in 1982 1150 dealt with the limits of the liability of an insurer in the case of motor vehicles in which passengers were carried for hire or reward or by reason of or in pursuance of a contract of employment.
[1155H; 1156A] Sub clause (i) of section 95(2)(b) provided that in respect of death of or injury to persons other than passen gers carried for hire or reward, a limit of Rs.50,000 in all was the limit of the liability of the insurer.
[1156A] Under sub clause (ii) there were two specific limits on the liability of the insurer in the case of motor vehicles carrying passengers.
The first limit related to the aggre gate liability of the insurer in any one accident.
It was fixed at Rs.50,000 in all where the vehicle was registered to carry not more than thirty passengers, at Rs.75,000 in all where the vehicle was registered to carry more than thirty but not more than sixty passengers and at Rs.1,00,000 in all where the vehicle was registered to carry more than sixty passengers.
The other limit was in respect of each passenger, which provided that subject to the limits afore said as regards the aggregate liability, the liability extended up to Rs.10,000 for each individual passenger where the vehicle was a motor cab and Rs.5,000 for each individual passenger in any other case.
Neither of the two limits can be ignored.
[1156B D] 2.2 The limit prescribed in section 95(2)(b)(ii)(4) cannot be said to be only the minimum liability prescribed by law.
The amount mentioned in that provision provides the maximum amount payable by an insurer in respect of each passenger who has suffered on account of an accident.
This is a fair construction of section 95(2) of the Act as it existed at the time when the accident took place.
[1156E] 2.3 After the 1982 amendment the liability of the insur er in respect of each individual passenger is Rs.15,000 as against Rs.10,000 in the case of each individual passenger where the vehicle was a motor cab and Rs.5,000 for each individual passenger in other cases, prior to the said amendment.
This shows that Parliament never intended that the aggregate liability of the insurer mentioned in sub clauses (1), (2) and (3) of section 95(2)(b)(ii) would be the liability of the insurer even when one passenger had died or suffered injury on account of an accident.
Such liability was always further limited by sub clause (4) of section 95(2)(b)(ii).
[1159F G] 2.4 In the instant case, the vehicle in question being a bus carrying passengers for hire or reward registered to carry more than thirty 1151 but not more than sixty passengers, the limit of the aggre gate liability of the insurer in any one accident was Rs.75,000 and subject to the said limit the liability in respect of each passenger was Rs.5,000.
[1156D] 2.5 As the law stands today the insurer is liable to pay upto Rs.15,000 in respect of death of any passenger or any injury caused to him.
Having regard to the large number of motor vehicle accidents which are taking place on roads and also to the fact that a large number of public service vehicles carrying passengers are involved in them, limit of Rs.15,000 fixed in the case of each passenger appears to be still meagre.
[1159E; 1160E] 3.
The following suggestions in respect of certain provisions of the are made for considera tion of the Central Government: (i) The limits of compensation in respect of death or permanent disablement payable in the event of there being no proof of fault have become unrealistic in view of inflation ary pressures and consequent loss of purchasing power of the rupee.
These limits should, therefore, be raised adequately.
[1162B C] (ii) There is no justification for continuing the dis tinction between public service vehicles and other vehicles and also between passengers and third parties with regard to the liability of the insurer to pay compensation.
Even among the public service vehicles a distinction is made between vehicles used as goods carriages and those used for carrying passengers.
It may be considered whether it is necessary to continue these distinctions and also whether the limits of liability of the insurer should not be altered suitably.
[1162D E] (iii) The society and the State which are responsible for a large number of motor vehicles being put on road should carry also the responsibility of protecting the interests of innocent victims of hit and run motor accidents which are increasing in number.
The amounts of Rs.5,000 and Rs.1,000 provided as compensation in respect of death or grievous hurt respectively appear to be highly inadequate.
It may be considered whether these figures should not be increased in an appropriate manner.
[1162F G] (iv) The expression "legal representative" has not been defined in the Act and it has led to serious doubts in the course of judicial proceedings.
It may be considered whether it would not be advisable to define the said expression for purposes of making claims before Claims 1152 Tribunals where death has resulted from a motor vehicle accident in the same way in which the English Law has been amended.
[1163A C] Motor Owners Insurance Co. Ltd. vs Jadavji Keshavji Modi Northern India Transport Insurance Co., [1971] Supp.
SCR 20; Manjusri Raha & Ors.
B.L. Gupta & Ors.
; , ; P.B. Kader & Ors.
vs Thatchamma and Ors., AIR 1970 Kerala 241; K.R. Sivagami, Proprietor, Rajendran Tourist vs Mahaboob Nisa Bi and others, ; Madras Motor and General Insurance Co. Ltd. by its successor: The United Fire and General Insurance Co. Ltd. and others vs
V.P. Ba lakrishnan and others, ; New India Assurance Co. Ltd. vs Mahmood Ahmad and others, ; Shiva hari Rama Tiloli and another vs Kashi Vishnu Agarwadekar and others, ; National Insurance Co. Ltd. vs Shanim Ahmad and others, ; Tara Pada Roy vs Dwijendra Nath Sen and others, ; Noor Mohammad and another vs Phoola Rani and others, ; Raghib Nasim and another vs Naseem Ahmad and others, and Gujarat State Road Transport Corporation, Ahme dabad vs Ramanbhai Prabhatbhai and Another, ; , referred to.
|
Civil Appeal No. 281 of 1959.
Appeal by special leave from the judgment and order dated October 12, 1955, of the former Nagpur High Court in Misc.
Petition No. 288 of 1954.
H. R. Khanna and R. H. Dhebar, for the appellants.
section N. Kherdekar and A. G. Ratnaparkhi, for respondent No. 1 1961.
November 20.
The Judgment of the Court was delivered by SHAH, J.
Out of a total area of 2,375 acres 3 gunthas of Dhanora an Izara village in Taluka 712 Pusad in the State of Madhya Pradesh 2,283 acres and 28 gunthas is assessed land and the remaining 91 acres and 15 gunthas is unassessed.
One Surat Singh who was the proprietor of the village, by sale deed dated May 24, 1947, conveyed an undivided half share in the village to Yeshwant Madhao Mahajan hereinafter called Mahajan for Rs. 25,000/ and on the same day executed a kabulayat (lease deed) for five years in respect of the same land for cultivation at an annual rental of Rs. 3,000/ .
The Legislature of the Madhya Pradesh State enacted the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1 of 1951 hereinafter called the Act to provide for acquisition of the rights of proprietors in estates, mahals, alienated villages and alienated lands in Madhya Pradesh and to make provision for other matters connected therewith.
The Act was brought into operation on March 14, 1951.
The Compensation Officer, Yeotmal started an enquiry about assessment of compensation in respect of the village Dhanora which had vested by the operation of section 3 of the Act in the State Government.
Before the Compensation officer, Mahajan claimed to retain possession of a half share in all the fallow lands in the village which had been leased by him under the deed (kabulayat) dated May, 24, 1947, to Surat Singh on the plea that these lands were "home farm".
This claim was rejected by the Compensation Officer and the order of the Compensation Officer was confirmed in appeal by the Additional Settlement Commissioner.
Mahajan then applied to the High Court of Judicature at Nagpur under article 226 of the Constitution for a direction quashing the order of the Additional Settlement Commissioner and the Compensation Officer and for a declaration that the lands mentioned in Schedule A attached to the petition be declared home farm and for a writ of mandamus against the State of Madhya Pradesh to deliver possession of all the lands mentioned in that Schedule.
713 The High Court quashed the order of the Additional Settlement Commissioner in so far as it related to the undivided half share in Survey Nos. 1 to 91 except those in possession of the specified tenants and also those already recognised as home farm and directed the Compensation Officer to decide the claim made by Mahajan in the light of the law laid down in the judgment.
Against the order passed by the High Court, the Additional Settlement Commissioner and the State of Bombay, which had by virtue of the States Reorganization Act, 1956, been substituted for the State of Madhya Pradesh, have appealed to this Court with special leave.
The dispute in this appeal relates to a half share in those lands in the village which had remained fallow on the date of the notification under section 3 of the Act.
By virtue of the sale deed dated May 24, 1947, Mahajan was the proprietor of the undivided half share in the entire village and under the kabulayat he had granted to Surat Singh a lease for cultivation of the undivided half share purchased by him.
Undoubtedly the lands specified in Schedule A to the petition were on the crucial date lying fallow.
The question which falls to be determined is whether those lands can be regarded home far": if they be so regarded, by virtue of section 4(2) of the Act Mahajan will be entitled to retain possession of those lands.
Section 3 of the Act provides, in so far as it is material, that "on and from a date to be specified by a notification by the State Government in this behalf, all proprietary rights in an estate, mahal, alienated village or alienated land, as the case may be, in the area specified in the notification, vesting in a proprietor of such estate, mahal, alienated village, alienated land, or in a person having interest in such proprietary right through the proprietor, shall pass from such proprietor or such other person to and vest in the State for the purposes of the State free of all encumbrances." Section 4(1) sets out the 714 consequence of the vesting.
By cl.
(a) of section 4(1), all rights, title and interest vesting in the proprietor or any person having interest in such proprietary right through the proprietor in such area including land (cultivable or barren), cease and are vested in the State for the purposes of the State free from all encumbrances.
But sub section 2 provides that "Notwithstanding anything contained in subsection (1), the proprietor shall continue to retain the possession of his home stead, home farm land. . . " . 'Home farm land ' is defined, in so far as it is material, in section 2(g) as: "(1) x x x x x x (2) x x x x x x (3) in relation to Berar, all land included in holdings which is (i) under the personal cultivation of the superior holder including land allowed to lie fallow in accordance with the usual agricultural practice; (ii) held by a lessee from the superior holder; and (iii) held by a tenant from the superior holder other than a specified tenant.
" 'Land ' is defined as "including land covered with water.
" Section 7 authorises the Deputy Commissioner to take charge of all lands, other than occupied lands and home stead lands, and of all interests vesting in the State under section 3 on the date of the vesting, and, by section 8, duty is imposed on the State Government to pay every proprietor, who is divested of proprietary rights, compensation in accordance with the rules contained in Schedule I. Mahajan was undoubtedly at the date of vesting the superior holder of the half share in the fallow lands which were held by Surat Singh as lessee from him.
Prima facie the claim of Mahajan 715 was covered by cl.
(g) (3) (ii) of section 2 of the Act, and Mahajan was entitled to the benefit of the exception in section 4 (2).
But counsel for the State contends that in respect of an undivided interest in land, the superior holder is not entitled to the benefit of section 4(2), because it is not a "holding.
" Alternatively, he contends that the land which is, at the date of vesting, lying fallow otherwise than in accordance with the usual agricultural practice can never be regarded as home farm.
" In our view, there is no substance in either of these contentions.
Schedule A to the petition sets out the description of the various lands which Mahajan claimed should be treated as "home farm" land.
Each of these lands is assessed.
The expression 'holding ' is not defined in the Act, but by cl.
(d) of section 2 expressions not defined in the Act in relation to Berar but used or explained in the Berar Land Revenue Code, 1928, have the meaning assigned to those expressions in the latter Act.
The Berar Land Revenue Code defines 'holding ' as "(a) a parcel of land separately assessed to land revenue; and(b) in reference to land held by a tenant a parcel of land held from a landlord under one lease or set of conditions.
" Evidently, the survey numbers included in Schedule A to the petition were "holdings" within the meanings of the Berar Land Revenue Code and therefore within the meaning of that expression as used in the Act.
It is true that Mahajan was not entitled to the entire area of each of these holdings but by the definition in the Act all lands included in holdings in Berar, provided they fulfil the conditions in cl.
(i), (ii) or (iii) of sub cl.
(3), are "home farm" lands.
In other words a part of the holding or an undivided interest in the holding may also be "home farm" land if it otherwise fulfils the requirements of cl.(i) (ii) or (iii) of sub cl.(3).
That a half share in the village which is included in the Schedule to the petition was granted 716 to Surat Singh on lease for cultivation cannot be gain said in view of the express covenants of the kabulayat.
Certain lands in the village, it is true, were lying fallow wholly or partially at the date of the vesting, but the lands having been granted in lease for cultivation, in our judgment, they are by virtue of section 4(2) to be retained in the possession of the proprietor, provision of cl.(1) of section 4 notwithstanding.
By sub section
(2) of section 4 all "home farm" lands are to remain in possession of the proprietor: there is no express exclusion of lands lying fallow from the benefit of section 4 (2) and none such can be implied either from the scheme of the Act or the context in which section 4 (2) occurs.
If Mahajan had remained in occupation as proprietor and had allowed the lands to remain fallow they may have vested in the State and Mahajan may not have been entitled to claim the benefit of section 4 (2) unless his case fell under cls.
(i) and (iii) of section 2 (g)(3), but the grant of a lease for cultivation evidences an intention on the part of Mahajan that the land be converted to agricultural purposes and default on the part of the lessee to cultivate those lands will not, deprive the lessor proprietor of the benefit granted to him by the statute.
In our view, the High Court was right in holding that the words of cl.
(ii) of section 2(g) (3) were explicit and a survey number which was lying fallow but was held by a lessee from the superior holder fell within the definition of "home farm.
" The appeal, therefore, fails and is dismissed with costs.
Appeal dismissed.
| In 1947 S conveyed by a sale deed to M an undivided half share of Land in his village.
On the same day S executed a Kabulayat for 5 years in respect of the same land for cultivation.
In 1951 the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1951, came into force and the Compensation Officer started enquiry about assessment of compensation.
M claimed to retain possession of the half share in all the fallow lands in the village which had been leased by him for cultivation to S on the plea that these lands were 'home farm '.
The claim 711 was rejected by the Compensation Officer and confirmed by the Additional Settlement Commissioner.
The High Court of Nagpur quashed the order.
In appeal to the Supreme the Additional Settlement Commissioner contended that in respect of an undivided interest in the land, the superior holder is not entitled to the benefit of section 4(2) of the Act because it is not a 'holding ', alternatively, that the land which was, at the date of vesting, lying fallow otherwise than in accordance with the usual agricultural practice could never be regarded as 'home farm '.
^ Held, that a part of a holding or an undivided interest in a " holding" in Berar may also be 'home farm ' land if it otherwise fulfils the requirement of cl.
(i), (ii) or (iii) of sub cl.
(3) of section 2(g) of the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1951.
The land having been granted in lease for cultivation it is by virtue of section 4(2) of the Act to be retained in the possession of the proprietor.
Grant of a lease for cultivation evidences an intention on the part of the proprietor that the land is to be converted to agricultural purposes, and default on the part of the lessee to cultivate the land will not deprive the lessor proprietor of the benefit granted to him by the statute.
| The respondent, who owned agricultural properties in the different districts of Uttar Pradesh, was assessed to agri cultural income tax by the Additional Collector of Banaras.
On challenge by way of a petition under article 226 of the Constitution, assessment was quashed by the Allahabad High Court on the ground that the assessing authority had no ,jurisdiction to assess.
Under section 6 of the U.P. Act No. XIV of 1956 the assessments by the Additional Collector were validated and a party to the proceedings under Agricultural Income tax Act was given the right to move the Court or authority within the prescribed period to review the proceedings where in the assessments had been set aside on the ground that the assessing authority had no jurisdiction to make the assessment.
By section 11 the authority or court so moved was bound to review the order.
The State of Uttar Pradesh applied to the High Court for review of its earlier order quashing the assessment.
The single judge of the High Court held that section II of the Act did not apply to writ pro ceedings under article 226 of the Constitution.
On appeal the Division Bench held that the order for the single judge did not amount to a 'judgment ' under Ch.
VIII r.5 cl.10 of the Letter Patent and the Rules of Allahabad High Court and that section 11 of the Act did not apply to proceedings.
by way of a writ before the High Court.
On appeal by special leave by the State it was contended that the Division Bench was wrong and by an additional statement of case it was sought to be urged that the application for review should be treated as one under order 47 of the Code of Civil Procedure, 2 Held (per Sinha, C. J, Subba Rao, Ayyangar and Aiyar, jj.), that under cl.
IO of the Letters Patent of the Allahabad High Court and the Rules of the Court the expression 'judgment ' would even on the narrow view of the expression include the order in the present case whereby the statutory right given to the party was finally negatived and that the Division Bench was in error in holding that it was not a 'judgment '.
Held, further, that the proceeding under article 226 of the constitution were neither 'proceedings ' under the Act nor proceedings on the basis of the Act.
The proceedings under article 226 of the Constitution were independent and original proceeding and not a continuation of the assessment proceedings.
Venkataratnam vs Secretary of State for India, (1930) I.L.R.53 Mad.
979, Ryots of Garabandha vs The Zamindar of Parlakimedi I.L.R. , Ramayya vs State of Madras, A.I.R. 1952 Mad.
300, Moulvi Hamid Hassan Nomani vs Banwarilal Coy.
(1947) II M.L.J. 32, Budge Budge Municipality vs Mangru (1952) 57 C.W.N.25 and Satyanarayanamurthi vs 1.T. Appellate Tribunal, A.I.R.1957 Andhra 123, referred to.
The Act had to be interpreted consistently with the Constitution and there was no power in the State Legislature to compel the High Court to act in a particular way in exercise of its jurisdiction under article 226 of the Constitu tion.
Section, II could only apply to cases 'Where any court or authority other than the High Court in exercise of its jurisdiction under article 226 of the Constitution, had decided the matter.
Held, further, that construing shall ' in section II of the Act as `may ' would defeat the very provisions of the Act.
Held, also, that the contention that the application under s.11 of the Act may be treated as one order 47 of the Code of Civil Procedure, was highly belated and further there were many possible objections to such a course and it cannot be acceded to.
| Upon an application filed by a cultivating tenant M under section 11 of the Himachal Pradesh Abolition of Big Landed Estates and Land Reforms Act, 1953, the Compensation Officer held that as such tenant he was entitled to acquire "the right, title and interest" of the owner of the land in question.
After payment by the tenant of a specified amount of compensation, a certificate of ownership was granted to him and, after his death, the land was mutated in favour of his wife and daughter, respondents in this appeal.
The respondents applied to the Divisional Forest Officer for permission to sell the trees of their land and although that Officer granted permission for the sale, he failed to give the necessary orders for felling the trees and taking out the converted timber from the land.
The respondents filed a petition under article 226 of the Constitution for the issue of a writ of mandamus directing the Divisional Forest Officer to issue or get issued the necessary permission for felling the trees and moving the timber.
The Judicial Commissioner, following Vijay Kumari Thakur vs
H.P. Administration.
A.I.R. 1961 H.P. 32, held that the appellants were estopped from contending that the respondents had no interest in the trees and allowed the petition.
In appeal to the Supreme Court it was contended on behalf of the appellants that under section 11 of the Act the trees did not vest in the deceased tenant but only the 'land ' as defend in section 2(5) of the Act, and that the Compensation Officer was not competent to grant and, in fact, did not grant proprietary rights in the trees to the deceased tenant.
HELD : dismissing the appeal: Under sub section
(6) of section 11, the tenant becomes the owner of the land comprised in the tenancy on and from the date of gram of the certificate, and it is expressly provided that the right, title and interest of the landowner in the said land shall determine.
In the context the word 'owner ' is very comprehensive and implies that all rights, title and interest of the land owner passed to the tenant.
[116E F] Furthermore, the expression "right, title and interest of the landowner in the land" is wide enough to include trees standing on the land.
Under section 8 of the Transfer of Property Act, unless a different intention is expressed or implied, transfer of land would include trees standing on it; and section 11 of the Himachal Pradesh Act should be construed in the same manner.
[115 E] Achhru Mal vs Maula Bakhsh, and Nasib Singh vs Amin Chand, A,I.R. , distinguished.
Kaju Mal vs Salig Ram, [1919] Punj.
Rec. 237, referred to. 113
| Respondent Town Improvement Trust Bhopal acquired 152 acres of land in village Jamalpura under section 68 of the Madhya Pradesh Town Improvement Trust Act within the munici pal limits of Bhopal.
That land included 12.62 acres of land belonging to the appellant on which stood a house, a well and some trees.
The appellant being not satisfied with the amount of compensation offered to him by the Trust, made a Reference to the Compensation Tribunal.
The Tribunal awarded compensation at the rate of Rs.6,000 per acre for the land, Rs.5,000 for the building, Rs.3,000 for the well and Rs.815 for the trees.
Thus the Tribunal awarded a total sum of Rs.1,20,000 as compensation as against a claim of Rs.13,39,560 made by the appellant.
On appeal, the High Court, maintained the award in respect of the building, well and the trees but enhanced the same so far as the land is concerned by determining the market value of Rs.12,000 per acre.
Working or this basis, including 15% solatium, the total amount of compensation awarded worked out to he Rs. 1,84,923.
Being dissatisfied with the Order of the High Court, he has come up to this Court after obtaining special leave.
The main contentions urged by the appellant are (i) that the house and well are undervalued; (ii) that the land ought to have been treated as urbanised developed land; (iii) that potential value of the land has not 909 been taken into consideration while determining compensa tion; (iv) that the value of the sales of similar plots has wrongly been rejected.
Partly allowing the appeal, this Court, HELD: In determining market value, where there was no sufficient direct evidence of market price, the Court is required to ascertain as best as possible from the materials before it, what a willing vendor would reasonably have expected to obtain from a willing purchaser from the land in its particular position and with its particular potentiali ty.
[914C D] A land which is certainly or likely to be used in the immediate or reasonably near future for building purposes but which at the valuation date is waste land or has been used for agricultural purposes, the owner, however, willing a vendor he is, is not likely to be content to sell the land for its value as waste or agricultural land as the case may be.
The possibility of its being used for building purposes would have to be taken into account.
However, it must not be valued as though it had already been built upon.
It is the possibilities of the land and not its realised possibilities that must be taken into consideration.
[914E F] In estimating the market value of the land, all the capabilities of the land and all its legitimate purposes to which it may be applied, or for which it may be adapted are to be considered and not merely the condition it is in and the use to which it is put at the time applied by the owner.
The proper principle is to ascertain the market value of the land taking into consideration the special value which ought to be attached to the special advantage possessed by the land; namely, its proximity to developed urbanised areas.
[915A B] The value of the potentiality has to be determined on such materials as are available and without indulgence in fits of imagination.
[915B C] A court of appeal interferes not when the judgment under attack is not right, but only when it is shown to be wrong.
[912E] In an appeal under article 136 of the Constitution of India involving the question of valuation of acquired land, the Supreme Court will not interfere with the award unless some erroneous principle has been invoked or some important piece of evidence has been overlooked or misapplied [912B C] 910 When the willing vendor had agreed to sell land at 14 annas per sq.
feet after development and the development charge was to be paid by the willing purchaser it could be reasonable to deduct only 50% on account of the land to be set apart for roads, drains etc.
and not beyond that.
Con sidering this aspect of the matter and the potential value of the land as urban developed area the Court took the view that the compensation may justly be enhanced by 1/6th i.e. to Rs.14,000 per acre.
Solatium 15% was maintained but the rate of interest was raised to 9% on the enhanced compensa tion till payment.
[918F G ] Atmaram Bhagwant vs Collector ofNagpur, A.I.R. 1929 P.C. 92, followed; Dollar Company Madras vs Collector of Madras, ; Gajapatiraju vs Rev. Divisional Officer, ; Mahabir Prasad Santuka vs Collector, Cuttack, [1987] 1 S.C.C. 587 and U.P. Government vs
H.S. Gupta, A.I.R. 1957 S.C. 202.
| The respondent was appointed as a Sub Inspector of police in a temporary post in 1955.
He was discharged from service on July 13, 1957.
A Writ Petition filed by him in the Allahabad High Court was allowed on August 4, 1959 and consequently he was re instated in service on December 15, 1959.
Thereafter, on January 21, 1960 his services were terminated on the ground that they were no longer required by the State.
A suit for declaration that the said order of termination was null and void was decreed in his favour by the trial court which was affirmed in appeal and also by the High Court in second appeal.
Allowing the State appeal by special leave the Court, ^ HELD: 1.
The considerations which prevailed with the High Court in reaching its findings on the application of Article 311(2) of the Constitution and the bona fides of the superior authority in making the impugned order of termination simpliciter are not warranted in law.
[1130D] 2.
The order terminating the services was order of termination simpliciter passed in accordance with the rules applicable to temporary Government servants.
After the original order of discharge was quashed by the High Court, the respondent was reinstated, allowed increment in pay and one month 's salary in lieu of notice under the 'general rules for termination of services of temporary government servants was also given.
[1128F G] 3.
It was open to the superior authority to terminate the respondent 's services on the ground on which it did so.
And the evidence disclosed no personal motive had influenced the order or that it was passed by way of punishment.
A departmental enquiry is not required under the law.
Instead of instituting disciplinary proceedings against the government servant, the suitability for retention in service could be decided.
[1128H, 1129A, E] State of U.P.v.
Ram Chandra Trivedi; , ; Champaklal Chimanlal Shah vs The Union of India, , Jagdish Mitter vs Union of India, A.I.R. 1964 S.C. 449 and State of Punjab & Anr.
vs Shri Sukh Raj Bahadur, ; ; referred to.
Union of India & Ors.
vs R. section Dhaba, , State of Bihar & Ors.
vs Shiva Bhikshuk Mishra and R. section Sial vs The State of U.P. and Ors., ; applied.
The State of Bihar vs Gopi Kishore Prasad, A.I.R. 1960 SC 689 and Madan Gopal vs The State of Punjab, [1963] 3 SCR 716; distinguished. 1127
| The 1960 Act makes provision for imposition of Ceiling on Land holdings and for determination of surplus land.
It was amended by U.P. Act 18 of 1973 to lower the ceiling limit and to make provisions with regard to transfers of land in anticipation of the imposition of ceiling.
This Act came into force on June 8, 1973.
Further amendments were made in the Act by U.P. Act 2 of 1975 inserting Explanation I & Explanation II after sub section (1) of section 5 as substituted by 1973 Act and given effect retrospectively i.e. from June 8, 1973.
A notice under section10(2) of Act was issued to the appellant and he filed objections submitting that Chhiddu Singh, his father, had executed a registered gift deed dated October 13, 1971 in respect of plot No. 111 measuring 63 Bighas, 12 Biswas and 17 Dhur in favour of appellant 's mother.
appellant 's wife and two sons of the appellant.
Chhiddu Singh died on April 28, 1973.
Accordingly the said gifted land was not inherited by the appellant and it could not be treated as part of his holding for the purpose of imposition of ceiling.
The prescribed authority overruled the objections, included the said land as part of the hold ing of the appellant and declared the surplus land of the appellant to the extent of 49 Bighas and 17 Biswas.
The appellant filed an appeal to the First Additional Civil Judge.
It was allowed partly and the surplus land was reduced to 42 Bighas 13 Biswas and 6 Dhur.
The appellant thereafter filed a writ petition in the High Court which was dismissed.
Feeling aggrieved the appellant filed this appeal after obtaining special leave to appeal.
The appellant urged before this Court that amendments introduced by the 1973 Act are not retrospective in nature and are operative only from June 8, 1973, that the surplus land has to be determined as on June 8, 1973, the date of coming into force of 1973 Act, and that the 119 land gifted by the appellant 's father on October 13, 1971 could not be included in the holding of the appellant as he was not the tenure holder of the said land on the death of his father on April 28, 1973.
Dismissing the appeal, the Court, HELD: The 1973 Act postulates that ceiling area of a tenure holder has to be determined in accordance with the provisions contained in sec.
5 of the Act.
While determining the ceiling area, the surplus land held in excess of ceiling area, which is to be acquired by the State, has also to be determined.
[123H; 124A] For determining ceiling area sub section (6) of section 5 provides that any transfer of land, which but for the transfer would have been declared surplus land under the Act if made after January 24, 1971 shall be ignored and not taken into account but transfers falling within the ambit of clauses (a) and (b) of the proviso to sub sec.
(6) are, excluded, and such transfers even though made after January 24, 1971, have to be taken into account.
[124B] In the instant case, the gift was made and executed on October 13, 1971 and it was a transfer of land and as it was made after January 24, 1971 the transfer of land was in respect of land which would have been declared surplus land under the Act.
This transfer did not fall within the ambit of clauses (a) and (b) of the proviso to sub section (6) of section 5.
Thus such gift was liable to be ignored for the purpose of determining the ceiling area applicable to the appellant.
Sub section (6) of section 5 does not speak of a transfer by the tenure holder but it speaks of any transfer of land made after January 24, 1971.
So the contention of the appellant that gift was made by his father and not by him as tenure holder and he did not inherit the same on the death of his father is untenable, since sub section (6) of section 5 is applicable to a transfer even made by the predecessors in interest of the tenure holder whose ceiling area is to be determined and who inherited the land prior to June 8, 1973.
The land which was transferred vide gift deed dated October 13, 1971 was land which but for the said transfer would have been declared surplus land under the Act.
[124C H; 125A] Thus, once the gift is ignored it is to be treated to have continued to vest in the appellant 's father and after his death the appellant inherited the same and as such was part of the holdings of the appellant on June 8, 1973 and has to be taken into consideration for determining the surplus land held by the appellant.
[125B] 120
| Respondent, an Income tax Officer, called an assessee to his house and took a sum of Rs. 800 from him.
Immediately afterwards a search was made and the respondent, after some evasion, produced the money.
The respondent 's defence was that he had taken the money as a loan and not as illegal, gratification.
The Special judge who tried the respondent found him guilty under section 16i, Indian Penal Code, and sen tenced him to six months simple imprisonment.
On appeal, the High Court acquitted the respondent.
The State obtained special leave and appealed.
Held, that the words used in article I36 of the Constitution show that in criminal matters no distinction can be made as a matter of construction between a judgment of conviction and one of acquittal.
The Supreme Court will not readily interfere with the findings of fact given by the High Court but if the High Court (i) A.I.R. (1954) S.C. 680.
581 acts perversely or otherwise improperly interference will be called for.
The findings of the High Court are halting and its approach to the case has been erroneous as it disregarded the special rule of burden of proof under section 4 Of the Prevention of Corruption Act (II Of 1947).
The judgment of the High Court shows that certain salient pieces of evidence were missed or were not properly appreciated.
In this situation the Supreme Court can interfere in an appeal by special leave.
Where it is proved that a gratification has been accepted, the presumption under s 4 Of the Prevention of Corruption Act shall at once arise.
It is a presumption of law and it is obligatory on the Court to raise it in every case brought under section 4.
The evidence and circumstances in this case lead to the conclusion that the transaction was not one of loan but of illegal gratification.
| Section 32 of the Bombay Tenancy and Agricultural Lands Act, 1948, as amended from time to time provided that on the 1st day of April, 1957 styled as the "tiller 's day" every tenant shall subject to other provisions of the next succeeding sections be deemed to have purchased from his landlord free from all encumbrance subsisting thereon, on the said date the land held by him as a tenant if other conditions of the section are satisfied.
By operation of this law, one Janardhan, the father of the respondent, became the "deemed purchaser" effective from April 1,1957, of the land bearing survey No. 1052 and F measuring 16 acres situated within the revenue limits of village Sonai Taluka Nawasa, District Ahmednagar which belonged to Tarachand Chopra.
Subsequent to this admitted fact, several incidents took place which have led to the present appeal raising the question of the legal effect of the several steps taken by different persons; ignorant of the factum of Janardhan having become the deemed purchaser".
They are (a) Landlord Tarachand died on August 12,1959, after two and a quarter years after Janardhan became the statutory purchaser; (ii) Tarachand executed a will, before his death, bequeathing the suit land to Ashoklal Gugale, a minor; (iii) the revenue authorities, who must be aware of the provisions of the Act, wrongly mutated the name of Ashoklal in the revenue records as the landlord in terms of the will; (iv) in spite of the mandatory duty imposed upon the Agricultural Lands Tribunal, under Section 32G, to issue notice to all tenants who under section 32 are deemed to have purchased the lands, all landlords of such lands and all other persons interested to appear before 238 it for the determination of the price of the land which is the subject matter of compulsory purchase, strangely accepted the plea for the postponement of the inquiry under section 32F of the Act and later again commenced the proceedings in the year 1967 and concluded the proceedings by its order dated July 13 1967 repeating the jurisdictional errors; (v) in the interregnum, Ashoklal through his next friend commenced proceedings in case No. 36 of 1967 in the Court of Tenancy Aval Karkoon for the recovery of the possession; (vi) the Tenancy Aval Karkoon, not only entertained the petition, but also got recorded two statements, on 5.10.1967, from Janardhan, "the deemed purchaser" to the effect that he had no objection to handing over the possession of the land to the landlord as he was old and could not cultivate the land personally and another from the present respondent to the same effect even though in the life time of his father Janardhan, he had no title to the land involved in the dispute, and, thereafter made the order dated October 6, 1967 exacting Janardhan from the land; (vii) this wholly null and void order enabled the minor landlord to sell the land by a registered deed on November 13, 1967 to one Haribhav and another, the former later transferred his interest in favour of some of the petitioners before the High Court; (viii) On October 6, 1971, Janardhan moved the Tribunal under section 32F of the Act to the effect that as the landlord Ashoklal had attained majority he was entitled to purchase the land; (ix) the Tribunal started the proceedings under section 32G and after bringing the present respondent on record due to the demise of Janardhan on November 29, 1976, went into the matter in depth, examined all previous orders and came to the conclusion that Janardhan having become the "deemed purchaser. ' all subsequent.
proceedings were null and void, which was affirmed by tho Assistant Collector, the Maharashtra Revenue Tribunal and the High Court later; (x) a parallel proceeding initiated by the respondent for the recovery of possession was decided in his favour by all Courts including the High Court Dismissing the appeals by the special leave, the Court ^ HELD: 1:1 on the tiller 's day, the landlord 's interest in the land gets extinguished and simultaneously by a statutory sale without anything more by the parties, the extinguished title of the landlord is kindled or created in the tenant.
That very moment landlord tenant relationship as understood ill common law or Transfer of Property Act comes to an end, the link and chain is broken.
The absent non cultivating landlord ceases to have that ownership element on the land and the cultivating tenant, the tiller of the soil becomes the owner thereof.
This is unquestionable, the landlord from the date of statutory sale is only entitled to receive the purchase price as determined by the Tribunal under section 32G.
In other words, landlord ceases to be landlord and the tenant becomes the owner of the land and comes in direct contact with the state.
Without any act of transfer inter vivos the title of the landlord is extinguished and is created simultaneously in the tenant making the tenant the deemed purchaser.
It is an admitted position that on April 1, 1957 Tarachand was the landlord and Janardhan was the tenant Tarachand landlord was under no disability as envisaged by Section 32F. Therefore or April 1, 1957 Janardhan became deemed purchaser.
[244 C G] 239 Sri Ram Ram Narain Medhi vs State of Bombay, [1959] Supp.
I S.C.R. 489 @ 518 followed.
If, in the instant case., Janardhan became the deemed purchaser on tillers ' day, the relationship of landlord and tenant between Tarachand and Janardhan came to be extinguished and no right could be claimed either by Tarachand or anyone claiming through him such as Ashoklal or the present purchasers on the footing that they are the owners of the land on or after April 1, 1957.
[244 G H, 245 A] 2:1.
Section 32F of the Bombay Tenancy and Agricultural Lands Act, 1948, has no application to the facts of the ease.
Section 32F postponed the date of compulsory purchase by the tenant where the landlord is a minor or a widow or a person subject to mental or physical disability on the tillers ' day.
Section 32F has an overriding effect over Section 32 as it opens with a non obstante clause.
The combined effect of Section 32F and 32 would show that there the landlord is under no disability as envisaged by Section 32F the tenant of such landlord by operation of law would become the deemed purchaser but where the landlord is of a class or category as set out in section 32F such as a minor, a widow or a person subject to any mental or physical disability, the date o, compulsory sale would be postponed as therein provided.
Now, if Tarachand the landlord was under no disability and he was alive on April 1, 1957 and he was the owner, his tenant Janardhan became the deemed purchaser.
[245 A D] 2:2.
If Janardhan became the deemed purchaser on April 1, 1957 all subsequent proceedings in which the Tribunal held that the date of purchase was postponed because the recorded owner Ashoklal was a minor were without jurisdiction.
The Tribunal had absolutely no jurisdiction to proceed on the footing that date of sale was postponed.
It is neither an incorrect order nor an erroneous order as was sought to be made out but Tribunal lacked tho jurisdiction to proceed under section 32F because when the proceedings under Section 32F were commenced, Janardhan had long since become the deemed purchaser.
Therefore all subsequent proceedings were ab initio void and without jurisdiction.
[245 D F] 2:3.
When a Tribunal of limited jurisdiction clutches at a jurisdiction by ignoring a statutory provision and its consequences in law on the status of parties or by a decision wholly unwarranted with regard to the jurisdictional fact, its decision is a nullity and can be set up in collateral proceeding.
The Tribunal clutched at a jurisdiction not vested in it and in such a situation it can not be disputed that the Tribunal lacked the jurisdiction to entertain any proceeding purporting to be between landlord and tenant on the erroneous assumption that tenant was still a tenant though he had long since become the deemed purchaser, The tenant has ceased to be a tenant much prior to the orders passed by the Tribunal on April 24, 1961 and July 13, 1967 holding that the date of compulsory purchase was postponed.
The compulsory purchase by the operation of law had taken place as early as April 1, 1957 and that legal position cannot be wished away.
[245 F H, 246 A Bl 240 3:1 When several orders passed by different authorities are wholly null and void and hence non est, such orders cannot thwart subsequent proceedings.
The nullity can be set up in subsequent proceedings.
The plea of estoppel by conduct also cannot be allowed to be raised, since a measure of agrarian reform cannot be permitted to be defeated by such devious means of the landlords trying to take advantage of any statement made contrary to their legally protected interest, in the absence of legal literacy and by such jugglery of orders of low level revenue officers who hardly knew what they were doing.
[246 C H, 247 G] 3:2.
In the instant case, even assuming Janardhan relinquished his right as a tenant, even then Ashoklal cannot recover possession as the land would be at the disposal of the Collector under Section 32P.
Further, the posthaste steps taken by Ashoklal and others in transferring the lands to several others speak of malafides of the landlord.
[246E F]
|
Civil Appeals No. 180 of 1961.
Appeal by special leave from the judgment and order dated January 30, 1961, of the Mysore High Court, in Writ Petition No. 1326 of 1960.
section T. Desai, B. R. L. Iyengar and K. P. Bhat, for the Appellant.
A. V. Viswanatha Sastri, R. Gopalakrishnan and T. M. Sen, for the respondents.
December 1.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
The appellants, C. P. C. Motor Service, Mysore, question a scheme approved and applied by the State of Mysore by its Notification No. HD.
200/TMP/60 in Gazette (Extraordinary) on November 10, 1960.
They had unsuccessfully moved the High Court under article 226 of Constitution, and the present appeal is filed with the special leave of this Court.
The appellants were running stage carriage omnibuses on 18 routes, and 14 such routes are inter District.
On September 21, 1960, the second respondent, who is the General Manager of the State Transport Undertaking, published a tentative scheme for taking over stage carriage services over 64 routes, which were shown in a schedule to the Notification, to the complete exclusion of private operators.
The action was taken under Chap.
IV A of the , inserted by section 62 of Act 100 of 1956.
Objections were duly filed by the appellants, which were heard by the Chief Minister, who was the authority to hear the objections under the Rules, and they were disposed of by his order dated 719 November 7, 1960.
The scheme was approved with some modifications, and it was published along with the order in the Notification, to which we have already referred.
The appellants, in their petition under article 226 of the Constitution, raised many points before the High Court.
The High Court, by its judgment under appeal dated January 30, 1961, dismissed the petition.
Some of the grounds were considered in that judgment; but others had already been disposed of in other petitions, in which a common judgment was delivered by the High Court also on the same day in Writ Petition No. 75 of 1960.
That order concerned another scheme for the Hassan District of Mysore State.
In the appeal before us, the scheme is challenged on four grounds.
Shortly stated, they are, that the modified scheme is vague, indefinite and contradictory and does not carry out the orders of the Chief Minister; that there has been non compliance with the mandatory requirements of sections 68C and 68E of the ; that the scheme is destructive of co ordination, which is the gist of efficient motor transport services; and finally, that the routes on which the appellants operated, were, in any event, not affected by the monopoly on certain routes created in favour of the State Transport Undertaking.
These contentions will be dealt with in detail by us in this judgment, and need not be stated at greater length at this stage.
Private operators in the Mysore State including the appellants, plied their omnibuses on three different kinds of routes.
They were inter District, inter District and inter State.
By the scheme, the State Transport Undertaking had taken over 64 routes, but the exclusion of the private operators was only in the Mysore District.
In the approved scheme, this is stated in the following words: 720 "(d) Whether the services are 1.
The State Transport to be operated by the Undertaking will ope State Transport Under rate services to the taking to the exclusion, complete exclusion complete or partial, of of other persons(i) other persons or other on all the notified wise.
inter district routes except in regard to the portions of inter district routes lying outside the limits of Mysore District, and also (ii) over the en tire length of each of the inter district route lying within the limits of Mysore District.
In so far as the noti fied routes are con cerned the State Transport Undertak ing will operate with out prejudice to rights of the existing valid permit holders for operation of Stage Carriage Services on the Inter State routes only".
In describing the routes in the appendix to the scheme, these routes were shown with all the stops between the termini, together with the length of the routes in miles, the maximum number of vehicles to be operated by the State Transport Undertaking and by private operators, and the maximum number of daily services (return trips) to be provided in relation to each route by the State Transport Undertaking and by the private operators.
The columns dealing with private operators in respect of the maximum number of vehicles as well as the maximum number of the daily services were invariably shown as "Nil".
Section 68C of the permits the taking over 721 of any route or area either wholly or partly by the State Undertaking, and the action of the State Government has not been challenged as either ultra vires or invalid.
This is due perhaps to the fact that in a number of cases recently decided by this Court, schemes of this type have been held to be valid, and the provisions of Chap.
IV A, in view of the amendments effected by the Constitution (First Amendment) Act, 1951, in article 19(6), have been held intra vires the State Legislatures.
Those cases are also referred to by the High Court in the judgment dealing with the Hassan District scheme.
The first question that has been raised is that the scheme is vague, indefinite and contradictory.
The vagueness, it is said, arises from the fact that though under section 68C certain particulars have to be mentioned, they have not been so mentioned in the scheme.
This point is illustrated by referring to the columns in which the routes of private operators have not been shown; but it is stated by the respondents that on the routes mentioned in the scheme, the private operators have no omnibuses, nor any daily services at all.
This, in our opinion, is the direct result of taking over of certain routes, because if those routes are taken away, then the private operators would not be running their omnibuses on those routes, and the appropriate entry would be as shown there, "Nil".
The rest of the particulars have been given in the scheme itself, including the kind of vehicles which would be run, and their seating capacity, equipment, etc.
No doubt, the fares and the timings have been left out, and the State Transport Authority has been given the power to fix them.
But that is a matter for the determination of the transport authorities under the .
It is too much to expect fares and timings to be indicated in the scheme, because each route requires elaborate enquiry for fixing the fares as well as the timings of service.
The scheme is 722 not required, under the law, to deal with these matters, and we are satisfied that the omission of these details from the scheme does not militate against it.
Similarly, the argument that the scheme is destructive of co ordination is not valid.
No doubt, the private operators cannot run in the Mysore District, but can ply their omnibuses from the border of the Mysore District on routes, which were saved to them, and there is likelihood of transhipment from State owned buses to private omnibuses at the border, where the routes operated by the State Transport Undertaking and the private operators bifurcate.
The transhipment, by itself, would not connote a lack of co ordination.
Under section 68C, the State Transport Undertaking may take over whole routes or whole areas or part of the routes or part of the areas and if the scheme operates partially, some transhipment would obviously be necessary, but co ordination would still exist, because where the State omnibuses come to a halt, the private omnibuses would take the passengers set down.
In our opinion, these grounds have no validity, in view of the partial nationalisation of the routes involved in the State.
Really, the main attack against the scheme is that though the Chief Minister had upheld the objection of the appellants in an earlier portion of his order, the direction which he contemplated giving was not effectuated, leading to a contradiction between the order and the approved scheme.
The Chief Minister, in dealing with the objection of the private operators, had observed in his order as follows: "The Private Operators contended that exclusive operation by the Mysore Government Road Transport Department on the proposed notified routes might seriously affect them on certain Inter District routes as well as Inter State routes.
The State Transport Undertaking 723 it was argued, had not proposed nationalisation of certain Inter District and Inter State routes lying outside the limits of Mysore District, though a few of the notified routes traverse portions of Inter State and Inter District routes.
It was contended by the Objectors that if the Mysore Government Road Transport Department was to operate certain notified routes to the complete exclusion of other operators, it would adversely affect the passenger transport system on certain portions of Inter State and Inter District routes which are notified.
There is much force in this contention and accordingly, the Scheme is directed to be suitably modified.
" It was argued that the point which was made before the Chief Minister was that between the routes which were taken over and some of the inter District and inter State routes which were left to the private operators, there was an overlap in the Mysore District, and that those routes which were not taken over including the portion of the route lying within the Mysore District should not be held to be affected by the scheme.
It was argued that the Chief Minister in his order quoted above, accepted the contention, and gave directions for the suitable modification of the scheme, but in carrying out the modifications, the directions, quoted above, were not included, and they excluded the private operators from that portion of the route lying within the District of Mysore, even though that route was different from the route, which had been taken over.
In our opinion, the error lies in not properly reading the order of the Chief Minister.
In the sentence, "It was contended by the Objectors that if the Mysore Government Road Transport Department was to operate certain notified routes to the complete exclusion of other operators, it would adversely 724 affect the passenger transport system on certain portions of inter State and inter District routes which are not notified," the words "which are not notified" qualify not the word "route" but the word "portions".
The direction which was given, effectuates the later reading, which was really meant and not the former, which is urged; because the qualifying phrase "which are not notified" has been unhappily put later.
It is no doubt true that the other reading is also open, and is more in accord with a grammatical construction.
Where two constructions are open, it is proper to read the order harmoniously with the directions, because it could not have been intended that the Chief Minister would express his opinion in one way, and include a contradictory direction in another way.
Indeed, the intention was to take over routes or parts of the routes lying in Mysore District and to notify them as within the exclusive operation of the State Transport Undertaking.
The exclusive operation of routes within the District meant that no other omnibus belonging to a private operator could run on that sector.
The direction, therefore, clearly said that the route left to the private operators would be open to them beyond the borders of the District, but there were excluded from that portion of the route which lay within the District.
In Nilkanth Prasad vs State of Bihar, in which we have delivered judgment today, we have explained what is meant by a "route" and 'a portion of a route ', and we need not cover the same ground.
In our opinion, there is no contradiction between the order of the Chief Minister and the directions included by him in the concluding part of his order.
Indeed, the directions carry out the order, if the order is to be read in the manner indicated by us.
It was next contended that the inter District routes, which the appellants were operating, could not be said to be affected by the scheme at 725 all, because "route" means a notional line running between two termini and following a distinct course.
This meaning was given to the word "route" by the Privy Council in a case from Ceylon reported in Kelani Valley Motor Transit Co., Ltd. vs Colombo Ratnapura Omnibus Co., Ltd. It is said that the ruling applies in the present case where what is notified as for exclusive running by the State Transport Undertaking is not a definite portion of a route of a private operator but is a different route altogether.
This may be illustrated by algebraic notations.
If the route of the private operator was ABPQR, AB lying within the District of Mysore and PQR outside it, it is submitted that a route ABCDE may overlap the other route up to the point B but is not the same route, and, therefore, cannot be said to be notified.
What is meant by a route in the Act has been elaborately discussed by us in the other judgment delivered to day.
The only difference between this case and the other cases is that, whereas in the latter, the notified route was only AB, here the notified route is ABCDE.
The notification of the Government must be read in two parts.
The first is that part of the notification referring to the whole of the route which is taken over, and the second part is with respect to the portion of the route lying within the District of Mysore.
The portion lying within the District of Mysore has been notified separately as within the exclusive operation of the State Transport Undertaking.
The natural result of it is that private operators would not be able to ply their omnibuses on that sector, and by "route" is meant, as already stated, not only the notional line but also the actual road over which the omnibuses run.
We have shown in the other appeals that the scheme of the Ceylon ordinance was different.
There, the 726 word "route" was contracted with the word "highway".
In the , the words used are "route or area", and it has been held by this Court that these words mean the same thing: Kondala Rao vs Andhra Pradesh State Road Transport Corporation.
The scheme of the Act in section 68F(2)(c)(iii) also shows that the Regional Transport Authority, in giving effect to the approved scheme, may "curtail the area or route covered by the permit in so far as such permit relates to the notified area or notified route".
This makes the route or area stand for the road on which the omnibuses run or portions thereof, and in view of the fact that the scheme reserved all the routes within the Mysore District to the State Transport Undertaking even those routes which were inter District open to the private operators would stand pro tanto out down to only that portion, which lies outside the Mysore District.
The result, therefore, is that no distinction can be made between the notification of a portion of the route of the private operators lying within the Mysore District and the notification of a different route, in which the portion within the Mysore District is also included.
What we have said in the other case applied equally here.
It was suggested during the argument that there were certain routes which did not cover any portion of the notified route but met that route at certain point or points.
Reverting to the algebraic notations given above, it was said that route APBQR would not cover any portion of the notified route ABCDE, and must at least, therefore, be outside the scheme.
No such route, however, was pointed out to us, and we need not express any opinion on this part of the case or as to what would happen, if such a route existed.
727 Lastly, it was contended that the minimum number of trips and the minimum number of vehicles to be put on the road with respect to any route has not been indicated, and that this is not a proper scheme, because a scheme must show how comparatively more efficient service is to be provided by the State Transport Undertaking.
The earlier Rules required a statement as to the minimum and maximum number of vehicles to be put on a route, as also the minimum and maximum trips.
It was, however, held by this court that a departure from the minimum number would mean the alteration of the scheme, necessitating the observance of all the formalities for framing a scheme.
In view of this, the Rules were amended, obviating the necessity of indicating the minimum number.
The Rule, as it now stands, has been complied with, and there being no challenge to the Rule as such, one cannot say that the scheme is defective on this account.
The result is that this appeal must fail, and is dismissed; but in the circumstances of the case, we make no order about costs.
Appeal dismissed.
| Under a scheme for taking over certain stage carriage services to the complete exclusion of private operators, which was approved and notified by the State of Mysore under the provisions of Ch.
IV A of the , it was provided, inter alia: "The State Transport Undertaking will operate services to the complete exclusion of other persons (i) on all the notified inter district routes except in regard to the portions of inter district routes Lying outside the limits of Mysore District, and also (ii) over the entire length of each of the inter district routes Lying within the limits of Mysore District.
" The appellants who were running stage carriage omnibuses of certain routes, some of which were inter district and inter State, challenged the validity of the scheme on the ground, inter alia, that between the routes which were taken over and some of the inter district and inter State routes which were left to the private operators, there was an overlap in the Mysore District, and that those routes which were not taken over including the portion of the route Lying within the Mysore District should not be affected by the scheme, because "route" meant a notional line running between two termini and following a distinct course. ^ Held, that the scheme of the , is that the word "route" meant not only the notional line but also the actual road over which the omnibuses run.
Under the Act the route or area stand for the road on which the omnibuses run or portions thereof.
Kondala Rao vs Andhra Pradesh State Road Transport Corporation, A. I. R. , relied on.
Kelani Valley Motor Transit Co., Ltd. vs Colombo Ratnapura Omnibus Co., Ltd. [1946] A. C. 338, explained and distinguished.
In the present case, in view of the fact that the scheme reserved all the routes within the Mysore District to the State Transport Undertaking, the private operators would not be able to ply their omnibuses on that sector and even those 718 routes which were inter district open to them would stand pro tanto cut down to only that portion which lay outside the Mysore District.
Nilkanth Prasad vs The State of Bihar, [1962] Supp. 1 section C. R. 717, followed.
| The Tamil Nadu Housing Board made Madras State Housing Board Service Regulations in exercise of the powers conferred under sections 17 and 19 of the Tamil Nadu State Housing Board Act, 1961.
The Board, by its Resolution No. 772 dated March 20, 1963, made and adopted the service regulations in regard to the service conditions of officers and servants of the Board and sent them to Government for approval under section 161(3) of the Act.
For promotion to the cadre of Assistant Engineers, the Board prescribed 5 years qualifying service in the case of Junior Engineers and 10 years in the case of Supervisors.
While the matter was pending with the Government.
For approval, the Board altered the period of 5 years ' qualifying service in the case of Junior Engineers to 3 years, by its Resolution No. 368 dated 8.12.1964 and forwarded the same to the Government.
Before the approval was received, the Board, by its Resolution No. 467 dated 8.11.1965, again prescribed the qualifying service of 5 years in respect of Junior Engineers, since, according to it, that would be in accordance with the rules governing the Madras Engineer ing Service in the Government.
By G.O. Ms. No. 156 (Housing) department of Labour dated 14.5.1969, the Government approved the regulations showing 3 years as qualifying service, but later issued a memorandum dated 26.2.1971, styled as an erratum, substituting the words "3 years" occurring under the sub head "by promotion of (i) Junior Engineers", by the words "5 years".
H 229 The appellants and other Supervisors who were working in the Engineering Subordinate Service of The Tamil Nadu Housing Board filed writ petitions challenging the promotions of respondents No. 2 to 11 and respondent No. 2 in the writ petitions in the High Court, who were working as Junior Engineers, to the cadre of Assistant Engineers, even though they had not put in 5 years ' service in the cadre of Junior Engineers, contrary to the regulations of the Board.
The writ petitions were opposed by the Tamil Nadu Housing Board and the Junior Engineers who had been impleaded as respondents in the writ petitions.
It was contended by the Junior Engineers who had been promoted as Assistant Engineers that the qualification prescribed by the regulations in respect of Junior Engineers was 3 years ' service as stated in the Government order dated 14.5.1969 and the memorandum dated 26.2.1971 which had been issued as an erratum was liable to be ignored since it had not been issued by following the procedure prescribed for modifying a regulation.
A Single Judge of the High Court directed the State Government to be impleaded as a party for ascertaining whether the memorandum dated 26.2.1971 was only an erratum for the purpose of correcting a clerical mistake that had crept into the Government order or whether it was in fact a modification of the earlier Government order.
The State Government filed an affidavit explaining the reasons for issuing the erratum.
The Single Judge concluded that the period of "3 years" mentioned in the Government order dated 14.5.1969 was as a result of clerical mistake, and that the memorandum dated 26.2.1971 was really an erratum and not a modification of the regulations as approved by the Government and held that the promotion of respondent Nos. 2 to 11 and respondent No. 2 in the writ petitions before the High Court from the cadre of Junior Engineers to the cadre of Assistant Engineers was contrary to the regulations as they had not completed 5 years ' service in the cadre of Junior Engineers when they were promoted as Assistant Engineers and, therefore, their promotions were liable to be set aside.
In the appeals before the Division Bench, a new plea was urged on behalf of the appellants that the petitioners in the writ petitions were not entitled to the issue of a writ in the nature of mandamus on the basis of the regulations since the regulations had no force of law as they had not been published in the official gazette.
Setting aside the Judgment of the Single Judge, the Division Bench held that the regulations were not valid and had no force of law 230 as they had not been published in the official gazette, as required by sub section (1) of section 161 of the Act and, therefore, no mandamus could be issued even if it was established that the regulations had been contravened in making the promotions.
Appeals by special leave were filed in this Court.
It was contended on behalf of the respondent Board that even though under the regulations it was necessary that a Junior Engineer should have experience of 5 years in the cadre for being promoted to the cadre of Assistant Engineers the impugned promotions could not be questioned since under regulation 28(d), the qualification prescribed in respect of Junior Engineers had been relaxed by.
the Resolution passed by the Board dated January 20, 1972.
Allowing appeals by special leave, this Court, ^ HELD: 1.
The memorandum issued by the State Government on 26.2.71 was merely an erratum correcting a clerical mistake and not a 1:) modification of an earlier regulation.
[241B] 2.
In the context in which the words "subject to approval of the Government" appear in regulation 28(d), they have to be interpreted as meaning "conditional upon the approval of the Government", i.e., that unless approval is given by the Government, the relaxation would not be valid because the regulations themselves had been put into effect after obtaining the approval of the State Government earlier.
Even if those words are understood as meaning that it was possible to obtain ex post facto sanction of a decision already given by the Board, even then such an approval should have been given by the State Government within a reasonable time from the date on which the decision is taken by the Board.
[251A C] The impugned promotions have been made between 28.6.1971 and 7.2.1972.
The resolution relaxing the qualification was passed by the Board on 20th January, 1972.
The approval has not been given at all till now.
Hence it cannot be said that the power had been validly exer cised under regulation 28(d).
Since relaxation of the qualification has not been done in accordance with regulation 28(d) it would be wholly unjust to uphold the impugned promotions on the ground that there was a valid relaxation.
[247A B; 251D] 3.1 No doubt the regulations which had received the approval of the State Government had not been published in the offecial gazette 231 by the relevant dates as required by sections 3(19 A) of the Tamil Nadu General Clauses Act, 1891.
The Tamil Nadu Housing Board Act did not provide for any other mode of publication or notification.
By the time the impugned promotions took place the regulations had been made by the Board and had also received the approval of the State Government although they had not been published in the official gazette.
[241D El 3.2 The making of the regulations in the ordinary course of events occupies considerable time since they had to receive the approval and confirmation of the Government in order to be effective.
The Board passed the resolution adopting the regulations on 20.3.63.
The regulations were submitted to the Government for approval.
Until the regulations were approved by the State Government, the Board necessarily had to take decisions in accordance with the certain norms laid down by it as regards the modes of appointment of officers and staff of the Board.
Those decisions cannot be invalidated merely on the ground that the regulations had not been promulgated in accordance with law.
[242B D] 3.3 It was open to the Board to lay down appropriate norms in accordance with which it proposed to make appointments of its officers and staff.
The power of the Board under section 16 of the Act is similar to the power exercisable by State Government under Article 162 of the Constitution as regards appointment to State Public Service is concerned, and that power could be exercised by the Board in accordance with its own resolution, which had received approval of the State Government, until appropriate regulations were published by it in accordance with section 161 of the Act.
[245E, H; 246A B] 3.4 Having taken a decision as per its resolution dated 8.11.1965 laying down that the qualifying service which a Junior Engineer should possess for purposes of promotion to the cadre of Assistant Engineers should be 5 years, which had received the approval of the State Government, the Board was bound to follow faithfully the said decision while making promotions of Junior Engineers.
It could not have, therefore, departed from the norm prescribed by itself earlier without modifying it by another resolution and obtaining the approval of the State Government to it.
[246B Cl 3.5 Having once obtained the concurrence of the State Government to the regulations made by it, the Board could not act contrary to the said regulations ignoring the State Government altogether merely 232 because the regulations had not been published.
Any such action would be arbitrary in character.
Mere non publication of the regulations in the of official gazette was not fatal to the writ petitions.
[251E, GJ The impugned promotions are, therefore, set aside, and the Board directed to pass fresh orders of promotion after considering the case of all the Junior Engineers and the Supervisors as on the date on which the impugned promotions were made and to make promotion in accordance with the regulations which had been acted upon by the Board with the approval of the State Government.
[251E F] [The Judgment of the Division Bench set aside and that of the Single Judge restored.
If in the process of reviewing the promotions, it becomes necessary to revert any Junior Engineer from the post which he is now holding, he shall not be so reverted but shall be continued in the post which he is now holding, by creating a supernumerary post, until such time he becomes eligible to be promoted to the said post.
The continuance of such a Junior Engineer shall not, however, come in the way of the petitioners in the writ petitions or any other employee of the Board getting promotions due and the seniority entitled in accordance with law.] [251G H; 252A B] Dundee Harbour Trustees vs D. & J. Nicol, [1915] A.C. 550; Mysore State Road Transport Corporation vs Gopinath Gundachar Char, ; ; B.N. Nagarajan and ors.
vs State of Mysore and ors.
, and K.R.C.S. Balakrishna Chetty & Sons & Co. vs State of Madras, ; , referred to.
| % These appeals and writ petitions involved two questions of law (i) whether Rule 41 A of the Karnataka Cinemas (Regulations) Rules (the Rules) framed by the State Government under section 19 of the Karnataka Cinemas Regulations Act of 1964 (the Act) had been made "for purposes of the Act", and (ii) whether Rule 41 A placed unreasonable restrictions on the appellants ' right to carry on their business of exhibiting cinematograph films, in violation of Article 19(1)(g) of the Constitution.
The appellants/petitioners held licences for exhibiting cinematograph films in their cinema theatres under the Act and the Rules in Form prescribed by the Rules.
Normally, the Cinema owners were holding four shows in a day, but later on, they increased the shows to five in a day starting from 10 a.m. and ending at 12 a.m.
This caused a number of problems.
The State Government in exercise of its powers under section 19 of the Act framed Rule 41 A directing that no licensee would exhibit more than four cinematograph shows in a day.
The appellants challenged the validity of the Rule 41 A placing restrictions on their right to exhibit cinematograph films before the High Court by writ petitions.
The appellants contended before the High Court that the restriction imposed by Rule 41 A on the licensees requiring them to exhibit more than four shows in a day was beyond the rule making power, as the Rule did not carry out the purposes of the Act, and that the Rule placed unreasonable restrictions on their fundamental right to carry on the business of exhibiting cinematograph films.
There was difference of opinion between the two learned Judges constituting the Bench of the High Court, which heard the petitions.
K.S. Puttaswamy, J. held infer alia that the impugned rule was ultra 512 vires as it was beyond the rule making power of the Government under section 19 of the Act, and that it placed unreasonable restrictions on the appellants ' right to carry on their business guaranteed under Article 19(1)(g) of the Constitution.
Narayan Rai Kudoor, J. upheld the validity of the Rule, holding that the impugned Rule carried out the purposes of the Act, viz., the regulation of the exhibition of cinematograph films, and the restriction placed by it was reasonable.
Since there was difference of opinion between the two learned Judges, the matter was placed before M. Rama Jois, J., who agreed with the opinion of N.R. Kudoor, J., holding that the State Government had the power to frame the Rule and the Rule did not place any unreasonable restriction on the appellants ' right to carry on business of exhibiting cinematograph films, and that it was not utlra vires the Act and did not violate appellants ' fundamental rights under Article 19 of the Constitution.
Consequently, all the writ petitions were dismissed.
Aggrieved by the decision of the High Court, the appellants filed appeals in this Court.
Some of the aggrieved cinema owners filed writ petitions in this Court, challenging the validity of Rule 41 A. Dismissing the appeals and the writ petitions, the Court, ^ HELD: The question whether Rule 41 A was validly framed to carry out the purposes of the Act could be determined on the analysis of the provisions of Act.
The title of the Act and the preamble clearly indicate that the main purpose of the Act is to regulate the exhibition of the cinematograph films in places in respect of which a licence for that purpose may be issued.
The extent of control and regulation is evidenced by the provisions of the Act.
The ultimate purpose of these provisions is to ensure safety and convenience of the general public visiting the licensed premises for witnessing the cinematograph films exhibited therein.
[518D,H; 519A B; 520F] Section 19 of the Act confers power on the State Government to frame rules for carrying out the purposes of the Act.
The preamble and the provisions of the Act provide for the regulation of the exhibition of the cinematograph films, which is the primary object of the Act.
The Act confers wide powers on the State Government for the regulation of the exhibition of the cinematograph films which include power to regulate hours during which cinematograph films may be exhibited, the seating arrangements for the members of the public, and any other allied matters pertaining to public safety, health, sanitation and incidental matters.
Rule 41 A which limits the numbers of shows in a day, regulates the exhibition of the cinematograph films and carries out the 513 purposes of the Act.
It was, therefore, referable to the State Government 's general power under section 19(1) of the Act.
Rule 41 A was further referable to clauses (a) and (d) of section 19(2) of the Act.
Clause (a) confers power on the State Government to frame rules prescribing terms, conditions and restrictions subject to which a licence may be granted.
The State Government may lay down conditions and impose restrictions prescribing hours during which the films might be exhibited and also the number of shows in the licensed premises.
Clause (d) confers power on the State Government to frame rules regulating the exhibition of cinematograph films for the purpose of securing public safety.
Any rule regulating the exhibition of the cinematograph films if reasonably connected with public safety would be justified under the said provision.
Rule 41 A adds a condition to the licence that exhibition of films would be limited to four shows in a day.
No licensee could claim to have unrestricted right to exhibit cinematograph films for all the 24 hours of the day.
Such a claim would be against public interest.
The restriction to limit the number of shows to four in a day placed by rule 41 A was regulatory in nature which clearly carried out purposes of the Act.
[520G H;521A F] The provisions of the Act have laid down the policy for regulating the exhibition of the cinematograph films in the licensed premises and also for regulating the construction of the building, auditorium, galleries, balconies, projection rooms, seating accommodation and other allied matters related to public health and safety, etc., and all other matters relating to the exhibition of films.
Validity of none of the other rules has been challenged by the appellants/petitioners although those provisions placed a number of restrictions on their right of exhibiting cinematograph films.
The restrictions placed by Rule 41 A are similar to the restrictions already placed on their right to exhibit cinematograph films.
It is incidental to the general power of regulating the exhibition of cinematograph films, and it is connected with the regulation of the exhibition of the cinematograph films.[522C D,H;523A] The question arises whether rule 41 A placed unreasonable restrictions on the appellants ' right to carry on business of exhibiting cinematograph films in violation of Article 19(1)(g) of the Constitution, The appellants/petitioners have not challenged the validity of the Act.
Therefore, they claim no unrestricted right to exhibit cinematograph films.
They have been carrying on the business exhibiting films under a licence in form which contained the terms and conditions prescribed by the Act and the Rules framed therunder.
Rule 41 A added one more condition to it, requiring the licensee not to exhibit more than four 514 shows in a day.
The freedom to practise any profession, or to carry on any occupation, trade or business, guaranteed by Article 19(1)(g), is not absolute, it is subject to clause (6) of Article 19, which permits imposition of reasonable restrictions by law, if it is necessary in the interest of the general public.
Any law imposing reasonable restrictions on the exercise of the right guaranteed by Article 19(1)(g) would be valid if it is in the interest of the general public.
Restriction contemplated in Article 19(6) may in certain circumstances extend to total prohibition, as held by this Court in Narender Kumar vs Union of India, ; The. material placed before the State Government as also this Court, clearly demonstrated the necessity for curtailing the holding of five shows to four to remove the public grievance, as the representation filed on behalf of the public highlighted the hazards to public safety and the inconvenience caused to the members of the public visiting the cinema halls.
Rule 41 A was framed to meet the public need and to secure public safety by placing minimum possible restrictions on the licensees.
The Court found no merit in the contentions of the appellants/petitioners that Rule 41 A was neither necessary nor reasonable as the purpose for which it was framed could have been achieved if the relevant authorities carried out their duties in making inspections and securing the compliance of the existing rules, and that the impugned Rule did not prescribe the duration of four shows or the intervals between them and each one of the reasons set out by the State to justify the impugned Rules, could be fully achieved by the enforcement of the existing Rules.[523B E;525A C] In holding five shows, the licensees did not exhibit approved documentaries and slides and adequate measures could not be taken to ensure public safety and health.
The Court had no doubt that the existing Rules could not meet the situation and the State Government was justified in framing Rule 41 A placing limit on the appellants '/petitioners ' right to exhibit cinematograph films to four shows which was in the public interest.
The appellants/petitioners had no unrestricted fundamental right to carry on business of exhibiting cinematograph films.
Their right to carry on business was regulated by the provisions of the Act and the Rules framed thereunder.
These provisions were necessary to ensure public safety.
Public health and other allied matters.
The Rule 41 A does not prohibit exhibition of the cinematograph films, instead, it regulates it by providing that instead of five shows only four shows should be exhibited in a day.
The Rule does not take away the licensees ' right to carry on business of exhibiting cinematograph films; it merely regulates it.
No rule or law could be declared unreasonable merely because there was reduction in the income of a on account of the regulation of the business.
Rule 41 A does not place any unreason 515 able restriction on the appellants '/petitioners ' fundamental right guaranteed to them under Article 19(1)(g) of the Constitution.
It carries out the purpose of the Act in regulating the exhibition of the cinematograph films in the licensed premises.
Rule 41 A is inter vires the Act.
[525G H;526C,527A B] The Court was in agreement with the majority opinion of the High Court.
Narender Kumar vs Union of India, ; , referred to.
Shelvarajan vs State of Mysore, , disapproved.
Vishnu Talkies vs State of Bihar, AIR 1975 Patna 26 and D.K .
V. Prasad Rao vs State of Andhra Pradesh, AIR 1984 A.P. 75, approved.
| The appellants in execution of a decree passed in their favour for possession over a house obtained possession thereof on July 22, 1951.
The order for delivery of possession was made without notice to and in the absence of the respondent.
The respondent made an application in the Executing Court under sections 47, 144 and 151, Code of Civil Procedure for setting aside the ex parte order of delivery and for redelivery of possession of the house to him or in the alternative, for an order to the appellants for giving facilities for removing the moveables from the house.
The Executing Court upheld the contention of the appellant that 76 592 the respondent 's application was not maintainable.
On appeal by the respondent the High Court held that the Executing Court had no jurisdiction to order the eviction of the respondent because of the provisions of the Mysore House Rent and Accommodation Control Order, 1948, which was in operation on the date of eviction and under sections 9 and 16 of which certain restrictions were placed on the eviction of tenants.
On appeal to this Court by special leave, the appellants contended, inter alia, as they did in the High Court also , that the Mysore House Rent Control Order of 1948 was repugnant to the provisions of the (IV of 1882), which became applicable in the State of Mysore by Part B States (Laws) Act, 1951 (Act III of 1951), which came into force on April 1, 1951 ; and therefore the House Control Order could not operate on the rights of the parties on the day when the Executing Court made the order for delivery of possession to the appellants, i. e., July 9, 1951, or when delivery was actually given i.e., on July 22, 1951.
Held, that the came into force only when it was extended by notification dated September 12, 1951, under section 3 of that Act, i.e., from October 1, 1951, and therefore the Mysore House Rent and Accommodation Control Order, 1948, was not repealed as from April 1, 1951, when the Part B States (Laws) Act, 1951, came into force and was in force when the possession was delivered.
It was then an existing law which was saved by article 372 of the Constitution and remained unaffected by article 254, and the question of repugnancy to the (Act IV of 1882) did not arise in this case.
M/s. Tilakram Rambaksh vs Bank of Patiala, A.I.R. 1959 Punj.
440, considered.
Section 47 of the Code of Civil Procedure was applicable to the proceeding out of which this appeal has arisen because the question whether the decree was completely satisfied and therefore the court became functus officio was a matter relating to execution, satisfaction and discharge of the decree.
Ramanna vs Nallaparaju, A, I. R. and J. Marret vs Mohammad Shirazi and Sons, A.I.R. 1930 P. C. 86, considered.
Where the court was not aware of the statutory restriction by which the execution of a decree was prohibited and passed an ejectment decree against a tenant the Executing Court could not execute the decree and any possession given under an ex parte order passed in execution of such a decree could be set aside under section 151 of the Code of Civil Procedure.
K.Muhammad Sikri Sahib vs Madhava Kurup, A.I.R. 1949 Mad. 809, considered.
1 The contentions of the appellant based on the ground of res judicata and estoppel were without any force.
Sections 9(1) and 16 of the House Rent Control Order placed restrictions on 593 the power of the Court to execute the decree and ignoring them was not merely an error in the exercise of jurisdiction.
| The respondent, State of Rajasthan through its District Rehabilitation Officer, Barmer filed a suit in the court of the District Judge, Balotra against the appellant, Union of India, and the Railway Administration claiming damages for the loss suffered by it on account of the damage caused to the goods transported by rail through the Railway Administration.
The appellant contended that the suit was not maintainable in the District Court in view of Article 131 of the Constitution which, according to it conferred exclusive jurisdiction on the Supreme Court to decide all disputes arising between a State and the Union.
The District Judge held that he had jurisdiction to try the suit.
A Revision Petition filed against the order of the District Judge was dismissed by the High Court.
Hence this petition for special leave to appeal.
Dismissing the petition, ^ HELD: The suit was entertainable by the District Court.
On a careful consideration of the whole matter in the light of the decisions of this Court, it is felt that Article 131 of the Constitution is attracted only when a dispute arises between or amongst the States and the Union in the context of the constitutional relationship that exists between them and the powers, rights, duties.
immunities, liabilities, disabilities etc.
flowing therefrom.
Any dispute 701 which may arise between a State in the capacity of an employer in a factory, a manufacturer of goods subject to exercise duty, a holder of a permit to run a stage carriage, a trader or businessman carrying on business not incidental to the ordinary functions of Government, a consumer of railway services etc.
like any other private party on the one hand and the Union of India on the other cannot be construed as a dispute arising between the State and the Union in discharge of their respective executive powers attracting Article 131 of the Constitution.
It could never have been the intention of the framers of the Constitution that any ordinary dispute of this nature would have to be decided exclusively by the Supreme Court.
[708G H; 709A B] State of Bihar vs Union of India & Anr., ; , Union of India vs State of Mysore, [1977] S.C.R. 842.
State of Mysore vs Union of India & Ors.
A.I.R. at pages 239 240, State of Rajasthan & Ors., etc.
vs Union of India etc.
; , , State of Karnataka vs Union of India & Anr., ; at page 92 and The Framing of India 's Constitution A Study by Shri B. Shiva Rao at page 483, referred to.
In the instant case, the State Government has made a claim like any other consignee of goods despatched through the railway for compensation and its success or failure in the suit depends on proof of facts which have to be established in the same way in which a private person would have to establish.
This is not even a case where a formal contract is entered into between the Union of India and the State of Rajasthan is accordance with the requirements of Article 299 of the Constitution.
It is just a commercial contract under which an officer of the State of Rajasthan was entitled to claim delivery of the goods consigned as any ordinary consignee.
The claim involved in this case is one based on section 80 of the Indian Railways Act, 1890.
Section 80 of the Indian Railways Act, 1890 indicates that the claim made under it is essentially against the Railway Administration concerned.
The Union of India is impleaded as a party to suits instituted thereunder being the owner of the Indian Railways by virtue of Article 300 of the Constitution.
The statute, however, treats the dispute as one between the Railway Administration concerned and the person instituting the suit.
Neither of the parties to these proceedings is questioning the applicability of the provisions of the Indian Railways Act, 1890 to these proceedings.
It is, therefore, difficult to hold that in these proceedings there is any question which falls within the scope of Article 131 of the Constitution.
[709H; 710A B; D; H; 711A B]
| The appellant and the fourth respondent along with others were applicants for a stage carriage permit.
The Regional Transport Authority after hearing the applicants granted the permit to the appellant.
On appeal by the fourth respondent the Central Road Traffic Board set aside the order of the Regional Transport Authority and granted the permit to the fourth respondent.
The appellant moved the State Government in revision but to no effect.
He thereafter moved the High Court under article 226 of the Constitution for a writ of certiorari quashing the orders of the Central Road Traffic Board and the State Government.
The single judge who heard the matter quashed 228 the said orders and directed the State Transport Appellate Tribunal, which was constituted in place of the Central Road Traffic Board, to dispose of the appeal according to law.
On a Letters Patent appeal by the fourth respondent, the Appellate Bench of the High Court set aside the order of the single judge and restored the order of the Central Road Traffic Board.
Hence this appeal by special leave.
The point for determination in the appeal was whether the order granting the permit to the appellant made by the Regional Transport Authority on the basis of an order issued by the State Government under section 43A of the , as amended by the Motor Vehicles (Madras Amendment) Act, 1948, could be set aside on the basis of another order imposing new restrictions issued thereunder while the appeal was pending before the Central Road Traffic Board and thus involved the question as to whether an order or direction issued by the State Government under section 43A of the Act had the force of law, so as to create a vested right in the appellant.
Held (per jafer Imam and Subba Rao, jj.), that section 43A of the , as amended by the Motor Vehicles (Madras Amendment) Act, 1948, properly construed, must be given a restricted meaning and the jurisdiction it conferred on the State Government must be confined to administrative functions.
An order or direction made thereunder by the State Government, therefore, could not have the status of law regulating rights of parties and must partake of the character of an administrative order.
C. section section Motor Service, Tenkasi vs The State of Madras, I.L.R. and Gopalakrishnan Motor Transport Co., Ltd. vs Secretary, Regional Transport Authority, Krishna District, Vijayawada, , approved.
Consequently, in the instant case, the appellant could not be said to have acquired a vested right that was defeated by a new law enforced pending the appeal and the order of the Central Road Traffic Board could not be set aside merely on the ground that it had decided the appeal on the basis of an order issued subsequent to the grant of the permit if such order was otherwise in public interest.
Per Sarkar, J. It could hardly be said that the rule that a court hearing an appeal from a decision should not ordinarily take into consideration a law passed subsequent to that decision had application where a quasi judicial tribunal heard an appeal from another such tribunal.
Consequently, in the instant case, it could not be said that there was an error of law apparent on the face of the record so as to attract a writ of certiorari and the appeal must fail on that ground.
No applicant for a permit under the could have a substantive right to the permit vested in him and 229 the granting or refusal of a permit by the Regional Transport Authority could not operate as res judicata.
It was unnecessary for the purpose of the present case to decide what kind of orders could be issued by the State Government under section 43A of the Act, for whatever its nature, administrative or otherwise, if an order under that section entitled a person to its observance, and there was hardly any doubt as to that, it would be a law a mistake of which would justify the issue of a writ of certiorari at his instance.
The Mayor of Rochester vs The Queen, (1858) EL.
& E.L. ; , referred to.
Nagendra Nath Bora vs The Commissioner of Hills Division and Appeals, Assam, ; , distinguished.
| These appeals by Special Leave and a petition for Special leave arose out of different judgments of the High Court.
The main issue involved was whether the location of Revenue Mandal Headquarters in the State of Andhra Pradesh under section 3(5) of the Andhra Pradesh District (Formation) Act, 1974, was a purely governmental function, not amenable to the writ jurisdiction of the High Court.
Writ Petitions were filed in the High Court by individuals and gram panchayats questioning the legality and propriety of the formation of certain Revenue Mandals and location of certain Mandal Headquarters notified in preliminary notification issued under sub section
(5) of Section 3 of the Act.
In some cases, the High Court declined to interfere with the location of Mandal Headquarters, holding that the government was the best judge of the situation, or on the ground that there was a breach of guidelines it directed the Government to reconsider the question of location of the Mandal Headquarters.
In some cases, the High Court quashed the final notification for location of the Mandal Headquarters at a particular place, holding that there was a breach of guidelines based on the system of marking and also on the ground that there were no reasons disclosed for deviating from the preliminary notification for location of the Mandal Headquarters at another place.
Allowing Civil Appeal Nos.
1980, 1982, 1985 and 1987 of 1986 and all other appeals and Special Leave Petitions directed against the judgments of the High Court, whereby the High Court had interfered with the location of the Mandal Headquarters, the Court, ^ HELD: It was difficult to sustain the interference by the High Court in some of cases with the location of the Mandal Headquarters and the quashing of the impugned notification on the ground that the Government had acted in breach of the guidelines in that one place or 695 the other was more centrally located or that location at the other place would promote general public convenience or that the Headquarters should be fixed at a particular place with a view to developing the areas surrounded by it or that merely because a particular person who was an influential Member of Legislative Assembly belonging to the party in opposition had the right of representation but failed to avail of it.
The location of Headquarters by the Government by the issue of the final notification under sub s (5) of section 3 of the Act was on a consideration by the Cabinet Sub Committee of the proposals submitted by the Collectors concerned and the objections and suggestions received from the local authorities like Gram Panchayats and the general public, keeping in view the relevant factors.
Even assuming that any breach of the guidelines for the location of the Mandal Headquarters was justiciable, the utmost that the High Court could have done was to quash the impugned notification in a particular case and direct the Government to reconsider the question.
There was no warrant for the High Court to have gone further and direct the shifting of the Mandal Headquarters at a particular place.
[711B E] The guidelines are merely in the nature of instructions issued by the State Government to the Collectors regulating the manner in which they should formulate their proposals for formation of a Revenue Mandal or for the location of its Headquarters keeping in view the broad guidelines laid down in Appendix I to the White Paper issued by the Government laying down the broad guidelines.
The guidelines had no statutory force and they had also not been published in the Official Gazette.
They were mere departmental instructions for the Collectors.
The ultimate decision as to the formation of a Revenue Mandal or location of its Headquarters was with the Government.
It was for that reason that the Government issued preliminary notification under sub s (5) of section 3 of the Act.
Deviation from the guidelines in some of the aspects was usually for reasons of administrative convenience keeping in view the purpose and object of the Act i.e. to bring the administration nearer to the people.
There was nothing on record to show that the decision of the Government in any of these cases was arbitrary or capricious or was one not reached in good faith or actuated with improper considerations or influenced by extraneous considerations.
In a matter like this, conferment of discretion upon the Government in the matter of formation of a Revenue Mandal or location of its Headquarters in the nature of things necessarily leaves the Government with a choice in the use of the directions conferred upon it.
[713A F] It was difficult to sustain the judgments of the High Court in the 696 cases where it had interfered with the location of Mandal Headquarters and quashed the impugned notifications on the ground that the Government had acted in breach of the guidelines in that one place or the other was more centrally located or that location at the other place would promote general public convenience or that the Headquarters should be fixed at a particular place with a view to developing the area surrounded by it.
The location of Headquarters by the Government by the issue of the final notification under sub section (5) of Section 3 of the Act was on a consideration by the Cabinet Sub Committee of the proposals submitted by the Collectors concerned and the objections and suggestions received from the local authorities like the gram panchayats and the general public.
Even assuming that the Government while accepting the recommendations of the Cabinet Sub Committee directed that the Mandal Headquarters should be at one place rather than at another place as recommended by the Collector concerned in a particular case, the High Court would not have issued a writ in the nature of mandamus to enforce the guidelines which were nothing more than administrative instructions not having any statutory force, which did not give rise to any legal right in favour of the writ petitioners.
The petitions filed under Article 226 of the Constitutions before the High Court were dismissed.
[723G H; 724A D] Gram Panchayat, Chinna Madur & Orr.
vs The Government of Andhra Pradesh, [1986] 1 Andhra Weekly Reporter 362; C.J. Fernandez vs State of Mysore & Ors., ; ; Padfield vs Minister of Agriculture Fisheries & Food, ; ; Laker Airways Ltd. vs Department of Trade, at 705; Council of Civil Service Unions and Others vs Minister for the Civil Service, ; ; Secretary of State for Education and Science vs Tameside M.B.C.; , ; Breen vs Amalgamated Engineering Union, at 190; R.V. Criminal Injuries Compensation Board, explain, and Ridge vs Baldwin, ; , referred to.
| The validity of a scheme of road transport service approved by the Government of Orissa under section 68D (2) of the 682 , was challenged by the petitioners on the grounds (1) that a proper notice was not given for the hearing of objections to the scheme, (2) that the Minister for Transport who approved of the scheme was biased, (3) that the final scheme did not mention the date on which it was to come into operation, and (4) that the Transport Controller who published the scheme had no authority to do so.
^ Held, that; (1) r. 8 of the Rules framed by the Orissa State Government under Ch.
IVA of the , applied only to the first date to be fixed for hearing, and that if for any reason the hearing was adjourned, it was not necessary to give a fresh notice under the rule for the adjourned date of hearing; (2) the statement made by the minister in answer to a question put in the legislative assembly that the Government had decided to take over all the routes from April 1, 1961, eliminating all private operators, was merely an indication of the Government 's policy and that the minister could not be said to be personally biased; (3) the approved scheme was not invalid for the reason that the actual date of operating the route was not mentioned in the final scheme, as required under r. 3 (vi) of the Rules, inasmuch as the notification publishing the final scheme referred to the draft scheme which contained that date and said that the draft scheme was approved, and, consequently, the rule must be considered to have been substantially complied with; and (4) the Transport Controller, being the Chief Officer of the State Transport Undertaking, had the authority to publish the scheme under section 68C of the Act since the section provided that the State Transport Undertaking "shall cause it to be published" which meant that some officer of the Undertaking would have it published in the Gazette.
|
s Nos. 117 and 137 of 1961.
Petition under Art 32 of the Constitution of India for enforcement of Fundamental Rights.
L. K. Jha and R. Patnaik, for the petitioner (in Petn.
No 117 of 1961).
C. B. Agarwala and R. Patnaik, for the petitioner (in Petn.
No. 137 of 1961).
A. V. Viswanatha Sastri, B. R. L. Iyengar and T. M. Sen, for the respondents.
683 1961.
November 28.
The Judgment of the Court was delivered by WANCHOO, J.
These two petitions challenge the validity of a scheme of road transport service approved by the Government of Orissa under section 68D (2) of the , No. IV of 1939 (hereinafter called the Act).
A large number of grounds have been raised in the petitions but we are now concerned with only six points urged on behalf of the petitioners and we shall deal with only those points.
No arguments were addressed on the other points raised in the petitions and it is therefore not necessary to set them out.
The six points which have been raised before us are these: 1.
No hearing was given to the petitioner in petition No. 117 as required by section 68D (2) and the Rules framed under Chap.
IV A. 2.
The minister who heard the objections under section 68D (2) was biased and therefore the approval given to the scheme is invalid.
The order of the Regional Transport Authority dated December 17, 1960, rendering the permits of the petitioners ineffective from April 1, 1961 is illegal inasmuch as section 68 F and r. 10 framed under Chap.
IV A were violated.
The State Transport Undertaking did not apply for permits six weeks before April 1, 1961, as required by section 57 (2) of the Act and therefore the issue of permits to the State Transport Undertaking was bad.
The final scheme did not mention the date from which it was to come into operation as required by r. 3 (vi) of the Orissa Rules and was therefore bad.
The Transport Controller who published the scheme had no authority to do so.
684 We propose to take these points one by one.
Re. 1.
The contention of the petitioner is that the minister heard the objections on September 21, 1960, and passed his orders approving the scheme on September 22, 1960.
The notice however issued to the petitioner of the date of hearing was received by him on September 23, 1960, and as such as there was no opportunity for the petitioner to get a hearing before the minister and consequently the scheme which was approved in violation of section 68D (2) and r. 8 was invalid.
It appears that the draft scheme was published on July 29, 1960.
Objections were invited from the operators and members of the public thereto.
The petitioner filed his objection on August 24, 1960.
The date which was originally fixed for hearing of objections was September 16, 1960, and it is not disputed that the notice of that date was given to all objectors as required by section 68D(2) and the Rules.
The petitioner, however, did not appear on September 16, 1960, which was the first date of hearing.
Many other objectors appeared on that date and prayed for time.
Consequently the hearing was adjourned to September 21.
As however the petitioner was absent a fresh notice was sent to him as a matter of abundant caution.
That notice could not be delivered to him before September 21, 1960, as he was absent from his address and he was actually served on September 23, 1960 The petitioner 's complaint therefore is that as he was not served with notice about the hearing on September 21, 1960 there was no compliance with section 68D (2) and the Rules framed in that connection under Chap.
On these facts, we are of opinion that there is no force in the contention raised on behalf of the petitioner.
What r. 8 of the Orissa Rules requires is that ten days ' clear notice has to be given of the time, place and date of hearing to all 685 objectors.
This was undoubtedly done, for the date originally fixed for hearing was September 16, 1960.
Thereafter the hearing was postponed to September 21 at the instance of the objectors.
It was in our opinion not necessary to give a fresh notice giving ten clear days as required by r. 8, for this adjourned date.
Rule 8 only applies to the first date to be fixed for hearing.
Thereafter if the hearing is adjourned, it is in our opinion unnecessary to give a further notice at all for the adjourned date.
It was the duty of the petitioner after he had received notice of the first date to appear on that date.
If he did not appear and the hearing had to be adjourned on the request of the objectors, or for any other reason, to another date, no further notice was necessary of the adjourned date.
It is true that notice was given to the petitioner of the adjourned date; but that was in our opinion as a measure of abundant caution.
The rule does not however require that a fresh notice must be given of the adjourned date of hearing also.
In the circumstances we reject this contention.
Re. 2.
Reliance is placed on two circumstances to show that the Minister was biased and therefore the hearing given by him was no hearing in law.
In the first place, it is said that in answer to a question in the Orissa Legislative Assembly as to when the Government was taking over the privately operated motor routes, the Transport Minister (who eventually heard the objections) replied that the Government had decided to take over all the routes from April 1, 1961, eliminating all private operators.
It is urged that this shows that the Transport Minister was biased and was determined whatever happened to push through the scheme so that it may become operative from April 1, 1961.
We are of opinion that there is no force in this contention 686 of bias based on this reply of the Minister to a question put in the Legislative Assembly.
The Government was asked when it was intending to take over the privately operated motor routes and its reply was really a matter of policy, namely that it was the policy of the Government to take over all the routes eliminating all private operators from April 1, 1961.
This did not mean that even if, for example, the scheme was not ready or if the scheme put forth was found by the Government to be open to objection, the Government would still force through the taking over of the privately operated routes from April 1, 1961 ; This answer was merely an indication of the Government 's policy, namely, that the Government was intending to take over all private operated routes from April 1, 1961 ; but whether in actual fact all the routes would be taken over on that date would depend upon so many circumstances including finance.
It cannot be said that this announcement of the Government 's policy in answer to a question put in the legislative assembly meant that the Government was determined whatever happened to eliminate all privately operated routes by April 1, 1961.
We are therefore of opinion that the Minister cannot be said to be personally biased because this policy statement was made by him in answer to a question put in the legislative assembly.
Another reason that is urged to support the personal bias of the Minister is that the Minister is said to have stated to certain persons that as the privately operated routes in the district of Ganjam which was his constituency had been nationalised he was determined to annihilate all the private bus operators in the district of Cuttack also.
This allegation has been denied on behalf of the State.
It is however urged that no affidavit has been filed by the Minister who alone was likely to have knowledge on this point.
It appears however that the petitioners also have no personal knowledge of 687 any such determination on the part of the Minister.
Thy based their allegation on an alleged talk between the Minister and two citizens of Cuttack, namely, a municipal councillor and an advocate.
No affidavit however of the two persons concerned has been filed to support this allegation.
In the circumstances we are of opinion that it was not necessary for the Minister to file an affidavit for the allegation on behalf of the petitioners was also based on heresay and it has been contradicted by similar evidence on behalf of the State.
It would have been a different matter if the two persons concerned had made affidavits from personal knowledge.
There is therefore no force in this contention and we are of opinion that it cannot be said on the facts of this case that the Minister was biased.
Re. 3 and 4.
We propose to take these points together.
We are of opinion that the petitioners cannot be allowed to raise these points for the first time in arguments before us, for there is no mention of these points in their petitions.
It appears that in an affidavit filed ill connection with stay, something was said on these two points; but the stay matter was never pursued and never came up before this Court for hearing.
In the circumstances there was no reply from the State Government to these allegations.
We are of opinion that the petitioners cannot be allowed to raise these points now for the first time in arguments when they did not raise them in their petitions and consequently reject them.
Re. 5.
It is contended that under r. 3 (vi) of the Orissa Rules, the draft scheme or the approved scheme has to be published in the official gazette under sections 68D and 68E and has to contain certain particulars including the actual date of operating 688 the route.
Now what happened in this case is that the draft scheme mentioned the date of operation as April 1, 1961.
This was in accordance with r. 3 (vi).
When the final scheme was published, this date was not mentioned in it.
We will assume that r. 3 (vi) requires that when the final scheme was published, the date should have been mentioned.
It seems to us that the rule so read has been substantially complied with, for the notification publishing the final scheme refers to the draft scheme and says that the draft scheme is approved and there is no mention of any modification.
In the circumstances it could in our opinion be not unreasonable to read the date April 1, 1961, incorporated in the final scheme by reference to the draft scheme.
It would have been a different matter if the draft scheme also did not contain the date of operation.
We are therefore of opinion that there has been substantial compliance with r. 3 (vi), and the final scheme cannot be said to be bad for non compliance with the rule.
We therefore reject this contention.
Re. 6.
It is urged in this connection that the Transport Controller had no authority to publish the draft scheme.
It is also urged that the Transport Controller is not the State Transport Undertaking and the notification under section 68C does not show that the State Transport Undertaking was of opinion that it was necessary to take over certain transport services for the purpose mentioned in that section.
The argument as raised before us is really two fold.
In the first place it is urged that the Transport Controller had no authority to publish the scheme.
There is however no force in this contention, for section 68C requires that after the State Transport Undertaking has formed the opinion required thereunder and prepared a scheme it shall cause the scheme to be published.
The Transport Controller 689 is the chief officer of the State Transport Undertaking and we see nothing irregular if he publishes the scheme prepared under section 68C.
The section lays down that after the scheme has been prepared in the manner provided thereunder, the State Transport Undertaking shall cause it to be published, which means that some officer of the Undertaking will have it published in the gazette.
In the present case, the chief officer of the Undertaking has got it published and this in our opinion is in sufficient compliance with section 68C.
The other part of the argument is that the notification under section 68C does not show that it was the State Transport Undertaking which was satisfied that it was necessary to take action under that section, for it says that "I, Colonel section K. Ray, Indian Army (Retd.), Transport Controller, Orissa, in charge of State Transport Undertaking, Orissa, am of opinion that for the purpose of providing an efficient, adequate and economical and properly coordinated road transport service it is necessary . . . ." The argument is that it was not the State Transport Undertaking which was satisfied but Col. section K. Ray, Transport Controller, who formed the necessary opinion under section 68C.
We find that this point was also not taken in the petitions.
All that was said in the petitions was that the Transport Controller was only in charge of the transport services in the State and there was no State Transport Undertaking in the State of Orissa within the meaning cl.
(b) of section 68A of the Act.
This case has been abandoned; but it is now contended is that even though there may be a State Transport Undertaking in Orissa that Undertaking was not satisfied that it was necessary to take action in the manner provided in section 68C.
This in our opinion is a question of fact and should have been specifically pleaded in the petitions so that the State may have been able to make a reply.
In the absence therefore of any averment on this question 690 of fact, we are not prepared to allow the petitioners to raise this point in arguments before us.
In the circumstances we reject this contention also.
The petitions therefore fail and are hereby dismissed with costs one set of hearing costs.
Petitions dismissed.
| The validity of a scheme of road transport service approved by the Government of Orissa under section 68D (2) of the 682 , was challenged by the petitioners on the grounds (1) that a proper notice was not given for the hearing of objections to the scheme, (2) that the Minister for Transport who approved of the scheme was biased, (3) that the final scheme did not mention the date on which it was to come into operation, and (4) that the Transport Controller who published the scheme had no authority to do so.
^ Held, that; (1) r. 8 of the Rules framed by the Orissa State Government under Ch.
IVA of the , applied only to the first date to be fixed for hearing, and that if for any reason the hearing was adjourned, it was not necessary to give a fresh notice under the rule for the adjourned date of hearing; (2) the statement made by the minister in answer to a question put in the legislative assembly that the Government had decided to take over all the routes from April 1, 1961, eliminating all private operators, was merely an indication of the Government 's policy and that the minister could not be said to be personally biased; (3) the approved scheme was not invalid for the reason that the actual date of operating the route was not mentioned in the final scheme, as required under r. 3 (vi) of the Rules, inasmuch as the notification publishing the final scheme referred to the draft scheme which contained that date and said that the draft scheme was approved, and, consequently, the rule must be considered to have been substantially complied with; and (4) the Transport Controller, being the Chief Officer of the State Transport Undertaking, had the authority to publish the scheme under section 68C of the Act since the section provided that the State Transport Undertaking "shall cause it to be published" which meant that some officer of the Undertaking would have it published in the Gazette.
| The respondent State approved a scheme in form II for nationalization of certain specific routes after complying with the provisions of sections 68C and 68D of the .
The scheme excluded.
all private operator 's from the notified routes.
The notified routes formed part of highways, having common road sectors and private operators continued to operate on the highways.
The appellant unsuccessfully filed writ petition in the High Court to quash the scheme.
In appeal to this Court, the appellant challenged the validity of the scheme on the grounds that (i) the scheme was a complete exclusion scheme and should have been in form I and as it was in form II it was in contravention of Rule 3 of the Kerala Motor Vehicles(State Transport Undertaking) Rules, 1960 read with section 68C of the Act; and (ii) since there were earlier schemes, they could not be modified by the impugned scheme without complying with the provisions of section 68E.
Dismissing the appeal, this Court: HELD: (i) From the language of section 68C and r. 3 it appears that a complete exclusion scheme in relation to.
any area of route would be a scheme which completely excludes the existing road services of private operators on the area or route in question.
The route includes the highway over it runs.
If other existing services are allowed to continue over a part of the highway relating to the notified route, the scheme is not one of complete exclusion.
The impugned scheme did not exclude the road transport services of other existing routes which overlapped many sectors of the highways relating to the notified routes.
In spite of the scheme the public could get services on the common road sectors from the private operators who continued to operate the highways.
Therefore, the scheme was not in complete exclusion of existing road transport services in respect of notified routes and was not required to be in form 1.
[466 G H, 467 D] Nilkanth Prasad & Ors.
vs State of Bihar.
[1962] Suppl.
1 S.C.R. 728 at 737; Kondala Rao vs Andhra Pradesh S.T.C. Corporation, A.I.R. 1961 S.C. 82, followed.
(ii) On the promulgation of the new scheme the earlier schemes stood modified pro tanto.
As the procedure laid down in sections 68C and 68D were followed the conditions of section 68 were satisfied.
section 68E does not require that the new scheme should expressly say that it cancels or modities the earlier schemes.
[467 G]
| The petitioner was convicted in 1949 and sentenced to trans portation for life.
He earned remission of 2963 days and adding this to the term of imprisonment actually served by the petitioner the aggregate exceeded 20 years.
The petitioner contended that his further detention in jail was illegal and prayed for being set at liberty: Held, that the petitioner had not yet acquired any right to be released.
A sentence of transportation for life could be undergone by a prisoner by way of rigorous imprisonment for life in a designated prison in India.
Section 53A of the Indian Penal Code, introduced by the Code of Criminal Procedure (Amendment) Act, 1955, provided that any person sentenced to transportation for life before the Amendment Act would be treated as sentenced to rigorous imprisonment for life.
A prisoner sentenced to life imprisonment was bound to serve the remainder of his life in prison unless the sentence was commuted or remitted by the appropriate authority.
Such a sentence could not be equated with any fixed term.
The rules framed under the Prisons Act entitled such a prisoner to earn remissions but such remissions were to be taken into account only towards the end of the term.
The question of remissions was exclusively within the province of the appropriate Government.
In the present case though the Government had made certain remissions under section 401 of the Code of Criminal Procedure, it had not remitted the entire sentence.
Pandit Kishori Lal vs King Emperor, (1944) L.R. 72 I.A. , referred to.
| The appellants, among others applied to the Regional Transport Authority for permits to operate a direct bus service on.
a route in Meerut District, U.P., which had no direct passenger bus service.
After hearing the appellants and those who opposed them, the Regional Transport Authority was satisfied that there was no sufficient demand for such a direct service, and therefore, there was no justification for opening the proposed new route.
The. applications of "the appellants and other applicants were therefore rejected.
The Appellate Tribunal reversed the order of the Regional Transport Authority and granted permits to the three appellants.
The respondents therefore filed writ petitions in the High Court for quashing the order of the Tribunal contending that no appeal against the order of the Regional Transport Authority lay under section 64(a) of the and that consequently, the Tribunal had No. jurisdiction to entertain such appeals, and grant permits to the appellants.
A Single Bench dismissed the petitions but the Division Bench held that no appeal against the order of the Regional transport Authority lay under section 64(a) and accordingly, allowed the writ petitions and quashed the Tribunal 's order.
On appeal to this Court, HELD: The appeal must be dismissed.
The decisions of this Court clearly lay down that the R.T.A. has first to make "a general order" as stated in Abdul Mateen 's case under section 47 (3) as to the number of permits necessary for a new route and he cannot exceed that limit while he is at the next stage when he considers under section 48 read with, section 56(7) as to.
who among the applicants should be granted the permit or permits.
Such a 'general order ' limiting the number of permits presupposes that he has come to a decision that the new route either proposed by him or by an applicant or applicants is necessary in the public interest.
If the order 'as to the number of permits is a 'general order ' passed under section 47(3) with which the individual applications are not concerned and is anterior to the stage under section 48 when applications of the individual operators are taken into, consideration, and therefore is not appealable under section 64 (a) it must follow a fortiori that the decision as to whether the new route is necessary or not is equally 'a general order ' arrived at either earlier or contemporaneously with the decision as to the number of permits.
If the latter order is not appealable, it cannot be that the former i.e. the decision whether the new route is necessary or not, is not an equally 'general order ' with which individual applications are not concerned and can appeal against it under section 64 (a).
However, the powers of the R.T.A. in connection with the decision as to whether a proposed route should be opened or not are not un 244 limited and unbridled.
The power is subject to the revisional power of the State Government under section 64 A. [250 E 251 C] Abdul Mateen vs
R.K. Pandev ; ; M/s Java Ram Motor Service vs
section Rajarathinam C.A. 95 of 1965, dec.
on October 27, 1967; R. Obliswami Naidu vs The Addl.
State Transort Appellate Tribunal Madras C.A. 1426 of 19 '68, dec.
on Feb. 17, 1969, applied.
| The Government filed a suit on the basis of a security bond executed by a Government Treasurer and certain sureties who joined in the execution of the bond.
The contention in defence, inter alia, was that article 149 Of the Indian Limitation Act prescribing a 60 years period of limitation for suits by the Government was unconstitutional as violative of article 14 Of the Constitution and as such the suit was barred under article 83.
Held, that statutes of limitation are designed for the bene ficent public purpose of preventing the taking away from one what he has been permitted to consider his own for a long time and on the faith of which he plans his future life.
If the suit was by a private individual the suit would have fallen under article 83 and would have been barred by it but different considerations arise in the case of the State and there is a distinction between claims by the Government and those of private individuals.
Article 149 Of the Limitation Act, 1908, which fixes a period of 60 years for suits by the Government has a reasonable basis of classification between the Government and private individuals, and the exact period that should be allowed to the Government to file a suit would be a matter of legislative policy and as such its constitutional validity cannot be questioned under article 14 Of the Constitution.
Purushottam Govindji Halai vs Desai, ; , Collector of Malabar vs Ebrahim, ; and Mannalal vs Collector of Jhalway, ; , applied.
| The petitioners carry on business as Shroffs and Bankers.
The Income tax Department searched various premises of the petitioners and seized a sum of Rs. 12 lakhs in cash from the petitioners, under section 132 and 132A of the Income tax Act.
The petitioners contended that the said amount represented the stock in trade of the petitioners.
The petitioners also contended that the provisions of section 132 and 132A of the Income tax Act, 1961, as well as rules 112, 112A, 112B and 112C of the Income Tax Rules, 1962, were unconstitutional as violative of Article 14, 19(1)(f) and (g) and 31(1) of the Constitutional.
Section 132 and 132A were further challenged on the ground of conferring naked, abitrary, unguided, discriminatory and uncanalised power on the executive authority.
Dismissing the petition, ^ HELD: (1) This Court has already upheld in Pooran Mal 's case the validity of section 132 and 132A as well as rules 112 and 112A. [893 A & C] (2) Rules 112B and 112C relate to the release of the articles seized and are therefore beneficial rules and as such cannot be challenged.
[893D]
| Presidential Orders dated 27th April 1960 and the var ious orders and circulars issued pursuant thereto by the Home Ministry, P & T Department and Railway Board, compel ling attendance in "Hindi in service training" as part of duty and providing for penal consequences for non attendance were quashed by the Madras High Court as being inconsistent with section 3 of the as amended by Act 1 of 1968 which was law made by Parliament under article 343(3) of the Constitution.
In appeals to this Court on certificates, the appellant Union contended: (i) The instructions were aimed at promoting the policy of the constitutional revisions that Hindi should be the official language of the Union; (ii) No employee was placed at a disadvantage even if one could not qualify oneself in Hindi because no penalty was prescribed for an employee who did not attain any particular standard; and (iii) The Government was within its rights to issue orders obliging its employees to take training in Hindi language, so that ultimately when Hindi became the language of the Union they could perform their duty in an efficient and smooth manner.
The respondents reiterated their stand, namely, (i) Article 343 of the Constitution is transitional and directions of the President are limited to the period of 15 years from the commencement of the Constitution in view of the provision in Articles 343, 344(1), 344(2)(a) and (b), 344 (3), 344 (6) indicating that directions should relate to purposes of subclauses (a) to (e) of Article 344(2); (ii) When the embodied the field covered by Parliamentary legislation, the Presidential Order would not have any effect; (iii) The Presidential Order is inconsistent with section 9 (4) of the as amended in 1968 and to that extent void; and (iv) Under section 3(4) of the , persons were not to be placed at a disadvantage on the ground that they do not have proficiency in both the languages, namely, English and Hindi.
Dismissing the writ petitions and allowing the appeals, HELD: (1) The Presidential Orders dated 27th April 1960 and the various orders and circulars issued by Home Minis try, P & T Department and Railway Board pursuant thereto are valid.
[323H] (2) The Presidential Order was validly made and there has been and can be no challenge to it.
The President Order keeps in view the ultimate object to make the Hindi language as official language, but takes into note the circumstances prevailing in our country and considers it desirable that the change should be a gradual one and due regard should be given to the just claims and the interests of persons belonging to the non Hindi speaking areas.
The purpose of the Presidential Order is to promote the spirit of the Hindi language and to provide the Central Government employees the facilities to take training in Hindi language when they are in service.
[322F G] (3) The provisions in article 344 indicate that if there is a Second Commission at the expiration of ten years from the commencement of the Constitution, the President, may after consideration of the report, issue directions at the end of fifteen years.
The provisions contained in article 344(6) are not exhausted by using it once.
The President can use it on more than one occasion.
Further the effect of the power used cannot be said to be exhausted on the expiry of fifteen 315 years.
The Presidential Order which was issued in 1960 continues to be in force and cannot be said to have exhaust ed itself at the end of fifteen years from the commencement of the Constitution.
It would be strange that the steps necessary for the change should be given up at the.
expiry of fifteen years because what is said to be a switch over from English to Hindi has not been possible and Parliament provided by law for the continued use of the English lan guage for particular purposes specified in that law.
[322D F] (4) Article 344 is enacted for the purpose of achieving the object of replacing English by Hindi within a period of 15 years.
The ultimate object is provided in article 351 which fulfils the object of the spirit and development of the Hindi language and enlargement of the composite culture of India, Articles 343 and 344 deal with the process of transi tion.
Article 343(3) provides merely for extension of time for the use of English language after the period of 15 years.
The progressive use of the Hindi language is thereby not to be impaired.
Extending the time for the use of the English language does not amount to abandonment of progress in the use of Hindi as the official language of the Union.
[321G H, 322A B] (5) Article 344(6) provides that notwithstanding any thing in article 343, the President may after consideration of the report of the committee issue directions.
The non obstante clause in article 344(6) does not operate only against article 344(1) and (2) but against the entire article 344 for the reason that so far as transition is concerned, the direc tions under article 344(6) may continue.
Article 344(6) takes this objective and is intended to determine the pace of progress and to achieve the same.
[322B C] (6) The High Court failed to see the sequences of the Presidential Order and the .
It is erroneous to suggest that the Presidential Order of 1960 became invalid after the passing of the Act.
The Act merely continues the use of English language in addition to Hindi.
The Act does not provide anything which can be interpreted as a limitation on the vower of the President to issue directions under article 344(6) of the Constitution.
The Presidential Order has no inconsistency with the Act.
The non obstante provision in article 344(6) empowers the Presi dent.
[322G H, 323A B] (7) Parliament is legislating in a different field.
The field is the permissible use of English language in addition to Hindi during the period following 15 years because the change to Hindi could not be complete.
The trasitional period has exceeded 15 years.
The Presidential Order keeps in view the steps to replace the use of English in Hindi and the application of the Act and the Presidential Order is in different fields and has different purposes.
The Offi cial Languages Act is to continue the use of English lan guage after the expiry of 15 years, but Presidential Order, on the other hand is, to provide for the progressive use of Hindi language.
It confers an additional qualification on those who learn Hindi and does not take away anything from the Government employees.
Prizes are offered and there may be increase in pay.
These are incentives.
The measures taken for enforcement of provisions for learning Hindi by providing for absence from classes as breach of discipline and insisting on appearance at the examinations are steps in aid of fulfilling the object of what is described as in service, training in Hindi language.
Such enforcement of attendance in examinations for proficiency if necessary for completion of training.
The contention that the Presiden tial.
Order conflicts with section 3(4) of the Act is unsound.
The "In service training" of the employees is during hours of duty and free of cost.
Even if they fail, there is no penalty.
There is no treatment of unequals alike.[323 B H] [323B F] Murasoli Maran etc.
vs Union of India & Ors.
1972 Madras 40 reversed.
| Respondent No. 1 was alleged to have been making repetitive orders under s.144 of the Code of Criminal Procedure, 1973 from August 1979 directing that no member of a procession or assembly of five or more persons should carry any fire arms, explosives, swords, spears, knives, tridents, lathis or any article which may be used as weapon of offence or any article likely to cause annoyance to the public, for example skulls.
A writ petition was filed in the High Court for a direction on the respondents not to impose such restraints on the followers of Ananda Marga.
The High Court dismissed the writ petition.
The respondent No. 1 made a similar order on March 29, 1982.
An application for permission to take out a procession in the public streets by the followers of Ananda Marga accompanied with Tandava dance was rejected.
The petitioner filed writ petition under article 32 of the Constitution for a direction to the respondent No. 1 and the State to allow procession to be carried in the public streets and meetings to be held in public places by the followers of the Ananda Marga accompanied by the performance of Tandava dance within the State of West Bengal.
The petitioner submitted that Ananda Marga was a socio spiritual organisation dedicated to the service of humanity in different spheres of life such as physical, mental and spiritual, irrespective of caste.
creed or colour; one of the prescriptions of the religious rites to be 448 performed by an Ananda Margi was Tandava dance which was to be performed with a skull, a small symbolic knife, a trishul, and a damroo; and at intervals processions were intended to be taken out in public places accompanied by the Tandava Dance as a religious practice.
The petitioner contended that Tandava Dance was an essential part of the religious rites of Ananda Margis and that they were entitled to practice the same both in private as also in public places and interference by the respondent was opposed to the fundamental rights guaranteed under articles 25 and 26 of the Constitution.
The petitioner also contended that repetitive orders under s.144 of the Code of Criminal Procedure were not contemplated by the Code and, therefore, making of such orders was an abuse of the law and should not be countenanced.
Dismissing the writ petitions, ^ HELD: The Ananda Marga is not a separate religion by itself.
Therefore, application of article 25 of the Constitution is not attracted.
The petitioner asserted that Ananda Marga was not an institutionalised religion but was a religious denomination.
The writings of the founder of the Ananda Marga are essentially founded upon the essence of the Hindu philosophy.
The test indicated in ; and the admission in para 17 of the writ petition that Ananda Margis belong to the Shaivite order lead to the clear conclusion that Ananda Margis belong to the Hindu religion.
[455 E.456 C] Sastri Yagnapurushadji & Ors.
vs Muldas Bhudar das Vaishya & Anr., ; , referred to.
The words 'religious denomination ' in article 26 of the Constitution must take their colour from the word 'religion ' and if this be so, the expression religious denomination ' must also satisfy three conditions: (1) It must be a collection of individuals who have a system of beliefs or doctrines which they regard as conducive to their spiritual well being, that is, a common faith; (2) common organisation; and (3) designation by a distinctive name.
In the instant case Ananda Marga appears to satisfy all the three conditions.
Ananda Marga, therefore, can be appropriately treated as a religious denomination within the Hindu religion.
[456 G 457 C] The Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar or Sri Shirur Mutt; , at 1021; The Durgah Committee Ajmer & Anr.
vs Syed Hussain Ali & Ors., ; ; and S.P. Mittal etc.
vs Union of India & Ors.
, ; at 774 referred to.
449 Article 26 of the Constitution provides that subject to public order, morality and health, every religious denomination or any section thereof shall have the right to manage its own affairs in matters of religion.
Courts have the power to determine whether a particular rite or observance is regarded as essential by the tenets of a particular religion.
[457 C D, 458 H] Ratilal Panachand Gandhi vs The State of Bombay & Ors., [1954] S.C.R. 1055; and Tilkayat Shri Govindlalji Maharaj vs The State of Rajasthan & Ors., [1964] 1 S.C.R. 561 referred to.
In the instant case the Tandva dance was not accepted as an essential religious rite of Ananda Margis when in 1955 the Ananda Marga order was first established.
It is the specific case of the petitioner that Shri Ananda Murti, founder of Ananda Marga, introduced Tandva as a part of religious rites of Ananda Margis later in 1966.
Ananda Marga as a religious order is of recent origin and Tandva dance as a part of religious rites of that order is still more recent.
It is doubtful as to whether in such circumstances Tandva dance can be taken as an essential religious rite of the Ananda Margis.
Even conceding that Tandva dance has been prescribed as a religious rite for every follower of the Ananda Marga it does not follow as a necessary corollary that Tandava dance to be performed in the public in a religious procession is a matter of religious rite.
In fact, there is no justification in any of the writings of Shri Ananda Murti that Tandava dance must be performed in public.
Therefore, performance of Tandava dance in procession in the public streets or in gatherings in public places is not an essential religious rite of the followers of the Ananda Marga.
Thus, the Claim that the petitioner has a fundamental right within the meaning of articles 25 or 26 to perform Tandava dance in public streets and public places has to be rejected.
[459 E 460 E] An order made under s.144 of the Code of Criminal Procedure is intended to meet an emergent situation.
The order is not intended to be either permanent or semi permanent in character.
The order is to remain valid for two months from the date of its making as provided in sub s.(4) of s.144.
The proviso to sub s.(4) of s.144 which gives the State Government jurisdiction to extend the prohibitory order for a maximum period of six months beyond the life of the order made by the Magistrate is clearly indicative of the position that Parliament never intended the life of the order under s.144 of the Code to remain in force beyond two months when made by a Magistrate.
The scheme of that section does not contemplate repetitive orders and in case the situation so warrants steps have to be taken under other provisions of the law such as s.107 or s.145 of the Code when individual disputes are raised and to meet a situation such as in this case, there are provisions to be found in the Police Act.
If repetitive orders are made it would clearly amount to abuse of the power conferred by s.144 of the Code.
[461 D 462 D] Gopi Mohun Mullick vs Taramoni Chowdhrani, ILR 5 Cal. 7; Bishessur Chuckerbutty & Anr.
vs Emperor, A.I.R. 1916 Cal.
47; Swaminatha Mudaliar vs Gopalakrishna Naidu, A.I.R. ; Taturam sahu vs The State of Orissa, A.I.R. 1953 Orissa 96; Ram Das Gaur vs The City Magistrate, Varanasi, 450 A.I.R. 1960 All. 397; and Ram Narain Sah & Anr.
vs Parmeshwar Prasad Sah & Ors., A.I.R. 1942 Pat.
414, approved.
Babulal Parate vs State of Maharashtra & Ors., ; at 437; and Gulam Abbas & Ors.
vs State of U.P. & Ors.
,[1981] at 1862, referred to.
|
Civil Appeal No. 490 of 1860.
Appeal by special leave from the judgment and order dated October 6, 1958, of the Punjab High Court in Civil Misc.
No. 28 of 1958(File 'A ').
Mohan Behari Lal, for the appellant.
N. section Bindra and P. D. Menon, for the respondent No. 1.
Radhey Lal Agarwal and V.N. Sethi, for respondent No.2.
December 5.
The Judgment of the Court was delivered by DAS GUPTA, J.
The appellant, Jetha Nand (Betab) was enrolled as an Advocate in the Chief Court of Sind on May 14, 1947.
He came away to India at the end of the year 1948 and practised in the courts at Delhi.
On October 8, 1956 an order was passed by the Chief Justice of the Punjab High Court prohibiting the appellant from practising as an 963 Advocate in the courts at Delhi.
On November 8, 1956 the appellant presented an application to the High Court in which he contended that by virtue of his having been enrolled as an Advocate in the Chief Court of Sind he was entitled to practice in all the subordinate courts within the territory of India.
This petition was however rejected by a Full Bench of the Punjab High Court on the view that the appellant could not after the partition of India be considered to be an Advocate enrolled under the provisions of the Bar Councils Act.
Against this order the present appeal has been preferred on special leave granted by this Court.
The petitioner 's case is that as immediately before the partition of India he was entitled to practise in any court in British India his right to practise in those Courts continued to exist even when on partition of India, "British India" ceased to exist and provinces of India took their place; and when thereafter on the formation of the Indian Union under the Constitution these provinces became States of India but those same courts continued, his right to practise in those courts also continued.
On behalf of the respondents it is contended that the petitioner 's right to practise in courts which were not under the Chief Court of Sind ceased as soon as Sind ceased to form part of India and the Chief Court of Sind ceased to be a High Court in India.
As the appellant bases his claim on section 14 (1) (b) of the , it is necessary to examine first the scheme of that Act.
This Act was passed to provide for the constitution and incorporation of Bar Councils for certain courts in British India, to confer powers and impose duties on such Bar Councils and to amend the law relating to legal practitioners entitled to practise in the courts.
It extended to the whole of British 964 India but was in the first instance made applicable to only certain named High Courts the High Court at Calcutta, and the High Courts at Madras, Bombay, Allahabad, Patna and Rangoon.
It was also provided (section 1, sub s.2) that the Act shall apply to such other High Court within the meaning of cl. 24 of section 3 of the as the Governor General in Council may, by notification in the Gazette declare to be High Courts to which this Act applies.
Sections 2,17, 18 and 19 were to come into force at once; but as regards the other provisions it was enacted that they could come into force in respect of any High Court to which the Act applied on such date as the Governor General in Council might by notification direct.
Section 2 defined Advocate as "an advocate" entered in the roll of advocates of a High Court under the provisions of this Act and "High Court" as "a High Court to which this Act applies".
Sections 3, 4 and 5 deal with the constitution and incorporation of Bar Councils.
Section 8 makes it the duty of every High Court to prepare and maintain a roll of advocates of the High Court and also provides that no person shall be entitled as of right to practise in any High Court unless his name is entered in the roll of the advocates of the High Court.
Section 10 empowers the High Court to reprimand, suspend or remove from practice any advocate of the High Court whom it finds guilty of professional and other misconduct.
The manner in which such action can be taken is dealt with in sections 10, 11, 12 and 13.
Of these, section 12 provides inter alia that when any advocate is reprimanded or suspended under this Act a record of the punishment shall be entered against his name in the roll of the Advocates of the High Court and when an Advocate is removed from Practice his name shall forthwith be struck of the roll.
Section 14 provides inter alia that an advocate shall be entitled as of right to practise in any other Court in British India.
965 It is not disputed before us that the Governor General by notification in the Gazette of India did declare the Chief Court of Sind to be a High Court to which this Act applied and that by another notification he also directed that all the provisions of the Act would come into force in respect of the Chief Court of Sind on some date long before 1947.
Consequently, even though these notifications have not been placed before us we must proceed on the bases that on May 14, 1947, when the appellant was enrolled as an advocate in the Chief Court of Sind he was an advocate for the purposes of the and so was entitled as of right to practise in any subordinate courts in what then was British India.
The question is whether this right continued to exist after Sind ceased to form a part of India.
It appears to us clear that when section 2 defines advocate as "an advocate entered in the roll of advocates of High Court", it means an advocate who has been entered in such roll of advocates and whose name continues to be on that roll.
When, for example, the name of the advocate is removed from the roll under section 12 (7) he ceases to be an advocate within the meaning of section 14 in spite of the fact that his name was once entered in that roll.
An advocate entered in the roll of advocates can therefore mean only one whose name continues to be entered in that roll.
What is the position if the High Court ceases to exist, by reason of abolition or otherwise ? The only possible answer to this question is that if the High Court ceases to exist; the roll which used to be maintained by it has also no legal existence and consequently a person whose name was in that roll, is no longer an advocate within the meaning of section 14 or any other section of the Act.
That appears to be exactly the position in the present case.
The Chief Court of Sind was a High Court within the meaning of sections 3 to 19 of the by reason of the notification made by the Governor General in Council under section 1 sub section 2 of the Act.
It would be absurd 966 to think that when Sind ceased to form part of India the Chief Court of Sind still continued to be a High Court for the purposes of Indian law.
All doubts in the matter have however been set at rest by the provisions of the Indian (Adaptation of Existing Indian Laws) Order, 1947.
In this connection it is necessary to recall section 18 sub section
18 sub section
3 of the Indian Independence Act which provides that the law of British India and of the several parts thereof existing immediately before the appointed day shall, so far as applicable and with the necessary adaptations, continue 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.
Many adaptations were in fact found necessary to remove complications and confusions which might otherwise have arisen.
Of the several adaptation orders made we are concerned here with the Adaptation Order No.16 which was called the India (Adaptation of Existing Indian laws) Order, 1947.
In this Order, the appointed dated was defined as August 15, 1947.
Section 5 of the Order is in these words : "Any reference in an existing Indian law to a High Court which as from the appointed day ceases to be a High Court for any part of the Dominion of India, shall (a) if the reference be to the High Court of Judicature at Lahore, be replaced by a reference to the High Court of East Punjab, and (b) in any other case, be omitted.
" The Chief Court of Sind (a High Court within the meaning of the ) having ceased as from August 15, 1947 to be a High Court for any part of the Dominion of India references to that Court as one to which the Act applied must be omitted in the application of the Indian Bar 967 Councils Act, 1926 after that date.
In other words, the Chief Court of Sind which was a High Court for the purposes of the up to the August 14, 1947 ceased to exist as a High Court for the purposes of the with effect from the 15th day of August, 1947.
The necessary consequence of this is that the roll maintained by the Chief Court of Sind was from August 15, 1947 no longer a roll maintained by a High Court within the meaning of the and thus any person whose name was entered on the roll of the Chief Court of Sind ceased to be an advocate for the purpose of section 14 of the and therefore ceased to have the right under that section to practise in courts in India.
There can be no doubt whatsoever that in making this adaptation in section 5 of the India (Adaptation of Existing Indian Laws) Order, 1947 the intention of the authority making the order was not only to ensure that rights will not in future accrue on the basis of a High Court now in Pakistan having been formerly a High Court in India but also to prevent the future exercise of any right that may have become vested in any person on such a High Court having been a High Court in India.
This conclusion is inevitable from the absence of any saving clause in the Adaptation Order.
Thus, even though the appellant had a right on the 14th August, 1947 to practise in the courts subordinate to any High Court in India such a right ceased to exist after the Adaptation Order mentioned above.
We need merely add that if the appellant 's contention was correct, the anomalous position would have arisen that there would be no court in India which could take disciplinary action against him, in the event of misconduct.
The scheme of the Bar Councils Act is as has been emphasised 968 earlier, that each High Court in the country should have disciplinary jurisdiction over the Advocates on its rolls.
The provisions of the Adaptation order have maintained this position.
In our opinion, the High Court rightly rejected the appellant 's application.
The appeal is accordingly dismissed.
In the circumstances of the case we make no order as to costs.
But the appellant who has filed the appeal as a pauper is directed to pay the court fees which would have been paid by him if he had not been permitted to appeal as a paper.
Appeal dismissed.
| The appellant J who was enrolled as an advocate in the Chief Court of Sind in May 1947 came to India at the end of the year 1948, and practiced in the Courts at Delhi.
The Chief Justice of Punjab High Court prohibited the appellant from practicing as an advocate in the Courts of Delhi.
At 962 the time the appellant was enrolled he was an advocate for the purposes of the , and so was entitled as of right to practice in any subordinate courts in what then was British India.
The question was whether this right continued to exist, after Sind ceased to form a part of India. ^ Held, that the Chief Court of Sind which was a High Court for the purposes of , upto August 14, 1947, ceased to exist as a High Court for the purposes of the , with effect from August 15, 1947, by virtue of section 5 of the India (Adaptation of Existing Indian Law) Order, 1947.
The necessary consequence of this was that the Roll maintained by the Chief Court of Sind was from August 15, 1947, no longer a roll maintained by a High Court within the meaning of the , and any person whose name was entered on the Roll of the Chief Court of Sind ceased to be an advocate for the purposes of section 14 of the , and therefore ceased to have the right under that section to practice in courts of India.
In the present case even though the appellant had a right on August 14, 1947, to practice in the courts subordinate to any High Court in India, such a right ceased to exist after the India (Adaptation of Existing Indian Laws) Order, 1947.
| In Civil Appeal No. 855(N) of 1979 and Civil Appeal No. 2665 of 1991 the issue raised was common and relating to the date of merger of the two departments of the Government of India, in the field of mines and minerals, namely (i) Exploration Wing of the Indian Bureau of Mines (IBM) and (ii) Geological Survey of India (GSI).
Between 1.1.1966 to 4.2.1969 thirty nine Lower Division Clerks belonging to GSI were promoted as Upper Division Clerks against the vacancies that arose in the GSI.
They were juniors to their counterparts in the IBM.
Being aggrieved by the said promotions, the respondents who originally belonged to the IBM, preferred Special Civil Application in the Bombay High Court for setting aside the seniority list and for a direction to consider their cases of promotion with effect from 1 January, 1966 and not from 4 February 1969 and therefore, there cannot be two separate channels of promotions from 1 January 1966 one from the employees of the Exploration Wing of IBM and another for the employees of GSI.
The appellants contended that the Officers of GSI were promoted on the ground that the actual merger took place not on 1 January 1966 but on 4 February 1969.
The High Court allowed the petition against which Civil Appeal No. 855(N) of 1979 has been preferred.
A Senior Technological Assistant (Geology) of the erstwhile IBM moved the Karnataka High Court for similar relief contending inter 894 alia that this case ought to have been considered for promotion in the merger cadre with effect from 1 January 1966.
The Karnataka High Court also allowed his claim with a direction to consider him for promotion with effect from 1 January 1966 in the merged cadre.
That decision was not implemented by the GSI.
In the contempt proceedings taken for disobedience of the judgment, the High Court allowed six weeks time for compliance, against which, SLP(C) No. 4906 of 1991 has been preferred.
Respondents relying on the letters dated 10 December 1965 and 29 November 1966 contended in support of the decision of the High Courts that the merger took place on 1 January 1966, whereas the appellants took assistance from terms of the letter dated 4/6 February 1969 in support of the counter plea.
Allowing the appeals, this Court, HELD: 1.
The statements in the letter make it abundantly clear that it was only administrative control of the relevant wings of IBM that were transfered to GSI with effect from 1 January 1966.
The letter does not refer to the decision of merger of the two departments.
[902E] 2.
The decision taken on the merger of the posts was communicated by subsequent letters dated 28 June 1967 and 4/6 February 1969.
By letter dated 28th June 1967 the Government communicated the sanction of merger of class I IBM and GSI (Proper) with immediate effect.
The letter also contains certain instructions to department about service conditions and seniority of persons in the amalgamated cadres of class I & II posts.
The decision with regard to merger in respect of other categories of posts which include are concerned in these cases is contained in the letter dated 4/6 February 1969.
[902F G] 3.
The letter dated 4/6 February 1969 further provides the inter se seniority of the incumbent in the merged cadres will be governed in accordance with the principles laid down in the earlier letter dated 28th June 1967.
The merger/revision of the scales of pay does not involve any change in the nature of duties of the respective posts.
The Officers concerned in the merged cadre will be given options in writing for opting the new scales of pay in the merged.
In case an individual concerned fails to exercise the option within the time limit, he will be treated to have accepted the new scale of pay.
It will be apparent from the terms of the letter dated 4/6 February 1969 that the posts 895 referred to in the letter were merged with GSI with effect from 4 February 1969 would be unnecessary and uncalled for.
[903A C] 4.
Provisional seniority list and the statement of introduction to the compilation are no evidence of the date of merger do not reflect the decision of the Govt.
of India.
| The appellant, a banking company incorporated in the United Kingdom, carries on banking business in India and is assessed under the Income Tax Act, 1961.
The appellant filed a return of its income for the assessment year 1972 73.
During the assessment proceedings the Income Tax Officer issued a notice under section 142(1) of the Income Tax Act requiring the appellant to produce certain account books and documents.
The appellant applied against the notice to the High Court of Calcutta under Article 226 of the Constitution.
The High Court construing the notice in specifically limited terms directed the appellant to comply with it.
The appellant preferred an appeal in the High Court.
Meanwhile, pursuant to the direction by the learned single judge, the Income Tax Officer made an assessment order on March 31, 1977.
Thereafter the appeal was allowed by a Division Bench of the High Court by its judgment dated May 8 and 12, 1978, and the impugned notice under section 142(1) and the consequent assessment order were quashed.
But while doing so, the Division Bench also directed the Income Tax Officer to make a fresh assessment.
Aggrieved by that direction, the appellant applied for, and obtained special leave to appeal to this Court.
Dismissing the appeal, the Court ^ HELD: 1.
The High Court was competent to make the order directing a fresh assessment since the limitation for making the assessment had not expired and no valuable right to be assessed had thereby accrued to the appellant.
[769 D E] The facts of the case make it clear that the assessment proceedings remained pending during the entire period from March 17, 1975 to March 31, 1977 by virtue of successive stay orders of the Court.
If regard be had to clause (ii) of Explanation 1 to section 153 which provides that in computing the period of limitation for the purposes of section 153 the period during which the assessment is stayed by an order or injunction of any court shall be excluded, it is abundantly clear that the assessment order dated March 31, 1977 is not barred by limitation.
In computing the period for making the assessment, the Income Tax Officer would be entitled to exclude the entire period from March 17, 1975, on which date there were fourteen days still left within the normal 766 operation of the rule of limitation.
The assessment order was made on the very first day after the period of stay expired; it could not be faulted on the ground of limitation.
[769 B D] 2.
The character of an assessment proceeding of which the impugned notice and the assessment order formed part, being quasi judicial, the "certiorari" jurisdiction of the High Court under Article 226 was attracted.
Ordinarily, where the High Court exercises such jurisdiction it merely quashes the offending order, and the consequential legal effect is that but for the offending order the remaining part of the proceeding stands automatically reviewed before the inferior court or tribunal with the need for fresh consideration and disposal by a fresh order.
Ordinarily the High Court does not substitute its own order for the order quashed by it.
It is, of course, a different case where the adjudication by the High Court establishes a complete want of jurisdiction in the inferior court or tribunal to entertain or to take the proceeding at all.
In that event on the quashing of the proceeding by the High Court there is no revival at all.
But although in the former kind of case the High Court, after quashing the offending order, does not substitute its own order it has power nonetheless to pass such further orders as the justice of the case requires.
[769 F H, 770 A] 3.
When passing such orders the High Court draws on its inherent power to make all such orders as are necessary for doing complete justice between the parties.
The interests of justice require that any undeserved or unfair advantage gained by a party invoking the jurisdiction of the court, by the mere circumstance that it has initiated a proceeding in the court, must be neutralised.
The simple fact of the institution of litigation by itself should not be permitted to confer an advantage on the party responsible for it.
[770 A C] In the present case, the appellant would not have enjoyed the advantage of the bar of limitation if, notwithstanding his immediate grievance against the notice under section 142(1) of the Income Tax Act, he had permitted the assessment proceeding to go on after registering his protest before the Income Tax Officer, and allowed an assessment order to be made in the normal course.
In an application under section 146 against the assessment order, it would have been open to him to urge that the notice was unreasonable and invalid and he was prevented by sufficient cause from complying with it and therefore the assessment order should be cancelled.
In that event, the fresh assessment made under section 146 would not be fettered by the bar of limitation.
Section 153(3)(i) removes the bar.
But the appellant preferred the constitutional jurisdiction of the High Court under Article 226.
If no order was made by the High Court directing a fresh assessment, he could contend that a fresh assessment proceeding is barred by limitation.
That is an advantage which the appellant seeks to derive by the mere circumstance of his filing a writ petition.
It will be noted that the defect complained of by the appellant in the notice was a procedural lapse at best and one that could be readily corrected by serving an appropriate notice.
It was not a defect affecting the fundamental jurisdiction of the Income Tax Officer to make the assessment.
The High Court was plainly right in making the direction which it did.
[770 C G] Director of Inspection of Income Tax (Investigation) New Delhi and Anr.
vs Pooran Mall and Sons and Anr.
@ 395; followed.
767 Cachar Plywood Ltd. vs Income Tax Officer, 'A ' Ward, Karimganj Dist.
Cachar and Anr., (1978) 114 ITR (Cal.); approved.
Rajinder Nath etc.
vs The Commissioner of Income Tax, Delhi, ; distinguished.
Pickles vs Falsham, 9 Tax Cases, 261, 288; Anisminic Ltd. vs The Foreign Compensation Commission & Anr.
[1969] 1 All E.L.R. 208; Bath and West Countries Property Trust Ltd. vs Thomas (Inspector of Taxes) ; distinguished.
| A large number of doctors employed in the State Health Services of the appellant State were leaving India for higher studies, after obtaining leave for a couple of years, and thereafter, they were neither returning to India, nor were sending any further applications for extension of leave.
This was causing considerable hardship to the public.
As this trend persisted, the state authorities wanted to take appropriate corrective steps.
Since the absentee doctors had not informed the department of their addresses, personal service of notice on such doctors could not be effected.
A general notice was published and press communique was issued in newspapers in India and abroad calling upon them to offer their explanations for remaining absent from service for more than five years, within the specified time and indicating that on their failure to do so, the services of 320 doctors would be terminated with the concurrence of the State Public Service Commission and the approval of the State Cabinet.
Services of doctors were, accordingly, terminated.
The respondent filed a Public Interest Litigation before the High Court stating that the particular doctor was unwell and was in need of financial help.
The services of this doctor had also been terminated along with others.
The details as to how she was taken ill and admitted in a hospital outside the country and then brought back to India for further treatment in the State, were given.
The High Court directed the appellants to pay the post retirement benefits to the medical officer doctor concerned.
Earlier the High Court had also directed payment of Rs.2,000 to the respondent writ petitioner as relief to the doctor concerned.
Allowing the appeal of the State, this Court, HELD: 1.1.
It is not known how the respondent writ petitioner became so interested in the beneficiary, who was being taken care of in the hospital and receiving attention of eminent doctors, and who had atleast a brother with whom she was staying for sometime.
The respondent writ petitioner could not tell about the other family members and relations of the beneficiary or how and why in this background the respondent chose the beneficiary for showering her benevolence in preference over the far more needy old and sick persons who are, unfortunately, in large number in the appellant State.
The judgment under challenge also does not indicate any reason.
[360 B D] 1.2.
Since there is no reason at all in the order under challenge or in the writ petitioner which may justify the relief granted in the present case, the writ petition should have been dismissed.
[360 H; 361 A] 1.3.
There is also no reason to accede to the request made on behalf of the respondent that the cheque for Rs. 2000, mentioned in the first paragraph of the High Court 's orders, drawn in the name of the beneficiary, may be directed to be drawn in the name of the respondent writ petitioner for the beneficiary 's fingers had since become stiff and hence the cheque could not be encashed.
There is no suggestion to the effect that the beneficiary has no relation of her own, who can look after her needs.
[361 B] 2.
There is no doubt that the State should strive to promote the welfare of its people so that at least the bare necessities of life are met and the needy and the sick are properly looked after.
This can be done only by adopting a welfare scheme in the interest of the general public; and since the resources of the State are not unlimited, the State is not expected, in absence of relevant reasons, to choose an individual for special treatment at the cost of the others.
Ordinarily, therefore, it is desirable for the State authorities to take up the individual cases coming to their notice and do their best in accordance with the policy decision of general application.
This will ensure equal treatment to all of course in accordance with the individual needs.
Unless all relevant materials are placed by an applicant, it will be onerous task for the Court to take upon itself to determine the extent of help a particular individual has to get.
The circumstance that a particular person is smart enough to approach the Court or is so fortunate to get somebody to do that on his or her behalf, cannot be a valid ground to divert the State funds to his or her advantage at the cost to corresponding disadvantage to others.
A judicial process should not be allowed to be used for the satisfaction of an individual 's whims, pious, though, they may apparently look.
[360 E, F, G]
| % As a result of the order passed by the High Court, proceedings under section 44(2a) of the West Bengal Estates Acquisition Act, 1953 were re opened by the Special Revenue officer and final orders were passed on 9.2.1982.
The Ist respondent preferred an appeal against this order before the 9th Additional District Judge, the competent authority to hear an appeal.
On 1.12.83 the Ist respondent obtained an opinion of the Advocate General regarding the aforesaid proceedings, and filed that opinion with an application.
The Additional District Judge passed an order on 25.2.86 rejecting the prayer of the Ist respondent that the appeal be disposed of in accordance with the opinion of the Advocate General, but observed that the opinion of the Advocate General could only be looked into as the ground of appeal on behalf of the Ist respondent.
The date of hearing of the appeal was fixed on 19.4.86 to suit the convenience of the Advocates of the parties.
A petition under article 227 was filed in the High Court against the 818 aforesaid order by the Ist respondent.
The High Court treated this petition as a revision application challenging the order passed by the Additional District Judge on 25.2.86, and held that the Additional District Judge should have disposed of the appeal in accordance with the opinion of the Advocate General, and quashed the proceedings under Section 44(2a) as well as the appeal that was pending hearing before the Additional District Judge.
Allowing the Appeal by the State this Court, ^ HELD: l.
The High Court lost sight of the fact that the only grievance against the order of the 9th Additional District Judge was that he refused to decide the appeal in accordance with the opinion of the Advocate General and that he did not give an early date of hearing.
The question about the suo moto proceedings under section 44(2a) and the validity of the Amendment Act, 1969 and its effect were not considered by the appellate authority and in fact the appeal was still pending before the 9th Additional District Judge which was yet to be heard and disposed of.
[823G H] 2.
The High Court after examining the legal aspect without having been raised before it decided the matter so that neither appeal remains nor any proceedings remain and in doing so the High Court went on without there being proper grounds before it and without giving an opportunity to the appellant State of West Bengal, to have their say in this matter.
[824A B] 3.
The order passed by the High Court dated 20.5.87 is, therefore, completely without jurisdiction and on matters which were not before it and also without giving adequate opportunity of hearing and, therefore, deserves to be quashed, and is quashed.
[824B c] 4.
The appeal that was filed by the Ist respondent before the 9th Additional District Judge was pending when the High Court passed the impugned order, revives.
It could not be said that the appeal is disposed of as observed by the High Court.
It is directed that the appeal which was pending before the 9th Additional District Judge shall be heard by the Additional District Judge in accordance with law.
[824C D]
| The respondent was a permanent and confirmed civilian worker in the Defence Department and he had a right to continue till he attained the age of 60 years.
His services, however, were terminated under Article 310 of the Constitution without assigning any reason.
He instituted a suit for declaration that the termination of his services was illegal and void ab initio.
In the alternative, he claimed damages or compensation for the illegal termination.
The Trial Court awarded him Rs. 25,000 as damages together with interest at 6 per cent per annum for the illegal termination of his services.
That decree was confirmed by the High Court.
The Courts below have proceeded on the basis that Article 311 (2) of the Constitution was not applicable to the respondent, but the Central Civil Services (Classification, Control and Appeal) Rules, 1965 were, however, applicable.
In the appeal to this Court on behalf of the appellants it was contended that the reasoning of the Courts below is untenable and uncalled for.
On behalf of the respondent employee it was contended that the 1965 Rules are applicable to the respondent and that the decree under appeal should not be set aside.
The poverty of the respondent and the long drawn litigation by which the respondent was suffered immeasurably were also highlighted.
PG NO 1074 PG NO 1075 Allowing the appeal on a question of law this Court HELD: 1.
The respondent is not entitled to protection of Article 311(2) since he occupied the post drawing his salary from the Defence Estimates.
That being the position, the exclusionary effect of Article 311(2) deprives him the protection which he is otherwise entitled to.
In other words there is no fetter in the exercise of the pleasure of the President or the Governor.
[1079D E] 2.
The 1965 Rules among others, provide procedure for imposing the three major penalties that are set out under Article 311(2).
When Article 311(2) itself stands excluded and the protection thereunder is withdrawn there is little that one could do under the 1965 Rules in favour of the respondent.
The said Rules cannot independently play any part since the rule making power under Article 309 is subject to Article 311.
[1079F G] L.R. Khurana vs Union of India, ; at 911; Ramanatha Pillai vs The State of Kerala, ; at 521 and Union of India vs Tulsi Ram, ; , followed.
This Court will not deny any equitable relief in deserving cases.
The case on hand cannot be an exception to that rule and indeed.
it is eminently a fit case.
[1080F]
| % The appellants had filed a suit for partition of property claiming 1/3rd share.
A preliminary decree was passed by the trial court.
Respondent No. 1 (defendant No. 9 in the suit) challenged the decree before the High Court in first appeal.
The appeal was disposed of on compromise whereby the appellants plaintiffs ' claim to l/3rd share was accepted, but it was agreed that half of the share of the plaintiffs would go to the defendant No. 9, provided he paid Rs.40,000 to the plaintiffs in two instalments, the first one of Rs.10,000 by 31.7.1979 and the second of the remaining amount, by 28.2.1980, failing which payment within time, the decree passed by the trial court would stand confirmed as per the terms of the compromise.
The first instalment was paid within time, but the remaining amount was not paid.
The defendant No. 9 made an application before the High Court on 28.8.1981 for extension of time for payment of the second instalment.
The High Court by its order dated 31.8.1981 allowed the application.
The appellants moved this Court by special leave, challenging the said order dated 31.8.1981 of the High Court.
The appellants inter alia contended that an order based on the consent of the parties could be modified only with the further consent of the parties and it was not open to the Court to alter the terms otherwise.
If the High Court had issued notice on the application for extension of time made by the defendant No. 9 to the plaintiffs appellants, they would have placed before the Court the circumstances showing that it was against the cause of justice to allow the prayer of the defendant No. 9 and specially so after such a long delay.
There was no justification whatsoever for the High Court to condone the delay and extend the period for deposit of the money, they contended.
288 The contesting respondents argued that the 6th term of the com promise dealing with the consequence of the default in payment of the instalments was penal in nature and illegal, and that the clause being severable from the other terms of the compromise should be ignored.
It was further argued that it was not correct to suggest that the Court had no power to permit the respondent No. I to make the deposit later.
Allowing the appeal, the Court, ^ HELD: There was no merit in the argument that the impugned clause 6 of the agreement was illegal being penal in nature.
It had to be noted that the plaintiffs had in the trial court obtained a decree for partition for their l/3rd share in the suit properties and there was presumption in favour of correctness of the decree.
At the appellate stage, one of the three branches of the parties, represented by the heirs of Brajgopal, and uncle of the plaintiffs appellants, was satisfied with the share allotted to them and the interest of defendant No. 9, second uncle of the plaintiffs, was identical to their interest.
The situation was acceptable to the defendant No. 9 also but he wanted to acquire half the share of the plaintiffs on payment of consideration, fixed at Rs.40,000.
The amount was to be paid by way of price.
It had not been suggested by the defendant No. 9 or his heirs that the entire compromise should be ignored on account of the impugned clause 6 thereof.
They had been relying upon the compromise except the default clause which alone was sought to be ignored.
That part of the compromise was in substance an agreement for transfer by the plaintiffs of half of their share for a sum of Rs.40,000 to be paid within stipulated time.
The market price of the property was higher, and a beneficial right was bestowed on the defendant No. 9 to acquire the property for a considerably low amount.
In this background, the said defendant was subjected to the condition that if he had to take the advantage of the bargain, he was under a duty to pay the stipulated amount within the time mentioned in the agreement.
On failure to pay within time, he was to be deprived of that special benefit.
Such a clause could not be considered a penalty clause.
The expression 'penalty ' is an elastic term with many different shades of meanings, but it always involves an idea of punishment.
The impugned clause in this case did not involve infliction of any punishment, it merely deprived the defendant No. 9 of a special advantage in case of default.
[293A H: 294A] The High Court assuming it had the power to do so, was not justified in allowing the prayer of the defendant No. 9 to make a grossly belated payment.
Even where such a power exists, it is not to be exercised liberally.
[294B C] 289 Justice was manifestly in favour of the plaintiffs and against the contesting respondents.
The clause in question was not a forfeiture clause.
[294E] The grievance of the plaintiffs that they were not afforded reasonable opportunity to contest the prayer of the defendant was also well founded; notice of the application for extension of time should have been directly sent to the plaintiffs.
The Court did not consider it necessary to remand the matter to the High Court for a fresh consideration, as it had come to a final conclusion on merits in favour of the plaintiffs.
[294G; 295B] The order dated 31.8.1981 of the High Court was set aside and the application filed by respondent No.1 defendant No. 9 for extension of time was rejected.
[295C D] Charles Hubert Kinch vs Edward Keith Walcott & Ors.
, A.I.R. 1929 P.C. 289; Banku Behari Dhur vs J.C. Galstaun & Anr., A.I.R. 1922 P.C. 339; Jagat Singh & Ors.
vs Sangat Singh & Ors., A.I.R. 1940 P.C. 70 and Smt.
Periyakkal & Ors.
vs Smt.
Dakshyani; , , referred to.
| The petitioners applied for the consent of the Central Government under section 87B of the Code of Civil Procedure to sue the Maharaja of Tripura, Ruler of a former Indian State, which has merged with India.
They wanted to implead the Union of India as well, as party to the suit as their case was that they were entitled, as members of a joint Hindu family to receive either from the said Ruler or from the Union appropriate maintenance allowance under the custom of the Ruling family.
Consent having been refused, they applied to this Court under article 32 of the Constitution.
Their case was that section 87B of the Code in granting exemption to Rulers of former Indian States from being sued except with the consent of the Central Government contravened articles 14 and 19(1)(f) of the Constitution.
Held, that in view of the previous decision of this Court section 87B of the Code of Civil Procedure was no longer open to challenge under article 14 of the Constitution.
Mohan Lal Jain vs His Highness Maharaja Shri Sawai Man Singhji [1962] 1 S.C.R. 702, referred to.
Regard being had to the legislative and historical back ground of section 87B of the Code, it could not be said that, that section in giving special treatment to ex Rulers had imposed an unreasonable restriction on the petitioner 's fundamental rights.
Motivated as it was by the sole object of bringing the entire country including the former Indian States under one Central Government, it must be held to be reasonable and in the interest of the general public.
But considered in the light of the basic principle of equality before law it would be odd to allow the section to continue prospectively for all time to come.
It would therefore, be for the Central Government to consider whether it should not be confined to dealings and transactions previous to January 26, 1950.
Nor should the section be used to stifle claims except such as are clearly far fetched or frivolous and consent should ordinarily if not as matter of course, be granted in the case of a genuine dispute which prima facie appears to be triable by a court of law such as the present one.
|
l Appeal ,#No. 151 of 1951.
Appeal from a Judgment and Order dated 14/15th September, 1949, of the High Court of Judicature at Bombay (Chagla C.J. and Tendolkar J.) in Income tax Reference No. 2 of 1949.
R. J. Kolah and N. A. Palkiwalla for the appellant.
C. K. Daphtary, Solicitor General for India (P.A Mehta, with him) for the respondent.
January 30.
The judgment of Mehr Chand Mahajan J., Das J. and Bhagwati J. was delivered by Bhagwati J. Bose J. delivered a separate judgment.
BHAGWATI J. This is an appeal from the judgment and order of the High Court of Judicature at Bombay upon a reference by the Income tax Appellate Tribunal under Section 66 (1) of the Indian Income tax Act, 1922, whereby the High Court upheld the decision of the Appellate Tribunal that two amounts of Rs. 12,68,480 and Rs. 4,40,878 were the sale proceeds of goods sold by the appellant to merchants in British India, were received in British India and were liable to income tax in British India.
The appellant is a company registered in the Baroda State, as it then was, prior to its merger with India.
It manufactures textile goods in Petlad in the Baroda State and after the goods are manufactured they are sold by the company ex mills.
The company employs Messrs. Jagmohandas Ramanlal & Co. as guaranteed brokers.
That firm guarantees the sale price of goods sold by the company ex mills to the purchasers from Ahmedabad and receives commission as consideration for the guarantee and the work which it does for the company.
The company is a non resident and its accounts are maintained according to the mercantile system.
953 In the assessment year 1942 43 (the previous year being the calendar year 1941) the total sales of the goods by the company amounted to Rs. 29,68,808.
In making the assessment on the company for that assessment year the following three amounts were considered for the purpose of determining the company 's liability to British Indian tax.
(a) Sale proceeds recovered through Messrs. Jagmohandas Ramanlal & Co. . . . .Rs.
12,68,480 (b) Sale proceeds through British Indian banks and shroffs rec eived by means of drafts or hu ndies drawn by the company. . .Rs.
4,40,878 (Railway receipts handed over to British Indian merchants by the banks on payment).
(c) Sale proceeds received by cheques on British Indian banks and hundies on British Indian shroffs and merchants, and collected by the banks and shroffs . . . . . .
Rs. 6,719735 Total Rs. 23,81,093 As regards item (a) the company debited the account of the firm of Messrs. Jagmohandas Ramalal & Co. with Rs. 13,41,744 which represented sales made by the company to merchants of Ahmedabad whose payments were guaranteed by that firm, and credited the sales account with the amount of the bills.
Messrs. Jagmohandas Ramanlal & Co. collected the amounts of the bills from the merchants at Ahmedabad and credited the sums recovered in the company 's accounts with banks and/or shroffs at Ahmedabad and also made dis bursements under instructions of the company to the creditors of the company in British India.
All these payments were credited by the company to the account of Messrs. Jagmohandas Ramanlal & Co. and during the relevant accounting year the company thus 954 received Rs. 12,68,480 against the total debits of Rs. 13,41,744.
As regards item (b) the company received Rs. 4,40.878 by drawing hundies or drafts for the amounts of its sales bills (including the forwarding charges and the cost of transit from the mills premises to the station) on the merchants in favour of recoginised banks and shroffs in British India, by sending the same to those banks or shroffs with the railway receipts duly endorsed in favour of the merchants and by instructing the banks or shroffs to recover the amounts including the costs of transmitting the same to them.
The amounts of these sales bills were debited by the company to the accounts of the respective merchants and credited to the sales account and the sums recovered by the banks or shroffs from the merchants in British India against the delivery of the relative railway receipts were on receipt of the same by the company credited to the accounts of the respective merchants in their books of account.
As regards item (c), the company received Rs. 6,71,735 from the merchants by cheques and hundies drawn on banks and shroffs in British India in favour of the company.
These cheques and hundies were negotiated by the company in Petlad and sent back for credit to its accounts with those banks and shroffs.
The said cheques and hundies were cashed in British India and the sale proceeds remitted by the banks and shroffs to the company.
The amounts of the sales bills were debited to the accounts of the merchants in the books of the company when the goods were invoiced to the merchants and these accounts were credited with the moneys thus received by the company from the merchants.
The Income tax Officer brought to tax the profits derived by the company represented by the said three items in the assessment year on the basis that the sale proceeds having been received in British India the profits were received in British India.
The Appellate Assistant Commissioner on appeal held that profits 955 from items (a) and (c) were exempt from British Indian tax while those represented by item (b) were rightly taxed.
The Department filed an appeal to the Appellate Tribunal against the decision of the Appellate Assistant Commissioner in regard to items (a) and (c) and the company filed an appeal in respect of item (b).
The Appellate Tribunal held in regard to item (a) that the merchants in British India were not absolved either in law or in fact from their responsibility to pay to the company its dues by virtue of the debit entries in the account of Messrs. Jagmohandas Rainanlal & Co. and in regard to item (b) that the payment of the amounts due was a condition precedent to ' the delivery of goods by the banks in British India on behalf of the company.
The Tribunal therefore held that profits arising from items (a) and (b) were rightly subjected to tax.
As regards item (c) the Tribunal held that Rs. 6,71,735 "were received by the assessee company directly from the merchants in British India by cheques and hundies drawn on banks and shroffs in British India in favour of the company but were negotiated in Petlad and sent for credit to the company 's account.
The amounts were received at Petlad and once they were received there, they could not be held to have been received again in British India ".
The Department asked the Tribunal to refer to the High Court the question of law arising on item (c) and the company asked the Tribunal to refer to the High Court the question of law arising on items (a) and (b) and the Tribunal therefore referred the following question of law to the High Court: " Whether on the facts and in the circumstances of the case, the sums of Rs. 12,68,480, Rs. 4,40,878 and Rs. 6,71,735, or any of them, which, represents receipts by the assessee company of its sale proceeds in British India, include any portion of its income in British India?" The High Court held that Rs. 12,68,480 were received in British India and included the profits and gains of the business of the assessee company.
It held that Rs. 4,40,878 also were received in British India 956 and the company was liable in respect of that amount.
In regard to the item of Rs. 6,71,735, the High Court found that the facts stated by the Tribunal were not sufficient to enable it to reach a decision and therefore directed that the Tribunal should submit a supplementary statement of case setting out the several aspects set out in the judgment.
The High Court reframed the question in regard to the two items of Rs. 12,68,480 and Rs. 4,40,878 in the manner following: (1)Whether the sums of Rs. 12,68,480 and Rs. 4,40,878 were sale proceeds of the goods sold by the assessee to merchants in British India or were debts due by the said merchants ? (2)Whether if they were sale proceeds, they were received in British India ? and answered them by stating that they were sale proceeds and they were received in British India.
There was also a third question which was comprised in the reference and that question was framed as under: Whether the profits of the assessee 's business are included in the sums of Rs. 12,68,480 and Rs. 4,40,878 ? This question was also answered by stating that they were included in these two sums.
The company obtained leave from the High Court to appeal against the decision in regard to the two sums of Rs. 12,68,480 and Rs. 4,40,878 and hence this appeal.
It is common ground that the company is a nonresident and its accounts have been regularly kept according to the, mercantile system.
Its balance sheets were also prepared on that basis.
The company was assessed to tax in British India on the basis that these two sums of money were received in British India by or on behalf of the company.
In regard to the item of Rs. 12,68,480, even though the amounts of the sales bills were in the first instance debited by the company in its books to the account of Messrs. Jagmohandas Ramanlal & Co. the sale proceeds in accordance with 957 the terms of the sales bills were paid by the respective merchants to Messrs. Jagmohandas Ramanlal & Co. in British India and were either credited by Messrs. Jagmohandas Ramanlal & Co. in the company 's accounts with banks or shroffs in British India or were disbursed by them in accordance with the instructions of the company in British India.
In regard to the item of Rs. 4,40,878 even though the amounts of the sales bills were debited in the first instance by the company to the accounts of the respective merchants in the books of account at Petlad the relative railway receipts were sent by the company to banks or shroffs in British India together with drafts or hundies in connection with the same with instructions that delivery of the railway receipts should be given to the respective merchants against payment and the amounts of the sales bills were thus paid by the respective merchants to the banks or shroffs in British India and were transmitted under the instructions of the company by the banks and shroffs in British India to the company at Petlad.
Prima facie therefore the amounts of the sales bills in both the cases whether they were paid to Messrs. Jagmohandas Ramanlal & Co. or to the banks or shroffs, through whom the railway receipts were negotiated were paid by the merchants in British India and were received by Messrs. Jagmohandas Ramanlal & Co. and the banks or shroffs on behalf of the company,in British India.
The receipt of these amounts thus fell within section 4 (1) (a) of the Act and the profits or gains of this business thus were received in British India by or on behalf of the company.
The company however sought exemption from liability to tax on the grounds (a) that the accounts of the company were kept on the mercantile or book profit basis under which the accrual of profit as shown in the account was the criterion of taxability and section 4(l) (a) had no application at all; (b) that it was obligatory on the authorities under section 13 of the Act to accept that system of maintaining accounts except under the proviso to that section and that the method of computation there was made the very basis of 124 958 chargeability and section 10 read with section 13 operated to save these amounts from chargeability and (c) that the amounts having been treated as received when credit entries were made in the books of account, and chargeability having crystallised on the date when the income accrued or was treated as received, there was no further scope for a charge when the amounts were subsequently actually received and the subsequent handling of the amounts by the company and the receipt thereof in British India were of no consequence.
The mercantile system of accounting or what is otherwise known as the double entry system is opposed.
to the cash system of book keeping under which a record is kept of actual cash receipts and actual cash payments, entries being made only when money is actually collected or disbursed.
That system brings into credit what is due, immediately it becomes legally due and before it is actually received and it brings into debit expenditure the amount for which a legal liability has been incurred before it is actually disbursed.
The profits or gains of the business which are thus credited are not realised but having been earned are treated as received though in fact there is nothing more than an accrual or arising of the profits at that stage.
They are book profits.
Receipt being not the sole test of chargeability and profits and gains that have accrued or arisen or are deemed to have accrued or arisen being also liable to be charged for income tax, the assessability of these profits which are thus credited in the books of account arises not because they are received but because.
they have accrued or arisen.
Mr. Kolah appearing for the company drew our attention to the following cases: Subramaniyan Chettiar vs Commissioner of Incometax(1), Ahmed Din Alladitta vs Commissioner of Income tax, Punjab(2), Kanwal Nayan Hamir Singh vs Commissioner of Income tax, Ajmer Merwara(3) and (1)(1927) (2)[1934] (3) 959 Commissioner of Income tax vs Shrimati Singari Bai(1).
The assessees there were all residents in British India and maintained their books of account according to the mercantile system.
Except in the case of Commissioner of Income tax vs Singari Bai(1) where the assessment was in respect of the total income or profits, stray items of income treated as received in British India were sought to be charged for tax and they were all assessed for tax not on the basis of actual receipts in British India but on the basis of their having accrued or arisen in British India.
The cases were decided with reference to the law as it stood before the amendment in 1939 which under section 4(l) rendered liable to tax all income, profits or gains from whatever source derived, accruing or arising or received in British India or deemed under the provisions of the Act to accrue, arise or to be received in British India.
The question that arose for the determination of the courts was whether under the mercantile system, profits which were credited in the books could be taxed even though they had in fact not been received and the conclusion reached by the courts was that these profits credited in the books of account were earned and could be charged as having accrued or arisen within British India even though they were in fact not received.
In none of these cases were the courts con cerned with a non resident claiming to have received profits or gains outside British India under the mercantile system of accounting and claiming exemption from liability to tax under section 4 (1) (a) in respect of profits actually received in British India.
It follows from the above that the mercantile system of accounting treats profits or gains as arising or accruing at the date of the transaction notwithstanding the fact that they are not received or deemed to be received and under that system, book profits are, assessed as liable to tax.
If an assessee therefore regularly adopts the mercantile system of accounting he would be liable to tax on the profits thus credited by (1). [1945] 960 him in his books of account subject to all deductions for bad debts as provided in section 10 (2) (xi).
Section 4 (1) (a) has nothing to do with this basis of taxation.
Section 13 which is an integral part of the computation of the total income of the assessee and is compulsory on the income tax authorities as well when computing the total income (vide section 2 (15) ) does not lay down any exemption from liability.
It only sets up a mode of computation of the income which is liable to assessment and imposes upon the income tax authorities an obligation to accept the mode of accounting regularly adopted by the assessee except in the cases where the proviso to that section comes into operation.
The profits earned and credited in the books of account being thus taken as the basis of computation, the system of accounting postulates the existence of debts in so far as moneys re ain due and payable by the parties to whom they have been debited and when it is realised that these debts are not recoverable the assessee gets a deduction for the bad debts under section 10 (2) (xi).
This however does not mean that the transaction as it has been recorded in the books of account under the mercantile system of accounting or the double entry system is metamorphosed or the relationship between the parties assumes a different character.
What was in its inception a transaction of sale and purchase is not converted into another transaction as between creditor and debtor.
The relationship as between vendor and purchaser still subsists and there does not come into existence a new relationship as between creditor and debtor with all its necessary consequences.
The transaction as it has been recorded in the books of account has got to be worked out to its fullest extent.
Merely because the goods have been supplied and the price thereof has been de bited to the purchaser the rights and obligations of the vendor and purchaser inter se are not in any manner affected.
The vendor is bound to fulfil all his obligations under the contract and continues to be liable for all the consequences of his default including rejection of his goods by the purchaser or a claim for damages 961 for breach of warranty by him.
The purchaser is equally entitled to reject the goods or to claim the damages as on breach of warranty by the vendor and all these rights and obligations have got to be worked out in spite of the fact that the entries 'are made in the books of account by the vendor in accordance with the mercantile system of accounting adopted by him.
The vendor could not say that he is under no further obligation to the purchaser and that the purchaser must pay the price of the goods debited to him as a debt arising out of the book entry.
The count in any action filed by the vendor against the purchaser would be a count for the price of goods sold and delivered and would not be a count on an assumpsit for recovery of a debt due by the debtor to him.
It is clear that under these circumstances there is no receipt of the moneys at all, either actual or constructive, in cash or in kind, by actual payment or by adjustment or settlement of accounts.
There is also no scope for the argument that even though these sums may not be said to be either actually or constructively received they should be "deemed to be received".
The expression "deemed to be received" only means deemed by the provisions of the Act to be received.
The phrase statutory receipt might be con veniently employed to cover income which is 'deemed to be received ' and instances of such statutory receipts are to be found in the provisions of the Act, e.g., section 18 (4), section 58 (E), section 58 (J) (3), section 7(2), section 16(1) (c) and sections 19 (2) (vii) and 16(2).
(See the observations of Beaumont C.J. in Commissionei, of Income tax, Bombay vs New India Assurance Co. Ltd.(1).
An amount cannot be "deemed to be received" merely by the volition or sweet will of an individual.
In all the cases which we have mentioned above the profits earned which were credited in the books of account according to the mercantile system of accounting were at best "treated as having been received" which is neither "received" nor "deemed to be received" and therefore not within the purview of section 4 (1) (a).
(1) at p. 614.
962 If then profits which have been thus credited cannot be said to be received nor deemed to have been received when the entries were made in the books of account, the contention urged before us by Mr. Kolah that there could not be a second receipt of the amount in British India does not survive.
It is true that the words used in section 4(l) (a) relate to the first receipt after the accrual of the income.
Once it is received by the party entitled to it, in respect of any subsequent dealing with the said amount it cannot be said to be " received" as income on that occasion.
[Per Kania J. in B. M. Kamdar (1)].
The "receipt" of income refers to the first occasion when the recipient gets the money under his own control.
Once an amount is received as income, any remittance or transmission of the amount to another place does not result in "receipt", within the meaning of this clause, at the other place.
This was definitely established by the Privy; Council in Pondicherry Railway Co. vs Commissioner of IncomeTax 2) and in Commissionei, of Income tax vs Mathias (3).
If, therefore, the income, profits or gains have been once received by the assessee even though outside British India they do not become chargeable by reason of the moneys having been brought in British India, because what is chargeable is the first receipt of the moneys and not a subsequent dealing by the assessee with the said amount.
In that event they are brought, by the assessee as his own moneys which he has already received and had control over and they cease to enjoy the character of income, profits or gains.
This ratio however does not apply to the facts of the present case before us.
The moneys were neither received by the company nor could be deemed to have been received by it when the entries were made in the books of account at Petlad.
They had merely accrued or arisen to it and so far as the receipt thereof is concerned they were first received in British India when they were received by Messrs. Jagmohandas Ramanlal (1)[1946] at P. 39, (2)[1931] 58 I.A. 239.
(3) [1939] 66 I.A. 23.
963 & Co. or by the various banks or shroffs in British India through whom the railway receipts were negotiated.
The first receipt of the moneys was therefore when they were paid as such by.
the merchants to Messrs. Jagmohandas Ramanlal & Co. or to the various banks or shroffs as above.
Whatever paid by the merchants to these several parties were the sale proceeds of the goods which had been sold and delivered by the company to them and they were received within the meaning of section 4 (1) (a) of the Act by these several parties on behalf of the company in British India at the time when these payments were made by the merchants to them.
Mr. Kolah pressed into service the argument based on section 13 of the Act that the mercantile system of accounting regularly adopted by the assessee was obligatory on the income tax authorities for computation of his income.
While agreeing generally with that submission in case of residents, we doubt whether that position would be available to a non resident, who maintains his books of account outside British India according to the mercantile system.
The section would only be relevant where the total profits of the assessee have to be computed, in which event he would be entitled to claim that they should be computed according to the system of accounts maintained by him.
But the section would hardly be relevant where stray items of income are caught in taxable territories as received in taxable territories by a nonresident.
The entries in the present case were put in merely to prove that the sale proceeds were received outside British India where the entries were made.
That contention however could not be sustained, as section 4 (1) (a) is concerned with cases of actual receipt and not with cases of paper receipts.
Having regard to the observations made above we have come to the conclusion that the High Court ",as right in holding that the two sums of Rs. 12,68,480 and Rs. 4,40,878 were the sale proceeds of the goods sold and delivered by the appellant to merchants in British India, that they were received by Messrs, 964 Jagmohandas Ramanlal & Co. and by the banks and shroffs through whom the railway receipts were negotiated, on behalf of the appellant in.
British India, that they were liable to tax under section 4 (1) (a) of the ,*Act as having been received in British India on its behalf, that there is nothing either in the facts and circumstances of the case or in law why they should be exempted from such liability, that the answers given to the questions which were ultimately considered by the High Court were correct, and the appellant was rightly held liable for the tax on these two amounts subject to all just deductions and allowances.
The appeal therefore fails and must stand dismissed with costs.
BOSE, J. I respectfully disagree.
Section 3 of the Indian Income tax Act provides that the " total income " is to be charged in accordance with the provisions of the Act.
We have therefore to see what " total income " means.
" Total income " is defined in section 2(15).
It means (not " includes " but means) the total amount of income, profits and gains "referred to in sub section (1) of section 4 computed in the manner, laid down in this Act." Therefore, the computation of all income refeffed to in section 4(l.) has to be "in the manner laid down in the Act ".
Section 4 (apart from the provisos and explanations is divided into three clauses, (a), (b) and (c).
Clause (b) deals with residents and (c) with nonresidents.
As (a) is general, it is legitimate to infer that it refers to both.
Therefore, the words " received" and " deemed to be received " must be construed in the same sense in both cases except of course where it is otherwise provided in the Act, for sub section (1) is made subject to the provisions of the Act.
Now the words "deemed to be received" can be excluded from consideration at once because I agree that they are confined, and are intended to be confined to what I may call the deeming sections in the Act, that is to say, to cases where the deeming must be done 965 under the express provisions of the Act.
That leaves us with the word "received" (I am of course only deal ing with section 4(l) (a) which deals with " receipts ' and not with section 4(l) (c) which refers to "accruals" and "arisals" and to that which is deemed to "accrue" or "arise").
Now this, in my opinion, is to be contrasted with the words "accrue" and "arise" which are used in clauses (b) and (c).
Though there may be overlapping in some cases, I do not think the three are intended to mean the same thing.
The Privy Council thought in Commissioner of Income tax vs Mathias(1) that there is some variation in meaning between them and in Commissioner of Income tax vs Chunilal B. Mehta(2) they drew attention to the antithesis between "accruing and arising in" and "received in", though they also said in the earlier case that there is not a complete disjunction between them and that they are not three mutually exclusive qualifications (page 56); that is, that there may be some overlapping in certain cases.
Next, we turn to section 6 which divides the various sources of income under various heads for the purposes of computation and chargeability and states that each head shall be " chargeable" "in the manner hereinafter appearing".
It is to be observed that the word "shall" has been used and not " may " thereby implying that there is no option in the matter.
So far as business is concerned, the head is No. (iv) "Profits and gains of business etc.
" That carries us on to sections 10 and 13 which prescribe the method of computation.
Here again, the language is imperative and in the case of a business the method of computation has to be in accordance with the method of accounting regularly employed by the assessee: see Commissioner of Income tax vs Kameshwar Singh(3).
Now in the present case, the method of accounting was the mercantile system.
The essential difference (1) at 56.
(3) at 100 and 101.
(2) [1938] P I.T.R. 521 at 527, 125 966 between this and the cash basis system is that in the latter actual receipts and disbursements are taken into account.
In the former, sums which are due to the business are entered on the credit side immediately they are legally due and before they are actually received and expenditures are entered the moment a legal liability to pay arises and before the actual disbursements.
The profit or loss at the end of the accounting year is therefore based, not on a difference between what was actually received and what was actually paid out, but on the difference between the right to receive and the liability to pay.
I find it impossible in such a case to say that the taxation is on income, or profits and gains which were "received".
It can only be oil profits which " accrued " or "arose" to the assessee in the accounting year: see the Privy Council in Feroz Shah vs Commissioner of Income tax( ').
That, in my opinion, excludes section 4(l) (a) and that in turn means that in such a case a resident is taxed under section 4(l) (b) and a non resident under section 4(l) (c).
Now, this to my mind is of vital importance.
The primary object of the Income tax Act is to tax and not merely to ascertain an income.
The computation of the income is subsidiary and is only for the purposes of ascertaining the quantum of the tax: see Commissioner of Income tax vs Kameshwar Singh(2).
Therefore, if the legislature chooses to lay down different methods of computation and say that the taxation shall be on the amount so computed, it is essential that these methods be adhered to.
In some cases this may be to the advantage of the assessee and in others it may operate to his disadvantage.
But that is immaterial.
The importance lies in this.
All that can be taxed in a given year are the profits and gains which are received or which arise or accrue in the " previous year", and if the Act directs that the profits are to be computed in a given case on "accruals" or "arisals" and not on actual receipts it is essential that that be (1) 224 and 225.
(2) [1933] 1 I.T.R. 94 at 100.
967 done; and it follows from that that the tax in such a case can only be on the accruals or arisals and not on the actual receipts, for clearly you cannot tax on that which you are forbidden to compute in a case where the tax can only be levied on what is computable.
under the Act.
It is important to draw the distinction for this reason.
The rate of tax varies from year to year, therefore if the book profits which are directed to be taxed in a given year are, say, Rs. 10,000 and the actual receipts only Rs. 100, it makes a lot of difference which figure is taken; nor does it even itself out in the long run, for if the rate of taxation increases in the following year and the state of the business is just the reverse, namely that the book profits are only Rs. 100 whereas the actual receipts arising from the previous year 's transactions are Rs. 10,000, it will make a considerable difference to the assessee in the aggregate of tax payable over the years, whether he pays oil the basis of book profits or actual receipts in the two years.
I am not able to draw a distinction between a resident and a non resident in these matters.
I can find no ground for holding that in the case of a resident the mercantile system must be adopted for computing the profits if that is the system of accounting regularly employed but that that need not be done in the case of a non resident.
If the assessee had been a resident company, the taxation would, in my opinion, have been under section 4(l) (b) on profits and gains which had accrued or arisen and not under section 4 (1) (a) on profits which had been received.
The same principle must, in my opinion, be applied in the case of a nonresident and therefore section 4 (1) (c) is attracted, provided the profits and gains have actually accrued or arisen in the taxable territories or they can, because of section 42, be deemed to have accrued or arisen there.
If section 4 (1) (c) is not attracted, then the tax cannot be levied.
Now, applying section 4 (1) (c), the question is where do the profits and gains arise or accrue, in a case 968 like the present ? This is not free from difficulty and various views have been, and can be, taken.
But as these expressions have not been defined and as they are not words of art, I think they should be construed in their ordinary meaning which businessmen would ordinarily and easily understand in a business transaction.
When goods are sold it is to my mind evident that the profit or the loss on any particular transaction arises out of the sale, for until there is a sale there can be no profit.
The profit may not be wholly attributable to the sale but that is another matter.
It is to my mind unquestionable that they arise, in part, at any rate, out of the sale.
Therefore, if the goods are sold in the taxable territories, then, to my mind, the profits, or a portion of them, arise there.
As the Privy Council pointed out in Commissioner of Income tax vs Chunilal B. Mehta(1), in determining where the profits arise the place of the formation of the contract is not the sole criterion, other matters, as for example acts done under the contract are also material.
I am not here attempting to go behind the decision of the Supreme Court to the effect that the place of sale is not necessarily the place of the receipt of the profits.
I am construing the word "arise " and not "receive".
That brings me to the next question, where were the goods in the present ease sold ? That is a, mixed question of fact and law and must vary in each case and must, in my opinion, be answered in a commonsense way and not necessarily in the artificial manner laid down by the Sale of Goods Act to determine where and when the property passes.
What are the facts here ? In the case of the Rs. 4 lakhs odd, the control over the corpus of the goods was retained by the assessee right up to the moment the price was paid; and the price was paid not outside British India but to his nominees in this country, namely, to the assessee 's banks in British India.
These banks retained the documents of title and had the right to refuse (1) [1938]61.T.R.521 at533.
969 delivery until the money was actually handed over.
Therefore, the right to get possession of the goods and to take delivery accrued or arose in British India where the money was actually paid, and that to my mind must be taken to be the place where the profits accrued and arose for income tax purposes, not because the money was received there, for we are not concerned with actual receipts, but because the right which accrued at the date of the transaction was to receive the money in British India and hand over the goods there on the receipt of the money.
As I have said, the substance of the transaction must be viewed and that cannot be made to depend upon the method of book keeping.
Even if there are no books the profits on such a transaction would accrue in the place where the money is to be paid and the goods are to be handed over.
I cannot see how that can alter by reason of the method of accounting employed.
Accordingly, I agree that the method of accounting adopted by the assessee cannot affect the substance of the transactions between the parties or affect their nature.
The rights and liabilities of the parties inter se cannot be made to depend on the way in which one of them chooses to keep its books.
But that is not the case when we come to the question of taxation for income tax purposes.
There the method of accounting is vital.
But even there the substance of the transaction must be viewed, for the substance cannot alter by a mere method of accounting.
It is evident that if the assessee had been resident in British India and these transactions had been omitted from tile books, the sums which ought to have been entered would be taxable as items which had escaped assessment even if there had been no actual receipts in that or in any following year.
Therefore, it is not the entry in the books which attracts the taxation but the profits on the transaction itself, and when the mercantile system is used the profits arise when the right to receive them accrues and not when the entry is made.
If the system is properly employed the entry is made as soon as the right to receive the price arises and so for all practical 970 purposes that is the date ordinarily referred to, but a man cannot manipulate the amount of his tax by choosing to enter or not to enter items which ought to be entered on a particular date, as and when he pleases.
Now, the Rs. 4 lakhs odd represent actual receipts but that is not what is taxable when the computation is based on the mercantile system.
What should be taxed, or rather taken into account for the purposes of taxation, are the figures entered in the accounting year as the sale price of the various transactions which the Rs. 4 lakhs represent.
The profits which arise out of these transactions do not, on my view, escape tax because the profits accrue or arise in the taxable territories.
But the figure on which the tax is to be computed is not the 4 lakhs odd which represent the actual receipts but another figure which unfortunately we have not been given.
I am of course assuming that the figures were duly entered in the books at the proper time in accordance with the mercantile system of accounting.
If they were not, then the Income tax authorities have power to tax income which, for one reason or another, has escaped assessment Turning to the Rs. 12 lakhs.
We know that the figure entered in the books relating to these transactions was Rs. 13,41,744.
i am not clear whether that was entered in the accounting year with which we are concerned, though I gathered that that was the case.
The actual receipts, which followed later, amounted to only Rs. 12,68,480.
In my opinion, if anything is computable for the purposes of tax, it is the former figure (assuming all the entries are in the accounting year) and not the latter.
But in order to determine whether the profits on these transactions are taxable at all, we must examine the transactions.
In these cases the sales were to merchants resident in Ahmedabad.
But according to the assessee 's affidavit, " In respect of buyers from Ahmedabad, the apllicant Mills have no account of such buyers.
The 971 price is debited to the account of the said Jagmohandas Ramlal and company and credited to the sales account in the books of the applicant:" and later, Jagmohandas " discharges its debts by making payments to the applicants from time to time towards the balance in their said account in the books of the applicant Mills.
The said amounts are paid by the said firm by paying the same to the credit of the applicant Mills with British Indian banks or shroffs.
" Now, it is evident from this that Jagmohandas & Company do not merely guarantee payment by the Ahmedabad buyers but actually make the payments, or the equivalent of payments, to the assessee company.
So little do the 'buyers matter that their transactions are not even reflected in the accounts.
All we have is Jagmohandas.
It does not, in my opinion, matter whether the actual buyers remained primarily and legally responsible to the assessee or not.
The fact remains that in practice Jagmohandas & Company actually met the obligations of the buyers and discharged their liabilities to the assessee.
it is, equally clear that Jagmohandas & Company must have recouped themselves in some way from the buyers.
The question is how.
If the whole of the transactions occurred outside British India and the buyers or their agents went to Petlad and received the goods there and paid Jagmohandas & 'Company outside British India, then I am clear that the profits and gains did not accrue or arise in British India, simply be cause the (foods were ultimately brought there.
But if Jagmohandas & Company or their agents were paid in British India, the profits and gains, in my opinion, arose there in the same way as in the 4 lakhs case.
If Jagmohandas & Company were the actual agents of the assessee as were the banks in the other case, and the payments were made in the taxable territories, then the accrual and arising was direct.
If, however, they were not the agents in the strict sense of the term, then I am of opinion that section 42 would be attracted because at the very least there would be a "business connection", 972 provided of course the payments were made in the taxable territories.
Now, here again.
, I am looking to what was actually done in order to determine what the rights were, for it is evident that what was done was done in pursuance of some agreement, express or implied, between the parties which agreement regulated their rights, and those rights in turn determine the place where the profits accrued or arose, or must, because of section 42, be deemed to have accrued or arisen.
In my view, the question referred by the Incometax Appellate Tribunal in its statement of the case does not reflect the true position because it concentrates on the actual receipts.
If the cash basis system of accounting was germane here, then I would agree that the Rs. 4,40,878 was part of the assessee 's income in British India, and so also in the other case, provided the payments were made in British India.
But it is misleading to enquire what would have happened in circumstances which are not material in this case because of the mercantile system of accounting which was employed.
As regards the High Court.
The learned Judges refrained the question and answered it without sending the case back to the Income tax Appellate Tribunal for a further statement of the case.
That was not strictly proper.
But, in my opinion, the refrained questions suffer from the same defect.
In my opinion, the case should be sent back to the Income tax Appellate Tribunal for a refraining of the questions along the lines I have indicated and for a further statement of the case.
Appeal dismissed.
| A non resident company manufactured textile goods at P out side British India and sold the goods ex mills.
A firm, R & Co., guaranteed the sale price of goods sold ex mills by the company to purchasers at Ahmedabad within British India.
As the company maintained its accounts according to the mercantile system, the company debited R & Co., with the price of goods sold and credited the sales account with the amount of the bills.
R & Co., collected the amounts of the bills from the purchasers on behalf of the company and credited the sums realised in the company 's account with banks at Ahmedabad and also disbursed them to creditors of the company in British India.
These payments were credited by the company to R & Co. During the relevant accounting year the company thus received Rs. 12,68,480.
The company also received Rs. 4,40,878 from sales to purchasers in British India.
The amount of the sales bills for which hundis were drawn on the purchasers in favour of banks were debited by the company to the accounts of the respective merchants and credited to the sales account and the sums received by the banks from the purchasers against delivery of the railway receipts were credited by the company to the accounts of the respective purchasers.
In either case there was no change in the relationship of vendor and purchaser between the company and the purchasers by reason of the entries made in the company 's books.
The question as re framed by the High Court was whether these two sums were sale proceeds of the goods sold by the assesses to merchants in British India and whether they were received in British India and could be included in the assessable income of the company in British India: Held, per Mehr Chand Mahajan, section B. Das and Bhagwati J.J., (Vivian Bose J. dissenting) that the two amounts in question were sale proceeds of the goods sold and delivered by the company to merchants in British India ; that they were neither received by the company nor could be deemed to have been received by it when the entries were made in the books of account at P but had 951 merely accrued or arisen to it there; that they were first received by R & Co. and by the banks through whom the railway receipts were negotiated on behalf of the company in British India; and that they were therefore liable to tax under section 4(l) (a) of the Indian Income tax Act as having been received in British India on its behalf.
Though it is true that in the case of residents, if the assessee employs the mercantile system regularly it is obligatory on the income tax authorities to compute the income according to that system, it is doubtful whether that position would be available to a non resident who maintains his books of account outside British India according to the mercantile system.
Section 13 would only be relevant where the total profits of the assessee have to be computed and in that event the assessee would be entitled to claim that they should be computed according to the system of accounts maintained by him; it would not be relevant when stray items of income are sought to be assessed in the taxable territories as received in the taxable territories by a non resident.
Bose J.
In the case of accounts kept in the mercantile system, the profit or loss at the end of the accounting year is based not on a difference between what was actually received and what was actually paid out, but on the difference between the right to receive and the liability to pay.
The taxation in such cases is not on income, profits or gains which were received but on profits which "accrued or arose" to the assessee in the accounting year.
This view excludes section 4(l) (a) and this means that a resident is taxed in such cases under section 4(l)(b) and a non resident under section 4(l) (c).
Applying section 4(l) (c) to the present case, in the case of the Rs. 4 lakhs odd the profits accrued or arose in British India where the right to take delivery of the goods accrued and where the price was actually paid, but what is really taxable under section 4 (1) (c) is not the Rs. 4 lakhs odd, but the figures entered in the accounting year as the price of the various transactions which the Rs. 4 lakhs represented.
Similarly, in the case of Rs. 12 lakhs odd, it is the figure entered in the books in the accounting year relating to the transactions which is taxable.
By the Full Court.
The expression "deemed to be received" in section 4 (1) (a) means deemed by the provisions of the Act to be received.
Subramaniyan (Chettiar vs Commissioner of Income tax (2 I. T. C. 365), Ahmed Din Alladitta vs Commissioner of Income tax, Punjab , Kanwal Yayan Hanir Singh vs Commissioner of Income tax, Ajmer Merwara , Commissioner of Incometax vs Singari Bai (13 l.
T.R. 224) distinguished.
B.M. Kamdar, In re , Pondicherry Railway Co. vs Commissioner of Income tax (58 I.A. 239) and Commissioner of 952 Income tax vs Mathias (66 I.A. 23), Commissioner of Income tax vs Kameswar Singh , Commissioner of Income tax vs Chunilal Mehta referred to.
| By virtue of Entry 36 of the First Schedule in the "footwear and parts thereof" in or on relation to the manufacture of which any process is ordinarily carried on with the aid of power, is chargeable to excise duty, the rate of duty being 10% ad valorem in respect of "footwear" and 15% ad valorem in respect of "parts of footwear".
By a Notification dated July 24, 1967, issued In exercise of the powers conferred by sub rule (1) of rule 8 of the Central Excise Rules, 1944, the Central Government exempted, with effect from the 26th May, 1967, footwear falling under item No. 36 of the First Schedule to the , of which the value did not exceed Rs. 5 per pair from the whole of the duty of excise leviable thereon.
During the year 1967 and 1968, Bata Shoe Company was manufacturing certain items of footwear of which the wholesale price was Rs. 6.25 per pair.
The contention of the company that since the assessable value of such items of footwear calculated in terms of section 4 of the Act, as it stood at the relevant time was only Rs. 4.94 and thus less than Rs. 5 per pair were qualified for exemption under the Notification was negatived by the department on the ground that while computing the value of the articles for the purpose of judging the applicability of the exemption, the duty element of the cost structure could not be deducted from the wholesale price and on such calculation the value of such footwear would exceed Rs. 5 per pair.
Three Writ Petitions were, therefore, filed in the High Courts of Patna, Calcutta and the Punjab & Haryana, since the company had three manufacturing establishments attracting the jurisdictions of these Courts.
The Patna High Court allowed the writ petition accepting the contention of the company and granted certificate of appeal to the department.
The High Court of Calcutta 961 dismissed the petition and accepted the stand of the Department that the expression "value" occurring in the Notification dated July 24,1967 is not the deemed "value" calculated according to the provisions of section 4 of the Act, but is the real and actual "value" of the goods after the payment of the duty.
The High Court of Punjab & Haryana dismissed the petition in limini on the ground of laches.
Both these two High Courts, however, granted certificate of appeal to the company.
Hence the three appeals by certificates.
Allowing the appeals of the company and dismissing the State appeal, he Court, ^ HELD 1.1 While computing the "value" of the articles of footwear for the purposes of testing the availability of the exemption granted under the Notification dated July 24,1967 section 4 of the gets attracted.
Section 4 is comprehensive in its coverage and it lays down the procedure to be followed for determination of "value" of any article in every case where the article is chargeable with duty at a rate dependent on the value of the article.
[966H, 967A] 1.2 While the notification makes it clear that the effect of the Notification is to render the changeability or otherwise to duty of excise of footwear falling under item 36 of the First Schedule is made wholly dependent upon the "value" of the article of footwear; in case such "value" exceeds Rs. 5 per pair, duty will be chargeable at the rate of 10%.
whereas if the value does not exceed Rs.5 per pair, no duty will be chargeable on such items of footwear, that is the rate of duty will be nil.
Thus entry 36 read along with the Notification dated July 24, 1967 clearly shows that the changeability to duty in respect of any article of footwear is made dependent upon its value in tho sense that the chargeability to duty of excise will arise only if the "value" of the article does not exceed Rs. 5 per pair.
[966D E, 967A B] 1.3 Before determining the question of availability of the exemption under the Notification dated July 24, 1967, the first essential step, therefore, is to determine the "value" of the article in the manner prescribed in section 4 of the Act.
The fact that on such a computation the article may ultimately be found to be exempted from excise duty does not have any bearing on the question of applicability of section 4 of the Act for determining the ' 'value" for purpose of duty.
[967B D] 1.4 The expression 'I`or the purpose of duty" occurring in section 4 has a wide import.
For all purposes connected with the determination of chargeability and levy of duty the provisions of the section are to be applied for computation of the "value" of the article.
Under the Explanation to section 4, it is mandatory that in determining the price of an article both trade discount as well as the amount of duty calculated as payable on the wholesale cash price payable at the time of removal of the article based on the wholesale cash price referred to in clause (a) are to be deducted from such wholesale price.
[967D E] In the instant case, in as much as the value of the articles of footwear in 962 question calculated in accordance with the provisions of section 4 of the Act did note exceed Rs.5 per pair, the articles in question were exempted from the charge to duty of excise under the Notification dated July 24, 1967 and the company is entitled, forthwith, to a refund of the amounts of duty illegally realised by the Department.
[967G H] The Collector of Central Excise, Patna & Ors.
vs The Bata Shoe Company (P) Ltd. AIR Patna approved.
The Bata Shoe Company (P) Ltd. vs The Collector of Central Excise & Ors., Calcutta, AIR Calcutta : The Bata Shoe Company (P) Ltd. vs The Collector of Central Excise & Ors., AIR Pun jab & Haryana reversed.
| The question for determination in the appeal was whether the Union of India was entitled to levy and recover arrears of excise duty on cotton cloth for the period April 1, 1949, to March 31, 1950, payable by the respondent, a cloth mill in the State of Rajasthan, under the Rajasthan Excise Duties Ordinance, 1949.
After the coming into force of the Indian Constitution and the extension of the Central Excise and Salt Act, 1944, and the rules framed thereunder to the State of Rajasthan by section II of the Finance Act of 1950, the duty in respect of cloth manufactured on and from April 1, 1950, became payable under that Act.
The appellant Union, however, claimed that as a result of the agreement entered into on February 25, 1950, by the President of India with the Rajpramukh of Rajasthan under article 278 and article 295 of the Constitution, the Union of India became entitled as from April 1, 1950, to claim and recover all arrears of excise duties which the State of Rajasthan was entitled to recover from the respondent before the Central Excise and Salt Act, 1944, was extended to Rajasthan.
Notice having been accordingly served on the respondent demanding payment of the outstanding amount of Rs. 1,36,551 12 as payable by it, it moved the High Court under article 226 of the Constitution.
On a reference by the Division Bench which heard the matter in the first instance, the Full Bench finding in favour of the respondent held that article 277 was a complete refutation of the said claim by the Union and article 278 and the said agreement were overridden by it.
Held, that the provisions of articles 277 and 278 of the Con stitution, properly construed, leave no manner of doubt that article 277 was in the nature of a saving provision, subject in terms to the provisions of article 278, permitting the States to levy a tax or duty which, after the Constitution could be levied only by the centre.
But article 277 had to yield place to any agreement in respect of such taxes and duties made between the Union Government and the Government of a Part B State under article 278.
Since there could not be the least doubt in the instant case that the agreement between the President and the Rajpramukh of Rajasthan conceded to the Union the right to levy and collect the arrears of the cotton excise duty in Rajasthan, the High Court was wrong in taking a contrary view of the matter.
| The respondent firm Harivallabhdas Kalidas was appointed the Managing Agent of Shri Ambika Mills Ltd., the appellant in the connected appeal by means of a Managing Agency Agreement the relevant portion of which ran thus: (2)(a) The Company shall pay each year to the said Firm either the commission of 5 (five) per cent on the total sale proceeds of yarn, and of all cloth, manufactured from cotton, 51 silk, jute, wool, waste and other fibres and sold by the company, or a commission of three pies per pound avoirdupois on the sale, whichever the said Firm choose to take, and also a commission of 10 (ten) per cent on the proceeds of sale of all other materials sold by the Company and 10 (ten) per cent on the bills of any ginning and pressing factories and on any other work done by the Company.
" And by clause (5) it was provided: " (5) The remuneration payable to the said Firm under clause 2(a) shall be paid to the said Firm forthwith after the 31st day of December or such other date as the Directors may fix for the closing of the accounts of the Company in each year and after such accounts are passed by the company in General Meeting.
" Subsequently, at the request of the Managed Company the Managing Agents agreed to charge commission at 3 per cent on sales instead Of 5 per cent for the year ending December 31, 1950 and a resolution to that effect was passed by the Managed Company and a formal agreement to that effect was executed.
The income tax Authorities, however, taxed the Managing Agents for two assessment years on the basis that by entering into an agreement with the mills they had voluntarily relinquished certain sums of money as their commission which had accrued to them as income for the purpose of income tax.
An appeal was taken to the Income tax Tribunal which held that the agreement between the Managing Agent and the Managed Company to receive remuneration at 3 per cent on the total sale was valid and took effect from January, 1, 1950 and the questions whether the commission accrued on the proceeds of every single sale or only when the assessee firm exercised its option to charge it on the total sale proceeds or on the weight of the yarn sold and whether the Managing Agents would get their commission after the whole profit was determined at the end of the year, were decided in favour of the Managing Agents.
The High Court also on a reference made to it at the instance of the Commissioner of Income tax, answered the above mentioned question in favour of the Managing Agents.
On appeal by the Incomee tax Commissioner by special leave, Held, that on a proper construction of the agreement, it was clear that there was no accrual of commission till the end of the year and that it did not accrue as and when the sales took place.
The Managing Agents were to be paid at the end of the year and by agreeing to the modification of the agreement before then they had not voluntarily relinquished any portion of the commission.
Commissioner of Income tax, Madras, vs K.R.M.T.T. Thiagaraja Chetty and Co., ; , E.D. Sasoon and Co. Ltd. vs The Commissioner of Income tax Bombay City, [1955] i S.C.R. 313 and Commissioner of Inland Revenue vs Gardner Mountain and D ' Ambrumenil Ltd., , not applicable.
| The appellants, a Hindu undivided family, carrying on business in the former State of Mysore, were assessed under the Mysore Income tax Act for the year of assessment 1949 50 corresponding to the year of account July 1, 1948, to June 30, 1949.
The Indian Income tax Act came into force in that area in April 1, 1950, and on December 26, 1950, notice under section 22(2) of that Act was served upon the appellants to submit their return for the assessment year 1950 51.
On September 8, 1952, the appellants submitted their return stating that they had no assessable income for that year.
The Income Tax Officer passed on that return an order, "no proceeding", and closed the assessment.
When the appellants submitted their return for the next assessment year, their books of account disclosed an opening cash credit balance of Rs. 1,87,000 and odd on July 1. 1949.
They failed to produce the books of account of the previous years, and the Income tax Officer held that Rs. 1,37,000 out of the said opening balance represented income from an undisclosed source.
The appellants submitted a fresh return for the assessment year 1950 51 purporting to do so under section 22(3) of the Indian Incometax Act.
Pursuant to the direction of the Appellate Assistant Commissioner, the Income Tax Officer on October 15, 1957, served on the appellants a notice under section 34 of the Act and thereupon the appellants moved the High Court under article 226 for an order quashing the said notice and the proceeding as without jurisdiction.
The High Court dismissed the petition.
Held, that it was not correct to say that the issue of the notice for reassessment was without jurisdiction as the assessment was yet pending.
Under section 23(1) of the Indian Income tax Act, it is open to the Income tax Officer, if he is satisfied as to correctness of the return filed by the assessee, to assess the income and determine the sum payable on the basis of the return without requiring the assessee either to be present or to Produce evidence.
The order 'no proceeding recorded on the.
return must, therefore, mean that the Income Tax Officer bad accepted the previous return and assessed the income as nil.
A revised return under section 22(3) filed by the assessee may be 912 entertained only before the order of assessment and not thereafter.
Lodging of such a return after the assessment is no bar to reassessment under section 34(1) of the Act.
It could not be said, having regard to the provisions of section 13(1) of the Finance Act (XXV of 1950) and cl.
5(1) of Part.
B States (Taxation Concessions) Order 1950, issued by the Central Government under section 60A of the Indian Income tax Act, that for the assessment year 1950 51 the appellants were assessable under the Mysore Income tax Act and not under the Indian Income tax Act.
| The appellants were carrying on the business of growing and manufacturing tea in their estates.
The sellers of tea were the appellants; the purchasers were local agents of Foreign buyers.
The sales were by public auction at Fort Cochin.
They were conducted by brokers of tea.
The sales were in conformity with the provisions of Tea Act of 1953.
The Sales tax Officer assessed the appellants to pay sales tax on transactions of sale of tea chests at the auctions held at Fort Cochin in the years 1956 57 to 1958 59.
Against the orders of assessment the appellants filed petitions before the High Court for writs of certiorari and for writs of prohibition re straining the Sales tax Officer from proceeding with the collection of sales tax.
The petitions were dismissed by the High Court.
With special leave the appellants appealed to this Court.
It was the common case of all the appellants that the pur chases by the local agent of foreign buyers were with a view to export the goods to their principals abroad and that the goods were in fact exported out of India.
It was contended on behalf of the appellants that the sales of tea were "in the course of export out of the territory of India", and thus exempt from taxation under article 286(1)(b) ,of the Constitution.
Held: (per Gajendragadkar, C. J., Shah and Sikri, JJ.) (i) A transaction of sale which occasions export, or which is effected by a transfer of documents of title after the goods have crossed the customs frontiers, is exempt under article 286(1)(b) of the Constitution from sales tax levied under any State legislation.
A transaction of sale which is a preliminary to export of the commodity sold may be regarded as a sale for export, but is not necessarily to be regarded as one in the course of export, unless the sale occasions export.
Etymological the expression "in the course of export", contemplates an integral relation or bond between the sale and the export.
In general where a sale is effected by the seller, and the seller is not connected with the export which actually takes place, it is a sale for export.
Where the export is the result of sale, the export being inextricably linked up with sale so that the bond cannot be dissociated without a breach of the obligations arising by statute.
contract of mutual understanding between the parties arising from the nature of the transaction the sale is in the course of export.
707 (ii) A sale in the course of export predicates a connection between the sale and export, the two activities being so in tegrated that the connection between the two cannot be voluntarily interrupted, without a breach of the contract or the compulsion arising from the nature of the transaction.
In the present case there was between the sale and the export no such bond as would justify the inference that the sale and the export formed parts of a single transaction or that the sale and export were integrally connected.
The appellants were not concerned with the actual exportation of the goods, and the sales were intended to be complete without the export, and as such it cannot be said that the said sales occasioned export.
The sales were therefore for export and not in the course of export.
Therefore the sales by the appellant to the agents of foreign buyers do not come with the purview of article 286(1)(b) of the Constitution.
State of Travancore Cochin vs Bombay Company Ltd. ; , distinguished.
State of Travancore Cochin V.Shanmugha Vilas Cashew Nut Factory; , , State of Madras vs Gurviah Naidu and Company Ltd. A.I.R. 1956 S.C. 158, State of Mysore vs Mysore Shipping and Manufacturing Co. Ltd. 13 S.T.C. 529 and B.K. Wadear vs M/s. Daulatram Rameshwarlal , relied on.
M. R. K. Abdul Salem and Company vs Government of Madras, 13 S.T.C. 629, explained.
Per Ayyangar, J.
In the present case the sale and the export being related to each other in the sense of one lead .
in. to the other are therefore within article 286(1)(b) of the Constitution.
There could be no difference in legal effect between a sale to a Foreign buyer present in India to take delivery of the goods for transport to his country and a sale to his resident agent for that purpose.
The buyer was an agent, who was not free to deal with the tea purchased by effecting a local sale, but was under an obligation to his Foreign principal to export the goods purchased to a Foreign destination.
The goods purchased were in fact exported from this country.
It was with such a buyer that the appellants entered into the transaction of sale.
In other words it was a part of understanding between the seller and the buyer, inferrable from all the circumstances attendant on these transactions that the buyer was bound to export.
State of Travancore Cochin vs Shanmugha Vilas Cashew ; , State of Madras vs Gurviah Naidu and Co. Ltd. A.I.R. 1956 S.C. 158, State of Mysore vs Mysore Spinning and Manufacturing Co. Ltd. A.I.R. 1958 S.C. 1002 and East India Tobacco Co. vs The State of Andhra Pradesh, [1963]1 S.C.R. 404, referred to.
(ii) Even though the Tea Act does not in terms prohibit in ternal sale of tea 'Purchased alongwith export quota rights, this could be explained by the circumstance that the rights to export tea is considered a privilege which secures an economic advantage to the exporter and hence there was no need for any statutory compulsion to do so.
L/P(D) ISCI 23(a). .
| The appellant company carried on the business of manufacturing textile goods at Indore and had offices at Indore and Bombay.
During its account years 1942 to 1947 it supplied goods to the Indian Stores Department, Government of India.
The purchase orders were placed by the latter with the appellant at Indore which was then in an Indian State.
On receipt of bills from the appellant the Government of India used to draw cheques on the Reserve Bank of India, Bombay, in favour of the appellant and used to send them by post to the appellant at Indore.
The appellant used to deposit the cheques with the Imperial Bank of India Indore for the purpose of realisation from the Reserve Bank of India.
In connection with the assessment years 1943 44 to 1948 49 the question that arose in income tax proceedings was whether the profits of the appellant a non resident in respect of the supplies were received by the appellant in British India and therefore taxable under section 4(1)(a) of the Indian Income tax Act, 1922.
The departmental authorities held that the payment was received by the appellant at Bom bay where the cheques were encashed but the Appellate Tribunal took the view that the payment was received at Indore.
In reference the High Court held on the basis of this Court 's decision in Commissioner of Income tax vs Kirloskar Bros. Ltd. which had meanwhile been delivered that the cheques were received by the assessee through its agent, the post office in British India and further held that the Revenue authorities were entitled to raise the contention for the first time in the High Court.
With certificate the appellant came to this Court.
HELD : (i) Whereas in the present case the question of law in issue between the parties and referred to the High Court is the broad question whether or not the assessee is liable to pay tax on the ground that the sale proceeds including the profits of the sale were received by the assessee in British India, the Revenue authorities may be permitted to argue for the first time at the hearing of the reference that on the facts found by the Tribunal, the post office was the agent of the assessee for the purpose of receiving the cheques representing the sale proceeds and the assessee received the sale proceeds in British India where the chequest were posted though this aspect of the question was not argued before the Tribunal and though the only point there argued was that the proceeds were received at Bombay where the cheques were encashed.
[655 H] Commissioner of Income tax vs M/s. Ogale Glass Works Ltd. , Zoraster & Co. vs Commissioner of Income tax, ; and Commissioner of Income tax, Bombay vs Scindia Steam Navigation Co. Ltd., ; , referred to.
The New Jahangir Vakil Mills Ltd. vs Commissioner of Income tax ; and Keshav Mills Co. Ltd. vs Commissioner of Income tax; , , distinguished.
652 (ii) If by an agreement, express or implied, between the creditor and the debtor or by request, express or implied, by the creditor, the debtor is authorised to pay the debt by a cheque and to send the cheque to the creditor by port, the post office is the agent of the creditor to receive the cheque and the creditor receives payment as soon as the cheque is posted to him.
[656 G] Commissioner of Income tax vs M/s. Ogale Glass Works Ltd., , Jagdish Mills Ltd. vs The Commissioner of Income tax, ; , Norman vs Ricketts, (1886) 3 Times Law Reports 182 and Thairlwall vs The Great Northern Railway, , relied on.
(iii) In the instant case cl.
9 of the terms and conditions of the contract read with the prescribed form of the bills and the instructions regarding payment showed that the parties had agreed that the assessee would submit to the Government of India, Department of Supply, New Delhi, bills in the prescribed form requesting payment of the price of the supplies by cheques together with signed receipts and the Government of India would pay the price by crossed cheques drawn in favour of the assessee.
Having regard to the fact that the assessee, was at Indore and the Supply Department of the Government of India was at Now Delhi, the parties must have intended that the Government would send the cheques to the assessee by post from New Delhi, and this inference was supported by the fact the cheques used to be sent to the assessee by post.
In the circumstances there was an implied agreement between the parties that the Government of India would send the cheques by post.
The Government of India was entitled to ignore the subsequent request of the.
assessee for cheques on an Indore bank and the assessee received payment of the price as and when the cheques on the Reserve Bank of India Bombay, were posted in British India in accordance with the contract (657 D; 658 Al Thairlwall vs The Great Northern Railway, [1910] 2 K.B. 509 and Commissioner of Income tax vs Patney & Co. , referred to.
On the above view the profits in respect of the sales were taxable under section 4(1) (a) of the Indian Income tax Act, 1922.
| The appellant purchased on July 1, 1945, the property of a colliery company and the consideration of Rs. 6 lacs was allocated in the sale deed in a certain manner among the various items purchased.
From the assessment year 1946 47 to the assessment year 1952 53, the appellant claimed depreciation on the basis of the written down value of the assets as per the.
assessment record of the vendor company, and the Income tax officer allowed depreciation on that basis.
For the assessment year 1952 53, however, the appellant contended that the depreciation should have been worked out on the basis of balance sheet valuation of the assets as per the audited accounts submitted by the appellant and as claimed in their return.
The Appellate Assistant Commissioner held against the appellant.
On appeal, the appellate Tribunal remanded the matter to the Income tax Officer, and the income tax Officer, after inquiry, held that some of the directors of the vendor company and the appellant were the same, that the valuation of the depreciable assets had been written up while that of the non depreciable assets was written down and that no provision was made for the goodwill of the vendor company even though it was making good profits.
He made the allocation of Rs. 6 lacs in a different manner, and included the goodwill of the vendor also as having been sold to the appellant, and made provision for it from out of the Rs. 6 lacs.
The Tribunal accepted the report of the Income tax Officer and held that when the settled practice was sought to be reopened by the appellant the Income tax Officer had a right to see whether there was any justification ,for the departure, that the break up of the valuation in the sale deed was in fact arbitrary and that it was unlikely that the goodwill was provided for in the break up of the valuation in the sale deed.
On reference, the High Court also held that the Income tax Officer was competent to go beyond the conveyance and refix the valuation and that he bad correctly worked out the valuation of the goodwill after examining all the relevant facts and reports of experts and that the method adopted was not challenged by the appellant.
Dismissing the appeal to this Court, HELD : In the case of an asset, other than ocean going ships, with regard to which depreciation allowance is claimed under 'section 10(2)(vi) of the Income tax Act, 1922, in view of section 10(5), the original actual cost to an assessee of the asset has to be ascertained for the purpose of finding out its written down value.
For the purpose of getting the benefit of cl.
(c) of the proviso to section 10(2) (vi) also the original cost to the assessee,that is theperson who owns the asset and who is being assessed,has to be ascertained.
[748F H] 743 The original cost of a particular asset is a question of fact which has to to determined on the evidence or on the material produced before or available to the Income tax authorities.
Any document or formal deed mentioning the consideration or the cost paid for the purchase of an asset by an assessee would be a piece of evidence and prima facie the statements or figures given therein show how much the cost of the asset to the assessee is.
But if circumstances exist showing that a fictitious price has been put on the asset or there is fraud or collusion between the vendor and the vendee and there has been inflation or deflation of value for ulterior purposes it is open to the Income tax authorities to refuse to accept the price mentioned in the deed or alleged by the assessee and to ascertain what the actual original cost was.
[749C E] Even if it is not expressly mentioned that goodwill has been sold it can be shown and ascertained by evidence whether it has been purchased or not by the assessee.
[749F G] Commissioner of income Tax, Madras vs The Buckingham & Carnatic Co. Ltd. Madras, [935] I.T.R. 384; Jogta Coal Co. Ltd. V. Commissioner of Income Tax, West Bengal 36 I.T.R. 521; Pindi Kashmir Transport Co. Ltd. vs Commissioner of Income Tax, Lahore ; and Kalooram Govindranm vs Commissioner of Income Tax, Madhya Pradesh, Nagpur and Bhandara, , referred to.
tax Therefore, in the circumstances of this case it was open to the Incomeauthorities to go behind the valuation as also the allocation given in the deed of conveyance and to determine afresh the valuation as well as the allocation between the depreciable and non depreciable assets.
[749G H]
|
Civil Appeal No. 94 of 1959.
Appeal by special leave from the judgment and decree dated May 7, 1957, of the Punjab High Court (Circuit Bench) at Delhi in Civil Revision Application No. 144 D of 1957.
Bishan Narain R. Mahalingier and B. C. Misra for the appellants.
935 Gurbachan Singh and Harbans Singh, for the respondent.
December 5.
The Judgment of Sinha, C.J., Hidayatullah and Shah, JJ., was delivered by Hidayatullah, J. Kapur, J. delivered a separate judgment.
HIDAYATULLAH, J.
The appellants (in this appeal by special leave) are the sons of one Gauri Shankar, who owned a bungalow known as 5, Haily Road, New Delhi.
This bungalow was given to the respondent by Gauri Shankar on a monthly rent of Rs. 234 6 0, excluding taxes.
The suit, out of which this appeal arises, was brought by the appellants against the respondent, Rao Girdhari Lal Chowdhury, for his eviction on the ground (among others) that he had sub let a portion of the bungalow after the commencement of the Delhi and Ajmer Rent Control Act, 1952 (38 of 1952) to one, Dr. Mohani Jain, without obtaining the consent in writing of the landlord, as required by section 13(1)(b)(i) of the Act.
The defence was that the original contract of tenancy was entered into sometime in 1940 and a term in the contract gave the tenant right to sub let.
It was alleged that a letter written by the tenant which embodied the terms of the tenancy was in the possession of the landlord and a demand was made for its production.
The case of the tenant was that the sub tenancy commenced in the year 1951, that is to say, before the passing of the Act of 1952, and the tenant was not required to obtain the written consent of the landlord to sublet Admittedly, in this case, no written consent was proved.
We need not mention the other allegations and counter allegations which are usual in proceedings between landlords and tenants, the most important of them being about the arrears of rent, which the tenant under permission of the Court ultimately deposited in Court.
936 The issue on which the decisions below have differed was framed by the Sub Judge, First Class, Delhi, in the following terms: "Did the plaintiff consent to the sub letting of parts of the demised premises by the defendant ? If so, when and to what effect.
" The trial Judge found that there was no evidence that the landlord was ever consulted before a portion of the bungalow was sublet to Dr. Mohani Jain, and further that the sub tenancy was created after June 9, 1952, the date on which the Act came into force.
In reaching the latter conclusion, the trial Judge made a reference to a dispute between the tenant and Dr. Mohani Jain for fixation of standard rent before the Rent Control authorities.
In those proceedings, Dr. Mohani Jain had alleged that she was living as a sub tenant from the end of 1951, but the tenant had denied this fact.
The proceedings before the Rent Control authorities ended in a compromise, but the admission of the tenant was relied upon to support the conclusion that the sub tenancy commenced after the Act.
The trial Judge decreed the suit.
The decision of the trial Judge was confirmed on appeal by the Additional District Judge, Delhi.
Though Dr. Mohani Jain gave oral evidence in this case that her sub tenancy commenced in December 1951, the Additional District Judge found categorically that the sub tenancy commenced sometime after the coming into force of the Act.
He held that even if Dr. Mohani Jain was living there even from before it was a guest and not as a sub tenant.
Against the order of the Additional District Judge, a revision was filed under section 35 (1) of the Act.
That section reads as follows: "The High Court may, at any time, call for the record of any case under this Act for the purpose of satisfying itself that a decision 937 made therein is according to law and may pass such order in relation thereto as it thinks fit.
" Acting in accordance with a decision of the Punjab High Court as to the ambit of this section, the learned single Judge, who heard the revision application, thought that it was competent for him to reconsider the concurrent findings about the time when the sub tenancy commenced.
He held that Dr. Mohani Jain 's statement showed that the sub tenancy commenced prior to the passing of the Act, and that the landlord 's consent in writing was not necessary.
In reaching this conclusion, the learned Judge was of opinion that all the evidence was not considered by the two Courts below, and that he was entitled, in view of the interpretation placed upon the section above quoted, to go into the matter afresh, and decide the question of fact.
It may be pointed out that while the suit was pending before the Subordinate Judge, an application was made for the production of the letter referred to in the written statement of the tenant, to which a passing reference has already been made.
A letter was produced, and it is exhibit D 1.
That letter does not disclose all the terms of the tenancy and it would appear, therefore, that the terms of the original tenancy have not been proved in this case, and there is no material on which it can be said either way as to whether a right to sublet was conferred upon the tenant.
The defendant did not insist in the Court of first instance that there was yet another letter, and the argument to that effect in this Court cannot be entertained.
In reaching the conclusion that all the evidence pertinent to the issue was not considered, the learned Judge of the High Court stated that Ex.
P 19, which was the petition filed by Dr. Mohani Jain under section 8 of the Act to get the standard rent fixed was not taken into account by the Additional District Judge.
That petition contained an averment 938 that her sub tenancy commenced on December 1, 1951 with a rent of Rs. 100/ per month, and that a cheque for Rs. 1,800/ as advance rent for 18 months was given by her in the name of the daughter of the tenant, because the tenant represented that he had no account in the bank and therefore a cheque should be given in the name of his daughter.
This, the learned Judge felt, adequately supported the statement of Dr. Mohani Jain to the same effect as a witness in this case.
The learned Judge was in error in thinking that exhibit P 19 was not taken into account by the Additional District Judge.
The latter had, in fact, considered exhibit P 19, the petition of Dr. Mohani Jain, before the Rent Control authorities.
exhibit P 20, the reply of the tenant to that petition and Ex.
P 21, the petition of compromise; but he cited Exs.
P 20 and P 21 only.
There is internal evidence to show that exhibit P 19 was, in fact, considered, because after mentioning the two Exhibits, the learned Additional District Judge goes on to say as follows: "The first of these is the written statement of the present appellant which he had filed in a case brought by Dr. Mohani Jain against him for the fixation of fair rent.
There he had completely denied somewhere in the year 1953 that Dr. Mohani Jain was his subtenant and could not sue for fixation of rent.
This was enough to show that right up to the year 1953 the appellant himself did not regard Dr. Mohani Jain as a sub tenant.
" This clearly shows that the learned Additional District Judge was weighing exhibit P 19 as against exhibit P20 and was acting on exhibit P 20, which contained a material admission by the tenant before the present dispute had begun.
The learned single Judge was, therefore, in error in departing from a concurrent finding of fact on a wrong supposition.
939 But the question that arises in this appeal is one deeper than a mere appraisal of the evidence.
It is whether the High Court in the exercise of its revisional power is entitled to re assess the value of the evidence and to substitute its own conclusions of fact in place of those reached by the Court below.
This question requires an examination of the powers of revision conferred on the High Court by section 35 of the Act.
That question is one of common occurrence in Acts dealing with some special kinds of rights and remedies to enforce them.
Section 35 is undoubtedly worded in general terms, but it does not create right to have the case reheard, as was supposed by the learned Judge.
Section 35 follows section 34, where a right of appeal is conferred; but the second sub section of that section says that no second appeal shall lie.
The distinction between an appeal and a revision is a real one.
A right of appeal carries with it a right of rehearing on law as well as fact, unless the statute conferring the right of appeal limits the rehearing in some way as, we find, has been done is second appeals arising under the Code of Civil Procedure.
The power to hear a revision is generally given to a superior Court so that it may satisfy itself that a particular case has been decided according to law.
Under section 115 of the Code of Civil Procedure.
the High Court 's power are limited to see whether in a case decided, there has been an assumption of jurisdiction where none existed, or a refusal of jurisdiction where it did, or there has been material irregularity or illegality in the exercise of that jurisdiction.
The right there is confined to jurisdiction and jurisdiction alone.
In other acts, the power is not so limited, and the High Court is enabled to call for the record of a case to satisfy itself that the decision therein is according to law and to pass such orders in relation to the case, as it thinks fit.
The phrase "according to law" refers to the decision as a whole, and is not to be equated to 940 errors of law or of fact simpliciter.
It refers to the overall decision, which must be according to law which it would not be, if there is a miscarriage of justice due to a mistake of law.
The section is thus framed to confer larger powers than the power to correct error of jurisdiction to which section 115 is limited.
But it must not be overlooked that the section in spite of its apparent width of language where it confers a power on the High Court to pass such order as the High Court might think fit is controlled by the opening words, where it says that the High Court may send for the record of the case to satisfy itself that the decision is "according to law".
It stands to reason that if it was considered necessary that there should be a rehearing, a right of appeal would be a more appropriate remedy, but the Act says that there is to be no further appeal.
The section we are dealing with, is almost the same as section 25 of the Provincial Small Cause Courts Act.
That section has been considered by the High Courts in numerous cases and diverse interpretations have been given.
The powers that it is said to confer would make a broad spectrum commencing, at one end, with the view that only substantial errors of law can be corrected under it, and ending, at the other with a power of interference a little better than what an appeal gives.
It is useless to discuss those cases in some of which the observations were probably made under compulsion of certain unusual facts.
It is sufficient to say that we consider that the most accurate exposition of the meaning of such sections is that of Beaumont, C.J. (as he then was) in Bell & Co. Ltd. vs Waman Hemraj (1) where the learned Chief Justice, dealing with section 25 of the Provincial Small Cause Courts Act, observed: "The object of section 25 is to enable the High Court to see that there has been no miscarriage of justice, that the decision was given according to law.
The section does not enumerate 941 the cases in which the Court may interfere in revision, as does s.115 of the Code of Civil Procedure, and I certainly do not propose to attempt an exhaustive definition of the circumstances which may justify such interference; but instances which readily occur to the mind are cases in which the Court which made the order had no jurisdiction or in which the Court has based its decision on evidence which should not have been admitted, or cases where the unsuccessful party has not been given a proper opportunity of being heard, or the burden of proof has been placed on the wrong shoulders.
Wherever the court comes to the conclusion that the unsuccessful party has not had a proper trial according to law, then the Court can interfere.
But, in my opinion, the Court ought not to interfere merely because it thinks that possibly the Judge who heard the case may have arrived at a conclusion which the High Court would not have arrived at.
" This observation has our full concurrence.
What the learned Chief Justice has said applies to section 35 of the Act, with which we are concerned.
Judged from this point of view, the learned single Judge was not justified in interfering with a plan finding of fact and more so, because he himself proceeded on a wrong assumption.
The appeal thus succeeds, and is allowed with costs.
The order under appeal is set aside, and that of the Additional District Judge restored.
As regards eviction, the respondent has given an undertaking that he would vacate the house on or before April 25, 1962, and this has been accepted by the appellants.
KAPUR J.
I agree that the appeal should be allowed and that the High Court was in error in interfering with the finding of fact, but in my 942 opinion the power of revision under section 35(1) of the Delhi & Ajmer Rent Control Act is not so restricted as was held by Beaumont, C. J., in Bell & Co. Ltd. vs Waman Hemraj(1), a case under section 25 of the Provincial Small Cause Courts Act.
The section provides that the order passed should be in accordance with law and if it does not then the High Court can pass such order as it thinks fit.
The language used in section 35(1) of the Act is almost identical with the words of the proviso to s.75(1) of the Provincial Insolvency Act.
The power under that proviso has been thus commented upon by Mulla in his Law of Insolvency at page 787 of 2nd Edition: "The power given to the High Court by this proviso is very wide.
In the exercise of this power the High Court may set aside any order if it is not `according to law '.
" The power under the Insolvency Act has not, by the Courts in India, been considered to be do restricted as the observations of Beaumont, C. J. in Bell & Co. Ltd. vs Waman Hemraj(1) seem to suggest in regard to section 25 of the Small Cause Courts Act.
This power of interference by the High Court is not, in my opinion, restricted to proper trial according to law or error in regard to onus of proof or proper opportunity of being heard.
It is very much wider than that.
When, in the opinion of the High Court, the decision is erroneous on a question of law which affects the merits of the case or decision is manifestly unjust the High Court is entitled to interfere.
The error may not necessarily be as to the interpretation of a provision of law, it may be in regard to evidence on the record.
Thus when material evidence on the record is ignored or a finding is such that on the evidence taken as a whole no tribunal could, as a matter of legitimate inference arrive at.
It is neither possible nor desirable to enumerate all 943 cases which would fall within the jurisdiction of the High Court under section 35(1) of the Act but it is not to be narrowly interpreted nor to be so widely interpreted as to convert the revision into an appeal on facts.
Appeal allowed.
| In an ejectment suit under the Delhi & Ajmer Rent Control Act, 1952, the trial Judge decreed the suit and on appeal under s.34 of the Act the Additional District Judge confirmed 934 the decision.
The Act did not provide for a second appeal, and under section 35 (1) a revision was filed against the Order of the Additional District Judge The single Judge of the Punjab High Court following a previous decision of the same High Court, was of opinion that in assessment as all the evidence was not considered it was competent for him to reconsider the concurrent findings of the courts below.
The question is whether the High Court in exercise of its revisional powers is entitled to re assess the value of the evidence and to substitute its own conclusions of facts in place of those reached by the courts below.
^ Held, (per Sinha, C. J., Hidayatullah and shah, JJ, that though section 35 of the Delhi and Ajmer Rent Control Act is worded in general terms, but it does not create a right to have the case re heard.
The distinction between an appeal and revision is a real one.
A right to appeal carries with it right of re hearing on law as well as fact, unless the statute conferring the right to appeal limits the re hearing in some way.
The power to hear a revision is generally given to a superior court so that it may satisfy, itself that a particular case decided according to law.
The phrase "according to law" in section 35 of the Act refers to the decision as a whole, and is not to be equated to errors of law or of fact simplicitor.
All that the High Court can see is that these has been no miscarriage of justice and that the decision is according to law in the sense mentioned.
per Kapur, J.
The power under section 35 (1) of the Act of interference by the High Court, is not restricted to a proper trial according to law or error in regard to onus of proof or proper opportunity of being heard.
It is very much wider than that when in the question of the High Court the decision is erroneous on a question of law which affects the merits of the case or decision is manifestly unjust the High Court is entitled to interfere.
Bell and Co. Ltd. vs Waman Hemraj approved.
| The appellant brought a suit for possession of land against respondent Birdhi Lal, under Ss. 180 and 183 of the Rajasthan Tenancy Act, 1955.
The Assistant Collector, Baran, dismissed the suit, but the Revenue Appellate Authority allowed his appeal and held that Birdhi Lal was a trespasser.
A further appeal by Birdhi Lal was dismissed by the Board of Revenue, Rajasthan.
Thereafter, his application made under article 226 was allowed by the High Court.
The High Court held Birdhi Lal to be a tenant within the meaning of section 5(43), and not a trespasser as conceived by section 5(44).
On appeal by special leave, the appellants contended before this Court that the High Court was not justified in exercising appellate jurisdiction and interfering with the concurrent opinions of the Revenue authorities.
It was further contended that even if Birdhi Lal was held to be a tenant.
he was liable to be ejected, as the original suit had been framed alternatively under section 180 of the Act.
Dismissing the appeal, the court ^ HELD: (1) The material on record does not establish that Birdhi Lal took or retained possession of the land without authority.
The essential conditions for holding Birdhi Lal to be a trespasser under section 5(44) were manifestly not satisfied.
The High Court was right in rectifying the error of law apparent on the face of the record and quashing the judgments of the Appellate Revenue Authority and the Board of Revenue.
[589F H & 590A] (2) The alternative case under section 180 required necessary averments and proof of facts which were absent in the case.
The plea therefore, cannot be entertained.
[590 C D]
| The appellant was one of the eight tenants in the build ing belonging to Respondent No. 1, who filed eviction peti tions against all the 8 tenants on the ground that the building was bona fide required by him for immediate demoli tion and construction as contemplated under Section 21(1)(j) of the Karnataka Rent Control Act.
In the petition against the appellant, it was specifically stated that he might occupy the premises corresponding to the original tenement in the new building after it was built.
The application of Respondent No. 1 for deletion of the words "corresponding portion" and for leave to withdraw the offer made earlier, were rejected.
Upon a memorandum filed by the appellant consenting to a decree being passed in pursuance of Section 21(1)(j) of the Act, the Court passed an order allowing the eviction petition against the appellant.
After the reconstruction work commenced, appellant gave a notice to Respondent No. 1 of his intention to occupy the corresponding shop in the new building, agreeing to pay the fair rent as contemplated under Section 27 of the Act.
Meanwhile Respondent No. 1 who got the eviction decree, filed an appeal before the District Judge, challenging the eviction decree on the ground that the Court had no juris diction to pass any decree by consent under Section 21(1)(j) of the Act.
The District Judge allowed the appeal.
Immedi ately thereafter Respondent No. 1 inducted Respondent No. 2 as a tenant in a shop in the reconstructed building reasona bly corresponding to the shop occupied by the appellant in the old building, and Respondent No. 2 started his business in the shop.
The appellant preferred a Revision Petition to the High Court against the order of the District Judge, and in the Revision Petition the appellant impleaded the second Respondent also.
The High Court allowed the Revision Petition and held that the decree passed by the Munsiff under Section 21(1)(j) of the Act was not a 577 578 decree passed by consent but was a valid decree passed by a competent Court after application of mind.
It was also held that the landlord was liable to place the tenants in vacant possession of the reconstructed building as provided in the Act, and that the rights of the second Respondent were subject to the rights of the original tenant conferred on them under Sections 27 and 28 of the Act.
After the High Court 's order, the appellant filed an application under Sections 27 and 28 of the Act before the trial court seeking permission to occupy the shop premises which was in possession of Respondent No. 2.
The trial court allowed the application.
On revision, the High Court set aside the order of the trial court, taking the view that the appellant was not entitled to claim the shop occupied by Respondent No. 2 and Respondent No. 1 was required to give the appellant any tenement in the newly constructed build ing.
Against this order of the High Court the appellant has filed this appeal by special leave.
On behalf of the appellant, it is claimed that he is entitled to be put in possession of the shop facing the Main Road and occupied by Respondent No. 2, whereas he was of fered a shop not facing the Main Road.
Allowing the appeal, HELD: 1.1 The appellant is entitled to be handed over the possesssion of the shop occupied by respondent No. 2.
[585B] 1.2 Under the provisions of Section 28 of the said Act, the appellant became entitled to occupy a tenement in the new building.
Although there is nothing specific in the language of sub section (1) of Section 28 to that effect, a fair, commonsense reading of the provisions of subsection (1) of Section 28 would show that a tenant against whom eviction decree has been passed under Section 21(1)(j) and who has given notice as contemplated under Section 27 of that Act would be entitled to a tenement in the new building which could be said to be reasonably comparable to or to reasonably correspond to the tenement in respect of which the decree was passed.
The High Court based its judgment on the consideration of a question which really was not materi al, namely, whether the appellant was entitled to get an identical shop in the new building, whereas the real ques tion was as to whether he was entitled to a comparable shop.
[583G H; 584A B] 1.3 The original shop occupied by the appellant admeasured 579 17 ' x 9 ' and was facing the Main Road.
The shop which re spondent No. 1 offered to the appellant was admeasuring only 11 ' 6" X 8 ' 6" and was not facing the Main Raod but was on the rear of the new building.
This shop cannot be considered as comparable to the shop originally occupied by the appel lant.
Moreover, it is not as if comparable shops were not available.
In fact, respondent No. 1 constructed several shops of 9 ' X 16 ' facing the Main Road, one of which he has given away in a hurried manner, to respondent No. 2, proba bly with a view to forestall the claim of the appellant.
In these circumstances, the appellant could not be compelled to accept the shop offered by respondent No. 1, which is in no way comparable.
The appellant was entitled to a shop reason ably corresponding to the original shop occupied by him as the circumstances would permit.
It was not the appellant 's case that he is entitled to an identical shoo but that he was entitled to a comparable shop.
It is not open now to respondent No. 2 to resist the claim of the appellant.
Respondent No. 2 was joined as a party in the revision petition wherein the High Court held that the rights of respondent No. 2 are subject to the rights of the original tenant conferred upon him under Sections 27 and 28.
This decision has not been challenged by respondent No. 2 in any proceedings and has now become final as against him.
[584C E, G; 585A] Sreenivasa Rao vs Narasimhaiah, , referred to.
| Under section 13(1)(e) of the Delhi and Ajmer Rent Control Act, 1952, the jurisdiction of the court to evict a tenant, may be exercised in favour of a landlord who wants the premises bona fide for his own residence, only when the premises are let out for residential purposes, and not, when the premises being let out for composite purposes, are used for residential and non residential purposes.
The owner of a house let it out to the appellant for her residence and for running a school.
The respondent purchased the house and filed a suit for eviction of the appellant.
The suit was dismissed, but the High Court, in revision, held that a decree in ejectment limited to that portion of the house which was used for residential purposes by the tenant could be granted, and remanded the case for demarcating that portion and passing a decree.
In appeal to this Court, HELD:The order of the High Court was without jurisdiction and should be set aside.
[540A] The contract of tenancy was a single and indivisible contract, and, in the absence of any statutory provision to that effect, it was not open to the Court to divide it into two contracts one of letting out for residential purposes and the other for non residential purposes and to grant relief under the section in respect of that portion of the property which was being used for residential purposes.
[538E] Dr. Gopal Das Verma vs section K. Bhardwaj & Anr.
[1962] 2 S.C.R. 678, followed.
Kunwar Behari vs Smt.
Vindhya Devi, A.I.R. 1966 Punj.
approved.
Motilal and Anr.
vs Nanak Chand & Anr. (1964) Punj.
L.R. 179, overruled.
| The appellant filed a suit for evicting his tenant Bhagwandas Kanu etc.
after giving them a notice to quit.
The Trial Court dismissed the suit but on appeal, the First Appellate Court passed a decree for eviction against the respondents.
In second appeal before the High Court, the respondents assailed the validity of the notice to quit, on the ground that it did not conform with the requirements of section 106 of the Transfer of Property Act.
The High Court allowed the appeal holding that the notice to quit did not clearly terminate the tenancy on the expiration of the, month of the tenancy, and was invalid.
Allowing the appeal by special leave, the Court, HELD: A notice to quit must be construed ut res magis valeat quam pereat.
It must not be read in a hyper critical manner, nor must its interpretation be affected by pedagogic pendantism or over refined subtlety, but it should be construed in a common sense, way.
The notice to qui re quired the respondents to vacate "within the month of Octo ber 1962", otherwise they would be treated as trespassers from 1st November, 1962.
This makes the intention of the authors of the notice clear that they were terminating the tenancy only with effect from the end of the month of October 1962 and not with effect from any earlier point of time during the currency of that month.
Sidebotham vs Holland ; Harihar Banerji vs Ramsashi Roy 45 I.A. 222, applied.
| Respondent No. 1 who was the landlord of the accommodation in dispute obtained a decree of ejectment against respondent No. 2, his tenant.
The appellants who were sub tenants under respondent No. 2 gave a notice to the landlord under section 15(2) of the Madhya Pradesh Accommodation Control Order, 1961, and thereafter filed a suit against him claiming a declaration that being lawful sub tenants they had become direct tenants of the landlord under s, 16(2) of the Act.
The High Court held that the suit was barred by section 45(1) of the Act according to which no civil court could enter Lain any suit or proceeding in so far as it related to any matter which the Rent Controlling Authority under the Act was empowered to decide.
In appeal to the Supreme Court.
HELD : (1) For section 16(2) to come into operation the sub tenancy has to be lawful.
The question of lawfulness of a sub tenancy was one which under section 15(3), the Rent Controlling Authority was empowered to decide.
Under section 45(1) of the Act no civil court could entertain a suit or proceeding which the Rent Controlling Authority was empowered to decide. 'Me High Court was therefore right in holding that the suit had been filed in a court incompetent to try it and in dismissing it.
[13OH 131B] (ii)There is nothing in section 15(3) of the Act to indicate that it does not apply to a case where a, landlord has already obtained a decree against a tenant.
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 prescribed period for a decision of the question that the subletting to them was lawful.
If the Rent Controlling Authority had the power to decide that question, a civil court would not be competent to decide the dispute in a suit brought within that period.
The suit by the appellants had been filed within that period.
[131G 132B] (iii)The fact that the landlord had not applied under section 15(3) did not affect the issue as it was for the appellants as sub tenants to prove that the sub letting to them was lawful.
, [132C] (iv)Section 45(2) also did not help the appellants.
That provision was clearly intended only to protect a right to resort to a civil court for the decision of a question as to an interest in property existing apart from the Act concerning which an adjudication may have been incidentally made by a Rent Controlling Authority in deciding a question which it had been empowered by the Act to decide.
It does not authorise a civil court to decide a dispute as to the lawfulness of sub letting for the purpose of section 16(2).
[133 C E] 129
| This appeal has been filed against the judgment of the Delhi High Court whereby the High Court gave the widow landlady the benefit of section 14 D of the Delhi Rent Control Act, 1958 and accordingly granted her the Possession of the premises in question.
Before this Court it was inter alia contended on behalf of the appellant that the relief under section 14 D was available only to a landlady who had become a Widow after the premises were let out either by herself or her husband.
it was further contended that if the benefit given by section 14 D was allowed to be availed by all widows, they may make a business of it.
Dismissing the appeal, this Court, HELD: (1) The legislature w anted to give a special privilege to the landlady who is a widow notwithstanding whether the Premises were let out before or after she became widow.
Such conferment of special benefit on a widow landlady is permissible even under the provisions of Article 15(3) of the Constitution which is an express exception to the provisions of sub clauses (1) and (2) of that Article.
A widow is undoubtedly a vulnerable person in our society and requires special protection.
[383H 384B] (2) Section 14 D can be availed of by the widow only once.
That is a sufficient guarantee against the abuse of the privilege granted by the section.
Secondly, she has to prove her bona fide need for the occupation of the Premises in question for her own residence like any other landlord.
Thirdly, the provisions of section 19 of the Delhi Rent Control Act come to play in her case also, when the order for possession on the ground of bona fide requirement for occupation as residence is made in her favour.
[384C] 382 Dr. P. P. Kapur vs Union of India & Ors.
Delhi High Court, Civil Writ No. 2686 of 1989 overruled.
| In 1954, the words "rent on land or buildings" were added to section 250 of the .
After the amendment, the appellant (Cantonment Board), applied under the section to the concerned Magistrate, for realisation of arrears of rent from the respondent, on the basis of a lease in his favour.
The Magistrate issued warrants for attachment of the movable property of the respondent.
The respondent went in revision to the Sessions Judge.
He made a reference to the High Court and the High Court set aside the Magistrate 's order.
In its appeal to the Supreme Court, the appellant contended that, upon a correct interpretation of the section, the Magistrate had the power to order the recovery of rent due to the appellant.
HELD: (Per Wanchoo and Sikri JJ.) ' The rent was not claimable by the appellant under the Act or the Rules but only under the lease in favour of the respondent.
Therefore, section 259(1), in so far as It refers to recovery of such rent by application to Magistrate, would not apply.
In view of the provisions of the Act, Cantonment Property Rules, 1925, and the Cantonment Land Administration Rules, 1937, a Cantonment Board has power, to manage the lands or buildings vested in it or entrusted to its management, to lease them out and to fix rents therefor.
But section 259 can be utilised for realisation of arrears of rent on land and buildings, only if such rent is recoverable by a Board or a Military Estates Officer under the Act or the Rules made thereunder.
The word "recoverable" means "claimable".
Section 257 read with section 2.56 is an example of the Board 's power to claim rent from the tenant of an owner.
There may be other such cases, and it is only in those cases, where the Act or the Rules, in terms, make the rent on land and buildings claimable by the Board, that the section will apply.
But where the liability arises purely on the basis of a lease between the Board and the tenant, nothing in the Act or the Rules, particularly after r. 42 which provided for such recovery had been repealed, makes such rent claimable by the Board under the Act or the Rules.
Since.
the repeal was in 1940 before the section was amended, it cannot be argued that the rule was repealed because of the amendment of the section.
[344 F H; 346 F H] The view taken, however, would not affect the right of the Board to recover by suit, under the general law, rent of its land and buildings given by it on lease.
[347 B] Per Mudholkar, J. (dissenting): The High Court was in error in setting aside the order of the Magistrate.
What the expression "recoverable by a Board or a Military Estates Officer under the Act or the Rules made thereunder," in section 259 means is, what the Act or the Rules permit the Board to recover, or what the Act or the Rules permit the Military Estates Officer to recover.
The words "recoverable by" and "under this Act of the Rules made thereunder." are meant to govern "a Board" or "a Military Estates Officer." Thus under the section the power to recover money is exercisable by such of these two authorities as performs the duty or exercises the power by reason of which the liability of another 342 to pay the tax, rent or any other money arises.
Powers are conferred upon a Board under the Act read with the Cantonment Land Ad ministration Rules, 1937.
to let out property vested in it or which is under its management.
Where, in exercise of those powers the Board has let out any land or buildings, it has the right as well as the duty to collect the rent from the tenant.
Therefore, where the liability to pay money arises against a person, by reason of something done by the Board or the Military Estates Officer, in exercise of a power or the performance of a duty under the Act, that liability can be enforced by the authority concerned, either by instituting a suit or by making an application to a Magistrate.
But if the word "rent" is confined to money due under some express provision of the Act or Rules, it will lead to the curious result, that, in respect of land or buildings under the management of the Board, neither remedy would be available though the claim for rent is ultimately traceable to those provisions of the Act and the Rules which empower the Board to let out the land or buildings upon the ground that it cannot be said to be claimable or recoverable under any express provision of the Act.
[350 C E; 351F; 351 G H] Further, if the meaning of the word "rent" is so restricted, that word itself would be rendered otiose, because, there is no provision whatsoever in the Act which expressly makes rent claimable or recoverable by either of the two authorities specified therein.
What the Board recovers under sections 256 and 257 cannot be regarded as rent, giving the word its dictionary meaning, for, the Board is not the landlord of the occupier, and what it recovers from him, is not something which was due to the Board as rent from him.
[352 E G].
|
Civil Appeal No. 325/61.
Appeal from the judgment and decree dated March 6.
1961, of the Allahabad High Court in Writ No. 3116 of 1960.
WITH Petitions Nos. 180, 181 and 205 of 1961.
Petitions Under article 32 of the Constitution of India for enforcement of Fundamental Rights.
section N. Kacker and J. P. Goyal, for the appellant (In C.A. No. 325/61) and the petitioner (In Petn.
No. 205/61).
H.N. Sanyal, Additional Solicitor General of India, K.L. Misra, Advocate General, U. P. H. N. Seth, J. K. Srivastva and C. P. Lal, for the respondents (in C.A. No. 325/61 and Petn.
No. 205 of 1961).
J. P. Goyal, for the petitioners (In petitions Nos. 180 and 181 of 1961).
C. P. Lal, for the respondents (In Petitions Nos. 180 and 181 of 1961).
December II.
The Judgment of the Court was delivered by SHAH, J.
The appeal and the writ petitions practically raise the same points and may be 78 disposed of together.
At the outset we shall briefly state the facts relevant to each of the said proceedings.
The appellant in Civil Appeal No. 325 of 1961 held a permit for plying stage carriage on the Kanpur Bela Bidhuna route via Chaubepur, in the State of Uttar Pradesh.
The entire route is 68 miles long, and a part of the route 16 miles in length i.e., Kanpur to Chaubepur, is a notified route.
This part was common between the said route and the Kanpur Chaubepur Sarai Miran route, which was a nationalised route.
A condition was, therefore, attached to the appellant 's permit that he would not be entitled to pick up passengers or drop them between Kanpur and Chaubepur.
His permit was to expire on June 10, 1960.
Before the said date, he applied for renewal of his permit, and on May 20, 1960 it was published in the U.P. Govt.
Gazette calling for objections.
On the same day, the State Government published a notification in the Gazette proposing to nationalise the said route.
As the application for renewal could not be disposed of before the expiry of the period fixed in the permit a temporary permit for the route was granted to the appellant.
On July 19, 1960 the application for renewal of the appellant 's permit was considered by the Regional Transport Authority, Kanpur, and his permit was renewed for three years with effect from July 23, 1966, only in respect of a part of the old route, namely, Chaubepur Bela Bidhuna; but under the directions of the Transport Commissioner, the Regional Transport Authority made an endorsement on the renewed permit authorizing the appellant to ply his vehicle between Kanpur and Chaubepur for a period of four months commencing from July 23, 1960.
As regards the proposed scheme of nationalization, on June 22, 1960 the appellant filed his objections thereto.
The said objections were heard by the Joint Secretary, Judicial 79 Department, who approved the scheme with some modifications.
The approved scheme was published in the Gazette on October 8, 1960.
Under the notification the scheme was to be put into operation from October 5, 1960 or thereafter.
On November 12, 1960, a notification dated November 4, 1960 was published in the Gazette under section 68F of the cancelling the appellant 's renewed permit with effect from November 27, 1960.
Under the nationalization scheme the stage carriages belonging to the State Transport Undertaking could ply on the said route without obtaining permits.
The appellant filed a petition under Art, 226 of the Constitution in the High Court of Judicature at Allahabad praying for the following reliefs: (a) That a writ in the nature of mandamus may issue to command the respondents not to interfere with the Petitioner 's right to ply on Kanpur Bela Bidhuna Via Chaubepur route under the permit duly renewed in his favour till the entire duration of the permit viz., till July 22, 1963.
(b) That a Writ in the nature of certiorari may issue to quash so much of the Resolution dated July 19, 1960 passed by the Regional Transport Authority, Kanpur, as directs imposition of illegal conditions to the renewed permit of the petitioner.
(c) That a Writ in the nature of mandamus may issue to command respondents No. 2 and 3 not to give effect to the illegal endorsements made on the petitioner 's permit on July 23, 1960 and to treat the petitioner 's permit as having been renewed without the illegal conditions attached thereto by the two endorsements dated July 23, 1960, reproduced in paragraph 15 of the affidavit.
80 (d) That a Writ in the nature of certiorari may issue to quash the notifications dated May 18, 1960 under section 68C of the Act, so also the subsequent notifications under section 68D(2) of the Act dated September 26, 1960 and the notification dated November 4, 1960 under section 68F (2) of the Act in regard to Kanpur Bela Bidhuna route.
(e) That a Writ in the nature of mandamus may issue directing the respondents Nos. 1 to 3 not to give effect to the notifications dated May 18, 1960, September 26, 1960 and November 4, 1960 in regard to Kanpur Bela Bidhuna route.
(f) That an interim direction may issue to the respondents Nos. 2 and 3 not to interfere with the Petitioner 's right to ply on the entire Kanpur Bela Bidhuna route under the renewed permit irrespective of the illegal conditions attached thereto or of the illegal scheme for the nationalization of the said route.
(g) That costs of this petition may be awarded to the Petitioners as against the opposite parties.
On December 2, 1960 the High Court made an interim order directing the State of Uttar Pradesh not to interfere with the petitioner operating his vehicle on Kanpur Bela Bidhuna route in accordance with the terms of his permit.
To that writ petition, the State of Uttar Pradesh, the Regional Transport Authority, and the Secretary to Regional Transport Authority, were made respondents.
The respondents opposed the petition.
On March 6, 1961 a Division Bench of the High Court, accepting the contentions raised by the respondents, dismissed the petition.
Hence the appeal.
81 Writ Petition No. 205 of 1961 is filed in this Court by another operator under article 32 of the Constitution.
He was plying his stage carriage on the Jaunpur Shahganj route in Uttar Pradesh under Permit No. 430, which was valid upto March 15, The State Government published in the Gazette dated July 23, 1960 a notification dated July 15, 1960 under section 68C of the Act proposing to nationalize the said route along with another route.
The petitioner and others filed objections against the scheme within the time prescribed.
The objections were heard by the Joint Secretary, Judicial Department, who approved the scheme.
The approved scheme was published in the U. P. Official Gazette dated February 25, 1961.
Thereafter, the Secretary to the Regional Transport Authority, Allahabad, issued a notification dated July 29, 1961 wherein it was stated that the permits of the operators on the said routes including that of the petitioner would stand cancelled and that the notification would come into force upon the expiry of 15 days from the date of publication of the said notification.
The petitioner has filed the present writ petition asking for the following reliefs: (a) A writ in the nature of certiorari quashing the notification (Annexures A, B and C to this writ petition).
(b) A writ in the nature of mandamus directing the respondents not to give effect to the notifications.
(c) A writ in the nature of mandamus commanding the respondents not to interfere with the rights of the petitioner to ply his stage carriage on the aforesaid route (Jaunpur Shahganj route), due to the aforesaid scheme.
(d) Award the costs of this petition to the petitioner.
82 Writ Petitions Nos.
180 and 181 of 1961 relate to the route Robertasgunj Dudhi Mamhani.
The State Government issued a notification dated July 13. 1960, proposing to nationalize the said route and published the same in the Gazette on July 23, 1960.
The petitioners filed objections against the scheme and the said objections were heard by the Joint Secretary, Judicial Department, and the scheme was finally approved by him.
The approved scheme was notified in the Gazette on May 20, 1961.
Under the said notification, the State Transport Undertaking would commence to operate its stage carriage service on the said route from July 15, 1961 or thereabout.
Aggrieved by the said scheme, the petitioners filed the said petition for writs in this Court for reliefs similar to those in the other petition.
Mr. Kacker, learned counsel for the petitioner in Writ Petition No. 205 of 1961, raised the following points: (1) Under section 68C of the , the State Transport Undertaking has to form its opinion and prepare a scheme for nationalisation and publish it in the manner prescribed thereunder, but in the present cases the State Government initiated the schemes and, therefore, the schemes were not validly made; (2) As neither the objection to the proposed scheme were heard nor were they approved by the State Government as they should be under section 68D of the , the schemes were invalid; (3) The Regional Transport Authority acted illegally in curtailing the period of renewal this question arises only in the appeal; (4) The Regional Transport Authority had not applied its mind in dealing with the renewal application but mechanically followed the provisions in the proposed schemes and, therefore, its order was bad; (5) Even after the approval of the nationalisation schemes, the State owned buses were required to apply for and get permits under the Act and plying of buses 83 by the State without permits was illegal; and (6) The Secretary to the Regional Transport Authority had no jurisdiction to issue an order under section 68F (2) of the , since under the said section only the Regional Transport Authority had the power to do so this question arises only in Writ Petition No. 205 of 1961.
To appreciate the first argument it is necessary to notice briefly the relevant provisions of Ch.
IVA of the (IV of 1939) hereinafter called the Act.
Section 68A(b) defines "State transport undertaking" to mean "any undertaking providing road transport service, where such undertaking is carried on by (i) the Central Government or a State Government.
Section 68C reads: "Where any State transport undertaking is of opinion that for the purpose of providing an efficient, adequate, economical and properly coordinated road transport service, it is necessary in the public interest that road transport services in general or any particular class of such service in relation to any area or route or portion thereof should be run and operated by the State transport undertaking, whether to the exclusion, complete or partial, of other persons or otherwise, the State transport undertaking may prepare a scheme giving particulars of the nature of the services proposed to be rendered, the area or route proposed to be covered and such other particulars respecting thereto as may be prescribed and shall cause every such scheme to be published in the Official Gazette and also in such other manner as the State Government may direct".
Section 68D reads: "(1) Any person affected by the scheme published under section 68C may, within 84 thirty days from the date of the publication of the scheme in the Official Gazette, file objections thereto before the State Government.
(2) The State Government may, after considering the objections and after giving an opportunity to the objector or his representatives and the representatives of the State Transport undertaking to be heard in the matter, if they so desire, approve or modify the scheme." Section 68E provides for the cancellation or modification of the scheme by the State transport undertaking and in that event the same procedure prescribed for framing a scheme is to be followed.
The effect of the said provisions, in so far as they are relevant to the present inquiry, may be stated thus: The State transport undertaking is an undertaking providing road transport service which is carried on by the State or any other corporation or authority mentioned in section 68A.
The definition creates a statutory authority distinct from authorities which run it.
This is made clear by section 68C whereunder it is the State transport undertaking that will have to form the requisite opinion.
This is further elucidated by the fact that under section 68C of the Act the state transport undertaking is required to publish the proposed scheme in the Official Gazette and also in such other manner as the State Government may direct.
This distinction between the two entities is further made clear by section 68D(2) whereunder the State Government has to hear the representatives of the State Transport undertaking.
Briefly stated, under the said provisions, a statutory authority called the State transport undertaking is created it is authorised to initiate a scheme of nationlisation of road transport, the aggrieved parties are given opportunity to file objections thereto, and 85 the State Government is empowered to hear both the parties and approve or modify the scheme, as the case may be.
Counsel for the appellant contends that the underlying scheme of the Act cannot be worked out unless a clear distinction is maintained between the State transport undertaking and the State Government, for, if one is equated with the other, the State Government would become a judge of its own cause, and that, therefore, it was incumbent upon the Government to form a separate and distinct, authority to enable it to initiate a scheme in accordance with law.
Counsel for the State contends that a transport undertaking run by a State Government is a State transport undertaking and, therefore, the scheme initiated by the State Government which runs the State undertaking is a scheme initiated by the said undertaking.
It is true that the provisions maintain a distinction between a State transport undertaking and the State Government.
It is also true that the State Government has to hear the objections of the aggrieved parties and also the representatives of the State transport undertaking before approving or modifying the scheme, indicating thereby that the State Government has to decide the dispute that may arise between the two contestants.
Though the functions of the different bodies are clearly demarcated in the case of undertakings run by corporations, there is overlapping in the case of an undertaking run by a State Government.
This may lead to anomalous position, but in practice it can be avoided, if the State Government creates a department to be in charge of the undertaking and hears the objections and approves or modifies the scheme in a manner without violating the principles of natural justice.
86 A State transport undertaking means, inter alia, an undertaking run by a State.
The statutory authority created is an undertaking run by a State.
The State can only run an undertaking through its officers; it may entrust the conduct of the transport service to a particular officer or to a department of the State; in either event, it is the State Government that runs the undertaking.
The statutory authority, namely, the State transport undertaking, has to form an opinion within the meaning of section 68C of the Act, and the opinion must necessarily be that of the State Government which runs it.
If the State Government running an undertaking forms an opinion, it can legitimately be said that the statutory authority i. e., the State transport undertaking, has formed the opinion.
In Gullapalli Nageswara Rao vs Andhra Pradesh State Road Transport Corporation (1) before the State of Andhra was formed in November, 1956, the Motor Vehicles (Hyderabad Amendment) Act, 1956 was in force in Telengana area.
Under the said Act the State transport undertaking was defined to mean the road transport department of the State providing road service.
After the Andhra Pradesh State was formed, that department initiated the scheme and this Court held that the said department clearly fell within the definition of state transport undertaking.
This Court observed in that case: "The State Government maintained the department for providing road transport service and therefore the department clearly falls within the definition of State Transport Undertaking.
" If a state directly runs an undertaking, it can only be through a department.
In law there cannot be any difference between an undertaking run by a department of a State Government and that run 87 by the State Government.
In either undertaking is run by the State and that undertaking is a State transport undertaking within the meaning of section 68C of the Act.
The opinion must necessarily be formed by somebody to whom, under the rules of business, the conduct of the business is entrusted and that opinion, in law, will be the opinion of the State Government.
It is stated in the counter affidavit that all the concerned officials in the Department of Transport considered the draft scheme and the said scheme was finally approved by the Secretary of the Transport Department before the notification was issued.
It is not denied that the Secretary of the said Department has power under the rules of business to act for the State Government in that behalf.
We, therefore, hold that in the present case the opinion was formed by the State transport undertaking within the meaning of section 68C of the Act, and that there was nothing illegal in the manner of initiation of the said scheme.
The second ground urged by counsel for the appellant that the scheme was invalid because the objections to the scheme were heard and the scheme was approved by the Joint Secretary, Judicial Department, who was not lawfully invested with authority in that behalf is for reasons to be presently stated not open to the appellant.
By the first sub section of section 68D which we have already set out persons affected by a transport scheme are entitled to file objections thereto.
By sub section (2), the State Government is authorised to approve or modify, the scheme after considering the objections, if any, and after giving an opportunity of being heard in the matter to the objector or his representatives and the representatives of the State transport undertaking.
Sub section (3) provides for the publication of the 88 approved or modified scheme in the Official Gazette by the State Government and on such publication the scheme becomes final.
It must at once be observed that neither in the petition under article 226 of the Constitution to the High Court, out of which Civil Appeal No. 325 of 1961 arises, nor in the Writ Petition under article 32 (No. 205 of 1961) presented to this Court, was the plea raised that the Joint Secretary to the Judicial Department was not authorised to hear the objection and to approve the scheme.
In the petition (No. 205 of 1961) under article 32 of the Constitution it was averred by the petitioner in para 10 that "the petitioner filed objections under section 68D(1) of the Act, against the scheme of the State Government, and it also heard its own representatives in opposition to the petition" and again it was averred in the same paragraph "at the time of hearing of the petitioner 's objections under section 68 D, Before the State Government it was argued on behalf of the petitioner that the aforesaid scheme was bad. " In the petition under article 226 of the Constitution it was averred in paragraph 25 "That no State Transport Undertaking having been constituted the State Government initiated the scheme and heard its own representatives on 13.8.1960.
The petitioner has bonafide belief that the Joint Secretary to the Government of Uttar Pradesh (Judicial Department) who heard the objections acted with bias against the petitioner.
" Even in the petition for special leave to appeal to this Court, no such objection was raised.
There is also no reference to any such contention in the judgment of the High Court.
The validity of the scheme on this ground is sought to be raised for the first time in this Court, and, according to the settled practice of this Court the appellant except in exceptional circumstances and there are none such in this case is not entitled to raise this argument for the first time at the hearing in this Court.
It was urged in the course of the 89 argument that by Rule 7 of the State Land Transport Services Development Rules 1958, which at the material time read as follows: "(1) The objections received shall be considered by the judicial Secretary to Government of U.P. or an officer of his department, not below the rank of Joint Secretary nominated by the former for the purpose.
x x x x x x x x x x (5) After hearing of such parties as appear, the officer shall give a decision whether the scheme be approved or modified as he may deem proper", no authority was lawfully conferred upon the Joint Secretary, and the proceedings of the Joint Secretary in purported exercise of powers under section 68D (2) were without jurisdiction.
But this is another facet of the same argument, and it is clear from a perusal of the petitions before the High Court and this Court and the judgment of the High Court that it was never raised.
There is no doubt that the scheme has been duly published under section 68D(3) and if the objection to the invalidity of the scheme on the ground that the objection were not heard by an authority competent in that behalf cannot be permitted to be raised in this Court for the first time during the course of the arguments, the statutory consequences prescribed by section 68F must ensue.
It is necessary to bear certain facts and considerations in mind in dealing with the remaining contentions.
By the scheme (cl. 7) the permit of the appellant was cancelled.
The scheme as approved was published in the U.P. Gazette on October 8, 1960, and was to come into operation on October 15, 1960, or thereafter.
A notification was published on November 4, 1960, under section 68F(2) 90 of the Act cancelling the appellant 's permit with effect from November 27, 1960.
The appellant therefore ceased to have any right to ply his vehicles on the route and he had no right to object to the vehicles of the State transport undertaking plying on that route.
If the scheme was validly promulgated and became final within the meaning of section 68D(3), it had the effect of extinguishing all rights of the appellant to ply his vehicles under his permit.
After cancellation of his permit, he could not maintain a petition for writ under article 226 because a right to maintain such a petition postulates a subsisting personal right in the claim which the petitioner makes and in the protection of which he is personally interested.
It is true that the appellant did at the date of the petition filed in the High Court hold a permit which was to enure till the 27th November, 1960.
But if the permit was validly terminated from the date specified, he will not be entitled to relief even if he had on the date of the petition a subsisting right.
Ground No. 2 must therefore fail.
Grounds 3 and 4 of the appellant that the Regional Transport Authority acted illegally in curtailing the period of renewal and that, in any event, it did not apply its mind in dealing with the renewal application but mechanically followed the provisions of the scheme may now be considered.
The Regional Transport Authority was by the terms of the scheme left no discretion in the matter.
It was by the scheme that the right of the appellant was restricted and if the scheme became final and binding the Regional Transport Authority had no authority to permit the appellant to ply his vehicles.
The order passed by the Regional Transport Authority was purely consequential on the scheme, and if the scheme is not open to challenge, orders consequential thereon will not 91 also be open to challenge.
We are supported in this view by the observations of this Court in Abdul Gafoor: Proprietor, Shaheen Motor Service vs The State of Mysore (1) that: "It appears to us that when deciding what action to take under section 68F(1) the authority is tied down by the terms and conditions of the approved scheme and his duty is merely to do what is necessary to give effect to the provisions of the schemes.
The refusal to entertain applications for renewal of permits or cancellation of permits or modification of terms of existing permits really flow from the scheme.
The duty is therefore merely mechanical and it will be incorrect to say that there is in these matters any lie between the existing operators and the State Transport Authority.
There is no justification therefore for saying that when taking action under section 68F(2) is really independent of the issue of the permits under section 68F(1).
Once the scheme has been approved, action under section 68F(1) flows from it and at the same time action under section 68F(2) flows from the same scheme".
We are bound by the decision.
We are not called upon to consider whether the State owned buses are being validly plied without obtaining permits under section 68F(1) of the Act.
If the right of the appellant to ply his buses is lawfully extinguished, he is not entitled to maintain an appeal challenging the right of the State Transport undertaking to ply their buses with or without permits.
Nor is any fundamental right of the appellant infringed by the State Transport undertaking plying its buses without permits, and a petition under article 32 of the Constitution cannot be maintained unless a fundamental right of the applicant is infringed.
92 Nor is there any substance in the last contention.
The orders passed under.
sections 68F(2)(a) and (b) flow from the publication of the scheme duly approved and the issue of an order, which is not quasi judicial but administrative, by the Secretary on behalf of the Regional Transport Authority is not open to challenge.
It is not the case of the Petitioner in W. P. 209/61 in which alone this contention is raised that the order unauthorised.
what is contended above this contention is raised that the order is being quasi judicial, power to make it cannot be delegated.
But for reasons already set out the order is not quasi judicial; it is purely administrative.
In our view, therefore, the appeal and the petitions must fail, and are dismissed with costs.
| The appellant, whose permit for plying stage carriage was shortly to expire, applied for its renewal.
The renewal application was published in the Gazette calling for objections.
The State Government published a notification proposing to nationalise the route.
The permit was renewed for three years for a part of the route but an endorsement was made thereon authorising the appellant to ply on the remaining part of the route for four months.
The appellants filed objections to the proposed scheme for nationalisation.
The objections were heard by the Joint Secretary, Judicial Department, who approved the scheme with certain modifications.
The scheme was published in the Gazette.
Thereafter, a notification was issued under section 68F of the cancelling the appellant 's renewed permit.
Under the Scheme the stage carriages of the State Transport Undertaking could ply on the route without obtaining permits.
The appellant challenged the validity of the scheme and the cancellation of his licence.
^ Held, that the scheme was valid and the appellant 's licence was properly cancelled.
Section 68C of the required the scheme to be initiated by the State Transport Undertaking.
Even though the scheme in the present case was actually initiated by the State Government there was no non compliance with the provisions of section 68C.
There was no difference between an undertaking run by a department of the State Government and that run by the State Government.
In either case the undertaking was run by the State and it was a State transport undertaking within the meaning of section 68C. Initiation of the scheme by the State Government running an undertaking was initiation by the statutory authority i.e., the State Transport undertaking.
The appellant could not be allowed to challenge the validity of the scheme on the ground that the Joint Secretary was not lawfully invested with the authority to hear objections and to approve the scheme as the point was not raised at the proper stage.
77 Gullapalli Nageswara Rao vs Andhra Pradesh State Road Transport Corporation, [1959] Supp. 1 S.C.R. 319, applied.
The scheme having been validly promulgated and having become final under section 68D(3) it had the effect of extinguishing all rights of the appellant to ply his stage carriage under his permit and he could not maintain a petition under article 226 of the Constitution.
The order passed by the Regional Transport Authority cancelling the appellant 's permit was purely consequential on the scheme and could not be challenged if the scheme was valid.
Once the right of the appellant to ply his stage carriage was validly extinguished he could not question the right of the State transport authority to ply their stage carriages with or without permits.
Abdul Gafoor, Proprietor, Shaheen Motor Service vs State of Mysore, ; , applied.
| The petitioners in these three writ petitions challenged the operative provisions of the Orissa Private Lands of Rulers (Assessment of Rent) Act, 1958 and the, Rules framed thereunder.
These petitioners possess 302 private lands in the State of Orissa, which before the impugned Act were not subjected to the payment of rent, but which were assessed by the Revenue Officers in conformity with the Rules framed under the Act.
The petitioners claims a writ in the nature of certiorari quashing the said orders of assessment.
The Act was passed by the Orissa Legislature because it was thought expedient to provide for assessment of rent with respert to the private lands of Rulers in the State of Orissa.
The main object of the Act is to authorise the levy of rent in respect of the private lands of persons included in the definition of the word "Ruler" prescribed by section 2(h) of the Act.
Section 2(h) defines a "Ruler" as meaning the Ruler of a merged territory in the State of Orissa and includes his relatives and dependants.
The petitioners attacked the pro visions of the Act mainly on the ground that they contravened article 14 of the Constitution.
Held:(i) that section 6 of the Act does not contravene article 14 of the Constitution for the reason that fair and equitable tests have been laid down under section 6 of the Act for determining the rent which should be assessed in respect of the private lands of the Rulers.
In the present case the legislature had prescribed the method of determining the rent payable on the private lands; and the relevant factors specified by section 6 appear to be just and substantially similar to the considerations which are generally taken into account at the time of survey settlement for determining the proper revenue assessment on ryotwari lands.
The problem posed by the requirement to levy assessment on these private lands had to be dealt with by the legislature on an ad hoc basis.
The settlement of rent and assessment introduced by the Act had been made applicable to these lands for the first time, and so, these lands could not be treated as comparable in every respect with the lands which were governed by the rates prescribed under the previous settlement.
(ii)In considering the validity of a statute under article 14 the wellestablished principle is that the legislature can make class legislation, provided the classification on which it purports to be based is rational and has a reasonable nexus with the object intended to be achieved by it.
If the party fails to show that the said classification is irrational, or has no nexus with the object intended to be achieved by the impugned Act, the initial presumption of constitutionality would help the State to urge that the failure of the party challenging the validity to rebut the initial presumption goes against his claim that the Act is invalid.
In all cases where the material adduced before the court in matters relating to article 14 is unsatisfactory, the court may have to allow the State to lean on the initial presumption of constitutionality.
(iii)There is no substance in the contention that the impugned Act is void because the definition of the word "Ruler" is inconsistent with Art, 366(22) of the Constitution.
There is no doubt that the definition of the word "Ruler" prescribed by section 2(h) of the Act is wider than that prescribed by article 366(22) of the Constitution.
303 The definitions prescribed by article 366 are intended for the purpose of interpreting the articles in the Constitution itself, unless the context otherwise requires.
The whole object of defining the word "Ruler" in the Act is to specify and describe the lands in respect of which the operative provisions of the Act would come into play.
It is in that connection that the word "Ruler" has been broadly defined in an inclusive manner.
(iv) The impugned Act is entirely outside the purview of article 31 of the Constitution as it has not purported either to deprive the Rulers of their property, or to acquire or requisition the said property.
It is a simple measure authorising the levy of a tax in respect of agricultural lands.
Pratap Kesari Deo vs The State of Orissa, A.I.R. 1961 Orissa 131, relied on.
| The plaintiffs (appellants herein) obtained settlements of certain land owned by a deity in village Siripur Majrahia in Bihar.
The contesting defendants (respondents herein) owned lands in the villages of Kazi Dumra and Shankarpur which were separated from Siripur Majrahia by a river.
The plaintiffs claimed that in consequence of the changes in the channel of the aforesaid river the lands in suit were lost to villages Kazi Dumra and Shankarpur by diluvion and were annexed to their land in village Siripur Majrahia by gradual increment and accretion.
The deity was also made defendant No. 18 in the suit although no relief was claimed against it.
The trial court dismissed the suit and the plaintiffs appealed to High Court, again impleading the deity as a respondent.
They, however, failed to deposit the cost of the guardian ad litem of the deity appointed by the High Court and the Court thereupon dismissed the appeal as against the deity.
The contesting defendants urged at the hearing that the entire appeal had become incompetent in view of the dismissal of the appeal against the deity.
Accepting the contention the High Court dismissed the appeal.
It held inter alia, that the appeal had abated against the deity.
The plaintiffs filed appeal, with certificate, in this Court.
On behalf of the respondents reliance was placed on Muni Bibi vs Trilokinath and it was urged that the decision of the trial court on the question whether the suit lands appertained to village Siripur Majrahia operated as res judicata between the deity and the contesting co defendants, that the appellate court could not record an inconsistent finding that the suit lands appertained.
to village Siripur Majrahia and that in the circumstances, the entire appeal before the High Court had become incompetent.
HELD: (i) The High Court was in error in holding that the appeal had abated either wholly or in part.
None of the parties to the appeal had died and there was no question of abatement of the appeal.
[973 E] (ii) The deity was not a necessary party to the appeal and the plaintiffs were entitled to prosecute: their appeal against the contesting defendants in the absence of the deity.
[973 G H; 974 A B] (iii) The case of Muni Bibi vs Trilokinath shows that a decision operates as res judicata between co defendants if (1) there is a conflict of interest between them; (2) it is necessary to decide that conflict in order to give the plaintiffs the reliefs which they claim and (3) the question between the co defendants is finally decided.
In the present case the third condition was not satisfied.
The question whether the suit lands appertained to Siripur Majrahia was not finally decided between the deity and the co defendants.
On the filing of the appeal by the plaintiffs, the question became once more the subject of judicial enquiry between the deity and the contesting defendants.
[974 B D] Muni Bibi vs Trilokinath, L.R. 58 I.A. 158, referred to.
972 (iv) Before the appeal was finally heard and decided, it was dismissed as against the deity for non payment of its guardian 's costs.
The appellate court did not give any decision on the merits of the case in the presence of the deity.
There was no final decision against the deity on the question of title to the suit lands.
The decision of the appellate court against the contesting defendants would not lead to conflicting and inconsistant decrees.
The High Court was in error in holding that the appeal against the contesting defendants became incompetent.
[974 D E]
| By a writ petition under Article 226 of the Constitution the respondent challenged the validity of a notice under section 226( 3 ) of the Income tax Act, 1961, in respect of tax due from him for the four assessment years from 1960 61 to 1963 64 and penalty for the assessment year 1962 63.
For the assessment year 1961 62 the assessment proceedings against the respondent were taken and concluded under the Income tax Act, 1922, and as a result of an appeal filed by the respondent, the tax liability was reduced by the Appellate Assistant Commissioner.
The I.T.O. thereafter issued a notice to the respondent on December 11, 1963, under section 156 of the 1961 Act requiring him to make payment within 35 days.
This period expired on January 22, 1964.
The impugned notice under section 226(3) was issued much later on April 23, 1965.
It was contended on behalf of the respondent that both the assessment order as well as the appellate order having been made under the 1922 Act, the provisions of section 226 of the 1951 'Act were not applicable.
As regards the. penalty sought to be recovered under the impugned notice for the assessment year 1962 63 and tax for 1963 64, it was contended by the respondent that as notices of demand had been served on him for payment of the two sums and the time given in the notice was due to expire on May 21, 1965, the impugned notice dated April 23, 1965 issued prior to the expiry of the time given to him was illegally issued; furthermore, the amount of tax must be "due to be paid by the assessee before a notice can be issued under section 225(3)of the 1961 Act.
In respect of the assessment for 1960 61, it was contended before the High Court that the I.T.O. did not properly exercise the statutory discretion vested on him in issuing the impugned notice when there was an appeal pending against the order of assessment before the AppeLlate Assistant Commissioner.
The High Court allowed the petition and accepted all the respondent 's contentions.
It also held that action under section 226 of the 1961 Act was possible only in the case of an assessee who was "in default" and that in the case of an assessment under the 1922 Act, no notice under section 156 of the new Act was possible and there was no way of taking advantage of the provisions for the 'recovery and collection of tax contained in sections 220 to 234 of the new Act.
On appeal to this Court, HELD: The impugned notice under s, 226(3) was valid and the writ petition must be dismissed.
30 (i) The Income tax Officer had authority to issue the.
notices under section 156 and section 226(3) of the new Act with respect to the liability of the respondent under the old Act.
The High Court was therefore in error in holding that the impugned notice was inoperative in regard to the amount to be recovered for the assessment year, 19 '51 62.
[37 D] The High Court had wrongly based its opinion on the premise that all recoveries are possible "only when the stage mentioned in section 220(4) was reached, namely, that the assessee had become or deemed to have been an assessee "in default" and the action under section 226 could be taken only when an assessee was in default.
The effect of the reasoning adopted by the High Court on this point is that the provisions of section 297(2) of the new Act are nullified and an interpretation of section 226(3 ) of the new Act which leads to such a startling result should be avoided as it is opposed to all sound canons of interpretation.
[37 E G] In a case falling within section 297(2)(j) of the new Act, for example in a proceeding for recovery of tax and penalty imposed under the old Act, it not required that all the sections of the new Act relating to recovery and collection should be literally applied but only such of the sections will apply as are appropriate in the particular ease and subject, if necessary, to suitable modifications.
In other words, the procedure of the new Act will apply to the cases contemplated by section 297(2)(j) of the new Act routatis mutandis.
[37 H 3 8 A] Kalawati Devi Harlalka vs
C.I.T. West Bengal, ; referred to.
The assessments of tax and penalty for 1962 63 and 1963 64 had been made against the respondent and the demand notices had also been issued under section 156 of the new Act.
It was not therefore possible to contend that the amount of tax and penalty were not ',due from the assessee" on April 23, 1965 when the impugned notice under section 226(3) was issued.
[38 H, 3,9 B C] Kesoram Industries & Cotton Mills Ltd. vs Commissioner of Wealthtax (Central), Calcutta, ; , referred to.
(iii)The finding of the High .Court that the Income tax Officer was not shown to have applied his mind to any of the facts relevant to ' the proper exercise of his discretion in relation to the assessment for the year 1960 61 could not be Upheld as the respondent had.
not alleged any specific particulars in his writ petition in support of his case that the I.T.O. had exercised his discretion in an arbitrary manner.
[39 F]
| Where the High Court dismisses a writ petition under article 226 of the Constitution after hearing the matter on the merits on the ground that no fundamental right was proved or contravened or that its contravention was constitutionally justified, a subsequent petition to the Supreme Court under article 32 of the Constitution on the same facts and for the same reliefs filed by the same party would be barred by the general principle of res judicata.
There is no substance in the plea that the judgment of the High Court cannot be treated as res judicata because it cannot 575 under article 226 entertain a petition under article 32 of the Constitution.
Citizens have ordinarily the right to invoke article 32 for appropriate relief if their fundamental rights are illegally on unconstitutionally violated and it is incorrect to say that article 32 merely gives this Court a discretionary power as article 226 does to the High Court.
Basheshar Noth vs Commissioner of Income tax, Delhi and Rajasthan, [1959] SUPP.
1 S.C.R. 528, referred to.
Laxmanappa Hanumantappa jamkhandi vs The Union of India; , , and Diwan Bahadur Seth Gopal Das Mohla vs The Union of India, ; , considered.
The right given to the citizens to move this Court under article 32 is itself a fundamental right and cannot be circumscribed or curtailed except as provided by the Constitution.
The expression "appropriate proceedings" in article 32,(1), properly construed, must mean such proceedings as may be appropriate to the nature of the order, direction or writ the petitioner seeks from this Court and not appropriate to the nature of the case.
Romesh Thappar vs The State of Madras, ; , referred to, Even so the general principle of res judicata, which has it.
; foundation on considerations of public policy, namely, (1) that binding decisions of courts of competent jurisdiction should be final and (2) that no person should be made to face the same kind of litigation twice over, is not a mere technical rule that cannot be applied to petitions under article 32 of the Constitution, Duchess of Kingston 's case, 2 Smith Lead.
13th E d. 644, referred to.
The binding character of judgments of courts of competent jurisdiction is in essence a part of the rule of law on which the administration of justice, so much emphasised by the Constitution, is founded and a judgment of the High Court under article 226 passed after a hearing on merits as aforesaid must bind the parties till set aside in appeal as provided by the Constitution and cannot be circumvented by a petition under article 32.
Pandit M. section M. Sharma vs Dr. Shree Krishna Sinha, and Raj Lakshmi Dasi vs Banamali Sen, [1053] S.C.R. 154, relied on.
Janardan Reddy vs The State of Hyderabad, ; , Syed Qasion Rezvi vs The State of Hyderabad, [1953] S.C.R. 589 and Bhagubhai Dullabhabhai Bhandari vs The District magistrate, Thana; , , referred to.
It was not correct to say that since remedies under article 226 and article 32 were in the nature of alternate remedies the adoption of one could not bar the adoption of the other, Mussammat Gulab Koer vs Badshah Bahadur, (1909) 13 1197 held inapplicable.
576 Consequently, (1) where the petition under article 226 is considered on the merits as a contested matter and dismissed by the High Court, the decision pronounced is binding on the parties unless modified or reversed by appeal or other appropriate proceedings under the Constitution; (2) Where the petition under article 226 is dismissed I not on the merits but because of laches of the party applying for the writ or because an alternative remedy is available to him, such dismissal is no bar to a subsequent petition under article 32 except in cases where the facts found by the High Court may themselves be relevant even under article 32; (3) Where the writ petition is dismissed in limine and an order is pronounced, whether or not such dismissal is a bar must depend on the nature of the order; (4) if the petition is dismissed in limine without a speaking order, or as withdrawn, there can be no bar of res judicata.
| Respondent No. 1 in the appeals instituted a suit for partition against his younger brothers and sisters, and the heirs of his deceased brothers.
The plaintiff was the eldest among the brothers and sisters.
The 1st and 2nd Defendants were his brothers, the 3rd Defendant his sister, the 4th and 5th Defendants, the widow and son respectively of the third brother.
Defendant 6 was the widow of the fourth brother, and Defendants 7 to 12 were his children, while Defendant No. 14 was the wife of Defendant No. 1, and Defendants 13, 15, 16 and 17 were their children.
The subject matter of the appeals related only to one item of property known as "Naroda Chawl" measuring 7 acres and 2 gunthas of land, where 115 rooms and huts stood con structed, out of which 114 rooms had been let out to ten ants, and one room was retained for the caretaker.
According to Defendants No. 6 to 12 this property exclu sively belonged to defendant No. 6 and was not liable to partition.
The other defendants however supported the plain tiff 's case that it belonged to the 233 joint family and was liable to partition.
Defendants 6 to 12 pleaded that the plaintiff 's father Bapalal orally gifted this property to his daughter in law Defendant No. 6 in March 1946 and made a statement before the Revenue authorities on .
the basis of which her name was mutated and she was put in possession thereof, that although she came in peaceful possession, the management which in cluded realisation of rent was in the hands of Defendant No. 1, that as some dispute arose in 1952 she assumed direct charge of the chawl and had remained in possession thereaf ter, and that she had acquired good title therein by adverse possession before the suit was filed in 1960.
The City Civil Judge who tried the suit, held that there was a joint Hindu family and a business was carried on for the benefit of the family and the income therefrom was thrown into the common pool and all the properties including the disputed chawl were treated as belonging to the family.
As the case of Defendant No. 6 about the gift, the mutation of her name, and her exclusive possession from 1946 till the date of the suit was found correct, it was held that she had acquired title by adverse possession, and the suit was dismissed with respect to the disputed chawl.
The plaintiff appealed to the High Court.
Some of the defendants also filed appeals in respect of the other items of property.
All these appeals were heard and disposed of by a common judgment.
The High Court reversed the finding of adverse posses sion in regard to the disputed chawl and granted a decree for partition.
It held that Defendant No. 6 remained in exclusive possession of the property only since 1952, the period was thus short of the time required for prescription of title.
It further held that since the rents of the chawl from 1952 were collected by her husband and after his death by her son (Defendant No. 7), she was liable to render accounts till the death of her husband, and she along with Defendant No. 7 would be jointly liable for the period thereafter.
Separate Appeals were preferred by Defendant Nos. 6 and 7 to this Court.
Allowing the Appeals, setting aside the decision of the High Court and restoring that of the Trial Court.
234 HELD: 1.
The principle that revenue entry furnishes presumptive evidence of title is inapplicable in the instant case.
It cannot be denied that title to Naroda Chawl could not have passed to Defendant No. 6 by virtue of the entry Ext.
The value of the chawl even in 1946 was large and no registered instrument of transfer was executed.
Besides Ext.
247 describes the plaintiff 's father (Bapalal) and Defendant No. 6 (Chandrakanta) as Kabjedar, that is occu pant.
In such circumstances, the presumption which can be raised in favour of Defendant No. 6 from this entry is with respect of her possession and possession only.
[238F G] Gangabai and others vs Fakirgowda Somaypagowda Desai and others, AIR 1930 Privy Council 93; and Desai Navinkant Kesarlal vs Prabhat Kabhai, 9 Gujarat Law Reporter 694, referred to.
The account books have to be rejected as not reli able.
It is apparent from the evidence that nobody takes the responsibility of supporting the correctness of the entries therein.
Many of the documents produced by Defendant No. 1 were accepted, but the account books which were section Nos.
123 75 to 123 97 of Ext.
123 were in express terms not admitted.
The plaintiff filed his objection Ext.
Defendant No. 6 also filed her objection Ext.
The books were admitted in evidence and marked as exhibits on the statement of the plaintiff which he made in cross exami nation.
The plaintiff by saying that he had written as per the instructions of Defendant No. 1 made it clear that he Could not vouchsafe for its reliability.
Defendant No. 1 could not summon courage to support them either personally or through any witness.
No reason has been suggested as to why he did not produce other important documents in his possession which could have supported the account books and the joint case of the parties resisting the appellant 's claim.
[243B E] 3.
Defendant No. 1 cannot be treated to be in joint possession as he was actually collecting the rents from the tenants.
it is well settled that the possession of the agent is the possession of the principal and in view of the fidu ciary relationship, Defendant No. 1 cannot be permitted to claim his own possession.
[247D E] David Lyeii vs John Lawson Kennedy, [1889] XIV H.L.(E) 437; Williams vs Pott, L.R. XII Equity Cases 149 and Secre tary of State for India vs Krishnamoni Gupta, 29 Indian Appeals 104, referred to.
It is the intention to claim exclusive title which makes 235 possession adverse and this animus possidendi must be evi denced and effectuated by the manner of occupancy which again depends upon the nature of the property.
The manner of possession depends upon the kind of possession which the particular property is susceptible.
That possession to the extent to which it is capable of demonstration must be hostile and exclusive and will cover only to the extent of the owner 's possession.
[246E F] (b).
The title to the chawl as owner, subject to the tenancy was an interest in immovable property so as to be covered by Article 144 of the Indian Limitation Act, 1908, which specifically mentioned, ".
or any interest therein".
[246E] In the instant case, the parties have been fighting for the rent from the chawl so long as it continued in posses sion of the tenants.
Before the gift of 1946 the Defendant No. 1 was collecting the rent and he continued to do so even thereafter till 1952.
The appellant has, however, estab lished her case that the Defendant No. 1 acted as her agent after 1946 and when he repudiated this agency in 1952 he was effectively removed from the management of the chawl.
Since 1946 the tenants attorned to the Defendant No. 6 and paid rent to her under printed receipts announcing her ownership, but of course through her agent the Defendant No. 1.
The fact that the tenants have been in actual physical posses sion of the chawl is, in the circumstances, of no assistance to the respondents.
What is material is that they paid the rent to the Defendant No. 6.
Defendant No. 6 was in adverse possession from the period 1946 to 1952 through her agent Defendant No. 1 and thereafter through her husband and son Defendant No. 7 till 1960 when the suit was filed, the total period being more than 12 years.
[246G H; 248G] Uppalapati Veera Venkata Satyanarayanaraju and another vs Josyula Hanumayamma and another, and Hari Prasad Agarwalla and another vs Abdul Haw and others, A.I.R. 1951 Patna 160, referred to.
| The respondent booked certain goods on September 4, 1947, with the N. W. Railway at Quebec in Pakistan to New Delhi.
The wagon containing the goods was received at the Indian border station of Khem Karan on November 1, 1947, duly sealed and labelled indicating its destination as New Delhi.
It reached New Delhi on February 3, 1948, and was unloaded on February 20, 1948, but no immediate information was sent to the respondent.
On June 7, 1948, the respondent was asked by the E. P. Railway to take delivery of the goods lying at New Delhi station but when the respondent went there the goods were not traceable.
Again, on July 24, 1948, the respondent was asked to take delivery of the goods when only a small portion of the goods 76 were offered to him subject to the payment of Rs. 1,067 8 0 as freight but the respondent refused to take delivery.
On August 4,1949, the respondent filed a suit for Rs. 1,62,123 with interest as compensation for non delivery of goods against the Dominion of India.
The trial court found that the E. P. Railway was guilty of negligence in handling the goods and decreed the suit for Rs. 80,000, and on appeal the High Court confirmed the decree.
The appellant contended that there was no privity of contract between the respondent and the E. P. Railway and he could only have a claim against the N. W. Railway in Pakistan, and that the suit was barred by limitation.
Held, that there was an implied contract of bailment between the respondent and the E. P. Railway and that Railway was liable for the loss.
The conduct of the parties indicated that the respondent delivered the goods to the N. W. Railway with an authority to create the E. P. Railway as his immediate bailer from the point the wagon was put on its rails.
The N. W. Railway must be deemed to have had implied authority to appoint the E. P. Railway to act for the consignor during the journey of goods by the E. P. Railway and by force of section 194 of the , the E. P. Railway became an agent of the consignor.
The N. W. Railway left the wagon with the E. P. Railway and the latter consciously took over the responsibility of the bailer, carried the wagon to New Delhi and offered to deliver the goods to the respondent.
The respondent also accepted this relationship.
From these facts, even if an agency could, not be implied, a tacit agreement between the two Railways to carry the respondents goods to New Delhi could be implied resulting in a contract of bailment between the E. P. Railway and respondent.
Kulu Ram Maigraj vs The Madras Railway Company, I.L.R. , G.I.P. Railway Co. vs Radhakisan Kushaldas, I.L.R. , Bristol and Exeter Railway vs Collins, VII H.L.C. 194 and De Bussche vs Alt, (1878) L.R. 8 Ch.
D. 386, referred to.
Held, further that the suit was not barred by limitation.
Even if article 30 of the Indian Limitation Act applied, as contended for by the appellant, the burden was on the appellant, who sought to non suit the respondent, to establish that the loss occurred beyond one year from the date of the suit.
Thus the appellant had failed to establish by any clear evidence.
| These appeals raised an identical question.
Civil Appeals Nos 4291 and 4292 of 1984 were preferred against the judgment of the Madras High Court in Writ Appeals Nos.
561 and 562 of 1983.
The appellant in these two appeals, an employee in the Bank of India, which is a Nationalised Bank, was dismissed.
Aggrieved, he preferred an appeal under section 41(2) of the Tamil Nadu Shops and Establishments Act, 1947 (the Tamil Nadu Shops Act).
A preliminary objection was raised by the Bank to the effect that the Tamil Nadu Shops Act was not applicable to the Bank in view of the exemption contained in Section 4(1)(c) thereof.
The Appellate Authority held that the preliminary objection might be decided along with the appeal.
The bank thereupon filed two writ petitions in the High Court, one for a direction to the Appellate Authority to dispose of the preliminary objection before disposing of the appeal on merits, and the other, for a direction to the Appellate Authority not to proceed with the appeal.
Both the Writ Petitions were allowed by a Single Judge of the High Court on the ground that the Bank was an establishment under the Central Government and consequently the provisions of the Tamil Nadu Shops Act were not applicable to it in view of the exemption contained in this behalf in section 4(1)(c).
Against that decision, two writ appeals aforementioned were filed, which were dismissed by a Division Bench of the High Court by the Judgment under appeal in these two appeals.
The same judgment of the High Court had disposed of Writ Petition No. 1550 of 1981 also, which had arisen out of an application under section 51 of the Tamil Nadu Shops Act made by the employees of the State Bank of India before the Commissioner of Labour for a direction that all the provisions of that Act would apply to them, being employed in the State Bank.
The State Rank had contended that it was an establishment under the Central 663 Government within the meaning of Section 4(1)(c) of the Tamil Nadu Shops Act and consequently the provisions of that Act were not applicable to it.
The Commissioner of labour had rejected the plea of the State Bank and held that the provisions of the Act were applicable to it.
Civil Appeal No. 4329 of 1984 was preferred against the said Judgment by the State Bank 's Staff Union and Civil Appeal No. 4735 of 1984 was preferred by the employees concerned.
Civil Appeal No. 1120 of 1976 was preferred by Syndicate Bank, a Nationalised Bank, against the judgment of the Andhra Pradesh High Court (Division Bench), dismissing the Writ Appeal No. 268 of 1975 and upholding the order of a Single Judge dismissing the Writ Petition No. 5973 of 1973 filed by the appellant Syndicate Bank.
The services of Respondent No. 3 in the appeal had been terminated by the appellant Syndicate Bank.
An appeal was preferred by the said respondent before the Labour officer under the Andhra Pradesh Shops and Establishment Act, 1966 (the Andhra Pradesh Shops Act).
The Labour officer allowed the appeal which was confirmed in a second appeal by the Labour Court.
Aggrieved by these orders, the Bank filed the Writ Petition above said.
It was urged by the appellant Bank that it being an establishment under the Central Government within the meaning of Section 64(1)(b) of the Andhra Pradesh Shops Act, the provisions of that Act including the provisions of appeal were not applicable to it in view of the exemption contained in this behalf.
Civil Appeal No. 1042 was preferred by the Syndicate Bank against the judgment of the Andhra Pradesh High Court, dismissing the Writ Petition No. 86 of 1979.
Respondent No. 3 in the appeal had been dismissed by the appellant bank.
He preferred an appeal which was allowed.
The Bank preferred a second appeal before the Labour Court, which was dismissed.
The Bank filed the aforesaid writ Petition before the High Court and urged that it being an establishment under the Central Government within the meaning of Section 64(1)(b) of the Andhra Pradesh Shops Act, the provisions of that Act were not applicable to it in view of the exemption contained in this behalf.
The High Court dismissed the Writ Petition.
Civil Appeal No. 837 of 1984 was preferred by the Bank of India a nationalised bank, against the judgment of the Kerala High Court dismissing the Writ Petition No. 1419 of 1978.
Respondent No. 1 in the appeal had preferred an appeal under section 18 of the Kerala Shops and Commercial Establishments Act, 1960 (the Kerala shops Act) against an order passed by the appellant Bank, discharging him from service.
A preliminary objection was raised by the Bank with regard to the maintainability of the appeal on the ground that it being an establish 664 ment under the Central Government within the meaning of section 3(1)(c) of that Act, the provisions thereof including section 18 above said were not applicable to it.
The objection was overruled by the appellate authority.
The Bank filed the original Petition abovementioned in the High Court which dismissed the same.
Dismissing the Civil Appeals Nos . 4291 and 4292 of 1984, 4329 of 1984 and 4735 of 1984, and allowing the Civil Appeal Nos. 1120 of 1976, 1042 of 1979 and 837 of 1984, the Court, ^ HELD: The common question which arose for consideration in all these appeals was as to whether the Nationalised Banks and the State Bank of India were establishments under the Central Government within the meaning of the Acts above said and consequently the provisions of the said Acts were not applicable to these Banks in view of the exemption contained therein in this behalf.
[670E] In view of the definition of the term "establishment" read with that of "commercial establishment" contained in the said Acts, it was not disputed even by counsel for the banks, that a bank is an establishment.
Consequently, unless exempted, the provisions of the said Acts would apply to the State Bank of India and the nationalised banks also.
[670F G] A conspectus of the provisions of the (Act No. 23 of 1955) and the (Act No. 5 of 1970), read with the dictionary meaning of the term "under" leaves no manner of doubt that the State Bank of India and the nationalised banks are clearly establishments under the Central Government.[677D] For the employees of these banks, it was urged that these banks were autonomous corporations having distinct juristic entity with a corporate structure of their own and could not as such be treated to be owned by the Central Government.
According to counsel, the word "under" used in the expression "under the Central Government" con noted complete control in the sense of being owned by the Central Government.
Disagreeing with that submission it was held that the mere fact that the State Bank of India and the nationalised banks are different entities as corporate bodies for certain purposes cannot by itself be a circumstance from which it may be deduced that they cannot be establishments under the Central Government.
[677E F; 678A] 665 If the criteria laid down in Ajay Hasia, etc.
vs Khalid Mujib Sehravardi & Ors. etc.
; , decided by a Constitution Bench of this Court, was applied to the facts of these cases, it is obvious that even though the State Bank of India and the nationalised banks may not be owned as such by the Central Government and their employees may not be the employees of the Central Government, they certainly will fall within the purview of the expression "under the Central Government", in view of the existence of deep and pervasive control of the Central Government over these banks.
As pointed out by this Court in Biharilal Dobray vs Roshan Lal Dobray; , , the true test of determination of the question whether a statutory corporation is independent of the Government depends upon the degree of control.
[679G H;682E F] In view of these considerations, no exception could be taken to the view of the Madras High Court in its judgments which were the subjectmatter of the Civil Appeal Nos. 4291 and 4292 of 1984, 4375 of 1984 and 4329 of 1984.
As regards the judgment of the Kerala High Court and the judgment of the Andhra Pradesh High Court under appeal even if the decisions dealing with Article 12 of the Constitution are not made the foundation for deciding the point in issue, the principles enumerated therein particularly with regard to deep and pervasive control are relevant for deciding the point in issue, and also it was sufficient to point out that for holding that the State Bank of India and the nationalised banks are establishments under the Central Government which have a corporate structure and have freedom in the matter of day to day administration, it is not necessary that these banks should be owned by the Central Government or be under its absolute control in the sense of a department of the Government.
As regards the circumstances that even though the Reserve Bank of India is mentioned specifically in the relevant clause containing exemption, neither the State Bank of India nor the nationalised banks are so mentioned, it is to be pointed out that the Reserve Bank of India was established as shareholders ' Bank under Act 2 of 1934.
The Kerala Shops Act and the Andhra Pradesh shops Act, of the years 1960 and 1966, were modelled almost on the pattern of the Tamil Nadu Shops Act, which is of the year 1947.
When section 4(1)(c) of this Act referred to the Reserve Bank of India in 1947, it obviously referred to it as the Shareholders ' Bank.
The Reserve Bank Transfer to Public ownership Act (Act 82 of 1948) came into force on 1st January, 1949, and it was thereafter that the shares in the capital of the Reserve Bank came to belong to the Central Government.
In this background, no undue emphasis could be placed on the circumstances that the State Bank of India or the nationalised banks did 666 not find mention in the provision containing exemption even though the Reserve Bank of India was specially mentioned therein.
For the response stated above, the aforesaid decisions of the Kerala High Court and the Andhra Pradesh High Court deserved to be set aside.[683C H] On the view the Court had taken that the State Bank of India and the nationalised banks are establishments under the Central Government, the Court did not consider the question as to whether these banks were establishment, which not being factories within the meaning of the , were, in respect of matters deal with in the Tamil Nadu Shops Act, governed by a separate law for the time being in force in the State so as to be entitled to claim exemption under clause (f) of sub section (1) of section 4 of the said Act or of the corresponding provisions in the Kerala Shops Act and the Andhra Pradesh Shops Act.
[684A B] Civil Appeals Nos.
4291 and 4292 of 1984, 4329 of 1984 and 4735 of 1984 were dismissed.
Civil Appeal No. 1120 of 1976 was allowed and the judgment of the High Court in Writ Appeal No. 268 of 1975 as also the Judgment of the Single judgement the Writ Petition No. 5973 of 1973 as well as the orders of the Labour officer in the appeal filed by respondent No. 3 and of the Second Appellate Authority m the second appeal filed by the appellant Bank under the provisions of the Andhra Pradesh Shops Act were set aside.
Civil Appeal No. 1042 of 1979 was allowed and the judgment of the Andhra Pradesh High Court in the Writ Petition No. 86 of 1979 as also the orders passed by the first and second appellate authorities in the appeals preferred by respondent No. 3 and the bank under the Andhra Pradesh Shops Act were set aside.
Civil Appeal No. 837 of 1984 was allowed and the judgment of the Kerala High Court in Writ Petition No. 1419 of 1978 was set aside.
The preliminary objection raised by the bank before the Appellate Authority in the appeal filed by respondent No. I under section 18 of the Kerala Shops Act to the effect that the said appeal was not maintainable was upheld, with the result that if the said appeal was still pending would be disposed of as not maintainable and in case it had been decided, the said decision should be treated as without jurisdiction.[684C F] The various employees whose appeals preferred under the Kerala Shops Act or the Andhra Pradesh Shops Act referred to above had been held to be not maintainable and the orders passed therein had been set aside, would be at liberty to take recourse to such other remedies as might be available to them in law.
[684G] 667 Ajay Hasia, etc.
vs Khalid Mujib Sehravardi & etc.
; , ; Heavy Engineering Mazdoor Union vs The State of Bihar & Ors., ; Hindustan Aeronautics Ltd. vs The Workmen and Ors., ; ; Graham vs Public Works Commissioner, ; Regional Provident Fund Commissioner, Karnataka vs Workmen represented by the General Secretary, Karnataka Provident Fund Employees ' Union and Another, [1984] II L.L.J. 503; Western Coalfields Ltd. vs Special Area Development Authority, Korba and Anr., ; ; Rashriva Mill Mazdoor Sangh, Nagpur vs The Model Mills, Nagpur and Anr., ; ; Union of India & Ors.
vs N. Hargopal and Ors., ; Thote Bhaskara Rao vs The A.P. Public Service Commission and Ors., Judgment Today and Biharilal Dobray vs Roshan Lal Dobray, ; , referred to.
|
Civil Appeal No. 9 of 61.
Appeal from the judgment and order dated May 7, 1959, of the Punjab High Court in L.P.A. No. 86 of 1956.
M.C. Setalvad, Attorney General of India, S.N. Andley, Rameshwar Nath and P.L. Vohra, for the appellants.
section M. Sikri, Advocate General, Punjab, B.K. Khanna and P.D. Menon, for the respondents.
915 1961.
December, 5.
The Judgment of Sinha C.J., Hidayatullah, Shah and Mudholkar JJ., was delivered by Hidayatullah, J. Kapur, J., delivered a separate judgment.
HIDAYATULLAH, J.
The appellants are a firm of general merchants which sells, among other goods manufactured tobacco as defined in the Punjab Tobacco Vend Fees Act, 1954 (12 of 1954), which came into force in the State of Punjab from April 1, 1954.
The firm is also a registered dealer under section 7 of the East Punjab General Sales Tax Act, 1948 and till the end of March, 1954, was paying sales tax on manufactured tobacco also.
Indeed, the firm paid sales tax on manufactured tobacco, also for the next quarter ending on June 30, 1954, but did not pay in the succeeding quarter in view of certain events, to which a detailed reference will be made presently.
On September 27, 1954, the State Government issued a Notification (No. 4556 E & T (Ch) 54/957) by which the schedule of exemptions under section 6 of the Sales Tax Act was amended by the inclusion of item 51, which reads as follows: "51.
Manufactured tobacco as defined in the Punjab Tobacco Vend Fees Act, 1954.
" This Notification was preceded by a Notification of May 7, 1954 (No. 427 E & T (Ch) 54/369), by which the State Government had given notice, as required by law, of its intention to add the said item in the schedule of exemptions.
In June, 1954, the State Government issued a Press Note by which it was intended to convey to the dealers that though the Tobacco Vend Fees Act had come into force from April 1, 1954, it was not intended to levy both the sales tax as well as the fee for any period.
The Press Note reads as follows: "There is some misapprehension in the minds of dealers in manufactured tobacco as to whether sales tax is also chargeable in respect of manufactured tobacco after the 916 1st April, 1954, in addition to the license fees under the Tobacco Vend Fees Act.
Government would like to make it clear that although the Tobacco Vend Fees Act has come into force with effect from 1st April, 1954, no license fees for dealers have yet been prescribed under the Act.
Therefore, the levy of sales tax continues till the Vend Fee licences come into operation.
It is to be clearly understood that the Vend Fee will be proportionately reduced for the current financial year to adjust the period for which sales tax will have been charged.
Manufactured tobacco will be exempted from sales tax simultaneously with the enforcement of the Vend Fees." On August 2, 1954, the State Government issued another Press Note, in which the decision was altered.
The Press Note said: "Government recently announced through a press note that the levy of Sales Tax on manufactured tobacco would be continued till the Vend Fee Licences came into operation and that the Vend Fee would be proportionately reduced for the current financial year in respect of the period for which Sales Tax would have been charged.
In order to avoid double taxation, Government have since reconsidered the matter and have, in supersession of the previous decision, decided that the Sales Tax, if any, recovered from the dealers would be refunded and that no Sales Tax would be charged during the current financial year in respect of sales of tobacco which fall under the Tobacco Vend Fees Act.
Tobacco Vend Fees will be recovered at full rates for the whole year as and when rules under the Punjab Tobacco Vend Fees Act are finalised.
" It appears that the Rules under the Tobacco Vend Fees Act were not promulgated; nor were the forms 917 and licences prescribed during the financial year ending on March 31, 1955.
In the meantime, the appellants, as already stated, paid sales tax on sales of manufactured tobacco for the first quarter ending June 30, 1954, and the Notification exempting manufactured tobacco from sales tax was issued on September 27, 1954.
The appellants had made enquiries from the Excise and Taxation Commissioner, Punjab, about the Press Note of August 2, 1954, and had been assured that the Notification as printed in the Newspapers was accurate, and that Government intended implementing the Press Note.
On January 23, 1956, the appellants received a notice from the Excise and Taxation Officer, Rohtak, calling upon them to produce their account books.
The appellants as well as other dealers of manufactured tobacco similarly affected, made representations on the basis of the Press Note of August 2, 1954, but without success.
The appellants then filed on February 8, 1956 a petition under article 226 of the Constitution for substantially three reliefs.
They were: (a) a declaration that the levy of sales tax on manufactured tobacco upto September 26, 1954 was illegal; (b) refund of the sales tax paid by it for the quarter ending June 30, 1954; and (c) an order in the nature of a writ of Prohibition against the proposed levy of sales tax till September 26, 1954.
It remains to mention that the sales tax authorities were acting in conformity with a Press Note issued in August, 1955, by which the State Government went back upon the policy declared in August, 1954 and reaffirmed the policy stated in the Press Note of June, 1954.
The following extract from the Press Note of August, 1955 may be read here: "2.
In conformity with the press note issued in June, 1954, and in view of the facts explained above, Government have now decided that sales tax on tobacco shall be levied for the year 1954 55 before the 27th September, 1954 918 only, the date on which tobacco was included in the schedule of exemptions appended to the General Sales Tax Act.
This amounts to a handsome concession to the dealers and Government except that, in return, every cooperation shall be shown by the dealers of the assessing authorities in the matter of the assessment of the tax.
" The petition under article 226 was heard by a learned Single Judge of the Punjab High Court, who held that the orders of Government were entirely in accordance with law, that the East Punjab Sales Tax Act, in so far as it related to the sale of manufactured tobacco was not repealed by the Tobacco Vend Fees Act, and that sales tax on manufactured tobacco was payable from April 1, 1954 to September 26, 1954, in view of the fact that the exemption was made on September 27, 1954, and would operate from the latter date.
Against the decision of the learned Judge dismissing the writ petition, an appeal under Letters Patent was filed.
The Divisional Bench, which heard the appeal, agreed with the judgment appealed from, and dismissed the appeal.
A certificate was, however, granted to the appellants and the present appeal has been filed.
Two contentions were raised in the forefront before the High Court, by the appellants.
The first was that the Punjab Tobacco Vend Fees Act had pro tanto repealed the East Punjab General Sales Tax Act, and that sales tax on manufactured tobacco could not be levied after April 1, 1954.
The second was that the State Government by its assurance in the Press Note of August, 1954, had estopped itself from reversing its policy and claming the sales tax up to the date of the Notification.
These points were not seriously pressed upon us, because there can be two taxes on the same commodity or goods without the one law repealing the other.
No repeal can be implied, unless there 919 is an express repeal of an earlier Act by the later Act, or unless the two Acts cannot stand together.
The first argument was, therefore, rightly rejected in the High Court.
The second argument is also without force.
There can be no estoppel against a statute.
If the law requires that a certain tax be collected, it cannot be given up, and any assurance that it would not be collected, would not bind the State Government, whenever it choose to collect it.
The question which is now raised, and of which there is but a trace in the High Court is the real one to decide, and it may be formulated thus; Did the exemption in the Notification issued on September 27, 1954 have effect from that date, or from the beginning of the financial year ? We are not concerned with the question whether, in the absence of rules and forms, the Punjab Tobacco Vend Fees Act, 1954 could operate from April 1, 1954.
Whether it did or did not, can make no difference to the sale tax, because the Punjab Tobacco Vend Fees Act, 1954 did not abrogate the Sales Tax Act.
If sales Tax was not payable, it would be because of the exemption, and the only question thus is when the exemption began to operate.
The Notification does not say from what date the exemption operates.
Taking the Notification by itself, it cannot be said that it comes into force from an earlier date.
Both sides have thus called in aid provisions of the East Punjab General Sales Tax Act and the Rules to determine the date from which the exemption can be said to operate.
Reference was made by the appellants to a decision of this Court in The Commissioner of Sales Tax, U.P. vs The Modi Sugar Mills Ltd.(1), where a notification increasing sales tax on edible oils issued in the middle of the year 1948 was held not to apply to the assessee in that year, inasmuch as its liability to tax had become fixed on April 1, earlier, as it had elected to pay tax on the turnover of the previous 920 year.
The scheme of taxation under the U.P. Sales Tax Act, 1948 (15 of 1948) and the Rules under that Act is so vastly different from the East Punjab General Sales Tax Act and the Rules under it, that a detailed reference to that case may not be necessary.
The question thus must be viewed in the setting of the East Punjab Sales Tax Act and the Rules under it.
We shall refer to them shortly as the Act and the Rules in the rest of this judgment.
The Act was passed in 1948, and came into force on November 15, 1948.
Previous to this, sometimes licence fee under an earlier Tobacco Vend Fees Act and sometimes sales tax also under an earlier Sales Tax Act had been levied but not side by side in the Province.
The history of these earlier Acts was brought to our notice during the course of the argument, but nothing turns upon it.
The sales tax under the Act continued to be levied up to April 1, 1954, and none has disputed that it could be levied.
On that date, the Punjab Tobacco Vend Fees Act came into force.
We have already said that the latter Act did not repeal pro tanto the earlier.
The liability for sales tax in this appeal is for two quarters ending June 30, 1954, and September 30, 1954.
There is no dispute that after September 27, 1954 sales tax could not be levied, in view of the inclusion of item 51 in the schedule exempting manufactured tobacco from the operation of the Act.
We must now examine those provisions of the Act which are claimed by the rival parties to indicate the moment of time from which the exemption granted by the Notification began to operate.
"Turnover" has been defined in the Act to include the aggregate of the amounts of sales and parts of sales actually made by any dealer during the given period, less certain allowances, and "year" means the financial year.
Sections 4 and 5 read together are the charging sections, the first dealing with the incidence of the tax, and the second, with its rate.
Section 6 (1) provides for exemptions on the sale of 921 goods which are specified in schedule to the Act.
Under section 6 (2), the State Government has been given the power to add to or delete from that schedule.
Section 10 deals with the making of returns and payment of the tax.
Section 27 empowers the State Government to make rules for carrying out the purposes of the Act.
This is the general scheme of the Act, in so far as we are concerned; but a somewhat detailed examination of these sections is necessary to understand the rival contentions.
Section 4 consists of five sub sections.
Sub Section (1), which is a subject to the provisions of sections 5 and 6, says that every dealer, except one dealing exclusively in goods declared tax free under section 6, whose gross turnover during the year immediately preceding the commencement of the Act exceeded the taxable quantum, shall be liable to pay tax under the Act on all sales effected after the coming into force of this Act.
A proviso is added, which is not relevant.
Sub section (2) says that every dealer who is liable to pay tax under the first sub section shall be liable to pay it on the expiry of 30 days after the date on which his gross turnover first exceeds the taxable quantum.
Sub sections (3) and (4) deal with the continuance of the liability of the dealer under certain circumstances, and are not relevant here.
Sub section (5) then defines "taxable quantum" in relation to different kinds of dealers, and fixes a certain amount as the lowest limit.
Since, in the present case, the taxable quantum is above the limit applicable to the appellants and they are also admittedly dealers, a detailed reference to the provisions of sub section
(5) is unnecessary.
Section 5, which deals with the rate of tax, is made subject to the other provisions of the Act, and the first sub section says that there shall be levied on the taxable turnover every year of a dealer a tax at such rates (not exceeding two pice in a rupee) as the State Government may by notification direct.
"Taxable turnover" 922 is then defined by the second sub section to mean that part of a dealer 's gross turnover during any period which remains after deducting therefrom, inter alia his turnover during that period of tax free sales, sales to registered dealers, sales to any undertaking supplying electrical energy, sales to dealers outside Punjab and other sales, as may be prescribed.
With none of these deductions we are concerned in this case.
Now, the appellants emphasise the words "gross turnover during the year" in s.4 (1) and the words "taxable turnover every year of a dealer" in section 5 (1), and argue that the tax is computed year wise, and the exemption must, therefore, operate for the whole of the year in which it is made, irrespective of the date on which the Notification is made.
The respondents, on the other hand, emphasise the words "gross turnover during any period" and "his turnover during that period" occurring in section 5, and contend that the tax is not year wise but accrues, so to speak, from day to day or at least from period to period within a year, and the exemption thus operates not from the whole of the year, but for the period within which it is granted, and refer in aid of this argument, to sections 6 and 10.
Sections 4 (1) and 5 (1) are subject to section 6, section 5 (1), to other sections of the Act and so, section 10, and we have to see what they provide.
Section 6 (1) is brief, and may be quoted in extenso.
It reads: "6 (1).
No tax shall be payable under this Act on the sale of goods specified in the first column of the Schedule, subject to the conditions and exceptions, if any, set out in the corresponding entry in the second column there of and no dealer shall charge Sales Tax on the sale of goods which are declared tax free from time to time under this section.
" The respondents emphasise the words "from time to time" in the first sub section, and say that 923 they also show that exemptions may be given, withdrawn, or given again and again several times during the year in respect of the same goods, and the exemptions, therefore, begin to operate when they are given and cease, when they are withdrawn.
But, the appellants contend that these words merely indicate that the power may be exercised as often as needed, and do not indicate the time from which the operation of the exemption commences and the period during which it lasts.
Section 10 (1) provides that the tax payable under the Act shall be paid in the manner provided at such intervals, as may be prescribed.
Two Rules framed under section 27 provide for such intervals.
Rule 20 reads: "Every registered dealer other than those referred to in rules 17, 18 and 19, shall furnish returns in Form S.T.VIII or S.T. XXIII, if so permitted quarterly within thirty days from the expiry of each quarter." (words underlined were introduced on June 28, 1955).
Rule 23: "Notwithstanding the provisions of rules 20 and 21, the appropriate Assessing Authority may, for reasons to be recorded in writing, fix monthly returns for a dealer, who would otherwise be required to furnish quarterly or annually under these rules.
" Section 10 and Rules 20 and 23 clearly provide that returns may be made annually, quarterly or monthly.
The forms, section T. VIII and S.T. XXIII, also are forms of returns of sales tax payable for the year, quarterly or monthly.
It is thus possible that some dealers pay tax annually some, quarterly, and some, monthly.
The contention of the appellants is that s.10 read with Rules 20 and 23 merely provides for making of returns at prescribed intervals and the 924 collection of tax is for a period falling between those intervals, but the tax is the tax appropriate to the whole year 's result.
The respondents contend that the effect of the section and the two Rules is that the tax due for the period of the return is separate from any other tax for any other period.
Each period, according to them, must be viewed separately and not as part of a year.
Thus, if exemption is granted during the second quarter, according to the respondents it affects that quarter and subsequent quarters but not the first quarter, because tax is payable on the turnover of a period and at such intervals, as may be applicable to an assessee.
We cannot help saying that the Act and the Notification could have been framed to obviate such unnecessary questions by providing clearly in them the time from which such exemptions would begin to operate.
Similarly, if the rules under the Punjab Tobacco Vend Fees Act had been framed in time and the Tobacco Vend Fees Act together with the Rules under it and the exemptions under the Sales Tax Act were brought into force together, a considerable amount of time to the Department and the Courts would have been saved, as also trouble to the tax payer.
The Rules under the Punjab Tobacco Vend Fees Act were not framed during the whole of the financial year, 1954 55.
Contradictory Press Notes were issued, which showed that the State Government itself was not sure of the true legal position, thus causing great confusion and distrust in the minds of the tax payers.
There is no doubt that the tax is a yearly tax.
It was payable, in the first instance, by a dealer whose gross turnover during the financial year immediately preceding May 1, 1949, was above the taxable quantum.
The tax is to be levied on the taxable turnover of a dealer every year.
The difference between gross turnover and taxable turnover is this, that to arrive at the taxable turnover of 925 any period some deductions have to be made for the same period.
This clearly shows that the tax is for a year.
The method of collection allows collection of tax at intervals; in some cases, the tax is collected at the end of the year; in some others, the tax is collected quarterly and in still other cases, even monthly.
If the exemption can be said to operate for that period for which the tax is payable according as it is annually, quarterly or monthly, the tax would be different for different persons.
Those who are paying the tax annually would get exemption for the whole year; but those who are paying it quarterly or monthly would get benefit in the quarter or the month of the Notification but not for earlier quarters or months.
It could not have been intended that the exemption was to operate differently in the case of dealers with different intervals of assessment.
The exemption thus must operate either from the date of the Notification or from the commencement of the financial year.
Here, the nature of the tax, as disclosed in sections 4 and 5, is decisive.
In section (5), the tax is made leviable "on the taxable turnover every year of a dealer".
The divisions of the year and the taxable turnover into different parts are to make easy the collection of tax, and form part of the machinery sections.
If the tax is yearly and is to be paid on the taxable turnover of a dealer, then the exemption, whenever it comes in, in the year for which the tax is payable, would exempt sales of those goods throughout the year, unless the Act said that the Notification was not to have this effect, or the Notification fixed the date for the commencement of the exemption.
In the present case, the Notification did not fix the date from which the exemption was to operate, probably because the Act omitted to make such provision, enabling the State to do so, and the exemption must, therefore, operate for the whole year, during which it was granted.
926 The case of this Court, to which we have referred earlier, dealt with an Act under which the taxpayer could elect to pay the tax on the turnover of either the previous year or the year of assessment.
A notification in the middle of the assessment year was considered, and was held inapplicable in those cases where a dealer had elected to pay tax on the turnover of his previous year.
The majority view on that occasion pointed out that it was not possible to divide the assessment year in two portions, in which the tax was levied at one rate in one part and another rate in another part.
The case was confined to a dealer who had elected to pay the tax for a year different from that in which the exemption was granted.
Those facts do not exist here; but if the case is considered at all relevant, it supports the appellants rather than the respondents.
In the result, the appeal succeeds, and is allowed with costs.
KAPUR, J.
The facts of this case have been set out in the judgment of my learned brother Hidayatullah J., which I have had the advantage of reading and as I am unable to agree with the conclusion that the effect of the exemption given by Notification No. 34556 E & T. (CH)54/957 dated September 27, 1954, issued under s.6(2) of the Punjab General Sales Tax Act (Act 16 of 1948), hereinafter called the "Act", on unmanufactured tobacco becomes effective as from the beginning of the financial year, I proceed to give my reasons for the same.
The period in regard to which the disputed amount of sales tax is sought to be levied was from April. 1, 1954 to September 27, 1954.
Previous to the issuing of the notification of September 27, 1954, the Punjab Government issued a notification required under s.6(2) of the Act for the purpose of information of persons likely to be affected thereby 927 and to give them an opportunity to file any objections or suggestions in regard to the same.
A press note was issued on August 4, 1954 stating that no sales tax will be leviable on manufactured tobacco for the financial year 1954 55.
In order to resolve the controversy as to whether the exemption is effective from the commencement of the financial year or from the date of the notification it is necessary to refer to the scheme of the Act and the rules made thereunder.
The East Punjab General Sales Tax Act (Act 46 of 1948) as amended, made provision for the levy of general sales tax on the sale of goods in the Punjab and repealed the General Sales Tax Act of 1941.
Section 2 of the Act gives definitions and cl.(d) defines a "dealer" as a person. engaged in the business of selling or supplying goods.
In cl.(i) "Turnover" was defined to include "the aggregate of the amount of a sale and parts of the sale actually made by any dealer during the given period less any sum allowed as cash discount according to ordinary trade practice. " Sections 4 and 5 are the charging sections, the former makes the tax leviable prospectively and the latter prescribes the rate of tax.
The relevant portions of these sections when quoted are as follows: S.4(1) "Subject to the provisions of sections 5 and 6, every dealer except one dealing exclusively in goods declared tax free under section 6 whose gross turnover during the year immediately preceding the commencement of this Act exceeded the taxable quantum shall be liable to pay tax under this Act on all sales effected after the coming into force of this Act.
(2) Every dealer to whom sub section (1) does not apply or who does not deal exclusively in 928 goods declared to be tax free under section 6 shall be liable to pay tax under this Act on the expiry of 30 days after the date which his gross turnover first exceeds the taxable quantum." "Taxable quantum" mentioned in sub section (2) is defined in sub section (5) of section 4.
Thus a dealer is liable to sales tax if his sales in the year preceding the commencement of the Act are more than the taxable quantum (section 4.(1) or subsequently becomes so during any year.
section 5.(1) "Subject to the provisions of this Act, there shall be levied on the taxable turnover every year of a dealer a tax at such rates not exceeding two pice in a rupee as the State Government may by notification direct: Provided that Government may by notification in the Official Gazette declare that in respect of any goods or class of goods the dealer may pay such lump sum by way of composition of the tax payable under this Act as the Government may notify from time to time.
(2) In this Act the expression "taxable turnover" means that part of a dealer 's gross turnover during any period which remains after deducting therefrom.
(a) his turnover during that period on (i) the sale of goods declared tax free under section 6; (ii). . . . . .
(iii). . . . . " Section 6 which makes provision for giving exemption is as follows: S.6(1) "No tax shall be payable under this act on the sale of goods specified in the first column 929 of the Schedule subject to the conditions and exceptions, if any, set out in the corresponding entry in the second column thereof, and no dealer shall charge Sales Tax on the sale of goods which are declared tax free from time to time under this section.
(2) The State Government, after giving by notification not less than three months ' notice of its intention so to do, may by like notification add to or delete from the Schedule and thereupon the Schedule shall be deemed to be amended accordingly.
" Section 10 deals with payment of taxes of returns.
Clause (1) of section 10 provides: S.10 (1) "Tax payable under this Act shall be paid in the manner hereinafter provided at such intervals as may be prescribed.
" Section 11 is the section dealing with assessments.
It provides that if the Assessing Authority is satisfied that the returns furnished are correct and complete he shall assess the amount of tax due and if he is not so satisfied he can require the production of evidence which may be necessary and provision is also made for default in carrying out the notice issued.
Section 27 gives the Government the power to make rules.
The relevant portions of this section are clauses (h) and (i) which were as follows: (h) "the return to be furnished under sub section (3) of section 10, and dates by which and the authority to which, such returns shall be furnished; (i) the date by which returns for any period are to be furnished and the procedure to be followed for assessment under section 11." Under the rule making power rules have been framed by the Punjab Government and reference may be made to Rules 20 and 23.
Under the 930 former rule every registered dealer is required to furnish returns in Form ST VIII or ST XXIII if so permitted quarterly within thirty days from the expiry of each quarter.
Under the latter the Assessing Authority is given the power to tax the returns to be made monthly in the case of a dealer who would otherwise be required to furnish them quarterly or annually.
It was argued that the tax under s.5 was a yearly tax and therefore whenever the exemption may be given during a financial year the effect of the exemption will become operative as from the beginning of the financial year and emphasis was laid on the words "there shall be levied on the taxable turnover every year of a dealer a tax. " The argument was that it was a yearly tax on the turnover and not that every year a tax was to be levied on the taxable turnover i.e. aggregate of the sales made during a given period.
It was also argued that if the exemption of the turnover was to operate for the quarter in which the exemption was notified, the consequence will be absurd as those who pay the tax on quarterly returns or monthly returns will not be able to get the advantage of the exemption whereas those who pay on yearly returns will be so entitled.
I am unable to agree that the effect of the collection of the words in section 5 and particularly of the words "shall be levied on the taxable turnover every year. a tax" is what was argued by the appellants i.e. it was a yearly tax like the income tax.
Section 6 which provides for exemption specifically envisages the declaration from time to time of exemption of goods which are to be tax free.
The use of the words "tax free from time to time", in my opinion, means that the exemption may be given at any time during the year but it does not suggest that the exemption will operate from the beginning of the year and not from the time that the exemption is given.
If this were not so the the imposition of sales tax by excluding an 931 article exempt from tax from the schedule say about the end of the financial year would render the dealer liable to sales tax for the whole year even though he may not have collected any sales tax from his customers which under the law he would be entitled to do if the article is not in the schedule.
It will be an imposition which is not envisaged by the general scheme of the Sales Tax Act because the tax is exigible on taxable turnover in every return made monthly or quarterly or yearly as the case may be.
It appears that it is for that reason that in the definition of the word "turnover" the legislature has chosen the word "during the given period" i.e. the period for which the tax is leviable and is levied.
Similarly in subsection (2) of section 5 where sales tax is levied on the taxable turnover of a dealer the use of the word "during any period" is again repeated and in cl.(a) of that section reference is made to deduction from his turnover during that period of the sale of goods declared tax free under section 6 and that is for a good reason because section 6 itself mentions the declaration of tax free goods from time to time indicating that whenever during the year or at any time during the year when goods are notified to be tax free.
That the intention of the legislature was to give exemption from the date of the notification or such date as is mentioned in the notification is further supported by the provisions of sections 10 and 11 of the Act.
Under section 10 a dealer may be required to furnish his return at such intervals as may be prescribed and when he makes a return it must necessarily be of the goods on which during that period sales tax was exigible.
Under sub s.(4) of s.10 the dealer is required to pay into the Government treasury the full amount of tax according to his return.
Under section 11 the assessment of the tax either on the acceptance of the return or after production of such evidence as may be required is to be made.
From the provisions of a 11, it does 932 not appear that returns are to be scrutinised at the end of the year like in income tax cases and assessment made on the income of the year preceding the assessment year.
It is to be made in regard to each return whenever according to the rules the return has to be and is made.
The tax is also paid for that period i.e. on the taxable turnover for the period for which the return is made and which becomes the subject matter of assessment.
When the assessment has been made and the tax assessed is paid the assessment for that period is completed and all proceedings and liabilities and subjected to what is stated as to escaped periods.
This is further clear from the rules which have been made in regard to registration and furnishing of returns.
In the registration certificate it has to be mentioned as to what goods are free of tax.
Returns are required to be made in the Forms which are given i.e. Form VIII or Form XXIII.
A return under Form VIII may be monthly, quarterly or yearly.
A return to be made also provides for mentioning the turnover of tax free goods and goods which are exempted from sales tax.
If the contention of the appellants is correct, then after all the returns have been filed, the amount of sales tax according to the returns assessed and payments made, there will have to be proceedings for reassessment, remission or refund as the case may be in regard to those periods, if any goods are added to the schedule exempting them from sales tax after the assessment or any goods are deleted from the schedule thus making them liable for sales tax and that will be for the periods of which the assessment had already been completed and finished.
That does not seem to be the scheme of the Act.
It does not envisage reassessment for the purpose of refunding the tax assessed and paid on articles which were assessable at the time the assessment was made but became exempt later nor is it envisaged in the case of 933 articles excluded from the schedule.
Section 11(6) which deals with reassessments at the relevant time provided: "If upon information which has come into his possession the Assessing Authority is satisfied that any dealer has been liable to pay tax under this Act in respect of any period has failed to apply for registration, the Assessing Authority shall. . assess to the best of his judgment the amount of tax. .due from the dealer.
" The scheme of the Act and the rules made thereunder do not, in my opinion, show that the exemption becomes operative for the whole year whenever during the year the notification of exemption is issued even though it may be on the last day of the financial year.
I would therefore dismiss this appeal with costs.
By Court.
In accordance with the judgment of the majority, the appeal stands allowed with costs.
| Section 6(1) of the East Punjab General Sales Tax Act, 1948, provided that no tax shall be payable on the sale of goods specified in the Schedule to the Act and that no dealer shall charge sales tax on the sale of goods which were "declared tax free from time to time".
Sub section (2) of section 6 empowered the State Government by notification to add or to delete from the Schedule.
On September 27, 1954, the State Government issued a notification under section 6 (2) 914 adding item 51 relating to manufactured tobacco to the Schedule.
The appellant contended that sales tax was a yearly tax and hence the exemption, whenever given during the financial year, became operative as from the beginning thereof.
^ Held, (per Sinha, C. J., Hidayatullah, Shah and Mudholkar JJ., Kapur, J., dissenting) that the exemption operated for the entire financial year.
The tax was a yearly tax levied on the taxable turnover of a dealer every year though it was collected in some cases at the end of the year, in some cases quarterly and in other cases monthly.
If the exemption operated for the period for which the tax was payable according as it was annually, quarterly or monthly the tax would be different for different persons; those paying annually would get exemption for the whole year but those paying quarterly or monthly would get the benefit in the quarter or month of the notification and not for earlier quarters or months.
This could not have been intended.
The exemption whenever it came in, in the year for which the tax was payable, exempted sales throughout the year, unless the notification fixed the date for the commencement of the exemption.
Commissioner of Sales Tax, U. P. vs The Modi Sugar Mills Ltd., ; , referred to.
Per Kapur, J. The exemption became operative only from the date of the notification.
The tax was not a yearly tax.
The use of the words "tax free from time to time" in section 6 (1) showed that the exemption could be given at any time during the year and that it would operate from the date of the notification and not from the beginning of the financial year.
Otherwise, an exemption given or an imposition made near the end of the year will both operate from the beginning of the year.
This was never intended
| The 1st appellant in the first batch of appeals had filed a writ petition in this Court challenging the notices calling upon him to pay the tax of 9 pies per ton on coal including coal despatched outside the State of Madhya Pradesh on two grounds, namely, that the levy of the tax by the Independent Mining Board was invalid at the date of its initial imposition and, 173 therefore, the respondent Sabha which was the successor of the Mining Board could not continue the levy and also that on a proper construction of section 51 of the Act, the levy could not be made.
Another point namely, the increase in the rate of tax from the original 3 pies to the 9 pies per ton at which the tax was demanded was illegal was sought to be canvassed but was not allowed to be argued by the Court as it had not been raised in the petition.
The writ petition was rejected.
The appellant challenged the levy of the tax for the further periods byway of a writ petition before the High Court of Madhya Pradesh on grounds distinct and separate from those which had been rejected by this Court.
The High Court dis missed the writ petition on the ground that it was barred by res judicata by reason of the earlier judgment by this Court.
In the case of the other appellants the High Court held that the matter was also concluded on the authority of the decision of this Court.
The appellants in the first batch of appeals came by special leave and also filed writ petitions challenging the validity of the levy.
Held, that while the general principle of res judicata applies to writ petitions under article 32 and article 226 of the Constitution, in its application to article 32 of the Constitution, the doctrine only regulates the manner in which the fundamental rights could be successfully asserted and does not in any way impair or affect the content of the fundamental rights.
Pandit M.S.M. Sharma vs Dr. Shree Krishna Sinha, [1961] 1 section 0.
R. 96, Raj Lakshmi Dasi vs Banamali Sen, [1953] section C. R. 154 and Daryao vs State of U.P., ; , referred to.
Constructive res judicata was a creature of statute and its application could not be extended to other proceedings particularly those questioning tax liability for different years.
Held, further, that the law declared by the Supreme Court which is binding under article 141 of the Constitution of India is that which has been expressly declared and any implied declaration though binding was subject to revision by this Court when the point was subsequently directly and expressly raised before this Court.
Held, further, that the procedure of assessment of tax authorised by the relevant statutory provisions and the Rules could not be said to be a capricious administrative or executive affair so as to violate article 19(1) (f) of the Constitution.
174 Kunnathat Thathunni Moopil Nair vs State of Kerala, ; , distinguished.
As the Rule which prescribed the maximum rate had itself been deleted it could not be said that there had been a levy in excess of the maximum prescribed.
As neither the Act nor the Rules prescribed a ceiling on the levy, the expression "first impositions occurring in section 51(2) would include every increase of the levy after its initial imposition and the increased levy would require the previous sanction of the Local Government and such sanction not being there, the levy at the rate of 9 pies per ton was illegal.
Considering the nature of the tax and the periods for which it was assessed and in the absence of any provision, the assessment once made by r. 10 was final and there could be no re assessment.
| The three respondents, who were the General Manager, the Assistant Manager and the Secretary of the Laxmi Devi Sugar Mills Ltd., were charged under sections 12, 13 and 26 of the United Provinces Shop and Commercial Establishment Act, 1947, for contravening the provisions of the Act relating to holidays, leave and maintenance of certain registers regarding a class of field workers employed by the company to guide, supervise and control growth and supply of sugar cane for use in the factory.
It was contended on their behalf that those employees were workers within the meaning of the and the United Provinces Shop and Establishment Act did not apply to them.
The Judicial Magistrate rejected that contention and convicted the respondents under section 26 of the Act and sentenced them to pay a fine of Rs. 30 each.
On a reference by the Sessions judge recommending that the said convictions and sentences may be set aside, the High Court acquitted the respondents.
The State Government appealed to this Court by Special Leave.
Held, that the order of acquittal passed by the High Court was erroneous.
The provisions of the were intended to benefit only workers employed in a factory and since field workers guiding, supervising and controlling growth and supply of sugar cane for use in the factory were not employed in the factory, the did not apply to them and they fell within the definition of " Commercial Establishment " under the United Provinces Shop and Commercial Establishment Act, 1947.
| Respondent firm owned a Steel Rolling Mill situate at Madras.
The said mill was leased out to a partnership firm viz., M/s. Steel Industries and after the expiry of the lease period, the Respondent took back the possession of the Mill on 1.8.1962 and informed the Central Excise Authori ties, who advised the Respondent to take out a licence for which it applied on 30.11.1962 Respondent sold away the Rolling Mill on 8.4.1963.
The Superintendent of Central Excise by his letter dated 13.10.1965 raised a demand of Rs.31,018.20 p. on the respondent on account of excise duty.
The Respondent having informed the Department that the firm had manufactured only 775.455 metric tonnes of steel, the demand of excise duty was reduced to Rs.6,419.38 p. only.
The Respondent, though pleaded that it was not liable to pay excise duty demanded, yet the Assistant Collector of Customs by his order dated 14.6.1967 confirmed the demand.
The Respondent firm challenged the validity of the demand by filing a Writ Petition in the High Court.
Respond ent contended before the High Court that (i) it was entitled to exemption of duty; (ii) that the demand for payment of excise duty was time barred and (iii) that Rules 10A under which the demand has been made are ultra rites as there was provision in the Act to enable the Government to frame rules for the recovery of duty short levied.
The High Court allowed the Writ Petition and upheld the contention advanced by the Respondent holding that Rule 10A did not apply to cases where there has been no prior levy of excise duty in respect of the articles manufactured during the relevant period.
Hence this appeal by the Department.
445 The question that arose for determination by this Court was whether Rule 10A of the Rules, as it stood at the rele vant time, was valid? Counsel for the appellant wile plead ing that the Rule was valid submitted that it was necessary to decide this question in view of the conflicting decisions creating difficulty for the Department in collecting short levies or escaped excise duty.
Counsel referred to decisions reported in 1972(2) MLJ 476; ; ; ; and 1977(2) Tax L.R. 1680.
Counsel for the Respondent urged that the Standing Counsel for the Central Government had conceded the ration ale of the decision in Haji J.A. Kateera sait vs Dy.
Commer cial Tax Officer, Mettupalayam;, 18 STC 370 which held that Sub Rule (7) of Rule S of the Central Sales Tax (Madras) Rules 1957 was in excess of the rule making power and as such the Sub rule as a whole was invalid.
In view of the said decision, the appellant would not be able to sustain the demand under Rule 10A; and it is no longer open to the appellant to challenge the validity of Rule 10A in the appeal.
Allowing the appeal and remanding the matter to the High Court, Court, HELD: Chapter II of the Act deals with levy and collec tion of duty.
Under Section 3 of the Act, duties specified in First Schedule to the Act were to be levied.
Rule 10A provided the machinery for collection of tax from assessee after the goods had left the factory premises.
This rule contemplated that the duty or deficiency in duty was payable on a written demand made by the proper officer in cases where either the rules did not make any specific provision for the collection of any duty or of any deficiency in duty, if the duty had for any reason been short levied.
It was a residuary provision and it applied only when there was no other specific provision in the Rules.
Where there had been no assessment at all there was no reason why claim and demand of the Respondent could not be said to be recoverable under Rule 10A. [449E; 448H; 449B C] The validity of the delegated legislation is generally a question of vires, that is, whether or not the enabling power has been exceeded or not.
Rule 10A as it existed at the relevant time, was valid and not ultra vires the rule making power.
Demand notice lawfully issued under the rule by the competent authority could not, therefore, be chal lenged on the ground of the Rule 10A itself being ultra vires.
Whether these could be challenged on any other ground must necessarily depend on the facts 446 and circumstances of each case.
[453E F] Kerala Polythene vs Superintendent Central & Excise, M/s. Chhotabhai Jethabhai Patel vs Union of India, Stateof Kerala vs K.M. Charie Abdullah & Co., [1965] 1 S.C.R.601.
Any rule if it could be shown to have been made 'to carry into, effect the purposes of the Act ' would be within the rule making power.
[452H; 453A] Citadel Fine Pharmaceuticals vs District Revenue Offi cer, Chingleput, ; M/s. Agarwal Brothers vs Union of India, ; N.B. Sanjane vs Elphin stone Spinning and Weaving Mills Company Ltd., ; Assistant Collector vs National Tobacco Co. Ltd., ; and D.R. Kohli vs Atul Products Ltd., ; , referred to.
| The appellant, a dealer in pulses in Vijayawada in Madras State made certain sales outside the State during the assessment year 1949 50.
The appellant claimed exemption from sales tax of sales effected outside the State during the year but the Deputy Commercial Tax Officer disallowed the claim.
A first appeal and a revision petition to the Board of Revenue were unsuccessful.
The appellant thereafter brought a suit for the recovery of tax collected from him with interest contending that part of sales effected outside the State could not be taxed under article 285(1)(a) of the Constitution.
The Trial Court held that the assessment to tax of the sales during the period from April 1, 1949 to January 25, 1950 ' could not be impeached but the sales from January 26 to March 31 outside the State were not liable to sales tax; as there was a single order of assessment 'for the whole year, the entire assessment was illegal.
In appeal to the High Court, and upon a direction from that Court, the Trial Court gave a finding that deliveries of the goods were not made for purposes of consumption within the delivery State only.
The High Court.
therefore.
allowed the appeal holding that the appellant could not claim the benefit under Article 286(1)(a) in the absence of evidence as to how the whole sales disposed of the goods after obtaining delivery and therefore the entire turn over for the year 1949 50 would be assessable to tax.
In the appeal to this Court, it was contended inter alia (i) that the High Court was in error in holding that the burden of proof was on the appellant to show that there was not only delivery of goods for consumption within the delivery States but there was actual consumption of goods in those States: (ii) the assessment must be treated as an indivisible one and if a part of the assessment was illegal, the entire assessment must be deemed to be infected and treated as invalid.
HELD: Allowing the appeal, (i) The part of the turnover which related to sales from January 26, 1960 to March 31.
1960 was not liable to sales tax and the levy of sales tax from the appellant to this extent was illegal.
It was rightly contended that the appellant did not carry the burden of showing that there was not only delivery of goods for consumption within the States but that the goods were actually consumed in those States.
[749 C] India Copper Corporation Ltd. vs The State of Bihar, 12 S.T.C. 56 relied upon.
744 (ii) In the present case though there was a single order of assessment for the period from April 1, 1949 to March 31, 1950, the assessment could be split up and dissected and the items of sales separated and taxed for different periods.
It was possible to ascertain the turnover of the appellant for the pre Constitution and post Constitution periods from the figures furnished in the plaint by the appellant himself.
It was, therefore.
open to the Court in these circumstances to sever the illegal part of the assessment and give a declaration with regard to the illegal part alone instead of1 declaring the entire assessment void.
[752 B] Case law referred to.
| On 30th June, 1969, State Government issued a notifica tion under Section 8A of the Karnataka Sales Tax Act, 1957, providing a package of reliefs and incentives including one concerning relief from payment of sales tax.
A further notification dated 11th August, 1975 was issued, envisaging certain modified procedures for effectu ating the reliefs contemplated by the exemption notification of 30th June, 1969.
For the assessment year 1976 77, the appellant made an application to the Respondent No. 1 on 10th November, 1976 for adjustment of the refunds against sales tax due and permission was granted with retrospective effect from 1st May, 1976 validating the adjustments, which the appellant had made during the interregnum.
For the three subsequent years, viz., 1977 78, 1978 79 and 197980, similar applications, which were made on 29th March 1977, 20th March 1978 and 8th March 1979 respectively, remained undisposed of.
In anticipation of the permission, appellant adjusted the refund against tax payable for these years and filed its monthly returns setting out adjustments so effected.
337 There was no dispute that the appellant was entitled to the benefit of the notification dated 30th June, 1969 and that the refunds were eligible to be adjusted against sales tax payable for respective years.
The respondent No. 1 in his letter dated 27.3.1979 informed the appellant that the orders on appellant 's appli cation for permission would be passed only on receipt of the clarification from the Government on the matters.
On 9th January, 1980, the appellant was issued three demand notices by the Commercial Tax Officer demanding payment of the sales tax, stating that as prior permission to adjust sales tax had not been considered by the respond ent No. 1, he was obliged to proceed to recover the taxes.
Steps for recovery of the penalties were also initiated.
The appellant moved the High Court for issue of writ of mandamus to quash the demand notices and the proceedings initiated for recovery of penalty under section 13 of the Act.
The High Court dismissed the writ petition, against which the present appeal was filed.
The appellant urged that indisputably the permission for the three years had been sought well before the commencement of the respective years but had been withheld for reasons, which were demonstrably extraneous; that the basic eligibil ity was conditioned by the notification of 30th June, 1969, which required a certificate from the Department of Indus tries and Commerce; that the requirement of the annual permission for adjustment envisaged by the notification of 11th August; 1975 was merely procedural, as clause 3 of the notification stipulated; and that if the conditions were satisfied, it was deemed that permission was given.
The respondents contended that it was not as if the right to the refund was denied or defeated by the inaction of the Deputy Commissioner but only one mode of the refund by adjustment became unavailable; that the benefit envis aged by the notification of 11th August, 1975 was in the nature of a concession and that the appellant in order to avail itself of its benefit had to show strict compliance with conditions subject to which it was available; that where exemptions were concerned, the conditions thereof ought to be strictly construed and strict compliance with them exacted before a person could lay claim to the 338 benefit of the exemptions; and that if, in the meanwhile, the period itself expired, no relief was possible as quite obviously, the requirements of 'prior permission ' became impossible of compliance.
Allowing the appeal, this Court, HELD: 1.
The main exemption is under the 1969 notifica tion.
The subsequent notification which contains condition of prior permission clearly envisages a procedure to give effect to the exemption.
[347E F] 2.
Clause 3 of the notification leaves no discretion to the Deputy Commissioner to refuse the permission, if the conditions are satisfied.
The words are that he "will grant".
There is no dispute that appellant had satisfied the conditions.
Yet the permission was withheld not for any valid and substantial reason, but owing to certain extrane ous things concerning some interdepartmental issues.
Appel lant had nothing to do with those issues.
[347F H] 3.
There was no other disentitling circumstance which would justify the refusal of the permission.
Appellant did not have prior permission, because it was withheld by the Revenue without any justification.
The High Court took the view that after the period to which the adjustment related had expired no permission could at all be granted.
A permis sion of this nature was a technical requirement and could be issued making it operative from the time it was applied for.
[349C D] 4.
A distinction between the provisions of statute which are of substantive character and were built in with certain specific objectives of policy on the one hand and those which are merely procedural and technical in their nature on the other must be kept clearly distinguished.
[347E G] 5.
The choice between a strict and a liberal construc tion arises only in case of doubt in regard to the intention of the Legislature manifest on the statutory language.
Indeed, the need to resort to any interpretative process arises only where the meaning is not manifest on the plain words of the statute.
If the words are plain and clear and directly convey the meaning, there is no need for any inter pretation.
[348F G] Assistant Commissioner of Commercial Taxes (Asstt.), Dharwar & Ors.
vs Dharmendra Trading Co. & Ors., ; ; Wells vs Minister of Housing and Local Government, at 1007 339 and Union of India & Ors.
vs M/s. Wood Papers Ltd. & Ors., [1991] JT (1) 151 at 155, referred to.
Kedarnath Jute Manufacturing Co. vs Commercial Tax Officer, Calcutta & Ors., ; at 630 and Col lector of Central Excise, Bombay and Anr.
vs Messrs Parle Exports (P) Ltd., ; , distinguished.
Francis Bennion: "Statutory Interpretation", 1984 edi tion at page 683, referred to.
| In response to a show cause notice dated March 15, 1957, under section 28(1)(c) of the Income Tax Act, before imposing a penalty for deliberate concealment of its income, the appellant, through its authorised representative, voluntarily agreed to a slum of Rs. 15,000/ being treated as income of Hindu Undivided Family.
The Income Tax officer, by his order dated March 20,1958, added a sum of Rs. 68,550/ to the income of the appellant and imposed on it a penalty of Rs. 26,000/ which on appeal was reduced to Rs. 15,000/ .
Meanwhile, on March 19, 1957, the appellant filed an application under section 25A of the Act for an order recording partition of joint family property in definite portions from June 22, 1956, claiming that date to be the date of partition.
The Income Tax officer, after due enquiries, accepted the disruption of the Hindu Undivided Family as claimed by his order dated March 26, 1962.
This led the appellant to contend that, in view of ' the orders dated March 26, 1962, of the Income Tax officer, the imposition of the penalty by him on March 20, 1958 was bad in law and could not be sustained.
The Tribunal uphold the contentions of the appellant resulting in a reference under section 66(1) of the Act to the High Court of Allahabad (Lucknow Bench), which reversed the decision or the Tribunal.
However, the High Court granted a certificate of fitness for appeal to this Court.
Dismissing the appeals the Court, ^ HELD: Sub section (3) of section 25A of the Income Tax Act embodies a legal fiction according to which a Hindu family which has been previously assessed as "undivided" is to be continued to be treated as "undivided" till the passing of the order under sub section
(1) of section 25A.
So long as no order under section 25(A)(1) 1 of the Act is recorded, the jurisdiction of the Income Tax officer to continue to assess as undivided despite a partition under personal law, a Hindu family which has hitherto been assessed in that status, remain unaffected.
[508G H] Additional Income Tax Officer, Quddapah vs A. Thimmayya vs Commissioner of Income Tax, Gujrat , applied.
Commissioner of Income Tax vs Sanchar Sah Bhim Sah section A. Raju Chattiar & Ors.
vs Collector of Madras & Anr. ; Mahankali Subba Rao Mahankali Nageswara Rao & Anr.
v, Commissioner of income Tax.
Hyderabad and Commissioner of Income Tax, Punjab vs Mothu Ram Prem Chand , not applicable
| The appellants were carrying on the business of growing and manufacturing tea in their estates.
The sellers of tea were the appellants; the purchasers were local agents of Foreign buyers.
The sales were by public auction at Fort Cochin.
They were conducted by brokers of tea.
The sales were in conformity with the provisions of Tea Act of 1953.
The Sales tax Officer assessed the appellants to pay sales tax on transactions of sale of tea chests at the auctions held at Fort Cochin in the years 1956 57 to 1958 59.
Against the orders of assessment the appellants filed petitions before the High Court for writs of certiorari and for writs of prohibition re straining the Sales tax Officer from proceeding with the collection of sales tax.
The petitions were dismissed by the High Court.
With special leave the appellants appealed to this Court.
It was the common case of all the appellants that the pur chases by the local agent of foreign buyers were with a view to export the goods to their principals abroad and that the goods were in fact exported out of India.
It was contended on behalf of the appellants that the sales of tea were "in the course of export out of the territory of India", and thus exempt from taxation under article 286(1)(b) ,of the Constitution.
Held: (per Gajendragadkar, C. J., Shah and Sikri, JJ.) (i) A transaction of sale which occasions export, or which is effected by a transfer of documents of title after the goods have crossed the customs frontiers, is exempt under article 286(1)(b) of the Constitution from sales tax levied under any State legislation.
A transaction of sale which is a preliminary to export of the commodity sold may be regarded as a sale for export, but is not necessarily to be regarded as one in the course of export, unless the sale occasions export.
Etymological the expression "in the course of export", contemplates an integral relation or bond between the sale and the export.
In general where a sale is effected by the seller, and the seller is not connected with the export which actually takes place, it is a sale for export.
Where the export is the result of sale, the export being inextricably linked up with sale so that the bond cannot be dissociated without a breach of the obligations arising by statute.
contract of mutual understanding between the parties arising from the nature of the transaction the sale is in the course of export.
707 (ii) A sale in the course of export predicates a connection between the sale and export, the two activities being so in tegrated that the connection between the two cannot be voluntarily interrupted, without a breach of the contract or the compulsion arising from the nature of the transaction.
In the present case there was between the sale and the export no such bond as would justify the inference that the sale and the export formed parts of a single transaction or that the sale and export were integrally connected.
The appellants were not concerned with the actual exportation of the goods, and the sales were intended to be complete without the export, and as such it cannot be said that the said sales occasioned export.
The sales were therefore for export and not in the course of export.
Therefore the sales by the appellant to the agents of foreign buyers do not come with the purview of article 286(1)(b) of the Constitution.
State of Travancore Cochin vs Bombay Company Ltd. ; , distinguished.
State of Travancore Cochin V.Shanmugha Vilas Cashew Nut Factory; , , State of Madras vs Gurviah Naidu and Company Ltd. A.I.R. 1956 S.C. 158, State of Mysore vs Mysore Shipping and Manufacturing Co. Ltd. 13 S.T.C. 529 and B.K. Wadear vs M/s. Daulatram Rameshwarlal , relied on.
M. R. K. Abdul Salem and Company vs Government of Madras, 13 S.T.C. 629, explained.
Per Ayyangar, J.
In the present case the sale and the export being related to each other in the sense of one lead .
in. to the other are therefore within article 286(1)(b) of the Constitution.
There could be no difference in legal effect between a sale to a Foreign buyer present in India to take delivery of the goods for transport to his country and a sale to his resident agent for that purpose.
The buyer was an agent, who was not free to deal with the tea purchased by effecting a local sale, but was under an obligation to his Foreign principal to export the goods purchased to a Foreign destination.
The goods purchased were in fact exported from this country.
It was with such a buyer that the appellants entered into the transaction of sale.
In other words it was a part of understanding between the seller and the buyer, inferrable from all the circumstances attendant on these transactions that the buyer was bound to export.
State of Travancore Cochin vs Shanmugha Vilas Cashew ; , State of Madras vs Gurviah Naidu and Co. Ltd. A.I.R. 1956 S.C. 158, State of Mysore vs Mysore Spinning and Manufacturing Co. Ltd. A.I.R. 1958 S.C. 1002 and East India Tobacco Co. vs The State of Andhra Pradesh, [1963]1 S.C.R. 404, referred to.
(ii) Even though the Tea Act does not in terms prohibit in ternal sale of tea 'Purchased alongwith export quota rights, this could be explained by the circumstance that the rights to export tea is considered a privilege which secures an economic advantage to the exporter and hence there was no need for any statutory compulsion to do so.
L/P(D) ISCI 23(a). .
|
n No. 105 of 1961.
Petition under article 32 of the Constitution of India for the enforcement of Fundamental Rights.
A. V. Viswanatha Sastri, M. K. B. Namburdripat and M. R. K. Pillai" for the petitioner.
M. C. Setalvad Attorney General of India, K. K. Mathew, Advocate General for the State of Kerala, Sardar Bahadur, George Pudissary and V. A. Seyid Muhammad, for the respondent.
December 5.
The Judgment of P.B. Gajendragadkar, A. K. Sarkar, K. N. Wanchoo and K. C. Das Gupta, JJ., was delivered by Gajendragadkar, J. N. Rajagopala Ayyangar, J., delivered a separate judgment.
GAJENDRAGADKAR, J.
This petition has been filed under article 32 of the Constitution and it seeks to challenge the validity of the Kerala Agrarian Relations Act, 1960 (Act 4 of 1961) (hereafter called the Act).
The petitioner owns about 1, 250 acres of land in the Kerala State.
These lands were originally situated within the erstwhile State of Cochin which now forms part of the Kerala State.
757 Out of the lands owned by the petitioner nearly 900 acres are classified in the land records maintained by the State as Pandaravaka holdings while the remaining lands are classified as Puravaka holdings.
By his petition the petitioner claims a declaration that the Act is ultra vires and unconstitutional and prays for a writ of certiorari or other appropriate writ, order or direction against the respondent, the State of Kerala, restraining it from implementing the provisions of the Act.
It appears that a notification has been issued by the respondent on February 15, 1961, directing the implementation of sections 1 to 40, 57,58,60,74 to 79 as well as sections 81 to 95 of the Act from the date of the notification.
The petitioner contends that the notification issued under the Act is also ultra vires, unconstitutional and illegal and as such he wants an appropriate writ or order to be issued quashing the said notification.
That in brief is the nature of the reliefs claimed by the petitioner.
The Kerala Agrarian Relations Bill which has ultimately become the Act was published in the Government Gazette of Kerala on December 18, 1957, and was introduced in the Kerala Legislative Assembly on December 21, 1957, by the Communist Government which was then in power.
The bill was discussed in the Assembly and was ultimately passed by it on June 10, 1959.
It was then reserved by the Governor of the State for the assent of the President under article 200 of the Constitution.
Meanwhile, on July 31, 1959 the President issued a proclamation under article 356 and the Assembly was dissolved.
In February 1960 mid term general elections took place in Kerala and as a result a coalition Government came into power.
On July 27,1960, the President for whose assent the bill was pending sent it back with his message requesting the Legislative Assembly to reconsider the bill in the light of the specific amendments suggested by him.
On August 2, 1960, the Governor returned the bill 758 remitted by the President with his message and the amendments suggested by him to the new Assembly for consideration.
On September 26, 1960, the amendments suggested by the President were taken up for consideration by the Assembly and ultimately on October 15, 1960, the bill as amended in the light of the President 's recommendations was passed by the Assembly.
It then received the assent of the President on January 21, 1961, and after it thus became law the impugned notification was issued by the respondent on February 15, 1961.
On March 9, 1961, the present writ petition was filed.
Broadly stated three points fall to be considered in this petition.
The petitioner challenges the validity of the Act on the preliminary ground that the bill which was pending before the President for his assent at the time when the Legislative Assembly was dissolved lapsed in consequence of the said dissolution and so it was not competent to the President to give his assent to a lapsed bill with the result that the said assent and all proceedings taken subsequent to it are constitutionally invalid.
If this preliminary point is upheld no further question would arise and the petition will have to be allowed on that ground alone.
If however, this preliminary challenge to the validity of the bill does not succeed the respondent raises its preliminary objection that the Act is protected under article 31 A (1) (a) and as such its validity cannot be challenged on the ground that it is inconsistent with, or takes away, or abridges, any of the rights conferred by articles 14, 19 and 31.
This point raises the question as to whether the properties owned and possessed by the petitioner are an "estate" within the meaning of article 31 A (2) (a).
If this question is answered in the affirmative then the Act would be protected under article 31 A (1) (a) and the challenge to its validity on the ground that it is inconsistent with articles 14,19 and 31 will not 759 survive.
If, however, it is held that the whole or any part of the properties with which the petitioner is concerned is outside the purview of "estate" as described by article 31 A (2) (a) the challenge to the validity of the Act on the merits would have to be considered.
The petitioner contends that the material provisions of the Act contravenes the fundamental rights guaranteed by Arts, 14, 19 (1) (f) and 31 of the Constitution.
That is how three principal points would call for our decision in the present writ petition.
Let us first examine the argument that the bill which was pending the assent of the President at the time when the legislative Assembly was dissolved has lapsed and so no further proceedings could have been validly taken in.
respect of it.
In support of this argument it is urged that wherever the English parliamentary form of Government prevails the words "prorogation" and "dissolution" have acquired the status of terms of art and their significance and consequence are well settled.
The argument is that if there is no provision to the contrary in our Constitution the English convention with regard to the consequence of dissolution should be held to follow even in India.
There is no doubt that, in England, in addition to bringing a session of Parliament to a close prorogation puts and end to all business which is pending consideration before either House at the time of such prorogation; as a result any proceedings either in the House or in any Committee of the house lapse with the session Dissolution of Parliament is invariably preceded by prorogation, and what is true about the result of prorogation is, it is said, a fortiori true about the result of dissolution (1).
Dissolution of Parliament is sometimes described as "a civil death of Parliament".
Ilbert, in his work on 760 'Parliament ', has observed that "prorogation means the end of a session (not of a Parliament)"; and adds that "like dissolution, it kills all bills which have not yet passed".
He also describes dissolution as an "end of a Parliament (not merely of a session) by royal proclamation", and observes that "it wipes the slate clean of all uncompleted bills or other proceedings".
Thus, the petitioner contends that the inevitable conventional consequence of dissolution of Parliament is that there is a civil death of Parliament and all uncompleted business pending before Parliament lapses.
In this connection it would be relevant to see how Parliament is prorogued.
This is how prorogation is described in May 's "Parliamentary Practice": "If Her Majesty attends in person to prorogue Parliament at the end of the session.
the same ceremonies are observed as at the opening of Parliament: the attendance of the Commons in the House of Peers is commanded; and, on their arrival at the bar, the Speaker addresses Her Majesty, on presenting the supply bills, and adverts to the most important measures that have received the sanction of Parliament during the session.
The royal assent is then given to the bills which are awaiting that sanction, and Her Majesty 's Speech is read to both Houses of Parliament by herself or by her Chancellor; after which the Lord Chancellor, having received directions from Her Majesty for that purpose, addresses both Houses in this manner: "My Lords and Members of the House of Commons, it is Her Majesty 's royal will and pleasure that this Parliament be prorogued (to a certain day) to be then here holden; and this Parliament is accordingly prorogued" (2).
According to May, the effect of prorogation is at once to suspend all business until Parliament shall be summoned again.
Not only are the proceedings of Parliament at an end but all proceedings pending at the time are quashed except 761 impeachment by the Commons and appeals before the House of Lords.
Every bill must therefore be renewed after prorogation as if it had never been introduced.
To the same effect are the statements in Halsbury 's "Laws of England" (Vide: Vol.
28, pp. 371, 372, paragraphs 648 to 651).
According to Anson, "prorogation ends the session of both Houses simultaneously and terminates all pending business.
A bill which has passed through some stages but which is not ripe for royal assent at the date of prorogation must begin at the earliest stage when Parliament is summoned again and opened by a speech from the throne" (1).
It would thus be seen that under English parliamentary practice bills which have passed by both Houses and are awaiting assent of the Crown receive the royal assent before the Houses of Parliament are prorogued.
In other words, the procedure which appears to be invariably followed in proroguing and dissolving the Houses shows that no bill pending royal assent is left outstanding at the time of prorogation or dissolution.
That is why the question as to whether a bill which is pending assent lapses as a result of prorogation or dissolution does not normally arise in England.
Thus, there can be no doubt that in England the dissolution of the Houses of Parliament kills all business pending before either House at the time of dissolution.
According to the petitioner, under our Constitution the result of dissolution should be held to be the same; and since the bill in question did not receive the assent of the President before the Assembly was dissolved it should be held that the said bill lapsed.
This argument has taken another form.
The duration of the Legislative Assembly is prescribed by article 172(1), and normally at the end of five years the life of the Assembly would come to an end.
Its life could come to an end even before the expiration of the said period 762 of five years if during the said five years the President acts under article 356.
In any case there is no continuity in the personality of the Assembly where the life of one Assembly comes to an end and another Assembly is in due course elected.
If that be so, a bill passed by one Assembly cannot, on well recognised principles of democratic government.
be brought back to the successor Assembly as though a change in the personality of the Assembly had not taken place.
The scheme of the Constitution in regard to the duration of the life of State Legislative Assembly, it is urged, supports the argument that with the dissolution of the Assembly all business pending before the Assembly at the date of dissolution must lapse.
This position would be consonant with the well recognised principles of democratic rule.
The Assembly derives its sovereign power to legislate essentially because it represents the will of the citizens of the State, and when one Assembly has been dissolved and another has been elected in its place, the successor Assembly cannot be required to carry on with the business pending before its predecessor, because that would assume continuity of personality which in the eyes of the Constitution does not exist.
Therefore, sending the bill back to the successor Assembly with the message of the President would be inconsistent with this basic principle of democracy.
It is also urged that in dealing with the effect of the relevant provisions of the legislative procedure prescribed by article 196 it would be necessary to bear in mind that the powers of the legislature which are recognised in England will also be available to the State Legislature under article 194 (3).
The argument is that whether or not a successor Legislative Assembly can carry on with the business pending before its predecessor at the time of its dissolution is really 763 a matter of the power of the Legislature and as such the powers of the Legislative Assembly shall be "such as may from time to time be defined, by the Legislature by law, and, until so defined, shall be those of the House of Commons of Parliament of the United Kingdom, and of its Members and Committees, at the commencement of this Constitution".
In other words, this argument assumes that the conventional position with regard to the effect of dissolution of Parliament which prevails in England is expressly saved in India by virtue of article 194(3) until a definite law is passed by the State Legislature in that behalf to the contrary.
It would be noticed that this argument purports to supply a constitutional basis for the contention which we have already set out that the word "dissolution" is a term of art and its effect should be the same in India as it is in England.
It may incidentally be pointed out that the corresponding provisions for our Parliament are contained in article 104(3).
As we have already mentioned there is no doubt that dissolution of the House of Parliament in England brings to a close and in that sense kills all business pending before either House at the time of dissolution; but, before accepting the broad argument that this must inevitably be the consequence in every country which has adopted the English Parliamentary form of Government it would be necessary to enquire whether there are any provisions made by our Constitution which deal with the matter; and if the relevant provisions of our Constitution provide for the solution of the problem it is that solution which obviously must be adopted.
This position is not disputed.
Therefore, in determining the validity of the contentions raised by the petitioner it would be necessary to interpret the provisions of article 196 and determine their effect.
The corresponding provisions in regard to the 764 legislative procedure of Parliament are contained in article 107.
The argument based on the provisions of article 194(3) is, in our opinion, entirely misconceived.
The powers, privileges and immunities of State Legislatures and their members with which the said Article deals have no reference or relevance to the legislative procedure which is the subject matter of the provisions of article 196.
In the context, the word 'powers ' used in article 194(3) must be considered along with the words "privileges and immunities" to which the said clause refers, and there can be no doubt that the said word can have no reference to the effect of dissolution with which we are concerned.
The powers of the House of the Legislature of a State to which reference is made in article 194(3) may, for instance, refer to the powers of the House to punish contempt of the House.
The two topics are entirely different and distinct and the provisions in respect of one cannot be invoked in regard to the other.
Therefore, there is no constitutional basis for the argument that unless the Legislature by law has made a contrary provision the English convention with regard to the effect of dissolution shall prevail in this country.
What then is the result of the provisions of article 196 which deals with the legislative procedure and makes provisions in regard to the introduction and passing of bills? Before dealing with this question it may be useful to refer to some relevant provisions in regard to the State Legislature under the constitution.
Article 168 provides that for every State there shall be a Legislature which shall consist of the Governor and (a) in the States of Bihar, Bombay, Madhya Pradesh, Madras, Mysore, Punjab, Uttar Pradesh and West Bengal, two Houses, and (b) in other States, one House.
In the present petition we are concerned with the State of Kerala which has only one House 765 Article 168 (2) provides that where there are two House of the Legislature of a State.
one shall be known as the Legislative Council and the other as the Legislative Assembly, and where there is only one House, it shall be known as the Legislative Assembly.
Article 170 deals with the composition of the Legislative Assembly.
and article 171 with that of the Legislative Council.
Article, 172 provides for the duration of the State Legislatures.
Under article 172(1) the normal period for the life of the Assembly is five years unless it is sooner dissolved.
Article 172(2) provides that the Legislative Council of a State shall not be subjected to dissolution, but as nearly as possible one third of the members thereof shall retire as soon as may be on the expiration of every second year in accordance with the provisions made in that behalf by Parliament by law.
It would thus be seen that under the Constitution where the State Legislature is bicameral the Legislative Council is not subject to dissolution and this is a feature which distinguishes the State Legislatures from the England Houses of Parliament.
When the Parliament is dissolved both the Houses stand dissolved, whereas the position is different in India.
In the States with bicameral Legislature only the Legislative Assembly can be dissolved but not the Legislative Council.
The same is the position under article 83 in regard to the House of the People and the Council of States.
This material distinction has to be borne in mind in construing the provisions of article 196 and appreciating their effect.
Article 196 reads thus: "196.
(1) Subject to the provisions of Articles 198 and 207 with respect to Money Bills and other financial Bills, a Bill may originate in either House of the Legislature of a State which has a Legislative Council.
766 (2) Subject to the provision of articles 197 and 198, a Bill shall not be deemed to have been passed by the Houses of the Legislature of a State having a Legislative Council unless it has been agreed to by both Houses either without amendment or with such amendments only as are agreed to by both Houses.
(3) A Bill pending in the Legislature of a State shall not lapse by reason of the prorogation of the House or Houses thereof.
(4) A Bill pending in the Legislative Council of a State which has not been passed by the Legislative Assembly shall not lapse on a dissolution of the Assembly.
(5) A Bill which is pending the Legislative Assembly of a State, or which having been passed by the Legislative Assembly is pending in the Legislative Council, shall lapse on a dissolution of the Assembly".
With the first two clauses of this Article we are not directly concerned in the present petition.
It is the last three clauses that call for our examination Under cl.
(3) a Bill pending in the Legislature of a State will not lapse by reason of the prorogation of the House or Houses thereof.
Thus, this clause marks a complete departure from the English convention inasmuch as the prorogation of the House or Houses does not affect the business pending before the Legislature at the time of prorogation.
In considering the effect of dissolution on pending business it is therefore necessary to bear in mind this significant departure made by the Constitution in regard to the effect of prorogation.
Under this clause the pending business may be pending either in the Legislative Assembly or in the Legislative Council or may be pending the assent of the Governor.
At whichever stage the 767 pending business may stand, so long as it is pending before the Legislature of a state it shall not lapse by the prorogation of the Assembly.
Thus, there can be no doubt that unlike in England prorogation does not wipe out the pending business.
Clause (4) deals with a case where a Bill is pending in the Legislative Council of a State and the same has not been passed by the Legislative Assembly; and it provides that such a bill pending before the Legislative Council of a State shall not lapse on the dissolution of the Legislative Assembly.
It would be noticed that this clause deals with the case of a Bill which has originated in the Legislature Council and has yet to reach the Legislative Assembly; and so the Constitution provides that in regard to such a Bill which has yet to reach, and be dealt with by, the Legislative Assembly the dissolution of the Legislative Assembly will not affect its further progress and it will not lapse despite such dissolution.
That takes us to cl.
This clause deals with two categories of cases.
The first part deals with Bills which are pending before the Legislative Assembly of a State, and the second with Bills which having been passed by the Legislative Assembly are pending before the Legislative Council.
The Bills falling under both the clause lapse on the dissolution of the Assembly.
The latter part of cl.
(5) deals with cases of Bills which are supplemental to the cases covered by cl.
Whereas cl.(4) dealt with Bills which had originated in the Legislative Council the latter part of cl.(5) deals with Bills which, having originated in the Legislative Assembly, have been passed by it and are pending before the Legislative Council.
Since cl.
(4) had provided that Bills falling under it shall not lapse on dissolution of the Assembly it was thought necessary to provide as a matter of precaution that Bills falling under the latter part of cl.
(5) shall lapse on the dissolution of the Assembly.
768 That leaves part 1 of cl.
(5) to be considered.
This part may cover three classes of cases.
It may include a Bill which is pending before the Legislative Assembly of a State which is unicameral and that is the case with which we are concerned in the present proceedings.
It may also include a case of a Bill which is pending before the Legislative Assembly of a state which is bicameral; or it may include a case of a Bill which has been passed by the Legislative Council in a bicameral State and is pending before the Legislative Assembly.
In all these cases the dissolution of the Assembly leads to the consequence that the Bills lapse.
It is significant that whereas cl.
(3) deals with the case of a Bill pending in the Legislature of a State, cl.
(5) deals with a Bill pending in the Legislative Assembly of a State or pending in the Legislative Council; and that clearly means that a Bill pending assent of the Governor or the President is outside cl.
If the Constitution makers had intended that a Bill pending assent should also lapse on the dissolution of the Assembly a specific provision to that effect would undoubtedly have been made.
Similarly, if the Constitution makers had intended that the dissolution of the Assembly should lead to the lapse of all pending business it would have been unnecessary to make the provisions of cl.
(5) at all.
The cases of Bills contemplated by cl.
(5) would have been governed by the English convention in that matter and would have lapsed without a specific provision in that behalf.
Therefore, it seems to us that the effect of cl.
(5) is to provide for all cases where the principle of lapse on dissolution should apply.
If that be so, a Bill pending assent of the Governor or President is outside cl.
(5) and cannot be said to lapse on the dissolution of the Assembly.
It is however, contended by the petitioner that if cl.
(5) was intended to deal with all cases 769 where pending business would lapse on the dissolution of the Assembly it was hardly necessary to make any provision by cl.
There is no doubt in force in the contention; but, on the other hand it may have been thought necessary to make a provision for Bill pending in the Legislative Council of a State because the Legislative Council of a continuing body not subject to dissolution and the Constitution wanted to make a specific provision based on that distinctive character of the Legislative Council.
Having made a provision for a Bill originating and pending in the Legislative Council by cl.
(4) it was thought necessary to deal with a different category of cases where Bills have been passed by the Legislative Assembly and are pending in the Legislative Council; and so the latter part of cl.
(5) was included in cl.
On the other hand, if the petitioner 's contention is right cls.
(3) and (4) of article 196 having provided for cases were business did not lapse it was hardly necessary to have made any provisions by cl.
(5) at all.
In the absence of cl.
(5) it would have followed that all pending business, on the analogy of the English convention, would laps on the dissolution of the Legislative Assembly.
It is true that the question raised before us by the present petition under article 196 is not free from difficulty but, on the whole, we are inclined to take the view that the effect of cl.
(5) is that all cases not falling within its scope are not subject to the doctrine of lapse of pending business on the dissolution of the Legislative Assembly.
In that sense we read cl.
(5) as dealing exhaustively with Bills which would lapse on the dissolution of the Assembly.
If that be the true position then the argument that the Bill which was pending assent of the President lapsed on the dissolution of the Legislative Assembly cannot be upheld.
In this connection it is necessary to consider articles 200 and 201 which deal with Bills reserved for the assent of the Governor or the President.
770 Article 200 provides, inter alia, that when a Bill has been passed by the Legislative Assembly of a State it shall be presented to the Governor, and the Governor shall declare either that he assents to the Bill or that he withholds assent therefrom or that he reserves the Bill for the consideration of the President.
The proviso to this Article requires that the Governor may, as soon as possible after the presentation to him of the Bill for assent, return the Bill if it is not a Money Bill together with a message requesting that the House or Houses will reconsider the Bill or any specified provisions thereof and, in particular, will consider the desirability of introducing any such amendments as he may recommend in his message and, when a Bill is so returned the House or Houses shall reconsider the Bill accordingly, and if the Bill is passed again by the House or Houses with or without amendment and presented to the Governor for assent the Governor shall not withhold assent therefrom.
The Second proviso deals with cases where the Governor shall not assent to but shall reserve for the consideration of the President any Bill which in the opinion of the Governor would, if it became law, so derogate from the powers of the High Court as to endanger the position which that Court is by this Constitution designed to fill.
Article 201 then deals with the procedure which has to be adopted when a Bill is be assented to by the President.
Under the said Article the President shall declare either that he assents to the Bill or that he withholds assent therefrom.
The proviso lays down, inter alia, that the President may direct the Governor to return the Bill to the House together, with such message as is mentioned in the first proviso to article 200, and when a Bill is so returned the House shall reconsider it accordingly within a period of six months from the date of receipt of such message, and if it is again passed by the House with or without amendment it shall be presented again to the President for his consideration.
The provisions of 771 these two Articles incidentally have a bearing on the decision of the question as to the effect of article 196.
The corresponding provision for Parliamentary Bill is contained in article 111.
It is clear that if a Bill pending the assent of the Governor or the President is hold to lapse on the dissolution of the Assembly unlikely that a fair number of Bills which may have been passed by the Assembly, say during the last six months of its existence, may be exposed to the risk of lapse consequent on the dissolution of the Assembly, unless assent is either withheld or granted before the date of the dissolution.
If we look at the relevant provisions of articles 200 and 201 from this point of view it would be significant that neither Article provides for a time limit within which the Governor or the President should come to a decision on the Bill referred to him for his assent.
Where it appeared necessary and expedient to prescribe a time limit the Constitution has made appropriate provisions in that behalf (vide : article 197 (1)(b) and (2)(b)).
In fact the proviso to article 201 requires that the House to which the Bill is remitted with a message from the President shall reconsider it accordingly within a period of six months from the date of the receipt of such message.
Therefore, the failure to make any provision as to the time within which the Governor or the President should reach a decision may suggest that the Constitution makers knew that a Bill which was pending the assent of the Governor or the President did not stand the risk of laps on the dissolution of the Assembly.
That is why no time limit was prescribed by articles 200 and 201.
Therefore, in our opinion, the scheme of articles 200 and 201 supports the conclusion that a Bill pending the assent of the Governor or the President does not lapse as a result of the dissolution of the Assembly and that incidentally shows that the provisions of article 196(5) are exhaustive.
772 At this stage it is necessary to examine another argument which has been urged against the validity of the Act on the strength of the provisions of articles 200 and 201.
It is urged that even if it be held that the Bill does not lapse, the Act is invalid because it has been passed in contravention of articles 200 and 201.
The argument is that the scheme of the said two Articles postulates that the Bill which is sent back with the message of the President ought to be sent back to the same house that originally passed it.
It is pointed out that when the message is sent by the President the House the requested to reconsider the Bill and it is provided that if the Bill is again passed by the House the Governor shall not withhold assent therefrom.
This argument proceeds on the basis that the concept of reconsideration must involve the identity of the House, because unless the House had considered it in the first instance it would be illogical to suggest that it should reconsider it.
Reconsideration means consideration of the Bill again and that could be appropriately done only if it is the same House that should consider it at the second stage.
The same comment is made on the use of the expression "if the Bill is passed against.
It is also urged that it would be basically unsound to ask the successor House to take the Bill as it stands and not give it an opportunity to consider the merits of all the provisions of the Bill.
We are not impressed by these pleas.
When the successor House is considering the Bill it would be correct to say that the Bill is being reconsidered because in fact it had been considered once.
Similarly, when it is said that if the Bill is passed again the Governor shall not withhold assent therefrom it does not postulate the existence of the same House because even if it is the successor House which passes it is true to say that the Bill has been passed again because in fact it had been passed on an early occasion.
Besides, if the effect of article 196 is that the Bills 773 pending assent do not lapse on the dissolution of the House then relevant provisions of article 200 must be read in the light of that conclusion.
In our opinion, there is nothing in the proviso to article 201 which is inconsistent with the basic concept of democratic Government in asking a successor House to reconsider the Bill with the amendments suggested by the President because the proviso makes it, perfectly clear that it is open to the successor House to throw out the Bill altogether.
It is only if the Bill passed by the successor House that the stage is reached to present it to the Governor or President for his assent, not otherwise.
Therefore, there is no substance in the argument that even if the effect of article 196 is held to be against the theory of lapse propounded by the petitioner the Bill is invalid because it has been passed in contravention of the provisions of articles 200 and 201.
This argument proceeds on the assumption that the House to which the Bill is sent must be the same House and that assumption, we think is not well founded.
We would accordingly hold that the preliminary contention raised against the validity of the Bill cannot be sustained.
That takes us to the point raised by the respondent that the Act attracts the protection of article 31A (1)(a) and so is immune from any challenge under articles 14, 19 and 31.
There is no doubt that if the Act falls under article 31A(1)(a) its validity cannot be impugned on the ground that it contravenes articles 14, 19 and 31; but the question still remains: Does the Act fall under article 31A (1) (a) ?; and the answer to this question depends on whether or not the properties of the petitioner fall within article 31A(2)(a).
Before dealing with this point it is necessary to set out the relevant provisions of article 31A (2) Article 31A(2) reads thus: "31A (2).
In this article (a) the expression 'estate ' shall, in relation to any local area, have the same meaning 774 as that expression or its local equivalent has in the existing law relating to land tenures in force in that area, and shall also include any jagir, inam or muafi or other similar grant, and in the States of Madras and Kerala any janmam right; (b) the expression 'rights ', in relation to an estate, shall include any rights vesting in a proprietor, sub proprietor, under proprietor tenure holder, raiyat, under raiyat or other intermediary and any rights or privileges in respect of land revenue.
" Article 31A was added by the Constitution (First Amendment) Act, 1951, with retrospective effect.
Similarly, the portion in italics was added by the Constitution (Forth Amendment) Act, 1955, with retrospective effect.
It is well known that the Constitution First Amendment of 1951 was made in order to validate the acquisition of zamindari estates and the abolition of permanent settlement.
In other words the effect of the First Amendment was to provide that any law which affected the right of any proprietor or intermediate holder in any estate shall not be void on the ground that its provisions were inconsistent with any of the fundamental rights guaranteed by part III of the Constitution.
The acquisition of zamindnri rights and the abolition of permanent settlement, however, was only the first step in the matter of agrarian reform which the Constitution makers had in mind.
When the first zamindari abolition laws were passed in pursuance of the programme of social welfare legislation their validity was impugned on the ground that they contravened the provisions of articles 14, 19 and 31.
In order to save the impugned legislation from any such challenge articles 31A and 31B and the Ninth Schedule were enacted by the Constitution First Amendment Act; and it is in that context that article 31A (2) (a) 775 and (b) were also enacted.
After the zamindari abolition legislation was thus saved the Constitution makers thought of enabling the State Legislatures to take the next step in the matter of agrarian reform.
As subsequent legislation passed by several States shows the next step which was intended to be taken in the matter of agrarian reform was to put a ceiling on the extent of individual holding of agricultural land.
The inevitable consequence of putting a ceiling on individual occupation or ownership of such agricultural land was to provide for the acquisition of the land held in excess of the prescribed maximum for distribution amongst the tillers of the soil.
It is in the light of this background that we have to determine the question as to whether the property with which the petitioner is concerned constitutes an estate or rights in relation to an estate under cl.
(2)(a) or (b).
The petitioner contends that in interpreting the expression "estate" we must have regard to the fact that originally it was intended to cover case of zamindars and other intermediaries who stood between the State and the cultivator and who were generally alienees of land revenue; and so it is urged that it is only what may be broadly described as landlord tenures which fall within the scope of the expression "estate ".
It is conceded that the expression "rights in relation to an estate " as it now stands is very broad and it includes the interest of a raiyat and also an under raiyat; but it is pointed out that the said rights, however comprehensive and broad they may be, must be rights in relation to an estate, and unless the property satisfies the test which would have been reasonably applied in determining the scope of "estate" in 1950 the amendment made in cl.
(2)(b) will not make the denotation of the word "estate" any broader.
In other words, the argument is that the denotation which the expression "estate " had in 1950 continues to be the same even after the 776 amendments of 1965 because no suitable amendment has been made in cl.
(2) (a).
But the infirmity in this argument is that the limitation which the petitioner seeks to place on the denotation of the expression "estate" is not justified by any words used in cl.
(2)(a) at all; it is introduced by reading cls.
(2)(a) and (b) together, and that would not be reasonable or legitimate.
In deciding what an "estate" means in cl.
(a) we must in the first instance construe cl.
(a) by itself.
In dealing with the effect of cl.
(2) (a) two features of the clause are significant.
First, that the definition has been deliberately made inclusive, and second, that its scope has been left to be determined not only in the light of the content of the expression "estate " but also in the light of the local equivalent of the expression "estate" as may be found in the existing law relating to land tenure in force in that area.
The Constitution makers were fully conscious of the fact that the content of the expression "estate" may not be identical in all the areas in this country and that the said concept may not be described by the same word by the relevant existing law; and so the decision of the question as to what an estate is has been deliberately left rather elastic.
In each case the question to decide would be whether the property in question is described as an estate in the terminology adopted by the relevant law.
If the said law uses the word "estate" and defines it the there is no difficulty in holding the property described by the local law as an estate is an estate for the purpose of this clause.
The difficulty arises only where the relevant local law does not describe any agricultural property expressly as an estate.
It is conceded that though no agricultural property may be expressly described as an estate by the local law, even so there may be some properties in the area which may constitute an 777 estate under cl.
(2) (a); and so in deciding which property constitutes an estate it would be necessary to examine its attributes and essential features and enquire whether it satisfies the test implied by the expression "estate " as used in cl.
(2) (a) In this connection it is pertinent to remember that the Constitution makers were aware that in several local areas in the country where the zamindari tenure did not prevail the expression "estate" as defined by the relevant law included estates which did not satisfy the requirement of the presence of intermediaries, and yet cl.
(2)(s) expressly includes estates in such areas within its purview and that incidentally shows that the concept of " estate " as contemplated by cl.
(2)(a) is not necessarily conditioned by the rigid and inflexible requirement that it must be landlord tenure of the character of zamindari estate.
That is why, treating the expression "estate" as of wide denotation in every case we will have to enquire whether there is a local definition of "estate" prevailing in the relevant existing law; if there is one that would determine the nature of the property.
If there is no definition in the relevant existing law defining the word "estate" as such we will have to enquire whether there is a local equivalent, and in that connection it would be necessary to consider the character of the given agricultural property and its attributes and then decide whether it can constitute an estate under cl.
(2)(a).
If the expression "estate" is construed in the narrow sense in which the petitioner wants it to be construed then it may not be easy to reconcile the said narrow denotation with the wide extent of the word "estate" as is defined in some local definitions of the word "estate ".
Therefore, in deciding the question as to whether the properties of the petitioner are an "estate" within the meaning of article 31A(2)(a) we are not prepared to adopt 778 the narrow construction that the estate must always and in every case represent the estate held by zamindars or other similar intermediaries who are the alienees of land revenue.
This question can also be considered from another point of view.
As we will presently point out, decisions of this Court in relation to agricultural estates existing in areas where the zamindari tenure does not prevail clearly show that the definitions in the relevant existing laws in those areas include properties within the expression "estate" despite the fact that the condition of the existence of the intermediary is not satisfied by them, and so there can be no doubt that even in such ares if the definition of the word "estate" includes specified agricultural properties they would be treated as estates under cl.
(2)(a).
Now just consider what would be the position in areas where the zamindari tenure does not prevail and where the relevant existing law dose not contain a definition of an "estate" as such.
According to the petitioner 's argument where in such a case it is necessary to find out a local equivalent of an estate the search for such a local equivalent would be futile, because in the area in question the condition or test of the presence of intermediaries may not be satisfied and that would mean that the main object with which the Constitution First and Fourth Amendment Acts of 1951 and 1955 were passed would be of no assistance to the State Legislatures in such local areas.
If the State Legislatures in such local areas want to enact a law for agrarian reform they would not be able to claim the benefit of article 31 A (1)(a).
Indeed, the petitioner concedes that on his construction of cl.
(2) (a) the intended object of the amendments may not be carried out in certain areas where the existing relevant law does not define an estate as such; but his argument is that the Constitution makers failed to give effect to their intention 779 because they omitted to introduce a suitable amendment in cl.
(2)(a).
On a fair construction of cl.
(2) (a) we do not think that we are driven to such a conclusion.
Therefore, we are not inclined to accept the petitioner 's narrow interpretation of the word "estate" in cl.
(2) (a).
It is necessary therefore to have some basic idea of the meaning of the word "estate" as used in article 31A(2) (a).
As we have said already, where the word "estate" as such is used in the existing law relating to land tenures in force in a particular area, there is no difficulty and the word "estate" as defined in the exiting law would have that meaning for that area and there would be no necessity for looking for a local equivalent.
But where the word "estate" as such is not defined in an existing law it will be necessary to see if some other term is defined or used in the existing law in a particular area which in that area is the local equivalent of the word "estate".
In that case the word "estate" would have the meaning assigned to that term in the existing law in that area.
To determine therefore whether a particular term defined or used in a particular area is the local equivalent of the word "estate" as used in article 31 A (2) (a) it is necessary to have some basic concept of the meaning of the word "estate" as used in the relevant Article of the Constitution.
It seems to us that the basic concept of the word "estate" is that the person holding the estate should be proprietor of the soil and should be in direct relationship with the State paying land revenue to it except where it is remitted in whole or in part.
If therefore a term is used or defined in any existing law in a local area which corresponds to this basic concept of "estate" that would be the local equivalent of word "estate" in that area.
It is not necessary.
that there must be an intermediary in an estate before it can be called an estate within the meaning of article 31 A (2)(a); it is true that in 780 many cases of estate such intermediaries exist, but there are many holders of small estates who cultivate their lands without any intermediary whatever.
It is not the presence of the intermediary that determines whether a particular landed property is an estate or not; what determines the character of such property to be an estate is whether it comes within the definition of the word "estate" in the existing law in a particular area or is for the purpose of that area the local equivalent of the word "estate" irrespective of whether there are intermediaries in existence or not.
This in our opinion, is also borne out by consideration of the relevant decisions of this Court to which we will now turn.
The decisions of this Court where this question has been considered lend support to the construction of the word "estate" for which the respondent contends.
In Sri Ram Ram Narain Medhi vs The State of Bombay (1) the constitutional validity of the Bombay Tenancy and Agricultural Lands (Amendment) Act 1956 (Bombay Act XIII of 1956) amending the Bombay Tenancy and Agricultural Lands Act, 1948 (Bombay Act LXVII of 1948), was considered by this Court.
Section 2(5) of the Bombay Land Revenue Code, 1879, had defined the word "estate" as meaning any interest lands and the aggregate of such interested vested in a person or aggregate of persons capable of holding the same.
This Court held that the Bombay Land Revenue Code was the existing law relating to land tenures in force in the State of Bombay and that the definition of the word "estate" as prescribed by s.2(5) had the meaning of any interest in land and it was not confined merely to the holdings of landholders of alienated lands.
The expression applied not only to such estate holders but also to land holders and occupants of unalienated lands".
It would be noticed that section 2(5) referred to "any 781 interest in lands" and the expression "lands" was undoubtedly capable of comprising within its ambit alienated and unalienated lands.
The argument urged by the petitioner in that case in attacking the validity of the impugned Act in substance was that having regard to the narrow denotation of the "estate" used in article 31A(2)(a) the broader construction of section 2(5) of the Bombay Land Revenue Code should not be adopted, and in construing what is the local equivalent of the expression "estate" in Bombay the narrow construction of section 2(5) should be adopted and its operation should be confined to alienated lands alone.
This contention was rejected and it was held that the estate as defined was not confined merely to the holdings of landholders of alienated lands.
It is true that the decision proceeded substantially on the interpretation of section 2(5) of the local Act ; but it may be observed that if the denotation of the word "estate" occurring in article 31A(2)(a) was as narrow as is suggested to by the petitioner before us this Court would have treated that as a relevant and material fact in considering the contention of the petitioner before it that the narrow construction of section 2(5) should be adopted.
There is no doubt that the property which was held to be an estate in Medhi 's case (1) would not be an estate within the narrow meaning of the word as suggested by the petitioner.
In Atma Ram vs The State of Punjab (2), this Court had occasion to consider the meaning of the expression "estate" in the light of the Punjab Land Revenue Act, 1887.
Section 3(1) of the said Act had provided that an "estate" means any area (a) for which a separate record of rights has been made, or (b) which has separately assessed to land revenue, or would have been so assessed if the land revenue had not been released, compounded for or redeemed, or(c) which the State Government may by general rule or special order, declare to be an estate.
Section 3(3) which is also relevant provided 782 that "holding" means a share or portion of an estate held by one landowner or jointly by two or more landowners.
One of the arguments urged by the petitioner before the Court was that a part of the holding was not an estate within the meaning of section 3(1) of the local Act.
This argument was rejected.
In dealing with the question as to whether the property held by the petitioner was an estate under the article 31A(2)(a) it became necessary for the Court to consider the amplitude of the expression "any estate or of any rights therein" in article 31A (1) (a).
Sinha J., as he then was, who spoke for the Court, has elaborately examined the different kinds of land tenures prevailing in different parts of India, and has described the process of sub infeudation which was noticeable in most of the areas in course of time.
An "estate", it was observed, "is an area of land which is unit of revenue assessment and which is separately entered in the Land Revenue Collector 's register or revenue paying or revenue free estates".
"Speaking generally", observed Sinha, J., "It may be said that at the apex of the pyramid stands the State.
Under the State, a large number of persons variously called proprietors, zamindars, malguzars, inamdars and jagirdars, etc., hold parcels of land, subject to the payment of land revenue designated as peshkash, quitrent or malguzari, etc., representing the Government demands by way of land tax out of the usufruct of the land constituting an state, except where the Government demands had been excused in whole or in part by way of reward for service rendered to the State in the past, or to be rendered in the future" (p. 759).
"Tenure holders", it was observed, "were persons who took lands of an estate not necessarily for the purpose of self cultivation, but also for settling tenants on the land and realising rents from them.
Thus, in each grade of holders of land, in the process of sub infeudation the holder is a tenant under his superior holder 783 the landlord, and also the landlord of the holder directly holding under him" (pp. 760, 761).
Having thus considered the background of the land tenures in Punjab and elsewhere this Court proceeded to consider the amplitude of the crucial words "any estate or of any rights therein" in article 31A(1)(a). "According to this decision as the connotation of the term "estate" was different in different parts of the country, the expression "estate" described in cl.
(2) of article 31A, has been so broadly defined as to cover all estates in the country, and to cover all possible kinds of rights in estates, as shown by sub cl.
(b) of cl.
(2) of article 31 A" (p. 762).
"The expression `rights ' in relation to an estate has been given an all inclusive meaning comprising both what we have called, for the sake of brevity, the horizontal and vertical divisions of an estate.
The Provisions aforesaid of article 31 A, bearing on the construction of the expression `estate ' or `rights ' in an estate, have been deliberately made as wide as they could be in order to take in all kinds of rights quantitative and qualitative in an area coextensive with an estate or only a portion thereof" (p. 763).
Further observations made in the judgment in regard to the effect of the addition of words "raiyats" and "under raiyats" in cl.
(b) may also be usefully quoted : "The expression `rights ' in relation to an estate again has been used in a very comprehensive sense of including not only the interests of proprietors or Sub proprietors but also of lower grade tenants, like raiyats or under raiyats, and then they added, by way of further emphasising their intention, the expression `other intermediary ', thus clearly showing that the enumeration of intermediaries was only illustrative and not exhaustive" (p. 765).
Thus, this decision shows that the amendments made by the constitution First and Fourth Amendment Acts of 1951 and 1955 were intended to enable the State Legislatures to undertake the task of agrarian reform with the object of abolishing intermediaries 784 and establishing direct relationship between the State and tillers of the soil; and it is in that context that the would "estate" occurring in cl.
(2) of article 31 A was construed by this Court.
What we have said about the decision in Medhi 's case (1) is equally true about the decision in the case of Atma Ram (2).
The property which was held to be an estate was not an estate in the narrow sense for which the petitioner contends.
In Shri Mahadeo Paikaji Kolhe Yavatmal vs The State of Bombay and Shri Namadeorao Baliramji vs The State of Bombay (3) this Court had to consider the case of the petitioners in Vidarbha who held lands under the State and paid land revenue for the said lands thus held by them.
The relevant provisions of the Madhya Pradesh Land Revenue Code.
1954 (II of 1955) were examined and it was held that though the word "estate" as.
such had not been employed by the said Code the equivalent of the estate had to he determined under article 31 A (2) (a), and as a result of provisions of sections 145 and 146 of the said Code it was held that the estates held by the petitioners satisfied the test of the local equivalent of "estate" as contemplated by article 31A (2) (a).
In The State of Bihar vs Rameshwar Pratap Narain Singh(4), this Court had occasion to consider the scope and effect of the expression "rights in relation to an estate" used in cl.
(2) (b), and it held that "in the circumstances and in the particular setting in which the words `raiyat ' and `under raiyat ' were introduced into the definition it must be held that the words "or other intermediary" occurring at the end do not qualify or colour the meaning to be attached to the tenures newly added".
It is in the light of these decisions that we must now proceed to examine the character of the properties with which the petitioner is concerned.
As we have already seen the petitioner owns about 900 acres of land which are classified 785 as Pandaravaka holdings and about 350 acres which are described as Puravaka holdings.
In meeting the respondent 's contention that these lands are an estate under cl.
(2) (a) of article 31A the petitioner has alleged that the Pandaravaka tenure represents lands of which the State was in the position of the landlord and whatever rights other persons possessed were directly derived from the State.
Of the several classes of Pandaravaka tenure the most common is the verumpattom and most of the petitioner 's lands falling under the Pandaravaka tenure belong to this class.
The petitioner 's case is that his liability is to pay rent to the State calculated as a proportion of the gross yield of the properties ; and so the lands held by the petitioner as tenant under the State cannot be said to be an estate under cl.
(2) (a).
He is not an intermediary between the State and the tiller of soil and so is outside the purview of cl.
(2) (a).
It has also been alleged by the petitioner that his properties cannot be said to be an estate even in the sense of a local equivalent of the term "estate" because there is no unified record of rights over the area in question; "each survey number is often divided into several sub numbers and representing holdings that do not often take in more than a few cents has his own record of rights and separate assessment register".
It is for these reasons that the petitioner resists the application of cl.
(2) (a) to his Pandaravaka Verumpattom lands.
No clear and specific plea has been expressly made by the petitioner in regard to Puravaka lands.
In that connection the petitioner has, however, alleged that the Janmam is another peculiar feature of the land system in Kerala which it is not easy to define since a good deal of ambiguity attaches to the term.
However he contends that the Janmam right has to be understood in its limited and technical sense as taking within its scope a particular form of land holding known as the known tenancy.
786 According to the petitioner the Janmam right included in cl.
(2) (a) can take in only the rights and liabilities controlled and created by the two Tenancy Acts to which he has referred.
That is how the petitioner contends that the Puravaka lands are also outside the purview of cl.
(2) (a).
It is common ground that the proclamation issued by his Highness Sir Rama Varma Raja of Cochin on March 10, 1905, is the relevant existing law for the purpose of deciding whether the agricultural properties of the petitioner constitute an estate under cl.
(2)(a).
It is therefore, necessary to examine the scheme of this proclamation and decide whether in view of the characteristics and attributes of the properties held by the petitioner they can be said to constitute a local equivalent of an estate under cl.(2)(a).
This proclamation consists of twenty eight clauses which deal broadly with all the aspects of land tenure prevailing in the State of Cochin.
The preamble to the proclamation recites that the Raja had already ordered that a complete survey embracing demarcation and mapping and the preparation of an accurate record of titles in respect of all descriptions of properties within his entire State shall be carried out, and it adds that directions had been issued that a revenue settlement or revision of the State demand shall be conducted in accordance with the principles laid down by the proclamation.
Clause 6 enumerates the tenures of lands prevailing in the State.
Under this clause there are two major tenures (1) Pandaravaka and (2) Puravaka.
The former are held on one or the other of six varieties of tenures; of these we are concerned with the verumpattom sub tenure.
This clause provides that the Pandaravaka verumpattom tenure shall be deemed as the normal tenure for settling the full State demand and that the other tenures shall be treated as favourable tenures and settled on the lines indicated in cls.
14 to 17.
Clause 7 says that the present rate of assessment 787 on Pandaravaka verumpattom nilas varies from one eighth para to twelve paras of paddy for every para of land; and it adds that such a vast disparity of rates is indicative of unequal incidence under the existing revenue system.
That is why the clause proceeds to lay down that the State demand should bear a fixed proportion to the produce a land is capable of yielding and so it prescribes that under the Pandaravaka verumpattom tenure the holder should pay half of the net produce to the State.
The clause then proceeds to provide for the method in which this half of the net produce should be determined.
Clauses 11 and 12 deal with the assessment on tree.
Clause 13 is important.
It says "at present holders of Pandaravaka verumpattom lands do not possess any property in the soil.
As we are convinced that proprietorship in the soil will induce the cultivator to improve his land and thereby add to the prosperity of the land, we hereby declare that the verumpattom holders of lands shall, after the new settlement has been introduced, acquire full rights to the soil of the lands they hold and that their rights shall remain undisturbed so long as they regularly pay the State revenue provided that the rights to metals, minerals possessed by the State in all lands under whatever tenure they are held are reserved to the State".
Under cl.18 it is provided, inter alia, that in the case of Pandaravaka lands held on the erumpattom tenure the settlement shall be made with the present holder of the land and in regard to Puravaka land with the Janmam.
Clause 22 prescribes the procedure and the time for the introduction of settlement.
It requires that before the introduction of the new rates of assessment a rough patta shall be issued to each of the landholders showing the relevant detail of his holdings and the assessment to be paid by him hereafter.
The object of preparing such a patta is to 788 give an opportunity to the landholders to bring to the notice of the authorities their objections if any.
The objections are then required to be heard before the final entries are made.
Clause 26 declares that the new settlement shall be current for a term of thirty years.
This has been done with a view to secure the utmost freedom of action to the landholders in improving their properties and turning them to the best advantage according to their means and inclination.
Clause 27 deals with escheats; and cl. 28 makes general provisions as to the formation of a new land record including reassessment of land and the registration of titles "a work calculated to promote the well being of a State".
It would thus be seen that under cl. 13 the person holding lands on the Pandaravaka verumpattom tenure is not a tenant.
He is given the proprietary right in the soil itself, subject of course to the rights as to metals and minerals reserved in favour of the State.
Indeed, the whole scheme of the new proclamation appears to be to change the character of the possession of the Pandaravaka verumpattom tenure holder from that of a tenant into that of a proprietor holder.
It is true that he is made liable to pay half of the net produce and that may appear to be a little too high, but the measure of the levy will not convert what is intended to be a recovery of assessment into a recovery of rent.
The proprietor of the land held on Pandaravaka verumpattom tenure is nevertheless a proprietor of the land and he holds the land subject to his liability to pay the assessment to the State.
It is not difficult to imagine that in a fairly large number of lands held by Pandaravaka verumpattom tenure holders the holders in turn would let out the lands to the cultivators and thus would come into existence a local equivalent of the class of intermediaries.
Land revenue record is required to be prepared by the proclamation and relevant entries showing the extent of the properties belonging to 789 the respective holders and the details about their liability to pay the assessment are intended to be shown in the said record.
In our opinion, it would not be reasonable to hold that the lands held by the petitioner under the Pandaravaka verumpattom tenure do not confer on him the proprietary right at all but make him a tenant of the State.
In the proclamation there does not appear to be a provision for forfeiture or surrender and the scheme adopted by the proclamation suggests that the amount due from the tenure holder by was of assessment would presumably be recovered as arrears of land revenue and not as rent.
Therefore, we are inclined to hold that the Pandaravaka Verumpattom can be regarded as a local equivalent of an estate under cl.
(2) (a) of article 31A.
The position with regard to Puravaka lands is still more clear.
Clause 14 of the proclamation enumerates four kinds of more favourable tenures.
The first of these is the class of Puravaka lands.
Clause 15 provides that in the case of Puravaka lands a third party called Janmi is recognised as owning proprietorship in the land and therefore entitled to share the produce with the cultivator and the sirkar.
Then the clause describes the mode in which share of the State or its demand on these Puravaka lands is calculated, under the previously existing land system; and it provides new rates of assessment payable in respect of the Puravaka tenure.
The Puravaka tenure in the State, the clause adds, corresponds to the normal conditions of land tenure in the District of Malabar where, in the recently introduced settlements, the net produce was distributed among the cultivator, the Janmi and the State in the following proportion : 790 __________________________________________________ __________ In Wet Lands In Garden Lands or Vrikshapattom Parambas __________________________________________________ __________ Cultivator 5 out of 15 5 out of 15 Jenmi 4 out of 15 5 out of 15 State 6 out of 15 5 out of 15 __________________________________________________ __________ Since it was thought that the said method of apportionment was fair and equitable the clause adopted the same in the State of Cochin.
It would thus be clear that the lands held by the petitioner under the Puravaka tenure satisfy the test of even the narrow construction placed by the petitioner on the term "estate" in cl.
(2)(a).
Therefore, there can be no doubt that about 350 acres of land held by the petitioner on the Puravaka tenure constitute an estate under cl.
(2)(a).
The result is that the lands held by the petitioner are an estate under cl.
(2)(a), and so the Act in so far as it operates against the holdings of the petitioner is protected under article 31A(1)(a) and so it is not open to the petitioner to challenge its validity on the ground that its material provisions offend against articles 14, 19 and 31 of the Constitution.
The writ petition accordingly fails and is dismissed.
There will be no order as to costs.
AYYANGAR, J. I regret I am unable to agree that article 31A of the Constitution saves the Kerala Agrarian Relations Act, 1960, from challenge under articles 14, 19 and 31 of the Constitution in so far as the said Act relates to the Pandaravaka lands of the petitioner.
Before however dealing with this point I consider it proper to add that I entirely agree that the Act was properly enacted by the State Legislature and that the consideration of the remitted bill by the new Legislative Assembly did not violate the provisions of article 20 of the Constitution.
In my judgment the terms of article 196 of the Constitution proceed on the basis that the Constitution maker 791 in line with the framers of the Government of India Act, 1935, radically departed from the theory of the British Constitutional Law and the practice obtaining in the Parliament of the United Kingdom as regards the effect of dissolution of the Houses of the Legislature on bills passed by the House or Houses and pending the assent of the head of the State.
Article 196 by its third clause having negatived the English rule that bills pending in the legislature lapse by reason of prorogation, goes on to enact cls.
(4) and (5) making special provision for Lapse in the event of not prorogation but dissolution.
Clause (5) enacts: "A bill which is pending in the Legislative Assembly of a State or which having been passed by the Legislative Assembly is pending in the legislative Council shall lapse on a dissolution of the Assembly." This clause on its terms applies both to States which have and which do not have a bicameral legislature.
In its application to a State without a Legislative Council the relevant words of the clause would read: "A bill which is pending in a Legislative Assembly of a State. . .shall lapse on dissolution of the Assembly".
The question that arises on the terms of this clause may be stated thus: Can a bill be said to be pending before the Legislative Assembly when it has gone through all the stages of the procedure prescribed for its passage through the house and has been passed by the Assembly ? Expressed in other words, does the pendency of a bill before the Assembly cease when it has passed through all the stages through which bills pass before the House or is it to be deemed as pending before the House until the bill receives the assent of the Governor or the President, as the case may be the latter event arising when bills are reserved by the Governor for the President 's assent ? Unless it could be contended that a bill 792 is pending in the Legislative Assembly until assent, there could be no scope for the argument based on article 196(5) in support of the position that an unassented bill is still pending in the Assembly.
In this context the difference in the terminology employed in article 196(3) and 196(5) requires to be noticed.
Whereas article 196(3) speaks of the pendency of a bill in the Legislature of a State which would, having regard to the description of 'Legislature ' in article 168, include the Governor, article 196(5) uses the words 'Legislative Assembly ' as if to indicate that it is only in the event of the bill being pending before that body that it lapses on dissolution.
In the face of the provision in article 196(5) there is no justification for invoking the Biritish practice under which bills not assented to before the dissolution of the Houses are treated as having lapsed on that event occurring.
If the Governor can assent or refuse to assent to a bill, which has passed through all the stages of consideration by a Legislative Assembly even though that Assembly is dissolved under the terms of article 200, because the bill is a live bill within the terms of that Article, it would follow that he can exercise the other alternative open to him under that Article, viz., to reserve the bill for the President 's assent.
If by reason of the language employed in article 196(5) the bill is alive so far, and the President could assent to the bill it would follow that subject to an argument based on the terms of article 201 he can also remit the bill for reconsideration by the Assembly notwithstanding the dissolution.
The next question for consideration is whether there is anything in the terms of article 201 which precludes effect being given to the above principle.
The Article runs: 793 "201.
When a Bill is reserved by a Governor for the consideration of the President, the President shall declare either that he assents to the Bill or that he withholds assent therefrom: Provided that, where the Bill is not a Money Bill, the President may direct the Governor to return the Bill to the House or, as the case may be, the Houses of the Legislature of the State together with such a message as is mentioned in the first proviso to article 200 and, when a Bill is so returned, the House or Houses shall reconsider it accordingly within a period of six months from the date of receipt of such message and if it is again passed by the House or Houses with or without amendment, it shall be presented again to the President for his consideration.
" Considerable stress was laid by the Learned Counsel on the use of the two expressions 'return the bill to the House ' and 'the House shall reconsider it accordingly ' as indicating that the words underlined* unmistakably implied that the consideration of the bill must be by the Assembly which originally passed it.
It was in this connection that reliance was placed on the terms of article 172(1) reading (omitting the proviso which is immaterial for the present purpose): "172.
(1) Every Legislative Assembly of every State, unless sooner dissolved, shall continue for five years from the date appointed for its first meeting and no longer and the expiration of the said period of five years shall operate as a dissolution of the Assembly: " The argument was that the Constitution did not envisage the Assemblies having a continuous life but 794 that on the other hand it clearly contemplated different Legislative Assemblies each one having a definite life which ended either automatically at the end of five years or at an earlier period by dissolution and that in the context of this provision, to the words 'return ' and 'reconsider ' employed in article 201 their literal meaning must be attached.
It is not possible to accept this construction as to the effect of article 172 on the rest of the provisions in this Part.
No doubt, for particular purposes each Assembly is conceived of as having a life of limited duration but it does not follow that the Constitution does not envisage the Legislature as an institution.
In this connection I consider it useful to refer to the decision of the Privy Council in Attorney General for New South Wales vs Rennie (1).
The question before the Board was as ragards the true construction of a New South Wales statute "The Parliamentary Representatives ' Allowance Act" which by its section 2 made an annual grant to "every member of the Legislative Assembly now serving or hereafter to serve therein".
Section 2 of the Imperial Act which enacted the Constitution Act of the Colony provided that "every Legislative Assembly was to continue for five years from the day of the return of writs for choosing the same and no longer, subject to be sooner prorogued or dissolved by the Governor of the Colony", which term was by a later enactment reduced to three years.
The Attorney General for New South Wales raised an information seeking a declaration that there were no moneys legally available or applicable to the payment of members of future Assemblies with a prayer that the Auditor General might be restrained from countersigning the authorisation of such payments.
The Supreme Court of the Colony dismissed the information whereupon the Attorney General brought the matter in appeal to the Privy 795 Council.
The question turned on the meaning of the words 'the Legislative Assembly ' in section 2 of the Act and reliance was placed on behalf of the appellant on the provision for dissolution contained in the Imperial Act.
It was contended that the Assembly was a body of limited duration called into existence from time to time and not a permanent and continuous body and that consequently the Act granting the allowance should be construed as applying to the members of the particular Assembly in existence on the date of the Act.
Rejecting this argument, Sir, Richard Couch stated: "They think that according to the ordinary use of the term 'legislative assembly it means the assembly created by the Constitution Act which, though liable to be dissolved or to expire by effluxion of time, is an essential part of the constitution of the colony and must be regarded as a permanent body.
" I consider these words apt to describe the reference to the "House of the Legislature" in the proviso to article 201.
I therefore respectfully concur in the view that the bill was validly passed and that the objection based on an infringement or contravention of article 201 must be repelled.
I shall now take up for consideration the merits of the petition.
The petitioner is the owner of about 1,250 acres of land in Trichur in the erstwhile princely State of Cochin.
Out of this extent, 900 acres are classified in the land records of the State as Pandaravaka Verumpattom lands and the remaining are entered as Puravaka lands.
While so the Kerala Legislature enacted the Kerala Agrarian Relations Act, 1960 (Kerala Act IV of 1961), providing for the acquisition of certain types of agricultural lands in the State beyond the specified maximum extents laid down in the statute and 796 on payment of compensation as determined by it.
The details of this legislation are set out and their impact on the owners of landed property in the State are dealt with in full in the judgment in Writ Petitions 114 and 115 which is being pronounced today.
In the circumstances it is not necessary to say more about the enactment than point out that it seriously interferes with the rights of landowners in a manner which, as held in the judgment in the other petitions, is violative of the rights guaranteed to citizens by Part III of the constitution.
For the respondent however the main defence on this petition is based on article 31A, the submission being that the lands of the petitioner by reason of the tenure by which he holds them, constitute an "estate" within the definition of that term in article 31A(2)(a).
As the tenures which are involved in the case cover considerable areas of the former State of Cochin, and as the implications arising from any decision as regards these tenures might affect other areas, particularly in South India the effect of the acceptance of the submission by the respondent would be far reaching.
I have therefore considered it proper to deal with matter from a wider angle than would be necessary if the effect of our decision would be confined to tenures of infrequent occurrence.
The two tenures into which the lands held by the petitioner fall are, as stated earlier, Pandaravaka Verumpattom and the Puravaka, but before considering their characteristics it will be useful to attempt a picture of the general system of landholding in Malabar.
As is well known, Malabar comprising the territories of the former princely State of Travancore & Cochin and the contiguous district of Malabar in the former Presidency of Madras, was among the few areas in India in which freehold rights in land were recognised.
This exclusive right and hereditary possession and usufruct of the soil was denoted by the term "Jenm" 797 and the holder was designated the Jenmi or the Jenmikaran.
The Jenmis had full and obsolute property in the soil.
All land which was not the property of Jenmis or ceased to be theirs such as by forfeiture, were held by the State.
These lands were let for rent to cultivators on terms of paying rent.
The assertion by the State to the proprietorship of the soil which carried with it a denial of the right of alienation by the tenant of the leased lands and so of the right to hereditary enjoyment was besides being contrary to the accepted theory of the Hindu law givers, was also productive of grave economic ills.
According to the Hindu Law givers starting from Manu, property in the soil arose out of occupation and cultivation.
The texts which expound this position are set out and discussed by Westropp, C. J., in Vykunta Bapuji vs Government of Bombay(1) (See also Sundaraja Iyengar Land Tenures in the Madras Presidency, pp. 5 to21).
According to this theory the King was not the owner of cultivated land but the proprietary interest in it vested in the cultivator, the right of the King being merely to the Raja bhagam which represented various proportions of the produce, sometimes thought of as being a sixth and at other times at higher proportions ranging up to a half.
As observed by Subramania Iyer, J., in Venkata Narasimha vs Kotayya (2).
"For, in the first place, sovereigns, ancient or modern, did here set up more than a right to a share of the produce raised by raiyats in lands cultivated by them, however much that share varied at different times.
And,in the language of the Board of Revenue which long after the Permanent Settlement Regulations were passed, investigated and reported upon the nature of the rights of ryots in the various parts of the Presidency, 'whether rendered in service, in money or in kind and whether paid to rajas, jagirdars, zemindars, poligars, mutadars 798 shro triemdars, inamdars or to Government officers, such as tahsildars, amildars, amins or thannadars, the payments which have always been made are universally deemed the due of Government. ' (See the Proceedings of the Board of Revenue, dated 5th January, 1818, quoted in the note at page 223 of Dewan Bahadur Srinivasa Raghava Ayyangar 's 'Progress in the Madras Presidency ').
" This proprietary interest of the cultivator was in its true sense a property right being capable of alienation and of hereditary enjoyment.
At the time of Permanent Settlement Regulation in Bengal (1793), and subsequently when its Madras counterpart was enacted (Regulation XXV of 1802), there was a great deal of controversy as to whether the East India Company as the Ruler was or was not entitled to the proprietary rights to the soil in the country.
In the words of Westropp, C. J., in Vykunta Bapuji vs Government of Bombay (1) involved in this "was the question as to the character in which native governments claimed, from the occupants of the land, payments either in money or in produce in respect of the land.
Were these payments rent or revenue ? Some maintained that those payments were rent, not revenue; because, it was said, the land could only be occupied and cultivated by the permission of the sovereign, and that such produce, as there may be in excess of what sufficed for the bare subsistence of the cultivators and for the expenses of cultivation, is the property of the sovereign.
Others maintained that the sovereign was only entitled to a fixed portion of the produce, and that the surplus beyond that portion, plus the subsistence of the rayuts (cultivators) 799 and the cost of cultivation, belonged to a class of great landlords between the sovereign and the rayuts, which intermediate class consisted of zamindars, talukdars or similar personages; while others again strongly contended that, subject to a land tax payable to the sovereign, the property in the soil was vested in the cultivator, sometimes in the form of village communities holding corporately, at other times individuals holding in severalty, or jointly as members of an undivided family.
In 1793, (either upon the ground that the soil was vested in the sovereign power, and that it was expedient that, by that power, a landed aristocracy should be created, or upon the ground, that the land, subject to the revenue assessment i.e., the king 's (or State 's share of the produce, ought to be publicly recognized as vested in the class of zamindars, & c., as landlords) the permanent settlement in Bengal, Bihar and Orissa was made by the Government of Lord Cornwallis, by recognizing the zamindars, & c., as the proprietors of the soil, and entitled to transfer it, and by fixing, once for all, the land tax payable by them to the State at an immutable annual rate.
" In 1796 the Government of Madras declared that "it is the first feature in all the Governments of India, that the Sovereign, whether he be a Mussulman or Hindoo is lord of the soil; and hence it is that no alienation of lands from the property of the circar, or rather no possession of land whatever is valid without a written instrument from the superior lord; and this distinction has invariably followed the conquests of all nations who have established themselves in India".
This statement was directly contrary to accepted practice and the consciousness of the cultivator in Madras.
It is not therefore a matter for surprise 800 that in answer to this declaration of the Government, the Board of Revenue at once pointed out that "there were hereditary cultivators on lands with the right of making any disposition of them by sale, mortgage or otherwise as long as they paid the Government revenue, and that they only could not make any alienation of them to the exclusion of the royal share of the revenue.
" Acting on the view that the Crown was the proprietor of the soil, the Birtish Government purported to confer proprietary rights in the soil on the zamindars under the Permanent Settlement the preamble to which referred to the reservation by the ruling power of the "implied right and actual exercise of the proprietary right to possession of all lands whatever" and by section 2 purported to vest in the zamindars the proprietary right to the soil.
It was however found that this interfered with the established rights of cultivators and Madras Regulation IV of 1822 was passed to declare that the provisions of Regulation XXV of 1802 were not intended to affect the actual ryots in cultivation of lands.
It might be added that the Privy Council ruled in Collector of Trichinapally vs Lekkamoni (1) that the theory underlying these words in the Regulation were not sustainable and that there were proprietary rights in land not traceable to or derived from the sovereign.
The introduction of the Permanent Settlement with the creation of a class of zamindars as in Bengal was not considered to be a beneficial system by the Government of Madras and so after the grant of some sanads under Madras Regulation XXV of 1802 mostly in recognition of ancient titles the creation of new permanently settled estates was stopped and in its place, the system of revenue administration associated with the name of Sir Thomas Munro known as the ryotwari system was adopted.
According to Munro there was 801 no need for the interposition of an intermediary between the State and the actual cultivator, particularly as it was clear that the system meant that the zamindars enjoyed what the cultivator parted with to the State; in other words, the difference between the rent paid by the actual cultivator, viz., the melwaram and the peishcush or the Jama fixed by the zamindar or proprietor was so much profit for the middleman and therefore pro tanto a diminution of the amount which would have accrued to the State.
Besides, Munro considered that on economic grounds and with a view to increase agricultural production it was necessary for the State being in touch with the actual cultivator.
For these reasons he formulated the "ryotwari system" and introduced it in several areas of the Madras Presidency and Coimbatore district adjoining the State of Cochin being almost the first among the districts where the system was introduced.
The basic and essential feature of the system was that the fixation of the revenue assessment payable by the cultivator had to be proceeded by a survey of the a land which included the ascertainment of the productivity of the soil and that the assessment should be based on what was known as 'tharam ' (or quality) classification.
The assessment thus began to be based on scientific data and principles and was so designed as to leave a sufficient margin to the cultivator to induce him to remain on the land and be assured of a good share in increased production resulting from the employment of his labour and capital.
The terms on which the ryot held the land was contained in the patta issued to him on behalf of the Government and this specified the extent of land held by him as well as the amount of the assessment and the time when the instalments had to be paid.
This was not however considered to be any document of title, because the ryot had the property in him and his interest was a proprietary interest in the soil and so capable 802 of being alienated and of being transmitted to his heirs.
This however was not anything new and it was not as if the interest of the cultivator was not alienable before the ryotwari system was introduced.
Before that date however, the assessment of the land was both heavy in most parts and unequal not being based on the productive capacity of the soil, as to leave little or no margin to the cultivator.
Besides the predations of revenue and the severity of the tax was dependent on the exigencies and necessities, if not the whims of the ruler and in such a situation, even though technically cultivated land was capable of alienation there being no ban on alienation, still having regard to the meagre margin left to the owner and the fear of increased taxation based on no principle, no purchaser could be found; though owing to the impossibility of finding a more profitable use for manual labour apart from the sentimental attachment to land, the actual cultivator clung to his holding.
But when with the advent of a system of assessment based on fixed and scientific principles which left a sufficient margin for the cultivator, and there was no fear of sudden increases of assessment, land became a marketable commodity investment in which was rendered worthwhile.
Notwithstanding that in Malabar absolute ownership of the soil by the Jenmi where the land was the property of individuals and of the State where it was the owner, was a characteristic of the landholding, still from a fairly early date after the British conquest of the neighbouring areas the concept of the cultivator with whom the State entered into direct relations being conceded the proprietorship of the soil slowly permeated.
In this connection I might usefully refer to a proclamation of the ruler of Travancore of 1865 (1040 M. E.) regarding Sarkar pattom lands, with the observation that subject to variations 803 dependent on local usages, the system of land tenure and the concepts as regards the rights of property in land were substantially similar in Travancore and Cochin.
Sarkar pattom lands were what might be termed 'Crown lands ' of which the ruler was deemed to be the Jenmi or the landlord.
Previous to the proclamation the lands were legally capable of being resumed by the ruler, though this was seldom done and the cultivators were not legally entitled to transfer their rights and where this was done the Government had the right to ignore the transaction.
The fact that the cultivator was conceived of as having no proprietary interest on the land also bore adversely on the State since the State was deprived of the means of realising any arrears of revenue by bringing the holding to sale.
It was to remedy this situation that the proclamation was issued and the preamble and its terms carry the impress of the impact of the ryotwari system of Madras.
The proclamation reads: "Whereas we earnestly desire that the possession of landed as well as other property in Our Territory should be as secure as possible; and whereas We are of opinion that, with this view Sirkar Pattom lands can be placed on a much better footing than at present so as to enhance their value; we are pleased to notify to our Ryots 1st.
That the Sirkar hereby and for ever surrenders, for the benefit of the people, all optional power over the following classes of lands, whether wet, garden or dry, and whether included in the Ayacut accounts or registered since: Ven Pattom, Vettolivoo Pattom, Maraya Pattom, Olavoo Pattom, Mara Pattom, 804 and all such Durkast Pattom, the tax of which is understood to be fixed till the next Survey and assessment.
2ndly.
That the Ryots holding these lands may regard them fully as private, heritable, saleable, and otherwise transferable, property.
3rdly.
Accordingly, the sales, mortgages, & c., of these lands will henceforward be valid, may be effected on stamped cadjans, and will be duly registered.
The lands may be sold for arrears of tax, in execution of decrees of Courts and such other legitimate purposes, and may also be accepted as security by the Sirkar as well as by private individuals.
4thly.
That the holders of the lands in question may rest assured that they may enjoy them undisturbed so long as the appointed assessment is paid.
5thly.
That the said holders are henceforth at full liberty to lay out labour and capital on their lands of the aforesaid description to any extent they please, being sure of continued and secure possession. . . . " The language employed in the proclamation is of significance.
It speaks of the relinquishment or withdrawal of the right of the State and not of the conferment of a right on the ryot so as to render the ryot a grantee from the State, just in line with the Hindu Law theory of the proprietorship of the soil vesting in the occupant cultivator.
With this background, I shall proceed to consider the nature of the tenures Pandaravaka and Puravaka with which this petition is concerned.
The two tenures are quite different in their origin and essential characteristics and so have to be separately dealt with.
Pandaravaka lands are those in which the State held proprietary rights the 805 name being derived from Bandara or the treasury, while in regard to the Puravaka, they were lands in which the proprietorship vested in the Jenmi, but which were under the cultivation of tenants on whom the State imposed land revenue.
Putting aside for the moment the Puravaka lands, the Pandaravaka lands might be approximated to the Crown lands dealt with by the Travancore Proclamation of 1865 already referred to.
The terms on which the tenants held the right of the Crown were almost the same as in the other case.
The evils which the system gave rise to, the economic insecurity of the tenant and the consequent lack of incentive on his part to put his best exertion on the land and the resultant loss to the state in the shape of revenue as well as the rise of a contented peasantry were exactly parallel to the situation which faced the ruler of Travancore leading to the proclamation of 1865.
It was in these circumstances that the ruler of Cochin issued a proclamation on March 10, 1905, which defined with precision the rights of the State and of the cultivator in regard to these lands and it is the submission of the learned Attorney General that the effect of this proclamation is to render the Pandaravaka and Puravaka lands held by the petitioner "estates" within the meaning of article 31A(2) of the constitution as it now stands.
It is therefore necessary to set out in some detail the terms of this proclamation.
The preamble to the proclamation recites the fact that the State demand had not been fixed either with reference to the actual measurements of the land or on any fixed or uniform principles and that a revision of the State demand based upon a correct measurement of lands and definite principles, fair alike to the State and "our" agricultural population, is desirable in the interest of a sound revenue administration.
It then proceeds to state 806 that a survey which included the demarcation, mapping and the preparation of an accurate record of titles in respect of all descriptions of properties was to be carried out and that a Settlement or revision of the State demand would be conducted in accordance with the principles laid down by the proclamation.
In passing it may be mentioned that this is reminiscent of the despatches of Thomas Munro in which he expatiates upon the need of a proper survey and a correct definition of the principles upon which land revenue shall be assessed and that the quantum of revenue should be such as while providing for a fair share to the State, should leave enough for the cultivator to live upon and offer an inducement to him to increase the output of his fields in which event the surplus available to him would be more.
In particular I might refer to a passage in a despatch which is extracted by Westropp, C.J., in Vykunta Bapuji vs Government of Bombay (1) reading: "When the land revenue is fixed and light, the farmer sees that he will reap the reward of his own industry: the cheerful prospect of improving his situation animates his labours, and enables him to replace in a short time the losses he may sustain from adverse seasons, the devastations of war, and other accidents.
" Paragraph 5 of the proclamation directs that lands, whether wet or dry, were to be classified with reference to the nature of their soils in accordance with the table of classification prescribed in the Madras Settlement Manual which is sufficiently indicative of the close correspondence between the ryotwari system and mode of fixation of land revenue and the principles underlying it as prevailed in the neighbouring Presidency of Madras.
Paragraph 6 reads: "Under the present land revenue system of the State, lands are held under two main 807 tenures, viz., Pandaravaka and Puravaka. . " At this stage it is necessary only to add that the proclamation does not deal with the rights as between the State and Jenmis, i.e., that class of land owners who were entitled to a freehold interest in the land as explained earlier.
I shall deal later with special legislation with reference to Jenmis in the other princely State which is a constituent of present State of Kerala in its proper place.
Paragraph 6 proceeds to enumerate the six subsidiary classifications of the Pandaravaka tenure and enumerates the Verumpattom type as the first among them and this type is taken as the standard for fixing the land revenue of the other categories which, it might be mentioned, are favourable tenants, the State demand being reduced.
To these others which partake of the nature of grants of land revenue very different considerations would apply.
The lands of the petitioner held on Pandaravaka tenure, it should be added fall within the sub category of Verumpattom lands.
The proclamation then proceeds to state: "The revenue paid to the State varies according to the nature of the tenure, i.e., the six sub classes.
It is however only the Pandaravaka Verumpattom lands which pay the full pattom or share due to the State.
We have accordingly decided that the Pandaravaka Verumpattom shall be deemed as the normal tenure for settling the full State demand and that the other tenures shall be treated as favourable tenures and settled on the lines hereinafter indicated. . ." Paragraph 7, after reciting that the rates of assessment on Pandaravaka Verumpattom wet lands vary from place to place, points out that such disparity is indicative of unequal incidence and stating that it was essential that the State demand should 808 bear a fixed proportion to the produce a land is capable of yielding announces the decision that the same shall be half the net produce.
The deductions to be made for ascertaining the net produce are indicated.
The next clause which is of relevance and importance in the present context is cl. 13 which runs: "13.
At present holders of Pandaravaka Verumpattom lands do not possess any property in the soil.
As we are convinced that proprietorship in soil will induce a cultivator to improve his land and thereby add to the agricultural prosperity of the country, we hereby declare that our Verumpattom holders of lands shall, after the new Settlement has been introduced, acquire full rights to the soil of the lands they hold and that their rights shall remain undisturbed so long as they regularly pay the State revenue, provided that the rights to metals and minerals, possessed by the State in all lands under whatever tenures they are held, are reserved to the State.
" Paragraph 14 onwards deal with favourable tenures and of these we are concerned only with Puravaka lands and it is pointed out in Paragraph 15 that in the case of Puravaka lands the Jenmi is recognised as owning the proprietorship in the land and is consequently entitled to share the produce with the cultivator and the Sirkar, and proceeds to define the State demand in such lands.
There are other clauses dealing with other incidents in regard to these tenures and in regard to other interests in the land such as house sites etc.
but we are not concerned with them.
The proclamation also makes provision for the grant of rough or draft pattas to cultivators and of fair pattas detailing the assessment payable on such lands provisions exactly parallel to the practice and procedure prevailing in the adjoining area of the Madras Presidency.
Besides, it also makes 809 provision against any revision of the assessment once fixed before the expiry of 30 years, also in line with the then practice in Madras.
I have made this analysis of the provisions of the proclamation for the purpose of emphasizing that what the proclamation intended to achieve was the introduction of ryotwari system of settlement in the place of exactions by the State based on no principles and unrelated to the productivity of the soil and having an unequal incidence for different areas and different lands.
The holder of Pandaravaka Verumpattom patta was therefore nothing more or nothing less than the holder of a ryotwari patta in the adjoining Madras State.
The only point of difference that could be suggested is this.
Under the ryotwari system, the proprietorship of the ryot to the soil is not in theory derived from the State, whereas under the proclamation of 1905, it appears to rest on a grant.
In my opinion this makes no difference, because the essential features of the system are the same as those of ryotwari (1) a direct relationship between the State and the cultivator, and with the absence of any intermediary to intercept the raja bhagam or land revenue, (2) there is no grant or alienation of the States ' right to revenue in favour of the grantee.
The Puravaka tenure was wholly different.
They were lands held by Jenmis.
As I shall show later, Jenmam lands were not exempt from the payment of land revenue but the Puravaka tenant had the benefit of a favourable assessment.
In other words, in respect of those lands the produce of the land was the subject of sharing as between the actual cultivator, the Jenmi and the State, though the Jenmi had a freehold interest in the land itself The question for consideration now is whether the lands held under a patta by a Pandaravaka Verumpattom and of Jenmam lands by a Puravaka 810 tenant are "estates" within the meaning of article 31 A (2).
Before examining the terms of article 31 A (2) as they now stand, it is necessary to refer to the antecedent history which led to the First and the Fourth Constitutional Amendments.
Preliminary to this it might not be out of place to briefly explain the circumstances which necessitated the First amendment as pointing to the mischief which that amendment was designed to remedy.
Very soon after independence several States initiated land reforms whose object was the elimination of the intermediaries.
The Madras Legislature enacted the Madras Abolition of Estates and Conversion into Ryotwari Act, 1948, by which intermediaries in the shape of zemindars, Palayagars, Jagirdars, Inamdars and other such proprietors were eliminated and persons in actual cultivation of the lands under the zemindars were brought into direct relationship with the government by being granted ryotwari pattas in respect of their former holdings.
There was similar legislation in Bihar Bihar Act 1 of 1950, as also in some of the other States of the Indian Union.
The validity of the several pieces of legislation was challenged in the respective High Courts principally on the ground that the deprivation of the rights of the zamindars etc.
effected by these enactments and the principles upon which the compensation payable for the deprivation was determined violated articles 14, 19 and 31 of the Constitution.
The first case in which a decision was rendered by a High Court in respect of the contentions urged was by the Patna High Court in Kameshwar Singh vs State of Bihar (1) in which the petition succeeded and Bihar Abolition of Estates Act 1 of 1950 was declared unconstitutional.
An appeal was preferred by the State against the judgment to this Court and it was during 811 the pendency of this appeal and with a view to validate the legislation which had been enacted in the several States and which was the subject of attack in several Courts, including this Court, that First Constitutional Amendment by which article 31A was introduced into the Constitution, was enacted.
The Constitution (First Amendment) Act, 1951, received the assent of the President on June 18, 1951, but article 31A which was introduced by section 4 of this Act was expressly made retrospective from the commencement of the Constitution.
As then enacted article 31A ran: "31A. Saving of laws providing for acquisition of estates: etc. (1) Notwithstanding anything in the foregoing provisions of this Part, no law providing for the acquisition by the State of any estate or of any rights therein or for the extinguishment or modification of any such rights shall be deemed to be void on the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by, any provisions of this Part: Provided that where such law is a law made by the Legislature of a State, the provisions of this article shall not apply thereto unless such law, having been reserved for the consideration of the President, has received his assent.
(2) In this article, (a) the expression 'estate ' shall in relation to any local area, have the same meaning as that expression or its local equivalent has in the existing law relating to land tenures in force in that area, and shall also include any jagir, inam or muafi or other similar grant; (b) the expression 'rights ' in relation to an estate shall include any rights vesting in a proprietor, sub proprietor, under proprietor tenure holder or other intermediary and any rights or privilege in respect of revenue.
" 812 In addition the First Constitution Amendment Act also enacted by its section 5 a further provision article
31B expressly validating the several enactments of the various States which were then under challenge and which were all set out in Sch. 9 of the Constitution.
From this collocation it would be seen that whereas article 31B immunised from attack all the pieces of legislation which had been enacted by June 1951, article 31A was intended to render the same types of legislation enacted in future immune from attack, provided that the enactments were reserved for the President 's assent and were assented to by him.
It is with this background that one has to approach the construction of article 31A. Clause (1) of article 31A does not present any difficulty in construction with reference to the point now under discussion, because its terms are clear and apply to laws providing for "the acquisition by the State of any estate or rights therein" or "the extinguishment or modification of any such rights".
The crucial words here are that the rights which are acquired, extinguished or modified are rights in or in respect of an "estate".
If there had been no definition of the expression 'estate ', one might have had to look to the grammatical of literal meaning of the word, and the word might conceivably be understood as including person 's interest in landed property whatever may be the nature or extent of the interest, though the width of this meaning might be controlled by the history of the provision, the antecedent state of circumstances and the mischief which it was designed to overcome.
But the enactment has not left this matter for investigation in that manner.
Sub clause (2)(a) contains the definition of expression 'estate ' and sub cl.
(b) of "rights in relation to an estate".
It is obvious that the word 'estate ' in sub cls.
(a) and (b) mean the same and is employed to designate identical types of land holding.
If the expression "rights in relation to an estate" in sub cl.
(b) 813 indicates that it is the "estate" or the right of the intermediary that is comprehended by the use of the words 'proprietor, sub proprietor, under proprietor, tenure holder or other intermediary", clearly the expression 'estate ' in sub cl.(a) must be understood as referring to such types of landholder.
It is also worth noting that the words "shall also include any jagir, inam or muafi or other similar grant" in sub cl.(a) have their parallel in sub cl.
(b) by the words "any rights or privileges in respect of land revenue.
" The net result therefore was that the term 'estate ' signified the land held by an intermediary who stood between the State and the actual tiller of the soil, and also the interests of those in whose favour there had been alienation of the right to revenue, i.e., lands held on revenue free or on favourable tenures.
The two sub clauses may now be further examined to determine their content and significance.
Taking first sub cl.
(a) it is necessary to advert to two matters: (1) the reference to the "local equivalent" of the term 'estate ' in the law existing in any local area, and (2) the denotation of the words 'the existing law in relation to land tenures in force in that area '.
In regard to the 'local equivalent ' of the term 'estate ' there is one observation I desire to make.
These words were not in the Bill as originally presented to Parliament and were brought in as a result of the suggestion of the Joint Select Committee to which the BIII was referred.
In their report the Select Committee stated: "We have amended the definition of an 'estate ' to cover cases where the existing law relating to land tenure is in a regional language for example in Hindi or Urdu and uses the local equivalent of 'estate '.
" I am far from saying that if the meaning of the expression were clear the purpose for which the words were used would determine their construction 814 but I am drawing attention to this passage from the report of the Joint Select Committee for pointing out that by the use of the expression 'local equivalent ' the central concept of an 'estate ', as would be clear from the terms of sub cl.
(b), which in effect is a further definition of the term 'estate ' was not intended to be departed from.
Next as to the meaning of "in the existing law in relation to land tenures".
These words raise for consideration the question as to what constitutes "a land tenure".
If one had to go merely by the grammatical meaning merely of 'tenure ' derived from the Latin 'tenere ' to hold, any kind of right or title by which property is held would be included, the only requirement would be that the property should be held of another.
In that wide sense it would include the case of land held under an ordinary tenancy under a landlord under the Transfer of Property Act.
Obviously that is not the sense in which the word is employed in the clause.
It has therefore to be understood as comprehending that type of "holding" where the holder is an intermediary between the State and the tiller, or is otherwise the grantee of land revenue holding the land under a favourable tenure.
If this is the essential feature of the concept of an 'estate ' under cl.
(2), the expression 'land tenure ' must in the context mean the 'tenure ' under which an 'estate ' as defined is held.
To read it otherwise and understand 'land tenure ' as designating any system of landholding, whether or not such system conforms to the central and essential concept of estate, would not be correct.
Such an interpretation would result in anomaly that in an existing law in force in a local area which uses the word 'estate ' and includes within that definition particular tenures, only they and none also are included, but if such law does not refer to a tenure as an 'estate ' then it comprehends any 815 holding of land under Government whatever be the nature of the tenure.
That would constitute a radical departure from the purpose of the First Amendment and a construction which is not compelled by the words, but on the other hand contradicted by the context and setting in which they occur.
This leads me to the case where an "existing law in relation to land tenures" uses the term 'estate ' and defines it in a particular manner and that definition includes not merely the proprietary rights of intermediaries or others holding land on favourable tenures as described in sub cl.
(b) but also others who hold properties in their own right and describes the land holding of these others also as 'estates '.
The question would then arise whether literal effect has or has not to be given to the words 'defined as an estate under the law relating to land tenures ' occurring in sub cl.
One possible view to take would be that having regard to the central concept of an 'estate ' as signifying the rights in land of an intermediary etc.
, those whose rights in land did not involve any assignment of the Raja bhagam but were in direct relationship with the State and subject to the payment of the full assessment of the revenue lawfully imposed upon it, could not be termed to have an interest in an 'estate ', nor the land held by them to fall within the concept of an 'estate ' as comprehended in sub cl.
The other view would be that if the operative terms of article 31A and in particular the definition of "an estate" contained in cl.
(2)(a) unambiguously covered cases of non intermediaries also, effect would have to be given to the terms used for it is a cardinal rule of interpretation that the operative words of an enactment, and in this must be included the terms of the Constitution, cannot be controlled by reference to the object for which the provision was introduced where the words are unambiguous.
If a law in force in any local area 816 at the commencement of the Constitution which was "a law in relation to land tenures" contained the definition of an 'estate ' then every species of land holding which fell within the definition and was comprehended by such law relating to land tenure would, for the purpose of the Constitution be comprehended within the ambit of an 'estate ' and it might be no answer in regard to any particular species of land tenure that its holder was not an intermediary.
I shall have occasion to refer to the decisions which turn on this aspect of the matter a little later.
Apart from the exceptional cases just now mentioned where one is faced with a definition of 'an estate ' in an existing law, I consider that the First Amendment to the Constitution did not bring within the definition of 'an estate ' the holdings of persons other than intermediaries or those who held land under grants on favourable tenures from Government Jagirdar, Inamdar, Muafidar, etc.
As pointed out by Venkatarama Ayyar, J., speaking for this Court in Thakur Amar Singhji vs State of Rajasthan (1): The object of article 31A was to save legislation which was directed to the abolition of intermediaries so as to establish direct relationship between the State and the tillers of the soil. . " I shall now turn to sub cl.
(b) and to the terminology employed in it to define 'rights in relation to an estate ' and examine how far this definition affects the content of cl.
(a) as above explained.
In the first place as already noticed, the use of the word 'estate ' in the clause serves to bring into it the concept of an 'estate ' as defined in cl.
(a) pointing to the inter dependence of the two clauses necessitating their having to be read together.
The second point requiring advertance is as regards the definition purporting to be inclusive and not exhaustive.
The question arising therefrom may be 817 posed thus: Does the definition include any other type of interest besides those enumerated, particularly of a different nature or characteristic which could not be comprehended within the extension brought in by the words 'or other intermediary '.
I am clearly of the opinion that it does not and that the word includes ' is here used in the sense of 'means and includes '.
In this connection I would usefully refer to the observations of Lord Watson delivering the judgment of the Privy Council in Dilworth vs Commissioner for Land and Income Tax (1): "The word 'include ' is very generally used in interpretation clauses in order to enlarge the meaning of words or phrases occurring in the body of the statute; and when it is so used these words or phrases must be construed as comprehending not only such things as they signify according to their natural import, but also those things which the interpretation clause declares that they shall include.
But the word 'include ' is susceptible of another construction, which may become imperative, if the context of the Act is sufficient to shew that it was not merely employed for the purpose of adding to the natural significance of the words or expressions defined.
It may be equivalent to 'mean and include ', and in that case it may afford an exhaustive explanation of the meaning which for the purposes of the Act, must invariably be attached to these words or expressions.
" If therefore the constitutional validity of a legislation extinguishing or modifying the rights either of the Pandaravaka Verumpattomdars who were in the position of a ryotwari pattadar or of the Puravaka holders who held under a Jenmi of Jenmam land had to be tested with reference to 818 article 31A as it stood when it was introduced by the First Amendment, these interests under the proclamation of 1905 would not be held to be an 'estate ' and therefore outside the scope of the protection against the guaranteed fundamental rights.
Before examining the effect of the change introduced by the Fourth Amendment to article 31A it might be useful to detail the circumstances which put these tenures outside article 31A under the First Constitution Amendment.
Taking the Puravaka tenure first, it ought to be mentioned that as would be seen from the terms of the proclamation of 1905 extracted earlier, Puravaka lands were those in the ownership of the Jenmi but in respect of which he was not directly in cultivation.
The Jenmi was considered an absolute proprietor not merely of lands which were cultivated but unlike the ryotwari pattadar also those which were not under his cultivation such as waste lands, forests, etc., and he did not hold land under the State.
In other words, his proprietorship to or rights over the land of which he claimed ownership was not traceable to any title derived from the State.
But notwithstanding this freehold right that he claimed and enjoyed the State was entitled from the earliest times to assess his lands to land revenue.
Exemption from taxation was not any essential condition of Jenmam tenure and the Jenmi was under an obligation to pay what was termed 'Raja bhagam ' which was the equivalent of the expression 'land revenue '.
This incidence of Jenmam land did not therefore detract from its character of its being the private and absolute property of the Jenmi.
There was legislation in Travancore as regards the liability of the Jenmi to pay the land tax or the Raja bhagam except, of course, in those cases where anr particular land was rendered tax free as a mattey of grace or concession by the ruler.
The legislation started with a royal proclamation 1869 (1042 M.E.) dealing with the lands of Jenmis and their relation 819 with their tenants.
This proclamation was replaced by Regulation 5 of 1071 (July 3, 1896) which continued in force with various amendments right up to the date of the Act whose validity is now impugned and is referred to in it.
By these pieces of legislation the rights of the Jenmi quoad his tenants were regulated, the grounds upon which eviction would take place were laid down and the customary rights enjoyed by either party were, so, to speak, codified.
I am pointing this out because the existence of a law regulating the rights of property owners and defining their rights or obligations either quoad the Government in respect of land revenue or as regards persons holding land under them did not by itself render such law one "relating to land tenure" within the meaning of article 31A(2)(a).
In order to be such a law it should regulate the rights of persons holding under grants from the government of the Raja bhagom.
A law defining or regulating the levy of assessment or revenue on lands held not under such grants from the State would not be such a law.
It was for this reason that the interest of Jenmis and the lands owned in Jenmam right did not fall within article 31A as it stood under the First Amendment to the Constitution and which necessitated the Fourth Amendment to which I shall refer later.
The position of persons holding lands on Puravaka tenure would not be different from that of the Jenmis.
As the Puravaka lands were held not under the State or under a grant from it but under the Jenmis, though liable to pay Raja bhagam, they would not be 'estates '.
The case of the Pandaravaka Verumpattomdars would be similar and the lands held by them would also not fall within the category of 'estate. ' This would be so because they like ryotwari pattadars held the lands for cultivation directly from the State, and were niether intermediaries nor persons 820 who held their lands on a favourable tenure as regards the payment of land revenue in other words, they were not alienees of the Raja bhagam to any extent, and were therefore not intended to be affected by the First Amendment.
For this purpose it would make no difference whether the origin of the ryot 's proprietary interest in the land be traceable to the Hindu law concept of title based on occupation and cultivation or to the relinquishment by the State under the Travancore Proclamation of 1865 or even to the conferment of proprietary rights by the Cochin Proclamation of 1905.
It is only necessary to add that, their being outside the ambit of article 31A(2), and this would equally apply to the interest of the Jenmi, was not due to their tenure not being regulated by enacted law, as distinct from regulation either by the common law of by departmental instructions in the shape of the Standing Orders of the Board of Revenue or other similar bodies.
The point next to be considered is regarding the effect of the change brought about by the Fourth Amendment in 1955 which on its terms was also to have retrospective effect from the commencement of the Constitution.
Clause 3 of the Act which was substituted for the original cl. 1 of article 31A, provides for various types of legislation interfering with property rights, but in respect of the matter now in question the words in the original cl. 1 referring to "a law providing for the acquisition by the State of an estate of an any rights therein or the extinguishment or modification of any such rights" were left untouched.
In regard to the definition of an "estate" contained in cl. 2 the only change effected in sub cl.
(a) was the addition of the words "in the States of Madras and Travancore & cochin any Janmam right" after the word "grant" in the clause as it stood and in sub cl.
(b) the addition of the words "ryot and under ryot" 821 after the word "tenure holder" in the original clause.
After the amendment, the relevant words in article 31A read as follow: "(I) Notwithstanding anything contained in article 13, no law providing for (a) the acquisition by the State of any estate or of any rights therein or the extinguishment or modification of any such rights . . shall be deemed to be void on the ground that it is inconsistent with, or takes away or abridges any of the rights conferred by article 14, article 19 or article 31: Provided that where such law is a law made by the Legislature of a State, the provisions of this article shall not apply thereto unless such law, having been reserved for the consideration of the President, has received his assent.
(2) In this article, (a) the expression 'estate ' shall, in relation to any local area, have the same meaning as that expression or its local equivalent has in the existing law relating to land tenures in force in that area, and shall also include any Jagir, inam or muafi or other similar grant and in the Sates of Madras and Kerala, any Janman right; (b) the expression 'rights ' in relation to an estate, shall include any rights vesting in a proprietor, sub proprietor, under proprietor, tenure holder, raiyat, under raiyat or other intermediary and any rights or privileges in respect of land revenue.
" It is not open to dispute that if the words of the statute are clear their import or content cannot be modified or varied either by way of extension or of 822 diminution by reference to the presumed intention gatherable from the statement of objects and reasons to which I shall refer presently, for it is the enacted words that constitute the record of the intention of the legislature and where this is clear any extrinsic aid is forbidden.
Now let us look at the definition of an "estate" in sub cl.(a) where in express terms the lands held by a Jenmi are deemed to be a part of an estate.
The words that precede the newly introduced words still retain their original form, with the result that they continue to connot the same idea and their content remains unaltered.
The result of this would be that to the class of the lands of proprietors who were intermediaries and of others holding on favourable tenures which was designated as an "estate" under the First Constitutional Amendment, Jenmi lands were by specific ad hoc addition included.
If therefore the holding of a ryotwari proprietor was not comprehended within the definition of an estate, the same cannot be included by reason of Jenmi lands being brought in.
The argument that a raiyatwari holding has merely by the inclusion of the Jenmi become an "estate" would require the entire clause to be rewritten so as to make it read as embracing all lands which are subject to payment of land revenue to government.
I consider this contention so unreasonable and unrelated to the language used in the clause as not to deserve serious consideration.
Proceeding next to sub cl.
(b), I must point out that it was on the introduction into it of the words 'raiyat and under raiyat ' that almost the entire argument on behalf of the respondent was rested.
It is therefore necessary to scrutinize carefully the effect of these words.
There is no doubt that if the words 'raiyat and under raiyat ' had been introduced in sub cl.(b) as an independent category of persons whose interests were intended to be covered by the definition, just as the lands held by Jenmis were brought into sub cl.
(a) then the words 823 of the definition would have to be given full effect and the expression 'raiyat and under raiyat ' receive the construction urged before us by the respondent.
But they are, however, not introduced as an independent category as has been done in the case of the Jenmam right, but are wedged in the midst of the enumeration of the several types of tenures in estates such as those of proprietor, sub proprietor under proprietor and tenure holder persons deriving their title to the interest held by them either under grants by a sovereign or under a title derived from grantees from government, the clause continuing to be wound up by a reference to "other intermediaries".
As regards this a few observations may pertinently be made.
The first is that even after the Fourth Amendment, "the rights vesting in a proprietor" etc.
still continue to be a definition of "rights in relation to an estate" and if the word 'estate ' in cl.
(b) has to be read in the light of the definition of that word in cl.(a) no interest other than one in the estate of an intermediary or of a grantee on a favourable tenure and other than one in the estate of a Jenmi would be covered by sub cl.(b).
(2) I have already had occasion to point out that raiyats in proprietary estates like those of zamindars etc.
did not claim title to hold their lands from the proprietor but according to law, as understood their rights even preceded that of the proprietor, i.e., the rights vested in them even before their proprietor.
The interest of such raiyats cannot therefore be comprehended within the expression 'rights in relation to an estate ' which as ordinarily understood would mean 'rights created in an estate or held under the proprietor '.
Undoubtedly, the words 'raiyat and under raiyat ' introduced by the Fourth Amendment would comprehend this class of raiyats because they were raiyats in an estate as defined in sub cl.(a).
I am pointing this out for the purpose of showing that it is not as if the words 'raiyat and under raiyat ' would be without any 824 meaning if they were not taken to extend to the interest of every raiyatwari proprietor having, direct relationship with the State.
In this connection the decision in this Court in The State of Bihar vs Rameshwar Pratap Narain Singh (1) is very relevant.
The point in controversy before the Court was this.
Under the Bihar Land Reforms Act (1 of 1950), the ex intermediaries were conferred a ryoti interest in certain types of land previously held by them as proprietors.
As owners of these lands they had been holding melas in some places on these lands and were deriving considerable income therefrom.
By the Bihar Land Reforms Amendment Act of 1959, their right to hold melas was taken away and it was the validity of this enactment that was challenged in the case.
It was urged on their behalf that when the land holders were converted into raiyats, they were entitled to hold melas as an incident of their rights as raiyats and that this could not be adversely affected by State legislation without the same standing the test of scrutiny under articles 19, 31 etc.
of the Constitution.
The State of Bihar which was the respondent in the Writ Petition sought the protection of article 31A of the Constitution as amended by the Fourth Amendment.
Dealing with the meaning of the words the 'raiyat and under raiyat ' in article 31A(2)(b) this Court said: "It is reasonable to think that the word 'raiyat ' was used in its ordinary well accepted sense, of the person who holds the land under the proprietor or a tenure holder for the purpose of cultivation, and the word 'under raiyat ' used in the equally well accepted and oridinary sense of a person who holds land under a raiyat for the purpose of cultivation".
and speaking of the purpose of the Fourth Amendment it was observed: 825 "At that time laws had already been passed in most of the States for the acquisition of the rights of intermediaries in the estates; rights of raiyats or under raiyats who might answer the description 'intermediary ' were also within the definition because of the use of the word 'or other intermediary '.
The only reason for specifically including the rights of 'raiyats ' and 'under raiyats ' in the definition could therefore be to extend the protection of article 31A to laws providing for acquisition by the State Governments of rights of these 'raiyats ' or 'under raiyats '.
In the circumstances and in the particular setting in which the words 'raiyat ' or 'under raiyat ' were introduced into the definition, in must be held that the words 'or other intermediary 'occurring at the end, do not qualify or colour the meaning to be attached to the tenures newly added".
In other words, the decision was that the object achieved by the Fourth Amendment by the introduction of these two words in sub cl.
(b) was to rope in the interests of 'raiyats ' and 'under raiyats ' in 'estates ', notwithstanding that the ryot might not derive his interest, in his holding from the proprietor.
The lands held by a ryotwari proprietor other than those in 'estates 'would not be an 'estate ' within sub cl.
(a) nor the interest of such ryot in his holding an 'interest in an estate ' within sub cl.
(b) having regard to the collocation of the words which I have attempted to explain earlier.
In support of the construction that the holdings of ryots were comprehended within the definition of 'estates ' in article 31A(2), to submissions were made.
The first was based on the object sought to be achieved by the Fourth Constitutional Amendment Act as set out in the statement of objects and reasons of the Bill.
The passage relied on reads: 826 "While the abolition of zamindaris and the numerous intermediaries between the State and the tiller of the soil has been achieved for the most part our next objectives in land reform are the fixing of limits to the extent of agricultural lands that could be held or kept by any person, the disposal of any land held in excess of the prescribed maximum and the further modification of the rights of landowners ' tenants and agricultural holders".
I am unable to accept the argument that this passage can be of any assistance in the construction of cl.
(a) or (b) of article 31A (2).
As already pointed out, any extrinsic aid to construction can sought only when the words of the statute reasonably and properly interpreted are of ambiguous import, and the construction of the clauses now under consideration leads to no ambiguity.
In the circumstances, to accept the construction contended for by respondent would be not to interpret the enacted words but to rewrite the clauses altogether.
Besides, article 31A makes provision for special cases where on account of overwhelming social needs, the protection normally afforded to the citizen by the guarantee of fundamental rights is withdrawn.
It would, I consider, be a proper rule of construction to interpret the terms of such a provision with strictness which would serve to preserve the area of the guaranteed freedoms from encroachment except as specially provided.
In other words, if the construction of article 31A were ambiguous, the ambiguity should be resolved in favour of the citizen, so as to preserve to him the guarantee of the fundamental rights guaranteed by articles 14, 19 and 31 except where the same has been denied to him by the clear words of the Constitution.
Secondly reliance was placed on three 827 decisions of this Court: Shri Ram Ram Narayan Medhi vs The State of Bombay (1), Atma Ram vs The State of Punjab (2) and Yavtamal vs State of Bombay (3).
In the two reported decisions, no doubt this Court held that interests of persons similar to those of raiyatwari proprietors were comprehended within the definition of an 'estate ' within sub cl.
(a) but the reasoning upon which this was rested in wholly inapplicable for resolving the controversy now before us.
In the first case Sri Ram Narain Medhi vs The State of Bombay (1), the Bombay Land Revenue Code 1879 contained a definition of an 'estate ' which included not merely the estates of intermediaries such as zamindars, taluqdars and other proprietors but also an occupant, i.e., a person who held directly under the government and whose property was assessed to land revenue in full.
The question however was whether the provision in article 31 A (2) (a) that the expression 'estates ' "shall have the same meaning as that expression has in the existing law relating to land tenures enforce in the area" could be read as permitting the exclusion from the definition of interests which were defined in such a law as 'estates ' on the ground that such interests were not those of an intermediary.
This Court held that full effect had to be given to these words and that the definition of an 'estate ' in a pre Constitution law relating to land tenures must determine the content of that expression.
It would be seen that the result would have been the same whether the case arose before or after the Fourth Amendment.
The decision in Atma Ram vs The State of Punjab (2) proceeds on an identical basis and turned on the definition of an 'estate ' in the Punjab Revenue Act 17 of 1887.
In this, as in the earlier case in relation to the Bombay Land Revenue Code, there could be no dispute that the enactment was a law in relation to land tenure.
The only question therefore was 828 whether full effect could or ought to be given to the words of the definition, and this was answered in the affirmative.
In my opinion, the learned Attorney General cannot derive any assistance from either of these decisions.
In the unreported decision in Yavatmal vs The State of Bombay (1) the challenge was to the validity of a Bombay enactment of 1958 which extended the Bombay Tenancy & Agricultural Lands Act 1956 to the Vidarbha region, an enactment whose constitutional validity had been upheld by this Court in Medhi 's case.
The argument before the Court was that the lands of the petitioners were not an 'estate ' and this, for the most part, was sought to be supported by the absence of any definition of the word 'estate ' in the Madhya Pradesh Land Revenue Code of 1954 which was taken to be "the existing law relating to landtenures" in the Vidarbha region.
This Court accepted the submission of Counsel for the respondent that article 31A applied to and saved the legislation from being impugned under articles 14, 19 and 31 for the reason that the interest of the petitioners in that case (who were bhoomiswamis) was the local equivalent of an 'estate '.
The decision, therefore, is no authority for the point now under consideration as to the proper meaning to be attached to the word 'raiyat ' and 'under raiyat ' in sub cl.
(2)(b) of article 31A or as regards the effect of the Fourth Amendment to the Constitution in regard to the point now under controversy.
From the foregoing it would be seen that the interests of the petitioner in the lands held by him on Puravaka tenure are within article 31A because they are lands belonging to a Jenmi and so covered by the definition of an 'estate ' as amended by virtue of the Fourth Amendment to the Constitution.
With regard, however, to the Pandaravaka Verumpattom lands I am clearly of the opinion that they are not an 'estate ' and that the interests of the 829 petitioner in them do not amount to "an interest in an estate" within sub cl.
(b) of article 31A(2).
It would follow that the validity of the impugned Act in relation to Pandaravaka lands would have to be considered with reference to articles 14, 19 and 31.
For the reasons stated in the judgment of this Court in Writ Petitions 114 and 115 which need not be repeated, I hold that the impugned Act is constitutionally in valid and cannot be applied to the Pandaravaka Verumpattom lands of the petitioner but that the petitioner would not be entitled to any relief as regards his other properties.
BY COURT: In accordance with the opinion of the majority, the petition is dismissed.
There will be no order as to costs.
Petition dismissed.
| The Kerala Agrarian Relations Bill was introduced in the Kerala Legislative Assembly on December 21, 1957, and was ultimately passed by it on June 10, 1959.
It was then reserved by the Governor of the State for the assent of the President under article 200 of the Constitution of India.
Meanwhile, on July 31, 1959, the President issued a proclamation under article 356 and the Assembly was dissolved.
In February 1960 fresh elections took place in Kerala and on July 27,1960, the President for whose assent the Bill was pending sent it back with his message requesting the Legislative Assembly to reconsider the Bill in the light of the amendments suggested by him.
On October 15, 1960, the Bill as amended in the light of the President 's recommendations was passed by the Assembly.
It then received the assent of the President on January 21, 1961, and became law as the Kerala Agrarain Relations Act, 1960.
The petitioner challenged the validity of the Act on the ground that the Bill which was pending before the President for his assent at the time when the Legislative Assembly was dissolved lapsed in consequence of the said dissolution and so it was not competent to the President to give his assent to a lapsed Bill with the result that the said assent and all proceedings taken subsequent to it were constitutionally invalid. ^ HELD, that the Constitution of India radically departs from the practice obtaining in the Parliament of the United Kingdom under which Bills not assented to before the dissolution of the Houses are treated as having lapsed on that event occurring.
Under Act.
196 of the Constitution a Bill which is pending assent of the Governor or the President does not lapse on the dissolution of the Legislative Assembly of the State.
754 Held, further, that the consideration of the remitted Bill by the new Legislative Assembly did not violate the provisions of article 201 of the Constitution.
Per Gajendragadkar, Sarkar, Wanchoo and Das Gupta, JJ. (1) Clause (5) of article 196 of the Constitution of India deals exhaustively with the circumstances under which Bills would lapse on the dissolution of the Legislative Assembly of a State, and all cases not falling within its scope are not subject to the doctrine of lapse of pending business on the dissolution of the Assembly.
(2) Under articles 200 and 201 there is no time limit within which the Governor or the President should reach a decision on the Bill referred to him for his assent and those Articles do not require that the Bill which is sent back with the message of the Governor or the President should be to the same House which had considered it in the first instance.
Per Ayyangar, J. (1) A Bill before the legislative Assembly of a State ceases to be pending under article 196(5) when it has passed through all the procedure prescribed for its passage through the House and has been passed by it, and is not deemed as pending before the House till the receipt of the assent of the Governor or the President as the case may be.
(2) Though under article 172 each Legislative Assembly of a State is conceived of as having a life of limited duration, in article 201 the expression "The House of the Legislature" i used in the sense of a House regarded as a permanent body.
Attorney General for New South Wales vs Pennie, , relied on.
The Kerala Agrarian Relations Act.
1960, was enacted with the object of providing for the acquisition of certain types of agricultural lands in the State beyond the specific maximum extents laid down in the statute.
The petitioner who was the owner of certain lands in Trichur of which 900 acres were classified in the land records of the State as Pandaravaka Verumpattom lands and the remaining were entered as Puravaka lands, claimed that the lands did not constitute estates under article 31A(2)(a) and, therefore, the Act was not applicable to them.
His case was (1) that as regards Pandaravaka Verumpattom lands he was paying rent to the State calculated as a proportion of the gross yield of the properties, that he held the lands under the State as a tenant and that as he was not an intermediary between the State and the tiller of the soil, the lands were not an estate under cl. 2 (a) of article 31A, and (2) that the Puravaka lands were held under a Jenmi and that as they had within its scope a particular form of land holding known as kanom 755 tenancy they were outside the purview of cl. 2 (a).
It was not disputed that the proclamation issued by the Ruler of Cochin on March 10, 1905, was the relevant existing law for the purpose of deciding whether the properties of the petitioner, were an estate under article 31A (2)(a).
Under cl. 13 of the proclamation the holders of the Pandaravaka Verumpattom tenure acquired full rights to the soil of the lands and held them subject to the liability to pay the assessment to the State.
Clause 15 provided that in the case of Puravaka Lands the Jenmi was recognised as owning proprietorship in the land and entitled to share the produce with the cultivator and the State.
Held, that the lands held by the petitioner on Puravaka tenure satisfied the test as to what constituted an estate under article 31A(2)(a) of the Constitution and, therefore, the provision of the Kerala Agrarian Relations Act, 1960, were applicable to them.
Held, further (Ayyangar, J., dissenting), that the basic concept of the word "estate" as used in article 31A(2)(a) of the Constitution is that the person holding the estate should be proprietor of the soil and should be in direct relationship with the State paying land revenue to it except where it is remitted in whole or in part.
If a term is used or defined in any existing law in a local area which corresponds to this basic concept of estate that would be the local equivalent of the word "estate" in the area.
It is not necessary that there must be an intermediary in an estate before it can be called an estate within the meaning of article 31A(2)(a).
Shri Ram Ram Narain Medhi vs State of Bombay, [1959] Supp. 1 S.C.R. 489, Atma Ram vs State of Punjab, [1959] Supp. 1 S.C.R. 748, Shri Mahadeo Paikaji Kolhe Yavatmal vs State of Bombay, ; and The State of Bihar, vs Rameshwar Pratap Narain Singh, relied on.
The holder of lands held on Pandaravaka Verumpattom tenure was a proprietor of the lands and held the lands subject to the liability to pay the assessment to the State and therefore, Pandaravaka Verumpattom could be regarded as a local equivalent of an estate under cl. 2(a) of article 31A. 382.
Per Ayyangar, J. (1) The word "estate" in sub cls.(a) and (b) in article 31A(2) has the same meaning and signifies lands held by an intermediary who stood between the State and the actual tiller of the soil and also the interests of those in whose favour there had been alienation of the right to revenue.
756 (2) The First Amendment to the Constitution did not bring within the definition of an estate in article 31A(2)(a) the holding of persons other than intermediaries or those who held land under grants on favourable tenures from Government.
(3) Lands held by a ryotwari proprietor other than those in 'estates ' would not be an estate within sub cl.
(a) of article 31A(2), nor the interest of such ryot in his holding an 'interest in an estate ' within sub cl.
(4) The word 'includes ' in Art 31A(2)(b) is used in the sense of 'means and includes '.
(5) The holder of Pandaravaka Verumpattom tenure was in the position of a ryotwari pattadar, and, therefore, his lands were not an estate within the meaning of article 31A(2).
(6) The lands held by the petitioner on Puravaka tenure were within article 31A(2) because they were lands belonging to a Jenmi and so covered by the definition of an estate as amended by virtue of the Fourth Amendment to the Constitution.
| The petitioner, an advocate, filed the application by way of a public interest litigation alleging that the working of the Judges of the apex Court was cocktail, based on Western Common Law and American techniques; that the Court had become a constitutional liability without having control over the illegal acts of Government, and that the Court was sleeping over the issues.
Dismissing the writ petition, ^ HELD: The petitioner is prima facie guilty of contempt.
The petition is clearly intended to denigrate the Court in.
the esteem of the people of India.
The allegations are clumsy.
It is an intentional attempt at lowering the prestige of the Court as the apex Judicial Institution.
[442G, D; 443A] The Registry to draw up an appropriate proceeding for contempt of court and issue notice to the petitioner.
[443C] The petition is an act against public interest.
The petitioner has certainly overstepped the limit of self restraint so much necessary in such litigation.
The Registry directed not to entertain any public interest litigation application filed by the petitioner in future.
[443E]
| The appellants were members of the East India Cotton Association which was an association recognised by the Cen tral Government under the Forward Markets Regulation Act, 1952.
Prioi to December 1955, they had entered into "hedge contracts" in respect of cotton for settlements in February and May 1956 in accordance with the bye laws of the Associa tion.
Towards the end of 1955 it was apprehended that the forward market in cotton was heading for a crisis and the Central Government issued notifications directing the Asso ciation to suspend business in hedge contracts for February and May 1955 deliveries for short periods this did not improve the situation.
On January 21, 1956, the Central Government, acting under section 12 of the Act, made a new bye law in substitution of bye law 52AA of the Association which empowered the Forward Markets Commission, constituted under, the Act, to issue a notification closing out all hedge contracts at rates fixed by the Commission.
On January 24, 1956, the Commission issued a notification closing out all hedge contracts including those subsisting on that date, and fixed the rates for the settlement of such contracts.
The appellants contended that the amended bye.law 52AA was invalid as the power to close out hedge contracts could not be conferred upon the Commission and as the Association was in law incapable of conferring such a power on the Commission or on any other body and that in any cases the bye law could not operate retrospectively so as to affect existing contracts.
Held, (per Sinha, C. J., Ayyangar, Mudholkar and Aiyar, JJ.
Subba Rao, J. contra), that the amended bye law 52AA was not ultra vires the Central Government and validly empowered the Commission to close all hedge contracts in cotton including existing contracts.
Clause (f) of section 4 of the Act provided that one of the functions of the Commission 722 shall be to perform such other duties and exercise such other powers as may be assigned to the Commission "by or under the Act, as may be prescribed".
There was no limitation upon the nature of the power that may be conferred under cl.
(f) except that it must be in relation to the regulation of forward trading in goods.
It was not possible to place any limitation on this power by invoking the rule of ejusdem genesis as there was no common positive thread running through cls.
(a) to (e) of section 4.
To judge whether legally a power could be rested in a statutory body the proper rule of interpretation was that unless the nature of the power was such as to be inconsistent with the purpose for which the body was created or unless the particular power was contra indicated by any specific provisions of the Act, any power which furthered the provisions of the Act could be legally conferred.
judge by this test the power conferred by the bye law could be validly vested in the Commission.
The power was one conferred "under the Act".
The words "under the Act" signified a power conferred by laws made by a subordinate law making authority which was empowered to do so by the Act.
The impugned bye law was clearly well within the bye law making power under sections II and 12.
The bye law did not contravene articles 64 of the Articles of Association of the Association as articles 64 applied only to the Board and placed no restrictions on the power of the Association, Western India Theaters Ltd. vs Municipal Corporation of Poona, [1959] Supp. 2 S.C.R. 71, Hubli Electricity Co. Ltd. vs Province of Bombay, 76 I.A. 57 and Narayanaswamy Naidu vs Krishnamurthi, I.L.R. , referred to, Further, upon a proper construction of the amended bye law it applied not only to contracts to be entered into in future but also to subsisting contracts.
A statute which could validly enact a law with retrospective effect could in express terms validly confer upon a rule making authority a power to make a rule or frame a bye law having retrospective operation.
In the present case the power to make bye laws so as to operate on subsisting contracts followed as a necessary implication from the terms of section 11.
There was no contra indication in the other provisions of the Act.
Per Subba Rao, J. Under section 12 (1) of the Act the Central Government had no power to make a bye law with retrospective effect.
The provision conferring rule making power must be strictly construed and unless it expressly conferred a power to make a bye law with retrospective effect, it must be held that it was not conferred any such power.
Evey if it was permissible to inter such a power by necessary 723 implication, it could not be inferred in the present case.
It could not be said that unless retrospective operation was given to the provisions of section 12, the object of the legis lature would be defeated or the purposes for which the power was conferred could not be fulfilled.
Further, the powers conferred on the Commission under the impugned bye law could not be performed by the Commission under c1.
(f) of section 4.
Clauses (a) to (e) of section 4 showed that the functions of the Commission were wholly supervisory and advisory in nature; the functions described in cl.
(f) were analogous to these and could only be supervisory or advisory.
The Commission had no administrative functions or powers of management or powers of interference in the internal management of registered association which were vested in the Association.
The power conferred upon the Commission was not conferred "under the Act".
The words did not include a rule or a bye law, and applied only to an assignment made in the exercise of an express power conferred under the Act.
The Central Government had no power tinder section 12 to make a bye,law assigning any function to the Commission.
Union of India vs Madan Gopal Kabra ; , Modi Food Products Ltd. vs Commissioner of Sale 's Tax, U.P., A. I.R. 1956 All. 35, Strawboard Manufacturing Co. Ltd. vs Gupta Hill Workers ' Union; , , India Sugar & Belineries Ltd. vs State of Mysore, A.I.R. 1960 Mys.
326, C.W. Motor Service (P) Ltd. vs State of Kerala, A.I.R. 1959 Kerala 347, Howell vs Falmouth Boat Construction Co. Ltd. ; The Western India Theatres Ltd. vs Municipal Crporation of the City of Poona, (1959) Supp.
2 S.C.R. 71 and Hubli Electricity Co. Ltd. vs Province of Bombay ( 1948) 76 I.A. 57, referred to.
| The respondents, who were the Khadims of the tomb of Hazrat Khwaja Moin ud din Chishti of Ajmer challenged the constitutional validity of the Durgah Khwaja Saheb Act, 1955 (XXXVI of 1955) and certain specified sections by a petition filed under article 226 of the Constitution in the Rajasthan High Court.
The High Court substantially found in their favour and made a declaration that the impugned provisions of the Act were ultra vires and restrained the appellants from enforcing them.
The respondents claimed to represent the Chishti Soofies who, according to them, constituted a religious denomination or a section thereof to whom the Durgah belonged and their case was that the impugned Act had interfered with their fundamental right to manage its affairs.
Their further case was that the Nazars (off erings) of the pilgrims constituted their customary and main source of income and were their property, recognised by judicial decisions including that of the Privy Council in Syed Altaf Hussain vs Dewan Syed Ali Rasul Ali Khan, A.I.R. , that the impugned Act and its material provisions violated their fundamental rights guaranteed by articles 14, 19(1) (f) and (g), 25, 26, 30(1) and (2) and 32 of the Constitution.
It was contended that sections 4 and 5 of the Act, which provided for the setting up and composition of the Durgah Committee consisting of Hanafi Muslims none of whom might belong to the Chishtia order, infringed the rights of the.
denomination guaranteed by Art, 26(b), (c) and (d) that cl.
(v) of section 2(d) of the Act, by which all such Nazars as were received on behalf of the Durgah by the Nazim or any person authorised by him were to be included in the Durgah Endowment, infringed their fundamental right to property, that sections 11(f) and (h) which empowered the committee to determine the privileges of the Khadims and the functions and powers of the Sajjadanashin and section 13(1) which authorised the committee to make provisional interim arrangement in case the office of Sajjadanashin fell vacant, infringed 384 their fundamental rights under article 25(1), that section 14 by creating a statutory right in the Nazim or his agent.
to solicit and receive offerings on behalf of the Durgah and prohibiting the Khadims and the Sajjadanashin from doing so, violated their right to property and section 118 which provided for the enforcement of the orders of the committee as orders and decrees of a civil court violated articles 14 and 32 of the Constitution.
The past history of the Endowment for centuries showed that its management was always vested in Mutawallis appointed by the State, some of whom were Hindus, and that the pilgrims who visited the Durgah and made offering were not confined to Moslems alone but belonged to all communities.
Held, that the contentions of the respondents must be nega tived.
Although this Court has laid down what is a religious deno mination and what are matters of religion, it must not be overlooked that the protection of article 26 of the Constitution can extend only to such religious practices as were essential and integral parts of the religion and to no others.
Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt, ; and Sri Venkataramana Devaru vs The State of Mysore, ; , discussed.
Assuming that the Chishti order of Soofies constituted such a denomination or section of it whom the respondents represented, it was obvious that cls.
(c) and (d) of article 26 could not create any rights which the denomination or the section never had; they could merely safeguard and guarantee the continuance of such rights which the denomination or section had.
Where right to administer properties had never vested in the denomination or had been surrendered by it or had otherwise been effectively and irretrievably lost to it, article 26, could not be successfully invoked.
In the instant case, since Chishti Soofies never had any rights of management over the Durgah Endowment for centuries since it was created, the attack on SS. 4 and 5 of the Act must fail.
Asrar Ahmed vs Durgah Committee, Ajmer, A.I.R. 1947 P.C. 1, referred to.
It was not correct to say that SS. 2(d)(v) and 14 of the impugned Act infringed article 19(1)(f) and (g) of the Constitution.
Those sections, properly construed, meant that offerings earmarked generally for the Durgah belonged to the Durgah and could be received only by the Nazim or his 'agent.
These offerings, as found by judicial decisions, never belonged to the respondents and the impugned sections did not affect what was found to belong to them.
Syed Altaf Hussain vs Dewan Syed Ali Rasul Ali Khan, A.I.R. , referred to.
385 There could be no doubt as to the competency of the Legis lature to regulate matters relating to the property of the Durgh by providing that the said Offerings could be solicited by the Nazim or hi,, agent.
It was, liower, not correct to say that the omission of the word explicitly ' contained in the definition in the earlier Act from the present Act enlarged the scope of the definition in any way.
The powers conferred on the committee by section 11(f) and (h), which must be read in the light of the mandatory provisions of section 15 which made it obligatory on the committee to observe Muslim Law and the tenets of the Chishti saint and which had to be exercised within the limits laid down by section 16, could not be said to violate article 25(1) of the Constitution.
section 16 in providing for the setting up of a Board of Arbitration, embodied a healthy and unexceptionable principle, obviously in the interest of the institution as well as the parties, and could not be said to infringe Arts 14 or 32 of the Constitution.
Section 13(1) could not be read apart from the other provi sions of section 13.
That section really intended to lay down the procedure for determining disputes relating to succession to III Office of Sajjadanashin and it was therefore fertile to contend that section 13(1) offended against article 25(1).
since section 18 was confined to such final orders as were within the jurisdiction of the committee and passed against persons who did not object to them but failed to comply with them, it did not contravene articles 14 or 32 of the Constitution.
| Respondent No. 1 obtained a mortgage decree for Rs. 1,14,581/14/6 against one Rao Raja Inder Singh (the judgment debtor).
The mortgage money was advanced under three mortgages, and the mortgaged properties consisted of Jagirs and some non Jagir immovable property.
The latter property was sold in execution and Rs. 33,750/ paid to the decree holder in partial satisfaction of the decree.
Then the decree holder filed an execution petition in the Court of the District Judge for the balance amount i.e. Rs. 99,965/3/6, praying for attachment of the amount of compensation and rehabilitation grant which would be paid to the judgment debtor on account of resumption of his Jagir.
The judgmment debtor submitted two applications in which he claimed relief under sections 5 and 7 of the Rajasthan Jagirdars ' Debt Reduction Act.
The decree holder, in his reply, to those petitions urged that the provisions relied in were ultra vires the Constitution of India, being in contravention of articles 14, 19 and 31 of the Constitution.
Thereafter the decree holder moved a petition under article 228 of the Constitution before the High Court, praying that the execution case pending in the Court of the District Judge, be withdrawn from that court to the High Court.
The High Court transferred the case to its file.
By its judgment the High Court could held that apart from the later part of section 2(e) excluding certain debts and section 7 (2) of the Act, the rest of the Act was valid.
The High Court granted a certificate under article 133(1)(c) of the Constitution to the State of Rajasthan to file an appeal to this Court.
Hence the appeal: Held: (i) That the impugned part of section 2(e) infringes article 14 of the Constitution for the reason that no reasonable classification is disclosed for the purpose of sustaining the impugned part of section 2(e).
It is now well settled that in order to pass the test of permissible classification, two conditions must be fulfilled, namely, (1) that the classification must be founded on an intelligible differentiation which distinguishes persons or things that are to be put together from others left out of the group, and (2) that the differential must have a rational relationship to the object sought to be achieved by the statute in question.
The said condition No. 2 above has clearly not been satisfied in this case.
The object sought to be achieved by the impugned Act was to reduce the debts secured on the Jagir lands which had been resumed under the provisions of the Rajasthan Land Reforms and Resumption of Jagirs Act.
The fact that the debts are owed to a Government or local authority or other bodies mentioned in the impugned part of section (2) (e) has no rational relationship with the object sought to be achieved by the Act.
Further, no intelligible principle underlies the exempted categories of debts.
The reason why a debt advanced on behalf of a person by the Court of Wards is clubbed with a debt due to a State or a scheduled bank and why a debt due to a non scheduled bank is not excluded from the purview of the Act is not discernible.
Manna Lal vs Collector of Jhalwar.
; , Nand Ram Chhotey Lai vs Kishore Raman Singh, A.I.R. (1962) All 521 and 905 Jamnalal Ramlal Kimtee vs Kishendas and State of Hyderabad, A.I.R. (1955) Hyd. 194, distinguished.
(ii) Section 7(2) is valid as it imposes reasonable restrictions, in the interests of general public.
on the rights of a secured creditor.
This sub section has been designed with the object of rehabilitating a Jagirdar whose Jagir properties have been taken over by the State for a public purpose at a low valuation.
If this provision was not made, the Jagirdar would find it diffcult to start life afresh because his future income and acquired properties would be liable to attachment and sale for the purpose of satisfying the demands of such creditors.
| The petitioners (workers) challenged the legality of the sale of certain plants and equipment of the Sindri Fertilizer Factory, whereby the highest tender submitted by respondent No. 4 was accepted by the Tender Committee and approved by the Board of Directors.
The petitioners, amongst others, contended that (i) that the decision to sell the plants and equipment of the Factory was taken without calling for any report;(ii) the original tender of Rs. 7.6 crores was unaccountably reduced to Rs. 4.25 crores; (iii) the price of the plants and equipment, which was ultimately realised in the sale was manipulated with ulterior purposes; (iv) the decision to restrict fresh offers, in respect of the reduced equipment, to the tenderers who had submitted tenders for more than Rs. 4 crores was unfair and arbitrary; (v) the said decision resulted in a huge loss to the public exchequer and (vi) the sale had jeopardised the employment of 11000 odd workers who faced retrenchment as a result of the sale.
On behalf of petitioners 3 and 4 it was further contended that the sale will deprive them of their fundamental right under Article 19(1) (g) to carry on their occupation as industrial workers and that the sale is in violation of the provisions of Article 14 of the Constitution being arbitrary and unfair.
The respondents raised a preliminary objection to the maintainability of the writ petition on the ground that the petitioners have no locus standi and that the impugned sale did not violate any of the fundamental rights of the petitioners.
Dismissing the petition: ^ HELD (By the Court) The petitioners ' right under article 19(1)(g) to carry on their occupation as industrial workers was not affected by the sale, nor was their fundamental right, if any, under Article 14 of the Constitution violated.
[60 A] (Per Chandrachud, C.J., Fazal Ali & Koshal, JJ.) 1.
The violation of a fundamental right is the sine qua non of the exercise of the right conferred by Article 32.
53 The jurisdiction conferred on the Supreme Court by Article 32 is an important and integral part of the basic structure of the Constitution because it is meaningless to confer fundamental rights without providing an effective remedy for their enforcement, if and when they are violated.
A right without a remedy is a legal conundrum of a most grotesque kind.
[59 E F] 2.
Whereas the right guaranteed by Article 32 can be exercised for the enforcement of fundamental rights only, the right conferred by Article 226 can be exercised not only for the enforcement of fundamental rights but for any other purpose.
[59 E] 3(i).
There is no substance in the grievance that the petitioners ' right under Article 19(1)(g) is violated or is in the imminent danger of being violated by the impugned sale, since not only did the sale not affect the employment of the workers employed in the Factory, but those of them who were rendered surplus from time to time on account of the closure of the plants were absorbed in alternate employment in the same complex.
[60 C, F G] (ii) The right of petitioners 3 and 4 and of the other workers is not, in any manner, affected by the impugned sale.
The right to pursue a calling or to carry on an occupation is not the same thing as the right to work in a particular post under a contract of employment.
If the workers are retrenched consequent upon and on account of the sale, it will be open to them to pursue their rights and remedies under the Industrial Laws.
The closure of an establishment in which a workman is for the time being employed does not by itself infringe his fundamental right to carry on an occupation which is guaranteed by Article 19(1)(g) of the Constitution.
[60 G H, 61 A] 4.
Article 19(1)(g) confers a broad and general right which is available to all persons to do work of any particular kind and of their choice.
It does not confer the right to hold a particular job or to occupy a particular post of one 's choice.
Even under Article 311 of the Constitution, the right to continue in service falls with the abolition of the post in which the person is working.
The workers in the instant case can no more complain of the infringement of their fundamental right under Article 19(1)(g) than can a Government servant complain of the termination of his employment on the abolition of his post.
The choice and freedom of the workers to work as industrial workers is not affected by the sale.
The sale may at the highest affect their locum, but it does not affect their locus, to work as industrial workers.
[61 B D] 5.
In the instant case, it is quite difficult to hold that the decision to sell the plants and equipment of the Factory was arbitrary, unreasonable or mala fide.
The real drive of the petition is against the decision of the Board to sell the plants and equipment.
It is that decision which is stated to furnish the cause to complain of the violation of the right conferred by Article 14, fairness, justness and reasonableness being its implicit assumptions.
[64 D F] 6.
As far as possible, sales of public property, when the intention is to get the best price, ought to take place publicly.
The vendors are not necessarily bound to accept the highest or any other offer, but the public at least gets the satisfaction that the Government has put all its cards on the table.
One cannot exclude the possibility here that a better price might have been realised in a fresh public auction but such possibilities cannot vitiate the sale or justify the allegation of mala fides.
[64 G H, 65 A B] 54 7.
It cannot be held that the petitioners ' rights, if any, under Article 14 are violated, in view of the fact that neither the decision to sell nor the sale proceedings were unreasonable, unjust or unfair.
But if and when a sale of public property is found to be vitiated by arbitrariness of mala fides, it would be necessary to consider the larger question as to who has the right to complain of it.
[65C, D E] 8.(i) The maintainability of a writ petition which is correlated to the existence and violation of a fundamental right is not always to be confused with the locus to bring a proceeding under Article 32.
These two matters often mingle and coalesce with the result that it becomes difficult to consider them in water tight compartments.
The question whether a person has the locus to file a proceedings depends mostly and often on whether he possesses a legal right and that right is violated.
But, in an appropriate case, it may become necessary in the changing awareness of legal rights and social obligations to take a broader view of the question of locus to initiate a proceeding, be it under Article 226 or under Article 32 of the Constitution.
[65 E G] (ii) The Court might not have refused relief to the workers if it had found that the sale was unjust, unfair or mala fide.
If a public property is dissipated, it would require a strong argument to convince the Court that representative segments of the public or at least a section of the public which is directly interested and affected would have no right to complain of the infraction of public duties and obligations.
Public enterprises are owned by the people and those who run them are accountable to the people.
The accountability of the public sector to the Parliament is ineffective because the parliamentary control of public enterprises is "diffuse and haphazard".
[65 G H, 66 A] (Per Bhagwati and Krishna Iyer, JJ.
concurring) 1.
Public law, as part of the panorama of the developmental process, must possess the specific techniques of public sector control within well defined parameters which will anathematise administration by court writ and interdict public officials handling public resources in disregard of normatice essentials and constitutional fundamentals.
In a society in which the State had thrust upon it the imperative of effectuating massive transformation of economy and social structure the demands upon the legal order to inhibit administrative evils and engineer developmental progress are enormous, though novel.
[68 E & 69 A B] 2.
It is important to underscore the vital departure from the pattern of judicial review in the Anglo American legal environment because the demands of development obligated by Part IV compel creative extensions to control jurisprudence in many fields, including business administrative law, contract law, penal law, fiscal law and the like.
[69 C D] 3.
Judicial interference with the Administration cannot be meticulous.
The court cannot usurp or abdicate, and the parameters of judicial review must be clearly defined and never exceeded.
If the Directorate of a Government company has acted fairly, even if it has faltered in its wisdom, the court cannot, as a super auditor, take the Board of Directors to task.
This function is limited to testing whether the administrative action has been fair and free from the taint of unreasonableness and has substantially complied with the norms of procedure set for it by rules of public administration.
[71 A C] 55 4.
Locus Standi must be liberalized to meet the challenges of the time.
Ubi jus ibi remedium must be enlarged to embrace all interests of public minded citizens or organisations with serious concern for conservation of public resources and the direction and correction of public power so as to promote justice in its triune facets.
[71 D E] 5.
An officious busybody picking up a stray dispute or idle peddlar of blackmail litigation through abuse of the process of the court cannot be permitted to pollute the court instrumentality, for private objectives.
Public justice is always and only at the service of public good, never the servant or janitor of private interest or personal motive.
[72 B C] 6.
Public interest litigation is part of the process to participate justice and 'standing ' in civil litigation of that pattern must have liberal reception at the judicial door steps.
[74 E F] 7.
Certainly, it is not part of the judicial process to examine entrepreneurial activities to ferret out flaws.
The court is least equipped for such oversights, Nor, indeed, is it a function of the judges under the constitutional scheme.
The internal management, business activity or institutional operation of public bodies cannot be subjected to inspection by the Court.
To do so, is incompetent and improper and, therefore, out of bounds.
Nevertheless, the broad parameters of fairness in administration, bona fides in action, and the fundamental rules of reasonable management of public business, if breached will become justiciable.
[77 A C] 8.
Article 43A of the Constitution confers, in principle, partnership status to workers in industry and therefore technical considerations of corporate personality cannot keep out those who seek to remedy wrongs committed in the management of the public sector.
[76 G] Municipal Council, Ratlam vs Shri Vardhichand and Ors. ; Wisconsin Law Review, Vol.
1966: 999 at P. 1064 and M. Cappelletti, Rabels Z (1976) 669 at 672 referred to.
| A notification under section 4 of the Land Acquisition Act, 1894 in respect of land belonging to the respondent was published in the official gazette of the Government of Mysore on August 17, 1961.
But no notice as required by that section were published in the locality till November 1 and 19 of 1961.
Under section 5A of the Act the time limited for filing objections is thirty days from the issue of the notification.
The respondent filed his objections only on December 4, 1961.
In his writ petition under Article 226 of the Constitution the respondent contended that the notice under section 4 was invalid.
The High Court upheld the contention and quashed the impugned notification.
The State of Mysore appealed to this Court with certificate.
HELD: Under certain circumstances publication in the official gazette is presumed to be notice to all concerned.
But in the case of a notification under. 4 of the Land Acquisition Act the law has prescribed that in addition to the publication of the notification in the official gazette the Collector must also give publicity to the substance of the notification in the concerned locality.
Unless both these conditions are satisfied section 4 of the Land Acquisition Act cannot be said to have been complied with.
no publication of the notices in the locality is a mandatory requirement.
In the absence of such publication the interested persons may not be able to file their objections about the acquisition proceedings and they will be deprived of the right of representation provided under section 5A which is a valuable right.
Under section 4 it is only when the notification is published in the official gazette and it is accompanied by or immediately followed by Public notice that a person interested in the property proposed to be acquired can be regarded to have had notice of the proposed notification.[857H 858D] The impugned notification did not comply with the requirement of the law since it was not accompanied by or immediately followed by public notice.
The High Court was, therefore, justified in quashing the proceedings taken.
[858E] The appeal must accordingly fail.
Gangadharaih vs State of Mysore & Ors., (1961) Mys.
L.J. 883, referred to.
| The Pepsu Tenancy and Agricultural Lands Act XIII of 1955 came into force on March 6, 1955, whereby it was provided that every land owner would be entitled to select any parcel or parcels of land not exceeding the permissible limit, which was fixed at 30 standard acres.
The principal Act was amended in 1956 by the inclusion of Chapter 4A which provided for the Government taking over the surplus lands in the hands of a land owner.
Another Amendment Act III of 1959 which was made operative from January 19, 1959 incorporated into the principal Act section 32(FF) which provided that except in certain specified cases no transfer or other disposition of land effected after 21st .August 1956 could affect the rights of the State Government under the Act.
In 1962 the Pepsu Tenancy and Agricultural Lands (Amendment and Validation) Act XVI of 1962 was passed.
Section 7 of this Act introduced a new section 32KK into the principal Act whereby it was provided that land owned by a Hindu undivided family would be deemed to be land of one land owner and, a partition of land owned by such a family shall be deemed to.
be a disposition of land for the purposes of section 32 FF.
Section 1(2) of 'the Amendment Act provided that Sections 2, 4, 5, 7 and 10 "shall be deemed to.
have come into force on the 30th day of October, 1956 and the remaining provisions of this Act shall come into force at once,".
The first Appellant together with his son the second Appellant and two other sons were members of a joint Hindu family which owned agricultural lands in Punjab.
The Appellant 's family divided their family property by a Registered Partition Deed on September 6, 1956 and necessary changes were thereafter made in the mutation register.
After Act III of 1959 ' came into force, the Collector of Sangrur started proceedings under Chapter 4A of the Act for determining the surplus lands in the hands of the appellant.
Despite the representations of the Appellants, the Collector ignored the partition effected in the family 'and held that about 18 standard acres were surplus in their hands.
Appeals filed by the Appellants before the Commissioner, Patiala Division and the State Government were rejected.
The Appellants then challenged the orders of these authorities by a writ petition under article 226 of the Constitution, but this was dismissed ' by a Single Judge of the High Court who took the view that as section 32 KK had become a part of the principal Act, the words "this Act" in that section must refer to the principal Act and not to Section 7 of the Amendment Act.
A Division Bench of the High Court dismissed an appeal following an earlier decision of the Court in Bir Singh and Ors.
vs The State of Punjab and Ors.
In the appeal to this Court there was no dispute that if the partition entered into in the family was.
taken into consideration, the lands held by the different sharers would ' be within the permissible limits.
348 HELD: The orders impugned in the writ petition must be quashed.
A reading of the various provisions of the 1962 Act show that the legislature intended that section 7 of that Act which introduced section 32 KK into the principal Act should be deemed to have come into force on the 30th October 1956.
The words "this Act" in section 7 of the Amendment Act (section 32 KK of the principal Act) were intended to refer to the Amendment Act 'and not to the principal Act.
It is true that ordinarily when a section is incorporated into the principal Act by 'means of an amendment, reference in that section to "this Act" means the principal Act.
But in view of sub section
(2) of section 1 of the Amendment Act of 1962 that construction had become impermissible.
Every statute has to be construed as a whole and the construction given should be 'a harmonious one.
It was not permissible for the Court to.
proceed on the basis that the legislature had enacted sub section
(2) of section 1 of the Amendment Act 1962, by oversight.
If any mistake had crept into that section it was for the legislature to correct the same.
[352 C F]
|
Civil Appeal Nos.
42 and 43 of 1961.
Appeals by special leave from the judgments and orders dated September 7, 1960 of the Chief Commissioner, Pondicherry in Appeals Nos.
56 and 57 of 1960.
WITH Petitions Nos. 297 and 298 of 1960.
Petitions under article 32 of the Constitution of India for enforcement of Fundamental Rights.
A. V. Viswanatha Sastri R. K. Garg, M.K. Ramamurthy, S.C. Agrawal and D. P. Singh, for the appellants/petitioners (In both the appeals and the petitions.) C. K. Daphtary, Solicitor General of India, B. Sen, B. R. L. Iyengar and T. M. Sen, for the 983 respondent No. 1 (in both the appeals) and respondents Nos. 1 and 2 (in both the petitions).
A. section R. Chari, K. R. Choudhri and R. Mahalingier, for respondent No. 2 (in both the appeals).
R. Gopalakrishnan, for respondent No. 3 (in both the petitions).
December, 8.
The Judgment of Gajendragadkar, Wanchoo and Ayyangar, JJ., was delivered by Ayyangar, J.
The judgment of Sarkar and Das Gupta, JJ., was delivered by Sarkar, J. AYYANGAR, J. The two Civil Appeals are by special leave of this Court and the two Writ Petitions have been filed by the respective appellants seeking the same relief as in the appeals, the relief sought being the setting aside of orders passed by the Chief Commissioner of Pondicherry as the State Transport appellate authority (under the Motor Vehicles Act).
All these four have been heard together because of a common point raised regarding the jurisdiction of this Court to entertain the appeals and the petitions.
It is manifest that the preliminary point about the jurisdiction of this Court should have first to be considered before dealing with the merits of the contentions raised in the appeals and petitions.
It might be convenient to state a few facts to appreciate the context in which the questions debated before us arise and the point concerned in the order now passed.
Sivarama Reddiar the appellant in Civil Appeal 43 of 1961 and the petitioner in Writ Petition 298 of 1960, is a citizen of India and is engaged in the business of motor transport.
By a notification dated December 27, 1958 in the Official Gazette of Pondicherry the State Transport Commission of Pondicherry invited applications for the grant of stage carriage permits to be submitted before February 27, 1959, including the route from Pondicherry to Karaikal, the latter being another 984 former French possession.
In response to this notification, Sivarama Reddiar as well as one Gopal Pillai who is the second respondent to the appeal and the second respondent in the Writ Petition were two of the 19 persons who made applications for the grant of this permit to them.
Before the State Transport Commission dealt with these applications, the Government of India in the exercise of its powers under section 4 of the published a notification in the Official Gazette of Pondicherry extending the provisions of the Indian as in force in Delhi to Pondicherry with effect from June 19, 1959.
Rules 3(4) and 4 of this order promulgated under the provided: "3(4).
Any Court, tribunal or authority required or empowered to enforce the said Act in Pondicherry may for the purpose of facilitating its application in relation to Pondicherry construe the said Act with such alteration not affecting the substance as may be necessary or proper with respect to the matter before the Court, tribunal or authority as the case may be.
" Rule 4 effected a repeal of existing laws in these terms: "Repeal of existing laws: All laws in force in Pondicherry immediately before the commencement of the Order which correspond to the Act and the rules, notifications and 'Orders applied to Pondicherry by this order shall, except in so far as such laws relate to the levy of any fee, cease to have effect save as respects things done or omitted to be done before such commencement.
" On July 21, 1959, the Chief Commissioner of Pondicherry, in exercise of the powers conferred on him by section 44 of the constituted a State Transport Authority for Pondicherry The 985 State Transport Authority, Pondicherry thus created, issued a notification on August 1, 1959 by which it required persons who had applied for Stage Carriage permits in response to the notification dated December 27, 1958 to furnish particulars with regard to a number of matters which were relevant for being considered for the grant of a Stage Carriage permit under the .
Both the appellant petitioner Sivarama Reddiar as well as inter alia the respondent Gopal Pillai furnished the required particulars.
The Particulars supplied by the parties were checked and verified by designated authorities and thereafter the State Transport Authority by an order on April 30, 1960 directed the grant of the permit to the appellant petitioner Sivarama Reddiar rejecting the claims of all others including the respondent Gopala Pillai.
Though the which had been extended to Pondicherry included section 64, whereby persons aggrieved by an order of a State Transport Authority could file appeals against such order, no appellate authority had been constituted by the Chief Commissioner.
This situation was remedied by a notification by the Chief Commissioner dated May 4, 1960 whereby he constituted himself under section 68 of the Act as the appellate authority for the purpose of exercising jurisdiction under section 64 thereof.
Several of the aggrieved operators including Gopala Pillai preferred appeals to the Chief Commissioner.
By an order dated September 5, 1960 the Chief Commissioner, Pondicherry allowed the appeal of the respondent Gopala Pillai, set aside the order of the State Transport Authority granting the permit to the appellant Sivarama Reddiar and directed that the permit for the route Pondicherry to Karaikal be issued in favour of the respondent Gopala Pillai.
Writ Petition 293 of 1960 has been filed to secure the setting aside of this order of the Chief Commissioner on the ground that the order violates the fundamental rights guaranteed to the petitioner by 986 of the Constitution and Civil Appeal No. 43 of 1961 is directed to obtain the same relief.
It is not necessary at this stage to set out the facts of the other appeal and petition by Masthan Sahib, because except that the route is different and so, are the grounds on which the order of the Chief Commissioner is sought to be impugned, the other material facts relevant for the consideration of the preliminary point to which we adverted are exactly the same.
The preliminary objection that is raised to the entertainment of the appeal is shortly as follows: article 136 (1) of the Constitution under which the appellant has obtained special leave reads: "136 (1).
Notwithstanding anything in this Chapter, the Supreme Court may, in its discretion, grant special leave to appeal from any judgment, decree, determination, sentence or order in any cause or matter passed or made by any court or tribunal in the territory of India.
" In order, therefore, that this Court might have jurisdiction to entertain the appeal it is a prerequisite that the Court or tribunal from whose judgment or order the appeal is preferred should be one in the territory of India.
It is urged on behalf of the respondent that Pondicherry is not part of the territory of India, with the consequence that the Chief Commissioner whose order is impugned in the appeal is not "a Court or tribunal in the territory of India.
" The question thus raised is of great political and constitutional significance and it is not disputed that if this area were not part of the territory of India, this Court would have no jurisdiction in the absence of any legislation by Parliament under article 138 (1), and the Civil Appeal would have to be dismissed as incompetent.
It was common ground that this was the position in regard to the maintainability of the appeal 987 but in regard to the Writ Petition Mr. Vishwanatha Shastri learned Counsel for the petitioner sought to sustain its maintainability on slightly different grounds.
He invited our attention to the terms of article 12 of the Constitution which reads: "In this Part, unless the context otherwise requires, "the State" includes the Government and Parliament of India and the Government and the Legislature of each of the States and all local or other authorities within the territory of India or under the control of the Government of India." Learned Counsel pointed out that for the purpose of the exercise of this Court 's powers under article 32 of the Constitution for the enforcement of the fundamental rights its jurisdiction was not limited to the authorities functioning within the territory of India but that it extended also to the giving of directions and the issuing of orders to authorities functioning even outside the territory of India, provided that such authorities were subject to the control of the Government of India.
This submission appears to us well founded and that the powers of this Court under article 32 of the Constitution are not circumscribed by any territorial limitation.
It extends not merely over every authority within the territory of India but also those functioning outside provided that such authorities are under the control of the Government of India.
The power conferred on this Court by Part III of the Constitution has, however, to be read in conjunction with article 142 of the Constitution which reads: "142 (1) The Supreme Court in the exercise of the jurisdiction may pass such decree or makes such order as is necessary for doing complete justice in any cause or matter pending before it, and any decree so passed or order so made shall be enforceable throughout the territory 988 of India in such manner as may be prescribed by or under any law made by Parliament and until provision in that behalf is so made, in such manner as the President may by order prescribe.
(2) Subject to the provisions of any law made in this behalf by Parliament, the Supreme Court shall, as respects the whole of the territory of India, have all and every power to make any order for the purpose of securing the attendance of any person, the discovery or production of any documents, or the investigation or punishment of any contempt of itself.
" It would be seen that article 142 brings in a limitation as regards the territory which the orders or directions of this Court could be enforced.
It is manifest that there is an anomaly or a discordance between the powers of this Court under article 32 read with article 12 and the executability or enforceability of the orders under article 142.
It is possible that this has apparently arisen because the last words of article 12 extending the jurisdiction of this Court to authorities "under the control of the Government of India" were added at a late stage of the constitution making while articles 142 and 144, the latter reading: "All authorities, civil and judicial, in the territory of India shall act in aid of the Supreme Court".
were taken, in whole or in part, from section 210 of the Government of India Act, 1935 and that no necessary changes were made in article 142 to bring it into line with article 12 as it finally emerged and the powers of this Court under article 32.
But this however offers us no solution to the question which is whether, in view of the limitation imposed by article 142 on the area within which alone the directions or orders of this Court could be directly 989 enforced, the Court could issue a writ in the nature of certiorari or other appropriate writ or direction to quash a quasi judicial order passed by an authority outside the territory of India, though such authority is under the control of the Government of India.
If the order of the authority under the control of the Government of India but functioning outside the territory of India was of an executive or administrative nature, relief could be afforded to a petitioner under article 32 by passing suitable orders against the Government of India directing them to give effect to the decision of this Court by the exercise of their powers of control over the authority outside the territory of India.
Such an order could be enforceable by virtue of article 144, as also article 142.
But in a case where the order of the outside authority is of a quasi judicial nature, as in the case before us, we consider that resort to such a procedure is not possible and that if the orders or directions of this Court could not be directly enforced against the authority in Pondicherry, the order would be ineffective and the Court will not stultify itself by passing such an order.
In these circumstances it becomes imperative that we should ascertain the constitutional and political status of Pondicherry in relation to the Union of India.
Certain documents have been placed before us and in particular an agreement dated October 21, 1954 entered into between the Government of India and of France by which the administration of Pondicherry was ceded to the Government of India.
Mr. Viswanatha Sastri learned Counsel for the appellant petitioner contended that on the terms and conditions contained in this agreement, Pondicherry was a part of the territory of India.
On the other hand, Mr. Chari learned Counsel for the respondents urged that the reservations contained in the agreement were such as to preclude the Court from reaching the conclusion 990 that there had been a transfer of complete sovereignty, which according to him was necessary in order to constitute the area as part of the territory of India.
The learned Solicitor General who appeared in response to the notice to the Union of India, submitted that the Union Government was agreeable to the respective contentions urged by the parties being decided by the Court.
We have considered the matter urged before us with great care and desire to make the following observations: So far as the Constitution of Indian is concerned, we have an express definition of what the phrase "territory of India" means.
article 1 (3) enacts: "1.
(3) The territory of India shall compromise (a) the territories of the States; (b) the Union territories specified in the First Schedule; and (c) such other territories as may be acquired.
" There might be little difficulty about locating the territories which are set out in cls.
(a) & (b) but when one comes to (c) the question arises as to when a territory is "acquired" and what constitutes "acquisition".
Having regard to the subject dealt with, the expression "acquired" should be taken to be a reference to "acquisition" as understood in Public International Law.
If there were any public notification assertion or declaration by which the Government of this country had declared or treated a territory as part and parcel of the territory of India, the Courts would be bound to recognise an "acquisition" as having taken place, with the consequence that that territory would be part of the territory of the Union within Art.1(3)(c).
In the present case, we have this feature that the administration of the territory is being conducted under the powers vested in the Government under the .
The preamble to that Act recites that it was: 991 "An Act to provide for the exercise of certain foreign jurisdiction of the Central Government".
and accordingly the expression "foreign jurisdiction" is defined in its section 2(a) to mean "the jurisdiction which the Central Government has for the time being in or in relation to any territory outside India.
" Thus this would prima facie show that Pondicherry has not been "acquired" but still continues to be outside the territory of India.
In our opinion, however, though this might be very strong evidence that the territory has not been "acquired" and so not part of the "territory of India", it is still not conclusive.
In this state of circumstances two courses would be open to us: (1) to decide for ourselves on the material that has been placed before us in the shape of the agreement between the two Governments etc.
Whether Pondicherry has been "acquired" so as to become part of the territory of India, or (2) to invoke the assistance of the Government of India by inviting them to state whether the territory has been acquired within article 1(3) of the Constitution and whether Pondicherry is thus now part of the "territory of India".
We originally proposed to avail ourselves only of the procedure indicated in s.6 of the which enacts: "6.
(1) If in any proceeding, civil or criminal, in a Court established in India or by the authority of the Central Government outside India, any question arises as to the existence or extent of any foreign jurisdiction of the Central Government, the Secretary to the Government of India in the appropriate department shall, on the application of the Court, ' send to the Court the decision of the Central Government on the question, and that decision shall for the purposes of the proceeding be final.
992 (2) The Court shall send to the said Secretary in a document under the seal of the Court or signed by a Judge of the Court, questions framed so as properly to raise the question, and sufficient answers to those questions shall be returned to the Court by the Secretary and those answers shall on production thereof be conclusive evidence of the matters therein contained." But the learned Solicitor General very properly pointed out that an answer to the question which could be referred under this provision would relate merely to "the existence or extent of jurisdiction" and that information on these points might not be sufficient to solve the problem posed by the preliminary question raised in the appeals and petitions as to whether Pondicherry is a part of the "territory of India" or not.
We agree with the learned Solicitor General that information relating to the "existence or extent" of the jurisdiction exercisable by the Union Government in the territory might not completely solve the question for our decision as to whether Pondicherry is part of the territory of India or not, but still if the extent of the jurisdiction vested in the Union Government by the arrangements entered into between the two Governments virtually amounts to a transfer of sovereignty for every practical purpose, it would be possible to contend that such a transfer or cession was so incompatible with the existence of any practical sovereignty in the French Government as to detract from the surrender or transfer being other than complete.
It is for this reason that we consider it proper to exercise the powers vested in the Court under section 6 of the .
It would be observed from what has been stated above that it would be more satisfactory and more useful for the disposal of the proceedings 993 before us if we ascertain from the Union Government an answer to the question whether they do or do not consider that Pondicherry is part of the territory of India.
We have only to add that on the decisions in England, the Court has jurisdiction to invite the Government to assist it by information as to whether according to Government any territory was part of Her Majesty 's Dominion or not (vide The Fagernes L. R. 1927 Probate 311).
Besides, the learned Solicitor General agreed that the Government would assist us by answering our reference.
In view of the matters set out above we direct that the following questions shall be forwarded to the Union of India under the seal of this Court for the submission of their answers: (1) Whether Pondicherry which was a former French Settlement is or is not at present comprised within the territory of India as specified in article 1(3) of the Constitution by virtue of the Articles of the Merger Agreement dated October 21, 1954 between the Governments of India and France and other relevant agreements, arrangements, acts and conduct of the two Governments.
(2) If the answer to Question 1 is that Pondicherry is not within the territory of India, what is the extent of the jurisdiction exercised by the Union Government over the said territory and whether it extends to making all and every arrangement for its civil administration, its defence and in regard to its foreign affairs.
The Government of India might also state the extent of jurisdiction which France possesses over the area and which operates as a diminution of the jurisdiction ceded to or enjoyed by the Government of India.
On the receipt of the answers to these questions the appeals will be posted for further hearing.
SARKAR J. Four matters came up for hearing together.
Two of these are appeals brought with leave 994 granted by this Court and two are petitions under article 32 of the Constitution.
One appeal and one petition are by one party and the other appeal and petition are by another.
The appeal and the petition by each party challenge an order made by the Chief Commissioner of Pondicherry under the .
Each of the two orders challenged was made on applications for the grant of bus permits.
By one of the orders a permit for a certain route had been given to a person other than one of the parties who has moved us, in preference to him.
By the other order, similarly, the claim of the other party moving us to a permit for a different route was rejected.
All the matters raise substantially the same question concerning the validity of the Chief Commissioner 's orders.
Now, Pondicherry was earlier a French possession administered by the Government of France.
By an agreement between the Governments of India and France, the administration of Pondicherry was transferred to the Government of India as from November 1, 1954.
The Government of India had been exercising power in Pondicherry since, under the .
The Chief Commissioner of Pondicherry is an officer of the Government of India appointed under the powers derived as a result of the agreement.
With regard to the appeals, question arose at the hearing before us as to whether they were competent.
The appeals had been filed with leave granted under article 136 of the Constitution.
It was said that the appeals were incompetent because Pondicherry was outside the Indian territories and under article 136 no appeal from any court outside such territories lay to this Court.
It was, however, contended on behalf of the appellants that since the Indo French agreement or very soon thereafter, Pondicherry became part of the Indian territories as a territory acquired by India and, therefore the appeals who 995 competent.
As the most satisfactory way of deciding the question whether Pondicherry is within India or not is to seek information from the Government on the point, the majority of the members of the bench are of opinion that the Government of India should be approached to enlighten us about it.
The learned Solicitor General, appearing for the Government, has not objected to this procedure being adopted.
With regard to the Petitions under article 32, it was contended that the Chief Commissioner of Pondicherry was a State within the meaning of article 12 of the Constitution as under that article any authority under the control of the Government of India outside the territory of India was a State for the purpose of Part III of the Constitution.
On this basis it was contended on behalf of the petitioners that the petitions under article 32 asking for certain writs to quash the orders of the Chief Commissioner of Pondicherry were also competent.
A further question then arises as to whether in view of article 142 of the Constitution the writs, if issued, could be enforced against an authority under the control of Government of India at Pondicherry, if Pondicherry was outside India and if they could not, whether the Court should issue the writs as it would only be stultifying itself by doing so.
It seems to us that it is unnecessary to decide these questions at this stage, for we are going to ask the Government to inform us whether Pondicherry was at the relevant time part of Indian territories.
If the Government inform us that Pondicherry was part of India, then no question would arise concerning the powers or jurisdiction of this court in any of the matters now before us.
If the information from the Government is that Pondicherry is not within the territories of India, that will, in our opinion, be the 996 proper time to consider whether the Court can still give the petitioners the relief which they ask.
These cases involve other questions of difficulty and importance on which it would be proper, in our view, to make a pronouncement after the Government of India 's answer to our request is received.
As to none of these are indeed any question arising in these cases we express any opinion at this stage.
We wish, however, to observe now that it seems to us exceedingly strange that if this Court finds that a party 's fundamental right has been violated, from which it would follow that that party has a right to move this Court under article 32 and to obtain the necessary writ, this Court could refuse to issue it for the reason that it would thereby be stultifying itself.
If a party is entitled to a writ under article 32, then we are not aware that there is any discretion in the Court to refuse the writ on the ground that the writ cannot be enforced.
Even assuming that in view of article 142 of the Constitution, a writ cannot be enforced outside India as to which we pronounce no opinion now might is not be said with justification that it is not necessary for us to be unduly pressed by considerations of the difficulties of the enforcement of the writ and that if would be reasonable for us to think that the Government of India has sufficient respect for this Court to do all that is in its power to give effect to this Court 's order, whether or not there might be technical difficulties in the way of its enforcement by this Court.
In view of these doubts, we are unable, as at present advised, to concur in the opinion expressed in the Judgment of the majority of the learned Judges constituting the Bench that article 142 stands in the way of this Court issuing a writ under article 32 in this case.
We would reserve our opinion till a later stage and till it becomes necessary to express any opinion at all.
997 BY COURT : We direct that the two questions set out in the majority judgment be forwarded to the Union of India under the seal of this Court for submission of their answers.
On receipt of the answers to the questions the appeals will be posted for further hearing.
The Judgment of Gajendragadkar, Wanchoo and Ayyangar, JJ., was delivered by Ayyangar J. The Judgment of Sarkar and Das Gupta, JJ., was delivered by Sarkar J. AYYANGAR, J.
In compliance with our directions the two questions were forwarded to the Union Government and they submitted their answers to them in the following terms: "Question No. (1) Whether Pondicherry which was a former French Settlement is or is not at present comprised within the territory India as specified in Article 1(3) of the Constitution by virtue of the Articles of the Merger Agreement dated October 21, 1954 between the Governments of India and France and other relevant agreements arrangements, acts and conduct of the two Governments.
Answer The French Settlement (Establishment) of Pondicherry is at present not comprised within the territory of India as specified in clause (3) of Article 1 of the Constitution by virtue of the Agreement dated the 21st October, 1954, made between the Government of France and the Government of India or by any other agreement or arrangement.
By the aforesaid Agreement, dated the 21st October, 1954, the Government of France transferred, and the Government of India took over, administration of the territory of all the French Establishments in India, including Pondicherry, with effect from the 1st November, 1954.
A copy of the Agreement is enclosed.
This is expressed to be a de facto transfer and was intended to be 998 followed up by a de jure transfer.
A treaty of Cession providing for de jure transfer has been signed by the Government of France and the Government of India on the 28th May, 1956, but has not been so far ratified in accordance with the French Law as well as in accordance with the article 31 of the Treaty.
A copy of the Treaty is also enclosed.
The Government of India has been administering Pondicherry under the , on the basis that it is outside India and does not form part of the territory of India.
Question No.(2) If the answer to question 1 is that Pondicherry is not within the territory of India, what is the extent of the jurisdiction exercised by the Union Government over the said territory and whether it extends to making all and every arrangement for its civil administration, its defence and in regard to its foreign affairs.
The Government of India might also state the extent of jurisdiction which France possesses over the area and which operates as a diminution of the jurisdiction ceded to or enjoyed by the Government of India.
Answer The Government of India has been exercising full jurisdiction over Pondicherry in executive, legislative and judicial matters in accordance with .
In doing so it has followed the aforesaid Agreement.
The Government of France has not also exercised any executive, legislative or judicial authority since the said Agreement.
The jurisdiction of the Government of India over Pondicherry extends to making all arrangements for its civil administration.
The administration of the territory is being carried on under the , and in accordance with the French Establishments (Administration) Order, 1954, 999 and other Orders made under sections 3 and 4 of that Act.
The Government of India have been aiming at conducting the administration of Pondicherry so as to conform to the pattern of administration obtaining to in India consistent with the said Agreement.
Accordingly a large number of Acts in force in India have already been extended to Pondicherry.
The Government of India hold the view that the sole responsibility in regard to arrangements for the defence of Pondicherry devolves on themselves.
Pondicherry has no foreign relations of its own.
No claims have been made by the Government of France in this matter nor have the Government of India recognized the existence of any such claim.
The Government of France do not possess any de facto jurisdiction over Pondicherry which would imply any diminution of the jurisdiction exercised by the Government of India.
" The appeals and the writ petitions were thereafter posted for further hearing before us on October 9, 1961.
Mr. N. C. Chatterji learned Counsel for Shri Masthan Sahib, appellant in Civil Appeal No. 42 of 1961 and petitioner in writ petition No. 297 of 1960, urged before us two contentions.
The first was that the answer to the second question clearly established that the French establishments including Pondicherry were part of the territory of India, having been acquired by the Union Government within the meaning of article 1(3)(c) and that in view of this position it was not necessary to consider nor proper for us to accept the views expressed by the Union Government in their answer to the first question wherein they had expressly stated that they did not consider the French "establishments" covered by the agreement between the Union Government and the Government of France dated October 21, 1954 as being within the territory of India within 1000 Art.1(3) of the Constitution of India.
Secondly, a point which was necessarily involved in the first one just set out that this Court was not bound by the statement of the Government of India in its answer to Question No. 1 and that it should disregard such an answer and investigate for itself on the materials placed before it as to whether Pondicherry was part of the territory of India or not.
In support of the first submission Mr. Chatterji placed considerable reliance on the passage in our judgment rendered on April 28, 1961 reading: "Still if the extent of the jurisdiction vested in the Union Government by the arrangements entered into between the two Governments virtually amounts to a transfer of sovereignty for every practical purpose, it would be possible to contend that such a transfer or cession was so incompatible with the existence of any practical sovereignty in the French Government as to detract from the surrender or transfer being other than complete.
" The argument was that the answer to the second question showed (1) positively that the Government of India exercised complete jurisdiction over the territory executive, legislative and judicial, its authority being plenary and extending to the making of laws.
Their execution and the administration of justice with complete power over its defence and foreign affairs and (2) negatively that the Government of France possessed no authority in the territory, so much so that it could not be predicated that there had been any retention of even a vestigial sovereignty to detract from the completeness of the transfer.
In the circumstances, learned Counsel urged that he was justified in inviting us to ignore or disregard the answer to the first question and instead answer the question as to whether these French establishments were within the territory of India or not on the basis of the second question.
1001 Having regard to the nature of this argument it is necessary to state briefly the circumstances in which we felt it necessary to frame the two questions that we did.
At the stage of the hearing of the petitions on the first occasion, notice was issued to the Union Government and the learned Solicitor General appearing in response to the notice did not convey to us any definite views on the part of the Government as to whether Pondicherry was or was not considered by them to be part of the territory of India but invited the Court to decide the question on the materials that might be placed the parties before us.
At that stage therefore we were not quite certain whether Government would be prepared to make a formal statement about their views on this question.
If therefore the Government were inclined still to leave the matter to the Court, we desired to have complete information as to the factual position regarding the government of the territory.
It was in view of that possibility that Question No. 2 was framed.
It was, of course, possible that Government might communicate their views to the Court and with a view to enable this to be done we framed Question No. 1.
In these circumstances nothing is gained by reference to the passage in our judgment dated April 28, 1961.
The passage extracted is certainly not an authority for the position as to whether if Question No. 1 was answered, the Court could properly consider any implications or inferences arising on the answer to Question No. 2.
We shall therefore proceed to consider the principal question that arises at this stage, viz., whether the answer of the Government is reply to a specific and formal enquiry by the Court that it did not consider a particular area to have been "acquired" by the Indian Government and therefore not a part of the territory of India was binding on the Court or not.
A number of decisions of the English and Australian Courts in which the point 1002 has been considered were placed before us and we shall proceed to refer to the more important of them.
In Duff Development Company vs Government of Kelantan(1) the question related as to whether the Sultan of Kelantan was the ruler of an independent sovereign State, such that the Courts in England had no jurisdiction over the Sultan or the Government of that State.
The Secretary of State for the Colonies who was requested by the Court to furnish information as regards the status of the ruler and of the Government stated that the Sultan was the head of an independent sovereign state.
The binding character of this statement was however questioned and it was argued before the House of Lords on foot of certain public documents that Kelantan was merely a dependency of the British Government and not a sovereign State.
On the other side; it was pressed upon the House, that the statement of the Secretary of State was binding and this latter submission was unanimously accepted by the House.
In doing so Viscount Cave observed: "If after this definite statement a different view were taken by a British Court, an undesirable conflict might arise; and in my opinion it is the duty of the Court to accept the statement of the Secretary of State thus clearly and positively made as conclusive upon the point." Viscount Finlay expressed himself thus: "It has long been settled that on any question of the status of any foreign power course is that the Court should apply to His Majesty 's Government, and that in any such matter it is bound to act on the information given to them through the proper department.
Such information is not in the nature of 1003 evidence; it is a statement by the Sovereign of this country through one of his Ministers upon a matter which is peculiarly within his cognizance." Lord Sumner said: "Where such a statement is forthcoming no other evidence is admissible or needed.
" There is one other decision of the House of Lord to which reference may usefully be made Government of the Republic of Spain vs Arantzazu, Mendi.(1) The question for decision was whether it was General Franco 's Government that was the Government in Spain or the Republican Government.
The Secretary of State for Foreign Affairs had, in a formal communication to the Court in reply to a letter forwarded under the direction of Bucknill J., stated that His Majesty 's Government had recognised the Nationalist Government as the Government which had administrative control over a large portion of Spain and particularly over the Basque Provinces wherein the ship, title to which was in question, had been registered.
Lord Wright in his speech said: "The Court is, in my opinion, bound without any qualification by the statement of the Foreign office, which is the organ of His Majesty 's Government for this purpose in a matter of this nature.
Such a statement is a statement of fact, the contents of which are not open to be discussed by the Court on grounds of law.
" No doubt, these decisions were in relation to the status of or recognition by the Government of foreign sovereign and are therefore not ad idem with the point which now arises for consideration viz., whether a particular piece of territory is or is not part of the territory of India.
A statement by Government in relation to a similar question 1004 came up before the Court of Appeal in Fagernes (1) The question for the Court 's consideration was whether the Bristol Channel, particularly at the point where a collision was stated to have taken place, was or was not part of British territory.
Hill J. before whom an action for damage caused by the alleged collision came up held that the waters of the Bristol Channel were part of British territory and therefore within the jurisdiction of the High Court.
The defendants appealed to the Court of Appeal and at that stage the Attorney General appeared and in response to a formal enquiry by the Court as to whether the place where the collision was stated to have occurred was within the realm of England, replied that "the spot where the collision is alleged to have occurred is not within the limits to which the territorial sovereignty of His Majesty extends." On the basis of this statement the Court of Appeal unanimously reversed the judgment of Hill J. An argument was raised before the Court as regards the binding character of the statement by the Attorney General and in regard to this Akin L.J. said: "I consider that statement binds the Court, and constrains it to decide that this portion of the Bristol Channel is not within British jurisdiction, and that the appeal must be allowed.
I think that it is desirable to make it clear that this is not a decision on a point of law, and that no responsibility rests upon this Court save that of treating the statement of the Crown by its proper officer as conclusive." Lawrence L.J. observed: "It is the duty of the Court to take judicial cognizance of the extent of the King 's territory and, if the Court itself is unacquainted with the fact whether a particular place is or is not within the King 's territory, the Court is entitled to inform itself of that fact by making 1005 such inquiry as, it considers proper.
As it is highly expedient, if not essential, that in a matter of this kind the Courts, of the King should act in unison with the Government of the King, this Court invited the Attorney General to attend at the hearing of the appeal and at the conclusion of the arguments asked him whether the Crown claimed that the spot where the collision occurred was within the territory of the King.
The Attorney General in answer to this inquiry, stated that he had communicated with the Secretary of State for Home Affairs, who had instructed him to inform the Court that "the spot where this collision is alleged to have occurred is not within the limits to which the territorial sovereignty of His Majesty extends.
" In view of this answer, given with the authority of the Home Secretary upon a matter which is peculiarly within the cognizance of the Home office, this Court could not, in my opinion, properly do otherwise than hold that the alleged tort was not committed within the jurisdiction of the High Court".
Bankes L.J., though he agreed with his colleagues in allowing the appeal, however struck a slightly different note saying: "This information was given at the instance of the Court, and for the information of the Court.
Given under such circumstances, and on such a subject, it does not in my opinion necessarily bind the Court in the sense that it is under an obligation to accept it" The entire matter is thus summarised in Halsbury 's Laws of England, Third Edition, Volume 7: "There is a class of facts which are conveniently termed 'facts of state '.
It consists of matters and questions the determination of which is solely in the hands of the Crown or 1006 the government, of which the following are examples: (1) . . . . . . . . . (2) Whether a particular territory is hostile or foreign, or within the boundaries of a particular state." Mr. Chatterji, however, invited our attention to certain observations contained in two decisions of the High Court of Australia Jolley vs Mainka and Frost vs Stevenson (2).In both these cases the point involved was as to the status of the territory of New Guinea which Australia was administering as mandatory territory under a mandate from the League of Nations.
There are, no doubt, observations in these cases dealing with the meaning of the word 'acquired ' in section 122 of the Commonwealth of Australia Act, but the point to be noticed however is that there was no statement by the Government of the Commonwealth of Australia as to whether this area was or was not part of the territory of Australia, such as we have in the present case.
We do not, therefore, consider that these observations afford us any assistance for the solution of the question before us.
Both Mr. Chatterji and Mr. Viswanatha Sastri learned Counsel who appeared for Sivarama Reddiar, the appellant and petitioner in the other cases, stressed the fact that what we were called upon to decide was the meaning of the expression 'acquired ' in article 1 (3) (c) of the Constitution and that in the case of a written constitution such as we had to construe, jurisdiction of this Court was not to be cut down and the enquiry by it limited by reasons of principles accepted in other jurisdictions.
In particular, learned Counsel stressed the fact that it would not be 1007 proper for the Court to ignore patent facts and hold itself bound by the statement of Government in cases where, for instance, the Government of the day for reasons of its own desiring to exclude the jurisdiction of this Court denied that a part of territory which patently was within article 1(3) was within it.
It is not necessary for us to examine what the position would be in the contingency visualized, but assuredly it is not suggested that the case before us falls within that category.
The proposition laid down in the English decisions that a conflict is not to be envisaged between the Executive Government and the judiciary appears to us to rest on sound reasoning and except possibly in the extreme cases referred to by the learned Counsel, the statement of the Government must be held binding on the Court and to be given effect to by it.
There is one other matter which was specially pressed upon us during the course of argument to which is necessary to refer.
The submission was that the answer by the Union Government to the two questions were really contradictory and that whereas the answer to the second question made it out that the French establishments had been acquired and were part of the territory of India, the Government had in relation to the first question made a contradictory answer.
We do not consider this argument well founded.
In cases where the only fact available is the de facto exercise of complete sovereignty by one State in a particular area, the sovereignty of that State over that area and the area being regarded as part of the territory of that State would prima facie follow.
But this would apply normally only to cases where sovereignty and control was exercised by unilateral action.
Where however the exercise of power and authority and the right to administer is referable to an agreement between two States, the question whether the territory has become integrated with and become part 1008 of the territory of the State exercising de facts control depends wholly on the terms upon which the new Government was invited or permitted to exercise such control and authority.
If the instruments evidencing such agreements negatived the implication arising from the factual exercise of Governmental authority then it would not follow that there is an integration of the territory with that of the administering power and that is precisely what has happened in the present case.
As annexures to their reply the Union Government have included The Treaty of Cession dated May 28, 1956, which is a sequel to the agreement dated October 21, 1954, transferring the powers of the Government of the French Republic to the Government of the Indian Union.
Under the terms, this Treaty would become operative and full sovereignty as regards the territory of the establishments of Pondicherry, Karikal, Maha and Yanam would be ceded to the Indian Government only when the treaty comes into force.
It is not necessary to refer to all the clauses of this Treaty except the one which stipulates that it would come into force on the day of ratification by the two Governments concerned.
According to the Constitution of France an Act of the France Assembly is required for the validity of a Treaty relating to or involving the cession of French territory.
It is common ground that the Treaty has not been ratified yet.
The resulting position therefore is that by the agreement dated October 21,1954, though complete administrative control has been transferred to the Government of India, this transfer of control cannot be equated to a transfer of territory, that being the common intention of the parties to that agreement.
Unless a ratification takes place there would legally be no transfer of territory and without a transfer of territory there would not be in the circumstances an "acquisition of territory", with the consequence that at present Pondicherry has to be treated as not part 1009 of the territory of India.
It is unnecessary to consider what the position would have been if the Union Government had, notwithstanding the terms of the Treaty, treated the former French establishments as having become part of the territory of India.
There was one minor submission made by Mr. Viswanatha Sastri to which a passing reference may be made.
He suggested that the term "territory of India" in article 142 might not represent the same concept as 'the territory of India ' within article 1(3) and that in the context of article 142 the term 'territory of India might include every territory over which the Government of the Union exercised de facto control.
We are not impressed by this argument.
The term 'territory of India ' has been used in several Articles of the Constitution and we are clearly of the opinion that in every Article where this phraseology is employed it means the territory of India for the time being as falls within article 1(3) and that the phrase cannot mean different territories in different Articles.
We have already dealt with the question as to what the effect on the maintainability of the appeals and the petitions would be if Pondicherry were not part of the territory of India.
In view of Pondicherry not being within the territory of India we hold that this Court has no jurisdiction to entertain the appeals.
The appeals therefore fail and are dismissed.
The writ Petitions must also fail and be dismissed for the reason that having regard to the nature of the relief sought and the authority against whose orders relief is claimed they too must fail.
They are also dismissed.
We would add that these dismissals would not include the petitioners from approaching this Court if so desired, in the event of Pondicherry becoming part of the territory of India.
In the peculiar circumstances of this case we direct that that the parties bear their respective costs.
1010 Before leaving this case, we desire to point out that the situation created by the French establishments not being part of the territory of India is somewhat anomalous.
Thier administration is being conducted by the extension of enactments in India by virtue of the power conferred by the .
We have had occasion to point out that though technically the areas are not part of Indian territory, they are governed practically as part of India.
But so far as the orders of the courts and other authorities judicial and quasi judicial within that area are concerned, the Superior Courts in India have not, subject to what we have stated as regards the limited jurisdiction of the court, any appellate or revisional jurisdiction over them and this might in a large number of cases lead to injustice and a sense of grievance.
There is enough power in Government even at the stage of the de facto transfer to remedy the situation.
By appropriate action under the , or by Parliamentary Legislation under the entry 'Foreign Jurisdiction ' the appellate Jurisdiction of the High Court or of this Court could be enlarged under articles 225 and 138 [1] respectively so as to afford an adequate remedy for the inhabitants of these areas.
To this aspect of the matter we consider that the attention of Government should be drawn.
SARKAR, J.
On the earlier occasion when these cases came up before this Court, we postponed further hearing of them till we received the answers of the Government of India to two questions which we then referred to it.
These questions substantially were, (a) whether Pondicherry is or is not within the territories of India and (b) if it is not, the extent of the jurisdiction exercised by the Union Government over it and the jurisdiction which France still possesses in regard to it.
These questions were put because considerable doubt was felt as to the real status of Pondicherry.
If it 1011 was a foreign territory, no appeal could lie to this Court under article 136 of the Constitution from any tribunal in Pondicherry and two of these matters were such appeals.
The other two matters were petitions asking for writs against certain authorities in Pondicherry and the majority held that no writ could issue to a foreign territory in view of article 142 of the Constitution and therefore for the purposes of these petitions also it was necessary to ascertain the status of pondicherry.
We however then felt some difficulty about the question whether we could refuse to issue writs to an officer of the Government of India outside the territory of India and expressed our inability to concur in the opinion of the majority.
We said that the proper time to discuss that question would be when on receipt of the Government 's answers to our questions, it had to be held that Pondicherry was a foreign territory and reserved our final decision on the question till then.
The Government 's answers to our questions have now been received.
On the basis of these answers, for the reasons hereafter mentioned, it has to be held that Pondicherry is a foreign territory.
We, therefore, now wish to say a few words on the question on which we reserved our opinion on the former occasion.
The opinion of the majority no doubt prevails in spite of what we shall say.
Before we discuss the question which we reserved we desire to observe in regard to the appeals that it must be held that they are not maintainable as Pondicherry is a foreign territory.
Now, the writs are sought to quash the orders of a quasi judicial authority functioning in Pondicherry on the ground that they violate certain fundamental rights of the petitioners This authority however is an officer of the Government of India.
How far writs can be issued under article 32 of the Constitution of India to quash a quasi judicial order even if made in India, itself a 1012 question of considerable difficulty on which there has been a difference of opinion in this Court.
That question was recently discussed before another Bench but the judgment in that case has not yet been delivered.
For the present purpose however we will assume that writs can be issued under article 32 to quash a quasi judicial order.
The First observation that we wish to make is that it has now been finally held by this Court, dealing with an application under article 32 that "the right to move this Court by appropriate proceedings for the enforcement of the rights conferred by Part III of the Constitution is itself a guaranteed right": Kavalannara Kottarthill Kochunni vs The State of Madras.
(1) A right to move this Court by a petition under article 32 is, therefore, a fundamental right.
That being so, a right to obtain a writ when the petition establishes a case for it, must equally be a fundamental right.
For, it would be idle to give a fundamental right to move this Court and not a similar right to the writ the issue of which the petition might clearly justify.
If then a fundamental right to a writ is established, and that is the assumption on which we are examining the present question the party who establishes such right must be entitled ex debito justitiae to the issue of the necessary writ.
There would then be no power in the Court to refuse in its discretion to issue it.
But it is said that if a writ was issued in the present case, it could not in view of article 142 which says that an order of this Court shall be enforced throughout the territory of India, be enforced Pondicherry.
Let us assume that is so.
Then it is said that if the Court were to issue the writ it would only be stultifying itself and should not therefore issue it.
We are unable to accede to this contention.
If a party has been given by the 1013 Constitution a fundamental right to a writ, there is no power in the Court to refuse that right.
Supposed practical considerations of incapacity to in force the writ issued cannot be allowed to defeat the provisions of the Constitution.
No authority has been cited to us in support of the proposition that when a party in entitled as of right to an order, a court can refuse to make that order on the ground that it would thereby be stultifying itself.
So far as we have been able to ascertain orders are refused on this ground when the matter is one for the discretion of the Court.
Such cases have, for instance, frequently occurred in proceedings relating to the issue of injunctions, to grant or not to grant which is well known, in the discretion of the Court.
The discretion has no doubt to be judicially exercised as indeed all discretions have, but none the less the right to the relief is in the discretion of the Court as opposed to a relief to which a party is entitled ex debito justitiae, a distinction which is well understood.
Thus, dealing with a case of the issue of an injunction restraining a person from.
proceeding with an action in a foreign court, Jessel M.R. Observed, in In re International Pulp and Paper Co. Ltd.(1), "Therefore, as to a purely foreign country, it is of no use asking for an order, because the order cannot be enforced".
Take another case.
In England an information in the nature of quo warranto is not issued as a matter of course as a matter of course [R.V. Stacey and therefore the courts there refused to issue it when in information would be futile in its results.
Halsbary Laws of England (3rd ed.) Vol.
11 p. 148.
So in Reg.
v Fox(2) the Court refused to issue the information for the reason that the person sought to be removed by it could be reappointed at once.
These however are cases in which a Court would be inclined not to make 1014 a discretionary order on the ground that the Court would thereby be stultifying itself.
Instances might be multiplied but it is unnecessary to do so.
We do not think that the principle of these cases can be applied where a court has no option but to make the order which we think is the present case.
It would clearly be less applicable to a case like the present where, as we shall immediately show, it would be wrong to think that the order would not be carried out.
Lastly, can we be certain that the Court would be stultifying itself by issuing the writ in this case ? That would be only if our order is sure to be ignored.
We think that this Court would be fully justified in proceeding on the basis that any order made by it would be carried out by any officer of the Government of India to whom it is directed wherever he may be, out of respect for the Constitution and this Court and this without requiring to be forced to do so.
In this connection the case of R.v.
Speyer, R. vs Cassel(1) is of interest.
There Speyer and Cassel had been called upon by the court by rules nisi to show cause why an information in the nature of quo warranto should not be exhibited against them to show by what authority they respectively claimed to be members of His Majesty 's Privy Council for Great Britain.
Speyer and Cassel were naturalised British subjects and the question was whether under certain statutes they were not disqualified from being appointed to the Privy Council.
One of the arguments on behalf of the respondents was that the court would be powerless to enforce a judgment of ouster for it could not prevent the immediate reinstatement of the names of these persons in the roll of Privy Councillors if the King though fit to alter it.
The answer that Reading C.J. gave to this argument was 1015 "Although it may be interesting and useful for the purpose of testing the propositions now under consideration to assume the difficulties suggested by the Attorney General, none of them would in truth occur.
This is the King 's Court; we sit here to administer justice and to interpret the laws of the realm in the King 's name.
It is respectful and proper to assume that once the law is declared by a competent judicial authority it will be followed by the Crown.
" The other members of the Bench also took the same view, Lush J. observing, "The consequences he suggests are argumentative and not real, and we cannot regard them as fettering the exercise of our jurisdiction".
Now this was a case of a discretionary order.
Even so, the Court felt that it would be wrong to stay its hand only on the ground that it could not directly enforce its order.
This salutary principle has been acted upon in our country by Das J. who later became the Chief Justice of this Court, in In re Banwarilal Roy(1) There Das J. issued an information in the nature of quo warranto in spite of the fact that he could not command the Governor of Bengal to comply with his order which might therefore have become futile.
We think it is a very healthy principle and should be followed.
We do not think that we can allow our powers for the protection of fundamental rights to be fettered by considerations of the enforcement of orders made by us; we must assume that the authorities in Pondicherry will willingly carry out our order.
We turn now to the other questions arising on the Government 's answers.
Pondicherry was admittedly a French possession but under an agreement with France, the Government of India is now administering it.
The Government has definitely stated that Pondicherry is not comprised 1016 within the territory of India.
It has also said that it has full jurisdiction over Pondicherry under that agreement, that the liability for defence of Pondicherry is on it and that Pondicherry has no foreign relations.
It has further said that France does not possess any de facto jurisdiction over Pondicherry which would imply a diminution of the jurisdiction exercised by it.
It was contended that we are not bound by the Government 's answer to the first question, namely, that Pondicherry is outside India and that on the basis of the answer to the second question we should hold, in spite of the Government 's view, that Pondicherry is a part of Indian territory.
It was said that since India had admittedly full jurisdiction over Pondicherry and France exercised none, it must be held the India has acquired sovereignty over it and that it had, therefore, become Indian territory by acquisition.
We are entirely unable to accept this contention.
We think that we are bound by the Government 's decision at least in a case where we have referred to it for our guidance.
That is the view taken in England and it is a view which is based on sound principle: see Duff Development Co. vs The Govt.
of Kelantan.(1) Any other view would create a chaos and we cannot be a party to it.
We may say that by a treaty.
as in the present case, India may acquire full jurisdiction over a foreign territory which under the same treaty may nonetheless remain a foreign territory.
It was contended that this would be absolute surrender to the executive Government; that such a view would enable the Government when it so liked, to disown a territory which was patently a part of India so that it might act therein as it liked in complete disregard of the laws and without any check from any court including this Court.
This contention, to use the words of Luch J. in Speyer 's case(2)is "argumentative and not real".
1017 We cannot imagine that in a democracy any Government would ever act in the way suggested and we are sure no Government of this country will ever do so.
Furthermore, the contention has no foundation whatever and is wholly imaginary.
It is the duty of a court to take judicial notice of the extent of the territory of its own State.
Section 57 of the Evidence Act requires that.
Therefore, if the fact is patent that a certain territory is within India, the courts will take judicial notice of it and there will be no occasion to refer to the Government for any information regarding it.
It may however be that in certain circumstances the fact is not patent but even then it appears that it will be the duty of a court to take judicial notice and it does so by requesting the Government to enlighten it on the point.
So Lawrence L. J. said in Fagernes (1), "It is the duty of the Court to take judicial cognisance of the extent of the King 's territory and, if the Court itself is unacquainted with the fact whether a particular place is or is not within the King 's territory, the Court is entitled to inform itself of that fact by making such enquiry as it considers necessary.
" It is only in cases where the Court is not aware of the facts that the question of referring to the Government will arise and therefore no occasion can possible arise where the Government might have the chance of distorting a patent fact.
This is all that we desire to say.
As the majority of the learned Judges of the Bench have taken a different view, the order to be made will follow their decision.
| The Supreme Court referred two questions to the Union Government viz (i) whether.
Pondicherry was comprised within the territory of India, and (ii) if not, what was the extent of the jurisdiction exercised by the Union Government and the French Government over the territory.
The answers given were that (i) Pondicherry was not comprised within the territory of India and (ii) the Union Government exercised full jurisdiction over Pondicherry and the French Government did not exercise any de facto jurisdiction over it.
There was a treaty of cession between France and India in respect of Pondicherry but it had not been ratified as required by the French and Indian laws.
The appellant contended that the answer of the Union Government to the second question established that Pondicherry was part of the territory of India and that the Court was not bound by the answer to the first question.
^ Held, that Pondicherry was not comprised within the territory of India as specified in article 1(3) of the Constitution.
The answer of the Union Government on this question was binding on the Court.
There was no conflict between the answers to the two questions.
Though complete administrative control over Pondicherry had been transferred to the Government of India it could not be equated to a transfer of territory.
Unless there was ratification of the Treaty there could legally be no transfer of territory.
Accordingly, no appeal could be entertained by the Court under article 136 of the Constitution against the decisions of the authorities in Pondicherry.
982 Duff Development Company vs Government of Kelantan , Government of the Republic of Spain vs Arantzazu Mendi.
(1939) A. C. 256 and Fagernes 1927 Probate 311, applied.
Jolley vs Mainka ; and Efrost vs Slevenson; , , distinguished.
Per Gajendragadkar, Wanchoo and Ayyangar, JJ.
Having regard to the nature of the relief sought no writ under article 32 of the Constitution could be issued to the authorities in Pondicherry.
Per Sarkar and Das Gupta, JJ The Supreme Court could issue a writ under article 32 to the quasi Judicial authorities in Pondicherry.
Article 32 was a fundamental right and the right to obtain a writ was equally a fundamental right.
If the Constitution gave to a party a fundamental right to a writ the Court could not refuse that right.
The consideration that the writ issued may not be enforced in Pondicherry could not be allowed to defeat the provisions of the Constitution.
Such a consideration is relevant only in the case of discretionary orders.
K. K. Kochunni vs The State of Madras, [1959] Supp. 2 S.C.R. 316, In re International Pulp and Paper Co. Ltd., , Reg vs Fox, ; , R. vs Cassel, (1916) I K B. 595 and In re Banwarilal Roy, , referred to.
| K, H and M filed four suits each against four sets of defendants in respect of different sets of plots under section 175 U. P. Tenancy Act, 1939.
Since similar points were involved the twelve suits were tried together and were disposed of by a common judgment decreeing them.
Twelve decrees were prepared and the defendants preferred twelve appeals to the Additional Commissioner.
Three appeals by one set of the defendants B were dismissed for default and the remaining nine were dismissed on merits.
Against the dismissal of the nine appeals on merits the three sets of defendants preferred nine second appeals before the Board of Revenue but they were dismissed as barred by res judicata on May 7, 1954.
In November, 1954, the appellants filed petitions for special leave before the Supreme Court and on April 18, 1955, special leave was granted.
In July 1954, the villages in Which the lands in suit were situate came under consolidation operations under the U. P. Consolidation of Holdings Act, 1953, and the operations were completed by the publication of a notification 218 under section 52 of the Act on October 17, 1953.
The appellants did not file any objections before the consolidation authorities.
The respondent contended that in view of the consolidation operations the appeals before the Supreme Court had become infructuous.
Held, that the appeals had not become infructuous.
There was nothing in the U. P. Consolidation of Holdings Act, 1953, as it stood during the period the village in suit was under consolidation operations which could have in any way affected these appeals, during or after the consolidation operations.
The subsequent Amending Acts did not affect the appeals as they were prospective in operation and applied only to cases where the consolidation operations were started after the Amending Acts had come into force.
Held, further that the appeals before the Board of Revenue were not barred by resjudicata.
It was essential for the bar of res judicata that the previous and judication must have been between the same parties.
The three suits in which judgments had become final were against one B and not against any of the appellants .
The matter in issue in those three suits was different from that in the other nine suits as each of the suits related to different plots.
The common judgment was really twelve judgments in the twelve suits.
Badri Narayan Singh vs Kamdeo Prasad Singh, (1962) 3. section C. R. 759 referred to.
| The petitioners were convicted under section 302 read with section 34 I.P.C. and were sentenced to death on November 26, 1977.
The High Court upheld the conviction and sentence on July 18, 1978.
The petitioners ' Special Leave Petition against the judgment of the High Court was dismissed on March 5, 1979 and the Review Petition against the dismissal of the Special Leave Petition was also dismissed on March 27, 1981.
The petitioners ' successive writ petitions challenging the validity of sections 302 and 34 I.P.C. were dismissed on January 20, 1981 and August 24, 1981 respectively.
The present writ petitions were filed on March 2, 1983 on the basis of the decision in T.V. Vatheeswaran vs State of Tamil Nadu which was rendered on February 16, 1983.
The contention on behalf of the petitioners was that more than two years had elapsed since they were sentenced to death by the trial court and therefore they were entitled in terms of the ruling in vatheeswaran to demand that the said sentence should be quashed and substituted by the sentence of life imprisonment. ^ HELD : Prolonged delay in the execution of a death sentence is unquestionably an important consideration for determining whether the sentence should be allowed to be executed.
But no hard and fast rule that "delay exceeding two years in the execution of a sentence of death should be considered sufficient to entitle the person under sentence of death to invoke article 21 and demand the quashing of the sentence of death" can be laid down as has been done in Vatheeswaran.
[594 E F] (i) No absolute or unqualified rule can be laid down that in every case in which there is a long delay in the execution of a death sentence, the 583 sentence must be substituted by the sentence of life imprisonment.
There are several other factors which must be taken into account while considering the question as to whether the death sentence should be vacated.
A convict is entitled to pursue all remedies lawfully open to him and get rid of the sentence of death imposed upon him and his taking recourse to them to ask for the commutation of his sentence even after it is finally confirmed by this Court is understandable.
But, it is, at least, relevant to consider whether the delay in the execution of the death sentence is attributable to the fact that he has resorted to a series of untenable proceedings which have the effect of defeating the ends of justice.
It is not uncommon that a series of review petitions and writ petitions are filed in this Court to challenge judgments and orders which have assumed finality, without any seeming justification.
Stay orders are obtained in those proceedings and then, at the end of it all, comes the argument that there has been prolonged delay in implementing the judgment or order.
The Court called upon to vacate a death sentence on the ground of delay caused in executing that sentence must find why the delay was caused and who is responsible for it.
If this is not done, the law laid down by this Court will become an object of ridicule by permitting a person to defeat it by resorting to frivolous proceedings in order to delay its implementation.
Further, the nature of the offence, the diverse circumstances attendant upon it, its impact upon the contemporary society and the question whether the motivation and pattern of the crime are such as are likely to lead to its repetition if the death sentence is vacated, re matters which must enter into the verdict as to whether the sentence should be vacated for the reason that its execution is delayed.
The substitution of the death sentence by a sentence of life imprisonment cannot follow by the application of the two years ' formula as a matter of "quod erat demonstrandum." [595 D H; 596 AE] T.V. Vatheeswaran vs State of Tamil Nadu.
overruled.
(ii) The period of two years purports to have been fixed in Vatheeswaran after making "all reasonable allowance for the time necessary for appeal and consideration of reprieve.
" It is not possible to agree with this part of the judgment in that case.
The fixation of the time limit of two years does not accord with the common experience of the time normally consumed by the litigative process and the proceedings before the executive.
A period far exceeding two years is generally taken by the High Court and this Court together for the disposal of matters involving even the death sentence.
Very often four or five years elapse between the imposition of death sentence by the Sessions Court and the disposal of the Special Leave Petition or an Appeal by this Court in that matter.
This is apart from the time which the President or the Governor, as the case may be, takes to consider petitions filed under article 72 or article 161 of the Constitution or the time which the Government takes to dispose of application filed under sections 432 and 433 of the Code of Criminal Procedure.
[594 F H; 595 AC] (iii) Piare Dusadh is not an authority for the proposition that if a certain number of years have passed since the imposition of a death sentence, 584 that sentence must necessarily be commuted to life imprisonment.
In that case the Federal Court commuted the sentence of death to sentence of transportation for life for reasons other than that a long delay had intervened after the death sentence was imposed.
In Ediga Anamma, Piare Dusadh was regarded as a leading case on the point.
In the other judgments of this Court referred to in Vatheeswaran, this Court was hearing appeals against judgments of High Courts confirming the sentence of death.
However, the Court has not taken the narrow view that the jurisdiction to interfere with a death sentence can be exercised only in an appeal against the judgment of conviction and sentence.
In very recent times, the sentence of death has been commuted to life imprisonment by this Court in quite a few cases for the reason, inter alia, that the prisoner was under the spectre of the sentence of death for an unduly long time after the final confirmation of that sentence.
[589 B D H; 590 A D] Piare Dusadh, [1944] F.C.R. Vol.6 61; Ediga Anamma; , ; Sunil Batra vs Delhi Administration, ; ; Maneka Gandhi [1978] 2 S.C.R. 621; Bachan Singh, , Hussainara Khatoon; , ; Hoskot; , ; Bhuvan Mohan Patnaik; , ; and Prabhakar Pandurang Sangzgiri; , referred to.
(iv) Article 21 is as much relevant at the stage of execution of the death sentence as it is in the interregnum between the imposition of that sentence and its execution.
The essence of the matter is that all procedure, no matter what the stage, must be fair, just and reasonable.
It is well established that a prisoner cannot be tortured or subjected to unfair or inhuman treatment.
It is a logical extension of the self same principle that the death sentence, even if justifiably imposed, cannot be executed if supervening events make its execution harsh, unjust or unfair.
A prisoner who has experienced living death for years on end is entitled to invoke the jurisdiction of this Court for examining the question whether, after all the agony and torment he has been subjected to, it is just and fair to allow the sentence of death to be executed.
That is the true implication of article 21 of the Constitution.
[593 B G] Bhuvan Mohan Patnaik; , ; Prabhakar Pandurang Sangzgiri; , ; and Sunil Batra vs Delhi Administration; , referred to.
(v) Traditionally, subsequent events are taken into account in the area of civil law.
There is no reason why they should not receive due consideration in other jurisdictions, particularly when their relevance on the implementation or execution of judicial verdicts is undeniable.
Principles analogous to res judicata govern all judicial proceedings but when new situations emerge, particularly factual, after a verdict has assumed finality in the course of the hierarchical process, advertence to those situations is not barred on the ground that a final decision has been rendered already.
That final decision is not a decision on new facts.
Courts are never powerless to do justice, that 585 is to say, to ensure that the processes of law do not result in undue misery, suffering or hardship.
That is why, even after the final seal of approval is placed upon a sentence of death, this Court has exercised its power to direct, ex debito justiciae, that though the sentence was justified when passed, its execution, in the circumstances of the case, is not justified by reason of the unduly long time which has elapsed since the confirmation of that sentence by this Court.
[590 E H] In the instant case, the sentence of death imposed upon the petitioners by the Sessions Court and which was upheld by the High Court and this Court cannot be vacated merely for the reason that there has been a long delay in the execution of that sentence.
Counsel for the petitioners have been asked to argue upon the reasons why, apart from the delay caused in executing the death sentence, it would be unjust and unfair to execute that sentence at this point of time.
The question will be decided after hearing the parties.
[596 G H; 597 A B] 2.
Petitions filed under articles 72 and 161 of the Constitution and under sections 432 and 433, Cr.
P.C. must be disposed of expeditiously.
A self imposed rule should be followed by the executive authorities that every such petition shall be disposed of within a period of three months from the date on which it is received.
[597 C]
| The Regional Transport Authority granted a permit to the appellant but this decision was reversed by the State Transport Appellate Tribunal.
In a petition under article 226 of the Constitution a single Judge of the High Court, on an examination of the merits of the case, reversed the view of the Stale Transport Appellate Tribunal.
On appeal, a Division Bench of the High Court held that a full scale reappraisal of the points was in excess of the jurisdiction of the single Judge under article 226.
the Division Bench restored the order of the State Transport Appellate Tribunal.
On appeal to this Court, remitting the, case to the State Transport Appellate Tribunal, ^ HELD: The boundaries of the High Court 's jurisdiction under article 226 of the Constitution are clearly and strongly built and cannot be breached without risking jurisprudential confusion.
The power of the High Court under article 226 be supervisory in nature.
[103E] Sri Rama Vilas Service (P) Ltd. vs C. Chandrasekharan ; referred to.
The single judge had undertaken an evaluation of the merits on his own which was beyond his jurisdiction.
The Division Bench disposed of the case in a short paragraph which hardly did justice to the order appealed against.
But while reversing the order appealed against valid reasons had to be adduced.
While the Division Bench was justified in observing that, sitting on the writ side, judicial review should have been more restricted than while sitting on the appellate side, its own judgment was vulnerable because of the plain finding that what was not pertinent was taken into consideration by the Appellate Tribunal.
[103G, H; 104A B]
| In response to an advertisement dated 25th June, 1974 issued by the State Transport Authority, Orissa inviting applications in the prescribed forms, from the operators for all India Tourist Permit, a number of intending operators including the appellants submitted their applications and at the meeting held on February 2, 1975, the State Transport Authority granted to the appellants all India Tourist Permits for omnibus with passenger capacity not exceeding 29.
Some of the applicants who failed to obtain a permit filed three appeals being M. V.
Appeals Nos. 15, 16 and 17 all of 1975 to the State Transport Appellate Tribunal under sec.
64 (2) of the .
The Appellate Tribunal dismissed all the appeals and confirmed the order made by the State Transport Authority granting all India tourist permits to the appellants.
Three unsuccessful applicants for permit filed three writ petitions styled as C.J.C. No. 381, 182 and 881, all of 1976 questioning the correctness of the order granting the permit and dismissal of their appeals in the High Court of Orissa.
A Division Bench of the High Court, by a common judgment, allowed all the three writ petitions quashing and setting aside the order of the State Transport Authority.
Consequently, these appellants surrendered their permits.
Hence these three appeals by special leave.
During the pendency of these appeals The appellants were granted temporary all India tourist permits in compliance with the interim orders made by the Court.
Allowing the appeals, the Court 2 ^ HELD: 1.1 It was not necessary that the applicants for an all India tourist permit must have a pre existing contract carriage permit which could be endorsed so as to convert it into all India tourist permit [11 B C] 1.2 By introducing sub section 7 in section 63 of the the concept of all India permit to be granted by a State Transport Authority of a State within the limits of the quota prescribed by the Central Government which would enable the holder of the permit to operate in the whole of India, was introduced, for the first time with effect from 1st October, 1970.
The underlying object for creating this new class of permit was to promote tourism and to remove the barrier caused by the earlier system under which if a tourist vehicle is hired by a tourist party for moving from State to State, the vehicle cannot be taken to another State from the place of commencement of journey unless a valid contract carriage permit of that State is obtained or the existing permit is counter signed.
[6G H, 7A B] 1.3 An Application for an all India tourist permit has to be processed in accordance with the provisions of sections 49, 50, 51, 57, 58, 59, 60, 61 and 63 (7).
An all India tourist permit is primarily a contract carriage permit but while the ordinary contract carriage permit can be granted by the Regional Transport Authority, for operation within local jurisdiction, or when counter signed by Regional Transport Authority of adjacent area in more than one such jurisdiction but not at any rate outside the State and not in any case on an all India basis.
To this extent, an ordinary contract carriage permit differs from an all India tourist permit but an all India tourist permit is none the less a contract carriage permit.
Sub section (7) Of section 63 on the other hand confers power on the State Transport Authority to grant an all India tourist permit which in effect is a contract carriage permit but which permits plying of tourist vehicle throughout India.
Even for obtaining such a permit, section 51 will apply with this modification that the application for all India tourist permit has to be made to State Transport Authority of the State in which their permit is sought.
This scheme of law nowhere expressly or by necessary implication suggests that an applicant for an all India tourist permit must of necessity or as a prerequisite have a contract carriage permit which alone can be endorsed for the purpose of all India operation.
Sub section (7) of section 63 if read thus would render nugatory the affirmative provision that on a proper application being made and legally processed, the State Transport Authority can grant an all India tourist permit.
[6D, 7E H, 8C D] 1.4 The fact that an application for an all India tourist Permit has to be made under section 49 which prescribes procedure for obtaining a contract carriage permit, because in substance an all India tourist permit is none the less a contract carriage permit but with a much wider area of operation, however, does not permit an inference that before obtaining an all India tourist permit, the intending operator must obtain a contract carriage permit from the Regional Transport Authority and then get it endorsed from the State Transport Authority to make it valid for the whole or any part of India.
Sub section (7) of section 63 does not speak of any 3 endorsement on permit, though endorsement may be another mode of enlarging the area of operation It speaks of granting a permit valid for the whole or any part of India when granted by a State Transport Authority in exercise of The power conferred by sub section (7) of section 63 without any further endorsement of any other authority [8E H] 2.
Sub Rules (2), (3) and (4) of Rule 3 of the Orissa Tourist Vehicles Rules, 1967 had absolutely no application to the proceedings of the State Transport Authority held for consideration of applications for all India Tourist Permit and granting them to the appellants.
These Rules were enacted in the year 1967 in exercise of the power conferred by section 68 of the and were brought into operation on 19/20 June, 1967.
These rules were made at a time when the only way to enlarge the area of operation in respect of a permit was by endorsement by various authorities on the original permit granted by a Transport Authority.
All India tourist permit was not conceptualized by the time 1967 Rules were framed.
Therefore, the rules at the relevant time catered to a situation When the area of operation specified in a contract carriage permit could be enlarged by endorsement by authority other than the grantor only.
[9F H; 10A] 3.
The applications of the appellants with all relevant information were complete and the blanks in their application forms were irrelevant.
In the advertisement issued by the State Transport Authority on June 24, 1974 inviting applications for permits in respect of omnibus authorising it to ply as an all India tourist vehicle in the prescribed forms, two prescribed forms were annexed.
The first form was meant for those who had no existing contract carriage permit and were applying straightaway for the first time for an all India tourist permit.
The form itself shows that the application had to be made to the State Transport Authority for a contract carriage permit with an all India operation.
There was another form which catered to the needs of the holder of the existing contract carriage permits who wanted the area of operation to be enlarged by converting an ordinary contract carriage permit into all India tourist permit.
For a fresh applicant like the appellants who had no existing contract carriage permit, therefore, the blanks could not have been filled in.
[10F H; 11A]
| Dismissing the appeal by special leave, the Court ^ HELD: (1) A bare reading of sections 68A to contained in Chapter IV A, which was added to the Act by Central Act 100 of 1956, makes it clear that they provide for nationalisation of road transport services.
However, such nationalisation, in view of the provisions of section 68C, is not nationalisation for nationalisation 's sake but nationalisation with a view to the achievement of certain specified objects.
Unless a scheme conforms to the two conditions referred to in section 68C, namely, (a) the S.T.U. is competent to prepare and publish a scheme under section 68C only after it has formed the opinion that it is necessary in the public interest that road transport services covered by the scheme should be run and operated by itself, whether to the exclusion, complete or partial, of other persons or otherwise; and (b) the necessity for the road transport services to be run and operated by the S.T.U. must flow, in its opinion, from the purpose of providing ar.
efficient, adequate, economical and properly coordinated road transport service, it will fall outside the ambit of section 68C. [1012A, 1013H, 1014A C] Section 68D gives the right to certain persons, associations and authorities to file objections to a scheme published under section 68C within the specified period of thirty days of its publication and also lays down the procedure for the hearing and disposal of such objections by the State Government.
The procedure provided in section 68D is designed to (a) enable parties affected by the scheme to point out flaws therein; (b) enable the State Government to find out which flaws, if any, the scheme suffers from, and (c) enable the State Government either to remedy the flaws by a suitable modification of the scheme or to rescind the scheme altogether.
Under section 68(2), every objector or his representatives and the representatives of the S.T.U. have to be given an opportunity of being heard in the matter and it is only thereafter that the State Government has to exercise its power to approve or modify the scheme, which power includes the power not to approve the scheme at all and to drop it in its entirety.
[1014D F] Malik Ram vs State of Rajasthan, ; at 981, followed.
1006 Section 68D does not specify the type of objections envisaged by it but then their purpose being to point out flaws in the scheme they must be confined to the matters covered by section 68C.
If the opinion forming the basis of the scheme does not suffer from errors such as may render it abnoxious to the dictates of section 68C and on the other hand, conforms to the conditions laid down in that section, the scheme would be unobjectionable.
Objections may thus be made to show: (a) that it is not necessary in the public interest for the concerned road transport services to be operated by the S.T.U.; (b) that it is not necessary in the public interest that such services be taken over by the S.T.U. to the complete exclusion (if such exclusion is envisaged by the scheme) of other persons and that their partial exclusion would suffice; (c) that it is not necessary in the public interest that such services shall be taken over by the S.T.U. even to the partial exclusion of others; (d) that the scheme is not calculated to provide an efficient road transport service; (e) that the scheme would not provide an adequate road transport service; (f) that the road transport service envisaged by the scheme would not be economical; or (g) that the road transport service provided for by the scheme would suffer from lack of proper coordination.
[1014H, 1015A E] Objections falling outside these seven categories would not be admissible inasmuch as they would not have anything to do with any of the conditions which a scheme must satisfy in order to be covered by section 68C. [1015E F] 2.
In order to find out if the scheme fulfils the requirements of section 68C a comparison of the attributes of the two services, such as quality, capacity, financial implications and coordination would certainly fall within the scope of the inquiry to be conducted by the State Government, although a comparison would not be permissible for the sole purpose of finding out whether the private operators should be given a preference over the State Transport Undertaking.
If such a comparison as held to be permissible is ruled out, the result would be to shut out from the enquiry held by the State Government under section 68D most of the material relevant for determination of the validity of the scheme a result contemplated neither by section 68D nor by the decision of this Court in ; [1018A C] Objections calculated to show that a scheme does not provide a road transport service which can be considered efficient, adequate.
economical o} properly coordinated would certainly lie; and the adjectives "efficient", "adequate", "economical" and "properly coordinated are not absolute but more or less comparative terms.
[1017E F1].
Capital Multi Purpose Co operative Society, Bhopal and others vs The State of Madhya Pradesh and others; , , explained.
Objections of a "personal" nature may be of two types.
(i) those challenging the scheme on the ground that it harms an existing operator and, (ii) those which indicate the details of the services afforded by an existing operator for the purpose of showing that service envisaged by the scheme would in comparison not be efficient, adequate, etc.
Objections of the second type would be admissible, while those of the first type, would be wholly irrelevant to the determination of the validity of the scheme in view of the postulates of section 68C and would, therefore, be inadmissible.
[1018E G] Gullapalli Nageswara Rao and others vs Andhra Pradesh State Road Transport Corporation and Another, [1959] Suppl.
1 S.C.R. 319, distinguished.
1007 4.
It is true that the State Government was acting in the discharge of its quasi judicial functions and it could devise its own procedure (in the absence of express provisions to the contrary) so that its functions could be effectively discharged.
Further, when the statute gives the power to the State Government to afford to the objectors a reasonable opportunity of being heard and to take evidence, oral as well as documentary, in support of their objections, the power to send letters of request to witnesses to appear and give evidence or to produce documents is inherent in the situation and needs no statutory sanction, although the power to enforce their attendance or compel them to produce documents is lacking on account of absence of conferment thereof by a statute.
[1021D F] Nehru Motor Transport Co operative Society Limited vs The State of Rajasthan, [1964] 1 S.C.R. 220, followed.
Sub rule (5) of rule 5 of Uttar Pradesh State Transport Services (Development) Rules, 1958 serves a salutary purpose and, that is, that the inquiring authority may shut out all evidence which is sought to be brought on the record but which is either irrelevant or otherwise inadmissible.
[1022G H, 1023A] 6.
In the instant case, no right of the appellants can be said to be infringed when their applications for summoning witnesses and production of documents were rejected by the State Government and the rejection is not illegal.
[1022E F] Capital Multi Purpose Co operative Society, Bhopal and Others vs The State of Madhya Pradesh and Others, ; ; applied.
| The appellant in the first case (C. A. No. 88/56) and the respondents in the other two cases (C. As.
Nos. 91 & 92 of 1958) were shipping companies carrying goods by sea from one port to another.
They carried goods of the opposite parties by ships to their places of destination but failed to deliver the whole of the goods consigned.
In the suits brought by the owners of the goods for compensation the main question related to the interpretation of the 3rd clause of para.
6 of article III in the Schedule to the Indian Carriage of Goods by Sea Act, 1925 (XXVI Of 1925) which runs thus: " In any event the carrier and the ship shall be discharged from all liability in respect of loss or damage unless suit is brought within one year after the delivery of the goods or the date when the goods should have been delivered ".
In the first case the Madras High Court expressed the opinion that the above clause did not provide for the extinction of the consignor 's right to claim compensation but merely prescribed a rule of limitation.
It also held that the term in the bill of lading requiring that the claim for compensation should be made within one month from the date of arrival of the vessel was repugnant to Rule 8 to article III of the Schedule and was void.
The Bombay High Court held that article 111(6) dealt with all cases of loss or damage whether the loss or damage was caused by the deterioration of the goods or by their non delivery and further that the words " the loss or damage " included any loss or damage caused to the consignee in respect of his claim for compensation from the shipping company.
If also held that the goods should have been delivered as soon as they were landed.
On appeal by special leave: Held, that the word " loss " in cl. 3, para.
6 of article III in the schedule to the Indian Carriage of Goods Act, 1925, meant and included any loss caused to a shipper or consignee by reason of the inability of the ship or the carrier to deliver part or whole of the goods, to whatever reason such failure might be due.
Spens and another vs The Union Mayine Insurance Co. Ltd., 3 Common Pleas 427, distinguished, 821 Sandeman & Sons vs Tyzack and Branfoot Steamship Co. Ltd., , referred to.
The words "discharged from liability" were intended to mean and did mean that the liability had totally disappeared and not only that the remedy as regards the liability had disappeared.
The date when the goods should have been delivered for the purpose Of cl. 3, para.
6 of article III of the Act was the date when the ship by which the goods were carried left the port of delivery.
The stipulation in the bill of lading requiring claim for compensation being made within one month from the date of arrival of the ship was null and void.
| The petitioner was the owner of a bus being run as a stage carriage.
On 24.7.78 while carrying passengers this bus met with an accident, as a result of which one passenger died.
The Motor Accident Claims Tribunal held that the accident took place due to the negligence on the part of the driver and awarded compensation of Rs.56,800 to the legal representatives of the deceased.
It further held that the liability of the insurer to indemnify the petitioner was limited to Rs.5,000 as the policy specifically limited the insurer 's liability to what had been provided by section 95(2)(b)(ii)(2) and (4) of .
The appeal filed by the Petitioner was dismissed by the High Court.
In the Special Leave Petition before this Court, it was contended on behalf of the petitioner that the insurer was liable to indemnify the petitioner upto a limit of Rs.75,000 under section 95(2)(b)(ii)(2) of the and that the further limit mentioned in section 95(2)(b) (ii)(4) was inapplicable to the case of the petitioner.
Dismissing the Special Leave Petition, this Court, HELD: 1.
Having regard to the as it stood prior to the amendments by Act 47 of 1982.
the insurer was liable to pay upto Rs.10,000 for each individual passenger where the vehicle involved was a motor cab and upto Rs.5,000 for each individual passenger in any other case.
[1161F] 2.1 Section 95(2)(b) as it existed before its amendment in 1982 1150 dealt with the limits of the liability of an insurer in the case of motor vehicles in which passengers were carried for hire or reward or by reason of or in pursuance of a contract of employment.
[1155H; 1156A] Sub clause (i) of section 95(2)(b) provided that in respect of death of or injury to persons other than passen gers carried for hire or reward, a limit of Rs.50,000 in all was the limit of the liability of the insurer.
[1156A] Under sub clause (ii) there were two specific limits on the liability of the insurer in the case of motor vehicles carrying passengers.
The first limit related to the aggre gate liability of the insurer in any one accident.
It was fixed at Rs.50,000 in all where the vehicle was registered to carry not more than thirty passengers, at Rs.75,000 in all where the vehicle was registered to carry more than thirty but not more than sixty passengers and at Rs.1,00,000 in all where the vehicle was registered to carry more than sixty passengers.
The other limit was in respect of each passenger, which provided that subject to the limits afore said as regards the aggregate liability, the liability extended up to Rs.10,000 for each individual passenger where the vehicle was a motor cab and Rs.5,000 for each individual passenger in any other case.
Neither of the two limits can be ignored.
[1156B D] 2.2 The limit prescribed in section 95(2)(b)(ii)(4) cannot be said to be only the minimum liability prescribed by law.
The amount mentioned in that provision provides the maximum amount payable by an insurer in respect of each passenger who has suffered on account of an accident.
This is a fair construction of section 95(2) of the Act as it existed at the time when the accident took place.
[1156E] 2.3 After the 1982 amendment the liability of the insur er in respect of each individual passenger is Rs.15,000 as against Rs.10,000 in the case of each individual passenger where the vehicle was a motor cab and Rs.5,000 for each individual passenger in other cases, prior to the said amendment.
This shows that Parliament never intended that the aggregate liability of the insurer mentioned in sub clauses (1), (2) and (3) of section 95(2)(b)(ii) would be the liability of the insurer even when one passenger had died or suffered injury on account of an accident.
Such liability was always further limited by sub clause (4) of section 95(2)(b)(ii).
[1159F G] 2.4 In the instant case, the vehicle in question being a bus carrying passengers for hire or reward registered to carry more than thirty 1151 but not more than sixty passengers, the limit of the aggre gate liability of the insurer in any one accident was Rs.75,000 and subject to the said limit the liability in respect of each passenger was Rs.5,000.
[1156D] 2.5 As the law stands today the insurer is liable to pay upto Rs.15,000 in respect of death of any passenger or any injury caused to him.
Having regard to the large number of motor vehicle accidents which are taking place on roads and also to the fact that a large number of public service vehicles carrying passengers are involved in them, limit of Rs.15,000 fixed in the case of each passenger appears to be still meagre.
[1159E; 1160E] 3.
The following suggestions in respect of certain provisions of the are made for considera tion of the Central Government: (i) The limits of compensation in respect of death or permanent disablement payable in the event of there being no proof of fault have become unrealistic in view of inflation ary pressures and consequent loss of purchasing power of the rupee.
These limits should, therefore, be raised adequately.
[1162B C] (ii) There is no justification for continuing the dis tinction between public service vehicles and other vehicles and also between passengers and third parties with regard to the liability of the insurer to pay compensation.
Even among the public service vehicles a distinction is made between vehicles used as goods carriages and those used for carrying passengers.
It may be considered whether it is necessary to continue these distinctions and also whether the limits of liability of the insurer should not be altered suitably.
[1162D E] (iii) The society and the State which are responsible for a large number of motor vehicles being put on road should carry also the responsibility of protecting the interests of innocent victims of hit and run motor accidents which are increasing in number.
The amounts of Rs.5,000 and Rs.1,000 provided as compensation in respect of death or grievous hurt respectively appear to be highly inadequate.
It may be considered whether these figures should not be increased in an appropriate manner.
[1162F G] (iv) The expression "legal representative" has not been defined in the Act and it has led to serious doubts in the course of judicial proceedings.
It may be considered whether it would not be advisable to define the said expression for purposes of making claims before Claims 1152 Tribunals where death has resulted from a motor vehicle accident in the same way in which the English Law has been amended.
[1163A C] Motor Owners Insurance Co. Ltd. vs Jadavji Keshavji Modi Northern India Transport Insurance Co., [1971] Supp.
SCR 20; Manjusri Raha & Ors.
B.L. Gupta & Ors.
; , ; P.B. Kader & Ors.
vs Thatchamma and Ors., AIR 1970 Kerala 241; K.R. Sivagami, Proprietor, Rajendran Tourist vs Mahaboob Nisa Bi and others, ; Madras Motor and General Insurance Co. Ltd. by its successor: The United Fire and General Insurance Co. Ltd. and others vs
V.P. Ba lakrishnan and others, ; New India Assurance Co. Ltd. vs Mahmood Ahmad and others, ; Shiva hari Rama Tiloli and another vs Kashi Vishnu Agarwadekar and others, ; National Insurance Co. Ltd. vs Shanim Ahmad and others, ; Tara Pada Roy vs Dwijendra Nath Sen and others, ; Noor Mohammad and another vs Phoola Rani and others, ; Raghib Nasim and another vs Naseem Ahmad and others, and Gujarat State Road Transport Corporation, Ahme dabad vs Ramanbhai Prabhatbhai and Another, ; , referred to.
|
Civil Appeal No. 59 of 1961.
Appeal from the judgment and decree dated March 14, 1957, of the Bombay High Court at Nagpur, in first Appeal No. 75 of 1956.
N. section Bindra and R. H. Dhebar, for the appellant Frank Anathony, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the respondent.
December 12.
The Judgment of the Court was delivered by 94 SARKAR, J.
This is an appeal by the State of Maharashtra against the judgment of the High Court at Nagpur confirming the decree of the Additional District Judge, Nagpur, declaring that the order reverting the respondent from the rank of officiating Deputy Superintendent of Police to the rank of Inspector of Police, was illegal and void, and granting certain consequential reliefs.
The judgment of the High Court and the learned Additional District Judge Seem to us to be clearly unsustainable.
The Courts below held that the respondent had been reduced in rank in violation of the terms of section 240(3) of the Government of India Act, 1935, which corresponds to article 311 of the Constitution, inasmuch as he was not given an opportunity to show cause against the order proposed to be made.
It is not in dispute that the opportunity has not been given.
In our view, however, for reasons to be presently stated, the respondent was not entitled to that opportunity.
On June 8, 1948, the respondent was holding the post of Inspector in the Central Provinces and Berar Police.
Service.
He was appointed to officiate as Deputy Superintendent of Police with effect from June 9,1948.
On January 27, 1949, his services were lent to the Hyderabad Government in connection with the police action then being taken there.
On February 5, 1949, he was sent back to the central Provinces and Berar.
On February 19, 1949, the Inspector General of Police, Central Provinces and Berar, passed an order which reads as follows: "Shri F. A. Abraham (respondent) Deputy Superintendent Police, Parbhani, is reverted to rank of Inspector.
" It is this order which was sought to be impugned by the respondent in the suit out of which this appeal arises.
95 After the order of reversion had been made the respondent, on February 23, 1949, asked for the reason for which he was reverted.
On March 3, 1949, the Government refused to communicate the reasons to him.
On May 25, 1949, a confidential memorandum was sent by the District Superintendent of Police, Parbhani, to the Deputy Inspector General of Police, Aurangabad, in which he stated that he had conducted an inquiry into certain allegations of corruption made against the respondent while he was acting in the service of the Hyderabad Government at Parbhani and he thought that those allegations were of substance.
Thereupon, the Deputy Inspector General of Police, Aurangabad, held a departmental inquiry regarding these allegations and found that they had not been proved.
This inquiry had been held behind the back of the respondent.
Notwithstanding this, the order reverting the respondent was maintained.
There is a letter addressed by the Inspector General of Police to the Chief Secretary to the Government of Madhya Pradesh, dated August 19, 1950, written after the departmental inquiry wherein it is stated that the respondents previous record was not satisfactory and that he had been promoted to officiate as Deputy Superintendent of Police as the Government was in need of officers and that he had been given a chance in the expectation that he would turn a new leaf but the complaint made in the confidential memorandum was a clear proof that the officer was habitually dishonest and did not deserve promotion.
The respondent made representations to the Government to revise the order reverting him to the lower rank but the Government expressed its inability to do so.
It may be stated here that on the promulgation of the Constitution the central Provinces and Berar became the State of Madhya Pradesh in the Indian Union.
In the judgment under appeal the High Court followed its earlier decision in M. A. Waheed vs State 96 of Madhya Pradesh (1) in which it had been held that if a person officiating in a higher post is reverted to his original post in the normal course, that is, on account of the cessation of the vacancy or his failure to acquire the required qualification, the reversion does not amount to a reduction in rank but if he is reverted for unsatisfactory work, then the reversion amounts to reduction in rank.
The High Court held that the Government 's plea that the respondent had been promoted as there was dearth of officers was an afterthought and that the fact that the respondent had been given a chance to officiate in the higher post prima facie showed that he was fit to hold that post.
The High Court also held that the Government 's refusal to communicate to the respondent the reasons for his reversion or to give him the report of the inquiry, indicated that the Government was reverting him on the ground that his work was not satisfactory.
It, therefore, came to the conclusion on the authority of M. A. Waheed 's case (1) that the respondent must be held to have reduced in rank and this reduction in rank was illegal as the respondent had not been given an opportunity to show cause against it.
We are unable to agree with the observation in M. A. Waheed 's case(1) that when a person officiating in a post, is reverted for unsatisfactory work, that reversion amounts to a reduction in rank.
A person officiating in a post has no right to hold it for all times.
He may have been given the officiating post because the permanent incumbent was not available, having gone on leave or being away for some other reasons.
When the permanent incumbent comes back, the person officiating is naturally reverted to his original post.
This is no reduction in rank for it was the very term on which he had been given the officiating post.
Again, sometimes a person is given 97 an officiating post to test his suitability to be made permanent in it later.
Here again.
it is an implied term of the officiating appointment that if he is found unsuitable, he would have to go back.
If, therefore, the appropriate authorities find him unsuitable for the higher rank and then revert him back to his original lower rank, the action taken is in accordance with the terms on which the officiating post had been given.
It is in no way a punishment and is not, therefore, a reduction in rank.
It has been held by this Court in Parshotam Lal Dhingra vs Union of India (1) that, "It is, therefore, quite clear that appointment to a permanent post in a Government service, either on probation, or on an officiating basis, from the very nature of such employment, itself of a very transitory character and, in the absence of any special contract or specific rule regulating the conditions of the service, the implied term of such appointment, under the ordinary law of master and servant, is that it is terminable at any time.
In short, in the case of an appointment to a permanent post in a Government service on probation or on an officiating basis, the servant so appointed does not acquire any substantive right to the post and consequently cannot complain, any more than a private servant employed on probation or on an officiating basis can do, if his service is terminated at any time.
" The respondent had of course no right to the post of Deputy Superintendent of Police to which he had been given an officiating appointment and he does not contend to the contrary.
He cannot therefore, without more, complain if he is sent back to his original post.
This is what happened in this case even if it be taken that the respondent 98 had been reverted to his original rank because he was found unsuitable for the higher rank to which he had been given an officiating appointment.
It is however true that even an officiating person may be reverted to his original rank by way of punishment.
It was therefore, observed in Dhingra 's case (1) at p. 863, "Thus if the order entails or provides for the forfeiture of his pay or allowances or the loss of his seniority in his substantive rank or the stoppage or postponement of his future chances of promotion, then that circumstances may indicate that although in form the Government had purported to exercise its right to terminate the employment or to reduce the servant to a lower rank under the terms of the contract of employment or under the rules, in truth and reality the Government has terminated the employment as and by way of penalty.
" It is quite clear that the circumstances mentioned in this observation have not occurred in the present case.
The reversion has not in any way affected the respondent so far as his condition and prospect of service are concerned.
He of course, lost the benefit of the appointment to the higher rank but that by itself cannot indicate that the reversion was by way of punishment because he had no right to continue in the higher post or to the benefits arising from it.
He had been reverted in exercise of a right which the Government had uncle the terms of the officiating employment.
The High Court seems to us to have been in error in thinking that the Government 's refusal to supply the respondent with the reasons why action has taken against him proved that the reversion was a reduction in rank by way of.
punishment; the refusal cannot prove that.
It may give rise to a suspicion about the motive which led the Government 99 to take the action, but it is now firmly established that if the action is justifiable under the terms of the employment, then the motive inducing the action is irrelevant in deciding the question whether the action had been taken by way of punishment: see Parshotam Lal Dhingra 's case (1) at p. 862.
It does not require to be repeated now that unless the reversion is by way of punishment, section 240 (3) is not attracted.
The High Court seems to have been in error also in drawing an inference from the holding of the departmental inquiry that the respondent must have been reduced in rank by way of punishment.
The departmental inquiry was held long after the order reverting the respondent had been passed and could not have been the occasion for the reversion of the respondent.
The Government had the right to consider the suitability of the respondent to hold the position to which he had been appointed to officiate.
It was entitled for that purpose to make inquiries about his suitability.
This is all that the Government did in this case.
This inquiry cannot show, whatever the findings may have been, that the reversion earlier made was by way of punishment.
Mr. Anthony for the respondent referred us to State of Bihar vs Gopi Kishor Prasad (2) in which it was observed, "But, if instead of terminating such a person 's service without any enquiry, the employer chooses to hold an enquiry into his alleged misconduct, or inefficiency, or for or some similar reason; the termination of service is by way of punishment, because it puts a stigma on his competence and thus affect his future career.
" That case dealt with the discharge of a probationer officer on the ground that he was unsuitable.
The observation there made was considered by this 100 Court in the later case of The State of Orissa vs Ram Narayan Das (1) where it was said, "The third proposition in the latter case refers to an enquiry into allegations of misconduct or inefficiency with a view, if they were found established, to imposing punishment and not to an enquiry whether a probationer should be confirmed.
" We would repeat that in the present case the enquiry was concerned with ascertaining the suitability of the respondent for the higher rank and was not a punishment.
At one stage Mr. Anthony was inclined to argue that the enquiry was really a part of the original order of reversion and that it had been deliberately postponed to as to avoid the applicability of section 240(3) of the Government of India Act, 1935 No such case is made in the plaint.
Neither was it made in the courts below nor can it be based on their findings.
Such a case cannot now be made.
We think, therefore, that the appeal must be allowed with costs throughout and we order accordingly.
Appeal allowed.
| The respondent who held the substantive post of Inspector of Police and had been officiating as the Deputy Superintendent of Police was reverted to his original rank of Inspector without being given any opportunity of being heard in respect of the reversion.
His request to furnish him with reasons of his reversion was refused.
Later a Departmental enquiry was held behind his back in respect of certain allegations of misconduct made against him in a confidential communication from the District Superintendent of police to the Deputy Inspector General of Police but these allegations were not proved at the enquiry.
The Inspector General of Police however thereafter wrote to the Government that the respondent 's previous record was not satisfactory and that he had 93 been promoted to officiate as Deputy Superintendent of Police in the expectation that he would turn a new leaf but the complaint made in the confidential memorandum was a clear proof that the respondent was habitually dishonest and did not deserve promotion.
As the order of reversion was maintained by the Government inspite of the representations made by the respondent.
he filed a suit challenging the order.
The suit was decreed by the Court of first instance and the decree was affirmed by the High Court on appeal.
^ Held, that a person officiating in a post has no right to hold it for all times.
A person who is given an officiating post to test his suitability to be made permanent later, holds it on the implied term that he would have to be reverted if he was found unsuitable.
A reversion in such a case on the ground of unsuitability is an action in accordance with the terms on which the officiating post was being held and is not a reduction in rank by way of punishment to which section 240 of the Government of India Act, 1935, would be attracted.
The observation in M. A. Waheed vs State of Madhya Pradesh, (1954) N. L. J. 305, that when a person officiating in a post is reverted for unsatisfactory work, that reversion amounts to reduction in rank disapproved.
The Government 's refusal to supply the respondent with the reasons for reverting him could not proved that the reversion was by way of punishment.
The departmental enquiry held later in this case does not prove that the respondent was reverted by way of punishment.
The Government had the right to consider the suitability of the respondent to the post to which he had been appointed to officiate.
State of Bihar vs Gopi Kishore Prasad, A. I. R. , referred to.
| The appellant was a protected lessee or tenant of the agricultural land in dispute, under the Bombay Tenancy and Agricultural Lands (Vidarbha Region) Act, 1958.
The respond ent became the landlady of the land on June 29, 1959 when her father effected a partition of his ancestral lands between himself, on the one hand, and his wife and his two minor daughters, including the respondent, on the other.
This was the third partition effected by the respondent 's father, who had earlier also twice partitioned the same lands.
Sometime in 1962, the respondent initiated proceedings against the appellant for recovery of possession of the suit land on the ground of default.
The Tehsildar dismissed the application holding that the respondent was not a landlady since the partition in question was illegal.
The Deputy Collector in appeal confirmed this decision, and the Maha rashtra Revenue Tribunal rejected the respondent 's revision.
In the Writ Petition filed before the High Court under Article 227 of the Constitution against the above decision of the three authorities below, the High Court remanded the matter to the Tehsildar for investigation into the validity of the partition.
On remand, the Tehsildar held that the partition effected on June 29, 1959 was bogus.
Thereafter, in a different proceeding the Maharashtra Revenue Tribunal had held that the said partition was bind ing.
Therefore, in the appeal against the decision of the Tehsildar, the Deputy Collector following the said decision of the Revenue Tribunal, held the partition valid and al lowed the respondent 's application for eviction.
The Revenue Tribunal, in revision, confirmed this order of the Deputy Collector.
67 The appellant preferred a writ petition before the High Court.
It was, inter alia, contended before the High Court that: (1) the partition was contrary to the provisions of Hindu Law; and (2)even assuming that the partition deed of June 29, 1959 was a valid document, the same had to be ignored since it could not confer the title of ownership on the respondent transferee in view of the provisions of section 38(7) of the Bombay Tenancy and Agricultural Lands (Vidarbha Region) Act, 1958.
The High Court however dis missed the petition holding that what was produced before the courts below was a family settlement.
Allowing the appeal, this Court, HELD: (1) A partition of the property can only be among the parties who have a pre existing right to the property.
Under the Hindu Law, a female, major or minor has no share in the ancestral property.
A female is given a share either in the self acquired property of the husband or the father, or in the share of the husband or the father in the coparce nary property after the property is partitioned.
There cannot, therefore, be a partition and hence a family settle ment with regard to the ancestral property so long as it is joint, in favour of either the wife or the daughter.
[70C D] (2) The position that obtain under section 38(7) after the Amending Act of 1963, is that any transfer of land effected after 1st August 1953 whether by way of partition or otherwise, has no effect of conferring on the transferee a right to terminate the tenancy of the tenant who was a protected lessee and whose right as such protected lessee had come into existence before such transfer or partition.
This amendment is admittedly retrospective in operation.
[71G H; 72A] (3) The appellant was tenant since prior to 1st August 1953 and had also continued to be such tenant till April 1, 1961.
Hence he became a statutory owner under section 46 of the Act on and from April 1, 1961.
Any proceedings for evicting him on the ground that he was a tenant and, there fore, had fallen in arrears of rent could not have, there fore, been adopted in 1962.
[72C D]
| Respondent instituted a suit against the appellant, the Coal Mines Provident Fund Commissioner without a notice as required under section 80 C.P.C. Appellant objected stating that he was a public officer within the meaning of the term occurring in section 80 C.P.C. and that the suit was incom petent.
The trial court overruled the objection and held that the appellant was not a public officer.
The High Court confirmed the same.
Aggrieved, the appellant, has preferred this appeal by special leave.
Allowing the appeal, this Court, HELD: 1.
I The courts below have erred in holding that the Coal Mines Provident Fund Commissioner is not a public officer within the meaning of the term in section 2(17)(h) of the C.P.C.
The word 'service ' in section 2 (17)(h) C.P.C. must necessarily mean something more than being merely subject to the orders of Government or control of the Gov ernment.
To serve means "to perform function; do what is required for".
The Commissioner appointed by Government performs the functions as envisaged in the Act and the scheme thereunder.
When he is actually acting in the capaci ty of Provident Fund Commissioner, he does not cease to be an officer in the service of the Government.
[184E F; 185F] 1.2 The fact that the Commissioner receives the salary and allowances out of the Coal Mines Provident Fund and not from the Government during the tenure as Commissioner would make no difference when the description as an officer in the service of the Government is answered.
[184D] 182 2.
In the present case, the Provident Fund Commissioner holds the office of Commissioner on appointment by Govern ment by virtue of his office.
His services are temporarily placed at the disposal of the Board constituted under Sec tion 3 of the .
He does not, therefore, cease to be an officer in the service of the Government.
The payment of his pay out of the Fund does not alter his status as Government employee.
[185E] Liquidator of Society Sangakheda Kalan Co Operative Bank, Hoshangabad vs Ayodhyaprasad Shiamlal, ; Kuppu Govinda Chattiar vs Uttukottai Co Operative Society, AIR 1940 Madras 831; Vishnu Wasudeo Joshi vs T.L.H. Smith Pearse, AIR 1949 Nagpur 362; Commissioner of Wakfs, Bengal vs Shahebzada Mohammed Zahangir Shah, AIR 1944 Cal cutta 206 and Kamta Prasad Singh vs The Regional Manager, F.C.I., AIR 1974 Patna 376, referred to.
| Prior to November 1, 1956 the appellants were holding permanent posts in the ministerial service of the Secretariats of the Part B State of Saurashtra and the Part C State of Kutch.
By virtue of section 8 of the States Reorganisation Act 37 of 1956 the new State of Bombay which included the territories of the States of Saurashtra and Kutch was formed.
Under section 115(1) of the Act the appellants were allotted to serve in connection with the affairs of the new State of Bombay.
BY the proviso to, section 115(7) it was provided that 'conditions of service applicable immediately before the appointed day to the case of any person allotted to another State shall not be varied to his disadvantage except with the previous approval of the Central Government '.
Section 116 provided for the continuance of officers in equivalent posts.
By section 117 power was conferred upon the Central Government to give directions to State Governments for the purposes of sections 114, 115 and 116.
The Act authorised the Central Government to establish one or more Advisory Committees to advise the Government on the division and integration of the services in the new States and for ensuring fair and equitable treatment to all persons affected by the provisions of section 115 and for proper consideration of any representation made by those persons.
A large majority of the members of the ministerial branch of the Secretariats of the State of Saurashtra and Kutch were unwilling to be posted in the Secretariat of the new State of Bombay.
A large majority out of them including the appellants were accordingly posted in the districts of the former States of Saurashtra and Kutch.
Under the Bombay Reorganisation Act 11 of 1960 the States of Gujarat and Maharashtra were carved out of the territory of the new State of Bombay.
Sections 81, 82 and 83 of the 1960 Act were substantially the same as Ss. 115, 116 and 117 of the 1956 Act.
The services of the appellants were under section 81 of the Act allotted to the newly constituted State of Gujarat.
The State of Gujarat transferred the appellants from the districts to the Secretariat.
After consulting the Public Service Commission it issued on August 19, 1966 an order "regularising" the services of the appellants and fixing their pay and seniority.
The officers of the Secretariat who before the, passing of the said order constituted the ministerial service filed a petition in the High Court challenging its validity.
The High Court allowed the petition mainly on two grounds, namely : (i) that the appellants were not absorbed in the ministerial services of the Secretariat within the meaning 516 of the Bombay Allocated Servants ' (Absorption, Seniority, Pay and Allowances) Rules, 1957; (ii) that r. 138 of the Bombay Civil Services Classification and Recruitment Rules, 1939 as amended in 1957 allowed recruitment to the Ministerial Staff of the Secretariat by nomination after an examination or by promotion from the Lower Division and it was not open to the Government to adopt any other method.
The High Court 's ,,decision was challenged in appeal before this Court.
The Court noted that no equivalence had been established between the ,posts in the Secretariats of the States of Saurashtra and Kutch and the posts in the new State of Bombay or later in Gujarat and that there had been no integration of the services by the Central Government.
It was conceded before the Court that the State had the authority to transfer, subject to the Constitution and the rules made under article 309, any public servant to render service which by his training and aptitude he was competent to do.
HELD : (i) The fact that the expression 'absorption ' had not been used in the impugned order would not justify the inference that there was no intention to absorb the former Saurashtra and Kutch State personnel in the Secretariat.
[521 F] In the absence of determination of equivalent posts under the orders of the Central Government, the State of Gujarat was competent, as a matter of provisional arrangement to absorb the former Saurashtra and Kutch States personnel in the ministerial establishment of the Gujarat State Secre tariat.
In terms the order said that the persons named therein "should be treated to have been regularly appointed in the posts shown against their names in column 4 of the statement" appended to the order.
That clearly amounted to absorption.
[521 G H] (ii) The High Court was wrong in holding that the impugned order was bad because it contravened r. 138 of the Recruitment Rules.
Assuming that r. 138 requires the State to follow a certain method for recruitment to the ministerial service, that rule made under article 309 of the Constitution cannot take away the statutory right vested in the personnel of the former Saurashtra and Kutch States which they acquired under section 115(7) of the to hold posts in the new State which we re equivalent and on terms which were not, unless previous approval of the Central Government was obtained, disadvantageous.
Since the arrangement which was made by the Gujarat Government must be regarded as provisional and to ensure so long as the Central Government did not make a final decision, it was not open to the officers of "the Secretariat to challenge the authority of the Government of Gujarat either to transfer officers from the Districts and to post and assign them duties in the Secretariat or to fix their pay and seniority among the officer of the Secretariat performing ministerial duties. ' [523 G 524 B] N. Raghavendra Rao vs Deputy Commissioner, South Kanara, Mangalore, ; and Union of India & Anr.
vs P. K. Roy & Ors.
; , applied.
| The respondent was appointed in 1949 a Tahvildar in the District of Azamgarh in the State of Uttar Pradesh and he worked, in the Cash Department of the Government Treasury of that District.
His appointment was made by Government Treasurer with the approval of Collector of the District.
In 1956, he was removed from service under instructions from the Collector.
He filed a writ petition in the High Court in which he challenged the legality of the order removing him from service on the ground that he was a member of the civil service of the State of Uttar Pradesh or held a civil post under the State and hence was not liable to be removed from service without being afforded a reasonable opportunity of showing cause against the action proposed to be taken in regard to him under article 311(2) of the Constitution.
The High Court held that the respondent was an employee of the State Government and as the provisions of article 311(2) had not been observed, the order terminating his services was illegal.
The appellant has come to this Court by special leave.
The only question raised before this Court was, whether a Tahvildar appointed in the Cash Department in the State of Uttar Pradesh is a civil servant of the State of Uttar Pradesh or holds a civil post in the State.
Dismissing the appeal, Held:The respondent was a civil servant of the State of Uttar Pradesh and as the requirements of article 311(2) were not conformed to, the order terminating his services was invalid.
The Government Treasurer is a civil servant of the State holding a specific post and he is authorised by the terms of his employment to employ Tahvildars to assist him in discharging his duties.
Payment of remuneration to Tahvildars is for services rendered in the Cash Department of the District Treasury of the State.
The Tahvildars receive their remuneration directly from the State and are subject to the control of the District Officers in the matter of transfer, removal and disciplinary action.
Employment of Tahvildars being for the purpose of carrying out the work of the State, even though a degree of control is exercised by the Government Treasurer and the appointment is in the first instance made by the Treasurer subject to the approval of the District Officers, the Tahvildar is entitled to the protection of article 311.
Whether in a given case, the relationship of master and ser vant exists is a question of fact which must be determined on a consideration of all material and relevant circumstances having a bearing on that question.
In general, selection by the employer,.
coupled with payment by him of remuneration or wages, the, 90 right to control the method of work and a power to suspend or remove from employment are indicative of the relation of master and servant.
However, co existence of all these indicia is not predicted in every case to make the relation one of master and ,servant.
In special classes of employment, the contract of service may exist, even in the absence of one or more of these indicia.
But ordinarily, the right of an employer to control the method of doing the work and the power of superintendence and control may be treated as strongly indicative of the relation of master and servant, for that relation imports the power not only to direct the doing of some work, but also to direct the manner in which work is to be done.
If the employer has such power, prima facie, the relation is one of master and servant.
Shivanandan Sharma vs The Punjab National Bank Ltd. ; , Dharangadhara Chemical Works Ltd. vs State of Saurashtra ; and M/s Piyare Lal Adisivar Lal vs Commissioner of Income tax, Delhi ; , referred to.
| The question for determination in these appeals was whether and to what extent the municipal activities of the Corporation of 943 Nagpur City fell within the term 'industry ' as defined by section 2 (14.) of the C.P. and Berar Industrial Disputes Settlement Act, 1947.
Disputes having arisen between the said Corporation and its employees in its various departments, the State Government referred them for adjudication to the State Industrial Court under section 39 of the Act and that Court by its award held that the Corporation and all its departments were covered by the said definition.
Against that award the Corporation made an application to the High Court under article 26 of the Constitution.
The High Court rejected its contention that the Corporation was not an industry within the meaning of the said section and remanded the case to the Industrial Court for determination as to which of its departments fell within the definition and making an award accordingly.
Thereafter The Industrial Court found all the departments of the Corporation except those dealing with (1) assessment and levy of house tax (2) assessment and levy of Octroi, (3) removal of encroachment and removal and pulling down of dilapidated houses, (4) prevention and control of food adulteration, and (5) maintenance of cattle pounds, to be industries within the meaning of the definition and passed its award accordingly.
The Corporation appealed to this Court by special leave but there was no appeal on behalf of the employees of the five departments excluded from the definition.
Held, that the decision of the Industrial Court except so far as it related to the five departments in respect of which the re was no appeal, must be affirmed.
The definition of the word 'industry ' in section 2 (14) of the C.P. and Berar Industrial Disputes Settlement Act, 1947, although in a language somewhat different from that of section 2 (1) of the , is very comprehensive.
It is in two parts, cl.
(a) defines it from the standpoint of employers and cl.
(b) from that of the employee.
An activity that falls within any of the two clauses must be ,in industry.
D.N. Banerji vs P. R. Mukherjee ; and Baroda Borough Municipality vs Its Workmen.
; , applied.
It is not necessary that an activity of the Corporation must share the common characteristics of an industry before it can come within the section.
The words Of section 2 (14) of the Act are clear and unambiguous and the maxim noscitur a socii can have no application.
The history of industrial disputes and the legislation, however, recognises the basic concept that the activity must be an organised one and not one that pertains to private or personal employment.
State of Bombay vs The Hospital Mazdoor Sabha.
; and Heydon 's Case b., referred to.
But the definition, however wide, cannot include the regal, primary and inalienable, functions of the State though statutorily delegated to a corporation and the ambit of such functions cannot be extended so as to include the welfare activities of a modern state and must be confined to legislative power, administration of law and judicial power.
120 944 Richard Coomber vs The Justices of the County of Berks, Berks.(1883 84) 9 A.C. 61 and The Federated State School Teachers ' Association of Australia vs The State of Victoria.
; , County Council of Middlesex vs Assessment Committee of St. George 's Union.
(1896) 2 Q.B.D. 143, Verisimo Vasquez Vilas vs City of Manila, 220 U. section 345, and The Federated Municipal and Shire Council Employees ' Union of Australia vs Mclbourne Corporation.
; , referred to.
The real test as to whether a service undertaken by a corporation is an industry must be whether that service, if ' performed by an individual or a private person, would be an industry.
Monetary cosideration cannot be an essential characteristic of industry in a modern State.
It was, therefore, incorrect to say that only such activities as were analogous to trade or business could come within section 2 (14) of the Act.
D. N. Banerji vs P.R. Mukherjee, ; , explained.
The Federated Municipal and Shire Council Employees ' Union of Australia vs Melbourne Corporation.
(19l8 19) ; , Federated Engine Drivey and Fireme 's Association and Ors.
vs The Broken Hill Proprietary Company Limited and Ors.
5 and The Federated State School Teachers ' Association Australia vs The State of Victoria; , , referred to.
Where a service rendered by a Corporation is an industry, the employees of the departments connected with that service, whether financial, administrative or executive, would be entitled to the benefits of the Act.
Baroda Borough Municipality vs Its Workmen.
[1957] S.C.R. 33, referred to.
If a department of a municipality discharges many functions, some within and some without the definition of industry given by the Act, the predominant functions of the department shall be the criterion for the purposes of the Act.
| The first respondent, in 1938, obtained a decree against the appellants branch of a joint family, and in 1941, commenced proceedings for the execution of the decree in Allahabad.
Meanwhile, in 1939, a final decree had been passed in a suit for partitioning the family properties among the members of the joint family, and the matter was taken up in appeal to the High Court of Allahabad.
Certain orders were passed by the High Court which were construed by the executing court in the years 1941 and 1942 as stay orders of the execution proceedings commenced by the respondent.
The High Court passed a final decree in the partition suit in December 1949, but did not immediately discharge the Receivers who were appointed during the pendency of the suit.
The respondent revived the execution proceedings in May 1,950 and a mill belonging to the joint family was attached and sold 'but the sale was set 'aside in 1955 as the appellant 's branch applied for relief under the U.P. Encumbered Estates Act, 1934.
Thereafter, in ' 1956, the decree in favour of the respondent was transferred to Madras High Court for execution and on 13th August, 1956, the respondent filed an execution application, for attainment of certain properties which fell to the appellant 's share.
High Court of Madras in Letters Patent Appeal held that the execution application was in time.
On the question whether the execution application dated 13th August, 1956, was in time, or barred by limitation, HELD : (i) The respondent bonafide pursued execution against the mill and since his good faith was not questioned before the Appellate Court it was not open to the appellant to do so in this Court.
[370 A, C] (ii) It was not possible to spell out any order of partial stay on the facts and circumstances of the present case.
The facts that the Receivers were not finally discharged in 1949 when the final decree by the High Court was passed in the partition suit, and the understanding of the parties and the executing court that execution was stayed by the High Court, indicate that the stay was in unqualified terms.
Therefore, the respondent could not have applied earlier 'for execution with respect to other property of the joint family either at Allahabad or at Madras.
[369 A C, D G] (iii) Further, when the execution proceedings were revived in May 1950 the executing court held that execution proceedings had been stayed till December 1949 and the appellant did not challenge the order of attachment and sale of mill on the ground that the proceedings were barred by limitation.
Therefore, the appellant was barred by the principle of res judicata from questioning the order of May 1950 on the ground of limitation.
[371 D E] 365 (iv) Section 15 of the Limitation Act states that in computing the period of limitation prescribed the time of the continuance of the injunction staying execution shall be excluded.
The word "prescribed" would apply not only to Limitation Act but also to the limitation prescribed in general statutes like the Civil Procedure Code.
Section 48 of the Code, as it then stood, laid down 12 years as the maximum limit of the period of execution but it did not prescribe the period within which each application for execution was to be made.
Such an application was to be made within three years from the dates mentioned in third column of Article 182 of the Limitation Act, 1908.
Therefore, an application for execution of a decree must first satisfy Article 182 and it would then have to be found out as to whether section 48 of the Civil Procedure Code operated as a further bar.
[370 C H; 371 A B] (v) Since the execution proceedings were stayed in the present case, the 'respondent was entitled to claim its benefit of section 15 of the Limitation Act in respect of the period of stay of the execution of his decree, from June 194.1 till end of 1949; and since the execution application of 1950 was finally disposed of in 1955, the present application filed in 1956 was within time.
[372 E]
| The appellants obtained a decree against the respondent in the court of Sub Judge, Bankura (West Bengal) on December 3, 1949.
On March 28, 1950 they applied to the court which passed the decree to transfer the decree with a certificate of non satisfaction of the court at Morgan in the then State of Madhya Bharat.
It was ordered accordingly.
The Judgment debtors resisted the execute on the ground that the court had no jurisdiction to execute the same as the decree was that of a foreign court and that the same had been passed ex parte.
The court accepted that contention and dismissed the execution petition on December 29, 1950.
On April , 1951 the Code of Civil Procedure (Amendment) Act 2 of 1951 came into force.
By this Act the Code was extended to the former State of Madhya Bharat as well as various other places.
Meanwhile the appellants appealed against the order of the Additional District Judge Morena dismissing the execution petition to the High Court of Madhya pradesh.
The appeal was allowed.
In further appeal this Court 'restored the order of the Addl.
District Judge, Morena.
Thereafter on February 15, 1963 the appellants filed another execution case before the Bankura Court praying for the transfer of the decree to the Molrena Court for execution.
The Bankura Court again ordered the transfer of the decree of the Morena Court.
The judgment debtors resisted execute on the flowing grounds : (1) that it was barred by yes judicature in view of the aforesaid decision of this Court; (2) that it was barred by section 48 of the Code of Civil Procedure; (3) that it was barred by limitation and (4) that it was not executable because it was the decree of a foreign court.
The Addl.
District Judge rejected the objections.
The High Court in appeal agreed with the executing court that the execution petition was neiber barred by resjudicata nor was there any bar of limitation but it disagreed with that court and held that the decree was not executable as the court which passed the decree was a foreign court.
The decree holders filed the present appeal by special leave.
The questions which fell for consideration were : (i) whether the decree under execution was not executable by courts situate in the area comprised in the former State of Madhya Bharat; (ii) whether the decree was barred by section 48 of the Code.
HELD:Per Sikri C.J., Mitter, Hyde and Bhargava JJ.
(1) (a) On the date when the decree under execution was passed foreign court ' was 8 1 100 SupCII71 816 defined in section 2(5) of the Code as a court situate beyond the limits of British India which had no authority in British India and was not established or continued by the Central Government.
After the amendment of the Code of Civil Procedure in 1951. 'foreign court ' under the Code means a court situate outside India and not established or continued by the authority of the Central Government.
Whether we take the earlier definition or the present definition the Bankura Court could not be considered as a foreign court within the meaning of that expression in the Code. 'Foreign judgment ' is defined as the 'judgment of a foreign court '.
Hence the decree under execution could not be considered as a foreign decree for the purpose of the Code.
[820 D G] Accordingly the judgment debtors could not take advantage of the provision in section 13(b) of the Code under which the ex parte decree of a foreign court is not conclusive.
Nor could they take advantage of section 13(d).
They were served with notice of suit but did not choose to appear before the court.
Hence, there was Po basis for the contention that any principle of natural justice has been contravened.
Further section 13(d) was not applicable because the judgment in question was not a foreign judgment.
[821 D] (b) Under Private International Law a decree passed by a foreign court to whose juri diction a judgment debtor had not submitted is an absolute nullity only if the local legislature had not conferred jurisdiction on the domestic courts over the foreigners either generally or in specified circumstances.
Clause (c) of section 20 of the Code provides that subject to the limitations mentioned in the earlier sections of the Code a suit can be instituted in a court within the local limits of whose jurisdiction the cause of action wholly or in part, arises.
This provision confers jurisdiction on a court in India over foreigners when the cause of action arises within its jurisdiction.
There was not dispute in the present case that the cause of action for the suit which led up to the decree under execution arose within the jurisdict on of the Bankura Court.
Hence, it must be held that the suit in question was properly instituted.
Accordingly the decree in question was a valid decree though it might not have been executable at one stage in courts in the former Indian States [822 B F] Sardar Gurdyal Singh vs The Rajah of Faridkot, 21 I.A. 171, referred to.
(c) A combined reading of sections 2(12), 38, 39 and 40 of the Code shows that a decree can be transferred for execution only to a court to which the Code apple .
This is what was ruled by this Court in Hansraj Nathu Ram 's case.
But by the date the transfer in the present case was made, the Code had been extended to the whole of India.
It followed that the transfer of the decree in question which was not a foreign decree, to the Morena Court, was in accordance with the provisions of the Code.
[823 B D] Hansraj Nathu Ram vs Lalii Raja & Sons of Bankura, , applied.
Narsingh Rao Shitole vs Shri Shankar Saran & Ors., ; , distinguished.
(d) Section 20(1)(b) of the Code of Civil Procedure Amendment Act, 1951 by which the Code was extended to Madhya Bharat and other areas undoubtedly protects the right acquired and privileges accrued under the law repealed by the amending Act.
But even by straining the language of the provision it cannot be said that the non executabilitv of the decree within a particular territory can be considered a privilege [824 E F] 817 Nor is it a 'right accrued ' within the meaning of section 20(1) (b) of the Code of Civil Procedure (Amendment) Act, 1950.
In the first peace in order to get the benefit of this provision the non executability of the decree must be a right, and secondly it must be a right that had accrued from the provisions of the repealed law.
It Was difficult to consider the non executability of the decree in Madhya Bharat as a vested right of the judgment debtors.
The non executability in question pertained to the jurisdiction of certain courts and not to the "rights of the judgment debtors.
Further the relevant provision of the Code of Civil Proedue in force in Madhya Bharat did not confer the, right claimed by the judgment debtors.
All that had happened in view of the extension of +he Code to the whole of India in 1951 was that the decrees which could have been executed only by courts in British India were made ' executable in the whole of India.
The change made was one relating to procedure and jury diction.
By the extension of the Code to Madhya Bharat, want of jurisdiction on the part of the Morena Court was remedied and that court was now competent to execute the decree [825 A E] Hamilton Gell vs White , Abbot vs Minister for Lands, and G. Ogden Industries Pvt. Ltd. vs Lucas, , applied.
(ii)The execution was also not barred, by section 48 of the Cod .
For considering the true impact of cl.
(b) of sub section
2 of section 48 of the Code provisions of articles 181 and 182 of the Limitation Act, 1908 have also to be taken into consideration.
These provisions clearly go to indicate that the period prescribed under section 48(1) of the Code is a period of limitation.
This interpretation is strengthened by the subsequent history of the legislation.
By the section 48 of the Code is deleted.
It , place has not been taken by article 136 of the Limtation Act of 1963 The High Courts also are now unanimous that section 48 of tile (ode is controlled by the provisions of the Limitation Act, 1908.
[828 A C] Kandaswami Pillai vs Kamappa Chetty, A I R, , Durg vs Poncham, I.L.R. [1939] All.
647, Sitaram vs Chunnilalsa, I.L.R. , Amarendra vs Manindra, A.I.R. '1955 Cal.
269, Krishna Chandra v Parovatamma, A.I.R. 1953 Orissa 13 and Ramgopal vs Sidram, A.I.R. 1943 Bom.
164 referred to.
Per Jaganmohan Reddy, J. (Concurring) No question of 'a vested right or privilege arose to entitle the respondent to challenge execution proceedings in Morena Court.
The decree granted by the Bankura Court was executable by the Courts governed by the same Code, by talk Court which passed it or by the Court to which it was transferred.
One the Code was made applicable to the whole of India by Amendment Act 11 of 1951 the decree was no longer a foreign decree qua the Morena Court which was a court under the Code to which the Bankura Court could transfer the decree for execution.
No doubt in ' Shitole 's case it was observed that section 13 of the Code creates substantive rights and not merely procedural and therefore defenses that were open to the resno dents were not taken away by any constitutional changes, but the ratio of the decision was that the Gwalior Court not being a court that passed the decree after the coming into force of Act 11 of 1951 the Allahabad Court could not execute it.
The impediment did not exist now in that the Bankura Court bad transferred the decree to a court under the Code.
the plea that section 48 Civil Procedure Code presents a bar of limitation was also not tenable.
[831 F H] 818 Kishendas vs Indo Carnatic Bank Ltd. A.I.R. 1958 A.P. 407 Sardar Gurdayal Singh V. Raja of Firidkote, 21 I.A. 171, Rai Rajendra Sardar Maloji Narsingh Rao Shirole vs Shri Shankar Saran, ; and Hansaj Nathuram Y. Lalji Raja
|
Civil Appeal No. 246 of 1959.
Appeal from the judgment and decree dated December 4.
1956, of the Patna High Court in First Appeal No. 429 of 1951.
A. V. Viswanatha Sastri and Mohan Behari Lal, for the appellant.
B. K. P. Sinha and A.G. Ratnaparkhi, for respondent No. 1.
M. K. Ramamurthy R. K. Garg, D. P. Singh and section C. Agarwal, for respondent No. 6. 1961, December 13.
This appeal arises out of a suit brought by the respondent Kumar Jagat Kishore 121 Prasad Narayan Singh, hereafter called the respondent, against the appellant, the Raja of Kanika, for redemption of certain mortgages.
The suit was decreed by a learned Subordinate Judge of Gaya and the High Court at Patna confirmed that decree on appeal.
The appellant has now appealed to this Court against the judgment of the High Court.
In the High Court many points were argued but in this Court Mr. Sastri for the appellant pressed only one point.
We have therefore to state only such of the facts as concern the point raised by Mr. Sastri.
The respondent claimed to be entitled to redeem the mortgages as the executor of the estate of Chandreshwar Prasad, the mortgagor, and as the receiver appointed in certain execution proceedings hereafter mentioned.
It has since been finally held, as will appear later, that the will appointing the respondent executor was not genuine.
It may also be stated that the respondent is no longer holding the office of receiver.
It would, therefore, appear that the respondent has now no locus standi to contest the appeal.
He was however, the only person opposing the appeal in this Court.
As learned counsel for the appellant did not object to the respondent appearing in this appeal, it is unnecessary to discuss the respondent 's position further.
It appears that on February 17, 1924, Chandreshwar Prasad executed a mortgage in favour of the then Raja of Kanika to secure a sum of Rs. 4,00,000/ .
The mortgaged properties consisted of certain Mokarrari tenures.
The mortgage debt not having been paid, the Raja of Kanika filed a suit on the mortgage and obtained preliminary and final decrees thereon.
Thereafter he put the decree into execution sometime in 1938 and we are informed that the execution case was never finally disposed of.
It was in these execution proceedings 122 that the respondent had been appointed the receiver of the mortgaged properties.
The Mokarrari tenures were held under the Tikari Raj.
The Tikari Raj had mortgaged its proprietary interests in these and other tenures to the Darbhanga Raj by way of a usufructuary mortgage.
Chandreshwar Prasad appears to have failed to pay the rent of the mortgaged and other tenures which he held under the Tikari Raj.
Thereupon, the Darbhanga Raj as the usufructuary mortgagee of the proprietary interests in these tenures started certificate proceedings for the realisation of the rent and in or about 1940 obtained a certificate for Rs. 83,267/ in respect of arrears of rent.
The certificate put the mortgage security of the Raja of Kanika in jeopardy and the latter thereupon on September 28, 1940, paid the amount of the certificate.
In view of this payment, under section 171 of the Bihar Tenancy Act the Raja of Kanika became the mortgagee of the tenures in respect of the rent of which the certificate had been issued and also entitled to possession of the tenure villages till the amount paid by him in respect of the certificate was repaid with interest at the rate prescribed.
On November 23, 1940, the Raja of Kanika took possession of all the tenures in respect the arrears of rent of which the certificate had been issued.
As a result, the receiver appointed in the execution case was dispossessed.
The mortgagor Chandreshwar Prasad died on September 28, 1941.
The respondent as the executor under a will alleged to have been left by Chandreshwar Prasad obtained probate of it from the High Court on December 10, 1945.
He was appointed receiver in the execution case on February 17, 1949.
On September 20, 1949, the respondent as the receiver and executor as aforesaid filed the suit for the redemption of the aforesaid mortgages.
By 123 this date, the Raja of Kanika in whose favour the mortgage had been executed in 1924 had died and the suit was brought against the appellant as his successor and as the person then entitled to the mortgage 's interest.
The respondent contended that the Raja of Kanika had realised sufficient amounts from the tenures of which he came into possession under section 171 of the Bihar Tenancy Act, to pay off both the mortgages and had in fact realised more which he was liable to repay.
On March, 19, 1951, the respondent was removed from his office as receiver and thereafter on August 22, 1951, the High Court in a Letters Patent Appeal set aside the grant of the probate, holding the will to be a forgery.
On the last mentioned date, a decree for redemption was passed in the suit by the Subordinate Judge, directing the accounts to be taken and giving other usual directions.
The appellant appealed from the judgment of the learned Subordinate Judge to the High Court at Patna some time in September 1951.
While this appeal was pending in the High Court, four daughters of Chandreshwar Prasad were brought on the record as representing the mortgagor 's interest.
In the meantime, on September 25, 1950, the Bihar Land Reforms Act, 1950 had come into force.
This Act provided that the State Government might by notification declare that the estates or tenures mentioned in it had passed to and become vested in the State.
Sometime in 1952, a notification was issued by the Bihar Government under this Act vesting in the State of Bihar the tenures which had come into the possession of the Raja of Kanika under section 171 of the Bihar Tenancy Act.
As a result of this notification the right, title and interest of the mortgagor Chandreshwar Prasad and of the superior owner in tenures vested absolutely in the state free from all encumbrances and 124 the proprietor and tenure holder ceased to have any interest in them.
In August 1952, the State of Bihar took possession of these tenures from the appellant who had till then been in possession.
Thereafter, the State of Bihar was made a party to the appeal pending in the High Court.
As required by section 14 of the Bihar Land Reforms Act, the appellant filed claims in respect of his dues under his aforesaid mortgage decree and the mortgage under section 171 of the Bihar Tenancy Act before the officer appointed under the first mentioned Act.
The daughters of Chandreshwar Prasad were made parties to the claim proceedings but they did not appear to contest the claim.
On January 15, 1955, the Claims Officer decided that a sum of Rs. 5,33,077/ was due to the appellant in respect of the mortgage of 1924 a sum of Rs. 25,034/4/ in respect of the mortgage created by the operation of section 171 of the Bihar Tenancy Act.
No appeals had been taken against these decisions of the Claims officer as provided in the Land Reforms Act and they therefore became final under section 18(3) of that Act.
The appellant 's appeal to the High Court which had been pending all this time, thereafter came up for hearing and it was dismissed on December 4, 1956.
It had been contended on behalf of the appellant that in view of section 35 of the Land Reforms Act a civil court must be deemed to have no jurisdiction to decide any question of mortgage claims over tenures vested in the Government under the Act.
The High Court was unable to accept this contention as in its view what was barred by the Act was a suit by the mortgagee only and observed that the Act did not contain any provision barring a suit by the mortgagor.
In that view of the matter the High Court confirmed the decree of the learned Subordinate Judge.
This appeal against this decisions of the High Court.
We think that this appeal must be allow.
It is clear that a redemption decree can no more be 125 given effect to after the notification issued under the Land Reforms Act, since thereafter the mortgaged tenures became vested in the State of Bihar free from all encumbrances.
The tenures having vested in the State of Bihar, the mortgagee had no longer any interest in the tenures nor was he in possession of them.
He could not carry out the decree by reconveying the tenures to the mortgagor or put him into possession.
The mortgage as a security had ceased to exist, for the mortgaged properties vested in the State of Bihar under the Act free from all encumbrances.
The mortgagor in his turn also ceased to be entitled to the mortgaged properties.
He had hence no right to redeem them.
Therefore, in our view, the decree for redemption which had been previously passed, became infructuous.
But it was said that if the mortgagee had realised more out of the income of the mortgaged properties than was due to him, the mortgagor was entitled to repayment of the excess realisation and that, therefore, the redemption decree in so far as it directed the taking of accounts had not become infructuous.
We are unable to accept this contention in view of the provisions of the Land Reforms Act to some of which we shall now refer.
Under section 4, upon the notification, all the interests of proprietors and tenure holders in estates and tenures mentioned in it came to an end and vested in the State free from all encumbrances.
Clause (d) of this section provides that no suit will lie in a civil court for the recovery of moneys due from the proprietor or tenure holder on a mortgage of the estate or tenure and all such suits and proceedings pending on the date of vesting will be dropped.
Section 14 provides that every creditor whose debt is secured by a mortgage of an estate or tenure vested in the State may within the time there prescribed notify his claim in writing to a Claims 126 Officer for the purpose of determining the amount of the debt payable to him.
It would be clear from this section and section 4(d) earlier referred to, that a mortgagee could not recover the amount due to him from the mortgaged tenures which had vested in the Government except by following the procedure laid down in section 14.
Section 14 also provides that the Claim 's Officer shall be a Subordinate Judge or a Munsif depending on the amount of the claim.
Section 16 states the principles how the claim of the creditors is to be ascertained.
It is not necessary to refer in detail to the provisions of this section but it may be stated that it gives power to scale down the interest.
Section 17 provides for appeals against the decisions of the Claims Officer to a Board one of whose members shall be a Judge of the High court or a District Judge, again depending on the amount of the claim.
Sub section (3) of section 18 provides that "The decision of the Board and where no appeal has been filed to the Board, the decision of the Claims Officer shall be final.
" Sections 14 to 18 are contained in Chapter 4 of the Act.
Chapter 5 of the Act deals with the assessment of compensation payable to the divested proprietors or tenure holders.
Section 24, which is contained in this chapter, deals with the determination of the amount of compensation payable in respect of the transference of the properties to the State.
Sub section (5) of this section provides that in a case where the interest of a proprietor or tenure holder is subject to a mortgage, the compensation shall first be payable to the creditor and then to the proprietor or tenure holder, the amount of compensation payable to the creditor being the amount determined under Ch.
All compensation payable to the proprietor, tenure holder or encumbrancer is required to be set out in the compensation Assessment roll.
Section 35 of the Act states, "No suit shall be brought in any Civil Court in respect of any entry in or omission from a Compensation Assessment roll 127 or in respect of any order passed under Chapters II to VI or concerning any matter which is or has already been the subject of any application made or proceedings taken under the said Chapters.
" This section would make it impossible for the decision of the Claims Officer or the Board to be challenged in an ordinary civil proceeding.
Section 32, which is contained in Chapter 6 of the Act, provides that when the Compensation Assessment roll was become final as prescribed in the Act, the Compensation Officer appointed under the Act shall proceed to make payment in the manner specified in it.
We may also refer to section 38 of the Act which states that the Claims Officer and the Compensation Officer shall have the powers of a Civil Court.
What is the effect of these provisions on the redemption decree in so far as it directed the mortgage accounts to be taken ? It seems to us that they rendered that part of the decree also infructuous.
In our view, the mortgage accounts cannot be taken under the decree for they have already been taken under the Act and the decision of the Claims Officer on the State of the accounts is final under section 18(3).
In view of section 35, no suit can be brought concerning the decision of the Claims Officer.
It is true that the suit in the present case had been brought before the Act and would not itself be affected by section 35.
But we should suppose that the Act will now prevent the account being taken under the decree so as to challenge the decision of the Claims Officer.
If this were not so, the Officer taking the accounts under the decree has to accept the Claims Officer 's decision for that is final and the parties cannot challenge it.
That being so, the result would be that the officer taking the accounts would have to make a report finding that the same amount which the Claims Officer found to be due, was due to the mortgagee.
On this report a decree would follow and the appellant would become entitled to the amount found due 128 to him under the decree.
Now, he was already entitled to that amount under section 32(1) of the Act.
He would then have a right to be paid the same sum twice over in respect of the same mortgage right.
We cannot conceive that such an anomalous position could have been intended by the Act.
We, therefore think that since the Act, the redemption decree cannot be given effect to.
The High Court seems to have thought that the Officer taking the accounts under the redemption decree would not be bound by the decision of the Claims Officer.
This view was based on the reason that only such of the Claims Officer 's decisions would be binding as had been given in matters over which he had jurisdiction and that he had no jurisdiction to investigate into a claim by the mortgagor in respect of realisation by the mortgagee from the mortgaged properties in excess of his dues.
We think that in this the High Court was in error.
In taking the accounts the Claim 's Officer has to decide under section 16 (2)(b) how much had been paid to the mortgagee or realised by him.
It is therefore, wrong to say that the Act did not give the Claims Officer jurisdiction to go into the question of the realisation by the mortgagee.
It is true, as the High Court pointed out, that the Act does not expressly bar a suit by a mortgagor for redemption but that seems to be the practical and inevitable effect of it.
This does not affect the rights of a mortgagor.
He can establish before the Claims Officer that the mortgagee had realised out of the income of the mortgaged properties of which he was in possession more than what was legitimately due to him.
If he succeeds in doing that the Claims Officer will hold that nothing in payable to the mortgagee out of the compensation.
He may even indicate that the mortgagee has been overpaid to a certain extent.
Whether in such a case the mortgagor can file a suit to recover from the mortgagee the amount paid in excess is not a question that arises in this appeal.
129 Even if he could, that would not lead to the conclusion that in the present case the mortgage accounts can be taken under the redemption decree.
We therefore, express no opinion on that question.
We think it right to point out that the Act has taken sufficient care to see that neither the mortgagor nor the mortgagee is in any way prejudiced in the proceedings concerning the investigation of the mortgagee 's claim.
It has provided that the investigation would be by experienced judicial officers of high status and that the proceedings would be taken as if they were taken in a Civil Court.
In the result, in our view, on the mortgage security having vested in the State of Bihar free from encumbrances under the Land reforms Act the redemption decree passed by the learned Subordinate Judge became infructuous.
The decree could not stand any more; the accounts directed to be taken by it could no more be taken, nor the other directions contained in it carried out.
In our view, the High Court was in error in confirming the decree.
The decree could no longer be acted upon.
The claim proceedings under the Act finally determined the state of the mortgage accounts.
We, therefore, allow this appeal, set aside the decree of the High Court and direct that the respondent 's suit for redemption be dismissed.
There will be no order for costs.
| K the mortgagee of certain Mokarrari tenures obtained a decree on his mortgage and put it into execution.
Pending execution, C the mortgagor having failed to pay the rent of the mortgaged and some other tenures they became liable to be sold for the realisation of the arrears of rent under a certificate issued for the purpose.
K whose security was thereby jeopardised paid the arrears and became under section 171 of the Bihar Tenancy Act a mortgagee of the tenures for the amount paid and entitled to possession of them till repayment.
K thereafter took possession of the tenures.
After C had died in 1941, the respondent claiming to represent his estate as receiver and executor under his will sued the appellant who had succeeded to K 's interest, for redemption of the mortgages on the allegation that K and the appellant had realised from the rents of the tenures in their possession more than what was due.
The suit was decreed by the trial court.
The appellant appealed to the High Court at Patna.
While the appeal was pending there the Bihar Land Reforms Act, 1950, came into force and as a result of a notification issued under it all the tenures became vested in the State of Bihar free from all encumbrances and the proprietors, tenure holders and all other persons ceased to have any interest in them but became entitled to compensation for the divestment.
As required by section 14 of the Land Reforms Act, the appellant filed a claim before the officer appointed under the Act in respect of his mortgages on the tenures and such claim was adjudge at a certain sum on notice to C 's representatives which adjudication later became final under section 18.
Under the provisions of the Land Reforms Act, the amount so found due became payable out of the compensation awarded to the proprietors and tenureholders.
Thereafter the appeal before the High Court came up for hearing.
The appellant contended that in view of the provisions of section 35 of the Land Reforms Act a civil court must 120 be deemed to have no jurisdiction to decide any question concerning claims under mortgages of tenures vested in the Government under the Act.
The High Court rejected this contention observing that the Act barred a suit by a mortgagee only and not a suit by a mortgagor and confirmed the decree. ^ Held, that though the Act did not expressly bar a suit by a mortgagor for redemption, that was the practical and inevitable effect of it.
The mortgage accounts could not be taken over again by the civil court when they had been taken under the Act and the decision in the proceedings under the Act had become final.
Held, further, in the proceedings under the Act to ascertain the claim of a creditor, the debtor was entitled to show what had been paid to the creditor or what the creditor had realised from the mortgaged property.
Held, also, that after a mortgagor had been divested of the mortgaged property under the Act a redemption decree would be infructuous as the mortgagor would not then be entitled to have it reconveyed to him.
Neither would it then be in the power of the mortgagee to convey that property.
In fact the mortgagor having been divested of the property and lost his right of redemption.
Query Whether if the mortgagee had realised from the profits of the mortgage property more than what was due him on his mortgage, a suit by the mortgagor refund would lie ?
| The respondent mortgaged different portions of a plot of land to different persons.
Five suits for redemption and actual possession of the mortgaged land against the mortgagees were filed, who contested the suits on the grounds that they were tenants of the suit land prior to the mortgage and were in possession thereof as such, that during the period of mortgage their tenancy rights remained in abeyance and after redemption their tenancy rights would revive again in view of the provisions of section 25A of the Bombay Tenancy and Agricultural Lands Act, 1948, and consequently the respondent could not get actual possession.
It was further contended that the respondent could not get actual possession over the disputed land from the civil court as the proper forum was a revenue court, The Civil Judge decreed the suits for possession holding that the defendants were not tenants of the suit land prior to the mortgage, and as such there was no question of revival of tenancy rights under section 25A of Act 404 In appeals the District Judge held that in only one suit the defendant was in possession of the suit land as a tenant on the date of the mortgage and so his tenancy would revive after redemption of the mortgage, However, relying on sections 2A and 3A of the Bombay Tenancy Act 1939 it was held that the defendants in the other four suits also became deemed tenants under section 2A and consequently a protected tenant under section 3A of the said Act as it stood amended in 1946 and could not, therefore, be evicted from the suit land.
All the appeals were, therefore, allowed, the defendants permitted to remain in actual possession of the suit land and the plaintiff respondent getting only symbolic possession.
The plaintiff filed appeals and the High Court reversed the judgment of the District Judge holding that the mortgagees in possession did not become 'deemed tenants ' under the provisions of section 2A of the Act of 1939 as amended in 1946.
The respondent defendants appealed to this Court.
Allowing the appeals, ^ HELD: 1.A mortgagee in possession cannot become a deemed tenant under section 2A of the Bombay Tenancy Act of 1939 on the strength of the saving provision in section 89(2)(b) of the Bombay Tenancy and Agricultural Lands Act of 1948.
[413F] Sidram Narsappa Kamble vs Sholapur Borough Municipality Salman Raje vs Madhavsang Banesang & Ors., 4 Guj.
L.R. 817 and Ishwara Bhau Sawant vs Pandurang Vasudeo Karmarkar, , overruled.
Dinkar Bhagwant Salekar vs Babaji Mahamulkar, 59 Bom.
L. R. 101 and Jaswantrai Tricumlal vs Bai Jiwi, 59 Bom.
L. R. 168 Shankar Kalyan Kulkarni Ors.
vs Basappa Sidramappa Kolar & Ors.
[1969]2 Mys.
L.J.77 and Patel Ambalal Manilal & Ors.
vs Desai Jagdishchandra Naginlal & Ors.
17 Guj.
L.R. 578, approved.
Two conditions were necessary in order to attract the provisions of section 2A(I) of the Bombay Tenancy Act, 1939.
But in the corresponding section 4 of the Bombay Tenancy and Agricultural Lands Act of 1948 one more condition was added in addition to the old two conditions as provided in section 2A(I) of the Bombay Tenancy Act, 1939 and that additional condition excludes the mortgagee in possession from acquiring the status of a 'deemed tenant ' within the meaning of section 4.
If the cases in hand were to be governed by the Bombay Tenancy and Agricultural Lands Act 1948, the mortgagees in possession would be out of the purview of section 4 of that Act 405 as mortgagees in possession have been excluded from being 'deemed tenants '.
As the Act of 1948 has no retrospective effect the suits giving rise to the aforesaid appeals will be governed by the Act of 1939.
[408H; 409A B] 3.
In the instant case, the plaintiff respondent was entitled to file an application for declaration before the Mamlatdar that the defendants were not tenants, within one year of the coming into force of the Amendment Act of 1946 as provided in sections 2A and 3A of the 1939.
But he did not choose to do so and, therefore, he lost whatever right he had.
[413G H]
| Respondent No. 1 acquired tenancy rights in five plots in the villages of Biknaur and Samahuta situated in the area known as Lower Murli Hill in District Shahabad, Bihar.
In 1949 he filed a plaint in the Court of the Subordinate Judge Sasaram, against the State of Bihar and others, claiming inter alia that as a tenant he had a customary right to quarry limestone for trade purposes from the Lower Murli Hill.
The claim was based mainly on certain entries in the Custom sheets prepared at the time of the Cadastral Survey in 1913 under section 102 of the Bihar Tenancy Act, 1885.
The trial court rejected the claim but the High Court held the custom to be established by the evidence of the Customs sheets.
The defendants appealed.
Held The High Court was in error in holding that the plain tiff had established the custom pleaded by him or that it was reasonable.
(i) There was nothing to show that the practices and privileges recorded in the Custom Sheets were exercised as a matter of right.
The record has presumptive value.
But the revenue authorities were concerned to ascertain the existing state of affairs and not to determine whether the practices and privileges were ancient, certain, reasonable and continuous.
As evidence of local custom, the custom sheets had therefore not much value.
On the other hand there were indications that the exercise of the privileges recorded therein was permissive.
Even on the most liberal interpretation they did not provide evidence of the exercise of the privilege of commercial exploitation of limestone from the area in question.
[317D; 319G] (ii) Even granting that the Custom sheets recorded a local custom that the tenants in the villages of Baknaur and Samahuta excavated stones from the hills near the villages for purposes of trade, a claim of right founded on that custom must be held unreasonable and incapable of enforcement by the sanction of a court 's verdict, [320B] A claim in the nature of a profit a prendre operating in favour of an indeterminate class of persons and arising out of a local custom may be held enforceable only if it satisfies the tests of a valid custom.
A custom is a usage by virtue of which a class of persons belonging to a defined section in a locality are entitled to exercise specific rights against certain other persons or property in the same locality.
To the extent to which it is inconsistent with the general law undoubtedly the custom prevails.
But to be valid a custom must be ancient, certain and reasonable, and being in derogation of the general rules of law must be construed strictly.
A right in the nature of a profit a prendre in the exercise of which the residents of a locality are entitled to excavate stone for trade purposes would ex facie 313 314 be unreasonable, because the exercise of such a right ordinarily tends to the complete destruction of the subject matter of the profit.
The custom, if exercised in its amplitude as claimed, may also lead to breaches of the peace, for it would be open to all tenants to work any quarry simultaneously for trade purposes.
[321B D; 324D] Lord Rivers vs Adams, L.R.3 exhibit Div. 361, Harris & Anr.
vs Earl of Chesterfield and Anr.
, , Alfred F. Beckett Ltd. vs Lyons , referred to Lutchhmeeput Singh vs Sadaulla Nushyo & Ors., I.L.R. 9 Cal.
698 and Arjun Kaibarta vs Manoranjan De Bhoumick, I.L.R. , approved.
Henry Goodman vs The Mayor and Free Burgesses of the Borough of Saltash.
7 A.C. 633 and Mercer vs Denne, , 557 distinguished.
| C was the lessee of a plot which consisted of agricultural land as well as a homestead.
The homestead was later leased to the appellants.
The respondents purchased the rights of C and brought a suit against the appellants for possession of the homestead.
The contention of the appellants in defence was that the suit had not been brought according to the provisions of the Bihar Tenancy Act and hence was not maintainable.
The contention of the respondents was that the lease of the homestead was not an agricultural lease within the meaning of section 117 of the Transfer of Property Act and was invalid under the provisions of the latter Act.
The trial court decreed the suit.
The first appellate court however dismissed it.
In doing so it relied on earlier rulings of the Patna and Calcutta High Courts which had held the field for over 55 years, to the effect that if the main lease is a lease for agricultural purposes all sub leases of portions of that leasehold should also be considered as agricultural leases despite the fact that a particular lease may he that of a homestead only.
The High Court in further appeal departed from the view taken in the earlier cases and decided against the appellants, who came to this Court.
The main question for consideration was whether the High Court was justified in departing from the settled view.
HELD: The rule laid down in the earlier decisions was never departed from in the past.
The Tenancy Act was amended a number of times but yet the legislature did not think it necessary to alter or modify the said rule.
In law finality is of the utmost importance.
Unless so required in public interest questions of law firmly 'settled by a long course of decisions should not ordinarily be disturbed and it is all the more so in the ease of an interpretation affecting property rights.
[471 C E] The rule that where the terms of a statute or ordinance are clear then even a long and uniform course of judicial interpretation of it may be overruled, if it is ' contrary to the clear meaning of the enactment is inapplicable to decisions on the basis of which titles and transactions must have been rounded [477 D] Case law referred to.
| The plaintiff appellants filed a suit against defendants for a declaration of their title to the land in question admeasuring 142 bighas.
The trial Court dismissed the suit in respect of land admeasuring 28 acres and decreed the suit in respect of the remaining land.
The plaintiffs ' suit was held to be barred in respect of that land on account of the doctrine of waiver and acquiescence.
The plaintiffs were also held entitled to recover mesne profits.
On an appeal filed by some of the respondents, the High Court accepted the appeal and dismissed the suit in its entirety.
The High Court held that it was not shown that the disputed land was the same as had been purchased by Mina Kuer in auction sale.
The High Court also held that the plaintiffs ' suit for possession was barred by limitation.
The appellants contended.
(1) The respondent did not dispute that the suit land was the same which was purchased by Mina Kuer as per sale certificate dated 26 2 1935.
(2) In any case the matter may be remanded for determining the above issdue.
Dismissing the appeal, ^ HELD: (1) The appellants have failed to establish that the land in dispute is the same as has been purchased in auction by Mina Kuer as per sale certificate dated 26 2 1935.
The contention of the appellant that the respondents did not dispute that the suit land is the same as the one purchased by Mina Kuer is not correct.
The respondents did deny this fact in their written statement.
The land which is the subject matter of the present litigation is situate in the State of Bihar on the right bank of the Ganges.
Although the land is subject to river action, the onus to prove that the land in dispute in Bihar State represents the land in U.P. which got submerged as a result of river action was upon the appellants.
The appellants have failed to discharge this onus.
[557F, H, 558A, E] (2) The prayer of the appellants for remand of the case is rejected because there was no valid basis for the assumption of the appellants that the appellants did not dispute the identity of the land.
The suit was filed as long ago as in January, 1950.
During the pendency of this litigation many of the original plaintiffs and defendants have died and are now represented by their legal representatives.
It is time that we draw the final curtain and put an end to this long course of litigation between the parties.
If the passage of time and laws of nature bring to an end the lives of men and women it would perhaps be the demand of reason and dictate of prudence not to keep alive after so many years the strife and conflict started by the dead.
To do so would in effect be defying the laws of nature and offering a futile resistance to the ravage of time.
If human life has short span, it would be irrational to entertain a taller claim for disputes and conflicts which are a manifestation of human frailty. 'the Courts should be loth to entertain a plea in a case like the present which would have the effect of condemning succeeding generation of families to spend major part of their lives in protracted litigation.
[558G H, 559A D] Sant Narain Mathur vs Rama Rrishna Mission ; reiterated.
| Certain properties belonging to the appellants were attached by the City Civil Court in Bombay in execution of a decree.
The appellant engaged the respondent firm of Solicitors who by Vakalat executed in their favour by the appellants agreed to act, appear and plead for them in the City Civil Court.
The respondents took out three Chamber Summonses on behalf of the appellants for raising the at tachment.
Thereafter, they submitted three bills.
Since the bills remained unpaid, they obtained an order from the Prothonotary of the High Court directing the TaXing Master to tax the bills.
The appellants filed an appeal against the order of the Prothonotary which was dismissed by the Chamber Judge with liberty to the Taxing Master to decide whether the respondents were entitled to be remunerated on the original side scale of fees as between an attorney and client.
The Taxing Master rejected the appellants ' contention and taxed the respondents ' bills according to the scale of fees applicable on the original side by the High Court.
A Chamber Summons filed by the appellants before a Single Judge was dismissed.
An appeal before the Division Bench by the appellants also failed.
In an appeal by Special Leave the appellants contended: 1.
The Solicitors ' bill for cost and remuneration in respect of the work done by them in the City Civil Court cannot be taxed by the Taxing Master of the Original Side, High Court.
The bill in any event cannot be taxed according to the scale of fees applicable on the original side as between an attorney and client, particularly in view of the provisions contained in the Legal Practitioners Fees Act, 1926, Bombay City Civil Courts Act, 1948 and the Bombay City Civil Court Rules, 1948 as well and the rules framed by the Bombay High Court under section 2 24 ( 1 ) (d) under the Government of India Act, 19 3 5.
Dismissing the appeal, HELD: 1.
Rule 569 of the Rules of the High Court of Bombay (Original side) 1957, authorises the Taxing Master to tax the bills of cost on every side of the High Court except the Appellate side of the High Court and in the Insolvency Court.
All other bills of cost of attorneys shall also be taxed by him when he is directed to do so by a judge 's order.
There is no justification for the appellants ' con tention that "other bills of cost" must be construed to mean other bills of cost relating to matters on the original side of the High Court.
Rule 573 as amended prescribed a limitation of 5 years for lodging the bill of cost for taxation after the disposal of the suit or the proceedings in the High Court.
In respect of matters which are not the subject of any proceedings in the High Court the attorney has to lodge his bill of cost for taxation within 5 years from the completion of the matter.
The necessity for making this provision arose because rule 568 empowers the Taxing Master to tax the attorneys bill of cost in all matters except those on the Appellate side of the High Court.
The Bombay High Court, over a long Course of years has consist ently taken the view that the Taxing Master has Jurisdiction to tax attorneys bills of cost in relation 8 436SC1/77 352 to the professional services rendered by them whichever be the court in relation to which the services are rendered except the Appellate side of the High Court, in regard to which an exception has been expressly carved out by the rule.
[354 G H, 355 A G] Nowroji Fudumli Sirdar vs Kanga & Savani, 28 Born.
L.R. 384, Chitnis & Kanga vs Wamanrao section Mantri, and M/s. Pereta Fazalbhoy & Co. vs The Rajputana Cold Stor age & Refrigeration Ltd., approved.
The preamble and the statement of objects and reasons of the Legal Practitioners Fees Act 1926 shows that the Act was passed in order to give effect to the recommendations of the Indian Bar Committee that in any case in which a Legal Practitioner has acted or agreed to act he should be liable to be sued for negligence and be entitled to sue for his fees.
The Indian Bar Committee recommended by para 42 of its report that the distinction relating to suing for negligence and being sued for fees was not of great impor tance since suits by or against Legal Practitioners in re spect of fees and the conduct of cases were extremely rare.
But it was necessary to provide that in any case in which a Legal Practitioner had acted or agreed to act he should be liable to be sued for negligence and be entitled to sue for his fees.
The definition of Legal Practitioner in the 1926 Act is the same as in the (which includes an attorney).
Section 3 of the Act of 1926 provides that any Legal Practitioner who acts or agrees to act for any person may by private agreement settle with such person the terms of his engagement and fees to be paid for his professional services.
Section 4 of the Act pro vides that any such Legal Practitioner shall be entitled to institute and maintain legal proceedings for the recovery of any fee due to him under the agreement or if no such fee has been settled a fee computed in accordance with the law for the time being in force in regard to the computation of the cost to be awarded to a party in respect of the fee of his Legal Practitioner.
It may be that if an attorney institutes a suit he may be governed by section 4 but it really confers an additional right on the Legal Practitioner to institute a suit and cannot be construed as detracting from any other right which he may possess in regard to the taxation and recovery of his fees.
[358 G H, 359 A B, F H] 3.
The High Court was in error in observing that alterna tively there was an apparent conflict between section 4 of the 1926 Act and the original side rules relating to the taxation of an attorney 's bills of cost.
Bearing in mind the true object and purpose for which the 1926 Act was passed and the drive of section 4, there is no conflict, apparent or real between the 1926 Act and the High Court Rules of 1957.
[360 D E] 4.
The rules framed by the High Court under section 224(1)(d) of the 1935 Act, are rules for fixing and regulat ing the fees payable as costs by any ' party in respect of the fees of his adversary 's attorney.
These rules according to their very terms have nothing to do with the taxation of any attorney 's bill of cost as between himself and .his own client.
[360 F G] 5.
The combined effect of section 4 of the 1926 Act and the Rules framed by the High Court under section 224(1)(d) is that if an attorney who has appeared or acted for his client in the City Civil Court sues his client for fees he cannot recover in the suit anything more than what is per missible under the Rules framed by the High Court under section 224(1)(d).
However, that do not affect the right of an attorney to have his bill taxed by the Taxing Master on the original side scale.
[361 C D] 6.
Section 18(2) of the Bombay City Civil Courts Act.
1948 provides that in respect of suits transferred from the High Court to the City Civil Court costs incurred in the High Court till the date of the transfer of the suit are to be assessed by the city Civil Court in such manner as the State Government may after consultation with the High Court determine by rules.
Rule 2 framed under section/8(2) pro vides that even as regards the fees of attorneys the Regis trar of the City Civil Court is given the Vower to tax and allow all such costs and out of pocket expenses as shall have been properly incurred by an attorney upto the date of transfer of the suit.
The rule further provides that after the date 353 of the transfer such fees shall be taxed and allowed as in the opinion of the Registrar are commensurate with the work done by the advocate having regard to the scale of fees sanctioned for the advocates in the City Civil Courts Rules.
The said rule, applies only to transferred suits.
It has no application to the suits and proceedings instituted in the City Civil Court after 148.
[361 D H] M/s. Sandersons & Morgans vs Mohanlal Lalluchand Shah, A,I.R. distinguished.
The Taxing Master, however, before allowing the cost claimed by the attorney from his client must have regard to the fact that the attorney has appeared in a subordi nate court and to the scale of fees generally prevalent in that Court.
[363 G H] The Court observed that power similar to the power of taxation of a bill costs between the advocate and client which is found in Supreme Court Rules, 1966, should be conferred on appropriate officers of the Court subordinate to the High Court.
Such a power may enable the presiding Judge to control the professional ethics of the advocates appearing before them more effectively than is possible at present.
[362 A G]
| The respondent sued the State of Bihar for a declaration that the Bihar Land Reforms Act, 1950, was ultra vires, void and unconstitutional and for a permanent injunction restraining the State and its officers or agents from issuing any notification thereunder in respect of her estate or taking possession thereof and on a petition filed along with the plaint obtained an order of temporary injunction against the State in terms of her prayer, pending the hearing of the suit.
More than a year thereafter, the State made an application under 0. 39, r. 4 of the Code for a discharge of the order of temporary injunction on the ground that the impugned Act had in another case been declarer valid by the Supreme Court.
Before that application could, however, be heard, the State of Bihar, on May 19, 1952 issued a notification under section 3(1) of the Act, authenticated by the Additional Secretary to the Government, declaring that, amongst others, the respondent 's estate had vested in the State of Bihar under the provisions of the Act.
Thereupon the respondent moved the trial Court for taking action against the State under 0. 39, r. 2(3) of the Code.
The contention on behalf of the State was that in view of article 31 B of the Constitution the issue of the notification was lawful and could not constitute contempt of Court.
The Subordinate judge held that this was no defence to the application by the respondent and directed attachment of the appellant 's property to the value of Rs. 5,000 and the High Court on appeal affirmed that decision.
Held, that the courts below took the correct view of the matter and that the appeal must be dismissed.
The procedure laid down by 0. 39, r. 2(3) of the Code of Civil Procedure is remedial and essentially one for the enforcement or execution of an order of temporary injunction passed under 0. 39, r. 2(1) and is available against the State although the provision for detention may not apply to it.
It is wrong to say that it is either contrary to article 300 of the Constitution or hit by the rule that no action lies against the State in tort or for a wrong doing entailing punishment or compensation.
District Board of Bhagalpur vs Province of Bihar, A.I.R. 1954 729 Pat.
529 and Tarafatullah vs section N. Maitra, A.I.R. 1952 Cal.
gig, distinguished.
There is also no basis for the contention that the State is not expressly or by necessary implication mentioned in 0. 39, r. 2(3).
The word 'person ' used by it, properly construed, includes the defendant against whom the order of injunction is primarily issued as also the defendant 's agents, servants and workmen.
Since the court 's power to issue an order of temporary injunction against the State under 0. 39, r. 2(1) cannot be in doubt, disobedience of such an order when issued necessarily attracts 0. 39, r. 2(3) of the Code.
Director of Rationing & Distribution vs Corporation of Calcutta, ; , held inapplicable.
Held, further, that when once an order is passed which the Court has jurisdiction to pass, it is the duty of the State no less than any private party to obey it so long as it stands, and the conduct of the State Government in the instant case in issuing the notification at a time when its application for vacating the injunction was still pending and the attitude taken up by it after the application under 0. 39, r. 2(3) was made and persisted in till the end must be disapproved.
| The appellant, an officer of Bihar State, filed a writ petition before the High Court, challenging the order of compulsory retirement passed by the respondent State, under Rule 74(b)(ii) of Bihar Service Code, 1979, contending that throughout his service of 30 years he had an exemplary service career and his integrity remained unquestionable and that neither any adverse remarks were communicated to him nor any departmental proceedings were initiated against him, nor any explanation called for from him.
The High Court dismissed the writ petition by a laconic order.
In the appeal, by special leave, the appellant contended that though the order was couched in innocuous terms and made in compliance with the provisions of Rule 74(b)(ii) of Bihar Service Code on appellant 's reaching the age of more than 50 years, and prima facie not appearing to cast any stigma, it was not made in public interest, but made by way of punishment for oblique purposes, in consideration of extraneous matter and purporting to removal from service on certain serious allegations of misconduct, casting a stigma, and hence the order was illegal, bad and in violation of audi alterem partem rule and Article 311(2) of the Constitu tion and was liable to be quashed.
On behalf of the respondent State it was contended that the order had been made in public interest under Rule 74(b)(ii) and there was nothing to show from the order itself that it had been made by way of punishment, casting a stigma, the language of the order was innocuous, and the appellant could not delve into the secretariat files, to find out the basis of the order.
680 Allowing the appeal, this Court, HELD: 1.1 Even though the order of compulsory retirement is couched in innocuous language without making imputations against the government servant, who is directed to be com pulsorily retired from service, the Court, if challenged, in appropriate cases can lift the veil to find out whether the order is based on any misconduct of the government servant concerned or the order has been made bona fide and not with any oblique or extraneous purposes.
Mere form of the order in such cases cannot deter the Court from delving into the basis of the order if the order in question is challenged by the concerned government servant.
[693F G] Shamsher Singh & Anr.
vs State of Punjab, and Anoop Jaiswal vs Government of India and Am '.
, ; , relied on.
Shyam Lalv.
The State of U. P. & Anr., ; ; Baldev Raj Chadha vs Union of India and Ors., ; and Union of India vs Col. J.N. Sinha and Anr., [1971] 1 SCR 791, referred to.
I.N. Saxsena vs The State of Madhya Pradesh, ; , distinguished.
1.2 The object of Rule 74(b)(ii) of the Bihar Service Code is to get rid of the government servant who has become dead wood.
This order is made only to do away with service of only those employees who have lost their utility, become useless and whose further continuance in service is consid ered not to be in public interest.
[655D] 1.3 In the instant case, the appellant had an unblem ished career, and undoubtedly by dint of merit and flawless service career, had been promoted to the post of Joint Director and ultimately to the post of General Manager.
The counter affidavit filed on behalf of the respondent State has categorically stated that while passing the order of compulsory retirement the officers concerned were guided by the report dated September 19, 1987 which stated that the appellant was responsible for grave and serious financial irregularities resulting in financial loss to the State Government, without giving any opportunity of hearing and without intimating allegations to the appellant before forming the opinion.
The memorandum in question has clearly stated that the order of compulsory retirement was made as the appellant 's misconduct tarnished the image of the Gov ernment in the public.
This categorical 681 statement clearly proves that the basis of making the order is the report dated September 19, 1987.
Therefore, the order of compulsory retirement cannot be defended on the mere plea that it has been made in accordance with the provisions of Rule 74(b)(ii) which prima facie does not make any imputa tion or does not cast any stigma on the career of the appel lant.
[657E, 689F H, 690A, 693H, 694A] In view of the clear and specific averments made by the respondent State that the order has been made under Rule 74(b)(ii) as the appellant was found to have committed grave financial irregularities leading to financial loss to the State, the order cannot but be said to have been made by way of punishment.
Such an order is in contravention of Article 311 of the Constitution and arbitrary as it violates princi ples of natural justice.
It has not been made bona fide, but for collateral purposes and for extraneous consideration by way of punishment and is, therefore, illegal, unwarranted and liable to be quashed.
[694A B, C] Accordingly the order of compulsory retirement is set aside and the respondents are directed to reinstate the appellant with full back wages.
[694D]
|
s Nos. 114 and 115 of 1961.
Petition under article 32 of the Constitution of India for enforcement of Fundamental Rights.
832 M. K. Nambiar, M. K. Govind Bhatt, section N. Andley, and Rameshwar Nath, for the petitioners.
M. C. Setalvad, Attorney General of India, K. K. Mathew, Advocate General for the State of Kerala, Sardar Bahadur, George Pudissary and V. A. Seyid Muhammad, for the respondents.
December 5.
The Judgment of Gajendra gadkar, Wanchoo and Das Gupta, JJ., was deliverd by Wanchoo, J. Sarkar, J. and Ayyangar, J. delivered separate Judgment.
WANCHOO, J. These two writ petitions which were heard along with Purushothaman Nambudiri vs The State of Kerala (1) raise the constitutionality of the Kerala Agrarina Relations Act, No. IV of 1961 hereinafter referred to as the Act.
The petitioners come from that part of the State of Kerala which was formerly in the South Canara district of the State of Madras and came to the State of kerala by the State Reorganisation Act of 1956.
Their lands are situate in Hosdrug and kasargod Taluks which have now been made part of the Cannanore District in the State of Kerala.
They hold large areas of lands, the major part of which is held by them as ryotwari parradars, of Madras under the Board 's Standing Orders of that State.
In these lands they have areca and pepper plantations besides rubber plantation.
They also grow other crops on some of the lands.
The Act is being attacked on the ground that it contravenes articles 14, 19 and 31 of the Constitution.
Besides this, it is also contended on behalf of the petitioners that the Bill which became the Act lapsed under the provisions of the Constitution, and therefore the assent given to the Bill by the President was of no effect and did not result in the Bill becoming an Act.
We do not think it necessary to set out the details of the attack on this last score in the present petitions as the matter 833 has been considered in full in the judgment in the connected Writ Petition No. 105 of 1961.
The petitioners further submit that their lands which they hold as ryotwari pattadars are not estates within the meaning of article 31A (2)(a) of the Constitution and therefore the Act so far as it affects them is not protected under article 31A, and it is open to them to assail it as violative of the rights conferred on them by articles 14, 19 and 31 of the Constitution.
They have attacked the Act on a number of grounds as ultra vires the Constitution in view of the provisions of articles 14, 19 and 31.
We do not however think it necessary to detail all the attacks on the constitutionality of the Act for present purposes.
It is enough to say that the main attack on the constitutionality of the Act has been made on the following six grounds: (1) The Bill which became the Act had lapsed before it was assented to by the President and therefore the assent of the President to a lapsed bill was of no avail to turn it into law.
(2) The Act is a piece of colourable legislation as it has made certain deductions from the compensation payable to landholders under Chap.
II and to others who held excess land under Chap.
III and this amounts to acquisition of money by the State which it is not competent to do under the power conferred on it in Lists II and III of the Seventh Schedule to the Constitution.
(3) The properties of the petitioners who are ryotwari pattadars are not estates within the meaning of article 31A of the Constitution and therefore the Act is not protected under that Article so far as it applies to lands of ryotwari pattadars like the petitioners.
(4) The Act exempts plantation of tea, coffee, rubber and cardamom from certain 834 provisions thereof, but no such exemption has been granted to plantations of areca and pepper, and this is clearly discriminatory and is violative of article 14.
(5) The manner in which ceiling is fixed under the Act results in discrimination and is therefore violative of article 14.
(6) The compensation which is payable under Chapters II and III of the Act has been reduced by progressive cuts as the amount of compensation increase and this amounts to discrimination between persons similarly situate and is therefore violative of article 14.
The petitions have been opposed on behalf of the State and its contention is, firstly, that the Bill did not lapse and the President 's assent was rightly given to it rightly became law; secondly, that the petitioners ' estates lands are estates within the meaning of article 31A (2)(a) and the Act is therefore protected under that Article; thirdly, that the Act is not a piece of colourable legislation and the State Legislature was competent to enact the Act under item 18 of List II and item 42 of List III of the Seventh Schedule and there is no acquisition of money by the state under the Act and reference is made to section 80 of the Act in this connection; and lastly, that the discrimination alleged with respect to plantations, the fixation of ceiling and the deductions from compensation payable under Chapters II and III is really no discrimination at all and the provisions in that behalf are based on an intelligible differentia which is in accordance with the object and purpose of the Act.
The question whether the Bill which finally received the assent of the President on January 21, 1961, had lapsed because the legislative assembly which originally passed it was dissolved and a new legislative assembly which came into being after 835 the general elections reconsidered and re passed it under article 201 of the Constitution has been considered by us in Writ Petition No. 105 of 1961, judgment in which has just been delivered and it has been held there that the bill did not lapse and therefore it validly became law when the President assented to it.
The attack on the Act therefore on this grounds must fail.
We now come to the attack made on the Act on the ground that it is a piece of colourable legislation beyond the legislative competence of the State legislature.
What is colourable legislation is now well settled: see K. C. Gajapati Narayan Deo vs The State of Orissa (1), where it was held "that the question whether a law was a colourable legislation and as such void did not depend on the motive or bona fides of the legislature in passing the law but upon the competency of the legislature to pass that particular law, and what the courts have to determine in such cases is whether though the legislature has purported to act within the limits of its powers, it has in substance and reality transgressed those powers, the transgession being veiled by what appears, on proper examination, to be a mere pretence or disguise.
The whole doctrine of colourable legislating is based upon the maxim that you cannot do indirectly what you cannot do directly.
The Act has been passed under the legislative powers vested in the State legislature under item 18 of List II and item 42 of List III of the Seventh Schedule.
Item 18 of List II deals inter alia with "land, that is to say, rights in or over land, land tenures including the relation of landlord and tenant, and the collection of rents" Item 42 of list III deals with "acquisition and requisitioning of property.
" The contention on behalf of the petitioners is that in the guise of legislating under these two entries the State legislature by the employment of certain 836 devices has taken away money, which should have gone to land owners or to those from whom excess lands were being acquired.
The attack is based on the facts that in section 52 of the Act compensation payable to a land owner is reduced after the purchase price to be paid by the tenant to whom the land is to be assigned has been ascertained, and that in section 64 of the Act the compensation payable to a person from whome excess land is taken in reduced by certain percentage after the market value of the land has been determined.
It is urged that by these devices the State is acquiring money which should properly have gone to the land owner to whome compensation is payable under section 52 and to the person who surrenders excess land to whome compensation is payable under section 64.
There is no doubt that certain deductions are made from the purchase price payable by the tenant under section 45 and from the market value before compensation is arrived at for payment to the land owner under section 52 and to the person surrendering excess land under section 64.
But if one looks at the purpose and object of the Act it will be clear that the main provisions of the Act are clearly within the legislative competence of the State legislature under item 18 of List II and item 42 of List III.
The scheme of the Act so far as Chap.
II dealing with extinction of the land owner 's right is concerned is that the land owner 's right vested in the State under sections 41 and 42 on a day to be notified by the Government in that behalf.
Thereafter, section 43 provides that cultivating tenants of the lands which have vested in the State shall have a right to assignment of the right, title and interest so vested in the State on payment of a certain price which is calculated under section 45 and is called the purchase price.
After the purchase price is determined, the compensation to be paid to the land owner is provided by section 52 and there is reduction in the purchase price for the purpose of given compensation.
It is however obvious that the object of Chap.
II is to vest proprietorship in the land in the 837 cultivating tenants and for that purpose Chap.
II provides for carrying out the object in two stages.
In the first stage, the property of the landowner is vested in the State.
Thereafter the tenant is given the right to acquire that property from the State.
What price the tenant is to pay for the land is worked out under section 45, and what compensation the State is to pay to the land owner is worked out under section 52, which however reduces the purchase price arrived at under section 45 for the purpose of giving compensation.
It is however clear that tenants are not bound to apply to acquire the land which they hold as tenants and where they do not do so, section 44 (3) provides that they become the tenants of Government and shall be liable to pay to the Government the rent payable in respect of the land from the date on which the right, title and interest over the land vested in the Government.
It cannot therefore be said that the scheme which provides for two stages, namely, first acquisition by Government and secondly assignment to tenants is a camoflage devised for the purpose of taking away the money which would otherwise have been payable to the land owner in case the interest of the landowner was directly transferred to the cultivating tenants.
It is also clear that there is bound to be a time lag between the acquisition under sections 41 and 42 and the assignment to tenants under section 43 and the subsequent sections and in the meantime the Government would be the owner of the rights acquired.
Clearly, therefore Chap.
II of the Act envisages first the acquirement of the land owner 's interest by the State for which compensation is payable under s.52.
Thereafter the State will assign to such cultivating tenants as may apply the rights acquired by the State and there is likely to be an interval between the two transactions.
Besides some cultivating tenants may not apply at all and that part of the property will remain with the State Government.
In these circumstances it cannot be said that the scheme evolved in Chap.
II is a device for 838 taking away any part of the money to the landowner from the tenant to whom his interest may eventually be assigned.
Besides the adequacy of compensation provided under section 52 for acquisition by the State of the interest of the land owner cannot be challenge on the ground that the compensation provided by the law is not adequate: See article 31(2).
It is only because the compensation provided under section 52 is a percentage of the purchase price as calculated under section 45 that it appears as if the State is taking away a part of the compensation due to the landowner.
Section 52 is however only a method for determining compensation and the whole compensation due to the land owner is to be found in section 52 and it cannot therefore be said that any part of the compensation is being taken away by the State.
Similarly the scheme of Chap.
III which provides a ceiling is that any land in excess of the ceiling shall vest in the Government under section 62.
Thereafter the land so vested in Government can be assigned under section 70 to persons who do not possess any land or possess land less than 5 acres of double crop nilam or its equivalent.
It is true that Government may assign the lands to those who apply under section 70 but it is not bound to do so and here again there will be a time lag between the vesting of the excess land in the Government under s.62 and its assignment to those who are eligible under section 70.
The charge that in this Chapter there is a device for taking away the compensation due to the land owner is based on the fact that section 72 the person to whom the land is assigned under section 70 has to pay 55 per cent.
Of the market value of the land while the person from whom the excess land is taken is not always paid 55 per cent.
Of the market value, inasmuch as the percentage goes down to 25 per cent.
Of the market value in certain circumstances.
But here again the compensation is provided entirely under section 64 and it is that section which sets out the manner in which the compensation is to be 839 provided.
The adequacy of that compensation cannot be questioned in view of article 31(2).
The fact that under sections 70 and 72 when the Government in its turn assigns land to those who are eligible for such assignment, a different percentage of market value is fixed would not make these provisions a device to take away the money due to those who surrender excess land.
As we have already said the compensation to those who surrender excess land is all provided by section 64 and even if there is a difference between the price payable under section 72 by the assignee and the compensation payable to the landowner under section 64 that would not amount to taking away the money of the landowner by a device particularly when the assignment is bound to take place sometime after the property has been acquired by Government.
It is also clear from the provisions contained in Chapters II and III of the Act that the main purpose of the Act is to do away with intermediaries and to fix a ceiling and give the excess land, if any, to the landless or those who hold land much below the ceiling.
The method employed to carry out this object is first to acquire the land for the State and thereafter to assign it to the cultivating tenants or to the landless or to those with small amounts of land.
The main provisions of the Act therefore are clearly within the legislative competence of the State legislature under item 18 of List II and item 42 of List III and this is not being disputed on behalf of the petitioners.
But what they contend is that in the process of doing this, the Government has by adopting certain devices taken away the money which was due to the land owner or to the person from whom the excess land is acquired.
This argument is however fallacious because the compensation due to the land owner or the person from whom excess land is acquired is not what is provided by section 45 and s 72 but what is provided in section 52 and s 64.
The adequacy of that compensation cannot be 840 challenged in view of article 31(2), and there is therefore no justification for saying that the money due to the landowner or the person from whom the excess land is acquired is being taken away by the State.
That argument would only be possible if the compensation was the whole amount arrived at under section 45 or under section 72 and from that the Government deducted money due to the landowner.
That however is not so and the compensation to which the landowner or the person from whom the excess land is acquired is to be found only in sections 52 and 64 and there is thus no question of taking away any money due to the landowner.
Further, whatever unfairness might appear because of the difference between sections 45 and 52 on the one hand and sections 64 and 72 on the other and the manner in which the compensation is shown as a percentage of the purchase price or the market value is removed by the provision in section 80 of the Act.
That section provides for the constitution of an agriculturist rehabilitation fund in which the surplus, if any, of the purchase price after the disbursement therefrom of the compensation is to be put along with other moneys.
This surplus does not to go to the revenues of the State and the State cannot be said to have taken away for its own purpose any part of the compensation.
Further section 80 provides that the fund shall be utilised for rendering help by way of loan, grant or otherwise to persons affected by the Act who are eligible for the same in accordance with the rules framed by the Government.
The fund therefore created under section 80 of the surplus, if any, is to be utilised for rendering help to persons affected by the Act.
That in our opinion clearly means either the landowners whose rights are affected by Chap.
II or the persons from whom excess land is taken under Chap.
The surplus money therefore is to be utilised for the benefit of the persons affected by the Act as indicated above.
This section also 841 provides that the Government will frame rules with respect to the persons affected and their eligibility for help from the fund.
Our attention in this connection has been drawn to the eligibility rules framed under this section for the administration of the fund, and in particular to r. 161 which provides for eligibility for grants and loan.
That rule in our opinion goes beyond the scope of section 80 in so far as it provides for making of grants or loans to persons not affected by the Act.
We may in this connection refer to r. 161 (a)(i) and (ii) and r. 161 (b) (i) and (ii) which are so framed as to take within their scope even persons not affected by the Act, though r. 161 (a)(iii) and r. 161(b)(iii) are with respect to persons who may be affected by the Act.
Rule 161(a)(i) and (ii) and r. 161(b)(i) and (ii) in so far as they take in persons not affected by the Act are ultra vires of the provisions of section 80 and must be struck down on that ground and may have to be replaced by more suitable rules.
But the rules which have been actually framed will not affect the provisions of section 80 which clearly show that the fund is for the benefit of those who are affected by the Act, namely, those who are affected by Chapters II and III of the Act, i.e., those landowners whose rights have been acquired under sections 41 and 42 and those persons from whom excess land is taken away under section 62.
Section 80 thus clearly shows that any surplus that may arise is not taken away by the State for its own revenue purposes but is meant to be used for the benefit of those affected by the Act and therefore even the apparent result of the difference between sections 45 and 62 and ss 64 and 72 is taken away by the constitution of the fund under section 80, and it cannot be said at all under the circumstances that any device has been employed in the Act to take away the moneys of the landowners or the persons from whom excess land is taken away for the purpose of adding to the revenue of the State.
We are therefore of opinion that 842 the Act" cannot be struck down as a colourable piece of legislation which is beyond the competence of the State Legislature.
Article 31A was inserted in the Constitution by the Constitution (First Amendment) Act, 1951, with retrospective effect so that it must be deemed to have been in the Constitution from the very beginning, i.e., January 26, 1950.
The article was further amended by the Constitution (Fourth Amendment) Act, 1955 which was also made retrospective and therefore article 31A as it stands today must be deemed to have been part of the Constitution right from the start, i.e., January 26, 1950.
We are not concerned in the present petitions with cl.
(1) of article 31A, which was extensively amended in 1955 but only with cl.
This clause originally read as follows: "In this article, (a) the expression 'estate ' shall, in relation to any local area, have the same meaning as that expression or its local equivalent has in the existing law relating to land tenures in force in that area, and shall also include any jagir, inam or muafi or other similar grant.
(b) the expression 'right ' in relation to an estate, shall include any rights vesting in a proprietor, sub proprietor, under proprietor, tenure holder or other intermediary and any rights or privileges in respect of land revenue.
" In 1955, in sub cl.
(a) the words "and in the States of Madras and Travancore Cochin any janmam rights " were added at the end while in sub cl.
(b) the words " raiyat under raiyat " were added after the word " tenure holder " and before the words "or other intermediary".
843 It will be seen therefore that so far as the meaning of the word "estate" is concerned, there was no change in sub cl.
(a) and the only change was with respect to the inclusive part of the definition of the word "estate".
The word "estate has all along been defined to have the same meaning in relation to any local area as that expression or its local equivalent has in the existing law relating to landtenures in force in that area.
It is also remarkable that the word "intermediary" does not occur in sub cl.
(a) though it occurs in sub cl.
The definition in sub cl.
(a) is self contained and there is no scope for importing any idea of intermediary in the definition from sub cl.
The reason why the words "other intermediary" are used in sub cl.
(b) which defines rights in relation to an estate, is that sub clause mentions a number of intermediaries as such, like sub proprietors, under proprietors, tenure holders but does not give a complete enumeration of all intermediaries that may be existing in an estates all over India and therefore uses the words "other intermediary" to bring in all kinds of intermediaries existing in an estate.
As an example we may mention that formerly in Uttar Pradesh there were fixed rate tenants in the permanently settled districts who were also intermediaries and it is such persons or their likes who were brought in within the sweep of the definition of rights in relation to an estate by the use of the words "other intermediary".
Therefore, when the words "raiyat, under raiyat " were added in sub cl.
(b) in 1955, it was further enumeration within a class already there; further as held in The State of Bihar vs Rameshwar Pratap Narain Singh (1), their inclusion in the circumstances and in the particular setting showed that the words "or other intermediary" did not necessarily qualify or colour the meaning to be attached to these new tenures.
The meaning of the word "estate" has however to be found in 844 sub cl.
(a) and it is the words used in that sub clause only which will determine its meaning irrespective of whether any intermediary existed in an estate or not.
The meaning of the word "estate" in sub cl (a) is the same as it might be in the existing law relating to land tenure in force in a particular area.
Where therefore there is an existing law in a particular area in which the word "estate" as such is defined the word would have that meaning for that area and there is no necessity then for looking for its local equivalent.
But if in existing law of a particular area the word "estate" as such is not defined, but there is a definition of some other term which in that area is the local equivalent of the word "estate" then the word "estate" would have the meaning assigned to that term in the existing law in that area.
In order, however, that one may be able to say that a particular term in an existing law in a particular area is a local equivalent of the word "estate" used in sub cl (a) it is necessary to have some basic idea of the meaning of the word "estate" for that purpose.
That basic idea seems to be that the person holding the estate should be the proprietor of the soil and should be in direct relationship with the State paying land revenue to it, when it is not remitted in whole or in part.
If a term therefore is defined in any existing law in a local area which corresponds to this basic idea of an estate that term would be a local equivalent of the word "estate" in that area.
It is unnecessary to pursue the matter further because this aspect of the case has also been considered in Writ Petition No. 105 of 1961.
It may be added that as the definition of the word "estate" came into the Constitution from January 26, 1950, and is based on existing law we have to look into law existing on January 26, 1950, for the purpose of finding out the meaning of the word "estate" in article 31A. 845 Let us therefore look at state of the law as it was in the State of Madras on January 26, 1950, for the area from which these petitions come was then in the district of South Canara, which was then a part of the Province of Madras, which became the State of Madras on January 26, 1950.
The usual feature of land tenure in Madras was the ryotwari form but in some districts, a landlord class had grown up both in the northern and southern parts of the Presidency of Madras as it was before the Constitution.
The permanent settlement was introduced in a part of the Madras Presidency in 1802.
There were also various tenures arising out of revenue free grants all over the Province (see Chap.
IV, Vol.
III of land Systems of British India by Baden Powell) and sometimes in some districts both kinds of tenures, namely, landlord tenures and the ryotwari tenures were prevalent.
There were various Acts in force in the Presidency of Madras with respect to landlord tenures while ryotwari tenures were governed by the Standing orders of the Board of Revenue.
Eventually, in 1908, the Madras legislature passed the Madras Estate Land Act, No. 1 of 1908, which was later amended from time to time.
It contains a definition of the word "estate" as such in section 3(2) and when the Constitution came into force the relevant part of the definition was as follows: "Estates ' means: (a) any permanently settled estate or temporarily settled zamindari; (b) any portion of such permanently settled estate or temporarily settled zamindari which is separately registered in the office of the Collector; (c) any unsettled palaiyam or jagir; (d) any inam village of which the grant has been made, confirmed or recognised by the British Government, notwithstanding that 846 subsequent to the grant, the village has been partitioned among the grantees or the successors in title of the grantee or grantees.
" This Act applied to the entire Presidency of Madras except the Presidency town of Madras, the district of Malabar and the portion of the Nilgiri district known as South East Wynaad.
It thus applied to the district of South Canara from where these petitions come.
So far therefore as the District of South Canara was concerned, there was an existing law which defined the word "estate" for that local area.
Shortly before the Constitution came into force the Madras legislature had passed the Madras Estates (Abolition and Conversion into Ryotwari) Act No. XXVI of 1948.
That Act provided for the abolition of estates subject to certain restrictions with which we are not concerned.
It also provided for repeal of the Madras Permanent Settlement Regulation, 1802, and the Estates Land Act of 1908 to the extent and from the date on which notifications were made under section 3 of that Act.
There was thus no repeal of Act I of 1908 by the Act of 1948, and it is not in dispute that Act No. 1 of 1908 was in force on January 26, 1950, in large parts of the Province of Madras including South Canara, and is still in force in such parts of it as have not been notified under section 3 of the Act of 1948.
Therefore, we reach the position that when article 31 became applicable from January 26, 1950, Act No. 1 of 1908 was still in force in large parts of the Madras State and it contained a definition of the word "estate" as such.
Further, Act I of 1908 was clearly a law of land tenures as a brief review of its provisions will show.
Section 6 of the Act conferred occupancy rights on tenants of certain lands in "estates" as defined in the Act of 1908.
Chapter II dealt with the general rights of landlords and tenants.
Chapter III dealt with provisions relating to rate of rent payable by tenants and provided for enhancement, reduction, commutation, alteration 847 and remission of rent.
Chapter IV dealt with pattas and muchilikas.
Chapter V provided for payment of rent and for realisation of arrears of rent.
Chapter VI provided the procedure for recovery of rent.
Other Chapters dealt with other matters including Chap.
X which dealt with relinquishment and ejectment.
It is clear therefore that the Act of 1908 was a law relating to landtenures.
Therefore, we reach the position that in a law relating to land tenures which was in force in the State of Madras when the Constitution came into force the word "estate" was specifically defined.
This law was in force in the whole of the State of Madras except some parts and was thus in force in the area from which the present petitions come.
This area was then in the south Canara district of the State of Madras.
We are therefore of opinion that the word "estate" in the circumstances can only have the meaning given to it in the Act of 1908 as amended up to 1950 in the State of Madras as it was on the date the Constitution came into force.
We have already said that the Act of 1908 dealt with landlord tenures of Madras and was an existing law relating to land tenures.
The other class of land tenures consisted of ryotwari pattadars which were governed by the Board 's Standing Orders, there being no Act of the legislature with respect to them.
The holders of ryotwari pattas used to hold lands on lease from Government.
The basic idea of ryotwari settlement is that every bit of land is assessed to a certain revenue and assigned a survey number for a period of years, which is usually thirty and each occupant of such land holds it subject to his paying the land revenue fixed on that land.
But it is open to the occupant to relinquish his land or to take new land which has been relinquished by some other occupant or become otherwise available on payment of assessment, (see Land Systems of British India by Baden Powell, Vol.
III, Chap.
IV, section II, p. 128).
Though, theoretically, according to some authorities, the occupant of ryotwari 848 land held it under an annual lease (see Macleane, Vol.
I Revenue Settlement, p. 104), it appears that in fact the Collector had no power to terminate the tenant 's holding for any cause whatever except failure to pay the revenue or the ryot 's own relinquishment or abandonment.
The ryot is generally called a tenant of Government but he is not a tenant, from year to year and cannot be ousted as long as he pays the land revenue assessed.
He has also the right to sell or mortgage or gift the land or lease it and the transferee becomes liable in his place for the revenue.
Further, the lessee of a ryotwari pattadar has no rights except those conferred under the lease and is generally a sub tenant at will liable to ejectment at the end of each year.
In the Manual of Administration, as quoted by BadenPowell, in Vol.
III of Land Systems of British India at p. 129, the ryotwari tenure is summarised as that of a tenant of the State enjoying a tenant right which can be inherited, sold, or burdened for debt in precisely the same manner as a proprietary right subject always to payment of the revenue due to the State".
Though therefore the ryotwari pattadar is virtually like a proprietor and has many of the advantages of such a proprietor, he could still relinquish or abandon his land in favour of the government.
It is because of this position that the ryotwari pattadar was never considered a proprietor of the land under his patta, though he had many of the advantages of a proprietor.
Considering, however, that the Act of 1908 was in force all over the State of Madras but did not apply to lands held on ryotwari settlement and contained a definition of the word "estate" which was also applicable throughout the State of Madras except the areas indicated above, it is clear that in the existing law relating to land tenures the word "estate" did not include the lands of ryotwari pattadars, however valuable might be their rights in lands as they eventually came to be recognised.
849 Turning now to the district of South Canara and the areas from which the present petitions come it appears that originally the ryotwari settlement was not in force in this area and two kinds of tenures were recognised, namely, mulawargdar and Sarkarigniwargdar.
It is, however, unnecessary to go into the past history of the matter, for it is not in dispute that the ryotwari system was introduced in South Canara district in the early years of this century.
The history will be found in the Book "Land Tenures in the Madras Presidency" by section Sunderaraja Iyengar, IIEdn., pp.
45 47, where it is said that "after the introduction of the ryotwari system into South Canara, no distinction now exists between the wargadar, the mnulawargadar and kudutaledar and they are all ryotwari pattadars" Therefore, when the Constitution came into force the ryotwari pattadars of South Canara were on the same position as the ryotwari pattadars of the rest of the State of Madras.
Further, as the Act of 1908 was in force in South Canara also, though there may not be many estates as defined in that Act in this area it follows that in this area also the word "estate" would have the same meaning as in the Act of 1908 and therefore ryotwari pattadars and their lands would not be covered by the word "estate".
Further, there can be no question of seeking for a local equivalent so far as this parts of the State of Kerala which has come to it from the former State of Madras is concerned.
We are therefore of opinion that lands held by ryotwari pattadars in this part which has come to the State of Kerala by virtue of the States Reorganisation Act from the State of Madras are not estates within the meaning of article 31A (2)(a) of the Constitution and therefore the Act is not protected under article 31A (I) from attack under articles 14, 19 and 31 of the Constitution.
850 Re.
The next contention on behalf of the petitioners is that the Act makes a discrimination between areca and pepper plantations on the one hand and certain other plantations on the other and should therefore be struck down as violative of article 14 of the Constitution.
Section 2(39) of the Act defines "plantation" to mean any land used by a person principally for the cultivation of tea, coffee, rubber or cardamom or such other kind of special crops as may be specified by the Government by notification in the gazette.
Areca and pepper plantations have however not been included in this definition.
It is urged on behalf of the petitioners that in this part of the State there are a large number of areca and pepper plantations which are practically run on the same lines as tea, coffee and rubber plantations and there is no reason why discrimination should be made between areca and pepper plantations on the other hand and tea, coffee and rubber plantations on the other.
The discrimination is said to arise from the provisions of section 3 and section 57 of the Act.
Section 3(viii) which occurs in Chap.
II dealing with the acquisition of the interest of landowners by tenants excepts tenancies in respect of plantations exceeding thirty acres in extent from the application of that chapter.
The result of this is that tenants in plantations exceeding thirty acres in extent cannot acquire the interest of the landowners with respect to such plantations and the landowners continue to own such plantations as before.
Further section 57 which is in Chap.
III provides for exemption of all plantations whatever their extent from the provisions of that Chapter.
Thus the ceiling area provided in section 58 will not apply to plantations which will be left out in calculating the ceiling area for the purpose of s.58.
Further, s.59(2) provides that in calculating the ceiling area any cashew estate if it was a cashew estate on April, 11, 1957 and continued as such at the 851 commencement of section 59 (provided the cashew estate was principally planted with cashewnuts tree and be a contiguous area not below 10 acres) will continue to be owned or held as before, though the ceiling in such cases would be reduced to half of that provided in s.58.
These provisions inter alia confer benefits on those who hold plantations as defined in section 2(39) and also on those who have cashew estates as defined in the Explanation to section 59(2).
The contention on behalf of the petitioners is that there is no reason why the same benefits which have been conferred on plantations as defined in the Act should not be conferred on those who hold areca and pepper plantations, and that there are no intelligible differentia which would justify the State legislature in treating the pepper and areca plantations differently from rubber, tea and coffee plantations.
Article 14 has been the subject of consideration by this Court on a number of occasions and the principles which govern its application have been summarised in Shri Ram Krishna Dalmia vs Shri Justice section R. Tendolkar (1), in these words: "(a) that a law may be constitutional even though it relates to a single individual if, on account of some special circumstances or reasons applicable to him and not applicable to others, that single individual may be treated as a class by himself; (b) that there is always a presumption in favour of the constitutionality of an enactment and the burden is upon him who attacks it to show that there has been a clear transgression of the constitutional principles; (c) that it must be presumed that the legislature understands and correctly appreciates the need of its own people, that its laws are directed to problems 852 made manifest by experience and that its discriminations are based on adequate grounds; (d) that the legislature is free to recognise degrees of harm and may confine its restrictions to those cases where the need is deemed to be the clearest; (e) that in order to sustain the presumption of constitutionality the court may take into consideration matters of common knowledge, matters of common report, the history of the times and may assume every state of facts which can be conceived existing at the time of legislation; and (f) that while good faith and knowledge of the existing conditions on the part of a legislature are to be presumed, if there is nothing on the face of the law or the surrounding circumstances brought to the notice of the court on which the classification may reasonably be regarded as based, the presumption of constitutionality cannot be carried to the extent of always holding that there must be some undisclosed and unknown reasons for subjecting certain individuals or corporations to hostile or discriminating legislation.
" The petitioners rely on cl.(f) of this summary and contention is that there is nothing to show either in the Act or even in the affidavit filed on behalf of the State in reply to the petitions or in the circumstances brought to the notice of the court that the classification in this case which excludes areca and pepper plantations and includes tea, coffee and rubber plantations is a proper classification based on intelligible differentia which are related to the objects and purposes of the Act.
853 This brings us to a consideration of the reasons which may have impelled the legislature to treat plantations as a class differently from other lands.
The objective of land reform including the imposition of ceilings on land holdings is to remove all impediments which arise from the agrarian structure inherited from the past in order to increase agricultural production, and to create conditions for evolving as speedily as possible an agrarian economy with a high level of efficiency and productivity (see p. 178 of the Second Five Year Plan).
It is with this object in view that ceiling on land holdings has been imposed in various States.
Even so, it is recognised that some exemptions will have to be granted from the ceiling in order that production may not suffer.
This was considered in the Second Five Year Plan at p. 196 and three main factors were taken into account in deciding upon exemptions from the ceiling, namely: (1) integrated nature of operations, especially where industrial and agricultural work are undertaken as a composite enterprise, (2) specialised character of operations, and (3) from the aspect of agricultural production the need to ensure that efficiently managed farms which fulfil certain conditions are not broken up.
Bearing these criteria in mind it was recommended in the Second Five Year Plan (see p. 196) that the following categories of farms may be exempted from the operation of ceiling namely: "(1)tea, coffee and rubber plantation; (2) orchards where they constitute reasonably compact areas; 854 (3) specialised farms engaged in cattle breeding, dairying, wool raising etc; (4) sugarcane farms operated by sugar factories; and (5) efficiently managed farms which consist of compact blocks, on which heavy investment or permanent structural improvements have been made and whose break up is likely to lead to a fall in production.
" The same view has been reiterated in Chap.
XIV of the Third Five Year Plan dealing with Land Reform and ceiling on agricultural holdings and para 28 thereof refers to the grounds of exemption envisaged by the Second Five Year Plan.
It is obvious therefore that when the State legislature in this case exempted tea, coffee, rubber and cardamom plantations from the ceiling under Chap.
III and treated plantations of over 30 acres as a special case for the purpose of Chap.
II, it must have had the principles enunciated above in mind to differentiate them from ordinary cultivation of other crops.
If that be so, the question immediately arises whether there is any reason for treating areca and pepper plantations differently.
If there is none and areca and pepper plantations stand so far as these conditions are concerned on the same footing as tea, coffee and rubber plantations there will clearly be a discrimination against them by the provisions of the Act referred to above.
Turning now to pepper plantations, first, we may refer to the information contained in Farm Bulletin No. 55 relating to pepper cultivation in India issued by the Farm Information Unit, Directorate of Extension, Ministry of Food and Agriculture, New Delhi in September 1959.
It appears from this bulletin that Kerala is the most important pepper producing State in India, where pepper is cultivated on an organised plantation scale over 855 fairly extensive areas.
There are three distinct regions of the pepper growing belt, namely, (1) The Travancore and Cochin region.
(2) The Malabar and South Canara region, and (3) the Coorg and North Canara region.
Though pepper is essentially a homestead garden crop, growers were encouraged to grow it on plantation scale since 1928 when the price of pepper rose to about Rs. 700/ per candy.
Since then there has been a further rise in the price of pepper with the result that new homestead gardens and plantations have sprung up and pepper cultivation has extended a good deal.
During the last fifty years, pepper which was largely a household garden crop has emerged as a plantation crop and fairly large sized plantations of pepper exist in the submontane eastern parts of North Malabar and the Hosdrug taluk of South Canara, (the area from which these petitions come).
In Hosdrug taluk in particular pepper is grown mostly on large scale plantations and it is here that the finest and the best organised pepper plantations in India exist.
Some of the largest plantations among them have an area of a 100 to 150 acres.
Pepper vines commence yielding usually from the third year, the yield increasing gradually until the vines come to full bearing in about ten years.
The economic life of a vine varies from place to place.
From the tenth to the 25th year, the vines are in full bearing, and the yield begins to decline after the 30th year.
The initial outlay on pepper plantations is heavy and the pepper crop requires continuous attention and care.
The total area under pepper is over 2 lakhs acres out of which about 20,000 acres are under pure pepper plantations.
The initial expenditure on laying out a pepper plantation can be recovered only after several years and the best organised and most extensive pepper plantations of India are in the Hosdrug taluk, South Canara (from where these petitions come) and North Malabar.
856 This information taken from Farm Bulletin 55 shows that in the last fifty years pepper in India has reached the plantation stage and in particular in Hosdrug taluk from where these petitions come there are the best organized and most extensive pepper plantations in India.
The initial cost of laying out a pepper plantation is heavy and the pepper vines yield nothing for three years and full production comes only in the tenth year.
Therefore, where pepper is cultivated as a plantation crop on a large scale the cost is heavy and may be comparable to the outlay on large scale tea, coffee and rubber plantations.
It is in these circumstances that we have to consider whether there has been discrimination against pepper plantations when they have not been included in the definition of plantation under section 2(39) of the Act.
Turning to arecanut, reference may be made to Farm Bulletin No. 14 issued by the same authority.
The major arecanut growing belt in India is again the same regions, i.e., South Canara, Malabar, Coorg and Travancore Cochin along with parts of Mysore, Bengal and Assam.
Arecanut is also grown on plantation scale.
Since the crop begins to bear fruit after about eight years, large sums have to be expended up to the bearing stage without any income till then.
The estimated life of an arecanut garden is about 50 to 60 years, though some of the palms in the garden will be dying occasionally or becoming uneconomic and it will be necessary to replace them.
For this reason underplanting is taken up periodically.
It appears further from the Proceedings of the Ninth Annual General Special and Twelfth Ordinary Meetings of the Indian Central Arecanut Committee held on January 23, 1958, that the question whether arecanut gardens should be put under ceiling or not and whether there would be hampering of production which would be against national interest if a ceiling were imposed on such gardens had been referred to a Sub committee for consideration.
857 The Sub committee reported that if areca gardens were brought under the ceiling it would hamper production which would be against the national interest and recommended to the Planning Commission, the Central Government and the State Governments that, as proposed by the Planning Commission in respect of tea, coffee and rubber plantations, orchards, specialised farms and efficiently managed farms, arecanut gardens be also similarly exempted from ceiling.
The Sub committee also noticed that arecanut cultivation involved heavy capital outlay in establishing, maintaining and protecting the arecanut trees.
This recommendation of the Sub committee came up for consideration before the Indian Central Arecanut Committee on January 23, 1958, and was accepted.
Thus these proceedings show that fixation of ceiling on arecanut gardens would hamper production which would be detrimental to national economy.
It is in this background therefore that we have to consider whether the non inclusion of areca and pepper plantations in the definition in section 2(39) with the result that areca and pepper plantations do not enjoy similar benefits as others, is discriminatory.
From what we have said above it has not been shown that there is any appreciable difference between the economics of tea, coffee and rubber plantations and areca and pepper plantations.
It is true that plantations in areca and pepper are not so widespread as tea, coffee and rubber plantations but it is equally true that in this particular area from which these petitions come areca and pepper plantations are very common.
The fact however that areca and pepper plantations are very common only in this area of the State of Kerala is no reason for treating them differently from tea, coffee and rubber plantations which are apparently more evenly distributed throughout the State.
If the criteria evolved by the Planning Commission, as already indicated, apply to tea, coffee and rubber 858 plantations in our opinion they equally apply to areca and pepper plantations and there is no reason for differentiating between these two sets of plantations.
So far as areca is concerned we have the recommendation of the Sub committee, mentioned above, endorsed by the Indian Central Arecanut Committee, that it would be detrimental to national economy not to extend the benefit of exemption from ceiling to arecanut plantations in the same way as is done in the case of tea, coffee and rubber plantations.
As for pepper we have it from Farm Bulletin No. 55 that the best organised and most extensive pepper plantations of India are in Hosdrug Taluk of South Canara and that some of them are even as large as 100 to 150 acres each.
The result of the application of the ceiling and other provisions of the Act would mean the break up of these plantations and may result in fall in production.
It is to avoid the break up of tea, coffee and rubber plantations and the consequent fall in production that ceiling has not been imposed on these plantations.
The same reasons in our opinion lead to the conclusion that pepper plantations should also be treated similarly.
In this connection reference may be made to the opinion expressed in Farm Bulletin No. 55 where the author has said that it is impossible to keep a large plantation of pepper in good tip top condition, without incurring heavy expenditure and without great efforts and has added that in the existing conditions no one planter should have more than 10 acres of pepper plantation.
This would seem to suggest that 10 acres is the economic optimum limit for pepper plantations.
It is not clear however on what basis this recommendation is based, for undoubtedly the bulletin shows that there are plantations of much larger extent in this area and the plantations here are the best organised and the most extensive throughout the whole of India.
The only reason which seems to have been given in support of the opinion that 859 10 acres is the optimum area for a pepper plantation is that one planter in that region was of the view that unless the price of one candy of pepper remained at a high level of anything between Rs. 1,500/ and Rs. 2,000/ it will be impracticable and unprofitable to maintain large scale plantations of pepper in these regions, and if prices go down for below this level, large scale pepper plantations may have even to be abandoned.
This does not afford a sufficient basis for holding that 10 acres is the optimum holding for a pepper plantation.
In the first place, it is mentioned at p. 8 of the bulletin that pepper began to be grown on plantation scale when the price rose to about Rs. 700/ per candy in 1928.
Therefore even if the price falls below Rs. 1,500/ to Rs. 2,000/ per candy there is no reason why pepper cultivation on a plantation scale should become impracticable, particularly as it is unlikely that the cost of only pepper will fall and not all other commodities.
At p. 72 the bulletin mentions that the cost of cultivation of pepper can be brought down only if the general price level is brought down substantially.
Now there is no reason to suppose that there would be a catastrophic fall in the price level of pepper only which would make all pepper plantations above 10 acres uneconomic and unprofitable.
In any case this is not the reason urged on behalf of the State in support of not including pepper plantations in the definition of plantation.
In this connection we ought to add that the counter affidavit filed by the respondent is very unsatisfactory; no serious attempt has been made at all to justify the exclusion of pepper and arecanut from the exemption granted to tea, coffee, rubber and cardamom; no facts are stated and no data supplied in reply to the detailed allegations made in the petitions challenging the validity of the classification in question.
The only reason given by the State in the counter affidavit is that a plantation crop is generally understood 860 to refer only to tea, coffee and rubber and cardamom.
It is not quite clear what exactly is meant by this one sentence in the counter affidavit in support of the definition.
If a plantation crop is generally understood to refer to only tea, coffee, rubber and cardamom, it is not understood why the definition provides for extending the word "plantation to other crops by notification.
The very fact that power has been reserved for extending the definition by notification to other crops shows that other crops can also be grown on plantation scale.
In view therefore of what we have said above with respect to the economics of areca and pepper cultivation, it is obvious that no sufficient reason has been shown for differentiating areca and pepper plantations in this area from tea, coffee and rubber plantations in the State.
Making all the presumptions in favour of the classification made under s.2(39) it is clear that there is nothing on the face of the law or the surrounding circumstances which has been brought to our notice in this case on which the classification contained in section 2(39) can be said to be reasonably based.
Considering the object and purpose of the Act and the basis on which exemption has been granted under Chapters II and III to plantations as defined in the Act, there appears to be no reason for making any distinction between tea, coffee and rubber on the one hand and areca and pepper on the other in this particular case.
It is not as if tea, coffee and rubber are grown only on a large scale while areca and pepper are mostly grown on a small scale.
We find from the report of the Plantation Inquiry Commission, 1956, that small holdings exist in tea, coffee and rubber plantations also and are in fact the majority of such plantations.
For example, in the report of the Plantation Inquiry Commission relating to coffee at pp. 9 and 14 we find that out of the total number of registered estates more than 4,500 are between 5 acres and 25 acres while only about 2,200 861 estates are above 25 acres.
Further there are more than 24,000 estates below 5 acres.
Similarly at p. 97, Chap.
XI, Part III of the Report dealing with rubber, out of the total of over 26, 709 rubber estates, 23,300 are up to 5 acres, 1,900 up to 10 acres and only about 1,500 above 10 acres.
So it appears that the large majority of plantations whether they be of coffee or rubber are below 10 acres and that is also the case with area and pepper plantations.
Thus there is no reason for giving preference to plantations of tea, coffee and rubber over plantations of area and pepper for the conditions in the two sets of plantations whether for the purpose of ceiling under Chap.
III or for the purpose of acquisition of landowners ' rights under Chap.
II are the same.
The reasons therefore which call for exemption of tea, coffee and rubber plantations equally apply to areca and pepper plantations and there is no intelligible differentia related to the object and purpose of the Act which would justify any distinction in the case of tea, coffee and rubber plantations as against area and pepper plantations.
We are therefore of opinion that the provisions relating to plantations are violative of article 14 of the Constitution.
The next question is whether these provisions are severable, that is to say, whether the Kerala legislature would have passed the Act without these provisions.
That depends upon the intention of the legislature and as far as we can judge that intention from the provisions of the Act, it seems clear to us that the legislature did not intend that the provisions relating to acquisition by tenants and ceilings should apply to plantations as defined in the Act, so that they may have to be broken up with consequent loss of production and detriment to national economy.
It seems that the legislature could not have intended in order to carry out the purpose of the legislation to do so even after breaking up all the plantations which 862 existed in the State.
It follows therefore that the legislature would not have passed the rest of the Act without the provisions relating to plantations.
As these provisions affect the entire working out of Chapter II and III of the Act which are the main provisions thereof, it follows that these provisions relating to plantations cannot be severed from the Act and struck down only by themselves.
Therefore, the whole Act must be struck down as violative of article 14 of the Constitution so far as it applies to ryotwari lands in those areas of the State which were transferred to it from the State of Madras, and we order accordingly.
Then we come to the attack that the Act is violative of article 14 on account of the manner in which ceiling has been fixed under section 58 thereof.
Section 2(12) defines a "family" as meaning husband, wife and their unmarried minor children or such of them as exist.
There are three kinds of families existing in this State namely, the joint Hindu family, Marumakhathayam family and Aliyasanthana family, the latter two being matriarchal.
In the matriarchal family the husband and wife are not members of the same family but belong to different families.
The joint Hindu family does not merely consist of the husband, wife and unmarried minor children; it consists at least of the husband wife and all the children whether married or unmarried and whether minor or adult.
The definition of "family" therefore in the Act is an artificial one which does not conform to any of the three kinds of families prevalent in the State.
Turning now to section 58, the ceiling has been fixed in two ways.
The first is by reference to a family as defined in the Act of not more than five members which is allowed 15 acres of double crop nilam or its equivalent with an addition of one acre of double crop nilam or its equivalent for each 863 member in excess of five, so however that the total extent of the land shall not exceed 25 acres of double crop nilam or its equivalent.
The second is by reference to an adult unmarried person who is allowed 7.50 acres of double crop nilam or its equivalent.
It has been urged on behalf of the State that the provisions as they stand do not make any discrimination whatsoever for there is the same provision for all adult unmarried persons and the same for all families as defined in the Act.
This in our opinion is an over simplification of the provision relating to ceiling under section 58.
On an argument of this kind no provision would ever be discriminatory for it is unlikely that a provision would on the face of it make a discrimination.
The discriminatory nature of the provision has to be judged from the results that follow from it and we have no doubt that the results which follow from this double provision as to ceiling are bound to be discriminatory.
If the ceiling had been fixed with respect to one standard whether it be of an individual person or of a natural family by which we mean a family recognised in personal law, the results may not have been discriminatory.
But where the ceiling is fixed as in the present case by a double standard and over and above that the family has been given an artificial definition which does not correspond with a natural family as known to personal law, there is bound to be discrimination resulting from such a provision.
A simple illustration will explain how the results of the manner in which the ceiling has been fixed by section 58 will lead to clear discrimination between person and person.
Take the case of an adult unmarried person and a minor who is an orphan with no father, mother brother or sister.
Assume further that each owns 25 acres of land under personal cultivation.
The former who is an adult unmarried person will retain 7 acres and will have to surrender 17.50 acres as excess land.
The latter will be an artificial family under the definition of that word 864 in section 2(12).
This follows from the fact that a family consists of husband, wife and their unmarried minor children or such of them as exist.
This is also made clear by section 61(2) which shows that even a minor who has no parents, and no brothers or sisters will constitute a family under section 2(12).
This minor therefore as constituting a family will be entitled to 15 acres of land and will have to surrender only 10 acres as excess land.
No justification has been shown to us on behalf of the State for this discriminatory treatment of two individual persons; nor are we able to understand why such discrimination which clearly results from the application of the provisions of section 58(1)is not violative of article 14 of the Constitution.
Examples can be multiplied with reference to joint Hindu families also, which would show that in many cases discrimination will result on the application of these provisions to joint Hindu families.
Similar would in our opinion be the case with Marumakhathayam and Aliyasanthana families where as we have already pointed out the husband and wife do not belong to the same family as known to personal law.
Discrimination therefore is writ large on the consequences that follow from the provisions of section 58(1).
We are therefore of opinion that section 58(1) is violative of the fundamental right enshrined in article 14; as that section is the basis of entire Chap.
III the whole Chapter must fall with it.
This would be an additional reason why Chap.
III should be struck down as violative of Art 14 in its application to ryotwari landas which have come to the State of Kerala from the State of Madras.
(6) It is contended that the manner in which the compensation is cut down progressively in sections 52 and 64 of the Act is violative of article 14.
The Compensation payable under section 52 is determined in this manner.
First the purchase price is arrived at under section 45.
Thereafter section 52(2)(b) provides that the landowner or the intermediary, except in the 865 case of religious, charitable and educational institution of a public nature, would be entitled to compensation.
The compensation would consist of (1) the value of structures, wells and embankments of a permanent nature situated in the land and belonging to the landowner or the intermediary, as the case may be, and (2) the percentage of the value of interest of the landowner or the intermediary in respect of the land and the improvements other than those falling under sub cl.
(i) according to the scales specified in Sch.
Schedule II then provides that the first Rs. 15,000/ .
of the compensation will be paid in full.
Thereafter there will be a reduction of 5 per cent.
in each slab of Rs. 10,000/ till we reach compensation above Rs. 1,45,000/ Thereafter the compensation arrived at under section 52 read with section 45 is reduced by 70 per cent so that the landowner or the intermediary gets only 30 per cent of what has been arrived at under section 52 (2) (b) read with section 45.
Similarly in section 64 the compensation payable for excess land surrendered is (i) the full value of any structures, wells and embankments of a permanent nature situate in the land and belonging to the person who surrenders such land, and (ii) the percentage of the market value of the land and improvements other than those specified above.
Here again on the first Rs. 15,000/ compensation at 60 per cent is to be paid.
Thereafter the compensation is reduced by 5 per cent for each slab of Rs. 15,000/ till we reach over Rs. 1,75,000/ when the compensation is reduced by 75 per cent.
The contention on behalf of the petitioners is that there is no intelligible differentia on which the purchase price determined under section 45 or the market value is to be reduced by different percentages depending on the total purchase price or the total market value of the interest to be acquired.
The reply on behalf of the State is that there is really no discrimination inasmuch 866 as the same percentage is reduced where the compensation payable to different persons is the same.
That is undoubtedly so.
But that alone is not in our opinion the end of the matter.
The question which is posed for our consideration is why a person in whose case the purchase price or the market value Rs. 15,000/ should get the full purchase price or suffer a reduction in the market value at a certain rate while another person in whose case compensation is more than Rs. 15,000/ should suffer reductions at a different rate which reductions become progressively higher as the purchase price or the market value increases.
We could understand once the purchase price or the market value had been determined a uniform cut therefrom for all persons entitled to compensation.
That would then raise the question of adequacy of compensation and unless the cut was so large as to make the compensation illusory the cut may be protected by Art.31(2).
But in the present case there is not a uniform cut on the purchase price or the market value for all persons, the cut is higher as the purchase price or the market value gets bigger and bigger after the first slab of Rs. 15,000/ .
This difference in cut in being justified on behalf of the State on the same principle on which (for example) the slab system exists for purposes of income tax.
We are however of opinion that there is no comparison between the slab system of income tax rates and the present cuts.
Taxation is a compulsory levy from each individual for the purpose of the maintenance of the State.
We may therefore reasonably expect that a rich man may be required to make a contribution which may be higher than what may be proportionately due from his income for that purpose as compared to a poor man.
This principle cannot be applied in a case where a person is deprived of his property under the power of eminent domain for which he is entitled to compensation.
There is no reason why when two persons are deprived of their property one richer than the other, they should be paid at 867 different rates when the property of which they are deprived is of the same kind and differs only in extent.
No such principle can be applied in case where compensation is being granted to a person for deprivation of his property.
Where one person owns property valued at Rs. 15,000/ while another owns property valued at Rs. 30,000/ , both are equally deprived of the property.
When therefore it comes to a question of payment of compensation we can see no reason why a person whose compensation amounts to Rs. 15,000/ should get the whole of it or a large part of it while another person whose compensation amounts to (say) Rs. 30,000/ should get something less than the first person.
It is not as if there is some difference in the nature of the property which might justify different payments of compensation.
What the Act provides is to work out the purchase price or the market value first for the purpose of determining compensation and then make different cuts from the purchase price or the market value according to whether in one case the purchase price or the market value is Rs. 15,000/ and in another case it is more than Rs. 15,000/ .
No justification, is pointed out for this discrimination except the principle on which the slab system for the purpose of income tax is justified.
That principles as we have just pointed out does not apply to a case of compensation.
Nor are we able to see any rational classification which would justify different cuts based simply on the amount of compensation worked out on the basis of purchase price or market value.
The only thing we can see is that because a person is possibly richer he must be paid less for the same type of land while a person who is poorer must be paid more.
This kind of discrimination in the payment of compensation cannot in our opinion be possibly justified on the objects and purposes of the Act.
The object and purpose of the Act, as we have already said, is to grant rights to cultivating tenants so that they may 868 improve their lands resulting in larger production to the benefit of the national economy.
Secondly, the object of the Act is to provide land for the landless and to those who may have little land by taking excess land from those who have large tracts of lands so that peasant proprietorship may increase with consequent increase in production due to greater interest of the cultivator in the soil.
But these objects have no rational relation which would justify the making of different cuts from the purchase price or the market value for the purpose of giving compensation to those whose interests are being acquired under the Act.
We can therefore see no justification for giving different compensation based on different cuts from the purchase price or the market value as provided in sections 52 and 64 of the Act.
We may in this connection refer to Kameshwar Singh vs The State of Bihar (1), in which similar question with respect to compensation provided in the Bihar Land Reforms Act, 1950, came up for consideration.
There the Act provided compensation at different rates depending upon the net income.
The landowner having the smallest net income below Rs. 500/ was to get twenty times the net income as compensation while the landowner having the largest net income, i. e., above 1,00,000/ was to get only three times of the net income.
Intermediate slabs provided different multiples for different amounts of net income.
That provision was struck down by the Special Bench of the Patna High Court as violative of article 14.
It may be mentioned that decision was given before the Constitution (First Amendment) Act adding article 31A and the Ninth Schedule to the Constitution was passed.
Three learned Judges composing the Special Bench who heard that case were unanimously of the 869 opinion that such difference in payment was violative of article 14 and the principle of progressive taxation did not apply to compensation for land acquired.
We are of opinion that the view taken in that case is correct and the same applies to the present case.
We may point out that case came in appeal to this Court (see, The State of Bihar vs Maharajadhiraja Sir Kameshwar Singh (1) ).
The appeal however was heard after article 31A and the Ninth Schedule had been introduced in the Constitution and therefore this Court had no occasion to consider whether such difference in payment of compensation would be violative of article 14.
We are therefore clearly of opinion that the manner in which progressive cuts have been imposed on the purchase price under section 52 and the market value under section 64 in order to determine the compensation payable to land owners or intermediaries in one case and to persons from whom excess land is taken in another results in discrimination and cannot be justified on any intelligible differentia which has any relation to the objects and purposes of the Act.
As the provision as to compensation is all pervasives, the entire Act must be struck down as violative of article 14 in its application to ryotwari lands which have come to the State of Kerala from the State of Madras.
In view of what we have said above on the main points urged in the petitions, it is unnecessary to consider other subsidiary points attacking particular sections of the Act on the ground that they were unreasonable restrictions on the right to acquire, hold and dispose of property under article 19(1)(f).
We therefore allow the petitions and strike down the Act in relation to its application to ryotwari lands which have come to the State of Kerala from the State of Madras.
The petitioners will get their costs from the State of Kerala, one set of hearing costs.
870 SARKAR, J. I wish to say a few words on two of the questions that arise in these cases.
The Act, the validity of which is challenged, provides for acquisition of lands for equitable distribution among the people who require it for cultivation by themselves.
It provides for payment of compensation to those whose interests are acquired.
It also provides for a mode of valuation of these interests.
Then it provides by sections 52 and 64 for payment of compensation at a progressively smaller rate for larger valuations.
For the higher slabs in the valuation made as provided by the Act, less and less is paid by way of compensation.
It is said that these provisions for progressively diminishing compensation are discriminatory and unconstitutional.
This is the first point with which I propose to deal.
The question is whether the payment of compensation at a progressively smaller rate as the valuation is higher offends article 14 of the Constitution.
Now it is not disputed that progressively higher rate of taxation by an Act taxing income is not unconstitutional.
I think such taxation is too well recognised now to be challenged.
If that is so and that was the basis on which arguments proceeded in this case I am unable to see that a statute providing for acquisition of property and for payment of compensation at a progressively lower rate for the higher slabs of valuation can be unconstitutional.
"The reason for progressive taxation in the case of inheritance taxes and income taxes is the ability of those receiving or giving to pay": Willis 's Constitutional Law (1936 ed.) p. 597.
The cases in America that I have looked up also put the matter on the same basis.
The classification by progressively higher taxation in a taxing statute is therefore good if based on the tax payers ' ability to pay.
It is however said that what applies in the case of a taxing statute cannot apply to a statute 871 permitting acquisition of property on payment of compensation.
I do not see why ? I am not aware that the test for determining whether there has been unequal treatment is different with different varieties of statutes, that the test for a taxing statute is not the same as that for a statute providing for acquisition on payment of compensation.
I think the test is the same for all statutes, and it is that there must be an intelligible differentia having a rational relation to the object of the Act.
Now the object of a taxing statute is to collect revenue for the governance of the country.
Ability to pay is acknowledged to be an intelligible differentia having a relation to such an object.
The object of the statute with which we are concerned is to acquire land on payment of compensation so that the land may be equitably distributed among the people.
If under a statute whose object is to collect revenue more can be legitimately demanded from a person having more, it seems to me that under a statute whose object is to acquire land by paying compensation less can equally legitimately be paid to a person who has more.
Ability to pay, or which is the same thing as ability to bear the loss arising from smaller payment received, would in either case be an intelligible differentia having a rational relation to the object of the Act.
In one case it serves the object by collecting more revenue for adding to the resources for governing the country and in the other case it serves the object by making it possible for the State by payment of less money out of its resources to acquire lands for better distribution.
In both cases the State resources are benefited, in one by augmentation and in the other by prevention of larger depletion.
Therefore, I would accept the learned Attorney General 's argument that sections 52 and 64 of the Act cannot be held to be discriminatory and void for the same reason on which 872 progressive rates of taxation are held not to be so in the case of an Income tax Act.
The next question on which I wish to say a few words concerns those provisions of the Act which exempt plantations of tea, coffee, rubber or cardamom or such other kinds of special crops as the Government may specify, from certain provisions of the Act.
Plantations have been defined in section 2(39) of the Act as land used by a person principally for the cultivation of tea, coffee, rubber or cardamom or other notified crops.
No other crop appears to have been notified yet.
Section 58 of the Act provides the ceiling area of land which may be held by any individual proprietor.
Land above the ceiling has to be surrendered to the Government.
Section 57 of the Act provides that this provision would not apply to plantations as defined in section 2(39).
Again, Ch. 2 of the Act which gives the tenants the right to purchase land from the landlords and vests in the Government the lands of the landlords not themselves cultivating them above the ceiling fixed, is by section 3 (viii) not made applicable to plantations exceeding thirty acres in extent.
The question is whether the benefit so given to the plantations as defined in the Act is discriminatory.
The petitioners own large scale cultivation of areca and pepper.
They contend that no legitimate differentiation is possible between lands on which areca and pepper are grown and lands on which tea, coffee, rubber and cardamom are grown.
No doubt the presumption is that a statute is constitutional but such presumption is not conclusive.
It is also true that a court is entitled to assume the existence of all rational basis on which the classification made by an Act may be justified.
Even so, it seems to me, that the present classification is, on the materials now before us not justified.
It may be that plantations of tea, coffee 873 rubber and cardamom, especially the first three, are usually large in size and require big investments.
It may be that they are carried on as industries which give employment to a large labour force.
These characteristics may however only justify the putting of large plantations of these crops in a class.
The Act however exempts all lands on which tea, coffee, rubber or cardamom is grown irrespective of the size of the business carried on or of labour employed on them, as a class.
Materials have been placed before us to show that there are a very large number of smaller plantations growing tea, coffee and rubber.
There are also many areca and pepper plantations exceeding thirty acres in area.
There is no reason to put tea, coffee, rubber and cardamom plantations in a class as distinguished from similar sizes of plantations of areca and pepper.
None at least has been shown by the State of Kerala to exist.
The only ground shown in the affidavit of the State of Kerala seeking to justify the classification of tea, coffee, rubber and cardamom plantations in one class is that "plantation crop is generally understood to refer only to tea, coffee, rubber and cardamom" and that "areca and pepper are not generally grown on a plantation scale".
I am unable to think that these afford sufficient justification for making a discrimination in favour of tea, coffee, rubber and cardamom plantations.
It would appear from the Planning Commission 's Report that other kinds of crops might profitably be grown as plantation crops.
In any case, a general understanding even if there was one, is not sufficient basis for discrimination.
With regard to the other statements of the State, it is enough to say that the Act does not make a discrimination because of the size of the plantations.
Therefore, there is no point in saying that areca and pepper are not grown on a plantation scale.
For these reasons I think the provisions in the Act making a discrimination in favour of tea, 874 coffee, rubber and cardamom plantations cannot be upheld.
For the same reason, I think the discriminatory treatment made in favour of cashew plantation also cannot be sustained.
Sections 3(viii), 57(1)(d) and 59(2) of the Act are therefore, in my opinion, invalid.
I think however that these provisions are severable from other parts of the Act.
I think it cannot be reasonably said that the legislature would not put the Act into operation if these provisions are taken out of it.
The deletion of the provisions does not further make it impossible for the rest of the Act to operate.
I am, therefore, unable, to hold that because the sections mentioned above are bad, the whole Act should be declared to be bad.
That is all I wish to say in this judgment.
With regard to the other matters arising in this case, I agree with the judgment delivered by Wanchoo J. AYYANGAR, J. I entirely agree with the order that the petitions should be allowed and the impugned Act struck down in relation to its application to ryotwari lands which came into the State of Kerala from the State of Madras this being the only relief which the petitioners seek from this Court.
My only reason for this separate judgment is because I do not agree with that portion of the reasoning in the judgment just now pronounced in these petitions where it deals with the interpretation of article 31A(2).
In my judgment in the companion case Writ Petition No. 105 of 1961 I have endeavored to point out what according to me is the proper construction of this Article and I adhere to that view.
I consider that on article 31A(2) as it stands even after the fourth Amendment, properties held on ryotwari tenures and the interest of the royt in such lands would not be "estates" for the purposes of that Article.
No doubt as pointed out by me in the 875 other judgment, if there was a law existing on the date of the Constitution in relation to land tenures under which "estate" were defined as including not merely lands held by intermediaries and of others holding under favourable tenurers, but also of ryotwari proprietors having direct relationship with the Government and paying full assessment, such latter category of interests might also be comprehended within the term "estate" by reason of the words "have the same meaning as that expression. .has in the existing law relating to land tenures in force in that area" in Art.31A(2)(a).
That is the real basis and the ratio underlying the decisions of this Court in Ram Ram Narain Medhi vs State of Bombay(1), and Atma Ram vs State of Punjab(2).
In all other cases (apart from the two categories specially added by the Fourth Amendment) no lands other than those held by intermediaries or held on a favourable tenure would fall within the definition of "an estate" this being according to me the central concept or the thread which runs through the entire definition.
The choice between the different interpretations of the Article does not however present itself for the disposal of this petition which has to be answered in favour of the petitioner even on the view of the scope of article 31A which has commended itself to my colleagues.
Where an "existing law in relation to land tenures in force in an area" contains a definition of an "estate" and that definition excludes the interest of a roytwari proprietor, the very words of Art.31A(2)(a) which I have extracted earlier would negative the applicability of its provisions to that tenure.
article 31A being out of the way I agree that the provision in (1) section 2 (39) of the Act which by definition excludes pepper and areca plantations from the category of the plantations which are named in it which are exempted from the operative provisions of the impugned Act, (2)s. 58 for the 876 determination of the ceiling in respect of different individuals who are brought within the scope of the enactment, and (3) ss.52 and 64 for determining the compensation payable to the several classes of persons whose lands are acquired under Act, all these are violative the guarantee of the equal protection of laws under article 14 of the Constitution.
I therefore agree in the order proposed that the petitions be allowed, and with costs.
Petitions allowed.
| The Kerala Agrarian Relations Act was impugned on various grounds.
^ Held, (per Gajendragadkar, Wanchoo and Das Gupta, JJ.) that (1) the bill which was originally passed by a Legislative Assembly which as dissolved and was reconsidered and re passed by a new legislative assembly did not lapse and validly became the law when the President assented to it after it was passed by the second legislative assembly.
830 Purushothaman Nambudiri vs State of Kerala, [1962] Supp. 1 S.C.R. 753, followed.
(II) The Act which made certain deductions from the compensation payable to the landholders under Ch.
II and to others who held excess land under Ch.
III cannot be struck down as a piece of colourable legislation which is beyond the competence of the State Legislature, and it cannot be said that any device has been employed in the Act to take away the moneys of the landowners or the persons from whom excess land is taken away for the purpose of adding to the revenue of the State.
Section 80 of the Act provides for the Constitution of an agriculturist rehabilitation fund for the purpose of rendering help by way of loan, grant or otherwise to persons affected by the Act and eligible for the same under the rules but rr. 161 (a) (III) and 161 (b) (III) are so framed as to take within their scope even persons not affected by the Act.
Those rules are ultra vires of section 80 and must be struck down.
(III) The lands held by ryotwari pattadars in the area which came to the State of Kerala by virtue of the States Reorganisation Act from the State of Madras are not 'estates ' within the meaning of article 31A(2)(a) of the Constitution and therefore the Act is not protected under article 31A (1) from attack under articles 14, 19 and 31 of the Constitution.
State of Bihar vs Rameshwar Pratap Narain Singh, ; , referred to.
(IV) The reasons which call for exemption of tea, coffee and rubber plantations from certain provisions of the Act equally apply to areca and pepper plantations and there is no intelligible differentia related to the object and purpose of the Act which would justify any distinction in the case of tea, coffee and rubber plantations as against areca and pepper plantations.
The provisions in the Act relating to plantations are violative of article 14 of the Constitution.
The provisions relating to plantations cannot be severed from the Act and struck down only by themselves.
The whole Act must be struck down as violative of article 14 of the Constitution so far as it applied to ryotwari lands in those areas of the State which were transferred to it from the State of Madras.
(V) The manner in which ceiling has been fixed under section 58(1) is violative of the fundamental right enshrined in article 14 of the constitution and as that section is the basis of entire Ch.
III the whole chapter must fall with it 831 (IV) The manner in which progressive cuts have been imposed on the purchase price under section 52 and the market value under section 64 in order to determine the compensation payable to landowners or intermediaries in one case and to persons from whom excess land is taken in another, results in discrimination and cannot be justified on any intelligible differentia which has any relation to the objects and purposes of the Act.
The provision as to compensation is all pervasive and the entire Act must be struck down as violative of article 14 of the Constitution in its application to ryotwari lands which have come to the State of Kerala from the State of Madras.
Per Sarkar, J. Sections 52 and 64 of the Act which provide for payment of Compensation at progressively smaller rates for larger valuations of the interests acquired are not invalid as offending article 14 of the Constitution.
The provisions in the act making a discrimination in favour of tea, coffee, rubber and cardamom plantation and also in favour of cashew plantations cannot be upheld.
Sections 3(viii), 57 (1) (d) and 59 (2) are therefore invalid.
These are however severable from the other parts of the Act and the whole Act cannot be held to be bad merely because those provisions are bad.
Per Ayyangar, J. Properties held on ryotwari tenures and the interest of the ryot in such lands would not be "estate" for the purposes of article 31A(2) as it stood even after the Fourth Amendment of the Constitution.
Where an existing law in relation to land tenures in force in an area contains a definition of an 'estates ' and that definition excludes the interest of a ryotwari proprietor, the very words of article 31A(2) of the Constitution negatived the applicability of its provisions to that tenure.
Ram Ram Narain Medhi, vs State of Bombay, [1959] Supp.
I S.C.R. 489 and Atma Ram vs State of Punjab, [1959] Supp.
I S.C.R. 748, referred to.
Section 2(39) which by definition excludes pepper and areca plantations from the category of the plantations named in it which are exempted from the operative provisions of the impugned Act, section 58 for the determination of the ceiling in respect of different individuals who are brought within the scope of the enactment and sections 52 and 64 for determining the compensation payable to the several classes of persons whose lands are acquired under the Act are all violative of the guarantee of equal protection of laws under article 14 of the Constitution.
| In these petitions in the nature of public interest litigation under Article 32 of the Constitution, the relief asked for is one for mandamus to the Union of India to fill the vacancies of Judges in the Supreme Court and the several High Courts of the country and ancillary orders or direc tions in regard to the relief of filling up of vacancies.
In response to the rule, the Union of India, relying upon S.P. Gupta vs Union of India, [1982] 2 SCR 365, raised a preliminary objection as to the justiciability of the issue.
The objection, however, was later withdrawn by the succeed ing Attorney General who made a statement that it was the constitutional obligation of the Union of India to provide the sanctioned Judge strength in the superior courts and default, if any, was a matter of public interest, and the writ petitions requiring a direction to the Union of India to fill up the vacancies were maintainable.
Disposing of the petitions, this Court, HELD: (1) The ratio in S.P. Gupta 's case left the matter of fixing Up Of the Judge strength to the President of India under the constitutional scheme, and the choice of Judges to the prescribed procedure, but once the sanctioned strength was determined it was the obligation of the Union of India to maintain the sanctioned strength in the superior Courts.
[437H; 438A] (2) It is too late in the day to dispute the position that justice has to be administered through the courts and such administration would relate to social, economic and political aspects of justice.
The Judiciary therefore be comes the most prominent and outstanding wing of the Consti tutional System for fulfilling the mandate of the Constitu tion.
434 For its sound functioning, it is necessary that there must be an efficient judicial system and one of the factors for providing the requisite efficiency is ensuring adequate strength.
[440E F] (3) For the availability of the appropriate atmosphere where a Judge would be free to act according to his con science it is necessary that he should not be over burdened with pressure of work which he finds it physically impossi ble to undertake.
This necessarily suggests that the judge strength should be adequate to the current requirement and must remain under constant review in order that commensurate Judge strength may be provided.
[441F G] Bradley vs Fisher, ; 1871, referred to.
(4) It is a matter for immediate attention of all con cerned and of Government in particular that the Adminis tration of Justice is made a plan subject and given appro priate attention.
[444C] (5) Backlog in Courts has become a national problem.
The adjudicatory process is being blamed for not equalling itself to the challenge of the times.
There is a general complaint that the judicial system is on the verge of col lapse.
It is, therefore, the obligation of the constitution al process to keep the system appropriately manned.
There is no justification for the sluggish move in such an important matter.
[447C D] (6) If in a given case the Chief Justice of the High Court has recommended and the name has been considered by the Chief Minister and duly processed through the Governor so as to reach the hands of the Chief Justice of India through the Ministry of Justice and the Chief Justice of India as the highest judicial authority in the country, on due application of his mind, has given finality to the process at his level, there cannot ordinarily be any justi fication for reopening the matter merely because there has been a change in the personal of the Chief Justice or the Chief Minister of the State concerned.
This has to be the rule and the policy adopted by the Union of India should immediately be given up.
[448B D] (7) In the functioning of public offices there is and should be continuity of process and action and all objective decisions taken cannot be transformed into subjective issues.
That being the position, recommendations finalised by the Chief Justice of India unless for any particular reason and unconnected with the mere change of the Chief 435 Justice or the Chief Minister justifying the same should not be reopened and if in a given case the Union of India is of the view that the matter requires to be looked into again a reference should be made to the Chief Justice of India and there can be a fresh look at the matter only if the Chief Justice of India permits such a review of the case.
[448E F] (8) Consistent with the constitutional purpose and process it becomes imperative that the role of the institu tion of the Chief Justice of India be recognised as of crucial importance in the matter of appointments to the Supreme Court and the High Courts of the States.
This aspect dealt with in Gupta 's case requires re consideration by a larger bench.
[450E] (9) In India the judicial institutions, by tradition, have an avowed a political commitment and the assurance of a non political complexion of the judiciary cannot be divorced from the process of appointments.
Constitutional phraseology of "consultation" has to be understood and expounded consistent with and to promote this constitutional spirit.
These implications are, indeed, vital.
The constitutional values cannot be whittled down by calling the appointment of Judges as an executive act.
The appointment is rather the result of collective, constitutional process.
It is a participatory constitutional function.
It is, perhaps, inappropriate to refer to any `power ' or `right ' to appoint judge.
It is essentially a discharge of a constitutional trust of which certain constitutional functionaries are collectively repositories.
[457D F] (10) The executive, on whose advice the President acts, as a participant in the process has its own important and effective role.
To say that the power to appoint solely vests with the executive and that the executive, after bestowing such consideration on the result of consultations with the judicial organ of the State, would be at liberty to take such decision as it may think fit in the matter of appointments, is an over simplification of a sensitive and subtle constitutional sentence subversive of the doctrine of judicial independence.
[457F G] (11) The word "consultation" is used in the constitu tional provision in recognition of the status of the high constitutional dignitary who formally expresses the result of the institutional process leading to the appointment of judges.
To limit that expression to its literal limitations, shorn of its constitutional background and purpose, is to borrow Justice Frankfurter 's phrase, "to stick in the bark of words".
[458B] (12) Judicial Review is a part of the basic constitutional structure 436 and one of the basic features of the essential Indian Con stitutional policy.
This essential constitutional doctrine does not by itself justify or necessitate any primacy to the executive wing on the ground of its political accountability to the electorate.
[458C] (13) It might under certain circumstances be said that Government is not bound to appoint a judge so recommended by the judicial wing.
But to contemplate a power for the execu tive to appoint a person despite his being disapproved or not recommended by the Chief Justice of the State and the Chief Justice of India would be wholly inappropriate and would constitute an arbitrary exercise of power.
[458D E] (14) The purpose of the `consultation ' is to safeguard the independence of the judiciary and to ensure selection of proper persons.
The matter is not, therefore, to be consid ered that the final say is the exclusive prerogative of the executive government.
The recommendations of the appropriate constitutional functionaries from the judicial organ of the State has an equally important role.
"Consultation" should have sinews to achieve the constitutional purpose and should not be rendered sterile by a literal interpretation.
[458F G] (15) There are preponerant and compelling cousideratious why the views of the Chief Justices of the States and that of the Chief Justice of India should be afforded a decisive import unless the executive has some material in its posses sion which may indicate that the appointment is otherwise undesirable.
[458G H] (16) The correctness of the opinion of the majority in S.P. Gupta 's case relating to the status and importance of consultation, the primacy of the position of the Chief Justice of India and the views that the fixation of Judge strength is not justiciable should be reconsidered by a larger bench.
[459B] (17) In view of the fact that the bulk of vacancies in the High Courts have been filled up, and in view of the assurance held out by the learned Attorney General that prompt steps are being taken to fill up the remaining vacan cies, further monitoring for the time being is not neces sary.
[459F]
| Pursuant to the Indo Pakistan Agreement, 1958, and after this Court 'section Advisory opinion in In re the Berubari Union and Exchange and Enclaves, , Parliament enacted the Constitution (Ninth Amendment) Act, 1960 for cession of part of the territory of India to Pakistan.
In order to implement the provisions of the Act a physical demarcation of the portion that had to be ceaded was necessary.
The respondents filed a petition under article 226 of the Constitution before the High Court challenging the validity of the proposed demarcation principally on the ground that they would be deprived of their property without compensation.
A single Judge of the High Court held that the cession of the territory involved transfer of ownership and other private property rights to Pakistan through the Union of India, which, though outside cl 2A of article 31 was compulsory acquisition within the meaning of article 31(2).
The single Judge granted a certificate under article 132(1) for appeal to this Court.
HELD:(i) No question of acquisition within the meaning of Article 31(2) is involved in the present case.
The Constitution (Fourth Amendment) Act, 1955, makes it clear that mere deprivation of property unless it is acquisition or requisitioning within the meaning of cl.
2A will not attract cl.
(2) and no obligation to pay compensation will arise thereunder and it is essential under clause (2) that in order to constitute acquisition or requisitioning there must be transfer of the ownership or right to possession of the property to the State or to a corporation owned or controlled by the State.
Cession indisputably involves transference of sovereignty from one sovereign State to another.
But, there is no transference of ownership or right to possession in the properties of the inhabitants of the territory ceded to the ceding State itself.
The effect of the Constitution (Ninth Amendment) Act, 1960, can by no stretch of reasoning be regarded as transfer of the ownership or right to possession of any property of the respondents to the "State" within the meaning of Article 12 of the Constitution.
[202C F, H] Charanjit Lal Chowdhury vs Union of India, [1950] S.C.R. 869, 902, State of West Bengal vs Subodh Gopal Bose & Ors.
; , Dwarkadas Shrinivas of Bombay vs Sholapur Spinning & Weaving Co. Ltd. & Ors.
; , Saghir Ahmed vs State of Uttar Pradesh, ; and Gullapalli Nageswara Rao & Ors.
vs Andhra Pradesh State Road Transport Corporation & Anr.
[1959] Supp. 1 S.C.R. 319, referred to.
245 (ii) This Court has on earlier occasions, observed that the practice of single Judge deciding the case and giving a certificate under Article 132 (1) for appeal to this Court, although technically correct, was an improper practice and that such a certificate should be given only in very exceptional cases where a direct appeal was necessary.
The present case may be of an exceptional kind; but this Court has been deprived of the benefit of the judgment of a larger Bench of the High Court on points which are of substantial importance.
[246B] R.D. Agarwala. & Anr.
vs Union of India & Ors.
C.A. Nos.
2634/69 etc.
dt. 23 2 1970 and Union of India vs J. P. Mitter; , , referred to.
| As a result of a notification dated December 30, 1967 under section 59(1) of the Madras General Sales Tax Act and later by Act 2 of 1968 sales of jaggery became liable to tax.
But while by notification under section 17 'palm jaggery was exempted from tax 'cane jaggery ' was not.
The appellants who were dealers in 'cane jaggery ' challenged the levy by writ petitions in the High Court which were, however, dismissed.
In appeal before this Court it was contended (i) that the tax on 'cane jaggery ' while exempting 'palm jaggery ' was ,discriminatory and violative of article 14 of the Constitution; (ii) that taxation of 'cane jaggery ' was restrictive of trade and commerce and therefore violative of article 301; (iii) that the impugned legislation constituted a colourable exercise of power.
HELD: (i) The evidence on record clearly showed that 'cane jaggery ' and 'palm jaggery ' were commercially different commodities.
The methods of production of 'palm jaggery ' and 'cane jaggery ' were different; they reached the consumers through different channels of distribution; the prices at which they were sold differed and they were consumed by different sections of the community.
'Cane jaggery ' and 'palm jaggery ' did not thus belong to the same class and in differently treating them for the purpose of taxation there was no unlawful discrimination.
[620 B E; 621 C D] It was incorrect to say that the State Legislature had always treated the two products on the same footing.
For nearly three years before April 1, 1958 sales of 'palm jaggery ' were exempt from tax but sales of 'cane jaggery ' were not.
[620 B] Further, it is for the legislature to determine the objects on which tax shall be levied.
The courts will not strike down an Act as denying equal protection merely because other objects could have been but are not taxed by the legislature.
[621 B C] N. Venugopala Ravi Varma Rajah vs Union of India, ; , applied.
(ii) Freedom of trade, commerce and intercourse guaranteed by article 301 of the Constitution is protected against taxing statutes as well as other statutes, but by imposition of tax on transactions of sale of 'cane jaggery ' no restriction on the freedom of trade or commerce or in the course of trade with or within the State.
was imposed.
[621 D F] State of Madras vs N. K. Nataraja Mudaliar. ; , referred to.
(iii) The plea of colourable exercise of power had no substance because the legislature had power in the present case to.
levy the tax.[621 G] 4 Sup.
C.I./69 616 K.C. Gajapati Narayan Deo & Ors.
vs State of Orissa, [1954] S.C.R.1, applied.
| Respondents I and 2 filed a suit against the petitioners/defendants claiming damages of Rs.1000 crores from the petitioners for causing loss to movable and immovable properties of the various Gurdwaras being administered and managed by respondent No. 1 under the provisions of the Punjab Sikh Gurdwaras Act, 1925 during the period from June to September 84.
They also sought mandatory injunction directing the petitioners and their principal functionaries to tender unqualified apology before the Sikh Sangat for causing mental, sentimental, social and spiritual setback and also for causing deep sense of injury to the honour and self respect of Sikhs who are law abiding citizens.
Besides, an application to sue as indigent persons under order 33, Rule l and 2 of the Code of Civil Procedure was filed.
It was alleged in the plaint that on 3rd June, 1984 the Martyrdom day of Shri Guru Arjun Devji, when a large number of devotees came to the Golden Temple complex at Amritsar to commemorate the said occasion the various units of the Armed Forces under the employment of the petitioners as well as Police units under the employment of petitioners and the Government of Punjab with malice launched an attack in the Golden temple complex by resort to indiscriminate and barbaric firing.
The defence of the petitioners was that it was an Act of State necessary for the security and integrity of the State and that the action taken was an exercise of sovereign power in respect of sovereign acts.
The petitioners in view of the extra ordinary situation prevailing in the State of Punjab in general and in Amritsar in particular moved the present transfer petition under section 25 of the Code of Civil Procedure, aver 473 ring that it is not possible to have a fair trial of the case in Amritsar or other parts of Punjab since the suit is an unusual one and tiled at a critical time in Punjab.
The question is whether the ends of justice requires the transfer of the suit from the State of Punjab to any other State.
Allowing the petition, the Court, ^ HELD: 1.
The power of the Supreme Court to transfer a suit or proceeding from one State to another State is a power which should be used with circumspection and caution but if the ends of justice so demand in an appropriate case, the Court should not hesitate to act.
One of the highest principles in the administration of law is that justice should not only to be done but should be seen to be done.
[476D E;C] 2.
In this case, in view of the nature of allegations regarding some of the respondents who have been added.
strong feelings are likely to be roused in some section of community.
In such an atmosphere to meet the ends of justice it would be desirable to have the case transferred to a calmer and quieter atmosphere.
Justice would be done in such a way.
To contend that no extra ordinary atmosphere exist in Punjab would be to contend for an unreality.
The suit is also unusual and sensitive and the time is critical.
Therefore, the Supreme Court should act by transfering the case outside the State of Punjab to meet the ends of justice.
That is an absolute imperative in this case.
[476D F] G.X. Francis & ors.
vs Banke Bihari Singh & Anr., AIR 1958 SC 309; Hazara Singh Gill vs The State of Punjab, [1964] (4) SCR l; and State of Assam vs Atul Vohra, Transfer Petition No. 21/80 referred to.
(The Court directed the case to be transferred to Delhi High Court to be tried by a learned Single Judge on the original side.) [477D]
| The petitioner and his two associates were convicted and sentenced under section 302 read with section 34, I.P.C. On appeal, the High Court maintained the conviction of the petitioner but acquitted his associates giving them the benefit of doubt.
The Petitioner applied to this Court for grant of special leave to appeal under article 136 but the same was dismissed.
By this petition under article 32 the petitioner sought issuance of a writ of mandamus directing the State to forbear from giving effect to the judgment and sentence passed by the trial court as also the judgment of the High Court as well as the order passed by this Court dismissing the special leave petition on the ground that his conviction was illegal and therefore his detention in jail was in violation of article 21 read with articles 14 and 19.
Dismissing the petition, ^ HELD: The propriety of asking for a declaration in these proceedings under article 32 that conviction of the petitioner by the High Court for an offence punishable under section 302 read with section 34 I.P.C. is illegal, particularly when this Court has declined to grant special leave under article 136 cannot be appreciated.
Nor can the petitioner be heard to say that his detention in jail amounts to deprivation of the fundamental right to life and liberty without following the procedure established by law in violation of article 21 read with articles 14 and 19.
When a special leave petition is assigned to the learned judges sitting in a Bench, they constitute the Supreme Court and there is a finality to their judgment which cannot be upset in these proceedings under article 32.
Obviously, the Supreme Court cannot issue a writ, direction or order to itself in respect of any judicial proceedings and the learned judges constituting the Bench are not amenable to the writ jurisdiction of this Court.
[470 D F] Shankar Ramchandra Abbyankar vs Krishnaji Dattatreya Bapat, ; , referred to.
| On the question whether, the right to execute a decree for the possession of watan land which has been obtained by the watandar came to an end, because of the abolition by the Gujarat Patel Watans Abolition Act.
1961, of patel watans and the extinguishment of all incidents appertaining to them under section 4 of, the Act, HELD : (1) There is nothing in the language of section 4 which renders such decrees for possession to be in executable.
Had the legislature intended that such decrees should become in executable, the legislature would have indicated .such intention by incorporating some provision to that effect.
[121B] (2) The words "any decree or order of a Court" in the opening clause of the section do not indicate that the decree or order of court could not be executed with effect from the appointed day.
The opening clause of the section only indicates that irrespective of any usage or custom and irrespective of any settlement, grant, agreement, sanad or decree or order of a court or the existing watan law.
which might have defined and declared the incidents appertaining to patel watans, the results contemplated by the various clauses of the section would follow and nothing contained in such settlement etc.
would prevent the operation of that section.
[122E 123A] (3) If the fact that patel watans have been abolished and incidents appertaining to them have, been extinguished does, not lead to the conclusion that the right of the erstwhile watandar to the possession of the watan lands also comes to an end.
Section 4(iv) expressly provides that the resumption of watan land consequent upon the abolition of patel watans would be subject to the provisions of sections 6, 7 and 10, According to section 6, the watan land.
subject to the conditions mentioned in that section, shall be regranted to the watandar.
He shall be deemed to be occupant of the said land, and he would be entitled to continue in possession if he complies with the provisions of that section.
That is, so far as the quondam watandars are concerned, they are entitled to be in possession of the watan lands, though not in their capacity as watandars but by virtue of the operation of section 6 of the Act.
If the respondent would be entitled to be in possession of the land under section 6, the right to execute the decree for possession of land cannot be denied to him.
[121C 122] (4) If the respondent is entitled to execute the decree for possession of the land obtained against the appellants the question whether the appellants, if allowed to remain in possession, could have applied for regrant to them under section 10 is not relevant.
[122C E]
| Dismissing the writ petitions, the Court ^ HELD : (1).
Having regard to the Memorandum of Association and the Rules of the Society, the respondent college is a State within the meaning of Article 12.
The composition of the Society is dominated by the representatives appointed by the Central Government and the Governments of Jammu & Kashmir, Punjab, Rajasthan and Uttar Pradesh with the approval of the Central Government.
The monies required for running the college are provided entirely by the Central Government and the Government of Jammu & Kashmir and even if any other monies are to be received by the Society, it can be done only with the approval of the State and the Central Governments.
The Rules to be made by the Society are also required to have the prior approval of the State and the Central Governments and the accounts of the Society have also to be submitted to both the Governments for their scrutiny and satisfaction.
The Society is also to comply with all such directions as may be issued by the State Government with the approval of the Central Government in respect of any matters dealt with in the report of the Reviewing Committee.
The control of the State and the Central Governments is indeed so deep and pervasive that no immovable property of the Society can be disposed of in any manner without the approval of both the Governments.
The State and the Central Governments have even the power to appoint any other person or persons to be members of the Society and any member of the Society other than a member representing the State or the Central Government can be removed from the membership of the Society by the State Government with the approval of the Central Government.
The Board of Governors, which is incharge of general superintendence, direction and control of the affairs of the Society and of its income and property is also largely controlled by nominees of the State and the Central Governments.
The State Government and by reason of the provision for approval, the Central Government also thus have full control of the work 80 ing of the Society and therefore, the Society is merely a projection of the State and the Central Governments.
The voice is that of the State and the Central Governments.
The Society is an instrumentality or the agency of the State and the Central Governments and it is an "authority" within the meaning of Article 12.
If the Society is, an "authority" and, therefore, the "State" within the meaning of Article 12, it must follow that it is subject to the constitutional obligation under Article 14.
[99F H, 100 K F] (2) The expression "other authorities", in Article 12 must be given an interpretation where constitutional fundamentals vital to the maintenance of human rights are at stake, functional realism and not facial cosmetics must be the diagnostic tool, for constitutional law must seek the substance and not the form.
The Government may act through the instrumentality or agency of juridical persons to carry out its functions, since, with the advent of the welfare State its new task have increased manifold.
[90B D] It is, undoubtedly, true that the corporation is a distinct juristic entity with a corporate structure of its own and it carries on its functions on business principles with a certain amount of autonomy which is necessary as well as useful from the point of view of effective business management, but behind the formal ownership which is cast in the corporate mould, the reality is very much the deeply pervasive presence of the Government.
It is really the Government which acts through the instrumentality or agency of the corporation and the juristic veil of corporate personality worn for the purpose of convenience of management and administration cannot be allowed to obliterate the true nature of the reality behind which is the Government.
It is clear that if a corporation is an instrumentality or agency of the Government, it must be subject to the same limitations in the field of constitutional law as the Government itself, though in the eye of the law it would be a distinct and independent legal entity.
If the Government acting through its officers is subject to certain constitutional limitations, it must follow a fortiorari that the Government acting through the instrumentality or agency of a corporation should equally be subject to the same limitations.
If such a corporation were to be free from the basic obligation to obey the Fundamental Rights, it would lead to considerable erosion of the efficiency of the Fundamental Rights, for in that event the Government would be enabled to override the Fundamental Rights by adopting the stratagem of carrying out its functions through the instrumentality or agency of a corporation, while retaining control over it.
The Fundamental Rights would then be reduced to little more than an idle dream or a promise of unreality.
[91B F] The Courts should be anxious to enlarge the scope and width of the Fundamental Rights by bringing within their sweep every authority which is an instrumentality or agency of the Government or through the corporate personality of which the Government is acting, so as to subject the Government in all its myriad activities, whether through natural persons or through corporate entities, to the basic obligation of the Fundamental Rights.
The constitutional philosophy of a democratic socialist republic requires the Government to under take a multitude of socioeconomic operations and the Government, having regard to the practical advantages of functioning through the legal device of a corporation, embarks on myriad commercial and economic activities by resorting to the instrumentality or agency of a corporation, but this contrivance of carrying on such activities through a corporation cannot exonerate the Government from implicit obedience to the Fundamental Rights.
To use the 81 corporate methodology is not to liberate the Government from its basic obligation to respect the Fundamental Rights and not to override them.
The mantle of a corporation may be adopted in order to free the Government from the inevitable constraints of red tapism and slow motion but by doing so, the Government cannot be allowed to play truant with the basic human rights, otherwise it would be the easiest thing for the government to assign to a plurality of corporations almost every State business such as Post and Telegraph, TV, Radio, Rail, Road and Telephones in short every economic activity and thereby cheat the people of India out of the Fundamental Rights guaranteed to them.
That would be a mockery of the Constitution and nothing short of treachery and breach of faith with the people of India, because though apparently the corporation will be carrying out these functions, it will in truth and reality be the Government which will be controlling the corporation and carrying out these functions through the instrumentality or agency of the corporation.
Courts cannot by a process of judicial construction allow the Fundamental Rights to be rendered futile and meaningless and there by wipe out Chapter III from the Constitution.
That would be contrary to the constitutional faith of the post Menaka Gandhi era.
It is the Fundamental Rights which along with the Directive Principles constitute the life force of the Constitution and they must be quickened into effective action by meaningful and purposive interpretation.
If a corporation is found to be a mere agency or surrogate of the Government, "in fact owned by the Government, in truth controlled by the government and in effect an incarnation of the government," the court must not allow the enforcement of Fundamental Rights to be frustrated by taking the view that it is not the government and, therefore, not subject to the constitutional limitations.
Therefore, where a corporation is an instrumentality or agency of the Government, it is an authority within the meaning of Article 12 and, hence, subject to the same basic obligation to obey the Fundamental Rights as the government.
[91G H, 92A G] R. D. Shetty vs The International Airport Authority of India & Ors., and U.P. Warehousing Corporation vs Vijay Narain, ; , followed.
(3) The test for determining as to when a corporation can be said to be an instrumentality or agency of Government may be culled out from the judgment in the International Airport Authority 's case.
They are not conclusive or clinching, but they are merely indicative indicia which have to be used with care and caution, because while stressing the necessity of a wide meaning to be placed on the expression "other authorities", it must be realised that it should not be stretched so far as to bring in every autonomous body which has some nexus with the Government with the sweep of the expression.
A wide enlargement of the meaning must be tempered by a wise limitation.
The relevant tests gathered from the decision in the International Airport Authority 's case may be summarized as: (i) "One thing is clear that if the entire share capital of the corporation is held by Government it would go a long way towards indicating that the Corporation is an instrumentality or agency of Government.
(ii) 'Where the financial assistance of the State is so much as to meet almost entire expenditure of the corporation, it would afford some indication of the corporation being impregnated with governmental character. ' (iii) 'It may also be a relevant factor. whether the corporation enjoys monopoly status which is the State conferred or State protected. ' (iv) 'Existence of 'deep and pervasive State control may afford an indication that the Corporation is a state 82 agency or instrumentality. ' (v) 'If the functions of the corporation of public importance and closely related to governmental functions, it would be a relevant factor in classifying the corporation an instrumentality or agency of Government. ' (vi) 'Specifically, if a department of Government is transferred to a corporation, it would be a strong factor supportive of this inference" of the corporation being an instrumentality or agency of Government.
"[96F H, 97A D] It is immaterial for this purpose whether the corporation is created by a statute or under a statute.
The test is whether it is an instrumentality or agency of the Government and not as to how it is created.
The enquiry has to be not as to how the juristic person is born but why it has been brought into existence.
The corporation may be a statutory corporation created by a statute or it may be a Government company or a company formed under the or it may be a society registered under the or any other similar statute.
Whatever be its genetical origin, it would be an "authority" within the meaning of Article 12 if it is an instrumentality or agency of the Government and that would have to be decided on a proper assessment of the facts in the light of the relevant factors.
The concept of instrumentality or agency of the Government is not limited to a corporation created by a statute but is equally applicable to a company or society and in a given case it would have to be decided, on a consideration of the relevant factors, whether the company or society is an instrumentality or agency of the Government so as to come within the meaning of the expression "authority" in Article 12.
[97F H, 98A B] (4) Merely because a juristic entity may be an "authority" and, therefore, "State" within the meaning of Article 12, it may not be elevated to the position of "State" for the purpose of Articles 309, 310 and 311 which find a place in The definition of "State" in Article 12 which includes an "authority" within the territory of India or under the control of the Government of India is limited in its application only to and by virtue of Article 36, to and it does not extend to the other provisions of the Constitution and, hence, a juristic entity which may be "State" for the purpose of Parts III and IV would not be so for the purpose of Part XIV or any other provision of the Constitution.
[98B D] section L. Aggarwal vs Hindustan Steel Ltd., [1970] 3 S.C.R. 365; Sabhajit Tewary vs Union of India & Ors., and Sukhdev Singh vs Bhagat Ram, [1975] 3 S.C.R. 619, explained and distinguished.
(5) Article 14 must not be identified with the doctrine of classification.
What Article 14 strikes at is arbitrariness because any action that is arbitrary, must necessarily involve negation of equality.
The doctrine of classification which is evolved by the courts is not para phrase of Article 14 nor is it the objective and end of that Article.
It is merely a judicial formula for determining whether the legislative or executive action in question is arbitrary and therefore constituting denial of equality.
If the classification is not reasonable and does not satisfy the two conditions, namely, (1) that the classification is founded on an intelligible differentia and (2) that differentia has a rational relation to the object sought to be achieved by the impugned legislative or executive action, the impugned legislative or executive action, would plainly be arbitrary and the guarantee of equality under Article 14 would be breached.
Wherever, therefore, there is arbitrariness in State action whether it be the 83 legislature or of the executive or of an "authority" under Article 12, Article 14 immediately springs into action and strikes down such State action.
In fact, the concept of reasonableness and non arbitrariness pervades the entire constitutional scheme and is a golden thread which runs through the whole of the fabric of the Constitution.
[100G, 102D F] E.P. Royappa vs State of Tamil Nadu, [1974] 2 S.C.R. 348; Maneka Gandhi vs Union of India, [1978] 2 S.R. 621 and R. D. Shetty vs The International Airport, Authority of India, & Ors., , applied.
(6) The procedure adopted by the respondent Society cannot be regard as arbitrary merely because it refused to take into account the marks obtained by the candidates at the qualifying examination but chose to regulate the admissions by relying on the entrance test.
The entrance test facilitates the assessment of the comparative talent of the candidates by application of a uniform standard and is always preferable to evaluation of comparative merit on the basis of marks obtained at the qualifying examination, when the qualifying examination is held by two or more different authorities, because lack of uniformity is bound to creep into the assessment of candidates by different authorities with different modes of examination.
[103A B, D F] (7) The oral interview test is undoubtedly not a very satisfactory test for assessing and evaluating the capacity and calibre of candidates, but in the absence of any better test for measuring personal characteristics and traits, the oral interview test must, at the present stage, be regarded as not irrational or irrelevant though it is subjective and based on first impression, its result is influenced by many uncertain factors and it is capable of abuse.
In the matter of admission to college or even in the matter of public employment, the oral interview test as presently held should not be relied upon as an exclusive test, but it may be resorted to only as an additional or supplementary test and, moreover, great care must be taken to see that persons who are appointed to conduct the oral interview test are men of high integrity, calibre and qualification.
[106C E] R.Chitra Lakha and Others vs State of Mysore and Others, ; , followed.
(8) Having regard to the drawbacks and deficiencies in the oral interview test and the conditions prevailing in the country, particularly when there is deterioration in moral values and corruption and nepotism are very much on the increase, allocation of a high percentage of marks for the oral interview as compared to the marks allocated for the written test, is not free from the vice of arbitrariness.
The allocation of as high a percentage as 33 1/3 of the total marks for oral interview suffers from the vice of arbitrariness.
[107A D] The court, however, to avoid immense hardship being caused to those students in whose case the validity of the selection cannot otherwise be questioned and who have nearly completed three semesters and taking into consideration the fact that even if the petitioners are ultimately found to be deserving of selection on the application of the proper test, it would not be possible to restore them to the position as if they were admitted for the academic year 1979 80, which has run out long since declined to set aside the selection made.
The Court was, however, of the view that under the existing circumstances.
84 allocation of more than 15% of the total marks for the oral interview would be arbitrary and unreasonable.
[107G H, 108A F] A. Peeriakaruppan vs State of Tamil Nadu, [1971] 2 S.C.R. 430; Miss Nishi Meghu vs State of Jammu & Kashmir & Ors., [1980] 3 S.C.R. p. 1253, applied.
(9) There can be no doubt that if the interview did not last for more than two or three minutes on an average and the questions asked had no bearing on the factors required to be taken into account the oral interview test would be vitiated, because it would be impossible in such an interview to assess the merit of a candidate with reference to these factors.
Here the absence of proper affidavit by the members of the committee to the contrary leads to the only conclusion that the selection made on the basis of such test must be held to be arbitrary.
However, if the marks allocated for the oral interview do not exceed 15% of the total marks and the candidates are properly interviewed and relevant questions are asked with a view to assessing their suitability with reference to the factors required to be taken into consideration, the oral interview test would satisfy the criterion of reasonableness and non arbitrariness.
Further it would be desirable if the interview of the candidates is tape recorded, for in that event there will be contemporaneous evidence to show what were the questions asked to the candidates by the interviewing committee and what were the answers given and that will eliminate a lot of unnecessary controversy besides acting as a check on the possible arbitrariness of the interviewing committee.
[109A B, D E, F H]
|
Civil Appeal No. 225 of 1960.
Appeal from the judgment and decree dated April 19, 1957, of the Madhya Pradesh High court (Indore Bench) at Indore in Civil Reference No. 1 of 1952.
B. Sen, B.K.B. Naidu and I.N. Shroff, for the appellant.
A. V. Viswanatha Sastri, K. A. Chitale, J. B. Dadachanji, section N. Andley, Rameshwar Nath and P. L. Vohra, for the respondents.
1961, December, 20 The Judgment of the Court was delivered by AYYANGAR, J.
This appeal comes before us by virtue of a certificate of fitness granted by the High Court of Madhya Pradesh under section 47(2) of the 245 Gwalior War Profits ordinance, Samvat 2001 (hereafter called the Ordinance) on the ground that the appeal involves a substantial question of law.
The question of law which arises in the appeal relates to the proper construction of r. 3(1) of the Schedule of the ordinance.
The respondent M/s.
Binodiram Balchand is the name under which a Hindu undivided family which wag resident in the State of Gwalior carried on various businesses in that State.
Profits derived from business carried in the State were charged to War Profits Tax under the ordinance.
Among the businesses carried on by the respondent was its employment as the Secretary Treasurer and Managing agent of a textile mill which was a limited company bearing the name of Binod Mills Company Limited, Ujjain.
The appeal is concerned with the computation of the profits of the respondent to War Profits Tax under the ordinance, which it might be stated at the outset, was on lines very similar to the Indian Excess Profits Tax Act, 1940.
The chargeable accounting period with which the appeal is concerned, is the period commencing from July 1, 1944, to.
October 16, 1944.
The respondent assessee submitted its return and thereafter the War Profits Tax officer by his assessment order dated July 9, 1951, determined the taxable income of the assessee for this chargeable accounting period at Rs. 12,16,145/ and assessed it to tax in the sum of Rs. 2,02,691/ .
Several points were raised in relation to this assessment order by the respondent, and one of them related to the inclusion in its assessable profits of a sum of Rs. 11,09,332/ which was received by the respondent on July 5, 1944, being the dividend declared and paid by the Binod Mills Ltd" for 1943 on the shares held by the respondent.
It was the contention of the respondent that this sum was its income from an investment pure and simple and was not 246 "profits" from business, and so could not be included in its taxable profits on a proper construction of the relevant provisions of the ordinance.
From the assessment order the respondent filed an appeal to the appellate authority which however was unsuccessful.
A revision to the Commissioner of War Profits Tax met with the same fate and thereafter the respondent prayed for a reference to the High Court under section 46(1) of the ordinance which ran thus: `46(1) If, in the course of any assessment under this ordinance or any proceeding in connection therewith, a question of law arises, The Commissioner, may; either on his own motion or on reference from any War Profits Tax authority subordinate to him, draw up statement of the case and refer it with his own opinion thereon to the High Court.
" The Commissioner acceded to this request and referred for the opinion of the High Court three questions:, "(1) Whether the dividend income of Rs. 11,09,332/ received from the Binod Mills was chargeable under the War Profits Tax ordinance ? (2) Whether certain bad debts written off by the assessees could be allowed as deductions in computing profits for war tax purpose? (3) Whether the expenses of assessees ' branch at Gwalior which was defunct, could be allowed as admissible expenses ?" The High Court answered questions 2 and 3 in favour of the department, but the first question was answered in the negative and in favour of the assessee.
There is now no dispute as regards questions 2 & 3 and the appeal is confined to the correctness of the answer to the first question.
247 Before setting out the grounds upon which the High court decided the reference in favour of the respondent it is necessary to read a few of the provisions of the relevant law which bear upon the point arising for consideration.
The preamble to the ordinance recites that it was enacted to impose a tax on "excess profits arising out of certain businesses" and this intention is carried out by section 4(1) which is the charging section which enacts: "4(1) Subject to the provisions of this ordinance, there shall, in respect of any business to which this ordinance applies, be charged, levied and paid on the amount by which the profits during any chargeable period exceed the standard profits, an excess profit tax (in this ordinance referred to as the War Profits Tax ') which shall be equal to 60 per cent.
of the aforesaid amount.
" The expression `business ', the profits derived from which are thus brought to charge is defined by section 2(5) in these terms: "2(5) `business ' includes any trade, commerce or manufacture or any adventure in the nature of trade, commerce or manufacturer or any profession or vocation, but does not include a profession carried on by an individual or by individuals in partnership, if the profits of the profession depend wholly or mainly on his or their personal qualifications, unless such profession consists wholly or mainly in the making of contracts on behalf of other persons or the giving to other persons of advice of a commercial nature in connection with the making of contracts: Provided that where the functions of a company or of a society incorporated by or under any enactment consist wholly or mainly in the holding of investments or other property or both, the holding thereof shall be 248 deemed for the purpose of this definition to be a business carried on by such company or society; Provided further that all businesses to which this ordinance applies carried on by the same person shall be treated as one business for the purposes of this ordinance;" There are two further definitions which are of some relevance to the arguments addressed to us and might therefore be set out at this stage.
Section 2(14) defines the expression `prescribed ' as meaning "prescribed by Rules made under the ordinance;" section 50 being the provision empowering the Government make rules and this section ran: "50(1) Subject to the provisions of this ordinance, Government may make rules for carrying out the purposes of this ordinance.
(2) Rules made under this section shall be published in the official Gazette and shall thereupon have effect as if enacted in this ordinance.
" The other relevant definition is of the expression profits ' which is defined in section 2 (16) as: "profits as determined in accordance with the provisions of this Ordinance and its first schedule;" There is a First Schedule which follows the ordinance and which is headed 'Rules for the computation of profits for the purposes of War Profits Tax ', and of these the one pertinent to the matter in controversy in the appeal is r. 3 of which sub rs.
(1) and (2) have been relied on in the course of arguments.
They run: "3(1)Income received from investments shall be included in the profits of a business liable to the War Profits Tax, unless it is proved to satisfaction of the War Profits 249 Tax Officer that the investments have no connection whatever with the business.
(2) In the case of a business which consists wholly or mainly in the dealing in or holding of investments, income received from investments shall be deemed to be profits of that business, and in the case of a business, a specific part only of which consists in dealing in investments, the income received from investments held for the purpose of that part of the business shall be deemed to be profits of that part of the business.
Explanation: 'The income from investments to be included in the profits of the business under the provisions of this rule shall be computed exclusive of all income received by way of dividends or distribution of profits from a company carrying on a business, to the whole of which the Section of the Ordinance imposing the War Profits Tax applies".
Pausing here, it is necessary to mention that in relation to the first question regarding the inclusion of the dividend income in the taxable profits of the assessee three contentions were raised on behalf of the respondent which are thus set out in the judgment under appeal: "(1) The assessees did not deal in shares and their holdings in the Binod Mills Limited, were purely in the nature of investments, having no connections with their business as defined in Section 2(5) read with Rule 1 of Sch.
I of the Gwalior War Profits Tax Ordinance.
The business of the Secretaries, Treasurers and Agents of the Binod Mills Limited, which was carried on by them did not require any holding of the shares of the company and 250 was not dependent on their investment in the said company.
(2) The dividend income accrued or arose from the profits of the Binod Mills Limited, and as the Ordinance applied to the business carried on by this company, the dividends were excluded under the explanation to Rule 3(1) of Schedule I. (3) The dividend income should be considered as income of the full accounting period, i.e. from Diwali of 1943 to Diwali of 1944 and should be apportioned on that basis.
" The learned Judges of the High Court dealt only with the first of the above contentions, and having accepted it, considered it unnecessary to express any opinion on the other two.
We may now proceed to state the grounds upon which the learned Judges of the High Court answered this contention in favour of the respondent.
It was urged before them by the respondent that though the provisions headed 'Rules for the computation of business ' purported to be part of the Ordinance itself as forming the Schedule to the Ordinance, they were in reality rules made by government under the rule making power conferred on it by section 50 of the Ordinance, This argument was accepted apparently being aided by the fact that immediately after the title "Schedule I" occur the words "See Section 2(14)".
Proceeding on this basis the reasoning of the learned Judges was on these lines.
The charge under section 4(1) was on the profits of a business and unless an activity which resulted in any income derived was one in the nature of trade, the mere fact that income was derived therefrom would not make it assessable to tax under the ordinance.
This they deduced from an interpretation of the words used in the charging section read in conjunction with the definition of "profits" in section 2(16).
The next question was whether 251 the dividend which the respondent obtained from the shares held by it in the Binod Mills Ltd., of which it was the Secretary, Treasurer and Managing agent were profits derived by any business activity.
Unless the acquisition of the shares was an adventure in the nature of trade or the respondent was a dealer in shares, such that the shares held by it were part of its stock in trade, the income derived therefrom by way of dividends could not be characterised as profits from business.
If this was the result on a proper construction of the Act the question the learned Judges addressed themselves to next was, whether r. 3(1), which according to them was a piece of subordinate legislation, could validly bring to charge an item of income which was not within the scope of the Ordinance itself, and this had necessarily to be answered in the negative.
They consequently held that r. 3(1) of the 1st Schedule was beyond the power of the rule making authority under section 50 of the Ordinance and answered the first question referred to them in favour of the assesssee.
Mr. Sen, learned Counsel for the appellant has however placed before us material to show that Sch.
I containing the rules for the computation of profits were not rules made by the Government under section 50 of the Ordinance but was really part of the Ordinance itself.
In the first place, it has to be noted that section 2(16) speaks of Sch.
I to the Ordinance, and admittedly besides the one now produced before us there was no other Schedule attached to the Ordinance.
It is impossible to hold that with section 2(16) in the form in which we now find it, the rules for the computation of the business did not form part of the Ordinance having been enacted simultaneously as part and parcel thereof.
In this connection it might be pointed out that the Excess Profits Tax Act, 1940, which formed the basis or model upon which the Ordinance was fashioned has 252 a similar Schedule headed "Rules" for the computation of profits" and the Schedule formed part of that Act.
The only ground for even a suspicion that Sch.
I was not a part of the Ordinance itself is the reference to section 2 (14) in the heading of these rules just below the words Schedule I, but very little assistance can be sought from this reference, because section 2(14) in not itself the source of power for making rules which is section 50 of the Ordinance and, in fact, rules have been made under the power conferred by section 50 of the Ordinance; vide War Profits Tax Rules Samvat 2001, No. 65 dated December 26, 1944, which carries the recital in the following terms: "In exercise of the powers conferred by section 50 of the War Profits Tax Ordinance the Government of Gwalior are pleased to make the following rules. " It is obvious therefore "section 2(14) in Sch.
I is a mistake or a misprint for "section 2(16)" and it might be noted that in the corresponding Schedule to the Indian Excess Profits Tax Act, 1940, immediately after the title "Schedule I" occur the words "See section 2(19)" which in that enactment corresponds to section 2(16) of the Ordinance.
There are other circumstances to which Mr. Sen has drawn our attention which also point to the Schedule being part of the Ordinance and not rules made under section 50.
The Schedule was the subject of amendments more than once and each time this was done it is significant that this was done not by virtue of the exercise of the rule making power under section 50 of the Ordinance but by further ordinances showing clearly that the Schedule was part of the Ordinance itself.
To give just a few example, the Explanation to r. 3(2) which we have extracted earlier was not in the Schedule as originally enacted but was introduced as 253 an amendment by Ordinance No. 42 dated February 28, 1946.
The short title of this Ordinance runs: "This Ordinance might be called the Gwalior War Profits Tax (Amendment) Act, Samvat 2002".
Further it would be noticed that in the Explanation there is a comma after the words "carrying on a business".
That comma was not there when the schedule was amended by the Amending ordinance of February 28.
1946, but was introduced by Ordinance 5 of Samvat 2004 and the short title of this second Ordinance reads: "This Ordinance might be called the Gwalior War Profits Tax (Amendment) Ordinance Samvat 2004".
We do not consider it necessary to dilate on the point as we are clearly of the opinion that the Schedule was part of the Ordinance and has therefore to be read not as subordinate legislation under r. 50 but as part and parcel of the Ordinance itself.
The whole basis therefore of the reasoning upon which the learned Judges of the High Court proceeded falls to the ground and the only question is whether accepting the respondent 's case that the shares held by it in the Binod Mills Ltd. were really part of its investments, these investments have "any connection" with its business.
It is common ground that the respondent was the Secretary, Treasurer and Managing agent of the Binod Mills and what we are now concerned with are the shares held by it in that company.
In the case of every assessee who carries on a business activity and is in receipt of profits from that business, on the terms of r. 3(1) income from every investment held by him is liable to be included in the profits assessable to tax unless such person was able to satisfy the 254 revenue authorities that the investments had "no connection whatever" with his business.
Mr. Viswanatha Sastri, learned Counsel for the respondent sought to overcome this position by submitting that the "connection" contemplated by the rule was a direct "connection" and not a remote or fanciful one and that in the present case there was really no connection between the respondents ownership of these shares and the office of managing agent which it held.
His contention was that except the fact that the recipient of the profits from the "business" of managing agency and of the dividend income was the same, there was no other connection between the one and the other.
In further elaboration of his point, he invited us to hold that the "connections would be direct only where the investment was related to a business activity as cause and effect or as a sine qua non.
Thus if it was a requirement either of the Articles of Association of the company or of the Managing Agency Agreement, that the managing agent should be a shareholder, or the holder of specified number of shares, then alone, learned Counsel contended, the managing agent being dependent on the shareholding, there would be that connection which would bring the dividend income with in the expanded definition of profits from business under r. 3(1).
In all other cases where shares were held, without the assessee being obliged to hold them for the purpose of his business activity, no distinction, Counsel submitted, could be drawn between the investment in the shares of a company with which he had nothing to do, and a company which he managed under an agreement.
Learned Counsel further stressed that the case of the respondent was stronger because the Managing Agency Agreement with the respondent was to last so long as the respondent firm existed and carried on business in that name and could not be terminated by the company "save and except when the agent being 255 found guilty of fraud in the Management or in the discharge of their duties." and having regard to this security of tenure which the respondent enjoyed, the holding of these shares had no connection whatever with the business of managing agency.
We find ourselves unable to accept this interpretation of r. 3(1).
The relevant words in the rule being "any connection whatever" it would not be giving proper effect to the meaning of the words "any" and "whatever" to restrict it to cases of "direct connection" in the sense suggested on behalf of the respondent.
But this apart, by the number of shares which the respondent owned in the mills it is admitted that it obtained a controlling interest it held the majority of the shares in the company.
The respondent was therefore enabled by reason of this investment to control the action of the company which was the other party under the Managing agency Agreement.
This control was capable of being used to further the interests of the Managing agent in its relations with the company and whether or not this was used for obtaining advantages, it would certainly be available for avoiding any disadvantages arising from misunderstandings with the company.
It could not be denied that the control would certainly be useful to keep the relations between the company and the Managing agent smooth so as to enable the Managing agent to earn his commission etc.
without differences or disputes.
Even if therefore the word "connection" in r. 3(1) meant a "direct" connection a construction which we do not adopt it appears to us that the present case satisfied even that test.
In any event the "connection" is not anything remote, fanciful or imaginary, but on the other hand real and capable of being turned to good account.
It certainly cannot be equated with the holding of shares by the respondent in a company with which he had no connection other than as a shareholder.
256 We are therefore of the opinion that the dividend received by the respondent from the Binod Mills Ltd., was properly included by the assessing authorities in the computation of the taxable profit of there respondent under the Ordinance and that the High Court erred in answering the reference in favour of the assessee.
We have already pointed out that the High Court did not deal with or express any opinion on the two subsidiary contentions urged by the respondent with reference to the first question.
Those points were also naturally not argued before us and we do not express any opinion on them.
It is obvious that the reference cannot be disposed of without deciding these contentions and the case would have to be remanded to the High Court for dealing with these subsidiary points.
The appeal will accordingly be allowed, the judgment of the High Court set aside and the first contention in relation to question No. 1 answered against the assessee and in favour of the appellant and the case remanded to the High Court for the consideration of the other contentions with reference to that question.
The appellant will be entitled to his costs here.
The costs in the High Court will be provided in its final order.
Appeal allowed.
| Rule 3 (1) of such.
I of the Gwalior War Profits Tax ordinance, Samvat 2001 provided: "Income received from investments shall be included in the profits of a business liable to the war Profits Tax, unless it is proved to satisfaction of the War Profits Tax officer that the investments have no connection whatever with the business." The respondent, a Hindu undivided family, was carrying on various businesses in the erstwhile State of Gwalior, and one of them was its employment as the Secretary, Treasurer and Managing Agent of, a limited company.
The respondent held a majority of the issued shares in the company.
For the accounting period July 1, 1944, to October 16, 1944, the War Profits Tax officer by his assessment order dated July 9, 1951, included in its assessable profits the sum received by the respondent on July s, 1944, as the dividend declare and paid by the company on its shares.
The respondent claimed that the said sum could not be included in its taxable profits on the ground that it did not deal in shares and that its holdings in the company were purely in the nature of investments having no connection with its business as defined section 2(5) of the ordinance Gwalior War Profits ordinance and that the business of the Secretaries, Treasurers and Managing Agent of the company which was carried on by it did not require any holding of the shares of the company and was not dependent on its investment in the said company.
The High Court of Madhya Pradesh took the view (1) that on a proper construction of the provisions of the ordinance, unless the acquisition of the shares was an adventure in the nature of trade or the respondent was a dealer in shares such that the shares held by it were part of its stock in trade, the income derived therefrom by way of dividends could not be characterised as profits from business, and (2) that Sch.
I of the Ordinance which 244 was headed "Rules for the computation of business", though it purported to be part of the Ordinance, in reality comprised rules made by Government under the rule making power conferred on it by section 50 of the ordinance and that r. 3 (I) of the Schedule, being subordinate legislation could not validly bring to charge an item of income which was not within the scope of the ordinance itself. ^ Held that : Schedule I of the Gwalior War Profits Tax Ordinance was part and parcel of the ordinance itself and, therefore, could not be considered to be subordinate legislation as rules framed under section 50 of the ordinance (2) the word "connection" in r. 3 (1) of Sch.
I of the Ordinance was not restricted to cases of "direct connection", in view of the expression "no connection whatever" in that rule; and (3) the respondent as the holder of the majority of the shares in the company, was enabled by reason of this investment to control the action of the company which was true other party under the Managing Agency Agreement, and therefore, the investment was connected with the business carried on by it within the meaning of r. 3(1) of Sch.
I of the ordinance.
Accordingly, the dividend received by the respondent from the company was properly included by the assessing authorities in the computation of its taxable profits under the ordinance.
| The appellant, a private limited company, was assessed to income tax for the assessment years 1942 43, 1943 44 and 1944 45 by three separate orders dated January 26, 1944, February 12, 1944, and February 15, 1945, under section 23(3) of the Indian Income Tax Act on returns filed by it with statements of account.
On March 28, 1951, three notices under section 34 of the Act were issued calling upon it to submit fresh returns for the said assessment years.
The appellant filed the returns but thereafter applied to the High Court under article 226 of the Constitution for writs restraining the Income tax Officer from initiating assessment proceedings on the basis of the said notices on the ground, inter alia, that he had no jurisdiction to issue the said notices.
In his report to the Commissioner of Income tax for obtaining sanction to initiate the said proceedings the Income tax Officer had stated as follows : " Profit of Rs. 5,46,002 on sale of shares and securities escaped assessment altogether.
At the time of the original assessment the then I. T. O. merely accepted the company 's version that the sale of shares were casual transactions and were in the nature of mere change of investments.
Now the results of the company 's trading from year to year show that the company has really been systematically carrying out a trade in the sale of investments.
As such the company had failed to disclose the true intention behind the sale of the shares as such section 34(1)(a) may be attracted".
The question for determination was whether in the circum stance the Income tax Officer was right in issuing notices on the assessee under section 34(1)(a) of the Act.
Held, (per section K. Das, K. C. Das Gupta and N. R. Ayyangar, jj.), that before the Income tax Officer could issue a notice under $ '.
34(1)(a) of the Indian Income tax Act, two conditions precedent must co exist, namely, that he must have reason to believe (i) that income, profits or gains had been under assessed and (2) that such under assessment was due to non disclosure of material facts by the assessee.
242 Although what facts would be necessary and material for the assessment in a particular case must depend on the facts of that case, there could be no doubt that the burden of disclosing all the primary facts must invariably be on the assessee.
The Explanation to section 34(1) made it clear that that burden could not be fully discharged by simply producing the account books and other documents, but the assessee must also disclose such specific items or portions thereof as are relevant to the assessment.
But once he has done so, it is for the Income tax Officer to draw the proper inferences of fact and law therefrom and the assessee cannot further be called upon to do so for him.
The Explanation does not enlarge the scope of the section so as to include " the disclosure " of such inferences.
The question whether by the sale of shares the assessee in the instant case intended to change the form of investment or to make a business profit was one of an inferential fact and the failure to disclose such intention could not by itself amount to a failure or omission to disclose a material fact within the meaning of section 34(1)(a) of the Act.
Where, however, the Income tax Officer has prima facie reasonable grounds for believing that there has been a non disclosure of a primary material fact, that by itself gives him the jurisdiction to issue a notice under section 34 of the Act, and the adequacy or otherwise of the grounds of such belief is not open to investigation by the Court.
It is for the assessee who wants to challenge such jurisdiction to establish that the Income tax Officer had no material for such belief.
Since, in the instant case, there was no non disclosure of a primary material fact which the assessee was bound to disclose under section 34(1)(a) of the Act, the Income tax Officer had no jurisdiction to issue the notices in question.
It is incorrect to say that the question of under assessment by reason of non disclosure of a material fact was relevant only for the purpose of applying either the longer or the shorter period of limitation prescribed by the section and not for jurisdiction and, therefore, not a proper matter for investigation under article 226 of the Constitution.
The High Courts have ample powers under article 226 of the Constitution, and are in duty bound thereunder, to issue such appropriate orders or directions as are necessary in order to prevent persons from being subjected to lengthy proceedings and unnecessary harassments by an executive authority acting without jurisdiction.
Alternative remedies such as are provided by the Income tax Act cannot always be a sufficient reason for refusing quick relief in a fit and proper case.
Per Hidayatullah, J. The Explanation to section 34(1) of the Indian Income tax Act clearly indicates that the duty of the assessee thereunder does not end by merely producing evidence or disclosing the primary facts, but also extends to the disclosure 243 of such other facts relating to status, agency, benami nature of the transaction, the nature of the trading and the like, which he knows but do not appear from the evidence, and which may be necessary for interpreting the evidence.
If the evidence produced hides nothing and discloses everything, the assessee cannot be subjected to section 34 merely because the Income tax Officer misinterprets such evidence.
But it is otherwise if the assessee raises a contention that is contrary to fact and requires the Income tax Officer to discover the truth for himself for that would be to suppress a material fact that would attract the section.
Since, in the present case, an investment company dealing in stocks and shares, not only knowingly suppressed that fact but contended otherwise, there was non disclosure of a material fact necessary for its assessment, and sufficient to attract section 34(1) (a) of the Act.
Per Shah, J.
The expression " has reason to believe " in section 34(1)(a) of the Indian Income tax Act does not mean a purely subjective satisfaction of the Income tax Officer but predicates the existence of reasons on which such belief has to be founded.
That belief, therefore, cannot be founded on mere suspicion and must be based on evidence and any question as to the adequacy of such evidence is wholly immaterial at that stage.
Whether all the material facts necessary for the assessment had or had not been fully and truly disclosed in a particular case has to be examined, in the fight of the Explanation to section 34(1)(a).
If there is disclosure of some facts but not all, a tax payer cannot resist reassessment on the plea that such non disclosure was due to the negligence or inadvertence on the part of the Income tax Officer to scrutinise the materials before him.
Where the existence of reasonable belief that there bad been under assessment due to non disclosure by the assessee, which is a condition precedent to exercise of the power under section 34(1)(a) is asserted by the assessing authority and the record prima facie supports its existence, any enquiry as to whether the authority could reasonably hold the belief that the under assessment was due to non disclosure by the assessee of material facts necessary for the assessment must, be barred.
| The appellant (holder of an inam in Madhya Pradesh) served a notice an his tenant, the respondent, terminating to tenancy on the ground that he wanted the land for personal cultivation and filed a suit for ejectment.
The trial court decreed the suit.
During the pendency of the appeal in the District Court, article 32 of 1954 was enacted, and pursuant to its provisions the hearing of the appeal was stayed.
After the Madhya Pradesh Land Revenue Code came into force in 1959, the District Court held that by virtue of section 185 of that Code the respondent acquired the rights, of an occupancy tenant and dismissed the suit.
The High Court confirmed the judgment of the District Court.
In appeal to this Court, it was contended that : (i) the rights of an occupancy tenant arise in favour of a personl under section 185(1) (i) (a) only if there was between him and the landlord a subsisting tenancy at the date when the Code came into force and since under the law in force before the commencement of the Code, the respondent had ceased to be a tenant because of the notice terminating the contract of tenancy the respondent was not invested with the rights of an occupany tenant; and (ii) bi virtue of sections 261 and 262(2), the operation of section 185 is expressly excluded when a person, against whom ejectment proceedings have been instituted prior to the commencement of the Code in enforcement of a right then acquired, claims the status of an occupancy tenant.
HELD : (i) The respondent acquired the right of an occupancy tenant under the Code, because the expression "tenant" in section 185 (1) (ii) (a) includes a person whose tenancy was terminated before the commencement of the Code.
The definition of the expression "tenant" in the Code postulates a subsisting tenancy, but the position of a tenant prior to the date on which the Code was brought into force is not dealt with in the definition.
In the context in which the expression "tenant" occurs in section 185(1), that definition could not be intended to apply in deter ining the conditions which invest a holder of land with the status of an occupancy tenant at the commencement of, the Code.
Therefore having regard to the object of the enactment the expression should be ascribed the meaning it 'has in Act 32 of 1954.
Under sections 3 & 4 of that Act a person who was inducted into the land as a tenant and who continued 'to hold the land at the commencement of the Act was entitled to protection against eviction and continue as tenant, notwithstanding that under the law in force prior to the commencement of the Act.
the contractual relationship of landlord and tenant was determined.
[432 D; 432 14 433 C] 428 There is no reason to think that the Legislature sought to make a A distinction between tenants of Inam land in section 185 (1) (ii) (a) and ryotwari sub lessees of other lands in section 185(1)(ii)(b).
Therefore, if the expression "ryotwari sub lessee ' in section 185(1)(ii)(b) includes a sub lessee whose tenaure was terminated before the commencement of the Code, a tenant of inam land, whose tenancy has been terminated would also be included in the protection, provided at some time prior to the date on which the Code was brought into force, he was in possession of the land as a tenant, and he continued to hold the land till the date of the commencement of the Code.
[434 E H] (ii) The provisions of the Code appeal to tenants in proceedings for ejectment pending at the commencement of the Code.
The proviso to section 261 protects a right which had been acquired under a law repeated by the Code and the right could be enforced as if the code had not been passed.
But the right to evict a tenant was governed by the general law of landlord and tenant and was not acquired under any repealed law.
The proviso had no operation and a legal proceeding pending at the date of the commencement of the Code will be disposed of according to the law enacted in the Code.
Therefore, the tenant could not ' be evicted otherwise than in the manner and for reasons mentioned in a. 193 of the Code but, personal requirement for cultivation of land is not a ground on which a claim for ejectment could be maintained.
[435 G436 A] Section 262(2) is only procedural it provides that a civil court will continue to have jurisdiction to dispose of a civil suit pending before it at the commencement of the Code, Which, if it had been instituted after the Code was passed would have been tried by a revenue court; and in the disposal of such a suit, the civil court will be governed by the procedural law applicable there to prior to the commencement of the Code.
It does not nullify the statutory conferment of occupancy right upon persons in the position of tenants against whom proceedings were taken at the date when the Code was brought into force.
[436 B D]
| Against the judgment of the Single judge of the Punjab High Court dated January 5, 1953, in which he followed the decision of a Division Bench holding that section 7A of the Delhi and Ajmer Rent Control Act, 1947, was unconstitutional and void, the appellants preferred an appeal under the Letters Patent.
Meanwhile the judgment or the Division Bench was brought up by way of appeal to the Supreme Court, and as the appeal was getting ready to be heard, the appellants made an application on January 5, 1959, for special leave to appeal to the Supreme Court against the judgment of the Single judge.
No notice was given to the respondent to the application, and special leave was granted ex parte.
The Letters Patents appeal was thereafter withdrawn by the appellants.
When the appeal came on for hearing in due course, the respondent raised an objection to the hearing of the appeal on the grounds that the application for special leave was barred by limitation, that there were no sufficient reasons for condoning the long.
delay of four years, and that the special leave granted ex parte should be revoked.
243 Held, that, in the peculiar circumstances of the case, leave should not be revoked.
Expect in very rare cases, if not invariable, the Supreme Court should adopt as a settle rule that the delay in making an application for special leave should not condoned ex parte but that before granting leave in such cases notice should be served on the respondent and the latter afforded an opportunity to resist the grant of the leave.
Desirability of the Rules of the Supreme Court being amended suitably pointed out.
| The appellant, assessee in an Abkari contractor.
It filed a return of its income for the assessment year 1959 60, disclosing a total turnover of Rs. 10,92,132/ and an income of Rs. 7,704/ .
The Income Tax Officer did not accept the correctness of the return.
He found that on 12th December, 1957 and 16th January, 1958 the excess of expenditure over the disclosed available cash was Rs. 17,726/ and Rs. 65,066 respectively.
He also noticed several deposits, totalling Rs. 28,200, entered in the names of certain Sendhi shopkeepers.
The Income Tax Officer rejected the account books of the assessee and his explanations for the discrepancies thereof and estimated the assessee 's income on an overall figure of Rs. 5,00,018.
In appeal before the Appellate Assistant Commissioner and thereafter before the Income Tax Appellate Tribunal the assessee succeeded in getting the assessed income reduced to Rs. 1,30,000 in addition to the books profits.
Penalty proceedings were taken against the assessee and the case was referred to the Inspecting Assistant Commissioner, who imposed a penalty of Rs. 75,000 under section 271(1)(c) of the Income Tax Act, 1961.
On appeal by the assessee, the Appellate Tribunal held that there was no positive material to establish that the cash deposits represented concealed income.
In regard to the cash deficits, the Appellate Tribunal noticed that for the assessment year 1957 58 an addition of Rs. 2,00,000 had been made to the book profits, and it observed that some part of that amount could have been ploughed back into the business.
It held that an amount of Rs. 90,000 representing unledgerised cash credits of that year could be said to have been introduced in that year.
Allowing the appeal, the Appellate Tribunal set aside the penalty order made by the Inspecting Assistant Commissioner.
On a reference to the High Court, at the instance of the Commissioner of Income Tax, the High Court held that the Appellate Tribunal was not justified in holding that no penalty was leviable.
Hence the appeal by special leave.
Directing the Appellate Tribunal to take up the appeal under section 260(1) of the Income Tax Act, the Court ^ HELD: An order imposing a penalty is the result of quasi criminal proceedings.
The burden of proof lies on the Revenue to establish that the disputed amount represents income and that the assessee has consciously concealed the particulars of his income or has deliberately furnished inaccurate particulars.
It is for the Revenue to prove these ingredients before a penalty can be imposed.
[622B C] 619 Since the burden of proof in a penalty proceeding varies from that involved in an assessment proceedings a finding in an assessment proceeding that a particular receipt is income cannot automatically be adopted as a finding to that effect in the penalty proceeding.
In the penalty proceeding the taxing authority is bound to consider the matter afresh on the material before it and, in the light of the burden to prove resting on the Revenue, to ascertain whether a particular amount is a revenue receipt.
No doubt, the fact that the assessment order contained a finding that the disputed amount represents income constitutes good evidence in the penalty proceeding but the finding in the assessment proceeding cannot be regarded as conclusive for the purposes of the penalty proceeding.
Before a penalty can be imposed the entirety of the circumstances must be taken into account and must point to the conclusion that the disputed amount represents income and that the assessee has consciously concealed particulars of his income or deliberately furnished inaccurate particulars.
The mere falsity of the explanation given by the assessee is insufficient without there being in addition cogent material or evidence from which the necessary conclusion attracting a penalty could be drawn.
[622C G] Commissioner of Income Tax, West Bengal and Anr.
vs Anwar Ali ; Commissioner of Income Tax, Madras vs Khoday Eswara and Sons, ; applied.
When an 'intangible ' addition is made to the book profits during an assessment proceeding, it is on the basis that the amount represented by that addition constitutes the undisclosed income of the assessee.
That income although commonly described as 'intangible ', is as much a part of his real income as that disclosed by his account books.
It has the same concrete existence.
It could be available to the assessee as the book profits could be.
[623A B] 3.
Secret profits or undisclosed income of an assessee earned in an earlier assessment year may constitute a fund, even though concealed, from which the assessee may draw subsequently for meeting expenditure or introducing amounts in his account books.
Any part of that fund need not necessarily be regarded as the source of unexplained expenditure incurred or of cash credits recorded during a subsequent assessment year.
The mere availability of such a fund cannot, in all cases, imply that the assessee has not earned further secret profits during the relevant assessment year It is a matter for consideration by the taxing authority, in each case, whether the unexplained cash deficits and the cash credits can be reasonably attributed to a pre existing fund of concealed profits or they are reasonably explained by reference to concealed income earned in that very year.
In each case the true nature of the cash deficit and the cash credit must be ascertained from an overall consideration of the particular facts and circumstances of the case.
Evidence may exist to show that reliance cannot be placed completely on the availability of a previously earned undisclosed.
income.
A number of circumstances of vital significance may point to the conclusion that the cash deficit or cash credit cannot reasonably be related to the amount covered by the intangible addition but must be regarded as pointing to the receipt of undisclosed income earned during the assessment year under consideration.
It is open to the Revenue to rely on all the circumstances pointing to that conclusion.
What those several circumstances can be is difficult to enumerate and indeed, from the nature of the enquiry, it is almost impossible to do so.
However, they must be such as can lead to the firm conclusion that 620 the assessee has concealed the particulars of his income or has deliberately furnished inaccurate particulars.
[623C H, 624A] Lagadapti Subha Ramiah vs Commissioner of Income Tax, Madras, ; section Kuppuswami Mudaliar vs Commissioner of Income Tax, Madras, ; approved.
In an income tax reference, a High Court should confine itself to deciding the question of law referred to it on facts found by the Appellate Tribunal.
It is the Appellate Tribunal which has been entrusted with the authority to find facts.
[624D E]
| The respondent assessee had a gross agricultural income of more than Rs. 1 lakh in 1355 Fasli (July 1, 1947 to June 30, 1948).
In response to a notice issued by the Assistant Collector under section 15(3) of the U.P. Agricultural Income tax Act, 1948, the assessee filled a return of his income and the said officer made an assessment though under section 14(2) of the Act Jurisdiction to assess in cases when the gross income exceeded Rs. 1 lakh lay within the Collector.
The, Collector thereafter made a reassessment under section 25 read with section 16(4) within the period of limitation prescribed under the former section i.e. "within one year of the end of the year in which the income had escaped assessment".
In appeal by the respondent the Agricultural Income tax Commissioner set aside the orders of the Collector and also of the Assistant Collector and directed the Collector to make a fresh assessment after giving notice to the res pondent.
The Board of Revision held that the Commissioner had rightly decided that the orders in question were invalid but that the Commissioner was not empowered to set aside the order of the Assistant Collector which was not challenged before him.
However the Board suo motu set aside the order of the Assistant Collector and directed that fresh assess ment be made "according to law".
The High Court in reference under section 24(4) held that having regard to the limitation provided in section 25 the Board could not in 1952 direct the Collector to make a fresh assessment for the period in question.
The State of Uttar Pradesh appealed to this Court.
It was contended on behalf of the State that: (1) The Assistant Collector could make assessment even in cases when the gross income exceeded Rs. 1 lakh.
(2) The notice under section 15(3) issued by the Assistant Collector not having been set aside by the higher authorities, the Collector could, as directed by the Board, make an assessment without transgressing any restrictions in section 15(3) or section 25.
(3) without a fresh notice under section 15(3) the Collector had the power by virtue of the notice under section 15(1), to assess the income of the respondent on the return made pursuant to the notice issued by the Assistant Collector.
(4) Since notice under 9. 25 for reassessment of the escaped income had been issued by the Collector within the period prescribed by section 25(3) and the notice was otherwise valid, assessment proceedings directed by the Board could be founded by the Collector on that notice.
HELD : (i) Reading sub section
(1) & (2) together there can be no doubt 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 162 does not exceed Rs. 1 lakh.
The Assistant Collector is not entitled to make assessment in such a case relying on the generality of the provisions of section 14(1).
[167 F G] (ii) When the Assistant Collector arrived at the conclusion that the gross income of the respondent exceeded Rs. 1 lakh the proceedings initiated by him including the issue of the notice must, unless that conclusion is set aside by a superior authority, be treated as unauthorised, for the power to issue a notice under section 15(3) is only conferred upon the assessing authority and the assessing authority within the meaning of section 2(6) s a person authorised to assess agricultural income tax.
There is no provision in the Act or the Rules for transfer of proceedings from the Assistant Collector to the Collector when the Assistant Collector in dealing with a return finds that he has no jurisdiction.
The Collector therefore could not in the present case make reassessment on the basis of the return filed under section 15(3).
In fact having regard to the terms of the order passed by the Board it was clear that the notice under section 15(3) issued by the Assistant Collector had been quashed by the Board.
[168 B F] (iii) If the proceedings for assessment were commenced on a 'return made pursuant to an invalid notice, and the proceedings for assessment were set aside on the ground of want of jurisdiction of the authority making the assessment the entire proceeding 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 notice under section 15(1) could not come to the aid of the Collector in commencing fresh assessment proceedings many years after the date on which that notice was issued on a return which was not made; to him.
[168 H 169 B] (iv) The notice under section 25 issued by the Collector must also be deemed to have been quashed by the Board.
The Collector had therefore, under the direction given by !he Board, to issue a fresh notice before a proceeding for assessment could be started and a fresh assessment could not be based on the earlier notice.
[169 E]
| The respondents flied returns for the year 1953 54 and they were provisionally assessed on 14 10 1954, and regular assessment was.
made on 27 2 58.
For the next four succeeding years the respondents filed returns, and for all the years the regular assessments under section 23 of the Income Tax Act, 1922 were made after 27 2 58.
SinCe no estimate of the tax payable on their income as required by section 18A was seat nor the in advance paid, the Income Tax Officer while assessing them under section 23 held that they were liable to pay interest under section 18A(8) and in addition he applied the provisions of section 18A(9)(b) and imposed a penalty for each year of assessment by virtue of section 28 read with section 18A(9)(b).
The respondents preferred appeals to the Appellate Assistant Commissioner on the ground that the levy of interest and penalty 'was unauthorised.
The appeals were dismissed, and the respondents went :in revision, which was also dismissed.
Thereupon, the respondents filed writ petitions in the High Court to quash the order and succeeded.
The High Court held that section 18(3) of the Act did not apply to the facts of the case as there had been a provisional assessment under section 23B of the Act in 1954.
In appeals to this Court, by the Revenue the question for consideration was whether the expression "any person who has not hitherto been assessed" in section 18A(3) of the Indian Income Tax Act, 1922 after the all Income Tax Amendment Act 67 of 1949 should be interpreted so as to 'include a person who has only been provisionally assessed under section 23B ,of that Act.
HELD : The appeals must be dismissed.
Even when the tax is provisionally assessed, there necessarily has to be a determination of the total income of the assessee.
The only difference is that under section 23 the total income is determined after the Income Tax Officer has satisfied himself fully about the correctness of the return fled by taking steps, if necessary, under sections 22(4) and 23(2) of the Act.
In the case of a provisional assessment under section 23B. of the Act, the powers under sections 22(4) and 23(2) of the Act are not to be exercised and the Income Tax Officer has to determine the tax on the basis of the return filed by the assessee after taking into consideration the accounts and documents available, if any, and after giving effect to certain allowances and losses.
In other words, what the Income Tax Officer has to do is to assess provisionally the total income of the assessee and thereafter he has to determine the tax payable on the basis of that provisionally assessed income.
[731 A D] It is important to notice that in section 18A(1) the expression "assessed" is used without any qualification or restriction as to whether the assessment should be a regular assessment or any other type of assessment 725 under the Act.
It is also manifest that in section 18A sub section (5) the two expressions "provisional assessment" and "regular assessment" are expressly mentioned.
The expression "regular assessment" is also repeatedly used in section 18A, sub.
section 6, 7, 8 and 9.
There is therefore, no warrant for restricting the meaning of the word "assessed" in section 18A(1) so as to include only a "regular assessment" under section 23 of the Act.
There is no reason why Parliament did not add the word "regularly" in the sub section so as to qualify the word "assessed".
Since there is no such qualification, the word "assessed" in section 18A(3) should be read in its ordinary sense as including every kind of assessment including a provisional assessment under section 23B of the Act.
[732 A C] There is nothing in the 1961 Act to suggest that Parliament intended to explain the meaning or clear up doubts about the meaning of the word "assessee" in section 18A(3) of the earlier Act.
Generally speaking a subsequent Act of Parliament affords no useful guide to the meaning of another Act which came into existence.
before the later one was ever framed.
Under special circumstances, the law does however admit of a subsequent Act to be resorted to for this purpose but the conditions under which the later Act may be resorted for the interpretation of the earlier Act are strict; both must be laws on the same subject and the part of the earlier Act which it is sought to construe must be ambiguous and capable of different meanings.
[733 F H] Kirkness (Inspector of Taxes) vs John Hudson & Co. Ltd., ; In re MacManasway, and Inland Revenue Commissioners vs Dowdall, O 'Mahonay & Co. Ltd., , referred to.
| The assessee purchased a spinning mill in 1941 from a vendor claiming to be its sole proprietor.
In a suit filed by the vendor 's sons the trial court had held that the suit property including the aforesaid spinning mill was the vendor 's self acquired property.
When the assessee purchased the mill an appeal against the trial court 's judgment was pending in the High Court 'the High Court decided that the property was not the self acquired property of the vendor but was coparcenary property in which the sons had two thirds interest.
The vendor filed an appeal before the Privy Council.
During its pendency the assessee entered into a compromise with the vendor 's sons whereby they agreed to release their two thirds interest in the mill and its profits for a sum of Rs. 1.15,000.
The compromise was certified by the High Court.
In 1947 the Privy Council decided that the property including the spinning mill was the self acquired property of the vendor.
On receipt of this decision which finally determined the rights of the parties and assessee 's ownership of the mill, the Income tax Officer issued a notice under section 34 of the Indian income tax Act, 1922 for the assessment year 1944 45 and assessed the income from the mill for that year and for the two subsequent assessment years in the hands of the assessee.
The assessee 's objection that the decision of the Privy Council was not 'definite information ' within the meaning of section 34 was rejected as also the assessee 's claim that the sum of Rs. 1,15,000 paid to the vendor 's sons in pursuance of the compromise should be set off as an expense against the income from the mill for the year in question.
The Appellate Assistant Commissioner and the Tribunal upheld the Income tax Officer 's order.
The High Court in reference held that the notice under section 34 was valid but that the payment of Rs. 1,15,000 was made partly towards acquisition of a capital asset and partly towards the discharge of the claim for profits and the part apportionable towards the profits was allowable as revenue expenditure.
The assessee as well as the Revenue appealed to this Court.
HELD: (i) In Maharaja Kumar Kamal Singh 's case this Court held that the word information section 34(1)(b) included information as to the true and correct state of the law, and so would cover information as to relevant judicial decisions.
It was further held that even in a case where a return had been submitted, if the Income tax Officer had erroneously failed to tax a part of the assessable income, it was a case when that part of the income had escaped assessment.
The decision of the Privy Council was therefore held to be information within the meaning of section 34(1)(b).
The principle laid down in Maharaja Kumar Kamal Singh 's case governed the present case and it must be held that the proceedings initiated under section 34 for the assessment year 1944 45 were legally valid.
[732 G 733 B] 727 Maharaja Kumar Kamal Singh vs Commissioner of Income tax, , followed and applied.
Kamakhya Narain Singh 's case, , referred to.
The contention that only two thirds of the income could be said to h,rye escaped assessment because the one third share of the vendor could have been validly assessed the Income tax Officer on the basis of the High Court 's judgment, could not be accepted.
When once valid proceedings are started under section 34(1)(b) read with section 22(2) the previous under assessment is set aside and the whole assessment proceedings start afresh.
The Income tax Officer then has not only the jurisdiction but the duty to levy tax on the entire income that has escaped assessment in that year.
[733 C E] It is well established that where money is paid to perfect a title or as consideration 'for getting rid of a defect in title or a threat of litigation the payment would be a capital payment and not a revenue payment.
Money paid in consideration of the acquisition of a source of profit or income is capital expenditure both on principle and authority.
[733 F G] Atherton vs British Insulated awl Helsby Cables Ltd. , 213 and Commissioner of Taxes vs Nchanga Consolidated Copper Mines Ltd. , referred to.
It was true that in the present case the High Court took into consideration income from the mill in testing whether the offer made by the purchaser of Rs. 1,15,000 for the release of the claim of the plaintiffs v, as a fair offer.
But that did not mean that the sons of the vendor were given as a result of the compromise a share in the profits of the assessee.
It was clear from the circumstances of the case that the payment was made by the assessee in order to perfect his title to a capital asset, and no portion of it could therefore could be set off against the profit.
[735 C]
|
minal Appeal No . 67 of 1952.
Appeal by special leave from the Judgment and Order dated the 14th September, 1951, of the High Court of Judicature for the State of Punjab at Simla (Bhandari and Soni JJ.) in Criminal Appeal No. 361 of 1950, arising out of Judgment and Order dated the 13th May, 1960, of the Court of the Sessions Judge, Ferozepore, in Trial No. 28 of 1950 and Case No. 5 of 1950.
P. section Safeer for the appellant.
Gopal Singh for the respondent.
December 10.
The Judgment of the Court was delivered by MAHAJAN J.
Ajmer Singh, a young man of about 22 years of age was tried for the murder of Bagher Singh, his first cousin, and was acquitted by the Sessions Judge of Ferozepore by his judgment dated 13th May, 1950.
On appeal by the State Government, the order of acquittal was set aside by the High Court and the appellant was convicted under section 304, Indian Penal Code, and sentenced to ten years ' rigorous imprisonment.
This is an appeal by special leave against that decision.
One Nikka Singh had three sons, Bhagwan Singh, Lal Singh and Sunder Singh.
Bhagwan Singh died issueless some years ago and disputes arose between Lal Singh and his brother Sundar Singh in regard to the division of the property of Bhagwan Singh.
Sunder Singh was in possession of some of his landed 420 properties and Lal Singh obtained a number of decrees against him but Sunder Singh declined to restore possession of the properties to his brother Lal Singh.
In view of this litigation the relations between Lal Singh and Sunder Singh were considerably strained and it is said that for some time they were not even on speaking terms.
Lal Singh is married to Mst.
Dhan Kaur and from her he had two sons.
One of them Bagher Singh was murdered and the other, Arjan Singh, is P. W. 5.
Accused Ajmer Singh is the son of Sunder Singh and Banta Singh is his real brother.
Ajmer Singh is married to Jagir Kaur and Banta Singh to Kartar Kaur.
It is alleged by the prosecution that on the evening of the 27th January, 1948, Jagir Kaur complained to her fatherin law that her husband had pawned her ear rings in order to pay off his gambling debts.
On the morning of the 28th Banta Singh inquired from Ajmer Singh about this matter and he replied that he had pawned the ear rings to one Banta Singh Mazhbi.
Soon after this Ajmer Singh, Banta Singh and one Teja Singh went to Banta Singh Mazhbi and asked him to return the ear rings but the latter replied that no ornaments had been pawned with him and added that he would give a sum of Rs. 30 to them if Ajmer Singh took an oath that the ornaments had in fact been left with him.
It is said that Lal Singh was also present when this conversation took place and took up cudgels on behalf of Banta Singh Mazhbi and this led to an exchange of hot words between Lal Singh and the party of Sunder Singh 's two sons and their companion Teja Singh.
The parties, however, dispersed after exchanging hot words but without coming to blows.
At about sunset the same day Lal Singh and his brother Sunder Singh started abusing each other from their respective houses which open out into a common.courtyard.
This wordy warfare between the two brothers attracted the attention of Arjan Singh, Bagher Singh and one Ujagar Singh Mazhbi who on bearing the noise came to the house of Lal Singh.
421 Lal Singh finding himself supported by three others threw out a challenge to Sunder Singh and told him to come out in the open.
It is said that Sunder Singh, his two, sons Banta Singh and Ajmer Singh, and Teja Singh, a cousin of theirs, accepted the challenge and rushed out of the house.
Teja Singh and Banta Singh were armed with spears and they made an attack on Lal Singh and Dhan Kaur and inflicted on their persons a number of injuries.
Ajmer Singh, it is said, was armed with a spear and he plunged his weapon into the chest of Bagher Singh who collapsed and died almost instantaneously.
Arjan Singh soon after reported this incident at the police station after travelling a distance of about seven miles at 11 45 p. m.
He gave to the police substantially the same version as has now been deposed to by him in the witness box.
In this report it was stated by Arjan Singh that it was Ajmer Singh who dealt Bagher Singh a barchha blow on his chest and that Bagher Singh fell down at this blow.
The police arrested Sunder Singh, Teja Singh and Banta Singh but the appellant could not be found.
Sunder Singh, Teja Singh and Banta Singh were prosecuted under section 302/34 but were convicted under section 324, Indian Penal Code, Banta Singh and Teja Singh were sentenced to two years ' rigorous imprisonment each and Sunder Singh to six months ' rigorous imprisonment.
On appeal, Sunder Singh was acquitted and the sentences imposed on Banta Singh and Teja Singh were reduced.
A lenient view ' of the affair seems to have been taken because the fight between these near collaterals took place suddenly and ended promptly.
Bagher Singh died as a result of one blow and injuries on the person of Lal Singh and Dhan Kaur were not very serious Ajmer Singh was apprehended on 4th December, 1948, and as above stated, was tried by the learned Sessions Judge of Ferozepore and acquitted, but was convicted by the High Court on appeal by the State Government.
422 Lal Singh, P. W. 3, father of the deceased, Dhan Kuar, his mother, and Arjan Singh,his real brother, have given direct evidence about the occurrence.
Ujagar Singh Mazhbi whose name is mentioned in the first information report was tendered for cross examination but no question was put to him about the actual fight, and the manner in which it took place or the part that was taken in it by the accused.
One Bishandas, whose shop adjoins the shop of Banta Singh Mazhbi, was tendered for cross examination as P.W.7.
He deposed that Banta Singh Mazhbi and Lal Singh were the only persons when the quarrel about ear rings took place near his shop.
In reexamination he stated that Banta Singh, brother of the accused, and Teja Singh had come on one side and Lal Singh on the other when the quarrel about the ear rings took place.
No direct question was put to the witness about the presence of, Ajmer Singh on that occasion.
The learned Sessions Judge considered him a wholly independent witness and accepted his evidence about the incident that took place at Banta Singh Mazhbi 's shop on the morning of the 28th.
He held that Ajmer Singh was not present at Banta Singh Mazhbi 's shop and that Lal Singh and Arjan Singh had falsely implicated him in the quarrel over the ear rings, and that if the witnesses could falsely involve him in regard to one part of the occurrence, the possibility of his being implicated for the murder of Bagher Singh merely as a matter of vindictiveness could not be outruled.
After examining the evidence of the three eye witnesses in detail, the learned Sessions Judge reached the conclusion that they had suppressed the facts in order to absolve themselves of all liability for the happenings of the 28th, and had uttered untruths and that no confidence could be reposed in their statements about the part that they had assigned to Ajmer Singh.
In the concluding part of the judgment he observed that " the parties were at logger heads on several issues and in the absence of independent evidence it is difficult to place reliance on the prosecution story 423 in regard to Ajmer Singh.
" The High Court on appeal minutely reviewed the evidence of these three eye witnesses and considered that the variations in the statements of witnesses made at , the two trials and which had weighed on the mind of the Sessions Judge were of a minor and trifling character and were quite natural as the Statements at this trial had been made 27 months after the occurrence and that the narration of events by Arjan Singh was substantially the same as had been given by him at the earlier trial and in the first information report.
As regards Lal Singh, who had resiled from his earlier statement and bad denied that he was armed with a phaura or that Arjan Singh wag armed with a lathi, it was said that this omission on his part was due to mere lapse of memory and forgetfulness rather than to a deliberate design to improve upon the prosecution story.
It was argued by Mr. Pritam Singh Safeer that in this case there were no compelling reasons for setting aside the order of acquittal and that due proper weight had not been given by the High Court to the opinion of the trial judge as regards the credibility of witnesses seen and examined by him.
The learned counsel submitted that the High Court was in error in the view that "when a strong prima facie case is made out against an accused person it is his duty to explain the circumstances appearing in evidence against him and` he cannot take shelter behind ' the presumption of innocence and cannot state that the law entitles him to keep his lips sealed.
" We think this criticism is well founded.
After an order of acquittal has been made the presumption of inno cence is further reinforced by that order, and that being so, the trial court 's decision can be reversed not on the ground that the accused had failed to explain the circumstances appearing against him but only for ,very substantial and compelling reasons.
As the courts below expressed divergent opinions on the credibility of the prosecution witnesses, we 35 424 had to read the evidence adduced in the case with great care and after doing so, we are on the whole inclined to agree with the view expressed by the High Court.
It is difficult to believe that without there being any truth in the fact that the appellant struck Bagher Singh with a barchha, Arjan Singh selected the appellant and ascribed to him that part soon after the occurrence.
There are no material discrepancies in the statements made by Arjan Singh on different occasions and in our view the reasons given by the learned Sessions Judge for rejecting his testimony are not convincing.
We agree with the High Court that there are no sufficient reasons for distrusting his evidence.
The number of persons who took part in the quarrel was not more than seven or eight and the blows inflicted were few, and in these circumstances Arjan Singh could have made no mistake as to the identity of the person who struck Bagher Singh fatally.
This part of his statement is corroborated by the evidence of Lal Singh and Dhan Kaur.
No cross examination was directed, against this part of their statements.
It seems that the learned Sessions Judge took too exaggerated a view of the minor discrepancies in these statements and read them with a rather hypercritical mind.
Bishandas, whose statement considerably impressed him, was only tendered for cross examination and never made a full statement about the happenings of the 28th morning.
The statement made by him is somewhat cryptic and from this it cannot be definitely concluded that Ajmer Singh was not present on the morning of the 28th at the shop of Banta Singh Mazhbi.
The learned Sessions Judge was not right in rejecting the whole of the prosecution evidence as unreliable merely on the basis of this cryptic statement.
Ujagar Singh, the other so called independent witness, was tendered for cross examination but the defence did not ask him a single question about the happenings of the 28th.
The argument therefore that the prosecution withheld from court independent witnesses who had witnessed the occurrence is without any substance.
The learned Sessions Judge 425 was apparently labouring under some misapprehension when he said that the prosecution had withheld from the court independent witnesses of the occurrence.
Apart from Ujagar Singh Mazhbi, no one else appears to have been present when the attack was made on Bagher Singh, Lal Singh and Mst.
Dhan Kaur by the party of the accused.
All that appears in evidence is that after the fight was over a number of persons arrived on the scene but as they did not witness the attack on Bagher Singh they could give no evidence on this point and their non production as witnesses cannot have any consequence on the case.
It is significant that the defence also led no evidence to prove that the fight took place in a manner different from the one described by the prosecution witnesses, or that Ajmer Singh was not present on the occasion.
In an appeal under section 417 of the Code of Criminal Procedure the High Court had full power to review the evidence upon which the order of acquittal was founded and we are satisfied that it did not in any way exercise it wrongly The injuries on the person of Kartar Kaur and under Singh were not proved to have been inflicted at the time of the occurrence and were of no consequence.
The prosecution was under no obligation to explain how they came about.
It was next argued that the trial held by the Sessions Judge was vitiated as the examination of the appellant was not in accordance with the provisions of section 342, Criminal Procedure Code.
There is considerable force in the point that the examination of the appellant by the Sessions Judge was detective.
All that the Sessions Judge did was, that he read out the examination of the accused in the committal court to him and then recorded the following questions and answers: " Q: Did you make before the Committing Magistrate the statement that has just now been read out to you ? A: Yes.
426 Q:Now that you have heard the entire evidence against yourself and the charge has been explained to you, do you wish to say anything else ? A: I am innocent.
Q: Do you wish to produce any evidence indefence ? A: No." In the committal court the 'questions put to the accused and his answers were these : " Q: Did you pawn the, ear ring of your wife with Banta Mazhbi and squander the proceeds on or about 28th January, 1948 ? A: No. Q : Did Lal Singh interfere when you were demanding the ear rings from said Banta Singh on 28th January, 1948, at Nathuwala and remark that the sweeper, i.e., Banta, was speaking truth when he denied the transaction ? A: No. Q: Did you on 28th January , 1948, at Nathuwala along with your father Sunder Singh, Banta Singh, and Teja Singh, you Banta Singh and Teja Singh being armed with spears, attack Lal Singh, his 'son Bagher Singh and Dhan Kaur at their house and in furtherance of the common intention of you all, Banta and Teja caused simple injuries to Lal Singh with spears and you caused fatal injuries with a spear to Bagher Singh deceased? A No. Q Why this case against you ? A Due to enmity.
Q Anything else to say? A No." The Sessions Judge did not even take care to ask the accused the routine question whether the statement made by him in the committal court was correct.
As if bard pressed for time, be simply asked him whether he had made that statement read out to him in the committal court, and was satisfied with an 427 answer, in the affirmative.
The, second question asked, is of a general character and. ' does not satisfy the requirements of section 342, Criminal Procedure Code.
We are of the opinion that when the Sessions Judge is required by that section to make the examination of the .accused, his duty is not discharged by merely reading over the questions and answers to the accused put in the committing magistrates court and by asking him whether he has to say anything about them.
It is not, sufficient compliance with the section to generally ask the accused that having heard the prosecution evidence, what he has to say about it.
The accused must be, questioned separately about each material circumstance which is intended to be used against him.
It was pointed out by this Court in Tara Singh vs The State(1) that the whole object of the section, is to afford the accused a fair and proper opportunity of explaining circumstances which appear against him and that the questions must be fair and must be couched in a form which an ignorant or illiterate person will be able to appreciate and understand.
In this particular case at one stage of the argument we were inclined to order a retrial of the accused in view of the defective examination of the accused by the Sessions Judge but on further thought we have reached the conclusion that the 'High Court was right in the view that the defective procedure followed by the Sessions Judge in this respect has not occasioned any prejudice to the accused.
The facts of the case are free from any complication and the point in issue was a simple one and it cannot be said that the per functory examination of the appellant did any damage.
The only point appearing in the evidence against the accused was that he gave a barchha blow to Bagher Singh.
The witnesses had stated that fact in his face and had been cross examined on the point by his counsel.
He was fully apprised of the part ascribed to him in the quarrel.
His answer to this specific question in the committal court was that he was innocent and that he was being implicated owing to (1) ; 428 enmity.
He stuck to that reply in the Court of Session after fully understanding what he was asked.
It is well settled that every error or omission not in compliance with the provisions of section 342 does not necessarily vitiate a trial.
Errors of this type fall within the category of curable irregularities, and, as held in Tara Singh 's case(1), the question, whether the trial is vitiated, in each case depends upon the degree of the error and upon whether prejudice has been or is likely to have been caused to the accused.
We are of the opinion that the disregard of the provisions of section 342 in this case is not so gross as would justify our quashing the conviction and ordering a retrial.
The result is that we uphold the judgment of the High Court and dismiss the appeal.
Appeal dismissed.
| After an order of acquittal has been made the presumption of innocence is further reinforced by that order, and that being so, the trial court 's decision cannot be reversed merely on the ground that the accused had failed to explain the circumstances appearing against him but only for very substantial and compelling reasons.
In an appeal under section 487, Criminal Procedure Code, the High Court has full power to review the evidence upon which the order of acquittal was founded.
The duty of a Sessions Judge under section 342, Criminal Pro cedure Code, to examine the accused is not discharged by merely reading over the questions put to the accused in the Magistrate 's Court and his answers, and by asking him whether he has to say anything about them.
It is also not a sufficient compliance with the section to generally ask the accused t hat, having heard the prosecution evidence what he has to say about it.
He must be questioned separately about each material circumstance which is intended to be used against him.
The, whole object of the section 419 is to afford the accused a fair and proper opportunity of explaining circumstances which appear against him and the questions must be fair and must be couched in a form which an ignorant or illiterate person may be able to appreciate and understand.
It is, however, well settled that every error or omission complying with section 342 does not necessarily vitiate the trial.
Errors of this type fall within the category of curable irregularities and the question whether the trial has been vitiated depends in each case upon the degree of error and upon whether prejudice has been or is likely to have been caused to the accused.
Tara Singh vs The State ([1951] S.C.,R. 729) referred to.
| The appellant was tried for an offence under section 302 Indian Penal Code for the murder of his wife.
The evidence consisted mainly of the uncorroborated dying declaration of the wife.
The Sessions judge accepted the evidence but convicted the appellant under section 304 Part 1 Indian Penal Code.
On appeal by the State the High Court convicted the appellant of an offence under section 302 Indian Penal Code and sentenced him to death.
The appellant contended that he had a right of appeal to the Supreme Court under article 134 (1) (a) of the Constitution and that his conviction was bad.
Held, that the appellant had a right of appeal to the Supreme Court under article 134 (1) (a) of the Constitution.
The conviction of the appellant under section 304 Part 1 of the Indian Penal Code by the Sessions judge amounted to an acquittal of the offence under section 302 and the High Court had reversed this order of acquittal and sentenced the appellant to death.
The word "acquittal" in article 134 (1) (a) did not mean that the trial must have ended in a complete acquittal of the charge, but acquittal of the offence charged and conviction for a minor offence was included in the word "acquittal".
Kishan Singh vs The King Emperor, (1928) L. R. 55, I.A. 390 relied on.
Per Kapur, Subba Rao and Shah, JJ.
The appellant was rightly convicted and sentenced by the High Court.
it was legal to found a conviction on the uncorroborated dying declaration.
The dying declarations had been accepted both by the Sessions judge and by the High Court and there was nothing in the evidence on the record which detracted from the findings of those courts in regard to the correctness or the propriety of this dying declaration.
776 Khushal Rao vs The State of Bombay, ; , referred to.
Per Hidayatullah and Dayal, JJ.
In an appeal under article 134 (1) (a) of ' the Constitution the Supreme Court assessed afresh the evidence on record and did not follow the practice in appeals by special Leave under article 136 that concurrent findings of the Courts below could be interfered with.
only when special circumstances existed.
In the circumstances of the present case it was not safe to rely on the dying declaration and the appellant was entitled to be acquitted.
| The appellant joined the Indian Civil Service in 1939 and was posted in the province of Madras.
After the transfer of power under the Indian independence Act on August 15,1947, he was 432 transferred to the Punjab and later when the Indian Administrative Service was constituted he became its member.
On July 18, 1959, he was suspended by the Governor of the State of Punjab under r. 7(3) of the Indian Services (Discipline and Appeal) Rules, 1955, on the ground that a criminal case was pending against him.
He challenged the order of suspension by a writ petition in the Punjab High Court as being violative of the guarantee contained in article 314 of the Constitution and contrary to r. 49 of the Civil Services (Classification, Control and Appeal) Rules which provided only for suspension as a penalty.
His case was that there was no provision immediately before January 26, 1950, that provided for suspension otherwise than as penalty.
The High Court dismissed the petition.
Held: (per Gajendragadkar, Subba Rao, Wanchoo and Shah, JJ).
The general law of master and servant and section 247 of the Government of India Act, r. 53 of the Fundamental Rules and rr. 49, 56 of the Civil Services (Classification, Control and Appeal) Rules, read together clearly show that members of the former Secretary of State 's Services were on August 14, 1947, liable to suspension either as an interim measure or as a punishment.
Interim suspension could be imposed either by the Secretary of State as the appointing authority or the Governor General or the Governor, as the case might be, as the statutory authority.
Management of Hotel Imperial, New Delhi v Hotel Workers ' Union, [19601 1 S.C.R. 476 and T. Cajee vs U. Jormanik Siem, ; , referred to.
It was not therefore correct to say that there could be no suspension except by way of punishment under r.49 of the Appeal Rules before 1947.
In a case of interim suspension before 1947 there was however no right of appeal.
Article 314 of the Constitution, properly construed, affords such protection to the members of the Secretary of State 's Services as they were entitled to immediately before the commencement of the Constitution.
There can be no doubt that suspension pending a departmental enquiry or a criminal proceeding falls within the word 'disciplinary matters ' used in that Article.
It was not correct to say that as independence was conferred on India and the Services automatically terminated, there was in law reappointment of all the former Secretary of State 's Services, and those serving in a province must be deemed to have been reappointed by the Governor and that, consequently, the Governor as the appointing authority had the power to order suspension.
Article 7(1) of India (Provisional Constitution) Order, 1947, G.G.O. 14, read with section 10 of the Independence Act, 1947, in the light of other relevant circumstances shows that the final decision whether or not the former members of the Secretary of State 's Services should continue was of the Government of India and that Government, therefore, must be deemed to have appointed 433 them to posts either under itself or in the Provinces.
Section 241(b) of the Government of India Act, as it then stood, and s.240(2) of the said Act, as amended by G.G.O. 14, could not alter this position.
State of Madras vs K.M. Rajagopalan, ; , referred to.
On the eve of the commencement of the Constitution i.e. January 25, 1950, a former member of the Secretary of State 's Services could be suspended under the general law by the Government of India alone as the appointing authority as an interim measure pending departmental enquiry or criminal proceeding and by no other authority.
He was liable to suspension as punishment under section 49 of the Civil Services (Classification, Control and Appeal) Rules.
Rule 53 of the Fundamental Rules governed pay during interim suspension or suspension as penalty.
While there was no appeal from an order of interim suspension, r. 56 of the Appeal Rules provided for an appeal from an order of suspension as penalty.
It was this position which article 314 of the Constitution sought to protect.
Rule 7 of the All India Services (Discipline and Appeal) Rules, 1955, violated the guarantee contained in article 314 in respect to interim suspension and was to that extent ultra vires in so far as it applied to the members of the Indian Administrative Services who fell within cls.
(a) and (b) of r.3 of the Indian Administrative Services (Recruitment) Rules, 1954.
The Governor 's Order under r.7(3) directing interim suspension of the appellant must, therefore, be set aside.
The proper procedure would be to approach Government of India for such interim suspension.
The Accountant General, Bihar vs N. Bakshi, [1962] Supp. 1 S.C.R. 505, referred to.
Per Dayal, J. In view of the provisions of section 241 of the Government of India Act as modified by the India (Provisional Constitution) Order, 1947, G.G.O. 14 of 1947, members of the Secretary of State 's Services who were holding posts under a provincial Government immediately before the appointed day, i.e., August 15, 1947, and continued in service thereafter must be deemed in view of article 7(1) of the said Order to have been appointed to the corresponding posts by the appropriate authority, the Governor of the Province.
That article generally applied to all appointments on and after the appointed day.
The appellant cannot be deemed to have been appointed by the Governor General or the Government of India.
It was not intended that merely because that Order was made by the Governor General, the deemed appointments must be taken to have been made by him.
It would be anomalous to hold that the Governor, who was in administrative control of the services, could not pass an interim order of suspension against a person appointed by the Secretary of State, though he could impose a penalty of suspension under 1/SCI/64 28 434 rr.
49 and 52 of the Civil Services (Classification, Control and Appeal) Rules, which continued in force till the All India Services (Discipline and Appeal) Rules came into force in 1955.
The Indian Civil Services ceased to exist from August 15,1947, and the services of its members automatically terminated on August 14, 1947.
The appellant 's service, therefore, came to an end on August 14, 1947, but since he was serving under the Madras Government immediately before August 15, 1947, and continued to do so thereafter he must be deemed to have been appointed by the Governor of Madras to the post he was holding on the appointed day.
Rule 7 of the All India Services (Discipline and Appeal) Rules, 1955, does not violate the provision of article 314 of the Constitution, nor can the absence of a right of appeal against interim suspension do so since the appellant had none before the Constitution.
His suspension by the Governor of Punjab under r.7(3) was, therefore valid.
State of Madras vs K.M. Rajagopalan, ; , considered.
| The appellant was tried for an offence under section 165A of the Indian Penal Code for having abetted K, an Inspector in charge of checking paddy, in the commission of an offence by the latter under section 161 of the Code.
The prosecution case was that while the complainant was taking paddy for sale K demanded Rs. 200/as bribe and threatened him that unless the money was paid the paddy would be seized, that at the instance of K the complainant handed over the bribe money to the appellant for being counted and that the latter after checking the money paid it to K.
The Special judge who tried the case accepted the prosecution story and convicted K under section 161 of the Indian Penal Code and the appellant for abetment of the offence.
On appeal, the High Court was of the opinion that the evidence was not strong enough to prove payment to K, and set aside his conviction, but confirmed that of the appellant on the ground that money was taken by him for payment to K as illegal gratification and whether he actually paid it to him or not the offence fell under section 165A. Held, that the conviction of the appellant for abetment under section 165A of the Indian Penal Code must under the circumstances be set aside.
On the facts found, the appellant received the money in the presence of and for and on behalf of K and if K was acquitted on the ground that no offence under section 161 was committed, then no question of intentionally aiding by any act or omission the commission of the offence arose.
Consequently, the appellant 's conviction for the offence of abetment wag not maintainable.
Dalip Singh vs State of Punjab, ; , distinguished.
| The respondent was appointed as a temporary clerk in an engineering division of the Government.
The attempt of another clerk to impersonate and appear for him in a depart mental examination was detected.
The Executive Engineer obtained explanations from both the clerks and reported the matter to the Superintending Engineer, who brought the matter to the notice of the ChiefEngineer.
The Chief Engi neer wrote to the Superintending Engineer to award suitable punishment.
The Superintending Engineer passed the order that the respondent a "temporary clerk is hereby served with one month 's notice to the effect that his services shall not be required after one month from the date of receipt of this notice.
" The respondent filed a suit challenging the order on the ground that the termination was one passed by way of punishment and therefore attracted Art 311 of the constitution;.
and since the provisions of the Article had not been complied had not been complied with the order was void.
The Trial Court and the First Appellate Court dismissed the suit.
But the High Court went,through the official correspondence preceding the passing of the impugned order, and observing that a close scrutiny of the facts on record showed that the order was passed by way of punishment on the basis of the enquiry proceeding and as a result of the recommendation by the Executive Engineer followed by the direction issued by Chief Engineer, allowed the second appeal.
Allowing the appeal to this Court, HELD :(1) It is no longer open to any one to urge that the constitutional position in regard to cases of the present nature is not clear.
An examination of the deci sions of this Court shows that there is no real conflict in their ratio decidendi.
Even if there is a conflict, the proper course for a High Court is to find out and follow the opinion expressed by larger benches of this Court in preference to those expressed by smaller benches of this Court.
This practice is followed by those Court itself and has hardened into a rule of law.
[475B C] Union of India & Anr.
K.S. Subramanian; , , followed.
State of U.P. & Ors vs Sughar Singh [1974] 2 .S.C.R. 335: ; , The State of Punjab vs
P.S. Cheema A.I.R. 1975 S.C. 1096, Satish Chandra Anand vs The Union of India ; , Shyam Lal vs State of U.P. ; , Parshotam Lal Dhingra vs Union of India ; , Gopi Kishore Prasad vs Union of India AIR. , The State of Orissa & ,Anr.
vs Ram Narayan Das ; , Madan Gopal vs State of Punjab [1963] 3 S.C.R. 716, Rajendra Chandra Banerjee vs Union of India ; , Champakal Chimanlal Shah vs The Union of.
India , Jagdish Mitter vs Union of India A.I.R. 1964 S.C. 449, State of Punjab & Anr.
vs Shri Sukh Raj Bahadur ; , Union Of India 463 & Ors.
R.S. Dhaba , State of Bihar & Ors.
vs Shiva Bhikshuk Mishra R.S. Sial vs The State of U.P. & Ors. , Shamsher Singh & Anr.
vs State of Punjab ; and The Regional Manager & Anr.
vs Pawan Kumar Dubey [1976] 3 S.C.R. 540 referred to.
(2) Before it is held that an order terminating the services of a Government servant amounts to punishment the Court must hold that either of the two tests,namely, (a) that the servant had a right to the post or (b) that he had been visited with evil consequences such as forfeiture of pay etc., is satisfied.
Therefore, an order terminating the services of a temporary servant or probationer under the Rules of employment and without anything more will not attract article 311.
Where a departmental enquiry is contem plated but an enquiry is not in fact proceeded with, article 311 will not be attracted unless it can be shown that the order, though.
unexceptionable in form, is made following a report based on misconduct.
Even though misconduct, negli gence, inefficiency or other disqualification may be the motive for the order of termination, if a right exists under the contract or the rules to terminate his services, then article 311(2) is not attracted unless the misconduct or negli gence is the very foundation of the order.
Where there are no express words in the impugned order itself ' which throw a stigma on the Government servant, the Court would not delve into secretariat files to discover whether some kind of stigma could be inferred on such research.
[469 A B; 473 C; 471 H; 475 F] Parshotam Lal Dhingra vs Union of India [1958] S.C.R. 828, R.S. Sial vs The State of U.P. & Ors.
[1974] 3 S.C.R. 754, Shamsher Singh & Ant.
vs State of Punjab ; and 1.
N. Saksena vs State of Madhya Pradesh ; followed.
(3) The respondent was a temporary hand and had no right to the post.
Under the contract of service and the service rules applicable to him the State had the right to terminate his services by giving him one month 's notice.
The order ex facie is an order of termination of service sim pliciter.
It does not cast any stigma on the respondent nor does it visit him with evil consequences, nor is it founded on misconduct.
Therefore, the respondent could not invite the Court to go into the motive behind the order and claim the protection of article 311(2) of the Constitution.
[475 D E] (4) The High Court failed to appreciate the true legal .and constitutional position and upset the concurrent findings of fact arrived at by the Courts below, ignoring the well settled principle of law that a second appeal cannot be entertained on the ground of erroneous findings of fact, however, gross the error might seem to be.
[475 G H] Paras Nath Thakur vs Smt.
Mohani Das & Ors.
[1960] 1 S.C.R. 271.
Sri Ramanuja Jeer & Ors.
vs Sri.
Ranga Ramanuja Jeer & Anr. ; , P. Ramachandra Ayyar vs Ramalingam ; and Madamanchi Ramappa & . Anr.
vs Muthaluru Bojappa ; , referred to.
| One Smt.
Ram Kali, widow of Tikam Singh, was the land holder of the agricultural lands in dispute situated in villages Agaota and Khaiya Khera in District Bulandshahr (U.P.).
On June 14, 1915 Smt.
Ram Kali, who was a Sirdar and a "disabled person" falling within section 157(1) of the U.P. Zamindari Abolition and Land Reforms Act, 1950, executed a registered deed of lease fora period of five years in favour of Uttam Singh and Murli Singh (the predecessors in title of the respondents) but before the expiry of the period of five years she died in August, 1945 and Dan Sahai, who was also "disabled person" within the meaning of section 157(1) of the Act, (her husband 's real brother and predecessors in title of the appellants) inherited her interest.
After the expiry of the period of registered lease Uttam Singh and Murli Singh continued to hold the lands as tenants from year to year under Dan Sahai.
In consolidation proceedings a question arose, whether Uttam Singh and Murli Singh, who were lessees (adhivasis) under Smt.
Ram Kali and Dan Sahai acquired the status of Sirdars, being entitled to be treated so under section 240B of the Act or they remained Asamis of the plots in dispute.
The Division Bench of the Allahabad High Court, relying on the earlier view taken by its Full Bench in Smt.
Maya vs Raja Dulaji and others , decided the appeals in favour of the respondents by holding that they were not Asamis but had become Sirdars.
Hence the appeals by certificate by successors in title of Ram Kali and Dan Sahai.
Allowing the appeals, the Court ^ HELD: 1.
On true construction of section 21(1)(h) of the U.P. Zamindari Abolition and Land Reforms Act the benefit thereof would be available to the land holder on the date of vesting, if the same land holder or his predecessor existing on the material dates was a person or persons belonging to one or more clauses mentioned in section 157(1) of the Act.
[378 C D] Since, in the instant case, which falls under sub clause (a) of clause (h) on the date of actual letting Smt.
Ram Kali was a "disabled person" and since on the next material date, namely, April 9,1946 Dan Sahai (successor in interest of Smt.
Ram Kali) was also a disabled person, the land holder on the date of vesting who incidentally happened to be Dan Sahai would be entitled to the benefit of section 21(1)(h) and the respondents (successors of Uttam Singh and 369 Murli Singh) would remain Asamis and cannot be said to have become Sirdars within the meaning of section 240B of the U.P. Zamindari Abolition and Land Reforms Act, 1950.
[378 E F] 2.
Section 21(1)(h) of the U.P. Zamindari Abolition and Land Reforms Act, 1950 provides that every person occupying or holding land in any one of the capacities mentioned in clause (h) on the date immediately preceding 1 7 1952 shall be deemed to be an Asami thereof notwithstanding anything contained in the Act, if the land holder or if there are more than one all of them were "disabled persons" within the meaning of section 157(1) both on the date of letting as well as on April 9, 1946 where the letting has taken place prior to April 9, 1946 or were disabled persons on the date of letting if the letting has occurred after April 9, 1946.
[373 A B] 3:1.
It is true that clause (h) contains the phrase "where the land holder or if there are more than one land holder all of them were person or persons belonging" to any one or more than one of the clauses mentioned in section 157(1) of the Act.
Under section 3(26) of the Act, the definition of "landholder" as given in the U.P. Tenancy Act, 1939 has been adopted since the expression is not defined in the Act.
The expression "land holder" who obviously is a possessor of interest in land under section 3(11) of the U.P. Tenancy Act, 1939 means a person to whom rent is payable, and under section 3(1), ibid.
by legal fiction it shall include his predecessor in interest as also successor in interest to whom the rent was or is payable.
It is such definition that will have to be read in the U.P. Zamindari Abolition and Land Reforms Act wherever that expression occurs.
Therefore the expression "land holder" occurring in section 21(1)(h) of the Act must mean a person to whom rent is payable and by fiction would include his predecessor in interest.
Read in this light there would be no question of adding the words predecessor in interest of the land holder in section 21(1)(h) as that would be implicit in the term "land holder" on account of deeming provision of section 3(1) read with section 3(11) of the U.P. Tenancy Act, 1939.
[375 G H, 376 A, D F] 3:2.
Section 157(1) of the U P. Zamindari Abolition and Land Reforms Act permits leases by disabled persons and provides that a Bhumidar or on an Asami holding land in lieu of maintenance allowance under section 11, who is a disabled person falling under any of the clauses (a) to (g), may let the whole or any part of his holding, "provided that in the case of a holding held jointly by more persons than one, but one or more of them but not all are subject to the disabilities mentioned in clauses (a) to (g), the person or persons may let out his or their share in the holding".
Having regard to the proviso under which even in the case of a joint holding a lease of his share by a disabled land holder is permissible and the same is liable to be separated by a partition, the expression "all of them" must refer to all such land holders who were disabled land holders on the material dates.
When under the proviso to section 157(1) a lease of his share by a disabled land holder in joint holding (held along with a non disabled person) is expressly permitted and under section 157(2) the Court has to determine such share of the disabled lessor and partition the same on an application being made in that behalf, it cannot be said that the Legislature intended to deprive the protection of section 21(1)(h) to such disabled land holder simply because on the date immediately preceding the date of vesting such land holder comes to hold the 370 land jointly with some other non disabled land holder.
On true construction of the crucial phrase occurring in clause (h) it is not possible to read into the provision the additional requirement, namely, that the identity of the land holder or land holders must remain unchanged up to the date of vesting.
[376 G H, 377 A, B D, G H] Further the scheme of the U.P. Zamindari Abolition and Land Reforms Act is different from the Agra Tenancy Act, 1926 and U.P. Tenancy Act, 1939.
In each of the two provisions of these two Acts express words have been used conferring personal rights on the individuals concerned which is not the case with section 21(1)(h) of the Zamindari Abolition and Land Reforms Act.
[378 B C] Smt.
Maya vs Raja Dulaji and Ors.
[1 over ruled.
Dwarika Singh vs Dy.
Director of Consolidation All W.C. 213 1981 All.
L.J. 484 approved.
| A made a will giving life interest in his properties to three daughters in law '.
After the death of the three ladies, half share of the property was to go to two daughters of one of the daughters in law and the other half to one S, collaterally related to A. S was appointed as one of the executors of the will.
One of the terms of the will was "that on the death of me, executant the aforesaid executors should perform the Shradh ceremonies of the executant according to the means and customs in the family." S performed the cremation ceremonies and helped the two daughters in law to manage properties.
There was no evidence to show that he performed the Shradh as well.
S died before the will was duly proved.
The principal question in the suit filed by the heirs of S was whether there was adequate manifestation of an intention to act as an executor on the part of section The two lower Courts held that the intention to act as an executor was apparent from the facts while the High Court held that, since there was no evidence of Shradh being performed by there was no 'manifestation ', as required by Sec.
141 of the Indian Succession Act.
Dismissing the appeal, HELD : There is a distinction between the cremation ceremonies and shradh ceremonies which are periodic.
It is also evident that what the testator desired his executors to do was that they should perform his shradh ceremonies.
The manner in which the testator has referred to S in his will, almost as a substitute for a son, shows that he expected S to perform his shradh ceremonies as his own sons, who had predeceased him, would have preformed these.
There is no evidence whatsoever on record that S ever performed any such ceremony.
The conclusion reached by the High Court, therefore, is correct.
[433 C]
| The appellant, a resident of Palwal in Gurgaon District, committed house trespass and tried to outrage the modesty of a girl aged 7 years.
By an order dated May 31, 1962, he was convicted by magistrate and sentenced to rigorous imprisonment.
He was also ordered to pay fine.
At the time of his conviction, he was 16 years old.
The was extended to Gurgaon on September 1, 1962 and hence at the time of his conviction the magistrate had no power or duty to make any order under the Act.
The appeal of the appellant was dismissed by the Additional Sessions Judge, Gurgaon by his order dated Sep tember 22, 1962.
His revision petition was also dismissed by the High Court on September 27, 1962.
No ground was taken either before the Additional Sessions Judge or High Court that the provisions of the should be applied in the case.
After the dismissal of the revision petition, appellant filed a criminal miscellaneous petition requesting the High Court to exercise its powers under section 11 of the Act and pass orders under sections 3, 4 or 6 of the Act.
The application was also dismissed by High Court.
The appellant filed a petition in the High Court for the grant of a certificate of fitness to appeal to this Court and one of the grounds taken was that High Court should have acted under section 11 of the Act and passed orders under sections 3, 4 or 6 of the Act.
The certificate having been refused by High Court, the appellant came to this Court by special leave.
Accepting the appeal, Held (Per Subba Rao and Das Gupta, JJ.): The order of the High Court be set aside and High Court be directed to make an order under section 6 or if it so desires, remand the case to the Sessions Court for doing so.
It is true that ordinarily, this court is reluctant to allow a party to raise a point for the first time before it, but in this case, both the Additional Sessions Judge and the High Court ignored the mandatory provisions of the Act.
It is true that the appellant did not bring the provisions of the Act to the notice of the Court till after the disposal of the revision petition, but that does not absolve the court from discharging its duty under the Act.
The appellate court in appeal or the High Court on revision can, in exercise of the powers conferred under section 11 of the Act, make an order under section 6(1).
The Act is a milestone in the progress of the modern liberal trend of reform in the field of penology.
It is the result of the recognition of the doctrine that the object of criminal law is more to reform the individual offender than to punish him.
The Act distinguishes offenders below 21 years of age and those 677 above that age and offenders who are guilty of committing an offence punishable with death or imprisonment for life and those who are guilty of a lesser offence.
While in the case of offenders who are above the age of 21 years, absolute discretion is given to the court to release them after admonition or on probation of good conduct, in the case of offenders below the age of 21 years an injunction is issued to the court not to sentence them to imprisonment unless it is satisfied that having regard to the circumstances of the case, including the nature of the offence and the character of the offenders, it is not desirable to deal with them under sections 3 and 4 of the Act.
An order under section 1 1 (1) of the Act can be made by any court empowered to try and sentence the offender to imprisonment and also by High Court or any other court when case comes before it on appeal or in revision.
The sub section ex facie does not circumscribe the jurisdiction of an appellate court to make an order under the Act only in a case where the trial court could have made that order.
The phraseology used therein is wide enough to enable the appellate court or High Court, when the case come before, it, to make such an order.
It was purposely made comprehensive as the Act was made to implement a social reform.
As the Act does not change the quantum of the sentence, but only introduces a provision to reform the offender, there is no reason why the legislature should have prohibited the exercise of such a power even if the case was pending against the accused at one stage or other in the hierarchy of tribunals.
The term "court" in section 6(1) includes an appellate court as well as revisional court.
Per Raghubar Dayal, J. (dissenting) When a person has been found guilty for the first time of an offence to which the provisions of sections 3 and 4 of the could apply, and such finding, be it of the trial court or of the appellate court, is arrived at before the application of the Act, the court of appeal or revision cannot take action under section 11(1) of the Act when the case comes before it in appeal or revision.
It is true that appellate courts have allowed parties to take advantage of a law enacted during the pendency of the case, but this is done when parties can litigate further in view of the changed law and is done to save multiplicity of proceedings.
Such a ground is not available in the present case.
Ramji Missar vs State of Bihar, [1963] Supp.
2 S.C.R. 745, referred to.
|
Civil Appeal No. 300 of 58.
A. N. Sinha, N. H. Hingorani and P. K. Mukherjee, for the appellants.
C. K. Daphtary, Solicitor General of India, R. Ganpathy Iyer and R. H. Dhebar, for respondent No. 1.
C. K. Daphtary, Solicitor General of India and K. L. Hathi, for respondent No. 3.
1961 December 13.
The Judgment of the Court was delivered by SARKAR, J.
This appeal raises certain questions as to the validity of an order made under section 36 of the , sanctioning the transfer of its life insurance business by one insurance company to another.
The appellants had challenged that order by a petition field under article 226 of the Constitution in the High Court of Punjab.
The High Court having dismissed the petition they have come to this Court in appeal.
There are three appellants, one of whom is a shareholder of the transferor company, another a policy holder in it and the third, one of its agents who claims to have become entitled under the to receive from it commission on renewal premiums paid on life insurance business 132 introduced by him.
They complain that their respective rights have been adversely and illegally affected by the sanction.
The transferor company is the India Equitable Insurance Company Ltd. and the transferee company, the Area Insurance Company Ltd. Under the transfer all the life insurance business including liabilities issued and all the life fund of the transferor company were taken over by the transferee company.
It is said and perhaps that is the correct position that as a result of the transfer all the transferor company would vest in the transferee company and the transferor company would really become defunct.
The first point argued by Mr. Sinha for the appellants is that the transfer offends sections 10 and 12 of the Companies Act.
The Companies Act with which we are concerned, is the Companies Act of 1913 as it stood in 1954.
Section 10 of the Companies Act provides that a company shall not alter the conditions contained in its memorandum except as provided in that Act.
Section 12 states that a company may by special resolution alter the provisions of its memorandum with respect to its objects but that the alteration shall not take effect until it is confirmed by court on petition.
The contention of the learned Advocate is that the arrangement of transfer really amounts to abandonment of the business of the transferor company and therefore to an alteration of its memorandum without following the procedure laid down in section 12 and this cannot be done.
The obvious answer to this contention is that the transfer does not effect any alteration in the memorandum of the transferor company.
Clause 3(27) of the memorandum of the transferor company gives it the power to sell its undertaking.
The transfer in this case is an exercise of this power and hence within the objects of the company.
An exercise by a company of a 133 power given by its memorandum cannot amount to an alteration of the memorandum at all.
It is then said that clause only authorised a sale and that a sale is a transfer for a consideration.
It is contended that in the present case there was no consideration moving from the transferee company and, therefore, the transfer was not by way of a sale.
This, it is contended, was, therefore, a transfer without any power in that regard in the memorandum and hence in substance amounts to unauthorised alteration of it.
We were referred to various balance sheets and other figures in support of this contention.
This point as to want of consideration was not taken in the petition and the High Court did not permit it to be raised.
We have, therefore, to proceed on the basis that the transfer was a sale.
We wish however to make it clear that we are not deciding what is enough consideration for a sale, nor whether a transfer not authorised by the memorandum would amount to an alteration of the memorandum.
What we have said furnishes enough answer to the contention raised.
Mr. Sinha then contends that the result of the transfer was a virtual winding up and that it was not one of the corporate objects of a company to wind it up.
The contention was that the winding up could be effected only under the provisions of the Companies Act.
We were referred to Bisgood vs Henderson 's Transvaal Estates Ltd(1) as authority for this proposition.
We think, this contention is misconceived.
What was done in this case was done under the provisions of the and not by way of carrying out a corporate object of the transferor company.
Now, section 117 of the provides that nothing in that Act would affect the liability of an insurance company to comply with the provisions of the Indian Companies Act, in matters not otherwise specifically provided for by it.
Section 36, of the , which has for the present purpose to be read with section 35 of that 134 Act, makes certain specific provisions which, as we shall presently show, override the provisions of the Companies Act.
The objection based on Bisgood 's case(1) is ill founded.
There a company was sought virtually to be wound up and its assets distributed in purported exercise of a power to sell the undertaking and other cognate powers contained in its memorandum of association, and this the Court said could not be done as it would make the provisions for winding up in the Companies Act ineffective.
In the present case the thing has been done under express statutory power.
No question here arises of a corporate power in the sense it arose in Bisgood 's case (1).
Further there is not here, as there was in Bisgood 's case (1), a distribution of the assets of the transferor company after its undertaking had been transferred.
Hence we have here no winding up really.
The next contention of Mr. Sinha is that the arrangement for the transfer had been made by the directors and the directors had no power in view of section 86H of the Companies Act, to transfer the undertaking of the company.
That section gave the directors power to transfer the undertaking with the consent of the company in a general meeting.
In the present case, what had happened was that an agreement between the two companies for the purpose of the transfer had been made by the directors and it was subsequently approved by the shareholders of the transferor company at a general meeting by about 82 per cent, majority.
It was after such approval that the transfer had been sanctioned under section 36 of the , and may be, though we do not have this on the record, the transfer was effected by proper documents executed between the companies.
An agreement only to transfer the undertaking by the directors clearly does not violate section 86H for it is merely 135 tentative subject to final approval by the Company in general meeting.
This we think is by itself sufficient answer to Mr. Sinha 's present contention.
Mr. Sinha however says that the approval by the Company at its general meeting was of no use because the defect in the original agreement, namely, that the directors had no power to transfer in view of section 86H, was not pointed out at that meeting to the shareholders.
It is somewhat difficult to appreciate this point.
There was no defect in the directors ' making the agreement to transfer; such agreement did not effect the transfer.
Even assuming that the agreement was beyond the power of the directors, it cannot be said that the approval of it by the shareholders had been without any knowledge of the defect.
The defect was of the want of the directors ' power to transfer in view of the provisions of section 86H of which the shareholders cannot be heard to deny knowledge.
The case of Permila Devi vs Peoples Bank of Northern India Ltd.(1) on which Mr. Sinha relied for the present purpose is of no assistance to him.
There certain shares had been illegally forfeited but it was contended that the shareholders had ratified the forfeiture.
It was held that the ratification, if any, was of no use because it had not been shown that the attention of the shareholders and creditors had been drawn to the illegality which depended on facts of which no knowledge by the shareholders could be presumed.
In the present case, the defect, if any, arose from a statutory provision itself of which the shareholders must be deemed to have had knowledge.
Mr. Sinha then says that the transfer was bad as it involved a reduction of share capital of the transferor company.
His point is that as all the assets were gone there was necessarily a reduction of its share capital.
He says that a reduction of share capital can be effected only as provided in section 55 and the succeeding sections of the Companies Act.
This contention is, in our view, wholly 136 misconceived.
Reduction of share capital under these sections, is not brought about by loss of assets.
A bare perusal of the sections, we think, is enough to establish that.
The disappearance of the assets of the Company, for whatever reason, does not cause a reduction of the share capital.
Another point raised by Mr. Sinha is that the transfer was bad it offended section 44 of the .
Under that section certain insurance agents have been given certain rights against their employer companies to receive commission in respect of renewal premiums paid.
We will assume for the present purpose that the petitioner who is an agent, had acquire such a right against the transferor company under section 44.
We do not however see that such rights are in any way affected by the transfer.
The right of the petitioner agent against the Company remains.
It may be that he cannot realise the amount due, by enforcing that right because the transferor company has no assets left after the transfer out of which to pay the commission.
But section 44 does not say that an insurance company shall not be entitled lawfully to deal with its assets where the effect of such dealing might be that nothing is left out of which the agents can be paid their commission.
Further, more it has to be remembered that what has been done in this case has been done under the same Act.
Section 36 of the does not say that a transfer shall not be sanctioned if the effect of it is to leave no assets with the transferor company.
Reading the two sections together, as we must do, it is not possible to take the view that transfer cannot be sanctioned under section 36 if the result of that is to denude the transfer or company of all its assets out of which an agent can be paid his commission.
A further point is based on article 14 of the Constitution.
It is said that there were other insurance companies in the same insolvent position 137 as the transferor company and that the policy holders of the latter company alone were being made to suffer.
It may be stated here that the transfer involved a condition affecting slightly adversely the rights of the policy holders.
It does not seem to us however that any question of discrimination arises in the present case.
The transfer was sanctioned with the assent of the shareholders of the two companies concerned.
The sanction was given after the policy holders of the transferor company were heard.
Again, section 36 of the applies to the insurance companies where the companies in general meeting agree to a transfer.
No action under section 36 can be taken except on the initiative of the companies concerned.
It is done in the best interests of the policy holders.
Then it is argued that the terms of sections 35 and 36 had not been complied with.
It is necessary now to be set out the relevant portions of the sections and some of the facts of this case.
section 35.
(1) No life insurance business of an insurer specified in sub clause (a)(ii) or sub clause (b) of clause (9) of section 2 shall be transferred to any person or transferred to or amalgamated with the life insurance business of any other insurer except in accordance with a scheme prepared under this section and sanctioned by the Controller.
(2) Any scheme prepared under this section shall set out the agreement under which the transfer or amalgamation is proposed to be effected, and shall contain such further provisions may be necessary for giving effect to the scheme.
(3) Before an application is made to the Controller to sanction any such scheme, notice of the intention to make the application together with a statement of the nature of 138 the amalgamation or transfer, as the case may be, and of the reason therefor shall, at least two months before the application is made, be sent to the Controller and certified copies, four in number, of each of the following documents shall be furnished to the Controller, and other such copies shall during the two months aforesaid be kept open for the inspection of the members and policy holders at the principal and branch offices and chief agencies of the insurers concerned, namely.
[Here certain documents are specified.
] section 36.
(1) When any application such as is referred to in sub section (3) of section 35 is made to the Controller, the controller shall if for special reasons he so directs, notice cause, of the application to be sent to every person resident in India who is the holder of a policy of any insurer concerned and shall cause statement of the nature and terms of the amalgamation or transfer, as the case may be, to be published in such manner and for such period as he may direct and after, hearing the directors and such policy holders as apply to be heard any other persons whom he considers entitled to be heard, may sanction the arrangement, if he is satisfied that no sufficient objection to the arrangement has been established and shall make such consequential orders as are necessary to give effect to the arrangement, including orders as to the disposal of any deposit made under section 7 or section 98: It would appear from the terms of section 35 (3) that it contemplates the following steps: (a) A notice of the intention to make an application to the Controller of Insurance for sanction of the transfer has to be given to him.
139 (b) Thereafter, together with the notice, certain specified documents have to be kept open for the inspection of the shareholders for two months.
(c) After the expiry of the period of two months, an application has to be made to the controller of insurance for sanction of the transfer.
Now, what had happened in this case was that the notice contemplated by section 35 (3) was given on July 27, 1951, and the necessary documents were kept open for inspection.
Before the application to the Controller was made, the directors of the companies were in touch with the Controller in regard to the proposed transfer and the latter suggested various modifications in the proposed scheme which was one of the documents which had to be kept open for the inspection of the shareholders.
On October 30, 1951, an application to sanction the transfer was made under section 35 (3) of Subsequently, also further modifications were suggested by the Controller.
On July 28, 1952, the transferor company in its general meeting considered the suggestions of the Controller and approved of the scheme with certain modifications, to the details of which it is not necessary to refer.
The scheme so modified contained the following clause: CL. 16.
That this arrangement is conditional upon the sanction on a subsequent date either with or without any modification of the terms hereof imposed or approved by the Controller and accepted by the parties here to and subject as aforesaid, the provisions as mentioned herein shall be operative on and from the thirty first of December 1950.
It was this scheme which was approved by the Company in its general meeting by the following resolution: "Read, considered and thoroughly discussed the proposed scheme of transfer. and resolved 140 that the proposed transfer. having been found to be arranged by the directors of the Company in the best interests of the Policy holders, the same be and are hereby approved and confirmed, and resolved further that the directors be and are hereby authorised to make and accept further modifications and alterations in the scheme if any suggested by the Controller of Insurance.
" It appears that certain further modifications in the scheme were thereafter made.
The Controller directed notice to be issued to all policy holders giving them full information of the scheme and fixed a date for hearing.
All policy holders desiring to be heard, were heard.
Before however the Controller passed his order sanctioning the scheme, the petition, out of which this appeal arises was filed on February 13, 1954.
Apparently, on this date further hearing of the matter by the Controller was pending.
On March 8, 1954, the controller gave his sanction to the scheme as modified.
Thereafter, the petitioners on May 14, 1954, filed a supplementary petition asking for writ quashing the order, the first petition having only for asked a writ to quash the proceeding then pending before the Controller.
Mr. Sinha points out and in this he is right that after notice under section 35 (3) had been issued, the scheme of transfer had been modified and it was such modified scheme that was sanctioned by the Controller.
Mr. Sinha 's point is that under section 36 the Controller could only sanction the scheme of which notice had been given under section 35.
He, therefore, contends that the sanction granted by the Controller in this case was not in terms of the section and hence a nullity.
The learned Solicitor General appearing to oppose the appeal contends that on a proper construction of the sections the Controller had power to sanction a scheme modified after notice under section 35 (3) had been issued.
It is however unnecessary in this case to decide the question so raised.
141 We will resume for the present purpose that under section 36 (1) only the scheme of transfer in respect of which notice under section 35 (3) had been given could be sanctioned and not a modified version of it.
The scheme and the resolution of the shareholders of the transferor company approving it, however both provided for its modification later at the suggestion of the Controller and gave power to the directors to accept the modifications on behalf of the Company.
The modifications were pursuant to the terms of the scheme as approved by the share holders of the transferor Company.
Therefore, in substance, it was the scheme of which notice had been given under section 35 (3) which was sanctioned.
A similar view was taken in England in regard to sections 153 and 154 of the English Companies Act, 1929.
Those sections dealt with compromises with creditors and for reconstruction and amalgamation of companies.
These could be effected by an order of court after the relative scheme had been approved by the companies or creditors concerned.
It was generally felt that the court could either sanction the scheme approved by the shareholders or reject it but had no power to modify it.
The contention of Mr. Sinha in the present case it will be remembered, is substantially the same.
To remove the doubt as to the power to modify the scheme after it had been approved by the share holders of the companies concerned, the author of Palmer 's Company Precedents appears to have recommended the device of inserting in the scheme a clause giving power to the court to modify the scheme and the directors to accept the modification.
In the 16th Edition of this well known book the following passage appears at p. 844, "It is more than doubtful whether, if a particular scheme is agreed to at a general meeting of creditors, the court can sanction 142 that scheme with modifications, unless there is some provision in the scheme providing for possible modifications.
In cases whether has no such provision, and some modification has been thought expedient, the court has required the calling of a second meeting to consider the scheme as modified; but to avoid this inconvenience it has for some time past been usual to insert in schemes a clause (originated by the author) expressly empowering the liquidator to assent to any modifications or conditions approved or imposed by the court, and this provision was approved by Chitty J. in Dominion of Canada, etc.
Co., and has frequently been acted on.
This practice seems to have obtained approval in our country to : see Mihirendrakishore Datta vs Brahmanbaria Loan Company Ltd., (1) turning on section 153 of the Companies Act, 1913, which corresponded to the sections of the English Act earlier mentioned.
Mr. Sinha contends that the authorities on the Companies Act earlier referred to had no application to the present case.
He says that the sections of the Companies Acts on which these authorities turned were not pari materia with sections 35 and 36 of the .
His contention is that the object of these sections of the was to protect the shareholders and policy holders of the Company and that they would be deprived of that protection if a scheme modified subsequently to the issue of the notice under section 35 (3) could be sanctioned.
We do not think that this contention is well founded.
So far as the policy holders are concerned, they have nothing to do with the approval of the scheme.
The scheme of transfer was agreed to between the shareholders of the companies concerned in the deal.
Assume, as Mr. Sinha says, that under the , as it is under the 143 the Companies Act, it is the shareholders who must agree to the scheme.
In the cases falling under the Companies Act, it is for protecting the shareholders that it has been held that the court cannot modify the scheme unless the scheme itself gives the court the power to do so.
On the assumption made we think it perfectly clear that the position under the is the same.
If Mr. Sinha is wrong and under the it is not for the shareholders to sanction the scheme, then there would be less reason for saying that what could be done under the Companies Act, cannot be done under the .
The intention of sections 35 and 36 of the would on the basis of Mr. Sinha 's contention, be to protect the shareholders from having to accept a scheme to which they have not agreed.
Such protection however may be given up by shareholders by inserting in the scheme approved by them, a clause empowering the directors to modify it.
So far as the policy holders are concerned, their protection is left in the hands of the controller.
That is the policy of the and, hence, the Controller hears them.
In the present case, he actually heard policy holders.
Therefore it does not seem to us that it can be contended with substance that sections 35 and 36 of the are not pari materia with the sections of the Companies Act to which we have earlier referred.
The last point of Mr. Sinha must also fail.
The result is that this appeal must be dismissed with costs and we order accordingly.
There will be one set of hearing costs.
| In an application under article 226 of the Constitution, to challenge the validity of the transfer of a life insurance company 's business to another company under section 36 of the : ^ Held, the transfer though it brought about an abandonment of the business of the company was not bad as resulting in an alteration of the memorandum of the company without recourse to section 12 of the Indian Companies Act, 1913.
The Company 's memorandum of association contained a power to sell its undertaking and an exercise of that power does not amount to alteration of the memorandum.
The transfer was not a winding up of the company without following the procedure laid down in the Companies Act and hence invalid.
It was effected under the provisions of the .
Bisgood vs Hendersons Transval Estate, , distinguished.
An agreement by the directors of a company to transfer its undertaking subject to confirmation by the company in general meeting did not offend section 86H of the Companies Act.
Section 55 and the connected sections of the Companies Act do not contemplate reduction of share capital brought about by loss of assets and loss of assets does not amount to reduction of share capital.
Section 44 of the does not prevent an insurance company from dealing with its assets though as a result thereof no asset was left out of which the agents of the company might be paid commission to which they are entitled under the . 131 Section 36 of the does not offend article 14 of the Constitution.
That section applies to all insurance companies which in general meeting agree to a transfer.
Even if it is assumed that under section 36 (1) of the only that scheme of transfer of which notice under section 35 (3) of the Act had been given could be sanctioned and not a modified version of it, there would be power to sanction a modified version where the scheme itself or the resolution of the company approving of it, gave power to the directors to accept modifications of that scheme on behalf of the company suggested by the controller of Insurance before final sanction by him.
Mihirendrakishore Datta vs Brahmanbaria Loan Co., Cal. 913, referred to.
| The appellant 's suit against the respondent for rendition of account and other reliefs was valued at Rs. 5,930/ for purposes of court fee and jurisdiction.
The suit was decreed in part and the amount decreed was less.
than the amount at which he stated his tentative valuation.
He filed an appeal to the District Court stating the valuation for purposes of appeal at Rs. 4,880 '/ .
The memorandum of appeal showed the valuation in the original suit and the court fee paid was the same amount as in the trial court.
The District Court returned the memorandum of appeal for presentation to the proper court because, under section 39 '(1) of the Punjab Courts Act appeals above the value of Rs. 5,000/ had to filed before the High Court.
The appeal was filed in the High Court the same day, but it was out of time.
The appellant also filed a revision against the order of the District Court.
His counsel placed reliance on r. 4 in Ch.
3 B of Vol.
1 of the Rules of the High Court which states that "in a suit for the amount found due after taking accounts it is not the tentative valuation of the plaintiff but the amount found to be due and decreed by the court that determines the forum of appeal.
" The High .Court held that there was no ground for extending time under section 5 of the Limitation Act and dismissed the appeal and also the revision.
In appeal to this Court, HELD: The High Court should have extended time under section 5 of the Limitation Act.
[9 '4 A B] (i) The appellant did not have any underhand motive in filing the appeal before the District Court, the filing had to be attributed entirely to the advice of his counsel.
[93 A B] There is no general proposition that mistake of counsel by itself is always a sufficient ground for condoning delay.
It is always a question whether the mistake was bona fide or was merely a device to cover an ulterior purpose.
[92 F G] In the present case the original valuation determined the court of lowest denomination before which the appeal from the suit had to go and that forum was the High Court.
The counsel seems to have been misled by r. 4 in Ch.
3 B of Vol. 1 of the Rules and Orders of the High Court.
This rule is applicable in a case where the amount decreed is larger than the amount for which the original suit was brought.
It does not apply where the amount decreed is below the valuation in the original court.
There is nothing in the case to show that the error committed by the counsel was tainted by any mala fide motive.
[93 C F; 94 A]
| The expression "systematic" has been deleted from sub section (3) of section 123 of the Representation of the People Act 1951 by the Amending Act by a candidate or his agent or by any other person with the consent of the candidate or his election agent or by any other person on the ground of his religion, race, caste, community or language etc.
would be a corrupt practice.
160 The appellant challenged the election of respondent No. 3 to the Punjab Legislative Assembly on the allegations of corrupt practice.
It was contended that section 123(3) of the Representation of the People Act had been violated for three reasons, namely, (a) Sponsorship of respondent No. 3 and distribution of election ticket to him for the Assembly elections by the Akal Takht, "the supreme religious authority of the Sikhs", (b) Issue of Hukumnama (Ex.p 4) by the Jathedar of the Akal Takht in the matter of Assembly elections having regard to the circumstances in which it was issued, indicated that the approval of the Akal Takhat was obtained in order to give his decision a colour of religious authority and (c) Appeal to the voters at election meetings by referring to the Hukamnama, to the writings in the Akali Times and exhorting them to vote for respondent No. 3 by applying to the religious sentiments and warning them of the consequences of not doing so.
It was further alleged that an ex Chief Minister of the State as well as the respondent No. 3 himself had represented to the voters at different election meetings that respondent No. 3 had been sponsored by the Akal Takht.
Respondent No.3 denied the aforesaid allegations and contended that the alleged Hukamnamas were not Hukamnamas of Akal Takht.
The High Court held that Akal Takht was a symbol of political and religious powers and the documents alleged to be the Hukumnamas of Akal Takhat, but contained decision of the leaders of the Akali Party written on the letter head of the Akal Takhat and announced by a Jathedar, and the appellant had not succeeded in proving the charges of corrupt practice.
The election petition was accordingly dismissed.
The contentions raised in the High Court were reiterated by the appellant before this Court.
In addition, it was contended (i) The documents shown at the meetings were Hukumnamas and having regard to the background it cannot be said that it did not have the effect of Hukumnama on the community at large of inducing them to believe 158 ignoring the claim of the candidate nominated by Shri Akal Takht and represented to be supported by Hukamnama would be an act of sacrilege on the part of a good Sikh; and (ii) Respondent No. 3 being a Sikh and a member of the Akali Dal and having known of the conditions precedent which were required to be fulfilled before a proper Hukumnama could be issued had not chosen to raise these contentions in his written statement.
It was also urged that the concept of secular democracy is the basis of the Indian Constitution and that the paramount and basic purpose under lying section 123 (3) of the Act is the concept of secular democracy.
Section 123 (3) was enacted to eliminate from the electoral process, appeals to divisive factors such as religion, caste, etc.
which give vent to irrational passions.
It is essential that powerful emotions generated by religion should not be permitted to be exhibited during election and that decision and choice of the people are not coloured in any way.
Condemnation of electoral campaigns on lines of religion.
caste, etc. is necessarily implicit in the language of section 123 (3) of the Act.
Consequently the section must be so construed as to suppress the mischief and advance the remedy.
161 Respondent No. 3 contested the appeal, and it was urged: (i) in order to constitute a Hukumnama proper there were certain conditions precedent, A which were required to be fulfilled, namely, there should be a meeting of Sarbat Khalsa, that is, a meeting of all the Sikhs and secondly anunanimous decision must be arrived at which should be followed by the approval of Shiromani Gurdwara Prabandhak Committee and the decision should be announced from Shri A kal Takht and that in the instant case no such Hukamnama held been issued; (ii) the constituency was a mixed constituency equally B divided into Hindu votes and Sikh votes and an appeal in the name of the Sikh religion in such a situation was unlikely; and (iii) the Akali Party was in alliance with CPI (M) and it was most improbable that when one of the allied parties was a Marxist Party, a candidate of Akali Dal would appeal in the name of religion.
Allowing the appeal, C ^ HELD :1.
Respondent No. 3 was guilty of corrupt practice under section 123 (3) of the Representation of the People Act, 1951.
[189D] 2.
As a result of amendment of sub section (3) of section 123 of the Act even a single appeal by a candidate or his agent or by any other person with the consent of the candidate or his election agent to vote or refrain from voting for any person on the ground of his religion, race, caste, community or language would be corrupt practice.
[1656] 3.
Section 123 (2), (3) and (3A) of the Act were enacted to eliminate from the electoral process appeals to those divisive factors which arouse irrational passions that run counter to the basic tenets of the Constitution.
Due respect for the religious beliefs and practices, race, creed, culture and language of other citizens is one of the basic postulates of our democratic system.
The line has to be drawn by the court between what is permissible and what is prohibited after taking into account the facts and circumstances of each case interpreted in the context in which the statements or acts complained of might have been made.
The court has to examine the effect of statements made by the candidate upon the minds and feelings of the ordinary average voter.
[171B D] F Ambika Sharan Singh vs Mahant Mahadev and Giri and others, and Ziyauddin Burhanuddin Bukhari vs Brijmohan Ramdas Mehra and Ors. [1975] Suppl.
S.C.R. 281, relied upon.
With a view to curb communal and separatist tendencies, section 123 (3) of the Act has been amended in 1961.
In order to determine whether certain activities come within the mischief of section 123 (3), regard must be had to the substance of the matter rather than to the mere form or phraseology.
The inhibition of section 123 (3) should not be permitted to be circumvented indirectly or by circuitous or subtle devices.
The court should attach importance to the effect and impact of the acts complained of and always keep in mind the paramount purpose, namely, to prevent religious influence from entering the electoral field.
The nature and consequence of an act may not appear n its very face but the same can be implied having regard to the language, H 162 the context, the status and position of the person issuing the statement, the appearance and known religion of the candidate, the class of persons to whom the statement of act is directed, etc.
[176C F] 5.
It would not be an appeal to religion if a candidate is put up be saying vote for him because he is a good Sikh or he is a good Christian or he is a good Muslim, but it would be an appeal to religion if it is publicised that not to vote for him would be against Sikh religion or against Christian religion or against Hindu religion or to vote for the other candidate would be an act against a particular religion.
It is the total effect of such an appeal that has to be borne in mind in deciding whether there was all appeal to religion as such or not.
In each case, therefore, the substance of the matter has to be judged.
[182E G] This question, however, has to be kept in view within proper limit and religious leaders have right freely to express their opinion on the comparative merits of the contesting candidates and to canvass for such of them as he considered worthy of the confidence of the electorates.
[183B] Shubnath Deograrm vs Ram Narain Prasnd an(l others, , Ram Dial vs Sant Lal and others, [1959] Supp.
2 S.C.R., 748 and Kultar Shingh vs
Mukhtiyar Singh; , , followed.
Whether the documents said to be Hukamnamas were actually Hunkamnamas or not should not be decided in a technical manner.
in these matter the Court has to examine the effect or the statements made by the candidate on his behalf upon the minds and the feelings of the ordinary voters of the country.
It is undisputed that Shri Akal Takht enjoys a unique position amongst the Sikhs.
It is indubitable that any communication from Shri Akal Takht which is represented by eminent members of the Sikh community as Hukamnama would have great religious persuasive value even though strictly speaking it might or might not be a Hukamnama.
[182A D] Zyauddin Burhanuddin Bukhari vs Brijmohan Ramdas Mehra Glory of the Akal Takht, p. 97 by Harjinder Singh Dilgeer, Singh The Sikh Religion Vol.
IV, p. 3 by M. A. Macauliff and a A History of the Sikhs by Khuswant Singh Vo. 1: 1469 1839, p. 63, referred to.
From the evidence on record, in the background of the fact that some communications from Akal Takht call it Hukamnama or any other name were issued and the issues of editorials of Akali Times were pointed out by the ex Chief Minister at the meetings, and the same had not been denied by him, it is apparant that appeal in the name of religion was made on behalf of the respondent No. 3.
Though some facts stated in the oral evidence about the meetings had not been stated in the petition, but when evidence was tendered and was not shaken in cross examination and the versions have a ring of truth in the background of other facts, the factum of appeal to religion by the respondent No. 3 has been proved.
This conclusion becomes irresistible in view of absence of any express denial by the ex Chief minister and in the absence of any explanation for not calling him as a witness on this point, [188 E to 189A] 163 8.
It is not a question of merely proving a fact by adverse presumption.
A In cases where there is positive evidence to prove a fact and there is no denial by the person who is most competent to deny that fact and no reason was given for his not giving evidence the conclusion is that the evidence advanced must be accepted.
In the instant case, in the background of his eminence and his position, as the ex Chief Minister, his relationship with respondent No. 3 and especially in view of the fact that respondent No. 3 had in fact been nominated by the same group on behalf of the Sikh community with which the ex.
Chief Minister was so intimately connected leads to the conclusion that the evidence advanced on behalf of the appellant must be accepted.
It is clear that the ex Chief Minister as well as the elected candidate himself represented to the electorate that respondent No. 3 was a nominee of the Akal Takht and that an appeal to vote for respondent No. 3 in the name of Akal Takht with all the consequences of Hukamnama of Akal Takht was highlighted before the electorate [185H; 186A D1 C 9.
In matters of this nature, the evidence naturally is mostly oral.
Especially where the charge is a grave one, namely, corrupt practice which if proved would disentitle the candidate to contest the election for sometime to come, the Court must proceed with caution.
[188C] Rahim Khan vs Khurshid Ahmed & ors., [1975] I S.C.R. 643 and Ch.
Razik Ram vs Ch.
I.S. Chauhan & ors., A.I R. 1975 S.C. 667, relied upon.
Kanhaiyalal vs Mannalal & ors.
; , and M. Narayama Rao vs G. Venkata Reddy & ors., [1977]1 S.C.R. 493, referred to, 10 While insisting on standard of strict proof, the Court should not extend or stretch this doctrine to such an extreme extent as to make it well nigh impossible to prove an allegation of corrupt practice.
Such an approach would defeat and frustrate the very laudable and sacrosanct object of the Act in maintaining Purity of the electoral process.
[189B] Ram Saran Yadav vs Thakur MIJneshawar Nath Singh & ors.
(Civil Appeal No. 892 (NCE) of 1980), relied upon.
The contentions of the respondent No. 3 that since it was a mixed constituency and his party was in alliance with CPI (M), it was unlikely and improbable to make an appeal in the name of religion, are rejected for the reason that if there is conclusive evidence to that effect then such a theory would not outweigh the facts proved.
These are only probabilities of a situation but if there is direct evidence of propaganda or campaign by candidate in the election in the name of religion, the probabilities of such a campaign not being made in view of other surrounding circumstances, cannot outweigh the direct evidence if the Court is otherwise inclined to accept such direct evidence.
[170B.C] Ambika Sharan Singh vs Mahant Mahadev and Giri and others, , followed.
For a proper verification of an affidavit or a petition based on certain informations, the source should be indicated.
But in the instant case? 164 this question was not examined further because no objection at any stage was taken.
[189 Ziyauddin Burhanuddin Bukhari vs Brijmohan Ramdas Mehra & ors Padmabati Dasi vs Rasik Lal Dhar.
I.L.R. XXXVII Calcutta 259 at 260 and Hardwari Lal vs Kanwal Singh, followed.
| The appellant company and the respondent firm were carrying on business in the erstwhile patiala State, and were non residents in British India.
The appellant, acting as commission agent for the respondent, entered into several forward transactions with a Hapur firm of commission agents.
The profits accruing on these transactions amounted to Rs. 29,275 2 6 on which the Hapur firm paid a sum Of Rs. 9,314 13 4 as income.
In 1943 the appellant was ordered to be wound up and the respondent was placed on the list of contributories.
The Official Liquidator applied to the Liquidation judge for a payment order for a sum which included the amount of income tax paid by the Hapur firm for and on behalf of the respondent.
The main contention raised on behalf of the respondent was that it had no taxable income in the year in dispute and was not liable to pay any income tax and that, consequently, it was not liable for the income tax paid by the Hapur firm.
Held, that the Liquidator was entitled to claim from the respondent the amount of income tax paid by the Hapur firm irrespective of the consideration whether its world income was taxable or not.
Under the law the Hapur firm was an agent of the respondent for the business of the agency which was entrusted to it, and was as such liable under ss 40(2) and 42(1) Income tax Act, as an assessee for income tax on the profits made on the respondent 's transactions at Hapur and was entitled to retain the estimated amount of income tax payable on the amount of the respondent 's profits.
As the Hapur firm had rightly paid the tax on the profits, the respondent could not be allowed to challenge the liability on the ground that his total world income was not taxable and he was entitled to his profits without deductions.
That was a question which must be agitated by the non resident assessee at the time of his assessment.
As between the parties the tax paid by the agent had to be taken into account irrespective of the result of the assessment on the non resident.
| The respondent, State of Rajasthan through its District Rehabilitation Officer, Barmer filed a suit in the court of the District Judge, Balotra against the appellant, Union of India, and the Railway Administration claiming damages for the loss suffered by it on account of the damage caused to the goods transported by rail through the Railway Administration.
The appellant contended that the suit was not maintainable in the District Court in view of Article 131 of the Constitution which, according to it conferred exclusive jurisdiction on the Supreme Court to decide all disputes arising between a State and the Union.
The District Judge held that he had jurisdiction to try the suit.
A Revision Petition filed against the order of the District Judge was dismissed by the High Court.
Hence this petition for special leave to appeal.
Dismissing the petition, ^ HELD: The suit was entertainable by the District Court.
On a careful consideration of the whole matter in the light of the decisions of this Court, it is felt that Article 131 of the Constitution is attracted only when a dispute arises between or amongst the States and the Union in the context of the constitutional relationship that exists between them and the powers, rights, duties.
immunities, liabilities, disabilities etc.
flowing therefrom.
Any dispute 701 which may arise between a State in the capacity of an employer in a factory, a manufacturer of goods subject to exercise duty, a holder of a permit to run a stage carriage, a trader or businessman carrying on business not incidental to the ordinary functions of Government, a consumer of railway services etc.
like any other private party on the one hand and the Union of India on the other cannot be construed as a dispute arising between the State and the Union in discharge of their respective executive powers attracting Article 131 of the Constitution.
It could never have been the intention of the framers of the Constitution that any ordinary dispute of this nature would have to be decided exclusively by the Supreme Court.
[708G H; 709A B] State of Bihar vs Union of India & Anr., ; , Union of India vs State of Mysore, [1977] S.C.R. 842.
State of Mysore vs Union of India & Ors.
A.I.R. at pages 239 240, State of Rajasthan & Ors., etc.
vs Union of India etc.
; , , State of Karnataka vs Union of India & Anr., ; at page 92 and The Framing of India 's Constitution A Study by Shri B. Shiva Rao at page 483, referred to.
In the instant case, the State Government has made a claim like any other consignee of goods despatched through the railway for compensation and its success or failure in the suit depends on proof of facts which have to be established in the same way in which a private person would have to establish.
This is not even a case where a formal contract is entered into between the Union of India and the State of Rajasthan is accordance with the requirements of Article 299 of the Constitution.
It is just a commercial contract under which an officer of the State of Rajasthan was entitled to claim delivery of the goods consigned as any ordinary consignee.
The claim involved in this case is one based on section 80 of the Indian Railways Act, 1890.
Section 80 of the Indian Railways Act, 1890 indicates that the claim made under it is essentially against the Railway Administration concerned.
The Union of India is impleaded as a party to suits instituted thereunder being the owner of the Indian Railways by virtue of Article 300 of the Constitution.
The statute, however, treats the dispute as one between the Railway Administration concerned and the person instituting the suit.
Neither of the parties to these proceedings is questioning the applicability of the provisions of the Indian Railways Act, 1890 to these proceedings.
It is, therefore, difficult to hold that in these proceedings there is any question which falls within the scope of Article 131 of the Constitution.
[709H; 710A B; D; H; 711A B]
| In response to a notice issued under Section 10(2) of the Uttar Pradesh Imposition of Ceiling on Land Holdings Act, 1960, the appellant contended that he was not in possession of 23.61 acres of surplus agricultural land as set out in the said notice, and that the authorities had failed to notice that he had transferred by means of a registered deed of gift dated January 7, 1972 an extent of 12.35 acres of land to his invalid daughter who remained unmarried inspite of being 30 years old because she was born a crippled child, and that the lands were part of Abadi and, therefore, stood excluded from the operation of the said Ceiling Act.
The Prescribed Authority as well as the Appellate Authority did not find favour with the aforesaid contentions, and held that the appellant had failed to establish that the transfer of land in favour of his daughter was made in good faith, and was not intended for the immediate or deferred benefit of the appellant and other members of his family, and furthermore the transfer appeared to be a device to defeat the provisions of the Act.
Being aggrieved with the order of the Prescribed Authority, that was affirmed by the Appellate Authority the appellant approached the High Court by way of Writ Petition to quash the said orders.
The High Court, however, dismissed the Writ Petition.
In the appeal to this Court it was contended on behalf of the 541 appellant: ( 1 ) though the registered deed of gift had been executed after the prescribed date viz. January 21, 1971, the transfer was in pursuance of an earlier family arrangement to provide maintenance for the invalid daughter and, therefore, the transfer falls outside the purview of Section 5(6) of the Act; (2) if the transfer attracted the operation of Section 5(6) and did not constitute an excepted transfer under Clause (b) of the proviso to Section 5(6), then Section 5(6) should be held ultra vires Article 31 A of the Constitution; (3) the Ceiling Act is violative of Article 14 of the Constitution in that it discriminates between major unmarried daughter and minor unmarried daughter by excluding the former from the definition of family ' under Section 3(7) of the Act.
Dismissing the Appeal, ^ HELD: 1(i) From the definition of 'family ' in Section 3(7) it can be seen that a major daughter of a tenure holder, even if she is unmarried.
is undoubtedly not treated as a member of the family.
[544D] (ii) The Legislature has provided by section 5(6) that any extent of land transferred after 24.1.197l has also to be included in the total extent of holding of the tenure holder for the purposes of calculation of the ceiling area, unless the transfer falls within the category of excepted transfers under clauses (a) or (b) of the proviso.
[544E] In the instant case, the finding of the Prescribed Authority and the Appellate Authority, which has found acceptance with the High Court, is a finding of fact and as such its correctness cannot be canvassed in an appeal under Article 136 of the Constitution.
Even otherwise, the appellant had failed to prove that there was an earlier family arrangement and if there was one, to explain why he had delayed the execution of gift till after the Ceiling Act came into force, especially when the purported gift would only result in himself and his sons being in possession of the land and enjoying the income therefrom.
[544F G] 2.
There is, no scope for the appellant to raise any contention that section 5(6) is ultra vires Article 31 A.
Its constitutionality cannot be assailed by reason of the immunity enacted in Article 31 B. [545A,B] 3.
The provisions of the Ceiling Act do not discriminate between man and woman qua man and woman but merely organise a scheme where life 's realism is legislatively pragmatised.
[545E] D.G. Mahajan vs Maharashtra, ; and Ambika 542 Prasad vs U.P. State, ; , referred to.
| The appellant Corporation was assessed to sales tax under section 13(5) of the Bihar Sales Tax Act, 1947, on the price of machinery and equipment, amounting approximately to Rs. 42,63,305, supplied to two contractor firms on the basis of an agreement which it entered into with them for the construction of a dam.
The agreement provided, inter alia, that the price of the machinery and equipment supplied was to be paid by the contractors and until that was done they were to remain the property of the Corporation.
It was further agreed that the Corporation would take them over after the completion of the work at their residual value, to be calculated in the manner set out in the agreement, provided that they were properly looked after during the period of operation; and if the contractors so chose earlier, if they were declared surplus and certified as such by the consulting Engineer.
The price was to be paid in 18 equal instalments, two thirds of which was realisable in any case, and thereafter the Corporation was to consider the date or dates of taking them over after assessment of the depreciation in order to arrive at the residual value.
The Corporation was not bound to take over if the residual life of the equipment fell below one third of the standard life as fixed by the parties.
523 The contractors were to replenish the stock of spare parts supplied to them at their own cost.
The appellant 's case was that the transaction represented by the agreement was not a sale within the meaning of the Act.
The Sales Tax authorities held against it and the only question that was ultimately referred to the High Court by the Board of Revenue under section 25 of the Act was whether the property in the equipment and machinery passed to the contractors and the transaction amounted to a sale.
The High Court answered the question in the affirmative, holding that the transaction was a sale within the meaning of section 2(g) of the Act.
The High Court having refused the necessary certificate, the appellant appealed by special leave granted by this court.
Held, that the appeal must be confined to the question debated in the High Court.
It is well settled that, while functioning in its advisory capacity under a taxing statute, the High Court cannot go beyond the question referred to it or on a reference called by it.
That the appeal was by special leave could make no difference and the scope of the controversy could not be extended beyond what could be legally raised before the High Court.
The two fold test to determine whether a particular agree ment is a contract of mere hiring or of purchase on deferred payments is (1) whether the hirer is under an obligation to purchase the goods and (2) whether he has the right to return the goods at any time during the subsistence of the contract.
What has to be considered in each case is the substance of the agreement and not the words describing its category.
Helby vs Matthews and others, , referred to.
So judged, there could be no doubt that on the terms of the agreement between the parties the transaction in the instant case was clearly a sale on deferred payments with an option to repurchase and not a mere contract of hiring.
| A public limited company, working at a loss, having come to know of the proposal of the Department to reopen its income tax assessments for the previous years, disposed of its assets to the respondent firm, with which it had a partnership business, and employed the proceeds in paying off the debts due to various creditors, with the result that nothing was left for paying off the tax arrears of the company.
A suit under section 53 of the was instituted by the Union of India appellant for a declaration that the sale deed in favour of the respondent firm was invalid, inoperative and not binding on the appellant and other creditors of the transferor company and alleging fraudulent intent to defeat legitimate claims, which was decreed by the trial court.
The High Court, however, allowed the appeal holding that the appellant had failed to satisfy the provisions of section 53 inasmuch as the evidence showed that the company had utilised the proceeds arising upon the transfer of its assets in paying off all its other creditors, and that even if the company had done so in order to avoid payment of its income tax dues no relief could be granted to the appellant.
In this appeal by special leave it was urged for the appellant that the transfer was effected in favour of a person who was not a creditor, that the assets had been undervalued and that there was evidence to show that the benefit of the sale proceeds was enjoyed by the directors 176 of the company, who were also partners of the respondent firm.
Dismissing the appeal, the court, ^ HELD: It is open to a debtor to prefer one or more creditors over the others in the payment of his debts, and so long as he retains no benefit in the property the mere circumstance that some creditors stand paid while others remain unpaid, does not attract the provision of section 53 of the .
[180A B] Musahar Sahu and Another vs Hakim Lal and another, L.R. 43 Indian Appeals 104, In re Moroney, , 62, Middleton vs Pollock, , 108 and MA PWA MAY and another vs S.R.M.M.A. Chettyar Firm, 56 Indian Appeals 379, referred to.
In the instant case, there was no finding by the High Court in support of the contention that some of the debts discharged were owed to persons who were also directors of the company or that the consideration which passed for the sale of the assets was inadequate and that the assets had been undervalued.
This Court will not permit such questions of fact to be raised unless there is material evidence which has been ignored by the High Court or the finding reached by the Court is perverse.
[180B C] It has been found by the High Court that the sale was effected for the purpose of discharging genuine debts payable by the company and that the sale proceeds were really employed for paying off the creditors of the company.
Once it was also found that the consideration was not inadequate, it was immaterial that the transfer was effected in favour of a person who was not a creditor.
[180D E]
|
Civil Appeal No. 398 of 1960.
Appeal by special leave from the judgment and decree dated June 23, 1959, of the Calcutta High Court in Appeal from Original Decree No. 50 of 1955.
Veda Vyasa, section K. Kapur and B.P. Maheshwari, for the appellant.
K. L. Gosain and K. L. Mehta, for the respondent.
December 20.
The Judgment of the Court was delivered by 219 SHAH, J.
Mr.
Justice Bachawat of the High Court of Judicature at Calcutta decreed Suit No. 1039 of 1948 filed by one Pearey Lal hereinafter called the plaintiff for a decree for Rs. 1,35,000/ with interest against the New Bank of India Ltd. The appeal of the Bank against the decree was dismissed by a Division Bench of the High Court.
With special leave the Bank has appealed to this Court.
The Bank had its registered office, originally at Lahore but after the partition of India the office was transferred to Amritsar.
The plaintiff who was a resident of Lahore had accounts with several banks including the New Bank of India Ltd. In view of the impending partition, the plaintiff was anxious to transfer his moveable property outside the territory it was apprehended would be included in Pakistan, and he gave instructions for transferring his accounts with the Bank to its other branches in India.
He also paid an amount of Rs. 1,25,000/ on July 18, 1947, into the Bank at Lahore with instructions to transmit the same the to Bank branch at Calcutta which it then proposed to open in the near future.
An amount of Rs. 10,000/ was also paid into the Bank at Lahore on July 19, 1947, with similar instructions.
In respect of these two transactions the Bank executed receipts which are set out below: "Received the sum of Rs. 1,25,000/ (Rs. One Lac & twenty five thousand) only from Mr. Pearey Lal on account of amount to be remitted to Calcutta branch for preparing various F.D. Receipts subject to his instructions on or after the opening date when he would call upon them personally.
Lahore for the New Bank of India Ltd. The 18th day of Sd.
Illegible July, 1947.
Manager.
" 220 . . . . . . . . . . . . . . . . . "Received the sum of Rs. 10,000/ (Rupees ten thousand) only through Mr. Pearey Lal for transmission to our Calcutta Office for making up various F. D. Receipts at his instance when he calls upon them personally on or after the opening date of the Branch.
Lahore for the New Bank of India Ltd. 19 7 47.
Illegible Manager.
" The two amounts were transmitted by the Bank to Calcutta.
A branch of the Bank was opened at Calcutta on September 24, 1947, but within a few days thereafter the Bank ceased making payments.
It appears that a moratorium for a limited period was declared under an Ordinance issued by the Governer General restraining the Bank from making payments to its depositors.
In December, 1947, after the expiry of the period of the moratorium the plaintiff applied to the Bank 's branch at Calcutta for facility to withdraw the whole amount but the Calcutta Branch raised certain technical objections against such a course.
On March 24, 1948 the plaintiff commenced an action against the Bank inter alia for a decree of Rs. 1,35,000/ in the Calcutta High Court on its original side.
During the pendency of the suit the High Court of East Punjab sanctioned a scheme for arrangement under sections 153 and 153A of the Indian Companies Act, 1913, for settlement of the liability of the Bank.
By the first clause of the scheme the expression "deposit" was to include "Fixed Deposits, Bank 's own Cash Certificates, Current Accounts, Deposits at Call, Savings Fund Accounts Amounts lying in Sundries or in any other kind of Credit Accounts, Bank Drafts, Cash Orders, and documents of the like nature and amounts due to Bankers over and above the value of Government Securities lying with them against 221 such depositors".
It was directed by the scheme, as it finally emerged, that the depositors were to be paid 701/2% of the deposits held by them and to he allotted shares of the face value of 5% of the deposits.
The plaintiff claimed by his suit that he had entrusted to the Bank at its registered office at Lahore Rs. 1,35,000/ on July 18 and 19, 1947, with instructions to transmit the same to the branch of the Bank which it proposed to open at Calcutta and to hold the amount subject to further instructions to be given by him when he would call personally at the branch at Calcutta on or after the opening date, that prior to the opening of the said Calcutta Branch the plaintiff countermanded his instructions on or about September 13, 1947 and demanded at Lahore that it be returned, but the Bank wrongfully claimed to have remitted the two sums to its Calcutta Branch and to have kept the same in a fixed deposit account in the name of the plaintiff, even though the plaintiff, had opened no such account at the Calcutta Branch and had given no instructions to put the same into any account by way of fixed deposit or otherwise.
The plaintiff, accordingly, claimed that the Bank was a trustee for transmission of the amount and in the absence of any instructions given by him for opening a fixed deposit account, in respect of the amount transmitted the Bank stood qua the plaintiff in a fiduciary relation and was liable to refund the full amount.
In substance, it was claimed by the plaintiff that the amount lying with the Bank at Calcutta was not a deposit within the meaning of the scheme and was not liable to any reduction.
The Bank submitted that the amount of Rs. 1,35,000/ was deposited by the plaintiff at its head office at Lahore for the purpose of opening a fixed deposit account in the name of the plaintiff upon the terms that the fixed deposit would carry 222 interest as on the respective dates of the deposits, that it was agreed that the plaintiff would be allowed to take loans upto 90% of the deposit at a rate of interest of half percent above the current fixed deposit rates and that the amount would be transmitted to the Calcutta Branch of the Bank for the purpose of crediting the same to the fixed deposit account of the plaintiff.
The Bank denied the alleged instructions in September, 1947, countermanding the original arrangement and contended that the plaintiff was bound by the scheme of arrangement sanctioned by the High Court of East Punjab.
The Bank offered to pay the amount due to the plaintiff under the scheme of arrangement and also to allot shares of the value of 5% in accordance with the scheme.
A decree on admission was passed against the Bank for Rs. 81,000/ and the suit was contested by the Bank for the balance of the claim.
The trial Court held that even though the plaintiff failed to prove the instructions in the month of September, 1947, set up by him countermanding transmission, it was established on the evidence, that the plaintiff had entrusted to the Bank Rs. 1,35,000/ for transmission and the plaintiff having given no further instructions, the Bank held the amount as trustee for the plaintiff and that the plaintiff 's claim was not liable to be reduced under the scheme sanctioned by the High Court of East Punjab.
The Court also negatived the plea of the Bank that the amount of Rs. 1,35,000/ was deposited with the Bank at Lahore for opening a fixed deposit account subject to the conditions which the Bank set up.
The finding of the trial Court were confirmed, in appeal, by a Division Bench of the High Court at Calcutta.
The facts found proved, according to the findings of the trial Court and confirmed by the 223 High Court are therefore that the plaintiff delivered an amount of Rs. 1,25,000/ on July 19, 1947, and Rs. 10,000/ on July 19, 1947, to the Bank at Lahore for transmission to Calcutta, with instructions to await the directions of the plaintiff regarding the opening of accounts for keeping the same in fixed deposit or otherwise in the Calcutta Branch of the Bank, and the plaintiff never gave instructions for opening any account, fixed deposit or otherwise, in regard to the amounts after they reached Calcutta.
Delivery of the amount for transmission to the Bank created ex facie a relationship of a fiduciary character.
But counsel for the Bank contends that when the amount was handed over at Lahore to the Bank by the plaintiff who was an old constituent of the Bank it must be presumed that a relationship of debtor and creditor arose and by the addition of instructions for transmissions of the amount to another branch the relationship of trustee and cestuique trust did not arise.
He submitted that the contention that the relation between the plaintiff and the Bank was of creditor and debtor was supported by three important circumstances: (1) that the Bank agreed to pay interest on the amount delivered by the plaintiff; (2) that the Bank charged no commission or remuneration for transmission of the amount and (3) that even on the plaintiff 's case the amount was to be utilized for opening fixed deposit accounts at Calcutta.
It is true that in the absence of other evidence a person paying money into a Bank, whether he is a constituent of the Bank or not, may be presumed to have paid the money to be held as bankers ordinarily hold the moneys of their constituents.
If no specific instructions are given at the time of payment or thereafter, and even if the money is held in a suspense account the bank does not thereby become a trustee for the amount paid.
In other words, when a person dealing with 224 a bank delivers money to the Bank an intention to create a relation of creditor and debtor between him and the Bank is presumed, it being the normal course of the business of the Bank to accept deposits from its customers.
But this presumption is one of fact arising from the nature of the business carried on by the Bank and is rebutted by proof of special instructions, or circumstances attending the transaction.
Where the money is paid to a bank with special instructions to retain the same pending further instructions (The Official Assignee, Madras vs Natesam Pillai (1)) or to pay over the same to another person who has no banking account with the bank and the bank accepts the instructions and holds the money pending instructions from that other person (Arbuthnot & Co. vs D. Rajam Ayyar (2)), or where instructions are given by a customer to his banker that a part of the amount lying in his account be forwarded to another bank to meet a bill to become due and payable by him and the amount is sent by the banker as directed (Farley vs Turner (3)), a trust results and the presumption which ordinarily arises by reason of payment of the money to the bank is rebutted.
It is not necessary in this appeal to consider whether because of an agreement to pay interest the relationship may be deemed to be of debtor and creditor, because it was held by both the courts below that no such agreement is proved, and according to the settled practice of this court the finding is regarded a binding.
The Bank charged no commission or remuneration for transmitting the amount to Calcutta, but that, in our judgment, is a circumstance which permits of no inference against the plaintiff.
Undoubtedly, when the amount was delivered to the Bank by the plaintiff it was his intention to open fixed deposit account in Calcutta with the 225 Bank 's branch but the fixed deposit accounts were to be opened after instructions were received.
The transaction, as evidenced by the two receipts, was primarily one of entrustment of the amount to the Bank for transmission to Calcutta.
After the purpose for which the moneys were entrusted was carried out, in the absence of further instructions the defendant did not cease to be a trustee.
So long as instructions were not given by the plaintiff for appropriation of the amounts the Bank continued to hold the amounts transmitted for and on behalf of the plaintiff and there is no evidence that the plaintiff gave instructions or acquiesced in the opening of a fixed deposit account after the same reached Calcutta.
It is immaterial that the Bank purported to open fixed deposit account in the name of the plaintiff with the amounts received at its head office at Lahore.
That course of action was adopted without the consent of the plaintiff and it could not bind the plaintiff.
The High Court was, therefore, right in holding that the amount delivered by the plaintiff to the Bank at Lahore remained in trust even after it reached Calcutta, and it was not held by the Bank, in deposit for the plaintiff within the meaning of the scheme sanctioned by the High Court of East Punjab.
In that view of the case the appeal fails and is dismissed with costs.
Appeal dismissed.
| The respondent delivered certain sums of money to the appellant bank at Lahore for transmission to Calcutta, with instructions to await his directions regarding the opening of accounts for keeping the money in fixed deposit in the Calcutta Branch of the bank which was proposed to be opened in the near future.
The respondent did not however give any instruction for opening any account, fixed deposit or otherwise in regard to the amounts after they reached Calcutta.
Within a few days after the opening of the Calcutta branch of the bank it ceased making payments and a moratorium for a limited period was declared under an ordinance issued by the Governor General restraining the bank from making payments to its depositors.
After the expiry of the period of the moratorium the Calcutta branch of the bank raised objections to the respondent 's application for withdrawal of the amount 218 whereupon the respondent filed a suit in the Calcutta High Court for a decree for refund of the amount.
During the pendency of the suit the High Court of East Punjab sanctioned a scheme under sections 153 and 153A of the Indian Companies Act, 1913 for settlement of the liabilities of the Bank.
The courts below decreed the respondent 's suit.
On appeal by the bank by special leave, the questions which arose for decision were whether the bank was a trustee for transmission of the amounts to Calcutta and whether in the absence of any instruction for opening a fixed deposit account the bank was liable to refund the full amount or a reduced amount according to the scheme sanctioned by the Punjab High Court.
^ Held, that when a person dealing with a bank delivers money to the bank an intention to create a relation of creditor and debtor between him and the bank is presumed, but the presumption may be rebutted by proof of special instructions.
When money is paid to a bank with special instructions to retain the same pending further instructions, a trust is created and the presumption which ordinarily arises by reason of payment of money to the bank is rebutted.
Held, further, that the money delivered by the Respondent remained in trust with the bank and was not held by it as a deposit subject to any scheme for the settlement of the liabilities of the bank sanctioned by the High Court under the Companies Act.
The Official Assignee, Madras vs Natesam Pillai, I.L.R. , Arbuthnot vs D. Rajan Ayyar, I.L.R. and Farley vs Turner, , applied.
| The respondent 's husband was a partner in a firm carrying on business as bankers.
He issued a cheque for Rs.3,00,000 in favour of the firm on 4th October, 1952 with a view to give Rs. 1,00,000 to each of his three minor grand nephews.
This amount was debited to his account in the firm and credited in the accounts of the three minors in equal proportion.
He died on 21st February 1956.
The said sum continued to stand in the respective accounts of the three minors in the books of the firm till its dissolution on 4th July, 1960 whereafter some assets were allotted to each one of them in lieu of the amounts standing to their credit.
The respondent, as the accountable person, filed an account declaring the value of the assessee 's estate without including the aforesaid sum of Rs. 3,00,000 transferred by the deceased to his three grand nephews.
The respondent assessee contended before the Deputy Controller (i) that these transfers were not gifts but amounted to transfer of actionable claims made in conformity with section 130 of the transfer of Property Act by effecting entries in the books of account; and (2) that the transfer amounted to a novation which did not require an instrument signed by the transferor.
The Deputy Controller negatived both the contentions and held that the sum of Rs. 3 lakhs was includible in the estate of the deceased that passed on his death.
The Appellate Controller confirmed the aforesaid order in appeal.
In the further appeal preferred by the respondent, the Appellate Tribunal, held (i) that the plain reading of section 130 showed that the transfer 349 of an actionable claim became complete and effective only upon the execution of an instrument in writing signed by the transferor or by his duly authorised agent; (ii) that the cheque issued by the deceased in favour of the firm only authorised the firm to pay to itself the sum of Rs. 3 lakhs from out of the amount lying at the credit of the deceased but it did not by itself authorise the firm to transfer this amount to anyone else and that such a transfer could be authorised by a separate letter of instructions from the deceased but no such instrument obtained and the oral instructions given could not take the place of such an instrument in writing and, therefore the transfer of Rs. 3 lakhs done in favour of the donees was not in accordance with the requirements of section 130; (iii) that the amount of Rs.3 lakhs was also includible in the estate of the deceased under section 10 of the even if it were assumed that the transfer became complete and effective on the date of the transfer inasmuch as on the facts, it could not be said that the donees retained possession and enjoyment of the gifted amounts to the entire exclusion of the donor or of any benefit to him and that this position continued to exist till the death of the deceased.
The High Court in a reference at the instance of the assessee, set aside the order of the Tribunal on the grounds (i) that it was a gratuitous transfer of an actionable claim and the inter position of a cheque issued by the deceased in favour of the firm made all the difference inasmuch as the transfer of an actionable claim represented by a negotiable instrument like a cheque was governed by section 137 in preference to section 130 of the Transfer of Property Act and that the cheque together with the oral instructions (which even the Tribunal presumed were given by the deceased) would constitute the firm a trustee or an agent holding the moneys for the benefit of the minors and, as such, the transfer to minors was valid, complete and effectual; (ii) that the donor had been completely excluded from the subject matter of the gift and, as such, section 10 was not applicable.
Dismissing the appeal, ^ HELD: 1.
The transaction in question clearly fell within the ratio of the decision in Munro 's case and the High Court 350 was right in coming to the conclusion that to such a transaction, section 10 was inapplicable.
[362 F G] 2.(i) Section 10 of the prescribes two conditions, namely,: (1) that the donee must bona fide have assumed possession and enjoyment of the property which is the subject matter of the gift to the exclusion of the donor immediately upon the gift; and (2) that the donee must have retained such possession and enjoyment of the property to the entire exclusion of the donor or of any benefit to him by contract or otherwise.
Both these conditions are cumulative.
Unless each of the conditions is satisfied, the property would be liable to estate duty under section 10 of the Act.
[357G H; 358 A] 2.(ii) The second part of section 10 has two limbs: the deceased must be entirely excluded (i) from the property; and (ii) from any benefit by contract or otherwise and that the word "otherwise" should be construed ejusdem generis and should be interpreted to mean some kind of legal obligation or some transaction enforceable in law or in equity which, though not in the form of a contract, may confer a benefit on the donor.
[358 B C] 3.(i) The question whether gifted property should be regarded as a part of the estate of the deceased donor passing on his death for the purpose of section 10 of the Act would depend upon as to what precisely is the subject matter of the gift and whether the gift is of absolute nature or whether it is subject to certain rights.
If the gift is made without any reservation or qualification, that is to say, where the gift carries fullest right known to law of exclusive possession and enjoyment, any subsequent enjoyment of the benefit of that property by way of possession or otherwise by the donor would bring the gift within the purview of section 10; but where the gift is subject to some reservation or qualification, that is to say, if the subject matter of the gift is property shorn of certain rights and the possession or enjoyment of some benefit in that property by the donor is referable to those rights i.e. rights shorn of which the property is gifted, then in that case the subject matter of the gift will not be deemed to pass on the death of the deceased donor.
In other words, if the deceased donor limits the interest he is parting with and 351 possesses or enjoys some benefit in the property not on account of the interest parted with but because of the interest still retained by him, the interest parted with will not be deemed to be a part of the estate of the deceased donor passing on his death for the purpose of section 10 of the Act.
It is these aspects which mark the distinction between the two leading cases, namely Chick 's case and Munro 's case.
The decision in chicks 's case falls within the first category while Munro 's case falls within the other category.
[358 E H; 359 A B] In the instant case, the donees were never admitted to the benefits of the partnership firm.
The Tribunal as well as the High Court found as a fact that when the cheque was issued oral instructions must be presumed to have been given by the deceased to the firm for crediting the three accounts of the three minors without which the firm could not make such credit entries.
Therefore, the transaction in question amounted to a gratuitous transfer of an actionable claim to which section 137 in preference to section 130 of the Transfer of Property Act applied and there was a valid gift thereof to the minor donees.
Moreover, the amount of Rs. 3 lakhs did not go out of the firm but on being transferred from the account of the deceased to the accounts of the minor donees continued to remain with the firm for being used for the firm 's business; in fact the partnership continued to have the benefit thereof even after the death of the donor till the firm was dissolved.
Obviously, the substance of the transaction was that the gift was of an actionable claim of the value of Rs. 3 lakhs out of the donor 's right, title and interest as a whole in the firm and as such was shorn of certain rights in favour of the partnership and therefore, the possession or enjoyment of the benefit retained by the donor as a partner of the firm must be regarded as referable to partnership rights and had nothing to do with the gifted property.
[361 G H; 362 A F] Munro vs Commissioner of Stamp Duties, ; ; C.R. Ramachandra Gounder 's case, ; N.R. Ramarathanm case, 91 I.T.R.Controller of Estate Duty vs R.V. Vishwanathan & Ors., & Controller of Estate Duty vs Kamlava, applied.
Chicks vs Commissioner of Stamp Duties of New South Wales, 37 I.T.R. (E.D.) 89; George Da Costa vs Controller of 352 Estate Duty, Mysore, ; Controller of Estate Duty, Madras vs Smt.
Parvati Ammal ; Shantaben section Kapadia vs Controller of Estate Duty, Gujarat, 73 I.T.R. 171 & Controller of Estate Duty, Gujarat vs Chandravadan Amratlal Bhatt, distinguished.
| The appellant Bank filed a suit for the recovery of the amount of loan together with interest thereon granted to Respondent No. I who had not only executed a promissory note but also a bond hypothecating the standing crop of his lands situated at Khandu and Surjipada in Rajasthan.
Respondents 2 and 3 being guarantors for the repayment of the loan were also proceeded against.
The Trial Court overruled the preliminary objection raised by the Respondents as to the maintainability of the Suit, in view of sections 207 and 256 of the Rajasthan Tenancy Act, 1955.
But the High Court, while allowing the Civil Revision Application set aside the judgment of the Trial Court and dismissed the suit.
Hence the appeal by special leave of the Court.
Allowing the appeal, the Court.
^ HELD: 1.1 A combined reading of sections 207 and 256 of the Rajasthan Tenancy Act, 1955 would show that the jurisdiction of the civil courts is barred only in respect of suits and applications of the nature specified in the Third Schedule to the Act and in respect of suits or applications based on a cause of action in respect of which any relief could be obtained by means of a suit or application of the nature specified in the Third Schedule.
The civil court has no jurisdiction to entertain a suit or proceeding with respect to any matter arising under the Act or the Rules made thereunder, provided that a remedy by way of a suit, application or appeal or otherwise is provided in the Act.
the long title of which shows that it was passed in order "to consolidate" and amend the law relating to tenancies of agricultural lands and to provide for certain measures of land reforms and matters connected therewith.
[787C D; 788A] 1.2.
Entry 35 is described in the Third Schedule as a "General" entry, that is to say, not relatable to any particular section of the Act.
The 785 suit filed by the Bank cannot fall under this "General" or "residuary" entry.
A loan given by a Bank to an agriculturist, which is in the nature of a commercial transaction, is outside the contemplation of the Act and cannot be said to be in respect of any matter arising under the Act.
[787G; 788A B] 1.3.
The business of the Bank, in so far as lending transactions are concerned, is not to lend moneys on mortgages but the business is to lend moneys.
In this particular case, the Bank lent a certain sum of money to respondent 1 in the usual course of its commercial business and nothing could be further removed from the contemplation of the Act than such a transaction.
It is only by way of a collateral security that the Bank obtained a hypothecation bond and a deed of mortgage from respondent 1 and a letter of guarantee from respondents 2 and 3.
The assumption that the mortgage has executed in pursuance of section 43 of the Act and, therefore, residuary Entry 35 of the Third Schedule is attracted, is not correct.
[788G H; 789A] 2.
On the question of jurisdiction, one must always have regard to the substance of the matter and not to the form of the suit.
Approaching the matter from that point of view, primarily and basically the suit filed by the Bank is one for recovering the amount which is due to it from the respondents on the basis of the promissory note executed by respondent No. I and the guarantee given by respondents 2 and 3.
The reliefs sought for also make it clear that the suit is not one to enforce the mortgage and, even assuming that it is, the mortgage not having been executed under section 43 of the Act, nor being one relatable to that section, the residuary Entry 35 can have no application.
If that entry is out of way, there is no other provision in the Act which would apply to the instant suit and therefore, the civil court has jurisdiction to entertain the suit filed by the appellant Bank.
[789C E]
| The question for determination in the appeal was whether the Union of India was entitled to levy and recover arrears of excise duty on cotton cloth for the period April 1, 1949, to March 31, 1950, payable by the respondent, a cloth mill in the State of Rajasthan, under the Rajasthan Excise Duties Ordinance, 1949.
After the coming into force of the Indian Constitution and the extension of the Central Excise and Salt Act, 1944, and the rules framed thereunder to the State of Rajasthan by section II of the Finance Act of 1950, the duty in respect of cloth manufactured on and from April 1, 1950, became payable under that Act.
The appellant Union, however, claimed that as a result of the agreement entered into on February 25, 1950, by the President of India with the Rajpramukh of Rajasthan under article 278 and article 295 of the Constitution, the Union of India became entitled as from April 1, 1950, to claim and recover all arrears of excise duties which the State of Rajasthan was entitled to recover from the respondent before the Central Excise and Salt Act, 1944, was extended to Rajasthan.
Notice having been accordingly served on the respondent demanding payment of the outstanding amount of Rs. 1,36,551 12 as payable by it, it moved the High Court under article 226 of the Constitution.
On a reference by the Division Bench which heard the matter in the first instance, the Full Bench finding in favour of the respondent held that article 277 was a complete refutation of the said claim by the Union and article 278 and the said agreement were overridden by it.
Held, that the provisions of articles 277 and 278 of the Con stitution, properly construed, leave no manner of doubt that article 277 was in the nature of a saving provision, subject in terms to the provisions of article 278, permitting the States to levy a tax or duty which, after the Constitution could be levied only by the centre.
But article 277 had to yield place to any agreement in respect of such taxes and duties made between the Union Government and the Government of a Part B State under article 278.
Since there could not be the least doubt in the instant case that the agreement between the President and the Rajpramukh of Rajasthan conceded to the Union the right to levy and collect the arrears of the cotton excise duty in Rajasthan, the High Court was wrong in taking a contrary view of the matter.
| The claim of his pension at the rate of 1sh 9d.
to a rupee by the respondeent, a former Secretary of State Service Officer was allowed by the Accountant General, but the Union appellant reversed it and directed recovery of the excess payment.
The respondent basing his claim under the second proviso to article 934 of the Civil Service Regulations moved the High Court under article 226 of the Constitution which was accepted.
The Letters Patent Appeal filed by the Union was dismissed.
The appeal by special leave, in view of the Constitution (28th amendment) Act 1972 introducing article 312A and the , was accepted and the court.
^ HELD: (i) Under section 12 of the Former Secretary of State Service Officers (Conditions of services) Act 1972, enacted by Parliament by virtue of article 312A of the Constitution the provisions of the Act or of any order made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any law other than the Act or in any rule, regulation or order or other instrument, having effect by virtue of any law other than the 1972 Act.
[863 B] (ii) The former members of the Indian Civil Service as a result of Ss. 8 & 12 of the Conditions of Service Act, 1972 are not entitled to claim payment of pension in sterling or outside India, or by converting $ 1000/ at the rate of exchange exceeding the rate of exchange of rupees thirteen one third to the pound sterling.
[863 C] (iii) The Judgment of the High Court holding that the second proviso to article 934 of the Civil Service Regulations applied to the instant case, cannot be sustained by reason of change in law.
[863 D] V. B. Raju vs State of Gujarat & Ors.
[1975] 1 S.C.R. 797, followed.
| On July 19, 1945 the assessee took an lease certain premises in Calcutta on a monthly rental.
He made some alterations in the premises so as to convert it into a cinema house but found himself short of money.
As permitted by the terms of his lease he leased the premises on February 23, 1946 to certain parties.
According to the terms of the indenture the lessees agreed to pay him Rs. 55,2GO towards construction of the cinema house which would on completion be let to them at a monthly rental of Rs. 2,100 payable with effect from June 1, 1946.
The Income tax authorities treated the sum of Rs. 55,200 thus received as taxable ;and the High Court on reference held the same.
in appeal by the assessee this Court had to consider whether the receipt was taxable.
HELD : (i) The departmental authorities as well as the High Court were in error in treating the amount of Rs. 55,200 as advance payment of rent.
The lease by which the cinema house was demised did not contain any condition or stipulation from which it could be inferred that the aforesaid amount had been paid by way of advance rent.
The transaction embodied in the indenture of lease was clearly business like.
The lessees wanted the building for running it as a cinema house and the lessor agreed to give it to them but apparently represented that he did not have enough money to complete it in accordance with the suggestions and requirement of the lessees.
The lessees agreed to pay him the aforesaid amount by way of a lump sum without making any provision for its adjustment towards the rent or repayment by the lessor.
On the terms of the lease and in the absence of any other material or evidence it could not be held that the sum of Rs. 55,200 was paid by way of advance rental.[465 G 466 B] (ii) The question whether premium is a capital or a revenue receipt cannot be decided as a pure question of law.
Its decision necessarily depends upon the facts and circumstances of each case.
It would not however be wrong to say that prima facie premium or salami is not income and it would be for the income tax authorities to show that facts exist which would make it a revenue receipt.
[467 B] According to the terms of the lease, in the present case ' the payment of rent was to commence not from the date of the lease which was February 23, 1946 but with effect from June 1, 1946.
The lessees entered into possession after the cinema house had been completed which was subsequent to the date of the lease.
These facts coupled with the payment of a lump sum which was of a non recurring nature showed that the amount in question had all the characteristics of a capital payment and was not revenue.
[467 C D] Henriksen vs Grafton Hotel Ltd., , Commissioner of Income tax, Bihar & Orissa vs Visweshwar, [1939] 7 I.T.R. 536 and 463 Member for the Board of Agricultural Income tax vs Sindhurani Chaudhurani & Ors., , applied.
| Under a compromise decree the respondent plaintiff agreed to deposit in court the sale amount by January 1, 1960.
December 31, 1959 and January 1, 1960 were holidays.
The respondent made the deposit on January 2, 1960 and sought to enforce his right under the decree compelling the appellant defendant to execute the conveyance.
The appellant filed execution for cost on the basis that the suit stood dismissed as per the provision in the compromise decree on the failure of the respondent lo deposit the amount by January 1, 1960.
, The Court held that the respondent had made the deposit in substantial compliance with the decree.
appeals against this order were also dismissed.
In appeals to this Court it was contended (i) where a party had to perform an act within a certain of by a certain date, the law would not take notice of the circumstance that the act became incapable of performance by reason of circumstances beyond his control on the last day of the period; (ii) the executing court had no right to alter or modify the terms of the decree and hold that the deposit made on January 2, 1960 had to be deemed to be a deposit made on January 1, 1960 and (iii) a compromise decree was a contract notwithstanding the fact that an order of court was superadded to it and a provision in a contract that an act had to be done within a certain period or by a particular day by a party was absolute dismissing the appeal.
HELD : (i) The respondent had the right or the liberty to deposit the amount in court till and including January 1, 1960.
That being so, the fact that be did not choose to make the deposit earlier would not affect his right or liberty to deposit the amount in court on January 1, 1960.
[518 F G] Halsbury vol.
37 3rd Edn.
p. 96; Fateh Khan vs Chhajju & Ors., A.I.R. 1931 Lah. 386, referred to.
It is a generally recognised principle of law that parties who are prevented from doing a thing in court on particular day, not by an act of their own, but by the court itself, are entitled to do it at the first subsequent opportunity.
[520 G] Halsbury Vol.
37, 3rd Ed.
p. 97, para 172, Muhammad Jan vs Shiam Lal; I.L.R. XLVI All. 328 (1924); Shooshee Bushan Rtidro vs Gobind Chander Roy, I.L.R. Cal.
XVIII (1891) 231, Sambasiva Chari vs Ramasaini Reddi, I.L.R. 22 Mad.
(1899) 179 and Mayor vs Harding, , referred to.
The present case is concerned with a decree which specifically provided that the respondent should deposit the amount in court.
He had, therefore, no option to pay the same to the appellant [520 C D] Kunj Bihari vs Bitndeshri Prasad, I.L.R. vol.
51, 1929, All.
527, Roshan Lal vs Ganpat Lal.
A.I.R. 1938 All.
, Indal vs Chaudhary 516 Ram Nidh, A.I.R. 33 [1946] oudh.
156 and Rain Kinkar Singh V. Smt.
Kamal Basini Devi, A.I.R. 1938 Pat. 451, distinguished.
Chatlapali Suryaprakasa Rao vs Polisetti Venkataratnam, A.I.R. 1938 Mad.
523, referred to.
(ii)The executing court has the right to construe the decree in the light of the applicable provisions of law, If in this case, on such a construction.
the court found that the deposit made by the respondent on January 2, 1960, was according to law a deposit in compliance with the terms of the decree, then, the executing court was not varying the terms of the decree but executing the decree as it stood.
[522 E] (iii)Although a contract is not the less a contract because it is embodied in a Judge 's order, it is something more than a contract.
Different considerations would apply when a contract is embodied in a Judge ' .; order [523 C] Wentworth vs Bullen, E.L.R. 141 769, Charles Hubert Kinch vs Fdward Keith Walcott, A.I.R. 1929 Journal & P.C. 289, Govind waman vs Murlidhar Shrinivas, A.I.R. 1953 Bom, 412 and Morris vs Barret, E.I.R. 141, 768, referred to.
| The respondent bank is a co operative society governed by the Punjab Co operative Societies Act, 1961.
A dispute between the bank and the appellant, one of its members, was referred by the Registrar of Co operative Societies, in exercise of the powers vested in him by section 55 of the Act, to the Deputy Registrar, Co operative Societies for arbitration.
The appellant filed an appeal against the award before the Central Registrar of Co operative Societies.
The Central Registrar dismissed the appeal holding that he was not the appropriate appellate authority, under the Act.
In appeal to this Court the appellant con tended that it was registered in 1955 under the Punjab Co operative Societies Act 1955 and by virtue of the and section 5(A) of the Multi Unit Co operative Societies Act, 1942, it had ceased to be governed by the provisions of the Punjab Co operative Societies Act, because, it had become a multi unit co operative Society.
Dismissing the appeal, HELD : There is nothing in the provisions of the Multi unit Cooperative Societies Act to indicate that a multi unit co operative society cannot be a member of a co operative society governed by the Punjab Act of 1961.
The multi unit co operative societies Act is for the incorporation, regulation and winding up of co operative societies with objects not confined to one State and it has no impact on section 55 of the Punjab Co operative Societies Act, 1961, in as much as the appellant remains a member of the Co operative Society, namely, the respondent bank.
If the appellant continues to be a member then the terms of section 55 apply and a dispute can be referred to arbitration under that section.
An appeal against that award lies under section 68 of the Punjab Act of 1961 to the government if the decision or order was made by the Registrar and to the Registrar if the decision or order is made by any other person.
Therefore the Central Registrar had no jurisdiction to hear the appeal.
|
Civil Appeal No. 62 of 1961.
212 Appeal by special leave from the judgment and order dated December 20, 1956, of the Madras High Court in Case Referred No. 85 of 1953.
A. V. Viswanatha Sastri, R. Ganapathy Iyer and G. Gopalakrishnan for the appellant.
K. N. Rajagopala Sastri and P.D. Menon for the respondent.
December 20.
The Judgment of the Court was delivered by KAPUR, J.
This appeal by special leave is directed against the judgment and order of the High Court of Judicature at Madras.
The appellant is the assessee and the respondent is the Commissioner of Income tax and the question raised is as to applicability of section 10(2)(xv) of the Indian Income tax Act to a gratuity paid by the appellant to one of its officers on his retirement from service.
The appeal relates to the assessment year 1950 51.
M/s. Gordon Woodroffee & Co. (Madras) Ltd., was incorporated as a private limited company in 1922 and became the Managing Agent of a public limited company M/s. Gordon Woodroffee Leather Manufacturing Company Ltd., which is the assessee.
One J. H. Philips was employee in the Managing Agent Company from 1922 to 1935 and from 1935 he became an employee of the appellant company and became its Director from 1940.
On March 22, 1949, he wrote a letter to the appellant company expressing his intention to resign from the Board of the Company as from April 4, 1949 upon his retirement from the employment of the company and requested that his resignation be accepted.
On March 24, 1949, the Board of Directors of the appellant Company passed a resolution that his resignation be accepted and in appreciation of his long and valuable services to Company hebe paid a gratuity of Rs. 50,000/ out 213 of which the appellant Company was to pay Rs. 40,000/ and the Managing Agent Company the balance of Rs. 10,000/ April 4, 1949, this resolution of the Board of Directors was confirmed.
On the same date a resolution to the same effect was passed at an Extraordinary General Meeting of the Company and before the end of its accounting year i. e. October 31, 1949, this amount of Rs. 40,000/ was paid to Mr. J. H. Philips.
This amount was claimed as a deduction under section 10 (2)(xv) of the Income tax Act which reads : Section 10(2) "Such profits or gains shall be computed after making the following allowances, namely: . . . . . . . . . . . . . . . . . (xv) any expenditure (not being an allowance of the nature described in any of the claused (i) to (xiv) inclusive, and not being in the nature of capital expenditure or personal expenses of the assesee) laid out or expended wholly and exclusively for the purpose of such business, profession or vocation.
" The amount was disallowed by the Income tax Officer as well as by the Appellate Assistant Commissioner on the ground that the appellant Company had no pension scheme; the payment was voluntary and that the entry in the assessee 's books clearly indicated it to be a capital payment.
Against this order the appellant Company took an appeal to the Income tax Appellate Tribunal which upheld the order of the Appellate Assistant Commissioner.
It held that according to the resolution the gratuity was paid "for long and valuable services to the Company"; that there was nothing to indicate that Mr. J. H. Philips had accepted a lower salary in expectation of getting a gratuity at the end of his service; that there 214 was no such practice in the appellant Company and that during the course of his service he was being remunerated at a graduated scale of salary and a commission of 2 1/2% on the profits; that there was no "expectancy" that at the end of the service there would be a recompense for faithful and efficient service that he had been suitably rewarded by being given a commission on the profits in order to whip up his enthusiasm".
It was also mentioned that in the books of the appellant Company the amount had not been debited in the profit and loss account but was debited to the appropriation account thereby indicating that it was an extra payment or a payment made in the nature of a capital expense.
Taking all these circumstances into consideration the Tribunal came to the conclusion that it was difficult to hold that the expenditure was not in the nature of a capital expenditure or that it was expended wholly and exclusively for the purpose of the assessee 's business.
At the instance of the appellant Company the case was stated to the High Court under section 66(1) of the Income tax Act and the following question was referred : "Whether the sum of Rs. 40,000/ paid to Mr. J. H. Philips on his retirement from the service of the Company was not an admissible deduction under Section 10(2)(xv) of the Income tax Act, 1922.
" The High Court answered the question against the appellant Company.
It held that in order that section 10(2) (xv) be applicable it had to be proved that the amount was laid out or expended wholly and exclusively for purposes of the company 's business.
In this case the amount was paid on retirement and for valuable services rendered by Mr. J. H. Philips; there was no evidence that he expected to receive this amount or the Company contemplated its payment at any time before; the payment 215 was voluntary and there was no evidence to show that it was in the future interest of the business of the Company that the expenditure was incurred.
The High Court observed: "In the case of a payment of a gratuity to a retiring employee recognition of his past services, with nothing more cannot, in our opinion satisfy the requirements of Section 10(2)(xv), even if those requirements are judged from the view point of commercial expediency, as it always should be when a claim arises under Section 10(2)(xv).
Was the expenditure incurred in the future interest of the business of the assessee? Was there any connection between the purpose of the payment and the further conduct of the business of the assessee ? These are the tests to be satisfied before it could be said that in paying the gratuity money was laid out or expended wholly and exclusively for the purpose of the business of the Company.
These tests the assessee did not satisfy in this case.
" Against this judgment and order the appellant Company has brought this appeal by special leave.
It was argued on behalf of the appellant that the amount had been paid as a matter of commercial expediency and in the interest of the Company as an inducement to other employees that if they rendered service in a similar manner with efficiency and honesty they would be similarly rewarded.
Decisive test, it was submitted, was whether such payments of gratuity were likely in future also and was the payment made as an incentive to the employees to give their best to the employer and if it was so then the payment was a matter of commercial prudence, It was also submitted that the Company had acted not with any oblique motive and 216 its good faith was not in doubt and in support of the contention several cases were relied upon.
In our opinion on the findings as given the payment in dispute does not fall within the provisions of section 10(2)(xv).
The amount was paid not in pursuance of any scheme of payment of gratuities nor was it an amount which the recipient expected to be paid for long and faithful service but it was voluntary payment not with the object of facilitating the carrying on of the business of the appellant Company or as a matter of commercial expediency but in recognition of long and faithful service of Mr. J. H. Philips.
There was no practice in the appellant company to pay such amounts and it did not affect the quantum of salary of the recipient.
The two cases strongly relied upon by the appellant Company were J. P. Hancok vs General Reversionary & Investment Company Ltd.(1) and J. W. Smith vs The Incorporated Council of Law Reporting for England and Wales(2).
In the former case the assessee Company sought to charge as a trade expense a lump sum which it had paid for the purchase for the benefit of a former actuary, of an annuity equal in amount to the pension which the Company had resolved to pay him.
This was held to be an expense admissible in computing the Company 's profits assessable to income tax.
But in that case it was the practice of the assessee company to grant pensions to its servants after a considerable period of service and this practice was known to the employees and affected the rate of salary paid by the Company in that the employees were willing to serve the Company at lower rates than they otherwise would have by reason of the expectation of the pension at the end of their service, In the latter case there was a practice of granting gratuities and that was the ground for holding the amount to be a proper deduction.
217 In our opinion the proper test to apply in this case is, was the payment made as a matter of practice which affected the quantum of salary or was there an expectation by the employee of getting a gratuity or was the sum of money expended on the ground of commercial expediency and in order indirectly to facilitate the carrying on of the business.
But this has not been shown and therefore the amount claimed is not a deductible item under section 10(2)(xv) The appeal therefore fails and is dismissed with costs.
Appeal dismissed.
| The company accepted the resignation of one of its directors and in appreciation of his long valuable services to the company, paid him a gratuity of Rs. 40,000/ .
This amount was claimed as a deduction under section 10(2) (xv) of the Income tax Act which was disallowed by the Income tax Officer, on the ground that the appellant company had no pension scheme; the payment was voluntary and that the entry in the assessee 's books clearly indicated it to be a capital payment.
^ Held, that the payment does not fall within the provisions of section 10(2)(xv) of the Act.
The amount was paid not in pursuance of any scheme of payment of gratuities nor was it an amount which the recipient expected to be paid for long and faithful service but it was for a voluntary payment not with the object of facilitating carrying on the business of the appellant company or as a matter of commercial expediency but in recognition of long and faithful service.
There Was no practice in the appellant company to pay such amounts to and did not affect the quantum of salary of the recipient.
To claim a deduction under section 10(2)(xv) of the Act the proper test to apply is, was that the payment made as a matter of practice which affected the quantum of salary or was there an expectation by the employee of getting a gratuity or was the sum of money expended on the ground of commercial expediency and in order indirectly to facilitate the carrying on of the business.
J. P. Hancok vs General Raversionary & Investment Co. Ltd. and J. W. Smith vs The Incorporated Council of Law Reporting for England and Wales, , REFERRED TO.
| In a suit for specific performance of an agreement to sell filed on the original side of the Bombay High Court the plaintiff (appellant) prayed for certain interim reliefs.
A single Judge of the High Court dismissed the application.
A Division Bench of the High Court, on appeal by the plaintiff, held that the appeal was not maintainable on the ground that the impugned order of the single Judge was not a 'judgment ' within the meaning of clause 15 of the Letters Patent of the High Court.
In appeal to this Court it was contended on behalf of the appellant that since the trial Judge is governed by the procedure prescribed by the Code of Civil Procedure, by virtue of the provisions of section 104 read with Order 43 Rule (1) the impugned order is appealable to a larger Bench; (2) assuming that the Letters Patent was a special law, section 104 read with Order 43 is in no way inconsistent with clause 15 of the Letters Patent; (3) even if section 104 read with Order 43 Rule 1 does not apply an order refusing to appoint a receiver or to grant injunction has the attributes of finality and, therefore, amounts to a judgment ' within the meaning of Letters Patent.
Allowing the appeal ^ HELD: (per Fazal Ali and A. Varadarajan, JJ.) (Amarendra Nath Sen, J. concurring.) Since the Order of the trial Judge was one refusing appointment of a receiver and grant of ad interim injunction, it is a 'judgment ' within the meaning of the Letters Patent both because order 43 rule 1 applies to internal appeals in the High Court, and such an order even on merits contains the quality of finality and would be a judgment within the meaning of clause 15 of Letters Patent.
Hence an appeal is maintainable to the Division Bench.
The Division Bench was in error in dismissing the appeal without deciding it on merits.
[259 F G] 188 There is no inconsistency between section 104 read with Order 43 Rule 1, C.P.C. and appeals under Letters Patent.
There is nothing to show that Letters Patent in any way excludes or overrides the application of section 104 read with Order 43 Rule 1 or that these provisions do not apply to internal appeals within the High Court.
[237 E F] Code of Civil Procedure 1877, by sections 588 and 589, did not make any distinction between appeals to the High Court from the District Court and internal appeals to the High Court under Letters Patent.
Notwithstanding the clear enunciation of law by the Privy Council that section 588 did not affect nor was it inconsistent with the provisions of Letters Patent and that, therefore, orders of a trial Judge which fall beyond section 588 could be appealable to a larger bench under the Letters Patent if its orders amounted to a 'judgment ' within the meaning of clause 15 of the Letters Patent, there was a serious controversy among the High Courts on this question.
Section 104 of the C.P.C., 1908 made it clear that appeals against orders mentioned in Order 43 Rule 1 were not in any way inconsistent with the Letters Patent but merely provide additional remedy by allowing appeals against miscellaneous orders passed by the trial Judge to a larger bench.
[205 E G] In dealing with a suit the trial Judge has to follow the procedure prescribed by the Code.
It is indisputable that any final judgment passed by the trial Judge amounts to a decree and under the provisions of the Letters Patent an appeal lies to a larger bench.
Letters Patent itself does not define the term 'judgment ' and has advisedly not used the word 'decree ' in respect of a judgment given by the trial Judge.
[206 B D] Section 5 of the Code empowers the State Government to apply the provisions of the Code where any enactment is silent as to its applicability.
Section 5 makes clear that, excepting the Revenue Courts, all other Civil Courts would normally be governed by the provisions of the Code in the matter of procedure.[206H,207A] Section 4 of the Code which provides that in the absence of any specific provision to the contrary the provisions of the Code do not limit or affect any special or local law, is not applicable in the instant case because even if the Letters Patent is deemed to be a special law within the meaning of this section the provisions of section 104 do not seek to limit or affect the provisions of the Letters Patent.
[207 B C] By force of section 104 all appeals, as indicated in the various clauses of Order 43 Rule 1, would lie to the appellate court.
In short a combined reading of the various provisions of the Code leads to the conclusion that section 104 read with Order 43 Rule 1 clearly applies to proceedings before a trial Judge of the High Court.
[207 H; 209 B] In the instant case, therefore, section 104 read with Order 43 Rule 1 does not in any way abridge or interfere with or curb the powers conferred on the trial Judge by clause 15 of Letters Patent.
They only give an additional remedy by way of appeal from the orders of the trial Judge to a larger bench.
That being so there is no force in the respondent 's argument that these provisions do not apply to internal appeals in the High Court.
[209 D E] 189 Hurrish Chunder Chowdry vs Kali Sundari Debia, 10 I.A. 4, Mt. Sabitri Thakurain vs Savi & Anr.
A.I.R. 1921 P.C. 80, Union of India vs Mohindra Supply Co., ; and Shankarlal Aggarwal & Ors.
vs Shankarlal Poddar & Ors. , referred to.
A number of enactments, as for example, section 202 of the and section 39 of the Arbitration Act widen, rather than limit, the original jurisdiction of the High Court by conferring additional or supplementary remedy by way of appeal to a Division Bench from the judgment of a single Judge.
On a parity of reasoning, therefore, section 104 read with Order 43 Rule 1 expressly authorises and creates a forum for appeal against orders falling under the various clauses of Order 43 Rule 1 to a larger bench of the High Court without disturbing, interfering with or over riding the Letters Patent jurisdiction.
[211 B C] Dayabhai Jiwandas & Ors.
vs A.M.M. Murugappa Chettiar, I.L.R. 13 Rangoon 457, Sonbai vs Ahmedbhai Habibhai [1872] 9 Bom.
HC Reports.
398, Rajagopal & Ors.
(in Re. LPA 8 of Mad. 447, Ruldu Singh vs Sanwal Singh Lahore 188, Lea Badin vs Upendra Mohan Roy Chaudhary & Ors. , Mathura Sundari Dassi vs Haran Chandra Shaha & Ors.
A.I.R. 1916 Cal.
361 Abdul Samad & Ors.
vs The State of J & K. A.I.R. 1969 J&K 52, and Kumar Gangadhar Bagla vs Kanti Chunder Mukerjee & Anr., , approved.
Ram Sarup vs Kaniz Ummehani, ILR 1937 All.
386 over ruled.
Assuming that Order 43 Rule 1 does not apply to Letters Patent appeals the principles governing these provisions would apply by process of analogy.
The provisions of Order 43 Rule 1 possess the traits, trappings and qualities and characteristics of a final order.
Although the word 'judgment ' has not been defined in the Letters Patent but whatever test may be applied the order passed by the trial Judge appealed against must have the traits and trappings of finality.
The appealable orders indicated in the various clauses of Order 43 Rule 1 are matters of moment deciding valuable rights of the parties and are in the nature of final orders so as to fall within the definition of 'judgment '.
[237G; 225 E F] Radhey Shyam vs Shyam Behari Singh ; referred to.
Pandy Walad Dagadu Mahar & Anr.
vs Jamnadas Chotumal Marwadi, ; Vaman Ravi Kulkarni vs Nagesh Vishnu Joshi & Ors, A.I.R. 1940 Bom. 216; Vishnu Pratap & Ors.
vs Smt.
Revati Devi & Ors.
A.I.R. 1953 All.
647; Madhukar Trimbaklal vs Shri Sati Godawari Upasani Maharaj of Sakori & Ors. ; Ratanlal Jankidas Agarwal vs Gajadhar & Ors.; A.I.R. 1949 Nagpur 188; Beads Factory & Anr.
vs Shri Dhar & Ors.
A.I.R. 1960 All. 692; J. K. Chemicals Ltd. vs Kreba & Co.; A.I.R. 1967 Bom.
56, overruled.
Having regard to the nature of the orders contemplated in the various clauses of Order 43 Rule 1 which purport to decide valuable rights of the parties in the ancillary proceedings even though the suit is kept alive these orders possess the attributes or characteristics of finality so as to be judgments within the meaning of clause 15 of the Letters Patent.
They are therefore, appealable to a larger 190 bench.
The concept of the Letters Patent governing only the internal appeals in the High Courts and the Code of Civil Procedure having no application to such appeals is based on a serious misconception of the legal position.
[237H 238A B] The question to be decided in this case which is a vexed and controversial one is as to what is the real concept and purport of the word 'judgment ' used in the Letters Patent.
The meaning of the word 'judgment ' has been the subject matter of conflicting decisions of the various High Courts raging for almost a century and over which despite the length of time no unanimity had been reached and it is high time that this controversy should be settled once and for all as far as possible.
[238 E F] Out of the numerous authorities cited three leading judgments have spelt out certain tests for determining as to when an order passed by a trial Judge can be said to be a 'judgment ' within the meaning of clause 15 of the Letters Patent and we are inclined to agree generally with the tests laid down in these cases though some of the tests laid down are far too wide and may not be correct.
[238 G H] While the view taken in the Justices of the Peace for Calcutta vs The Oriental Gas Company (VIII Bengal L.R. 433) is much too strict, the one taken in T. V. Tuljaram Row vs M.K.R.V. Alagappa Chettiar (ILR 35 Madras 1) is much too wide.
The correct test seems to lie somewhere in between the tests laid down in these cases.
Similarly the full Bench decision in Manohar Damodar Bhoot vs Baliram Ganpat Bhoot (AIR 1952 Nagpur 357) pithily described the essential requisites and the exact meaning of the word 'judgment ' as used in the Letters Patent.
The pointed observations made in this case try to synthesize the conflicting views taken by the Calcutta and Madras High Courts.
They represent the true scope and import of the word 'judgment ' as used in the Letters Patent.
[The Court reviewed the entire case law on the subject laying down various tests to determine what a judgment is.] The test for determining as to when an order passed by a trial Judge can be said to be a 'judgment ' within the meaning of the Letters Patent are: (1) Where an order, which is the foundation of the jurisdiction of the Court or one which goes to the root of the action, is passed against a particular party, it amounts to a judgment.
[248 B C] Asrumati Debi vs Kumar Rupendra Deb Raikot ; (2) An order dismissing an application for review would be appealable under the Letters Patent being a judgment, though it is not made appealable under Order 43 rule 1.
[249 B] State of Uttar Pradesh vs Dr. Vijay Anand Maharaj ; (3) The which confers original jurisdiction on the trial Judge expressly makes an order passed by the trial Judge under section 202 appealable and, therefore, any order passed under that section would be appealable under the and is, therefore, a judgment.
[249 C D] 191 Shankarlal Aggarwal vs Shankerlal Poddar (4) Whenever a trial Judge decides a controversy which effects valuable rights of one of the parties it is a judgment within the meaning of the Letters Patent.
[249 H] Radhey Shyam vs Shyam Behari Singh ; (5) Where an order passed by the trial Judge allowing amendment of the plaint, takes away from the defendant the defence of immunity from any liability by reason of limitation, it is a judgment within the meaning of clause 15 of the Letters Patent.
[250 A B] Shanti Kumar R. Canji vs The Home Insurance Co. of New York ; (6) Clause 15 of the Letters Patent does not define the term 'judgment '.
The Letters Patent is a special law which carves out its own sphere and it would not be possible to project the definition of the word 'judgment ' as defined in the Code of Civil Procedure.
Letters Patent were drafted long before the Code of Civil Procedure of 1882 was enacted.
The word 'judgment ' used in the Letters Patent does not mean a 'judgment ' as defined in the Code.
At the same time it does not include every possible order final, preliminary or interlocutory passed by a Judge of the High Court.
[251 D E] Mt. Shahzadi Begum vs Alak Nath & Ors.
A.I.R. 1935 All 628.
Under the Code of Civil Procedure a judgment consists of reasons and grounds for a decree passed by a Court.
As a judgment constitutes the reasons for the decree, it follows as a matter of course that the judgment must be a formal adjudication which conclusively determines the rights of the parties with regard to all or any of the matters in controversy.
The concept of a judgment as defined in the Code seems to be rather narrow and the limitations engrafted by section 2(2) cannot be physically imported into the definition of the word 'judgment ' as used in clause 15 of the Letters Patent because the Letters Patent has advisedly not used the terms 'order ' or 'decree ' anywhere.
The intention of the givers of the Letters Patent was that the word 'judgment ' should receive a much wider and more liberal interpretation than the word 'judgment ' used in the Code of Civil Procedure.
At the same time, it cannot be said that any order passed by a trial Judge would amount to a judgment; otherwise there will be no end to the number of orders which would be appealable under the Letters Patent.
The word 'judgment ' has a concept of finality in a broader and not a narrower sense.
[2 52 G H; 253 A C] A judgment can be of three kinds: (1) A final judgment: A judgment, which decides all the questions or issues in controversy so far as the trial Judge is concerned and leaves nothing else to be decided is a final judgment.
This would mean that by virtue of the judgment, the suit or action brought by the plaintiff is dismissed or decreed in part or in full.
Such an order passed by the trial Judge is a judgment within the 192 meaning of the Letters Patent and amounts to a decree so that an appeal would lie from such a judgment to a Division Bench.
[254 D E] (2) A preliminary judgment: A preliminary judgment may be of two forms: (i) where the trial Judge by an order dismisses the suit without going into the merits of the suit but only on a preliminary objection raised by the defendant or the party opposing on the ground that the suit is not maintainable.
Since the suit is finally decided one way or the other, the order passed by the trial judge would be a 'judgment ' finally deciding the cause so far as the trial Judge is concerned and, therefore, appealable to a larger bench; (ii) where the trial Judge passes an order after hearing the preliminary objections raised by the defendant relating to the maintainability of the suit as for example, bar of jurisdiction, res judicata, a manifest defect in the suit, absence of notice under section 80 and the like.
An order of the trial Judge rejecting these objections adversely affects a valuable right of the defendant who, if his objections were held to be valid, is entitled to get the suit dismissed on preliminary grounds.
Such an order, though it keeps the suit alive, decides an important aspect of the trial which affects a vital right of the defendant and must, therefore, be construed to be a judgment so as to be appealable to a larger bench.
[254 F H; 255 A B] (3) Intermediary or Interlocutory judgment: Most of the interlocutory orders which contain the quality of finality are clearly specified in clause (a) to (w) of Order 43 Rule 1.
They are judgments within the meaning of the Letters Patent and, therefore, appealable.
There may also be interlocutory orders not covered by Order 43 Rule 1 but possessing the characteristics and trappings of finality because they adversely affect a valuable right of the party or decide an important aspect of the trial in an ancillary proceeding.
Before such an order can be a judgment the adverse effect on the party concerned must be direct and immediate rather than indirect or remote.
Thus when an order vitally affects a valuable right of the defendant it will be a judgment within the meaning of Letters Patent so as to be appealable to a larger bench.
[255 C E; 256 A] Every interlocutory order cannot be regarded as a judgment but only those orders would be judgments which decide matters of moment or affect vital and valuable rights of the parties and which work serious injustice to the party concerned.
[256 H 257 A] The following considerations should prevail with the Court in deciding whether or not an order is a judgment: (1) The trial Judge being a senior court with vast experience of various branches of law occupying a very high status, should be trusted to pass discretionary or interlocutory orders with due regard to the well settled principles of civil justice.
Thus any discretion exercised or routine orders passed by the trial Judge in the course of the suit which may cause some inconvenience or, to some extent, prejudice one party or the other cannot be treated as a judgment.[258D E] (2) An interlocutory order, in order to be a judgment, must contain the traits and trappings of finality either when the order decides the question in controversy in ancillary proceeding or in the suit itself or in a part of the proceedings.
[258 G] 193 It is not the form of adjudication which has to be seen but its actual effects on the suit or proceedings.
[243 H] If irrespective of the form of the suit or proceeding, the order impugned puts an end to the suit or proceeding it doubtless amounts to a judgment.
[244A] If the effect of the order, if not complied with, is to terminate the proceedings, the said order would amount to a judgment.
[244 B] An order in an independent proceeding which is ancillary to the suit, (not being a step towards judgment) but is designed to render the judgment effectively can also be termed as judgment within the meaning of the Letters Patent.
[244C] An order may be a judgment even if it does not affect the merits of the suit or proceedings or does not determine any rights in question raised in the suit or proceedings.
[244 D E] An adjudication based on a refusal to exercise discretion, the effect of which is to dispose of the suit, so far as that particular adjudication is concerned, would amount to a judgment within the meaning of the Letters Patent.
[244 E F] Some illustrations of interlocutory orders which may be treated as judgments may be stated thus: (1) An order granting leave to amend the plaint by introducing a new cause of action which completely alters the nature of the suit and takes away a vested right of limitation or any other valuable right accrued to the defendant.
[258 B C] (2) An order rejecting the plaint.
[258 C] (3) An order refusing leave to defend the suit in an action under Order 37, Code of Civil Procedure.
[258 C] (4) An order rescinding leave to the trial Judge granted by him under clause 12 of the Letters Patent.
[258 D] (5) An order deciding a preliminary objection to the maintainability of the suit on the ground of limitation, absence of notice under section 80, bar against competency of the suit against the defendant even though the suit is kept alive.
[258 D E] (6) An order rejecting an application for a judgment on admission under Order 12 Rule 6.
[258 E F] (7) An order refusing to add necessary parties in a suit under section 92 of the Code of Civil Procedure.
[258 F] (8) An order varying or amending a decree.
[258 F G] (9) An order refusing leave to sue in forma pauperis.
[258 F G] (10) An order granting review.
[258 F G] 194 (11) An order allowing withdrawal of the suit with liberty to file a fresh one.
[258 G H] (12) An order holding that the defendants are not agriculturists within the meaning of the special law.
[258 G H] (13) An order staying or refusing to stay a suit under section 10 of the Code of Civil Procedure.
[258 H] (14) An order granting or refusing to stay execution of the decree.
[259A] (15) An order deciding payment of court fee against the plaintiff.
[259 B] (per Amarendra Nath Sen J concurring) On a plain reading and proper construction of the various provisions of the Code of Civil Procedure, section 104 of the Code applies to the original side of the High Court of Bombay and the impugned order of the single Judge is appealable to a Division Bench under this section read with Order 43 thereof.
[279 H; 280 A] The right of appeal under clause 15 of the Letters Patent is in no way curtailed or affected by section 104.
By virtue of the provisions of section 104(1) a litigant enjoys the right of preferring an appeal in respect of various orders mentioned therein, even though such orders may or may not be appealable under clause 15 of the Letters Patent as a judgment and the right of appeal under clause 15 remains clearly unimpaired.
[275 E G] The argument of the respondent, based mainly on the provisions of sections 3 and 4 of the Code of Civil Procedure that even if various other provisions of the Code apply to the Bombay High Court, including its original side, the provisions of section 104 read with Order 43 could not apply to the original side of a Chartered High Court because the jurisdiction conferred by clause 15 of the Letters Patent is a special jurisdiction is without force.
[267 B C] That by virtue of section 1 (which provides for territorial extent of the operation of the Code) the Civil Procedure Code applies to the State of Maharashtra cannot be disputed.
[268 E F] Section 3 which deals with subordination of Courts to the High Court has no bearing on the point in issue and does not create any bar to the competence and maintainability of an appeal from an order passed by a single Judge on the original side if the order is otherwise appealable.
While dealing with any matter on the original side of the High Court a single Judge is in no way subordinate to the High Court.
Nor again, could there be a question of his being a subordinate to the Division Bench which hears an appeal from his judgment.
If any order passed by him on the original side is a 'judgment ' within the meaning of clause 15 of the Letters Patent an appeal lies to a Division Bench.
[272 E G] Similarly there is no force in the argument that since section 104 and Order 43 of the Code affect the special jurisdiction conferred on the High Court under 195 clause 15 of Letters Patent these provisions are not applicable to the present case.
[273 C D] Section 4 of the Code cannot be said to be in conflict with the provisions of clause 15; nor can it be said that it limits or otherwise affects the power and jurisdiction of the High Court under clause 15.
[274 A B] Section 4 provides that nothing in the Code shall be deemed to limit or otherwise affect any special or local law in force or any special jurisdiction conferred by or under any law for the time being in force.
Clause 15 confers on the litigant a right to prefer an appeal from the court of original jurisdiction to the High Court in its appellate jurisdiction.
It confers a right of appeal from a judgment of any Judge on the original side to the High Court.
Though this clause is a special provision it cannot be said that it is intended to lay down that no appeal would lie from an order of a single Judge on the original side even if specific provision is made in any statute making the order appealable.
By virtue of this provision any order considered to be a judgment would be appealable.
If a statute confers on the litigant right of appeal, it cannot be said that such provision would affect the special provisions of clause 15.
This special power is in no way affected and is fully retained.
In addition, the High Court may be competent to entertain other appeals by virtue of specific statutory provisions.
[273 C H: 274 A] On the contrary, the Code contains specific provisions indicating cases in which its provisions are or are not applicable, as for example section 5, which makes specific provision regarding the nature and manner of applicability of the Code to revenue courts.
Sections 116 to 120 clearly indicate that section 104 and order 43 apply to the original side of the High Court.
Section 104 and Order 43 which is attracted by section 104, clearly provide that an appeal shall lie from the orders mentioned in rule 1 of Order 43.
The impugned order is one such order and is clearly appealable.
When the legislature conferred such a right on the litigant a Court would be slow to deprive him of the statutory right merely on the ground that the order had been passed by a single Judge on the original side of the High Court.
[274 B E] Section 104 recognises that, apart from the orders made appealable under the Code, there may be other orders appealable by any law for the time being in force.
It further provides that no appeal will lie from any orders other than orders expressly provided in the Code or by any other law in force.
The right of appeal against a judgment of a single Judge on the original side under clause 15 is a right conferred by "any other law in force".
[275 C E] Union of India vs Mohindra Supply Co. ; and Mt. Savitri Thakurain vs Savi and Anr.
referred to.
Mathura Sundari Dassi vs Haran Chandra Shaha, A.I.R. and Lea Badin vs Upendra Mohan Roy Choudhary, A.I.R. 1935 Cal.
35 approved.
Vaman Raoji Kulkarni vs Nagesh Vishnu Joshi, A.I.R. overruled.
Hurrish Chander Chowdhry vs Kali Sundari Debia, 10 I.A. 4, held in applicable.
196 Unless a right is conferred on him by law, a litigant does not have an inherent right of appeal.
An order appealable under the C.P.C. or any other statute becomes appealable because the concerned statute confers a right of appeal on the litigant.
But yet such an order may or may not be appealable as 'judgment ' under clause 15 of the Letters Patent.
An order appealable under clause 15 as a 'judgment ' becomes appealable because the Letters Patent confers the right of appeal against such order as 'judgment '.
Similarly an order appealable under the Letters Patent may or may not be appealable under the Code.
[281 C E] The Letters Patent, by clause 15, confers a right of appeal against a 'judgment ' and therefore an order which satisfies the requirements of 'judgment ' within the meaning of clause 15 becomes appealable.
What kind of order will constitute a 'judgment ' within the meaning of this clause and become appealable as such must necessarily depend on the facts and circumstances of each case and on the nature and character of the order passed.
[281 F G] A comprehensive definition of 'judgment ' contemplated by clause 15 cannot properly be given.
Letters Patent itself does not define 'judgment '.
The expression has necessarily to be construed and interpreted in each case.
But yet it is safe to say that if an order has the effect of finally determining any controversy forming the subject matter of the suit itself or any part thereto or the same affects the question of the Court 's jurisdiction or the question of limitation, it normally constitutes 'judgment ' within the meaning of clause 15 of Letters Patent.
[282 E G]
| In 1931 the respondent, a registered firm, was appointed the sole selling agents and distributors for the Hyderabad State of 376 cigarettes manufactured by V (a limited company)/ under the terms of a resolution of the Board of Directors, the agency commission being a discount of 2% on the gross selling price.
In 1939 another arrangement was made whereby the respondent 's agency was extended to the rest of India.
By a resolution dated June 16, 1950, the agency of 1939 was terminated on payment of Rs. 2,26,263 to the respondent by way of compensation, but the respondent continued to be distributors for the Hyderabad State.
For the assessment year 1951 52 the Income tax Officer included the aforesaid sum in the respondent 's total income and taxed it as a revenue receipt under the head of " business ".
The respondent claimed that it did not carry on business of acquiring and working agencies, that the agency acquired in 1931 was a capital asset of its business of distributing cigarettes in the Hyderabad State, that the expansion of territory outside the Hyderabad State in 1939 was an accretion to the capital asset already acquired by it, that the resolution Of 1950 was in substance a termination of the agency qua territory outside the Hyderabad State which resulted in the sterilisation of the capital asset qua that territory, that the sum of Rs. 2,19,343 received by it in the year of account was by way of compensation for the termination of the agency outside Hyderabad State and being therefore compensation for the sterilisation Pro tanto of a capital asset of its business was a capital receipt and therefore was not liable to tax.
It was contended on behalf of the Incometax Authorities that the sole selling agency which was granted by the company to the assessee in the year 1931 was merely expanded as regards territory in 1939 and what was done in 1950 was to revert to the old arrangement, that the structure or the profit making apparatus of assessee 's business was not affected thereby, that the expansion as well as the restriction of the assessee 's territory were in the ordinary course of the assessee 's business and were mere accidents of the business which the assessee carried on and that the sum of Rs. 2,19,343 received by the assessee as and by way of compensation for the restriction of the territory was a trading or an income receipt and was therefore liable to tax.
It was also urged that the agency agreement between the respondent and the company was terminable at the will of the latter and so it could not be considered as an enduring asset.
Held (per Bhagwati and Sinha, JJ., Kapur, J., dissenting) that the agency agreements in question did not constitute the business of the respondent, but formed a capital asset, being the profit making apparatus of its business of distribution of the cigarettes manufactured by the company within the respective territories, and, consequently, any payment made by the company as compensation for terminating the agency would only be a capital receipt in the hands of the respondent.
Commissioner of Income tax vs Shaw Wallace & Co., (1932) L.R. 59 I. A. 206, relied on.
377 Commissioner of Income Tax and Excess Profits Tax, Madras vs The South India Pictures Ltd., Karaikudi; , and Commissioner of Income tax, Nagpur vs Rai Bahadur jairam Valji, [1959] Supp. 1 S.C.R. 110, distinguished.
Case law reviewed.
Held, further, that the fact that the agency agreements were terminable at will, or that only one of them was terminated, would not make any difference because in either case, when the agency was terminated and the amount was paid as compensation for such termination it resulted in the sterilisation of the capital asset Pro tanto and it was received as a capital receipt in the hands of the respondent.
Glenboig Union Fire Clay Co., Ltd. vs The Commissioners of Inland Revenne, , relied on.
Per Kapur, J. The true effect of the facts of the present case was that in 1939 the respondent 's area of distribution was increased from the State of Hyderabad to the whole of India and in 1950 it was again reduced to the original area of 1931, so that the respondent did not lose its agency.
Consequently, the termination of the agency in 1950 did not affect the trading activities of the respondent and, therefore, viewed against the background of the respondent 's business Organisation and profitmaking structure the compensation for the termination of the agency was no more than that for the loss of future profit and commission.
The compensation therefore was in the nature of surrogatum and in this view of the matter it was revenue and not capital.
The answer to the question, as applied to agencies, whether the compensation is capital or revenue, is that it will be a capital receipt if it is received as the value of the agency, i. e., it is a price of the business as if it is brought to sale.
On the other hand it is revenue receipt if it is paid in lieu of profits or commission.
In view of the decision The Commissioner of Income tax vs The South India Pictures Ltd., Karaikudi; , , and the observations of Bose, J., in the case of Raghuvanshi Mills Ltd. vs Commissioner of Income tax, ; , the authority of Commissioner of Income tax vs Shaw Wallace considerably shaken.
| In respect of the assessment year 1949 50, the appellant while submitting his return disclosing his turnover of the sale of oil, included therein the value of the hydrogenated oil that he sold and claimed a deduction under r. 18 of the Turnover and Assessment Rules in respect of the value of the groundnuts which had been utilised for conversion into hydrogenated oil on which he had paid tax at the point of their purchase.
The sales tax authorities rejected the claim on the ground that hydrogenated groundnut oil was not groundnut oil within that rule.
This view was upheld by the High Court on February 11, 1955, in the Tax Revision Case No. 120 of 1953 filed by the appellant, but, on application, the High Court granted a certificate of fitness under article 133(1) of the Constitution of India on the ground that substantial questions of law arose for decision in the case.
For the assessment years 1950 51, 1951 52 and 1952 53, the same question as to whether hydrogenated groundnut oil was raised and decided against the appellant by the sales tax authorities and the High Court.
The appellant then applied for a certificate of fitness under article 133(1) of the Constitution, but the High Court dismissed the petition on September 4, 1959, stating: "The judgment sought to 175 be appealed against is one of affirmance.
We do not think that it involves any substantial question of law . . . nor do we regard this as a fit case for appeal to the Supreme Court.
" On November 23, 1959, applications for review were filed under 0.
47, r. 1, of the Code of Civil Procedure but they were dismissed.
The appellant then applied for special leave under article 136 of the Constitution against the orders dismissing the applications for review and leave was granted after notice to the respondent.
When the appeal came on for hearing in the Supreme Court, the respondent raised a preliminary objection that the special leave granted to the appellant should be revoked.
The grounds for revoking the special leave were not urged by the respondent at the time of the hearing of the applications under article 136, nor were they set out in the statement of case filed by the respondent under O.XVIII of the Supreme Court Rules, 1950.
Held (i) that where notice is given to the respondent before the hearing of the application for grant of special leave, no objection to the maintainability of the appeal or to the granting of special leave would be permitted to be urged at any stage after the grant of it, except possibly where the ground urged happens to arise subsequent to the grant of leave or where it could not be ascertained by the respondent at that date notwithstanding the exercise of due care.
(ii) that the statement in the order dated September 4, 1959, that the case did not involve any substantial question of law,was an "error apparent on the face of the record" within the meaning of 0.
47, r. 1, of the Code of Civil Procedure inasmuch as this was a case where without any elaborate argument one could point to the error and say that here was a substantial point of law which stared in the face.
| The appellant who resigned from service of the respondent company after serving for over 29 years was not paid retiring gratuity by the respondent, even when the appellant had become eligible for it under the relevant gratuity rules styled as the Retiring Gratuity Rules, 1937 (Gratuity Rules for short).
The appellant filed a suit in the Court of Subordinate Judge for recovering the amount of gratuity.
The Subordinate Judge decreed the suit.
The High Court allowed the appeal filed by the respondent.
Hence this appeal.
The respondents submitted; (1) that since the appellant did not retire from the service but left the service by resigning the post, he was not eligible for gratuity under Rule 6 of the Retiring Gratuity Rules, 1937; (2) that under Rule 10 the retiring gratuity was payable at the absolute discretion of the respondent and could not be claimed as a matter of right by the appellant even if he had become eligible for it; and (3) that claim to gratuity could not be enforced in the civil court.
Allowing the appeal ^ HELD: Rule 6(a) which prescribed the eligibility criterion for payment of retiring gratuity provides, inter alia, that every permanent uncovenanted employee of the Company, will be eligible for retiring gratuity.
The expression `retirement ' has been defined in Rule 1(g) to mean `the termination of service by reason of any cause other then removal by discharge due to misconduct '.
It is admitted that the appellant was a permanent uncovenanted employee of 326 the Company paid on monthly basis and he rendered service for over 29 years and his service came to an end by reason of his tendering resignation which was unconditionally accepted.
It is not suggested that he was removed by discharge due to misconduct.
Unquestionably.
therefore, the appellant has within the meaning of the expression, thus retired from service of the respondent and he is qualified for payment of gratuity in terms of Rule 6.
[ 332D F] According to the High Court, the service conditions of the appellant were.
governed by the Works Standing orders of the respondent.
No exception has been taken to this finding.
These Works Standing orders were framed and certified under the Industrial Employment (Standing orders) Act, 1946.
The Act was a legislative response to the laissez faire rule of hire and fire at sweet will.
It was an attempt at imposing statutory contract of service between two parties unequal to negotiate, On the footing of equality.
The intendment underlying the Act and the provisions of the Act enacted to give effect to the intendment and the scheme of the Act leave no room for doubt that Standing orders certified under the Act become part of the statutory terms and conditions of service between the employer and his employee and they govern the relationship between the parties.[333E 334G] Western India Match Company Ltd. vs Workman; [1974] I SCR 434.
Work man of Messrs Firestone Tyre & Rubber Co of India (P) Ltd. vs Management and ors; ; at 612.
Workman in Buckingham and carnatic Mills Madras vs the presiding Officer, labour Court, Meerut & Ors; [1984] 1 SCC 1.
Agra Electricity Supply co. Ltd. vs Sri Alladin & Ors;[1970] 1 SCR 806, referred to Upon a combined reading of Standing order (S.O) 54 along with Rule 5 and 6(a) of the Gratuity Rules, it becomes distinctly clear that payment of gratuity was an express or statutory conditions of service governing the relationship between the appellant and the respondent.
Therefore, it would be obligation upon the respondent to pay gratuity on retirement to the appellant.
If the respondent refuses to pay or discharge its statutory obligation, the claim can be enforce by a civil suit.
The High Court was of the opinion that in view of Rule 1 of the Gratuity Rules, recovery of gratuity cannot be enforced by a civil suit.
But upon an Industrial dispute being raised, the Industrial Tribunal may be in a position to award the gratuity as a matter or right even under the existing rules.
In reaching this conclusion the High Court overlooked the effect of the certified Standing orders and the inter relation between the Gratuity Rules and S.O 54, When under 1946 Act, an obligation is cast on the employer to specifically and precisely lay down the conditions of service, Sec.
13(2) subjects the employer to a penalty if any act is done in contravention of the Standing orders certified under the.
A face of collective bargaining is that any settlement.
arrived at between the parties would be treated as incorporated in the contract of service of each employee governed by the settlement.
Similarly, certified standing Orders which statutorily prescribe the conditions of service shall be deemed to be incorporated in the contract of employment of each employee with his employer.
If the employer commits a breach of the contract of employment the same can be enforced or remedied depending upon the 327 relief sought by a civil suit.
The jurisdiction of civil court amongst others is determined by the nature of relief claimed.
If the relief claimed is a money decree by enforcing statutory conditions of service, the civil court would certainly have jurisdiction to grant the relief.
[335F 337B] Labour Law Text and Materials by Paul Davies and Mark Freedland p 233 and system of Industrial Relations in Great B itain p. 58 59, referred to.
In the instant case, the appellant filed the suit alleging that he was entitled to payment of gratuity on completion of service for the period prescribed.
He alleged it and the High Court accepted it as a condition of service.
Its breach would give rise to a civil dispute and civil suit would be the only remedy.
In the case of workmen governed by the may provide an additional forum to recover monetary benefit.
It is not suggested that appellant was a workman governed by the .
The High Court was, therefore, in error in holding that the remedy was only by way of an industrial dispute and not by a civil suit.
[337C D] The Court while interpreting and enforcing the relevant gratuity rules will have to bear in mind the concept of gratuity.
The fundamental principle under lying gratuity is that it is a retirement benefit for long service as a provision for old age.
Demands of social security and social justice made it necessary to provide for payment of gratuity.
On the enactment of the a statutory liability was cast on the employer to pay gratuity.
Pension and gratuity which have much in common are well recognised retiral benefits as measures of social security.
It is now well settled that pension is a right and payment of it does not depend upon the discretion of the employer, nor it can be denied at the sweet will or fancy of the employer.
If pension can be recovered through civil suit, there is no justification in treating gratuity on a different footing.
Pension and gratuity in the matter of retiral benefits and for recovering the same must be put on par [339G H; 340A] Burhanpur Tapti Mills Ltd. vs Burhanpur Tapti Mills Mazdoor Sangh; , Deokinandan Prasad vs State of Bihar & Ors.
,[1971] Supp SCR 634, State of Punjab & Anr. vs Iqbal Singh, ; , D.S. Nakara & Ors vs Union of India; , ; referred to.
If the rules for payment of gratuity become incorporated in the Standing orders and thereby acquired the status of the statutory condition of service, an arbitrary denial referable to whim, fancy or sweet will of the employer must be, rejected as arbitrary.
Sec. 4 of the 1946 Act which confers power on the certifying officer or the appellate authority to adjudicate upon the fairness or reasonableness of the provisions would enable this Court to reject that part of Rule 10 which confers absolute discretion on the employer to pay gratuity even if it is earned, at its absolute discretion, as utterly unreasonable, ineffective and unenforceable.
That part of Rule 10 must, therefore, be treated as ineffective and un enforceable.
[340C D] 328 The claim to absolute discretion not to pay gratuity even when it is earned is a hang over of the laissez faire days and utterly inconsistent with the modern notion of fair industrial relations and, therefore, it must be rejected as ineffective and hence unenforceable.
[340H] Western India Match Company Ltd. vs Workmen, ; referred to.
Our Constitution envisages a society governed by rule of law.
Absolute discretion uncontrolled by guidelines which may permit denial of equality before law is the anti thesis of rule of law.
Absolute discretion not judicially reviewable inheres the pernicious tendency to be arbitrary and is, therefore, violative of article 14.
Equality before law and absolute discretion to grant or deny benefit of the law are diametrically opposed to each other and cannot co exist.
Therefore also the conferment of absolute discretion by Rule 10 of the Gratuity Rules to give or deny the benefit of the rules cannot be upheld and must be rejected as unenforceable.
[341A C]
| The respondent limited companies purchased certain premises in Calcutta for the purpose of providing residential accommodation for their staff.
They instituted suits against the appellants for the recovery of possession of two flats on the ground that as these flats were required for housing their officers, they were reasonably required for the occupation of the respondents within the meaning of section 13(1) (f) of the West Bengal Premises Tenancy Act, 1956.
The Trial Court dismissed the suits but the High Court allowed an appeal and held that a limited company can be a landlord within the meaning of section 13(1) (f) and can reasonably require the premises for its own occupation; and that where there are several landlords, the requirement of the premises by the landlords for the occupation of one or more of them is sufficient to bring the case within section 13(1) (f).
In the appeal before the Supreme Court the only question for determination was whether on the construction of the terms of an agreement which was normally signed between each of the respondents and any officer who was allotted a flat, the officer occupied the flat as a tenant or a licensee, and therefore whether the officer 's occupa tion would be the company 's own occupation within the meaning of clause (f).
Held:Dismissing the appeal: The High Court nightly held that the respondent reasonably required the flats for the second respondent company 's own occupation through officers holding flats on its behalf as licensees.
[29B] Under the standard form of agreement, the occupation of the officer ceased on the termination of his employment, upon his death, or on his transfer and the company was at liberty to allot him any other flat or to assign the premises to any other employee or other person during his absence.
In view of these and its other terms the agreement operated as a license and not as a tenancy.
It created no interest in the land and gave only a personal privilege or license to the servant to occupy the premises for the greater convenience of his work.
[28F H] Under section 105 of the Transfer of Property Act, a lease is the transfer of a right to enjoy the premises whereas under section 52 of the Indian Easements Act a license is a privilege to do something on the premises which otherwise would be unlawful.
The transaction is a lease if it grants an interest in the land; it is a license if it gives a personal privilege with no interest in the land.
[27E F] Errington vs Errington and Woods, ; , 298: Associated Hotels of India Ltd. vs R. N. Kapoor. ; ; 3815.
Addiscombe Garden Estates Ltd. and Anr, V. Crabe and Ors. , 525; referred to.
24 A service occupation is a particular kind of license whereby a servant is required to live in the premises for the better performance of his duties.
Now it is also settled law that a servant may be a licensee though he may not be in service occupation.
[27H] Nippon Menkwa Kalmshiki vs F. Portlock, A.1.R. ; and Torbett vs Faulkner, , 560; referred to.
| In January, 1956 the assessee company whose assets had been valued at Rs. 155 lacs as on December 31, 1955 decided to terminate the services of 22 of its employees with effect from 31st March, 1956 and to pay them retrenchment compensation and compensation for termination of employment.
Thereafter Davids, who held the shares of the company entered into an agreement with Tatas to sell to them all the shares for Rs. 155 lacs.
The agreement provided that compensation and gratuity payable to the Directors and employees whose services had been terminated and the annuity payable to the managing director should be deducted from the purchase consideration.
The assessee claimed deduction under section 10(2)(xv) of the Indian Income Tax Act, 1922 of a sum of Rs. 1.64 lakhs paid by way of retrenchment compensation and compensation for termination of service during the assessment year 1957 58 and a sum of Rs. 16,885 which was the amount of annuity paid to the managing director in each of the three succeeding assessment years.
The Income Tax officer disallowed the amounts on the ground that the services of the directors and employees had been terminated not as business expediency but because the purchasers of the shares made it a condition under the agreement.
On appeal the Appellate Assistant Commissioner, affirming the view of the Income Tax Officer, held that the decision to pay compensation could not be said to have been taken solely with a view to the business requirement of the company.
Dismissing the assessee 's appeal the Appellate Tribunal held that the expenses had not been incurred for the purpose of the company but purely as a result of the bargain between Davids and Tatas and assuming that the payments were beneficial to the assessees by reason of the reduction in its establishment expenses, no deduction could be allowed under section 10(2) (xv) since the payment was made to the benefit of a third party.
Relying principally upon the decision of this Court in Gordon Woodroffee Leather Manufacturing Co. vs The Commr.
of Income tax, [1962] Supp. 2 SCR 211, the High Court held that the amount involved in the case did not satisfy the test applicable to the expenditure allowable under section 10(2)(xv) of the Act and, therefore, disallowed the expenditure of Rs. 1.27 lakhs out of a sum of Rs. 1.64 lakhs on the ground that it had not been incurred for commercial expediency.
The High Court also disallowed the annuity paid to the managing director in the succeeding three assessment years.
879 Allowing the assessee 's appeals ^ HELD: 1(a) The three tests laid down by this Court in Gordon Woodroffee 's case viz., (1) that the payment should have been made as a matter of practice which affected the quantum of salary, (ii) that there was an expectation by the employee of getting a gratuity and (iii) that the sum of money was expended on the ground of commercial expediency and in order indirectly to facilitate the carrying on of the business of the assessee have to be read disjunctively.
So read the present case which satisfied the third test fell under section 10(2) (xv) of the Act.
The High Court was in error in holding that the amount in question did not satisfy any of the tests applicable to the expenditure allowable under the section.
[893H] (b) In order to claim deduction under the section an assessee has to show that the expenditure in question (1) was not an allowance of the nature described in any of the clauses (i) to (xiv) of the section, (ii) was not in the nature of a capital expenditure or personal expenses of the assessee and (iii) had been laid out or expended wholly and exclusively for the purposes of his business, profession or vocation.
[891G] (c) Even assuming that the motive behind the payment of retrenchment compensation was that the terms of the agreement of the sale of shares should be satisfied, as long as the amount had been laid out or expended wholly and exclusively for the purpose of the business of the assessee there could be no good reason for denying the benefit of this section if there was no other impediment to do so.
[891H] In the instant case the assessee company was neither dissolved nor was its business undertaking sold.
It continued to exist as a juristic entity and continued to function even after the transfer of its shares to Tatas.
The expenditure was laid out for the purpose of the assessee company 's own trade and not for the trade of Tatas who were only shareholders of the company.
As a result of the expenditure the company was benefited and it was possible for it to earn more profits as a consequence of the reduction in the wage bill.
It cannot be said that Tatas were in any way benefited financially by reason of reduction in the consideration payable by them for the shares.
[893B C] Gordon Woodroffae Leather Manufacturing Co. vs The Commissioner of Income tax, Madras, [1962] Supp.
2 SCR 211, applied.
(i) Commissioner of Inland Revenue vs Patrick Thomson, Ltd. (in Liquidation), (ii) Commissioners of Inland Revenue vs J. & R. Allan, Ltd. (In liquidation), (iii) Commissioners of Inland Revenue vs Pattigrew & Stephens, Ltd., , referred to.
Commissioner of Income tax, Gujarat vs Laxmi Cement Distributors (P) Ltd., , Commissioner of Income tax, Bombay City I vs Fairdeal Corporation (P) Ltd., ; Commissioner of Income tax, Bombay City I vs Patel Cotton Co. Pvt. Ltd., ; approved.
880 (d) Moreover it is too late in the day whatever might have been the position about two decades ago, to treat the expenditure incurred by the management in paying reasonable sums by way of gratuity and retrenchment compensation or compensation for termination of services as not business expenditure.
Such expenditure would ordinarily fall within the scope of section 10(2)(xv) of the Act.
[889C] 2.
The argument that since there was no necessity to retrench the services of all the employees, the expenditure could not be treated as one laid out wholly and exclusively for the purpose of business has no force.
The expression "wholly and exclusively" does not mean "necessarily".
Ordinarily it is for the assessee to decide whether any expenditure should be incurred in the course of his or its business.
Such expenditure may be incurred voluntarily and without any necessity and if it is incurred for promoting the business and to earn profits the assessee can claim deduction under the section even though there was no compelling necessity to incur such expenditure.
The fact that somebody other than the assessee was also benefited by the expenditure should not come in the way of an expenditure being allowed by way of deduction under the section, if it satisfies otherwise the test laid down by law.
[894D G] In the instant case the company thought that its business could be carried on with a smaller number of employees and the only way to reduce the number was to terminate the services of all employees by paying compensation and to re employ only some of them.
Thereby the company reduced its expenditure on wages payable to its employees.
It could not therefore be said that compensation was paid with an oblique motive and without regard to commercial considerations or expediency.
[895F]
| The appellant company, which carried on the business of buying bulk electrical energy and distributing it to consumers, made an application under the , to the Certifying Officer, Madras, for an amendment of two of its certified Standing Orders relating to holidays and leave.
It was claimed by the appellant that the urgent need for increased production and for increased supply of electrical energy could be met if the existing rules embodied in the two standing orders were suitably amended; the amendments pro posed sought to introduce different rules relating to holidays and leave for employees who were appointed before a specified date and those who joined service after that date.
The proposed amendments were resisted by the respondents ' union on the ground, inter alia, that they would introduce discrimination between one se of employees and another resulting in industrial unrest and disharmony.
The Certifying Officer upheld the respondents I plea and nega tived the amendments.
An appeal to the appellate authority against this decision was dismissed.
it was contended on behalf of the appellant that the proposed amendments were fair and reasonable and that the Certifying Officer and, the appellate authority had erred in law in not certifying the Standing Orders as proposed to be amended.
HELD : (i) The Certifying Officer and the appellate authority committed no error of law in refusing to certify the modified Standing Orders.
[510 E] The Act provides a self contained code and the Certifying Officer is given the power to consider questions of fairness and reasonableness as well as other questions indicated by section 4(a) and (b).
An appeal is provided against the decision of the Certifying Officer and in case a dispute arises as to the interpretation or the application of the Standing Order, a remedy is provided In section 13A.
A Tight is given both to the employer and the workman to move the appropriate authorities for modification of the existing Standing Orders.
[505 G H] (ii) It is clear from the provisions of the Act requiring industrial establishments to have their Standing Orders certified that matters specified in the Schedule to the Act should be covered by uniform Standing Orders applicable to all workmen employed in an industrial establishment.
[505 B] 499 Rai Bahadur Diwan Badri Das V. The Industrial Tribunal, Punjab;[1963] 3 S.C.R. 930; Associated Cement Staff Union vs Associated Cement Co.,& Ors. ; Guest Keen Williams Private Ltd. vs F. I. Sterling and others: ; ; referred to.
|
Civil Appeal No. 211 of 1956.
Appeal from the judgment and order dated July 19, 1955, of the Bombay High Court in Special Civil application No. 976 of 1955.
A. V. Viswanatha Sastri, section N. Andley, Rameshwar Nath and P. L. Vohra, for the appellant.
M. C. Setalvad, Attorney General for India, C. K. Daphtary, Solicitor General of India and B. Sen, for respondent No. 1.
Vithlbhai B. Patel and I. N. Shroff, for respondent No. 2.
368 1961, December 21.
The Judgment of Sinha C. J., Sarkar, Das Gupta and Mudholkar JJ., was delivered by Sarkar J. Ayyangar J., delivered a separate judgment.
SARKAR J.
The appellant is a City Municipality within the meaning of the Bombay District Municipal Act, 1901 and is governed by that Act.
It had by a resolution duly passed by it, made a rule under section 60 of the Act selecting for the purpose of an octroi tax of /4/ annas per Bengali maund, milk brought within its octroi limits for consumption, use or sale therein.
On November 29, 1954, the Government of Bombay had given its sanction to the rule under section 61 of the Act.
The appellant Municipality thereafter published the rule and the sanction as required by section 62 of the Act and the tax was accordingly imposed with effect from January 1, 1955.
On April 4, 1955, the Government of Bombay passed an order directing that the octroi tax shall not be leviable by the appellant Municipality.
This order has given rise to the present proceedings.
The appellant Municipality filed a petition in the High Court at Bombay under article 226 of the Constitution challenging the validity of the order.
This petition was dismissed by the High Court.
The appellant Municipality has now come up to this Court in appeal against the decision of the High Court.
The questions that arise in this case will be stated after a few of the sections of the Act have been referred to.
Chapter VII of the Act deals with municipal taxation.
We shall be concerned principally with sections 59, 60, 61 and 62 which are all contained in this chapter and deal with imposition of taxes by Municipalities.
It will be necessary also to consider section 46.
Section 46 gives power to a Municipality to make rules for various purposes as specified in 369 the several clauses contained in it.
Under cl.
(i) of this section a Municipality has power to make rules for the purpose of "prescribing, subject to the provisions of Chapter VII, the taxes to be levied".
Section 59 is the section on which the decision of this case will really turn and we, therefore, think it right to set out that portion of it which is relevant for our purpose.
section 59.
(1) Subject to any general or special orders the State Government may make in this behalf, any Municipality (a) after observing the preliminary procedure required by section 60 and (b) with the sanction of the State Government in the case of City Municipalities . . . and subject to such modifications or conditions as under section 61 the State Government. . . in according such sanction, deems fit, may impose, for the purposes of this Act, any of the following taxes, that is to say, . . . . . . . . (iv) an octroi on animals or goods, or both, brought within the octroi limits for consumption, use or sale therein; Section 60 lays down the procedure to be observed by a Municipality preliminary to imposing a tax.
It requires that first a resolution shall be passed at a meeting to the Municipality selecting the tax and making rules for the proposes of cl.
(i) of section 46 prescribing the tax.
Thereafter the resolution has to be published with a notice in a specified form inviting the inhabitants of the Municipal 370 area to submit within a month their objections, if any, to the tax.
After the objections have come in, they are to be considered by a committee of the Municipality and unless on the report of the committee the Municipality decides to abandon the tax, it has to submit the objections with its opinion thereon, any modifications it desires to make and the rules prescribing the tax to the State Government.
Section 61 provides that on receipt of the rules and the other things mentioned in section 60 from the Municipality, the Government may refuse to sanction the rules, or return them to the Municipality for further consideration or sanctioned them with or without modifications or subject to conditions prescribed.
Section 62 lays down that the rules as sanctioned by the Government shall be published by the Municipality and the tax shall, from the date which shall be specified in the notice publishing the rules, be imposed accordingly.
It is not in controversy that in the present case the procedure prescribed in the sections mentioned above had been complied with.
The Government 's contention is that the order made by it was competent as it was order which was authorised by section 59, subject to which only a tax could be imposed by a Municipality.
The appellant Municipality does not dispute that it can impose a tax only under section 59 but it contents that the general or special orders mentioned in the section subject to which it has the power to impose tax, are orders which were in existence before the rule prescribing the tax was framed and once a rule has been framed by it and the Government has accorded its sanction to that rule, the Government has no power to control the imposition of tax under it by any order made under section 59.
The question so raised is one of the construction of section 59.
But for such construction we have to refer also to the other sections earlier mentioned.
371 In our opinion, the Government 's contention is well founded.
The Municipality 's power to tax arises only under section 59.
Under that section, it has been given the power of impose a tax after following the procedure prescribed but subject always to the general or special orders of the Government.
The appellant Municipality can succeed in this appeal only if the word "impose" in section 59 means the acquisition of the power to tax by following the procedure laid down in sections 60 to 62.
Its appeal must otherwise fail.
It seems to us that the word "impose" in section 59 has not the meaning for which the appellant Municipality contends.
It would have been noticed that under section 59 a Municipality may impose a tax only after it has framed a rule under section 60 prescribing the tax to be levied and the Government has given its sanction to that rule under section 61.
It is this imposition which is made by section 59 "subject to any general or special orders which the State Government may make in this behalf".
Therefore, it is the imposition after the making of the rule authorising the tax, that is subject to the Government 's orders and not the making of the rule itself which authorises the tax itself.
It is plain from section 59 that the control over a Municipality 's power to tax imposed by the requirement of the Government 's sanction of the rule prescribing the tax in contained in section 61, is not the same thing as the control contemplated by the general or special orders mentioned in section 59, for both are mentioned in section 59.
If it were not so, it would have been unnecessary to provide for the general or special orders controlling the imposition of the tax in section 59.
This is the first reason why we think that the appellant Municipality 's contention is untenable.
The imposition contemplated by section 59 is clearly not the passing of the resolutions under 372 section 60 selecting the tax and making the rule prescribing the tax to be levied in terms of section 46(i), for section 59(1)(a) expressly makes the imposition something happening after section 60 has been complied with.
This seems to us to be another reason for not accepting the appellant Municipality 's contention.
The third reason is to be found in section 62.
As we have earlier stated, it provides that the tax shall be imposed from the date mentioned in the notice publishing the sanctioned rule.
The choice of this date lies with the Municipality and not with the Government.
The power to levy the tax is acquired by a Municipality when the rule prescribing the tax made by it is sanctioned by the Government.
The Municipality at its own choice thereafter fixes a date from which it will collect the tax.
Therefore, the word "impose" in section 62 does not refer to the acquisition of power to levy a tax by making the rule but to the actual levy of the tax under the power so acquired.
It is of some significance to note that in section 46(i) the words used are "make. rules. prescribing. .the taxes to be levied".
What we wish to point out is that in connection with the making of the rules the Act uses the word "levied" in section 46 (i) and in connection with an actual impost, and word "imposed" in section 62.
We, therefore, think that it would be legitimate to construe the word "impose" in section 59 in the sense in which it has clearly been used in a connected provision, that is, section 62.
Hence, in our view, "impose" in section 59 means the actual levy of the tax after authority to levy it has been acquired by rules duly made and sanctioned, and it is such imposition that is made subject to the general or special orders of the Government.
Therefore, the Government can at any time by any such order prohibit the imposition of the tax.
373 Mr. Sastri for the appellant said that the general or special orders in section 59 refer to orders that can be made under section 73, but the present order had admittedly not been made under that section.
Section 73 does not empower an order prohibiting the imposition of a tax altogether as the order in the present case does.
It only gives power to suspend the levy of the tax authorised till the objections to the tax which the Government required to be removed, had been removed.
Because section 73 gives a power to suspend the tax, it is, in our opinion, no argument that the general or special orders in section 59 must be understood as confined to such orders.
Section 73 cannot help in interpreting the words "general or special orders" in section 59.
A third objection to the validity of the order was that it was discriminatory.
It was said that no other Municipality had been prohibited from collecting a similar tax which it had power under its rules to collect.
Apart from the very interesting question raised by the learned Attorney General that the Municipality being a local authority, was a state, and was not therefore entitled to the benefit of article 14, as to which we think it unnecessary to express any opinion we are on the facts satisfied that there is no discrimination.
The Government has now, it is not disputed, prohibited all Municipalities from levying any octroi tax on milk.
Furthermore, it has not been shown to us that all Municipalities stand on the same footing with regard to milk.
The last objection was that the order had been mala fide made.
This grievance is completely without foundation.
The Government had earlier requested the appellant Municipality to drop the tax on the ground, among others, that milk was really being purchased for the Government and that the Government was not liable to be 374 taxed by a Municipality.
It may be that this ground was not justified on the facts, but as to this we do not come to any finding.
It is clear to us that even if this stand taken by the Government was not tenable, that is no reason for thinking that the order was made mala fide.
It was said that the Government had made this order to benefit respondent No. 2, a co operative union, dealing in milk.
This is a bare allegation and is not supported by facts.
In any event, since similar orders have now been made in respect of all Municipalities within the State, no question of mala fide can possibly arise.
We think that the challenge to the order dated April 4, 1955 is without any foundation.
In our view, the order was perfectly legitimate and must be upheld.
We accordingly dismiss the appeal with costs.
AYYANGAR J. I have had the advantage of perusing the judgment just delivered and I agree with order passed.
The relevant facts and the statutory provisions which bear on the points arising in the appeal have all been set out by Sarkar J. and do not require to be repeated.
There is no dispute that the levy of the duty by the municipality as and from January 1, 1955 was lawful because the requirements of sections 59 62 were satisfied when the levy was made.
No general or special order of the State Government stood in the way of the municipality making the particular levy and the sanction of the State Government under section 59 (1) (b) had been accorded to it, and the relevant rules had conformed to the procedural and other requirements of these sections.
The power of the municipality in the matter of the levy of the tax is, however, not absolute but it made subject, apart from other provisions to which I 375 shall advert, to such general and special orders as the State Government might pass by virtue of the opening words of section 59 of the Act.
The argument strenuously pressed by Mr. Visvanatha Sastri was this: The Government had no doubt, a power to prescribe and control by general or special orders the right of a municipality to impose a tax.
These general or special orders would again, no doubt, be subject to modification from time to time to suit the changing needs of particular areas, or of particular interests which would be affected by the tax levy, but the exercise of the power of modification or this power too prescribe conditions and restrictions is exhausted when a municipality does, by conforming to the orders then in force, impose a levy which has come into force under section 62.
I am unable to agree with this construction of the opening words of section 59 (1).
On its language there is nothing to warrant the doctrine that it gets exhausted by reason of a municipality imposing a tax in conformity with an order as it stood at a particular date.
The limitation suggested must therefore, be deduced as a necessary implication either from the fasciculus of sections ending with section 62 leading to the imposition of a levy, or from other provisions of the Act.
The other provision of the Act to which learned Counsel referred was section 73 which reads: "If it shall at any time appear to the Provincial Government, on complaint made or otherwise, that any tax, leviable by a Municipality, is unfair in its incidence, or that the levy thereof, or of any part thereof, is obnoxious to the interest of the general public, it may require the said Municipality, within such period as it shall fix in this behalf, to take measures for removing any objection which appears to it to exist to the said tax, 376 and if, within the period so fixed, such requirement shall not be carried into effect to the satisfaction of the Provincial Government, it may, by notification in the official Gazette, suspend the levy of such tax, or of such part thereof, until such time as the objection there to shall be removed.
The Provincial Government may at any time, by a like notification, rescind any such suspension.
" It is obvious that this section is of limited operation and confined to the subject it actually deals with.
It posts the continued exaction of the impost, but points to the removal of anomalies and hardships in the details of the levy or of its administration.
The existence of this provision would manifestly not suffice to negative the right of the Government to forbid the continued imposition of the tax altogether such as has been done in the present case.
Section 73 cannot therefore be construed as negativing by implication the right claimed by the state Government under section 59, for it refers to and comprehends a totally different subject matter.
Coming now to the construction of sections 59 62 as themselves supporting theory of the exhaustion of the power, the submission was this.
"The general or special orders" could only restrict the power of a municipality "to impose a tax".
On the scheme of provisions contained in sections 59 62 a tax was "imposed" only once, though when imposed and in operation the levy and collection of such a tax might be periodic and throughout the life of the imposition.
Hence there was no scope for the exercise of the State Government to make "any special order" in relation to a tax after it has once been "imposed" because the power to prescribe conditions or restrictions by general or special order is with reference to the "imposition" of the tax.
I feel unable to accept this construction.
The whole foundation 377 of the argument is based on a denial of the premise that a power to impose tax is a continuing power.
In my judgment the "imposition" of a tax is a continuing power in the sense that so long as it is in force, it points to the existence of and derives vitality from the power of the authority to impose it.
When the municipality levies the tax in the sense of quantifying it with reference to an ascertained person and thereby creating a statutory debt payable by the tax payer, it is in reality exercising the power to "impose" the tax, for it is the continued existence of the imposition that furnishes the legal basis for the levy when made.
When the power to impose is withdrawn the imposition falls to the ground.
That is the ratio of saving provisions which enable taxes to be levied and collected not withstanding the deprivation of the right to impose taxes for the future.
In this view it is clear that there is no exhaustion of the State power under the opening words of section 59 (1).
In arriving at this construction I have also taken into consideration the scheme of the Act and the wide powers conferred on the State Government in the matter of control and supervision over the municipalities powers designed to ensure, that, subject of course to express statutory provision, municipal administration is coordinated to secure the vital interest of the general public.
In this connection reference may be made to section 74 of the Act which reads: "Whenever it appears to the Provincial Government that the balance of the municipal fund of any Municipality is insufficient for meeting the expenditure incurred under section 175 or for the performance of any duties in respect of which they shall have been declared under section 178 to have committed default, the Provincial Government may be notification require the Municipality to impose 378 within the Municipal district, any such tax specified in the notification as may be imposed under section 59 if no such tax is at the time imposed therein, or to enhance any existing tax in such manner or to such extent as the Provincial Government considers fit, and the Municipality shall forthwith proceed to impose or enhance in accordance with the requisition such tax under the provisions of this Chapter as if a resolution of the Municipality had been passed for the purpose under section 60: Provided that: (a) the Provincial Government shall take into consideration any objection which the Municipality or any inhabitant of the Municipal district may make against the imposition or enhancement of such tax, (b) it shall not be lawful for the Municipality to abandon or modify or to abolish such tax when imposed, and (c) the Provision Government may at any time cancel or modify any requisition made by it under this section, and the levy of tax or the enhancement, except as to arrears theretofore accrued due.
shall thereupon cease or be modified accordingly.
" Government are thus empowered both to direct the municipality to impose tax when Government consider the same necessary in the interest of municipal finance and administration as also to direct the municipality to desist from continuing the imposition when the necessity ceases.
In cases where a tax is imposed by the municipality by virtue of the provisions in sections 59 62, the municipality 379 itself could revoke the tax if the rules so provide, for section 47 of the Act enacts: (1) Subject to the requirements of clause (a) of the proviso to section 46 every Municipality may, except as otherwise provided in clause (b) of the proviso to section 74, at any time for any sufficient reason, suspend, reduce or abolish any existing tax by suspending, altering or rescinding any rule describing such tax under the provisions of clause (1) and of the first clause of the proviso to section 46.
(2) The provisions of Chapter VII relating to the imposition of taxes shall, so far as may be, apply to the suspension, reduction or abolition of any tax and to the suspension, alteration or rescission of any rule prescribing a tax.
" But for the opening words of section 59(1) there is no specific provision in the Act to enable Government to intervene in cases where the continued levy of a tax is contrary to public interest.
I do not consider that any such gap was intended and in my judgement the opening words in section 59(1) are both apt and sufficient to clothe Government with power to direct by 'special order ' a municipality to desist from 'imposing ' a tax when satisfied that public interest so requires.
The points raised regarding discrimination and mala fides are without substance and for the reasons stated by Sarkar J. I would reject them.
The appeal therefore fails and has to be dismissed with costs.
The Writ Petition which raises the same points as the appeal will also stand dismissed but without any order as to costs.
Appeal dismissed.
| After following the procedure prescribed by the Bombay District Municipal Act, 1901, and after obtaining the requisite sanction of the Government the appellant imposed an octroi tax on milk brought within its limits for consumption, use or sale therein.
Shortly afterwards the Government passed an 367 order directing that the octroi tax shall not be leviable by the appellant.
The appellant contented that the Government had no power to control the imposition of the tax once it had been properly imposed.
^ Held, that the Government was competent under section 59 of the Act to pass the order.
Section 59 provided that subject to any general or special orders which the State Government may make, a Municipality may "impose" the tax after following the procedure laid down and after obtaining the sanction of the Government.
The word "impose" in section 59 meant the actual levy of the tax after authority to levy it had been acquired by rules duly made and sanctioned and this imposition was subject to the general or special orders of the Government.
The general and special orders under section 59 could not be confined to orders under section 73 which gave the Government power to suspend the tax in certain cases.
Held, further, that the order of the Government was not discriminatory.
Subsequently the Government had prohibited all municipalities from levying octroi tax on milk.
For the same reason no question of mala fides could arise.
Per Ayyangar, J. Imposition of tax was a continuing power deriving vitality from the power of the authority to impose it.
The power of the Government to issue special or general order under section 59 was therefore not exhausted after "imposition" of the tax.
There were provisions in sections 47, 73 and 74 for other contingencies but except for the opening words of section 59 there was no provision to enable Government to intervene in cases where the continued levy was against public interest.
The opening words of section 59 clothed the Government with power to direct a municipality to desist from imposing a tax.
| The Calcutta City Civil Court Act empowered the State Government to establish a civil court to be called the City Civil Court and under section 5(2) thereof the local limits and the jurisdiction of the City Civil Court was to be the city of Calcutta.
Section 5(2) as it stands now fixed the jurisdiction of the City Civil Court at Rupees one lakh and excluded the High Court 's jurisdiction up to that limit.
The appellant moved the Calcutta High Court for a declaration that the Act was ultra vires the jurisdiction of the State Legislature and contended that Parliament alone had the legislative competence to make law affecting the jurisdiction of the High Court.
The learned Single Judge and also the Division Bench negatived the appellant 's plea and held that the Act was intra vires the Constitution.
Hence the appeal by certificate.
Dismissing the appeal, the Court, ^ HELD: 1.
Entries 1 and 2 of List II of the Government of India Act, 1935 (now Entry llA of List III of the Seventh Schedule of the Constitution) authorised law making on subject of administration of justice, constitution and organisation of courts and jurisdiction and powers thereof excepting in regard to the Supreme Court.
The Calcutta City Civil Court Act received the Presidential assent and was therefore, competent to bring about a change in the prevailing position obtaining 548 under the Letters Patent of the Calcutta High Court.[551E G] 2.
In Narotham Das 's case, the Supreme Court took the view namely, "administration of justice" authorised making of law conferring on, or talking away from, courts, jurisdiction to entertain cases.
Inasmuch as the provisions of the Bombay City Civil Court Act, 1948 considered in Narotham Das 's case and the provisions of the Calcutta Act, are in pari materia, the High Court correctly held that the Act was intra vires the Constitution.
The decision of the Constitution Bench in Narotham Das 's case is clear and binding precedent under Article 141 of the Constitution, against the appellant 's stand.
[551E F;H] State of Bombay vs Narothamdas Jethabhai & Anr., ; , followed.
Amarendra Nath Roy Chowdhury vs Bikash Chandra Ghose & Anr., , approved.
| By notifications issued under the Bombay District Municipal Act 1901, the State of Bombay set up.
the respondent Municipality comprising portions of certain villages.
The Municipality framed House Tax Rules under section 46 of the Act and served notice to the appellant company that it proposed to assess its buildings at a certain amount.
On, the appellants ' objections, it was asked to furnish the cost.
of constructions, which it failed to furnish.
The appellant was served a house tax bill.
Thereupon the.
appellant unsuccessfully filed petitions in the High Court under articles 226 and 227 of the Constitution for quashing the notifications, assessment.
and bills.
In appeal to this Court, the appellant, inter alia, contended: (i) that ' the notifications were invalid as sections 4 and 7 of the Act do not permit the Government to constitute a local area by including in it not villages but only portions thereof; (ii) that the House Tax Rules were not in conformity with sections 59 to 63 of the Act.
as they failed to prescribe the basis of valuation of each class of property on which it imposed the house tax; what these Rules provided was merely to impose the house tax at the rate of 15% or Rs. 12/ whichever was more on the valuation arrived at after deducting 10% from the annual letting value without specifying the method by which such annual letting value was to be arrived at: and (iii) that the bill served on the appellant was not in conformity with the Rules, as (a) the buildings could be assessed on their annual letting value and not at a flat rate on the carpet area.
and (b) in assessing the rate it could not include the rate on open lands.
Held: (i) The notifications were not in any way contrary to or ultra vires sections 4 or 7 of the Act.
There is nothing either in sections 4 or 7 to limit the power of the Government in constituting a municipal district to include therein the whole of the village or suburb.
The Act, on the other hand.
permits the Government to include "land adjoining thereto" which shows that a part of land adjoining an existing village or a suburb can, also be added if it is thought expedient so to do.
Likewise, while altering the limits of an existing municipal district it can exclude from or include in it part of the land where it becomes necessary or expedient so to do.
[216G, H] (ii) The word "rate" in section 59(1) means a tax for local purposes imposed by local authorities, the basis of which is the annual value of the lands or buildings arrived at in one of the three ways, viz. (1) the actual rent fetched by such land or building where it is actually let; (2) where it is not let rent based on hypothetical tenancy particularly in the case of buildings and (3) where either of these two modes is not available, by valuation based on capital value from which annual value has to be found 212 by applying a suitable percentage which may not be the same for lands and buildings.
It is legitimate to.
infer that the legislature intended this meaning of the word "rate" in section 59(1) by using the word "rate" as distinct from other imposts specified in that very sub section and designated as toll, cess, tax etc.
[218 C E] In case of buildings or lands or both the municipality cloud impose a "rate" and not a "tax" The rate is as understood in such statutes.
viz., on the basis not of capital but on the annual letting value ascertained by any of the said recognised methods.
Section 60 leaves it to the option of the municipality for arriving at the annual value for assessment of the rate to choose any one of the aforesaid recognised methods, the only restriction being that it must specify in the rules which basis of valuation.
capital or annual letting value or any other basis, it proposes to adopt.[218H; 219B] The Municipality had complied with the procedure required by the Act before a tax was imposed by selecting the tax, by laying down the class of property which it desired to make liable, the amount of the rate at which such property would be liable and lastly the basis of valuation for purposes of the rate on buildings and houses.
[220F G] (iii) (a) Schedule 1 to the Rules expressly provides that the house tax is to be assessed on the basis of the annual letting value.
The annual letting value can be arrived at by any one of the recognised methods.
Neither the Rules nor Sch.
1 constrict the Municipality to adopt any one particular method of arriving at the annual letting value.
It may well be that a flat rate on the carpet area may correspond to the annual letting value of a building in which case it would be the annual letting value as provided by Sch. 1 which would be the basis of assessment.
if it is not, the owner or occupier of the building can legitimately challenge the assessment on the ground that such assessment on the basis of a 11at rate on the carpet area does not reflect the annual value so calculated.
[221E G] Patel Goverdhandas Hargovindas vs Municipal Commissioner, Ahmedabad, and Lokmanya Mills vs Barsi Borough Municipality.v, ; referred to.
(b) The open lands could not be included while rating the factory buildings of the appellant companies as such inclusion was ultra vires the Rules and therefore invalid.
Rule 3(7) expressly excludes the definition of a building or a house in sec.
The word "building" or "house" must therefore bear the meaning given to it by the Rule and not the meaning given to it by the Act.
By virtue of r. 1 (ii) these rules extend to buildings or houses or shops or huts (jhupras) only and a building or a house under r. 3(7) means a building, house, shop, hut (jhupras) etc.
with a roof thereon constructed for human habitation or otherwise.
Open lands obviously are not only not included in the term "building" or "house" but the Rules do not extend to such open lands.
[222H 223B]
| The respondent Board realised terminal tax on goods experted by the appellants.
In suits filed by the appellants for refund of the amounts which they claimed were collected without authority of law, the respondent Board pleaded that the levy was in accordance with law and that the suits where barred by limitation.
The trial court decreed the suits and on appeal the District Judge affirmed the trial Court 's decrees.
In second appeal the High Court held that the levy was illegal.
The High Court, however, allowed the appeals in respect of those amounts which were found to be within limitation under section 179(2) of the Act and dismissed the others.
On the question whether the levy could be said to be a thing done or purported to be done under the Act.
Allowing the appeal, ^ HELD: The suits did not fall within the purview of section 179 of the Act and were not barred by limitation.
[172 D] 1.
(a) It is well established that if levy of a tax is prohibited by an Act and is not in pursuance of it, it could not be said to be purported to be done in pursuance of the execution or intended execution of the Act.
[172 B] Poona City Municipal Corporation vs Dattatraya Nagesh Deodhar, ; followed.
(b) The terminal tax could not be imposed under any of The provisions of the Act.
The High Court was right in holding that the amounts ` paid by the appellants by way of terminal tax were recoverable by the suits.
[173 F G 174 Al 2.
The Bikaner State Municipal Act, 1923 (which was the predecessor of the present Act) authorised the levy of terminal tax and the Board accordingly levied the tax until January 26, 1950.
With the coming into force 12 SCI/78 170 of the Constitution, by virtue of article 277 it was permissible for the Board to continue to levy the terminal tax until provision to the contrary was made by Parliament by law.
But with effect from December 22, 1951 the Bikaner Act was repealed and the present Act was brought into force.
the repeal, however, did not affect the validity of those taxes which had already been imposed and which could be "deemed` ' to have been imposed under the Act.
But the provisions of the Act the clear that the terminal tax in question could not be imposed thereunder.
The levy could not, therefore, be saved by cl.
(b) of the proviso to section 2.
on the other hand it is clear that the State Legislature had decided to discontinue the levy by excluding it from the purview of the saving clauses.
The further levy of the tax, therefore, became illegal and it was not permissible to continue it any longer under article 277 which merely gave the authority concerned the option to continue to levy if it so desired.
[173A, F G]
| The respondent Municipality passed a resolution under s.67(1) of the C.P. & Berar Municipal Act, 1922, for the purpose of levying an octroi duty which was published in the State Gazette along with the rules for assessment.
Objections were invited to the said proposed tax, and only one objection was filed within time which was also rejected.
The Government gave its sanction to the imposition of the tax and draft Rules by two Notifications.
The appellants filed a petition challenging the legality of the imposition of the tax inter alia on the ground that the notifications were ultra vires.
They contended that all steps necessary for the imposition of tax had not been taken and that objections raised within time by the respondent No. 1 were not considered on their merits and were rejected merely on the ground that there was only one objector; as this was one of the essential steps for the validity: of the imposition of tax it could not be said that section 67 of the Act had been complied with, therefore the imposition was invalid.
Held, that where the Government Notification clearly was one which directed imposition of Octroi Tax it fell within subs.
( 7) of section 67 of the Act and having been once notified in the Gazette sub section
(8) of section 67 of the Act came into operation and the issue of the notification was conclusive evidence of the Tax having been imposed in accordance with the provisions of the Act, and it could not be challenged on the ground that all necessary steps had Rot been taken.
| These two appeals Civil Appeal No. 3446 of 1987 and Civil Appeal No. 3447 of 1987 were filed in this Court against the judgment of the High Court in the Writ Petition No. 6789 of 1982.
Ratan Prakash Mangal and Kuldip Singh, respondents Nos. 1 and 2 in the Civil Appeal No. 3446 of 1987 and the appellants in Civil Appeal No. 3447 of 1987, had filed the said writ petition challenging a notification dated 20th May, 1982, issued under section 4(1) read with section 17(4) of the Land Acquisition Act, 1894 (the Act) and also the consequential notification dated 21st May, 1982, issued under section 6 of the Act with regard to a plot No. 289.
The notification under section 4(1) of the Act was quashed in part in so far as it invoked Section 17(4) of the Act, and the notification under section 6 was quashed as a whole with regard to the said plotNo.
The Civil Appeal No. 3446 of 1987 was preferred by Krishi Utpadan Mandi Samiti, Muzaffar Nagar for which the said plot had been acquired, for setting aside the judgment of the High Court.
Civil Appeal No. 3447 of 1987 was preferred by Ratan Prakash Mangal and Kuldip Singh afore mentioned hereinafter referred to as respondents Nos. 1 & 2 asserting that the notification under section 4(1) should have been quashed by the High Court in its entirety and not only in so far it invoked section 17(4) of the Act.
Initially, a Notification dated 20th March, 1975 was issued under section 4(1) of the Act for acquiring land, including the plot No. 289, for construction of a market yard for the appellant Krishi Utpadan Mandi Samiti.
Later, this Notification was superseded by another Notification dated 30th August, 1975 issued under section 4(1) with regard to land which did not include the said plot.
Subsequently, another Notification dated 26th October, 1978, was issued under section 4(1) read with Section 17(4) of the Act with regard to land, including the plot abovementioned.
The Notification dated 26th October, 1978 was followed by 183 a Notification dated 27th October, under section 6.
Prior to the issue of these Notifications, respondents Nos. 1 and 2 had purchased the said plot No. 289.
The said respondents Nos. 1 and 2 had challenged the Notifications dated 26th October, 1978 and 27th October, 1978 by a writ petition in the High Court.
The High Court had quashed the two Notifications in so far as Plot No. 289 was concerned.
This Judgment of the High Court had been challenged by Krishi Utpadan Mandi Samiti before this Court in Civil Appeal No. 2970 of 1979.
This Court had held that even though the quashing of the Notification under Section 6 had been justified, the High Court had not been right in quashing the Notification under section 4(1) in its entirety, and had set aside the Judgment of the High Court in so far as it had quashed the Notification under section 4(1) in its entirety, while maintaining the rest of the Judgment with a direction regarding inquiry under Section 5A into the objections of the respondents Nos. 1 and 2 to the proposed acquisition etc.
In pursuance of the said direction, inquiry under section 5A had been made and the Land Acquisition Officer had submitted a report on 20th January, 1981, after about 15 months of the direction above said of this Court, to the effect that the Plot No. 289 might be exempted from acquisition.
The Government did not agree with the said report and issued the Notifications impugned in present appeals.
Allowing Civil Appeal No. 3446 of 1987, and dismissing Civil Appeal No. 3447 of 1987, the Court, ^ HELD: There was no doubt with regard to the legal position that the Report dated 20th January, 1981 of the Land Acquisition Officer was not binding on the State Government and it was still open to it to continue the proceedings for the acquisition of the Plot No. 289 notwithstanding the said report.
The Government had its reason why in place of issuing a Notification under section 6(1) of the Act in continuation of the Notification dated 26th October, 1978 under section 4(1), fresh notifications under section 4 and 6 had to be issued as also the reason for the delay in issuing the fresh Notifications, as was apparent from the record.
As regards the submission that section 17(4) of the Act had been erroneously invoked in fresh Notification under section 4(1) dated 20th May, 1982 also and that inquiry under Section 5A had again to be made before issuing this Notification, it was enough to point out that once an inquiry under the said section had already been made and the parties had been given full opportunity to substantiate their case in the enquiry and the State Government had not been inclined to agree with the 184 report of the Land Acquisition Officer submitted in pursuance of that inquiry, it would have been a futile exercise to repeat the whole performance again.
After the issue of the earlier Notification dated 26th October, 1978, a period of nearly 3 1/2 years had expired when the fresh Notification dated 20th May, 1982 above said was issued and apparently the necessity to acquire the plot No. 289 during this period became more acute due to this delay.
Further, as stated in the said Notification itself, the urgency had become more imminent on account of the direction issued by this Court on 2nd March, 1982 in Writ Petition No. 1318 of 1982 filed by the traders in gur, khandseri and foodgrains, Muzaffar Nagar, challenging the Notification under Section 7(2)(b) of the U.P. Act No. 25 of 1964.
Consequently, it was diffcult to hold that the opinion of the State Government that it was a fit case to invoke section 17(4) of the Act was invalid on the ground that there was no basis or material in support of the opinion.
On the facts of the case, it was not possible to hold that the Notification dated 20th May, 1982 had been issued by the State Government in colourable exercise of its power.
[194A F] The Notification dated 20th May, 1982 and 21st May, 1982 had not been challenged by respondents Nos. 1 and 2 on the basis of mala fides of any particular officer of the State Government.
What was urged was that it was a case of legal mala fides inasmuch as in issuing the said fresh Notification dated 20th May, 1982, an attempt had been made by the State Government to circumvent the direction of this Court issued in the Civil Appeal No. 2970 of 1979 to make inquiry under Section 5A of the Act and to proceed thereafter in accordance with law, the State Government did make an inquiry under Section 5A of the Act in pursuance of the direction of this Court after giving full opportunity to the concerned parties to substantiate their case.
It was difficult to agree with the submission of respondents 1 and 2 that the government attempted to circumvent the direction of this Court.
A case of legal mala fide was not made out.
[194G H; 195B] The Government all through was of the opinion that Plot No. 289 did not deserve to be released from acquisition.
Also, this plea lost significance and became almost of academic value inasmuch as the State Government had not issued a notification under section 6(1) of the Act in continuation of the Notification dated 26th October, 1978 under Section 4(1).
After the issue of the fresh Notification what was really to be seen was whether there was justification for invoking section 17(4) of Act or not.
There was such a justification.
There had been a material change in the circumstances after the report of the Land Acquisition 185 Officer dated 20th January, 1981, to justify Section 17(4) of the Act being invoked and to dispense with a further inquiry under section 5A of the Act.
[196D E; 198C] The submission of the respondents 1 and 2 about the lack of application of mind before issuing the Notification dated 20th May, 1982 with regard to plot No. 289 had no substance, as indicated by the original record produced by counsel for the State Government.
The effect of issuing a fresh Notification under Section 4(1) and the delay in issuing it had benefited the respondents 1 and 2 inasmuch as now they would be entitled to compensation not on the basis of market value of plot No. 289 as on 26.10.78 when the earlier Notification under Section 4(1) was issued but as on 20th May, 1982 when the fresh Notification under the said section was issued.
[200G H; 201A] Civil Appeal No. 3446 of 1987 was allowed and the judgment of the High Court in the Writ Petition No. 6789 of 1982 was set aside, and as a consequence, Civil Appeal No. 3447 of 1987 was dismissed.
[201B] State of Punjab vs Gurdial Singh & Ors., ; ; The Collector (District Magistrate) Allahabad and Anr.
vs Raja Ram Jaiswal, etc.
; , ; P.L. Lakhanpal vs Union of India & Ors., ; Siemens Engineering & Manufacturing Co. of India Limited vs Union of India & Anr., ; Narayan Govind Gavate vs State of Maharashtra, ; and State of U.P. vs Pista Devi, ; , referred to.
| The appellants, a Hindu undivided family, carrying on business in the former State of Mysore, were assessed under the Mysore Income tax Act for the year of assessment 1949 50 corresponding to the year of account July 1, 1948, to June 30, 1949.
The Indian Income tax Act came into force in that area in April 1, 1950, and on December 26, 1950, notice under section 22(2) of that Act was served upon the appellants to submit their return for the assessment year 1950 51.
On September 8, 1952, the appellants submitted their return stating that they had no assessable income for that year.
The Income Tax Officer passed on that return an order, "no proceeding", and closed the assessment.
When the appellants submitted their return for the next assessment year, their books of account disclosed an opening cash credit balance of Rs. 1,87,000 and odd on July 1. 1949.
They failed to produce the books of account of the previous years, and the Income tax Officer held that Rs. 1,37,000 out of the said opening balance represented income from an undisclosed source.
The appellants submitted a fresh return for the assessment year 1950 51 purporting to do so under section 22(3) of the Indian Incometax Act.
Pursuant to the direction of the Appellate Assistant Commissioner, the Income Tax Officer on October 15, 1957, served on the appellants a notice under section 34 of the Act and thereupon the appellants moved the High Court under article 226 for an order quashing the said notice and the proceeding as without jurisdiction.
The High Court dismissed the petition.
Held, that it was not correct to say that the issue of the notice for reassessment was without jurisdiction as the assessment was yet pending.
Under section 23(1) of the Indian Income tax Act, it is open to the Income tax Officer, if he is satisfied as to correctness of the return filed by the assessee, to assess the income and determine the sum payable on the basis of the return without requiring the assessee either to be present or to Produce evidence.
The order 'no proceeding recorded on the.
return must, therefore, mean that the Income Tax Officer bad accepted the previous return and assessed the income as nil.
A revised return under section 22(3) filed by the assessee may be 912 entertained only before the order of assessment and not thereafter.
Lodging of such a return after the assessment is no bar to reassessment under section 34(1) of the Act.
It could not be said, having regard to the provisions of section 13(1) of the Finance Act (XXV of 1950) and cl.
5(1) of Part.
B States (Taxation Concessions) Order 1950, issued by the Central Government under section 60A of the Indian Income tax Act, that for the assessment year 1950 51 the appellants were assessable under the Mysore Income tax Act and not under the Indian Income tax Act.
| The Municipal Board Sitapur took various steps to levy water tax as authorised by section 126(1)(x) of the U.P. Municipalities Act, 1916, and the special resolution imposing the tax with effect from October 1, 1957 was passed on April 23, 1957.
The High Court held the levy to be, invalid.
In appeal filed by the Municipal Board this Court had to consider the effect of (i) the omission to publish the preliminary proposal separately in the manner prescribed by section 131(3) read with section 94, (ii) the nonpublication of the modified proposal in accordance with section 132(2) and (iii) the non publication of the special resolution directing the imposition of the tax in accordance with section 94.
HELD: The High Court was in error in quashing the imposition of the water tax.
(i) Procedural defects in the imposition of the tax are cured by section 135(3).
Such defects cannot be regarded as fundamental or as invalidating the imposition, if no substantial prejudice is caused thereby to the inhabitants of the municipality.
The issue of the notification under section 135(2) is conclusive proof that all necessary steps for the imposition of the tax have been taken in accordance with the. provisions of the Act.
[389E F] Municipal Board vs Raghuvendra, ; , Buland Sugar V. Municipal Board, ; and Berar Swadeshi Vanaspathi vs Municipal Committee, Shegaon, , applied.
(ii) In the present case there was substantial compliance with section 131(3).
The proposal was not separately published in the prescribed form but the omission to do so was a mere irregularity.
The object of the publication under section 131(3) is to inform the inhabitants of the proposal so that they can file their objections to it.
That object was fully achieved by the publication in the local newspaper.
[390 B D] (iii) The inhabitants submitted all objections which they could possibly raise both with regard to the rate of tax and the exemption limit.
Noprejudice was caused by not inviting fresh objections to reduction of the rate of tax or the exemption limit.
The non publication of the modified proposal was a mere irregularity and the defect was cured by section 135(3).
[390 E] (iv) Section 134(2) does not provide for the publication of the special resolution passed under it.
Assuming that it had to be published under the general provisions of section 94, the non publication was a mere irregularity cured by section 135(3).
[391 C]
|
Civil Appeals Nos.
140 to 142 of 1952.
Appeals from the judgment and order dated March 24, 1953, of the former Nagpur High Court in Misc.
Petitions Nos.
1795 1796 of 1951 and 1 of 1952.
WITH Petitions Nos. 24, 25 and 93 of 1952.
Petition under article 32 of the Constitution of India for enforcement of Fundamental Rights.
G.S. Pathak, S.N. Andley, J.B. Dadachanji and Rameshwar Nath, for the Appellants/petitioners.
H.N. Sanyal, Additional Solicitor General of India, N.S. Bindra, R.H. Dhebar and T.M. Sen, for the respondents.
C.R. Pattabhi Raman and R. Ganapathy Iyer, for the interveners (in C.A. No. 141 of 1954).
1961, December 11.
The judgment of S.J. Imam, K.C. Das Gupta, Raghubar Dayal and N. Rajagopala Ayyangar, JJ., was delivered by Rajagopala Ayyangar, J., J.L. Kapur, J., delivered a separate judgment.
AYYANGAR, J. The appellants in Civil Appeal 140 of 1954 are tobacco merchants and manufacturers of biris.
They own private warehouses licensed under r. 140 of the Excise Rules, 1944 at Gondia and other places in Madhya Pradesh.
On the 28th of February, 1951 a Bill was introduced in the House of the People, being Bill 13 of 1951 containing the financial proposals of the Government of India for the fiscal year beginning the 1st of April, 1951.
Clause 7 of the Bill made provision for the amendment of the 4 Central Excise Act (Act 1 of 1944) by way of alteration of duties on "tobacco manufactured and unmanufactured." In particular, it provided that "unmanufactured tobacco other than flue cured and ordinarily used otherwise than for the manufacture of cigarettes" (which included tobacco intended for manufacture into biris) should be charged to an excise duty of 8 annas per lb.
and it also imposed a new duty of excise on biris varying from 6 to 9 annas per lb.
depending upon the weight of tobacco contained in the biris.
Section 3 of the (Act XVI of 1931) enacted "Where a bill introduced into the Indian Parliament provided for the imposition or increase of a duty of excise the Central Government might cause to be inserted in the bill a declaration that it was expedient in the public interest that any provision of the bill relating to such imposition or increase shall have immediate effect under this Act".
A declaration under this section was made in respect of the provision for imposing the duties on tobacco under cl. 7 of the bill already adverted to.
The effect of such a declaration was stated in section 4 of Act XVI of 1931 in the following terms: "4.
(1) A declared provision shall have the force of law immediately on the expiry of the day on which the Bill containing it is introduced.
(2) A declared provision shall cease to have the force of law under the provisions of this Act (a) When it comes into operation as an enactment with or without amendment, or (b) when the Central Government in pursuance of a motion passed by parlia 5 ment, directs, by notification in the Official Gazette, that it shall cease to have the force of law, or (c) if it has not already ceased to have the force of law under clause (a) or clause (b), then on the expiry of the sixtieth day after the day on which the Bill containing it was introduced.
" In compliance with this law the appellants paid the excise duty at the rates imposed under cl. 7 of the bill and obtained clearance certificates in regard to the tobacco moved out from their warehouses from and after March 1, 1951.
Bill 13 of 1951 was passed into law as the Indian Finance Act 1951 (Act XXIII of 1951 on April 28, 1951 but as passed, changes were effected in the duty proposed in the bill, as a result of certain alterations suggested by the Select Committee.
Under section 7 (1) of the Finance Act 1951 while the excise duty on biris was abandoned, the duty on unmanufactured tobacco (other than flue cured and used in the manufacture of cigarettes) was increased to 14 annas per lb.
from the rate of 8 annas per lb.
in the bill.
Consequential provisions were enacted in section 7 (2) of the Finance Act which read: "The amendments made in the Central Excise and Salt Act 1944, sub cl. 1 shall be deemed to have effect on and from the 1st March, 1951 and accordingly: (a) refund shall be made of all duties collected which would not have been collected, if the amendment had come into force on that day, and (b) recoveries shall be made of all duties which have not been collected but which would have been collected if the amendment had so come into force." 6 In pursuance of section 7 (2) a demand was made upon the appellants on June 22, 1951 for the payment of the duty payable by them, after giving credit for the refund of the duty paid on biris which had been deleted by the Act.
The appellants contested the legality of this demand by a petition under article 226 which they filed in the High Court at Nagpur urging that the retrospective operation given to section 7(1) by sub s.(2) thereof was illegal, ultra vires and unconstitutional, and besides that the provision in r. 10 of the Excise Rules which contained the machinery for enforcing the demand was not adequate to meet the situation arising out of the change in the law from the provisions of the bill to those of the Act.
The learned Judges of the High Court repelled all the contentions disputing the legislative competence and the constitutionality of the legislation contained in section 7(2) of the Finance Act of 1951, but they upheld the objection to the adequacy of the procedure for recovery based on the limited scope of r. 10 of the Excise Rules.
Thereafter the Central Government, by a notification dated December 8 1951, amended the Central Excise Rules, 1944 by the addition of a new r. 104 providing machinery specially designed f r the enforcement of a demand like the one arising in the circumstances of the present case.
On December 12, 1951 a further and a fresh demand was made for the payment of the duty in terms of section 7(2)(b) of the Finance Act quoted earlier, and the appellants thereupon once again moved the High Court of Nagpur under article 226 challenging the validity of the demand on the very same grounds as before.
This petition was heard by a Full Bench of the Court and every contention raised by the appellants including that based on the adequacy of the new r. 10A to cover the present case was rejected.
The learned Judges granted a certificate under article 132 of the Constitution which was enabled the appellants to file this appeal.
Before proceeding further it is only necessary to state that there is no material difference between the facts of the 7 cases covered by Civil Appeals 141, 142 as well as the points raised in the Writ Petitions and that this judgment will cover and dispose of the other appeals and the petitions.
We might also, at this stage mention that other parties who were similarly situated as the appellants in Civil Appeals 140 to 142 of 1954 and who had filed petitions under article 226 of the Constitution in the High Court of Madras which arc pending there, raising the same points as the appellant 's before us, have intervened in these appeals and they have also been heard.
Learned Counsel appearing for the interveners adopted the arguments urged in support of the appeal.
Mr. Pathak, learned Counsel who appeared for the appellants urged three point in support of the appeals(1) Section 7 (2) of the Finance Act, 1951 in so far as it imposed an excise duty retrospectively before the date of its enactment (April 28, 1951) was beyond the legislative competence of Parliament.
The contention on this head was briefly this: The impugned tax was imposed by Parliament in purported exercise of the power to levy "a duty of excise on tobacco" within Legislative Entry 84 of Union list which reads: "Duties of excise on tobacco and other goods manufactured or produced in India except An "excise" was basically an indirect tax, i.e., a tax or duty not intended by the taxing authority to be borne by the person on whom it is imposed and from whom it is collected but is intended to be passed on to those who purchased the goods on which the duty was collected; but when such a tax was imposed with retrospective effect it could not be passed on, so such a levy deprived the tax of its essential characteristic of being indirect.
It therefore ceased to be a "duty of excise" and 8 became a personal tax of a category quite distinct from "excise" and so was beyond the legislative power of Parliament under that Entry.
(2) That the impugned levy was unconstitutional in that it contravened the fundamental right guaranteed to the citizens of India to hold property under article 19(1)(f), the point urged being that a retrospective levy of an "excise duty" deprived the tax payer of the right of passing it on and recovering it from his buyer, that this constituted a restraint on "the right to hold property" (the amount of the tax levy) conferred by article 19(1)(f) and was not saved by cl. 5 of that Article as being a reasonable restraint and should, therefore, be struck down under article 13(2).
(3) That the terms of r. 10A of the Excise Rules 1944 were insufficient to cover the cases of the appellants and that in consequence the demand made on them and the attempt to recover the sums by resort to the coercive process provided for by section 11 of the central Excise Act was illegal and without statutory authority.
We shall now proceed to consider these points in that order.
(1) Want of legislative competence: To appreciate the submission of learned Counsel it is necessary to set out the steps in the reasoning by which he sought, to establish that a "duty of excise" when imposed with retrospective effect ceased to be a "duty of excise" as used in Entry 84 of the Union List.
The submission of learned Counsel was this: The term "duty of excise" on goods was universally recognized as a tax on home produced goods and as a typical instance of an indirect tax.
It was a tax on the activity of production or manufacture of goods within the country and that it was levied on or collected from tho producer or manufacturer or from those who held such goods.
It was, further, not a personal tax but its essential and characteristic nature, which distinguished it from other types of taxes was that it was levied on goods.
It had, therefore, in order that it might 9 truly be "duty of excise", to satisfy two tests: (a) It had to be an indirect tax, i.e. levied in such a manner that the person from whom the tax was collected was in a, position to pass it on to those who acquired the goods from him or at least the taxing authority expected him to pass it on, and laid no impediment on his ability to do it.
(b) Being a tax on goods, it was levied on the producer or manufacturer or person in possession of the goods at the time when the person taxed was the owner or had possession and control over the goods.
Where neither of these essential elements or attributes was present, and in the present, case, according to learned Counsel neither condition was satisfied, the tax levy would not fall under the category of "duty of excise.
" The same argument was Presented in a slightly different from by saying that though Parliament, generally speaking, had the power to legislate in respect of everyone of the subjects included in the relevant legislative entries whether prospectively, or retrospectively including legislation with regard to taxation, still if the retrospective levy of a taxes, altered its essential nature and identity, then the power to legislate retrospectively would be open to Parliament only if the tax in its altered from i.e., a tax direct and personal would be open to Parliament to impose.
In the case of a "duty of excise" as the tax in the present case was, if imposed retrospectively, deprived it of its essential characteristic of being in indirect tax and a tax on goods, and so the power of Parliament to enact such retrospective legislation would depend upon whether Parliament could impose a tax on a person merely because he happened to produce goods at an antecedent date, or, happened to have had in his control goods of indigenous production at a prior date and if this could not be done, it would follow that Parliament could not impose a "duty of excise" with retrospective effect.
10 In support of his submission regarding the nature of an excise duty and that meaning that ought to be attributed to the expression as it occurs in Entry 84 of the union List, Mr. Pathak placed before us judgments of the Privy Council in appeals from Canada and some decisions of the American Supreme Court and of the Australian High Court.
First as to the decisions relating to the Canadian constitution though learned Counsel referred us to several decisions on the interpretation of the word "excise" in connection with the distinction between direct and indirect taxes in most of the British North America Act, 1867, we do not think it necessary to refer to all of them.
The general line of approach of the Privy Council decisions referred by learned Counsel could be gathered from the observations of Lord Cave in City of Halifax vs Fairbanks ' Estate.
The impugned tax legislation was a business tax imposed by the Province of Nova Scotia to be paid by every occupier of real property for the purposes of any trade, profession, or other calling carried on for the purpose of gain, the assessment being according to the capital value of the premises.
This was challenged inter alia on the ground that it was an indirect tax and therefore not within the legislative competence of the Provincial Legislature.
Lord Cave said: "Thus, taxes on property or income were everywhere treated as direct taxes; and John Stuart Mill himself, following Adam Smith, Ricardo and James Mill, said that a tax on rents falls wholly on the landlord and cannot be transferred to any one else. .
On the other hand, duties of customs and excise were regarded by every one as typical instances of indirect taxation.
When therefore the Act of Union allocated the power of direct taxation for Provincial purposes to 11 the Province, it must surely have intended that the taxation, for those purposes, of property and income should belong exclusively to the Provincial legislatures, and that without regard to any theory as to the ultimate incidence of such taxation.
To hold otherwise would be to suppose that the framers of the Act intended to impose on a Provincial legislature the task of speculating as to the probable ultimate incidence of each particular tax which it might desire to impose, at the risk of having such tax held invalid if the conclusion reached should afterwards be held to be wrong. . .
The imposition of taxes on property and income, of death duties and of municipal and local rates is, according to the common understanding of the term, direct taxation, just as the exaction of a customs or excise duty on commodities. . would ordinarily be regarded as indirect taxation; and although new forms of taxation may from time to time be added to one category or the other in accordance with Mill 's formula as a ground for transferring a tax universally recognised as belonging to one class to a different class of taxation." Similar passages in relation to a "duty of excise" being an indirect tax occur in other judgments of the Judicial Committee to which learned Counsel drew our attention.
Of these, it is sufficient to refer to one more Attorney General for British Columbia vs Kingcome Navigation Company, Limited which raised the question as to whether a tax which was imposed upon every consumer of fuel oil according to the quantity which he had consumed imposed by the Fuel Oil Tax Act of 1930 of British Columbia was a direct tax under section 92, head 2, of the British North America Act, 1867.
After extracting the following passage from Bank of Toronto vs Lambe: 12 "A direct tax is one which is demanded from the very persons who it is intended or desired should pay it.
Indirect taxes are those which are demanded from one person in the expectation and intention that he shall indemnify himself at the expense of another; such are the excise or customs.
Lord Moulton who delivered the judgment of the Board referred to the passage from the judgment of Lord Cave in City of Halifax vs Fairbanks ' Estate just now quoted and went on to add: "The ultimate incidence of the tax in the sense of the political economist, is to be disregarded, but where the tax is imposed in respect of a transaction, the taxing authority is indifferent as to which of the parties to the transaction ultimately bears the burden . . .
Similarly, where the tax is imposed in respect of some dealing with commodities, such as their import or sale, or production for sale, the tax is not a peculiar contribution upon the one of the parties to the trading in the particular commodity who is selected as the tax payer.
This is brought out in the second paragraph of Mill 's definition, and is true of the typical custom and excise duties referred to by Lord Cave.
" The tax was therefore held to be valid.
We consider that not much assistance could be derived from these decisions for the interpretation of the scope or content of the term "duties of excise" in Entry 84 of the Union List.
The line of division in Canada between those taxes which a Province could impose and those which it could not was, whether it was direct or indirect.
In Canada, taxing powers are divided between the Dominion and the Provinces on the basis of the incidence of the tax, the Dominion power extending to "any mode or system of taxation" (vide section 91 (3) British North America Act, 1867) while that of the 13 Provinces is restricted to "direct taxation within the Province in order to the raising of revenue for provincial purposes" (Section 92(2) ibid).
When therefore the validity of any Provincial tax legislation is challenged in Canada the enquiry is as regards the normal incidence of the tax whether it is "direct" or "indirect." As these expressions had a settled meaning in economic theory, the Courts had necessarily to find out whether the particular tax imposed by the Province fell within the class of "indirect" taxes or not.
In such a situation naturally the classification by economists of taxes as those which are "direct" as distinct from those which are "indirect" assumed a vital role in deciding whether the tax impugned is or is not within Provincial power.
As pointed out by Gwyer, C.J. in the Province of Madras vs Boddu Paidanna: "The Canadian cases which were cited do not seem to afford any assistance, since analogous problems in Canada are always concerned with questions of direct and indirect taxation; and if a Provincial tax is held to be an indirect tax, it is unnecessary for the Court to consider whether it may not also be a duty of excise: see, for example Att.
for British Columbia vs The Canadian Pacific Railway Co. , where a tax on every person purchasing within the Province fuel oil for the first time after its manufacture in, or importation into, the Province was held to be invalid as an indirect tax, and the question whether it might not also be bad as an excise duty was left unanswered.
In contrast to the case just cited we may refer to Att.
Gen. for British Columbia vs Kingcome Navigation Co. in which a fuel oil tax imposed by a Province upon every consumer of fuel oil according to 14 the quantity which he had consumed was held to be valid as a direct tax, because it was demanded from the very persons who it was intended or desired should pay it.
" Similarly, Lord Simonds observed in Governor General in Council vs Province of Madras: "little assistance is to be derived from the consideration of other federal constitutions and of their judicial interpretation.
Here there is no question of direct and indirect taxation, nor of the definition of specific and residuary powers.
" Under the Indian Constitution the scheme of division of the taxing powers between the Union and the States is not based on any criterion dependent on the incidence of the tax.
Sir Maurice Gwyer in In re the Central Provinces and Berar Act XIV of 1938 speaking of the word "excise" as occurring in the legislative lists in the Government of India Act (and for this purpose there is no variation in the lists in Schedule VII of the Constitution) said: "Its primary and fundamental meaning in English is that of a tax on articles produced or manufactured in the taxing country and intended for home consumption.
I am satisfied that this is also its primary and fundamental meaning in India; and no one has suggested that it has any other meaning in Entry No. 45 (corresponding to Entry 84 in the Union List).
It was then contended on behalf of the Government of India that an excise duty is a duty which may be imposed upon home produced goods at any state from production to consumption; and that therefore the federal legislative power extended to imposing excise 15 duties at any stage.
This is to confuse two things, the nature of excise duties and the extent of the federal legislative power to impose them . .
There can be no reason in theory why an excise duty should not be imposed even on the retail sale of an article, if the taxing Act so provides.
Subject always to the legislative competence of the taxing authority, a duty on home produced goods will obviously be imposed at the stage which the authority find to be the most convenient and the most lucrative, wherever it may be; but that is a matter of the machinery of collection, and does not affect the essential nature of the tax.
The ultimate incidence of an excise duty, a typical indirect tax, must always be on the consumer, who pays as he consumes or expends; and it continues to be an excise duty, that is, a duty on home produced or home manufactured goods, no matter at what stage it is collected.
" As Lord Simonds said in the decision, to which reference has already been made after referring to the decision of the Federal Court in the C.P. Petrol case: "Consistently with this decision their Lordships are of opinion that a duty of excise primarily a duty levied on a manufacturer or producer in respect of the commodity manufactured or produced.
It is a tax on goods not on sales or the proceeds of sale of goods," and then speaking about taxes on sale of goods the learned Lord continued: "The two taxes, the one levied on a manufacturer in respect of his goods, the other on a vender in respect of his sales, may, as is there pointed out, in one sense overlap.
But in law there is no overlapping.
The taxes 16 are separate and distinct imposts.
If in fact they overlap, that may be because the taxing authority, imposing a duty of excise, finds it convenient to impose that duty at the moment when the exciseable article leaves the factory or workshop for the first time on the occasion of its sale.
But that method of collecting the tax is an accident of administration; it is not of the essence of the duty of excise, which is attracted by the manufacture itself.
" In view of this clear exposition of the content of the term "duty of excise" in the Indian setting we think, no assistance can be derived for the meaning ascribed and the characteristics attributed to it in the decision construing the relative taxing powers of the Dominion and the Provinces under the British North America Act 1867.
Before dealing with the Australian decision to which Mr. Pathak drew our attention, we could conveniently dispose of the American cases which were referred to by the learned counsel bearing on the meaning of the word "excise".
We might point out that the American decisions do not assist the appellant in the least since under the Constitution of the United States practically every tax other than a capitation, a poll tax or a tax on land is termed an "excise duty" and even income tax was held to be an 'excise ' until the decision of the Supreme Court of the United States in Pollock vs Farmers Loan & Trust Co. It has to be borne in mind that the American Constitution provides that direct taxes have to be apportioned among the States according to their respective populations (article 1, section 2, and article 1, section 9, cl. 4).
Hence the attempt in the United States has been to bring taxes which according to the classification of economists would be direct taxes within the category of excise or indirect taxes which need not follow the rule as to apportionment among the States.
It follows, 17 therefore, that neither the American decisions, nor the understanding by the Courts of that country as to what a duty of excise connotes can be of any utility for deciding the content of that entry in the Indian Constitution.
The relevance of the American decisions is, therefore, even remoter than the decisions from Canada which were relied on by the learned Counsel.
Mr. Pathak referred us to some of the decisions in Australia and in particular to Parton vs Milk Board (Victoria) in support of his submission that the characteristic of being an indirect tax and therefore the capability of being passed on was an essential ingredient and pre requisite of an excise duty.
In this connection it is necessary to point out that the decisions in Canada which were relied on by Mr. Pathak as aids for understanding the import of the expression "duty of excise" in Entry 84, have been treated by the Australian Courts as not helpful to determine the meaning of "excise" in section 90 of the commonwealth of Australia Act.
As explained by Wynes: "In Canada, the distribution of taxation is based upon the direct and indirect character thereof, the Provincial power being limited to direct taxation within the Province.
Hence Canadian cases such as the Bank of Toronto vs Lambe are of very little use in settling the question whether or not a tax is a duty of customs or excise within the meaning of the Australian Constitution.
It may be pointed out that under the Australian Constitution taxes levied on commercial dealings in goods produced, such as taxes on sales, have been held to fall within the category of excises.
Several of the decisions of the Australian High Court rendered before Parton vs Milk Board (Victoria dealing with what constituted an excise 18 under section 90 of the Commonwealth of Australian Act were cited to the Federal Court in the Province of Madras vs Boddu Paidanna and the learned Chief Justice, after referring to them in detail, observed: "We find it impossible to say that the expression 'duties of excise ' even in Australia is limited to duties imposed in connection with the production of a commodity alone.
We should be disposed to say on the contrary that in Australia all taxes on the sale of commodities are, or may be regarded, as, duties of excise. .
Under the Australian Constitution power to impose duties of excise is, as we have said, the exclusive right of the Commonwealth Parliament; the residuary taxing power remains in the States.
In the Indian Constitution Act the whole of the taxing power in this particular sphere is expressly apportioned between the Centre and the Provinces, to the one being assigned the power to impose duties of excise, to the other taxes on the sale of goods.
" The decision in the Milk Board case follows in general the same lines as did the earlier decisions which have been detailed and discussed by Sir Maurice Gwyer C. J. in Paidanna 's case.
In these circumstances we do not consider it useful or necessary to discuss these decisions.
Undoubtedly, there are passages in these judgments in the Australian Courts which refer to the fact that an excise duty is an instance of an indirect tax.
As regards the general proposition, however, there is little controversy, but these decisions did not lay down that if by reason of the tax being levied retrospectively the duty cannot be passed on it ceased to be a duty of excise.
On the other hand, there is express and high authority for the position that a duty of excise could be validly levied with retrospective effect under the Australian Constitution.
The question for 19 consideration before the privy Council in Colonial Sugar Refining Company Ltd. vs Irving related to the constitutional validity of the Excise Tariff Act, 1902, passed by the Commonwealth Parliament.
One of the objections raised to the levy was that on the terms of the enactment which was passed on the 26th of July, 1902, the imposition of the duty could be as and from October 8, 1901, the day on which the Minister had moved a resolution to that effect in the committee of Ways & Means of the House of Representatives.
The respondent before the Board who were manufacturers of refined sugar in Brisbane in the State of Queensland questioned the legality of the tax which had been demanded and paid by them in respect of the sugar produced by them between October 8, 1901, and July 26, 1902.
Lord Davey delivering the judgment of the Board observed: "It is a little difficult to understand the first point taken by the appellants.
The Parliament had undoubted power to impose taxation under the express words of section 51 of the Constitution, and it is not now disputed that the Parliament could, if it thought fit, make the Act retrospective and impose the duties from the date of the resolution.
That practice is (it is believed) universally followed in the imperial Parliament, and (their Lordships were told) is common in the Colonial Legislatures in Acts of this description, and for obvious reasons it is convenient and almost necessary.
There was nothing, therefore, in either the subject matter of the Act, or in the mode of dealing with it, which was beyond the power of the Parliament.
" In our opinion, the above aptly describes and covers the point raised by the appellants in the appeals now before us.
20 There is no doubt that excise duties have been referred to by the economists and in the judgments of the Privy Council as well as in the Australian decisions as an instance of an "indirect tax", but in construing the expression "duty of excise" as it occurs in Entry 84 we are not concerned so much with whether the tax is "direct" or "indirect" as upon the transaction or activity on which it is imposed.
In this context one has to bear in mind the fact that the challenge to the legislative competence of the tax levy is not directed to the imposition as a whole but to a very limited and restricted part of it.
This challenge is confined (a) to the operation of the tax between the period March 1, 1951, and April 28, 1951, and (b) even in regard to this limited period, it is restricted to the imposition of the additional duty of six annas per lb.
which was levied, beyond the eight annas per lb.
collected from the appellants by virtue of the Finance Bill under the provisions of the .
It would seem to be rather a strange result to achieve that the tax imposed satisfies every requirement of a "duty of excise" in so far as the tax operates from and after April 28, 1951, but is not a "duty of excise" for the duration of two months before that date.
Learned Counsel conceded, as he had to, that even on the decision relied upon by him, the fact that owing to the operation of economic forces it was not possible for the taxpayer to pass on the burden of the tax, did not alter the nature of the imposition and detract from its being a "duty of excise".
For instance, the state of the market might be such that the duty imposed upon and collected from the producer or manufacturer might not be capable of being passed on to buyers from him.
Learned Counsel urged that this would not matter, as one had to have regard to "the general tendency of the tax" and "the expectation 21 of the taxing authority" and to the possibility of its being passed on and not to the facts of any particular case which impeded the operation of natural economic forces.
The impediment to the duty being passed on might be due not merely to private bargains between the parties or abnormal economic situations such as the market for a commodity being a buyers ' market.
Such impediments may be brought about by the operation of other laws which Parliament might enact, such for instance, as control over prices.
If in such a situation were the price which the producer might charge his buyer is fixed by the statute, say under the Essential Supplies Act, and a "duty of excise" is later imposed on the manufacturer, it could not be said that the duty imposed would not answer the description of an "excise duty".
Learned Counsel had really no answer to the situation created by such a control of economy except to say that it would be an abnormal economic situation.
It could hardly be open to argument that a tax levied on a manufacturer could be stated not to be a "duty of excise", merely because by reason of the operation of other laws the tax payer was not permitted to pass on the tax levy.
The retrospective levy of a tax would be one further instance of such inability to pass on, which doses not alter the real nature or true character of the duty.
It might further be pointed out that the submission of the learned Counsel that a tax which according to economic theory is an indirect tax or a tax on goods becomes a direct and a personal tax and a tax of a different nature or category if imposed retrospectively because it was then incapable of being passed on, does not correctly represent the law as laid down by this Court.
In common with duties of customs and excise, a tax on the sale of goods is another instance of a typical indirect tax 22 Indeed Lord Thankerton pointed out in Attorney General for British Columbia vs Kingcome Navigation Company Ltd.: "The ultimate incidence of the tax in the sense of political economist is to be disregarded and referred to a tax imposed in respect of some dealings in commodities such as their import or sale or production for sale as instances of indirect taxes, the tax not being a peculiar contribution upon one of the parties to the trading in the particular commodity selected as the tax payer.
" The question of the validity of the imposition of a sales tax with retrospective effect came up for consideration before this Court in the Tata Iron & Steel Co. Ltd. vs The State of Bihar.
An argument similar to the one now presented before us was submitted to this Court in challenge of that levy which was summarized by Das, C.J., in these terms: "The retrospective levy by reason of the amendment of section 4(1) (of the Bihar Sales tax Act which was impugned) destroys its character as a sales tax and makes it a direct tax on the dealer instead of an indirect tax to be passed on to the consumer.
" Dealing with this point the learned Chief Justice said : "The argument is that sales tax is an indirect tax on the consumer.
The idea is that the seller will pass it on to his purchaser and collect it from them.
If that is the nature of the sales tax then, urges the learned Attorney General, it cannot be imposed retrospectively after the sale transaction has been concluded by the passing of title from the seller to the buyer, for it cannot, at that 23 stage, be passed on to the purchaser. . .
Once that time goes past, the seller loses the chance of realising it from the purchaser and if it cannot be realised from the purchaser, it cannot be called sales tax.
In our judgment this argument is not sound.
From the point of view of the economist and as an economic theory, sales tax may be an indirect tax on the consumers, but legally in need not be so. .
This also makes it clear that the sales tax need not be passed on to the purchasers and this fact does not alter the real nature of the tax which, by the express provisions of the law, is cast upon the seller . .
If that be the true view of sales tax then the Bihar Legislature acting within its own legislative field had the powers of a sovereign legislature and could make the law prospectively as well as retrospectively.
We do not think that there is any substance in this contention.
" In our judgment this passage covers the argument regarding a duty of excise getting its essential nature altered and ceasing to be a duty of excise if imposed retrospectively.
The submission, therefore, lacks any force and is rejected.
It is also necessary to refer to one further matter : Even assuming that the learned Counsel is right in his submission, that to be a duty of excise within Entry 84 of the Union List the taxing authority should have expected the tax to be passed on, we consider that learned Counsel is not right in submitting that condition is not satisfied in the case of the levy now impugned.
The provisions of the impugned enactment have to be read in the light of section 64A of the Sale of Goods Act which enacts: "In the event of any duty of customs or excise on any goods being imposed, increased decreased or remitted after the making of any 24 contract for the sale of such goods without stipulation as to the payment of duty where duty was not chargeable at the time of the making of the contract, or for the sale of such goods duty paid where duty was chargeable at that time: (a) if such imposition or increase so takes effect that the duty or increased duty, as the case may be or any part thereof, is paid, the seller may add so much to the contract price as will be equivalent to the amount paid in respect of such duty or increase of duty, and he shall be entitled to be paid and to sue for and recover such addition, and (b) if such decrease or remission so takes effect that the decreased duty only or no duty, as the case may be, is paid, the buyer may deduct so much from the contract price as will be equivalent to the decrease of duty or remitted duty and he shall not be liable to pay, or be sued for or in respect of, such deduction.
" This provision originally formed section 10 of the Tariff Act VIII of 1894 and was subsequently enacted as section 10 in the Indian Tariff Act of 1934 (cl Act XXXII of 1934).
The object of the statutory provision is that where contracts for the sale of goods are entered into and the price payable therefor determined on the basis of existing rates of duty either of excise or of customs neither party shall be prejudiced or advantaged by reason of the increase or decrease of the duty.
The question as to the scope of section 10 of the Tariff Act of 1894 came up for consideration before a Bench of the Madras High Court whose decision is reported in Narayanan v, Kadir Sahib (1).
The suit out of which the second appeal before the High 25 Court arose was by a buyer of salt for the refund of salt excise duty which had been reduced after the date of the contract.
The transaction of sale between the plaintiff and the defendant took place on March 5, 1922, and the price payable by the plaintiff was based on the rate of duty prevailing on that date.
Subsequent thereto the Government of India reduced the duty on salt from Rs. 5/ to Rs. 2/8/ per bag and this was to have effect from a date prior to March 5, 1922.
The defendant firm (the sellers) had obtained from the Government refund of the duty on the salt sold by them to the plaintiff.
It was to recover this amount of duty that the suit was filed by the buyer.
The learned Judges held that on the terms of s, 10 of the Tariff Act of 1894 (indentical with section 64A of the Sale of Goods Act) the fact that the contract was no longer executory but that delivery had been made and the price paid, was no bar to the plaintiff succeeding in his suit.
It will be seen that section 64A is in two parts: the first cl.
(a) dealing with the case of an increase in duty and conferring on the seller the right to recover the amount of the increased duty from the buyer, and the second limb (cl.
b) making provision regarding the correlated case of a reduction in the duty with corresponding rights to the buyer to obtain the benefit of a reduction.
Whatever argument might be raised baned upon the language of the second limb of the section, it is not open to doubt that in the case of an increase in duty, the seller would be entitled to recover the duty from the buyer provided: (a) there was no contract to the contrary by which he had precluded himself from claiming such enhanced duty, i. e., the contract having negatived or limited the seller 's right to prefer such a claim, or was at least silent as regards what was to happen in the event of the duty being increased, (b) the change in the rate of duty was effected after the date of the contract.
In 26 these circumstances, it appears to us that there might not be even a factual basis for the complaint of learned Counsel for the appellants that in the case of a retrospective increase in duty, the duty ceases to be a duty of excise by becoming a "direct" tax because it was incapable of being passed on.
The answer of learned Counsel to this point regarding the operation of section 64A of the Sale of Goods Act was merely that the Court could not take account of the provisions of another statute for dealing with the validity of a provision of the Finance Act 1911.
The submission has no force at all because section 64A of the Sale of Goods Act refers in express terms to "duties of excise" and has therefore, to be read as part and parcel of every legislation imposing a duty of excise.
In view of our conclusion, however, that the duty in the present case, notwithstanding its imposition with retrospective effect, and even if it be that it was incapable of being passed on to a buyer from the tax payer, was a duty of excise within Entry 84 as properly understood it is not necessary to rest it upon this narrower ground.
In our view, a duty of excise is a tax levy on home produced goods of a specified class or description, the duty being calculated according to quantity or value of the goods and which is levied because of the mere fact of the goods having been produced or manufactured and unrelated to and not dependent on any commercial transaction in them.
The duty in the present case satisfies this test and therefore it is unnecessary to seek other grounds for sustaining the validity of the tax.
One further aspect of the matter on which some emphasis was laid by Mr. Pathak was that a duty of excise was in its essence a tax on goods and not a personal tax a levied on the tax payer such as an income tax.
He urged that being a tax levied on goods notwithstanding that it was 27 collected from the producer or manufacturer, it followed that the essential attribute or characteristic of that duty was that the producer or manufacturer must own or have possession and control over the goods at the moment of the levy.
If this element of ownership, possession or control over the goods by the tax payer was lacking, learned Counsel urged the duty would not be a duty on the goods but a personal tax levied on the tax payer.
This is really another aspect of the same argument that a duty of excise is in its nature an indirect tax but learned Counsel submitted that viewed from this angle it would be seen that the duty imposed by the impugned enactment was shown to be not a duty of excise.
The grounds upon which the submission of learned Counsel that a duty of excise levied retrospectively was converted into a direct tax and therefore not a duty of excise have been repelled by us which ought to suffice to repel the contention in this form also.
Besides, it may also be pointed out that even in strict theory there is no basis for the submission now under consideration.
The duty imposed by the impugned Act being retrospective, it operates as from a previous date and admittedly on the date when by force of the enactment the duty was levied the tax payer was the owner or was in possession and control of the goods.
To deny this, would in effect deny the legal effect of the tax being imposed retrospectively and fictionally deemed to be in force on an earlier date.
In dealing with the arguments of learned Counsel on the scope and content of Entry 84 of the Constitution and of the meaning of the expression "duty of excise" in that entry we have also covered the special argument questioning the right of Parliament to impose retrospectively a duty of excise.
It was conceded, that Parliament has power to enact laws with retrospective effect and as it was not suggested that laws 28 dealing with taxation are any exception to that rule the only ground upon which the learned Counsel could rest this submission was that being an indirect tax, capability of being passed on was an essential characteristic or requirement of a duty of excise, and so its imposition with retrospective effect deprived it of that essential character and therefore rendered it a duty of a different nature and for that reasons a retrospective imposition of an excise duty was not permissible.
It would be seen that this is really the same argument which we have dealt with earlier presented in another form.
For the reasons already stated, we find no substance in this form of argument either and we have no hesitation in rejecting it.
It need only be mentioned that the passage in judgment of Lord Davey in the Colonial Sugar Refining Company Ltd. vs Irving, already extracted, is sufficient precedent, if authority were needed, to reject this argument.
The second point raised by learned Counsel was that the impugned section 7(2) of the Act was unconstitutional in that it contravened the fundamental rights guaranteed under articles 19(1)(f) and 31(1) and (2) of the Constitution.
It was urged that even if the impugned provision was within the legislative competence of Parliament as being covered by Entry 84 of the Union List, the retrospective levy of an excise duty violated the freedom guaranteed by article 19 (1)(f) the right to hold property and was not saved by article 19(5) since the same was not "a reasonable restraint" on the rights of the appellant.
If Counsel was right so far, his next submission was that the threat to deprive the appellant of the amount of the tax levy was a deprivation without authority of law article 31(1) and was further a compulsory acquisition of that property without compensation (article 31(2)) which was not saved by article 31(5)(b)(i) because the 29 law contemplated by that sub article was a valid law for the imposition of a tax which satisfied the requirements both of legislative competence and of the rights guaranteed by Part III of the Constitution.
The submission of Mr. Pathak on this part of the case was briefly as follows.
A law which imposes a tax and provides for its levy and collection is as much a law, as a law under other non taxation entries of the legislative list.
All laws including laws imposing taxes are within Part III of the Constitution being laws under article 13(2) thereof and unless any particular Article was inapplicable to such laws by reason of obvious irrelevance every Article in the Part would apply to them and without such a law satisfying the test of reasonableness or constitutionality laid down in the various Articles guaranteeing the several.
Fundamental rights the statute in question could not be pronounced valid and enforceable.
We shall be referring to the manner in which Mr. Pathak sought to urge that the impugned provision offended article 19(1) (f), but before doing so, it is necessary to notice the submission which Mr. Sanyal invited us to accept.
He raised a broad contention that no law imposing a tax could be impugned on the ground of violation of Part III of the Constitution in general and in particular of article 19(1) (f) or article 31.
His submission was that the validity of tax laws were governed solely by article 265 and that such laws were not governed by Part III of the Constitution and specially because the money sought to be taken by the State as tax by virtue of a fiscal enactment was not "property" within article 19(1) (f) and that the expression "laws for the purpose of imposing a tax" used in article 31(5) (b) (i) saved all laws from the operation of article 31 whether such laws be within legislative competence or not, as 30 also whether or not such laws were repugnant to Part III of the Constitution.
Before adverting to the decisions on which reliance was placed for this position two things might he pointed out: (1) that article 265 merely enacts that all taxation the imposition, levy and collection shall be by law; and (2) that the Article beyond excluding purely executive action does not by itself lay down any criterion for determining the validity of such a law to justify any contention that the criteria laid down exclude others to be found elsewhere in the Constitution for laws in general.
If by reason of article 265 every tax has to be imposed by "law" it would appear to follow that it could only be imposed by a law which is valid by conformity to the criteria laid down in the relevant Articles of the Constitution.
These are that the law should be (1) within the legislative competence of the legislature being covered by the legislative entries in Schedule VII of the Constitution; (2) the law should not be prohibited by any particular provision of the Constitution such as for example, articles 276(2), 286 etc., and (3) the law or the relevant portion thereof should not be invalid under article 13 for repugnancy to those freedoms which are guaranteed by Part III of the Constitution which are relevant to the subject matter of the law.
The reference therefore to article 265 does not lead necessarily to the result envisaged by Mr. Sanyal.
The entire argument of Mr. Sanyal on this part of the case was rested on the observations contained in two decisions of this Court, Ramjilal vs Income tax Officer, Mohindargarh and Laxmanappa Hanumantappa Jamkhandi, vs The Union of India.
We do not understand these decisions as laying down any such broad proposition.
We are further 31 satisfied that the learned Judges could not have meant that if a law imposing a tax was outside the legislative competence of the legislature enacting it, as the argument before us appeared to suggest it could be a law under which a person could be deprived of his property under article 31(I) or regarding which a person could not move this Court for relief under article 32.
Such a proposition would be contrary to a long catena of cases of this Court of which it is sufficient to refer to Mohammad Yasin vs The Town Area Committee, Jalalabad, State of Bombay vs The United Motors (India) Ltd., The Bengal Immunity Company Limited vs The State of Bihar and Ch.
Tika Ramji vs The State of Uttar Pradesh.
In all these cases the legislation imposing the tax or the fee which had been held not to have been within the legislative competence of the authority imposing the tax or the fee was struck down on the ground that those laws violated the freedom guaranteed by Part III of the Constitution.
Learned Counsel laid some stress on the fact that in these cases the tax or fee was held to be unconstitutional as imposing an unreasonable restraint on the right to carry on a trade or business guaranteed by article 19(1)(g) and not as an infringement of the right to hold "property" under article 19(I)(f).
In our opinion nothing turns on this, for it is the deprivation of the freedom "to hold property" that is the direct result of the tax and the restraint on the business by reason of the collection of the illegal tax or the procedures prescribed for such collection is only an indirect and incidental effect thereof.
Nor do we find it possible to accept even the more limited proposition that whatever be the position in regard to tax laws which lack legislative competence, once a tax law is covered by an entry in the Legislative List and does not contravene direct prohibitions like those in articles 276 (2) or 286 32 etc.
, such a law is immune from the limitations imposed by Part III of the Constitution.
Mr. Sanyal is right in his submission that the levying of taxes though it might involve taking private property for a public use is entirely distinct from the power of eminent domain which is covered by article 31(1)(2) and that the saving in article 31(5)(b) (i) of such laws is really by way of abundant caution.
It has been stated that where "property is taken under a taxing power, the persons so taxed may be said to be compensated for their contribution by the general benefits which they receive from the existence and operation of Government.
But this is not to say that the burden of a tax that may be constitutionally laid upon an individual needs to be justified by a showing that he, individually will receive benefit from the expenditure of the proceeds of the tax, and much less that the degree of that burden may be measured by the amount of benefit that the tax payer is excepted to receive (1)".
It would, therefore, be obvious that a tax law need not satisfy the tests of article 31(2).
But it does not follow that every other Article of Part III is inapplicable to tax law.
Leaving aside article 31(2) that the provisions of a tax law within legislative competence could be impugned as offending article 14 is exemplified by such decisions of this Court as Suraj Mal Motha vs Sri A. V. Visvanatha Sastri and Shree Meenakshi Mills Ltd., Madurai, vs Sri A. V. Visvanatha Sastri.
In Moopil Nair vs State of Kerala the Kerela Land Tax Act was struck down as unconstitutional as violating the freedom guaranteed by article 14.
It also goes without saying that if the imposition of the tax was discriminatory as contrary to article 15, the levy would be invalid.
It might very well be that a distinction might have to be drawn between the legality of the 33 quantum of a tax levied which might not be open to challenge under article 19(1)(f) and the incidence of the tax or the procedure prescribed therein either for the assessment or the collection which might be open for being tested with reference to all the freedoms including that contained in article 19(1)(f).
In fact in Moopil nair vs State of Kerala (1) already referred to, certain provisions of the Act therein challenged which prescribed the procedure for the levy of the tax were struck down on the ground of being obnoxious to article 19(1)(f).
Having regard to the very limited controversy before us we do not consider it necessary to embark on any further or more detailed examination of this question, except to say that we cannot accept the argument of the learned Additional Solicitor General that by reason of article 265 tax laws are outside Part III of the Constitution.
In support of the submission that a tax levied with retrospective effect was unconstitutional as being an unreasonable restriction on this right to hold property (article 19(1)(f)).
Mr. Pathak relied on the decisions in Nichols vs Coolidge (2).
The tax in question was an estate duty on property passing on death and in the items to be included for computing the value of the estates was included not merely all property of which the deceased died possessed, on the date of his death but also that which he had transferred by gifts within a period of two years fore his death.
This inclusion of property transferred to third persons not in contemplation of death but by the grantor in the ordinary and natural course of the transaction of his affairs so that the donees might enjoy the properties absolutely, was held to be unconstitutional as offending the rule as to "due process" contained in fifth amendment to the constitution.
Justice McReynolds delivering the opinion of the Court said: 34 "Under the theory advanced for the United States, the arbitrary, whimsical and burdensome character of the challenged tax is plain enough . .Real estate transferred years ago, when of small value, may be worth an enormous sum at the death.
If the deceased leaves no estate there can be no tax; if, on the other hand, he leaves ten dollars both that and the real estate become liable.
Different estates must bear disproportionate burdens determined by what the deceased did one or twenty years before he died.
This Court has recognised that a statute purporting to tax may be so arbitrary and capricious as to amount to confiscation and offend the fifth Amendment.
We must conclude that section 402(c) of the statute here under consideration, in so far as it requires that there shall be included in the gross estate the value of property transferred by a deceased prior to its passage merely because the conveyance was intended to take effect in possession or enjoyment at or after his death, is arbitrary, capricious and amounts to confiscation." Learned Counsel also referred us to a few later decisions of the American Supreme Court in which retrospective taxation has been held arbitrary and capricious and to amount to a violation of the due process clause contained in the 5th Amendment.
In regard to these decisions, two points have to be noted: (1) that the decisions of Supreme Court of the United States are not uniform and there are undoubtedly decisions of the Court of a later date which speak the other way.
In Third National Bank vs White (1) the Supreme Court upheld an estate tax which operated retrospectively.
It is in view of these decisions that Mr. Ballard states in an article in the Harvard Law Review (*), referring to White 's case (1) 35 "It seems accurate to say that the decision marks for practical purposes the passing of 'arbitrary retroactivity ' in the field of the estate tax. . .And the present status of Nichols vs Coolidge is not entirely clear. .
Since the Nichols case can be distinguished on its facts, it may well give way. .
In any event. .it would seem that after the White case no application of the estate tax can be successfully resisted on the score of retroactivity.
" For instance in Welch vs Henry (1) which related to an enactment imposing income tax which had retrospective operation, Justice Stone delivering the Judgment of the Court referring to Nichols vs Coolidge (2) and other cases in which observations broadly stating that any retrospective tax legislation was obnoxious to the requirement of due process, stated: "Even a retroactive gift tax has been held valid where the donor was forewarned by the statute books of the possibility of such a levy.
In each case it is necessary to consider the nature of the tax and the circumstances in which it is laid before it can be said that its retroactive application is so harsh and oppressive as to transgress the constitutional limitation." "Any classification for taxation is permissible which has reasonable relation to a legitimate end of governmental action.
Taxation is but the means by which government distributes the burdens of its cost among those who enjoy its benefits.
And the distribution of a tax burden by placing it in part on a special class which by reason of the taxing policy of the State has escaped all tax during the taxable period is not a denial of equal protection.
36 Nor is the tax any more a denial of equal protection because retroactive. .
A tax is not necessarily unconstitutional because retroactive.
Milliken vs United States and cases there cited.
Taxtation is neither a penalty imposed on the taxpayer not a liability he assumes by contract.
It is but a way of apportioning the cast of government among those who in some measure are privileged to enjoy its benefits and must bear its burdens.
Since no citizen enjoys immunity from that burden, its retroactive imposition does not necessarily infringe due process, and to challenge the present tax is not enough to point out that the taxable event, the receipt of income, antedated the statute.
" In Untermyer vs Anderson (1) which was concerned with the validity of a tax on gifts which was made to operate from a date before it was enacted, Justice Holmes stated: ". .
I find it hard to state to myself articulately the ground for denying the power of Congress to lay the tax.
We all know that we shall get a tax bill every year.
I suppose that the taxing act may be passed in the middle as lawfully as at the beginning of the year.
A tax may be levied for past privileges and protection as well as for those to come," and Justice Brandeis made the added observations which have been repeatedly quoted in later decisions as well as in text books: "For more than half a century, it has been settled that a law of Congress imposing a tax may be retroactive in its operation.
Each of the fifteen income tax acts adopted from time to time during the last sixty seven years has been retroactive, in that it applied 37 to income earned, prior to the passage of the act, during the calendar year. .
The need of the government for revenue has hitherto been deemed a sufficient justification for making a tax measure retroactive whenever the imposition seemed consonant with justice and the conditions were not such as would ordinarily involve hardship.
On this broad ground rest the cases in which a special assessment has been upheld.
Liability for taxes under retroactive legislation has been 'one of the notorious incidents of social life '. .
Recently this Court recognized broadly that 'a tax may be imposed in respect of past benefit '.
" It would thus be seen that even under the constitution of the United States of America the unconstitutionality of a retrospective tax is rested on what has been termed "the vague contours of the 5th Amendment." Whereas under the Indian Constitution that grounds on which infraction of the rights a property is to be tested not by the flexible rule of "due process" but on the more precise criteria set out in article 19(5), mere retrospectivity in the imposition of the tax cannot per se render the Law unconstitutional on the ground of its infringing the right to hold property under article 19(1)(f) or depriving the person of property under article 31(1).
If on the one hand, the tax enactment in question were beyond legislative competence of the Union or a State necessarily different considerations arise.
Such unauthorised imposition would undoubtedly not be a reasonable restriction on the right to hold property beside being an unreasonable restraint on the carrying on of business, if the tax in question is one which is laid on a person in respect of his business activity.
Mr. Pathak also presented his argument on this head in a slightly different form.
He submitted that the Constitution makers had contemplated that a duty of excise would be imposed only when the 38 manufacturer or the producer was in possession and control of the goods at the moment of the imposition, and therefore would be in a position to pass it on and obtain payment from the purchaser of the duty paid by him to State.
The imposition of the levy retrospectively however deprive him of this benefit of passing on the burden which he would normally have.
This restriction or impairment of his right to pass on the duty, he urged rendered the restriction imposed on him in the shape of the obligation to pay the duty unreasonable.
Learned Counsel admitted that as the imposition would yield to the Exchequer more money, the restriction on appellants ' right to hold property could not be denied to be in the 'interest of the general public" within article 19(5) but his submission was that it lacked the character of "reasonableness" because it deprived him of the right to pass on the tax to others.
It was further admitted that it was only if learned Counsel was right in his submission regarding the infraction of article 19 (1) (f) that any question of the violation of article 31 (1) could arise.
It would be seen that it is the same argument as was presented to challenge the legislative competence of Parliament to enact the legislation.
Only the nomenclature employed is different and adapted to suit the need of bringing it into the fold of an impairment of fundamental rights under Part III of the Constitution.
As Evatt, J. observed in Broken Hill South Limited (Public Officer) vs The Commissioner of Taxation (New South Wales) (1) "It is not proper to deny to the legislature the right of solving taxation problems unfettered by legal categories.
" If notwithstanding that according to economic theory or doctrines propounded by economists a duty of excise does not cease to be such, merely because it is imposed at a time or in circumstances (as pointed out earlier in conjunction with a system of price control) in 39 which it cannot be passed on one fails to see any substance in the argument that the imposition of such a tax is an unreasonable restriction on the exercise of the fundamental rights to hold property guaranteed by article 19 (1) (f).
The last of the points urged was that r. 10A was not apt to cover the recovery of the duty which was a subject of demand dated December 12, 1951.
The learned Judges of the High Court rejected this submission and, in our opinion, correctly.
Rule 10 under which the first demand of June 22, 1951, was made ran: "10.
Recovery of duties or charges short levied or erroneously refunded.
When duties or charges have been short levied through inadvertence, error, collusion or misconstruction on the part of an officer, or through mis statement as to the quantity, description or value of such goods on the part of the owner, or when any such duty or charge, after having been levied, has been owing to any such cause, erroneously refunded the person chargeable with the duty or charge, so short levied, or to whom such refund has been erroneously made shall pay the deficiency or repay the amount paid to him in excess, as the case may be, on written demand by the proper officer being made within three months from the date on which the duty or charge was paid or adjusted in the owners account current, if any, or from the date of making the refund.
" The contention which was then urged was that the short levy which led to the demand was not caused through inadvertence, error etc., which are set out in this rule and that consequently there was a defect in the operative machinery for collection of the refund.
This objection of the present appellants was upheld by the Full Bench of the 40 Nagpur High Court and it was as a result of this decision that rule 10 A was framed.
This rule reads: 10A. Residuary powers for recovery of sums due to Government.
Where these rules do not make any specific provision for the collection of any duty, or of any deficiency in duty if the duty has for any reason been short levied, or of any other sum of any kind payable to the Central Government under the Act or these Rules, such duty deficiency in duty or sum shall, on a written demand made by the proper officer, be paid to such person and at such time and place, as the proper officer may specify.
" The words "deficiency in duty if the duty has for any reason been short levied" are in our opinion, wide enough to include cases of deficiency arising like those in the circumstances of the present case, viz., where 8 annas out of the 14 annas of the duty has been collected in the first instance but 6 annas remains to be collected.
We consider, therefore, that there is no substance in the objection that r. 10A is not wide enough to cover the recovery of the duty from the appellants.
The result is that these appeals fail and are dismissed with costs.
There will, however, be only one hearing fee for all the cases.
The writ petitions also fail and are dismissed, without any order as to cost.
KAPUR J.
The appellants are manufacturers, warehousemen and merchants of tobacco and they have private licensed warehouses which are governed by r. 140 of the Rules made under the Central Excise & Salt Act (Act 1 of 1944), hereinafter termed the "Act.
" According to their allegations in the petition under article 226 of the Constitution, the appellants had a considerable quantity of tobacco in their licensed 41 warehouses on February 28, 1951.
On the same day the Central Bill (Bill No. 13 of 1951) was introduced in the House of the People, one of the clauses of which related to the duty of excise for the financial year beginning April 1, 1951.
According to the Bill, on unmanufactured tobacco a duty of 8 As.
per Ib.
and 6 to 9 As.
(per 1000) Biris was to be imposed.
This Bill was amended and by this amendment the duty on tobacco other than Biri tobacco was fixed at 6 As.
per Ib.
On Biri tobacco 14 As.
per Ib.
and no duty was imposed on manufactured Biris.
As a result of the operation of sections 3 & 4 of the provisional Collection of Taxes act (Act XVI of 1931) the duty became leviable as from the date of the introduction of the Bill.
The petitioner have stated that in accordance with the provisions of the Bill that was introduced, they paid excise duty on tobacco in their possession at the rates mentioned in the Bill and obtained clearance certificates in accordance with the Rules under the Act.
On April 28, 1951, the Finance Bill was passed and became Finance Act, 1951 (Act XXIII of 1951).
By section 7 of that Act the first schedule to the Central Excise and Salt Act was amended in accordance with what has been stated above.
By section 7.
(2) of the Finance Act.
1951, it was provided that the amendment made in the first schedule to the Act shall be deemed to have effect on and from the first day of March 1951.
A demand was subsequently made from the appellants in respect of excess duty payable on tobacco cleared out of the store houses from March 1, 1951, to April 28, 1951.
Thereupon the appellants filed a petition under article 226 of the Constitution in the High Court at Nagpur.
The grounds of the attack as to the constitutionality of the tax were decided against the appellants but the petition succeeded on the ground that there was no machinery 42 provided under the Act for recovery of the tax.
This judgment is reported as Chhotabhai Jethabhai Patel & Co. vs The Union of India (1).
On December 8, 1951, the Central Government by a notification amended the Central Excise Rules by adding r. 10A which provided machinery for the collection of tax.
The rule was : "10 A. Residuary powers for recovery of sums due to Government.
Where these rules do not make any specific provision for the collection of any duty or of any deficiency in duty if the duty has for any reason been short levied, or of any other sum of any kind payable to the Central Government under the Act or these Rules, such duty, deficiency in duty or sum shall on a written demand made by the proper officer be paid to such person and at such time and place as the proper officer may specify." After the introduction of this rule a fresh demand was made on December 12, 1951, for excess duty on the tobacco cleared.
The appellants again filed a petition in the High Court of Nagpur which was decided against them and against that judgment the appellants have come to this court on a certificate under article 132 of the Constitution.
The question submitted to this Court is as to the validity of the said tax on the ground of its repugnancy to the Constitution of India.
Counsel for the appellants has raised two questions against the legality of the taxes; (1) The Parliament had no power to make a retrospective legislation while making a law under item 84 of List I so as to affect goods that had been cleared from the warehouses after payment of proper duties at the rates prevailing on the date that the goods were cleared because (a) Parliament 's power to make retrospective laws is subject to constitutional limitations, namely, the language 43 of item 84 of List I; (b) duty of excise as defined in the Constitution and its nature and character is such that it is not capable of being exercised after the goods on which it is imposed are no longer in possession of the warehousemen and after they have passed into the common stock of the country; (2) legislation of this character imposes an unreasonable restriction under article 19 (1) (f); and (3) r. 10 A does not apply to the facts of the case and does not authorise the collection of the duty imposed.
The first point relates to the legislative competency of Parliament.
Item 84 of List I provides: Item 84 "Duties of excise on tobacco and other goods manufactured or produced in India. " In the corresponding item under the Government of India Act, 1935, the same language was used so that the nature of the duties remains the same both under the Constitution and under the Government of India Act, 1935 Section 3 of the Act empowers the levying of duties specified in the First Scheduled.
The relevant portion of that section is as follows: Section 3(1) "There shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods other than salt which are produced or manufactured in India and a duty on salt manufactured in, or imported by land into, any part of India as, and at the rates set forth in the First Schedule." By section 7 (2) of the Act retrospective effect was given to the duties imposed by the Finance Act taking effect as and from the First day of March, 1951.
section 7(2) "The amendment made in the , by sub section (1) shall be deemed to have had effect on and from the first day of March 1951. ." 44 The effect of this deeming provision is that the new rates of duties must be taken to have been imposed and become operative as if they were in the bill as and when the bill was introduced in Parliament: Venkatachalam vs Bombay Dyeing & Manufacturing Co. Ltd.(1).
The contention raised is as to the nature of the duty of Excise.
It was argued that Excise Duty is a tax on goods which must exist at the time when the tax is levied and it must have been intended and expected by the legislature that it will be passed on to the consumer and as retrospective operation of such duties has not got these qualities when the goods are no longer in possession of the person sought to be taxed they do not fall within the term "duty of excise" and therefore they are beyond the legislative competence of Parliament.
To support his contention, counsel for the appellants relied on Bank of Toronto vs Lambe (2) where the question for decision was as to whether certain taxes imposed on commercial corporations carrying on business were direct taxes or indirect taxes of the Provinces or the Dominion.
Lord Hobhouse at p. 582 relying upon the definitions given by John Stuart Mill said: "Taxes are either direct or indirect.
A direct tax is one which is demanded from the very persons who it is intended or desired should pay it.
Indirect taxes are those which are demanded from one person in the expectation and intention that he shall indemnify himself at the expense of another; such are the excise or customs.
" The same distinction was brought out in some other Canadian cases decided by the Privy Council; City of Halifax vs Estate of J. P. Fairbanks (3) which related to the nature of "Business Tax" which was held to be a direct tax; Attorney General 45 for British Columbia vs Mc Donald Murphy Lumber Company Ltd. (1); & Attorney General for British Columbia vs Kingcome Navigation Comapny Limited (2) Attorney General for Manitoba vs Attorney General for Canada (3) and Brewers & Malster 's Association of Onatario vs The Attorney General for Ontario (4) Reference was next made to an Australian case Parton vs Milk Board (Victoria) (5) where two necessary qualities of the duty of Excise were stated to be that it must be levied on goods which are in existence and the taxpayer should be able to pass it on to the consumer.
But as was pointed out by Gwyer, C.J., in the Province of Madras vs Boddu Paidanna (6): "The Canadian cases which were cited do not seem to afford any assistance since analogous problems in Canada are always concerned with direct and indirect taxation. " Dealing with the same distinction the Privy Council said in Governor General in Council vs Province of Madras (7): "Little assistance is to be derived from the consideration of other federal constitutions and of their judicial interpretations.
Hence there is no question of direct and indirect taxation. " The Indian Constitution is unlike any that have been called to their Lordships ' notice in that it contains what purports to be an exhaustive enunciation and division of legislative powers between the Federal and Provincial Legislatures.
" The Excise duty in England came to be imposed as a scheme of revenue and taxing device by Pym and approved by the Long Parliament.
It consisted of charges on wine and tobacco and some 46 other articles were added later.
The basic principle of duties of Excise was that they were taxes on the production and manufacture of articles which could not be taxed through the customs house.
The revenue derived from that source is called excise revenue proper.
In England it was later on extended to comprise other taxes but the fundamental conception of the term is that it is a tax on articles produced or manufactured in the country.
It was in this sense that the word "duty of excise" was understood in Australia (Peterswalad vs Bartley (1).
The importance of legislative practice of a country was pointed out by the Privy Council in a Canadian case Croft vs Dunphy (2) where it was held that when a power is conferred to legislate on a particular topic it is important in determining the scope of the power to have regard to what is ordinarily treated as embraced within that topic in the legislative practice in England, U.S.A. and the Dominions and of India, the Federal Court considered the nature of duty of Excise in Re The Central Provinces & Berar Sales of Motor Sprit & Lubricants Taxation Act (In re A Special Reference under section 213 of Government of India Act, 1935) (3), generally known as the "Central Provinces" case.
In that case the Act of the Provincial legislature levying a tax on retail sale of motor spirit was held to fall within item 48 in List II of the 7th Schedule of the Constitution Act and not a duty of Excise within the meaning of entry 45 of List I of that Schedule.
The nature of the duty was considered by the Court.
Gwyer, C. J., after referring to the distionary meaning of the word "excise" said at p. 41: "But its primary and fundamental meaning in English is still that of a tax on articles produced or manufactured in the taxing country and intended for home consumption.
I am satisfied that is also its primary and fundamental meaning in India; and no 47 one has suggested that it has any other meaning in entry No. 45.
" At p. 47 the learned Chief Justice said: "The expression "duties of excise", taken by itself conveys no suggestion with regard to them time or place of their collection.
Only the context in which the expression is used can tell us whether any reference to the time or manner of collection is to be implied.
It is not denied that laws are to be found which impose duties of excise at stages subsequent to manufacture or production; but so far as I am aware, in none of the cases in which any question with regard to such a law has arisen was it necessary to consider the existence of a competing legislative power such as appears in entry No. 48." But Mr. Pathak relied on the observations of the learned Chief Justice at p. 50 where he said: "Thus the Central Legislature will have the power to impose duties on excisable articles before they become part of the general stock of the Province, that is to say at the stage of manufacture or production, and the Provincial Legislature an exclusive power to impose a tax on sales thereafter.
" But these observations only mean this that when there is a competition between the duty, imposed at the stage of manufacture of production and a tax imposed on sales thereafter, the sphere of the Central and the Provincial Legislatures comes into operation but, as the previous passages, show, it does not in any manner vary the meaning of the word "excise" nor does it accept a further qualification which is sought to be included in that phrase as a necessary quality of that tax that unless it is capable of being passed on to the consumer or the person taxed can indemnify, himself, it is not a duty of excise.
At p. 47, the learned Chief Justice 48 observed that in the expression "duties of excise" no suggestion as to time or place of collection was implied.
Sulaiman, J., pointed out at p. 73 that in the Indian Constitution it was not necessary to go into the fine niceties of distinction between direct and indirect taxation because in the Indian Act no such division existed and that ultimate incidence of tax was not a crucial test under the Indian Constitution.
Again at p. 77, Sulaiman, J., said: "The essence of a tax on goods manufactured or produced is that the right to levy it accrues by virtue of their manufacture or production.
It is immaterial whether the goods are actually sold or consumed by the owner or even destroyed before they can be used.
If a duty is imposed on the goods manufactured or produced when they issue from the manufactory then the duty becomes leviable independently of the purpose for which they leave it and irrespective of what happens to them later.
" In a subsequent case The Province of Madras vs Messrs. Boddu Paidnna & Sons(1) Gwyer, C. J., again went into the question of the nature of the duty of excise under the expression "duties of excise" and said at p. 101: "There is in theory nothing to prevent the Central Legislature from imposing a duty of excise on a commodity as soon as it comes into existence, no matter what happens to it afterwards, whether it be sold, consumed, destroyed or given away.
A taxing authority will not ordinarily impose such a duty, because it is much more convenient administratively to collect the duty (as in the case of most of the Indian Excise Acts) when the commodity leaves the factory for the first time, and also 49 because the duty is intended to be an indirect duty which the manufacturer or producer is to pass on to the ultimate consumer, which he could not do if the commodity had, for example been destroyed in the factory itself.
It is the fact of manufacture which attracts the duty, even though it may be collected later; and we may draw attention to the Sugar Excise Act in which it is specially provided that the duty is payable not only in respect of sugar which is issued from the factory but also in respect of sugar which is consumed within the factory." The Privy Council described the nature of the duty of Excise in Governor General in Council vs Province of Madras (1) as a duty which is primarily levied on a manufacturer or producer in respect of the commodity manufactured or produced.
At p. 103 Lord Simonds referred to In re Central Provinces & Berear case (2) and to Baddu Paidanna case (3) and said: "The two taxes, the one levied on a manufacturer in respect of his goods, the other on a vendor in respect of his sales, may as is there pointed out in one sense overlap.
But in law there is no overlapping.
The taxes are separate and distinct imposts.
If in fact they overlap, that may be because the taxing authority, imposing a duty of excise finds it convenient to impose that duty at the moment when the excisable article leaves the factory or workshop for the first time on the occasion of its sale.
But that method of collecting the tax is an accident of administration; it is not of the essence of the duty of excise, which is attracted by the manufacture itself.
That this is so is clearly exemplified in those excepted cases in which the Provincial, not the Federal legislature has power to impose a duty of excise.
" 50 Thus according to the Indian cases decided on the nature of duties of excise ultimate incidence is not of any importance or relevance.
In dealing with excise duty (1) there is no mention of a direct or indirect taxes; the Indian Legislature has avoided this incidence to be characteristic of the tax; (2) taxable event is the manufacture or production of goods; it is immaterial what happens to them afterwards whether they are sold, consumed, destroyed or given away; (3) it is not a necessary incidence that the manufacturer must be able to pass it on to the consumer or indemnify himself; (4) the general tendency of its being passed on may be there but it may be prohibited by the circumstances, economic or otherwise.
The fact that the manufacturer has no chance to get the tax from the buyer does not affect the legality of the tax; it was so held in the case of sales tax in The Tata Iron & Steel Co. Ltd. vs The State of Bihar (1) where the nature of the excise duty was discussed.
At page 1369 the observations of Gwyer C. J. in Boddu Paidanna case (2) and of the Privy Council in Governor General in Council vs Province of Madras (3) were quoted with approval.
It may be noted that in the Tata Iron & Steel Co. case (1) the tax was a retrospective tax and was imposed at a time when in the Sales Tax Act no provision was made for passing on the Sales Tax to the purchaser.
In the Union of India vs Madan Gopal Kabra (4) it was pointed out that Parliament was not precluded from exercising the power of imposing a retrospective tax and therefore it was competent to make a law imposing a tax on the income of any year prior to the commencement of the Constitution.
As was pointed out in that case under articles 245 and 346 of the Constitution read with the relevant entry in List I of Schedule VII Parliament is empowered to make laws with regard to taxes and no limitation or restriction is imposed in regard to 51 retrospective legislation.
See Sargood Bros. vs The Commonwealth (1) where retrospective laws about the levying of Customs were held valid.
See also Welch vs Henry (2) On the ground of retrospectivity alone therefore the tax is not unconstitutional.
In view of what has been said above the cases decided in Canada or Australia cannot have any application.
It was next contended that a retrospective tax purporting to be a duty on goods when the goods had been disposed of would be a tax not under item 84, List I of the Seventh Schedule but one under item 60 of List II, i.e., tax on profession, trade, calling and employment the submission being that the word "trade" would include manufacture.
This contention was sought to be supported by the observations of Lords Davey in Commissioner of Taxation vs Kirk (3): "The word `trade ' no doubt primarily means traffic by way of sale or exchange or commercial dealing, but may have a larger meaning so as to include manufactures." In National Association of Local Government Officers vs Bolton Corporation (4) Lord Wrights in interpreting the word "trade" in section 11 of the Industrial Courts Act, 1919, said: "Sect.
11 of the Act of 1919 shows that `trade ' used as including `industry ' because it refers to a trade dispute in the industry of agriculture.
" But this letter case has no application because there the word "trade" was interpreted in relation to a section of a particular Act and trade in that context has quite a different meaning.
In Skinner vs Jack Breach Limited (5), Lord Hewart, C. J. in interpreting the word "trade" in Trade Boards Act held that the word "trade" indicates a process of buying 52 and selling but it was by no means an exhaustive definition.
It might also mean a calling or industry or class of skilled labour.
The duty of Excise in item 84 should be given the widest construction unless for some reason it is cut down either by the terms of that item itself or by other Parts of the Constitution.
The legislative history of the duty of Excise shows the nature of the tax.
The word "trade" in item 60 of List II has reference to the carrying on of an activity in the nature of buying and selling and may in a different context mean a calling or an industry.
Therefore reading the two items together it is obvious that item 84 deals with taxes on goods manufactured or produced and item 60 deals with the carrying on of trade i.e., an activity in the nature of buying and selling and the Act in its pith and substance relates to duty on goods manufactured or produced and has no relationship with item 60 of List II.
Even assuming that the nature and tendency of the duty of Excise is, as contended by Mr. Pathak that it can be passed on to the consumer, even than the complaint of the appellants that they have been deprived of that opportunity is not well founded, because of section 64 A of the Indian Sale of Goods Act (3 of 1930), which was section 10 in the Indian Tariff Act, 1934.
It was originally taken from the British Tariff Act, 1901, 1 Edw.
VII Ch.
Section 64A of the Indian Sale of Goods Act is as follows : section 64 A. "In the event of any duty of customs or excise on any goods being imposed, increased, decreased or remitted after the making of any contract for the sale of such goods without stipulation as to the payment of duty where duty was not chargeable at the time of the making of the contract, or for the sale of such goods duty paid where duty was chargeable at that time, 53 (a) if such imposition or increase so takes effect that the duty or increased duty, as the case may be, or any part thereof, is paid, the seller may add so much to the contract price as will be equivalent to the amount paid in respect of such duty or increase of duty, and he shall be entitled to be paid and to sue for and recover such addition; and (b) if such decrease or remission so takes effect that the decreased duty only or no duty, as the case may be, is paid, the buyer may deduct so much from the contract price as will be equivalent to the decrease of duty or remitted duty, and he shall not be liable to pay, or be sued for or in respect of, such deduction.
" This section provides for the recovery by the seller of the amount of increase in duty from the purchaser where the increase takes effect subsequent to the contract and for the right of the purchaser to recover from the seller the duty in cases where there is a similar decrease and this right exists both before the delivery is given, taken and price received or paid as the case may be : Narayanan Chettiar vs Kidar Sahib(1).
Counsel for the appellants attempted to counter this submission by relying upon a judgment of the Privy Council in Prbhudas vs Ganidada (2).
In that case the Government duty had not been reduced but the Buyer claimed that it had constructively been decreased because the tariff valuation had been reduced and so constructively it must be reckoned that there was a decrease in the duty on the goods sold.
This contention was negatived by the Privy Council and it was held that a change of duty means a change in the rate of duty, and not a change of tariff value.
Thus assuming that the contention of the appellants is correct as to the nature of the excise duty it cannot be said that in the present case the appellants were 54 deprived of the opportunity of recovering the additional duty from the purchaser and therefore the duty lost its character of being excise duty and was transformed into a different tax.
This argument of the appellants is therefore without substance and must be overruled.
The constitutionality of the tax and retrospective imposition of enhanced duty on tobacco was further challenged on the ground of violation of the fundamental rights of the appellants under article 19(1)(f) of the Constitution which it was submitted is not saved by cl.
(5) of that article because it is not a reasonable restriction in the interest of the general public.
The grounds of attack may be stated in this way : (1) that the nature of an excise duty is such that normally it is passed on to the purchaser by the manufacturer or the producer and it has that tendency and quality; (2) as the impugned duty was enhanced at a time when the appellants had cleared their goods after paying the then prevailing duty, it was not possible for them to realize the excise duty from any purchaser and (3) at the time of the clearance of the goods the appellants had paid all the taxes under the then existing law and the new liability rendered them liable to pay an illegal exaction or in the alternative to suffer the consequences of non payment which are of a drastic nature.
On this basis it was submitted that the imposition was an unreasonable restriction on the fundamental rights of the appellants guaranteed under article 19(1) (f).
At this stage an examination of the extent of the State 's power of taxation will be helpful.
This power is one of the three governmental powers of the State; the other two being police power and power of eminent domain.
The power of taxation is the legal capacity of government to impose charges upon persons or their property to raise revenue for governmental 55 purposes.
A tax is neither a penalty imposed on the taxpayer nor a liability which he assumes by contract.
It is but a way of apportioning the cost of government among those who in some measure are privileged to enjoy its benefits and must bear its burdens.
Welch vs Henry (1), but the constitutionality of a tax does not depend upon a showing of benefits ; protection and taxation are not correlative terms.
Willis Constitutional, Law, p. 224 : Tax is levied against the person and not against property.
Property only serves as a basis for computing the measure of each person 's liability.
Weaver on Constitutional Law, p. 513 : "The power of taxation is one so unlimited in force and so searching in extent, that the courts scarcely venture to declare that it is subject to any restrictions whatever, except such as rest in the discretion of the authority which exercises it.
It reaches to every trade or occupation to every object of industry, use, or enjoyment; to every species of possession; and it imposes a burden which, in the case of failure to discharge it, may be followed by seizure and sale or confiscation of property.
No attribute of sovereignty is more pervading and at no point does the power of the government affect more constantly and intimately all the relations of life than through the exactions made under it." (Cooley 's Constitutional Limitations, Vol. 2, 8th Ed.p. 987.) Chief Justice Marshall said in M 'Culloch vs Maryland (2) : "The power of taxing the people and their property is essential to the very 56 existence of government, and may be legitimately exercised on the objects to which it is applicable to the utmost extent to which the government may choose to carry it.
The only security against the abuse of this power is found in the structure of the government itself." (See Willough by on the Constitution of the United States, Vol. 2 at p. 666).
As the exigencies of the government cannot be limited, no limits can be prescribed to the exercise of the right of taxation.
Every individual must bear a portion of public burden and that portion is determined by the legislature.
According to the American Supreme Court the power of taxation is very wide and uncontrolled.
In M 'Culloch vs Maryland(1) Chief Justice Marshall said : ". . . . it is unfit for the judicial department to inquire what degree of taxation is the legitimate use, and what degree may amount to the abuse of the power." See also Graves vs Schmidlapp(2) (per Chief Justice Stone).
In Pacific Insurance Co. vs Soule(3) the Court said: "Congress may prescribe the basis fix the rate, and require payment as it may deem proper within the limits of the constitution it is supreme in its action.
No power of supervision or control is lodged in either of the other departments of the government.
" Again in Veazie Bank vs Fenno (4), it was said : "It is insisted. . that the tax in this case is excessive and so excessive as to indicate a purpose on the part of the congress to destroy the franchise of the bank, and is, therefore beyond the constitutional power of 57 congress. . .
The first answer to this is that the judicial cannot prescribe to the legislative department of the Government limitations upon the exercise of its acknowledged powers.
The power to tax may be exercised oppressively upon persons, but the responsibility of the legislature is not to the Courts but to the people by whom its members are elected.
" In Patton vs Brady(1), the Court observed: "It is no part of the function of a Court to enquire into the reasonableness of the exercise of the power of taxation either as respects the amount or the property on which it is imposed.
" In Welch vs Henry(2), at p. 94 it was observed : "The equitable distribution of the costs of government through the medium of an income tax is a delicate and difficult task.
In its performance experience has shown the importance of reasonable opportunity for the legislative body, in the revision of tax laws, to distribute increased costs of government among its tax payers in the light of present need for revenue and with knowledge of the sources and amounts of the various classes of taxable income during the taxable period preceding revision.
Without that opportunity accommodation of the legislative purposes to the need may be seriously obstructed if not defeated." Thus according to American view (1) the power to tax is an attribute of sovereignty; (2) tax is an rateable contribution of each individual in a State towards the amount of revenue which is essential for the existence and operation of a public governing body; (3) it being essential for the very existence of an organised State, it may be exercised on objects to the utmost extent to which the legislature may choose to carry it and (4) the needs of 58 the revenue are only known to the legislature and the court cannot enquire into the necessity of imposing a tax or the objects on which the imposition should be made or the extent of the imposition.
In the very nature of things the courts are unable to go into the propriety, extent or economics of a particular tax or the policy underlying it, which must depend upon a multitude of circumstances, which can only be known to the government or the legislature.
As the appellants have relied on certain American decisions where certain taxing laws operating retrospectively were tested on the touchstone of "due process of law" clause it becomes necessary to examine the extent of that doctrine.
"The taxing power of Federal Government," says Prof. Willis (Constitutional Law, p. 378), "is limited by the procedural requirements of the due process clause.
Notice and hearing, though not a judicial tribunal, are required where the tax is based on the value of the property.
Jurisdiction, also, is a requirement for all forms of taxation, though the rules as to jurisdiction vary with the kind of tax levied." According to Willoughby, Constitution of the United States, Vol.
III, p. 1875, the due process of law obliges the exercise of the taxing power to conform to the following rules : 1.
That the tax shall be for a public purpose.
That it shall operate uniformly upon those subject to it.
That either the person or the property taxed shall be within the jurisdiction of the government levying the tax.
That in the assessment and collection of the tax certain guarantees against injustice to individuals, especially in the case of specific as distinguished from ad valorem taxes, by way of notice and 59 opportunity for a hearing shall be provided.
These principles of taxation are not peculiar to America but are accepted in all countries which have parliamentary democracies and govern the Indian taxation system also.
In some American decisions retroactive tax laws were held to be inconsistent with due process : Nichols vs Coolidge(1); Helvering vs Helwholz(2) Blodgett vs Holden (3).
But the decision in those cases rested on the ground that the tax could not reasonably be anticipated by the taxpayer at the time of the voluntary act which the statute later made the taxable event e.g., the gift by the descendent of the whole or a part of his interest in property.
As was explained in Welch vs Henry(4) at p. 93 : "Since, in each of these cases, the donor might freely have chosen to give or not to give the taxation, after the choice was made of a gift which he might will have refrained from making had he anticipated the tax, was thought to be so arbitrary and oppressive as to be a denial of due process.
But there are other forms of taxation whose retroactive, imposition cannot be said to be similarly offensive, because their incidence is not on the voluntary act of the taxpayer.
And even a retroactive gift tax has been held valid where the donor was forewarned by the statute books of the possibility of such a levy, Milliken vs United States, 75 L. Ed. 809. . . " In that case the retroactive operation of a tax on dividends was upheld and the objection on the ground of inconvenience in being called upon, after the customary time for levy and payment of the 60 tax had passed, to bear a governmental burden of which he had no warning and which he did not anticipate was held to be unsustainable.
The contention that the retroactive application of the Revenue Acts is a denial of the due process guaranteed by the Constitution has not been accepted in America as an invariable rule.
Welsh vs Henry(1) and the other cases there cited.
The doctrine of due process of law has received various interpretations in America which have not always been consistent.
Sometimes it has favoured personal liberty and sometimes social control sometimes personal liberty as a matter of substance.
Sometimes it has protected personal liberty by extending due process to matters of substance and sometimes it has protected social control by broadening the scope of police power or the power of taxation or the power of eminent domain.
Willis ' Constitutional Law, p. 659.
Brandeis J., in Untermyer vs Anderson(2) dealing with the presumption of validity of a taxing statute observed : "The presumption should be particularly strong where as here the objection to an act arises not from a specific limitation or prohibition on congressional power but only out of the `vague contours of the 5th Amendment prohibiting the depriving any person of liberty or property without due process of law '.
Holmes J., in Adkins vs Children 's Hospital, , 800.
" It was because of the varying meanings and concepts which have from time to time been attached to "due process of law" that the framers of the Indian Constitution did not adopt it in the Constitution; on the other hand they tried to give more defined boundaries to the area of fundamental rights in articles 19 and 31 which deal with rights of property 61 and in articles 19, 20, 21 and 22 which relate to protection of personal liberty and this Court rejected it in A. K. Gopalan 's case (1) and in the State of West Bengal vs Subodh Gopal Bose (2).
The constitutionality of the duty of excise was challenged in the present case on the ground of violation of article 19 (1) (f) of the Constitution.
he argument is that a taxing law under article 265 is as much a law as any other and therefore falls within the definition of law under article 13(3)(a), and if it contravenes any of the fundamental rights under Part III, then to the extent of the contravention it is void.
Counsel relied on the second Kochuni case (3).
Article 19 guarantees personal freedoms subject to certain restrictions.
Its relevant portion is as follows: article 19(1)(f).
"All citizens shall have the right to acquire, hold and dispose of property; article 19(5).
"Nothing in sub clauses (d), (e) and (f) of the said clause shall affect the operation of any existing law in so far as it imposes or prevent the State from making any law imposing reasonable restrictions on the exercise of any of the rights conferred by the said sub clauses either in the interests of the general public or for the protection of the interests of any Scheduled Tribe.
" As has already been said the power to tax is the legal capacity of the State to raise from all those subject to its authority a certain amount of revenue essential so the existence and operation of government.
A tax is not a penalty but a contribution of monies for governmental purposes by 62 persons who may be residents or non residents citizens or non citizens, living persons or legal personae who are privileged to enjoy its benefits, but those are not co relative.
It implies an equality of burden and regular distribution of expenses of government among the persons taxed.
It is levied by authority of law equitably, uniformly or in echelons on all persons subject to it.
The appellants alleged that they had sold their goods during the period when the Finance Bill was before Parliament.
Variations in the rates of duties are not unexpected, it being within the power of Parliament to do so both prospectively and retrospectively.
It is not suggested that such variations are unknown in legislative practice or that the legislators were not entitled to amend a money bill as introduced.
If the appellants ' contention is sustained then it will mean the deprivation of Parliament of its right to choose the objects of taxation and therefore Parliament will only vary the rates of duties proposed by the Executive or the time of their effectiveness at the peril of their being declared invalid although they may be within its legislative competence and may in its opinion be necessary for the carrying out of its policies or subserve the proper governance of the country.
In the Indian Constitution there is an exhaustive enunciation and distribution of legislative powers, including powers as to taxation, between the State Legislatures and Parliament.
Subjects of taxation are distributed in the three Legislative Lists and areas of the respective fields of Parliament and State Legislatures as to taxes are defined.
In Parts XII and XIII limitations on legislative competence of the various legislatures as to taxation are indicated and emphasis is placed on the preservation of the economic unity of 63 India.
Article 265 is in Chapter XII and provides : "No tax shall be levied or collected except by authority of law," which means that all taxation has to be under a law enacted by a legislature of competent jurisdiction and subject to constitutional limitations.
This Court in 1950 rejected the applicability of the doctrine of "due process of law" to Indian constitutional problems: A. K. Gopalan 's case (1); The state of West Bengal vs Subodh Gopal Bose (2).
In the latter case it was also held that the Indian Constitution recognises no fundamental right to immunity from taxation and that is why presumably no constitutional protection is provided against the exercise of that power.
Per Patanjali Sastri, C.J., p. 614.
Das, J. (as he then was), held the power of taxation to be distinct from police power (i.e. regulatory power of the State) and the power of Eminent Domain (i.e. the power of the State of compulsory acquisition of property).
Dealing with protection against taxation he said in Subodh Gopal 's case (2) at p. 652 : "Our Constitution makers evidently considered the protection against deprivation of property in exercise of police power or of the power of eminent domain by the executive to be of greater importance than the protection against deprivation of property brought about by the exercise of the power of taxation by the executive, for they found a place for the first mentioned protection in article 31 (1) and (2) set out in Part III dealing with fundamental rights while they placed the last mentioned protection in article 265 to be found in Part XII dealing with finance etc.
So with regard to all the three sovereign powers we have complete protection against the executive organ of the State.
" 64 Again at p. 653 he observed : "Apart from this, what I ask is, our protection against the legislature in the matter of deprivation of property by the exercise of the power of taxation ? None whatever.
By exercising its power of taxation by law the State may deprive us, citizen or non citizen of almost sixteen annas in the rupee of our income." (See also p. 654).
In Ramjilal vs Income Tax Officer (1) Das, J. (as he then was), observed at pp.
136 137 : "Reference has next to be made to article 265 which is in Part, XII, Chapter 1, dealing with 'Finance '.
That article provides that no tax shall be levied or collected except by authority of law.
There was no similar provision in the corresponding chapter of the Government of India Act, 1935.
If collection of taxes amounts to deprivation of property within the meaning of article 31(1), then there was no point in making a separate provision again as has been made in article 265.
It, therefore, follows that clause (1) of article 31 must be regarded as concerned with deprivation of property otherwise than by the imposition or collection of tax, for otherwise article 265 becomes wholly redundant.
In the United States of America the power of taxation is regarded as distinct from the exercise of police power or eminent domain.
Our Constitution evidently has also treated taxation as distinct from compulsory acquisition of property and has made independent provision giving protection against taxation save by authority of law.
When Dr. Tek Chand was asked if that was not the correct position, he did not advance any cogent or convincing answer to refute the conclusion put to him.
In our opinion, the protection against imposition 65 and collection of taxes save by authority of law directly comes from article 265, and is not secured by clause (1) of article 31.
Article 265 not being in Chapter III of the Constitution, its protection is not a fundamental right which can be enforced by an application to this court under article 32.
It is not our purpose to say that the right secured by article 265 may not be enforced.
It may certainly be enforced by adopting proper proceedings.
All that we wish to state is that this application in so far as it purports to be founded on article 32 read with article 31(1) to this court is misconceived and must fail.
" A similar decision was given and similar language used by Mahajan, C.J., in Laxmanappa Hanumantappa vs Union of India (1) : "It was held by this Court in Ramjilal vs Income Tax Officer, Mohindergarh (2), that as there is a special provision in article 265 of the constitution that no tax shall be levied or collected except by authority of law, clause (1) of article 31 must therefore be regarded as concerned with deprivation of property otherwise than by the imposition or collection of tax, and inasmuch as right conferred by Article 265 is not a right conferred by Part III of the constitution, it could not be enforced under article 32.
" Ramjilal 's case (2) was quoted with approval in Bengal Immunity Co. Ltd. vs State of Bihar (3).
Thus early after the establishment of this Court opinion was expressed excluding the applicability of fundamental rights in Part III to taxing Statutes.
But it is important to notice that the Article which was sought to be applied in those cases was article 31 (1) which deals with deprivation of property 66 and not article 19 which is regulatory of the rights of a citizen of personal liberty, property and avocation.
It was contended that the impugned tax illegally deprives the appellants of their property and was therefore unconstitutional.
In support reference was made to Suraj Mal Mohta & Co. vs A. V. Viswanatha Sastri (1) (under article 14); Shree Meenakshi Mills Ltd. vs Sri A. V. Viswanatha Sastri (2) (under article 14); Purshottam Govindji Halai vs Shree B. M. Desai, Additional Collector of Bombay (3) (under articles 14 and 21); M. Ct.
Muthiah vs The Commissioner of Income tax, Madras (4) (under article 14); A. Thangal Kunju Mudaliar vs M. Venkatchalam Potti (5) (under article 14); Bidi Supply Co. vs The Union of India (6) (under article 14); Panna Lal Binjraj vs Union of India (7) (under articles 14 and 19(1)(g);) and Collector of Malabar vs Erimal Ebrahim Hajee (8).
These are the cases in which the validity of taxation laws was attacked under the Articles above mentioned.
In Panna Lal Binjraj vs The Union of India (7), the assault was not against the imposition or the vires of the tax but against the vires of section 5(7A) of the Indian Income tax Act which empowers the Commissioner of Income tax to transfer any case from one Income tax Officer subordinate to him to another and empowers the Central Board of Revenue to transfer any case from one Income tax officer to another.
This attack was based on the contravention of articles 14 and 19(1)(g).
It was held that the discretion vested in the authorities empowered to make the transfer is not discriminatory and there was no interference with the right of the citizen to carry on his trade or calling.
In collector of Malabar vs Erimal Ebrahim Hajee (8) the attack against the recovery of income tax under section 46 (2) of the Income tax Act was based on articles 14, 19 and 22.
There again the question for decision was not the imposition of the tax but 67 the mode of recovery and at Page 976 this ground of attack was rejected and reference was there made to the State of Punjab vs Ajaib Singh (1); Purshottam Govindji Halai vs Shree B. M. Desai, Additional Collector of Bombay (2).
Another case relied upon by the appellant 's counsel was Western India Theatres vs The Cantonment Board, Poona, (3) in which the tax was imposed on cinema houses with larger seating capacity and the attack was on the ground of article 14 but that was repelled.
The appellant 's counsel also referred to the Bengal Immunity Co. Ltd. vs State of Bihar (4) where the vires of the sales tax imposed on inter State transactions was attacked.
The High Court in the case had held that the petition under article 226 was misconceived overlooking the fact that the contention raised was that in so far as the tax purported to act on non residents in respect of inter State sales it was ultra vires of the Constitution.
p. 619, Das, C. J., observed : "It is also true that article 31 which protects citizens and non citizens alike cannot be availed of as it deals with deprivation of property otherwise than by way of levying or collecting taxes as held by this Court in Ramjilal vs Income tax Officer, Mohindergarh ; , and that, therefore the Act does not constitute an infringement of the fundamental right to property under that article.
It is, however, clear from article 265 that no tax can be levied or collected except by authority of law which must mean a good and valid law.
The contention of the appellant company is that the Act which authorises the assessment, levying and collection of sales tax on inter State trade contravenes and constitutes an infringement of article 286 and is, therefore, ultra vires, void and unenforceable.
If, therefore, this contention be well founded, 68 the remedy by was of a writ must, on principle and authority, be available to the party aggrieved.
The next case relied upon by counsel for the appellants was Kailash Nath vs State of U. P. (1) which was a case under the U. P. Sales Tax Act, the plea of the petitioners was that the goods sought to be taxed had been exported overseas and therefore not liable to sales tax.
It was held that if a tax is levied without due legal authority on any trade or business then it is open to the citizen to approach this Court under article 32, since his right to carry on trade is violated or infringed by the imposition of the tax and article 19 (1)(g) "comes into play".
There again the taxation law itself was not challenged on the ground of violation of any fundamental right which has reference to property, but the imposition of the tax was assailed on the ground that it was not imposeable on the transactions which had been entered into.
In support of the proposition that the taxation laws are assailable under the provisions of article 19(1) State of Travancore Cochin vs Shanmuga Vilas Cashew Nut Factory (2) was relied upon.
That was not a petition under article 32 or a matter under article 19(1)(f) but one under article 286(1) and the question in dispute was whether the transaction was in the course of inter State trade.
Himatlal Harilal Mehta vs The State of Madhya Pradesh (3) was also a similar case.
Article 19(1)(g) was applied because of the unconstitutionality of the tax under article 286(1)(a).
M/s. Ram Narain Sons Ltd. vs Asst.
Commissioner of Sales Tax (4) was also a case under article 286 of the Constitution and was not a matter falling under article 19(1) of the Constitution.
In all these cases relied upon by counsel for the appellants the basis of attack was (1) that the 69 tax was not within the legislative competence of the legislature imposing the tax and therefore the tax was being illegally recovered from the assessee or (2) an objection was taken to the differential mode of imposition and collection and use of a more stringent procedure i.e., illegal discrimination between persons similarly situated e.g., under Taxation on Income (Investigation Commission) Act.
The imposion of an illegal tax not within the legislative competence of the legislature, a colourable piece of legislature imposing a tax which is not a tax but is an imposition of a confiscatory nature, a breach of principles of natural justice or imposing an unimposeable tax have all been held to be violative of the right to carry on trade under article 19(1)(g).
But they do not support the proposition that the tax if otherwise valid can be declared unconstitutional and can be subject to judicial review on the ground of being excessive or being retrospective in operation or being imposed on one article rather than another.
These cases do not support the proposition which has been contended for by the appellants that the very imposition of the tax is a contravention of the right of the assessee to acquire, hold (or own) or dispose of property or on the ground of contravention of article 31.
In the State of Bombay vs Bhanji Munji (1), it was also held that article 19(1)(f) read with cl.
(5) postulates the existence of the property which can be enjoyed and over which rights can be exercised because otherwise the reasonable restriction contemplated by cl.(5) cannot be brought into play.
That was the uniform view held in this Court till the majority judgment in Moopil Nair 's case(2) which relied on the second Kochuni case i.e., Kavalappara Kottarathil Kochunni etc.
vs The State of Madras (3).
But the latter was not a taxation case.
It was held in that case (Kochuni case) that all laws within 70 article 13 are subject to Part III and that for a law to be valid it must satisfy two tests (1) of being enacted by a legislature having legislative competence and (2) it should not contravene any of the fundamental rights.
The above opinion is not in accord with the opinion of this court in A. K. Gopalan 's case (1); Ram Singh vs State of Delhi (2); State of Bombay vs Bhanji Munji (3); The Daily Express case (4) and The Hamdard Dawakhana case (5).
The question of the applicability of article 19(1)(f) of the Constitution to taxing matters was considered in K. T. Moopil Nair vs The State of Kerala (6).
That was a case in which a tax at a flat rate was levied on forest lands in the State of Kerala and this Court by majority held that the tax so imposed was unconstitutional on the ground of infringement of articles 14 and 19(1)(f).
The reasons given by the learned Chief Justice were: (a) In the procedure to be adopted for the levying of the tax, there was no provision for a notice to be given to the assessee; (b) There was no procedure for rectification of mistakes committed by the assessing authorities; (c) There is no procedure for obtaining the opinion of a superior Civil Court on a question of law as is generally found in all taxing stautes (d) No duty was cast upon the assessing authority to act judicially; and (e) There was no right of appeal provided to the assessee.
The provisions of the Act were held in the majority judgment to be confiscatory.
It was observed by the learned Chief Justice at p. 559: "That the provisions aforesaid of the impugned Act are in their effect confiscatory is clear on their face.
Taking the extreme 71 case, the facts of which we have stated in the early part of this judgment, it can be illustrated that the provisions of the Act, without proposing to acquire the privately owned forests in the State of Kerala after satisfying the conditions laid down in article 31 of the Constitution, have the effect of eliminating the private owners through the machinery of the Act." Thus the impugned statute in that case was held to be violative of article 19(1)(f) because its procedural part made no provision for giving a hearing to the assessees or for appeal nor was the Assessing Authority required to act judicially and the imposition though called a tax was in effect confiscatory and therefore a colourable piece of legislation.
Sarkar, J., in his minority judgment remarked that reasonableness of the rate was not assailed but what was assailed was the imposition of a flat rate per acre without any reference to productivity.
Undoubtedly Moopil Nair 's case (1) did hold that a law under article 265 was also a law within article 13 and if it contravened article 14, it was liable to be struck down and that such law must also pass the test of the limitations prescribed in Part III of the Constitution but it did not lay down that all Articles in Part III would be applicable to taxation laws nor did it decide contrary to Ramjilal 's case (2) that article 31 (1) would apply to taxation law which is otherwise invalid.
But it is difficult to hold that a regulatory Article like article 19(1) was intended to limit the powers of the Legislature to impose taxes and thus to discharge its duty in regard to country 's financial needs and policies.
The contention of infringement of the appellants ' right under article 19(1) (f) is unsound and must be rejected and the reasons are these: Firstly: Clause (5) of article 19 allows the enacting of laws which impose "reasonable restrictions" 72 in the interests of the general public.
The use of the term "reasonable restrictions" is indicative of regulation of the right to the personal rights mentioned in sub cl.
(f) of the first clause.
It must have relation to the existence of the thing to be regulated.
There can be no regulation of things not in existence.
Therefore where an Act is deprivatory as the imposition of a tax is it cannot fall within article (19)(1) but under the specific article 31, which relates to deprivation of property.
Imam, J., in The Collector of Malabar vs E. Ebrahim Hajee (1) said at p. 976: "If the property itself is taken lawfully under article 31, the right to hold or dispose of it perishes with it and article 19(1)(f) cannot be invoked.
" That was a case where the Income tax Officer issued a certificate under section 46 (2) of the Income tax Act and the Collector proceeded to recover under section 48 of Madras Revenue Recovery Act.
Secondly: All taxation, as shown by its very nature and object, is in the interest of the general public because it is a contribution for governmental expenditure from all persons who in some measure are entitled to its benefit.
Thirdly: There is no means or measure for determining the reasonableness of the restrictions which is an objective determination.
The needs of the revenue cannot be known to the courts and cannot be determined by them, and the sources of revenue are entirely within the knowledge of the legislature and it is for that department of the State to determine how the burden will be distributed and why, because that department is the policy making body and is familiar with the economics and the resources of the country and its needs.
It is for that department in its discretion to select 73 anything for taxation or to exclude it.
Cooley 's Constitutional Limitations, Vol.
II, p. 986 (note).
Fourthly: The power to tax is an attribute of sovereignty and it is an accepted principle that the exercise of that power is not subject to judicial control because no Constitutional Government can exist without the power to raise money for its needs and the only security against abuse is in the structure of the Government.
That power carries with it the power to determine when and how the tax shall be levied.
section Ananthakrishnan vs The State of Madras (1), M 'Culloch vs The State of Maryland (2).
There is no indication that the Indian Constitution has rejected or modified the American concept of the sovereignty of the State in regard to the power of taxation.
Fifthly: Article 19 (1) declares the right of a citizen and cl.
(5) prescribes its limits.
If a taxation statute is within article 19(1)(f) it must be capable of being upheld as a reasonable restriction on the holding of property etc.
On the submission of the appellants all taxes will be restrictions.
If they are restrictions then their reasonableness will be justiciable depending upon the appreciation of established facts.
How are the courts to judge ? All the necessary data for determining reasonableness can never be before a court which in the very nature of things is available only to the legislature.
Can the court say that a particular tax is excessive or unreasonable or can the court say which particular source should be taxed and which particular income group should bear the burden of taxation or what the policy of the State as to taxation should be.
It would seem therefore that the reasonableness of tax laws is not justiciable and therefore they cannot fall within clause (5) of article 19.
Article 74 19(1)(f) and cl. 5 are part of one scheme and the former is incapable of operating where the latter is inoperative.
If considerations of article 19(5) are foreign to taxing laws article 19(1)(f) can have no application to them.
Sixthly: Applicability of article 19(1)(f) to taxation laws will mean that laws which are otherwise valid will be inapplicable to citizens but will be applicable to non citizens.
At any rate such law will operate differentially between one set of taxpayers and another i.e., between citizens and non citizens.
This will violate the very principles of due process relied upon by the appellants.
Seventhly: In American due process which has a variable concept has not been applied to retrospective operation of tax laws except to tax on voluntary gifts of property and that also was doubted in Welch vs Henry (1).
Eighthly: Retroactive duty of excise will be a valid imposition in the case of persons who have not sold their tobacco between the period of the introduction of the bill and the enactment of the Finance Act but will be invalid in the case of persons placed as the appellants.
Ninthly: The acceptance of the appellants ' argument would mean that they can recover any excess duty paid, excess because of subsequent decrease, but would not be liable to pay any similar increase in duty in spite of section 64 A of the Indian Sale of Goods Act under which variations in the rates of duties become operative on contracts of sale and purchase.
Tenthly: It has been held that article 31 is inapplicable to deprivation by taxation.
Ramjilal 's case (2); Lakshmanppa Hanumantappa vs The Union of India (3); and taxation laws are expressly excluded from the operation of article 31(2) by 75 cl.
5(b)(i) of that Article.
If the appellants ' contention is correct then deprivation although not protected under article 31 will be subject to regulatory control under article 19(1)(f).
Eleventhly: To put it in the words of the American Supreme Court in Odgen vs Saunders(1) "It is but a decent respect due to the wisdom the integrity and the patriotism of the legislative body, by which law is passed to presume in favour of its validity, until its violation of the Constitution is proved beyond all reasonable doubt".
Twelfthly: The challenge to the legality of the tax in dispute is not based and is unsustainable on the ground of specific limitation or prohibition on Parliamentary power but has been raised on the ground of the infringement of an article containing the principles of the State 's power of control.
The cases dealing with legislative incapacity are inapplicable to the latter ground of assault.
Cases such as Mohammad Yasin vs The Town Area Committee, Jalalabad(2) (a case of a licence fee which is not a tax), The State of Bombay vs United Motors India Ltd.(3)(a case of inter State trade) and Bengal Immunity Co. case (4) (which was also a case of inter State trade and some of the provision of the impugned Act there were held to be unreasonable restriction on the right to carry on trade) and Ch.
Tika Ramji 's case (5) (a case dealing with the imposition of the restriction on the right to purchase except through a particular society) were not cases in which the imposition of a tax was challenged on the ground of infringement of article 19(1)(f).
I, therefore, agree that appeals be dismissed with costs.
One hearing fee.
Appeal dismissed.
| The appellants who were carrying on business in tobacco had in their licenced warehouse considerable quantity of tobacco on February 28, 1951.
On the same day a Bill was introduced in the House of the People containing the financial proposals of the Government of India for the fiscal year beginning April 1, 1951.
Clause 7 of the Bill made provision for the amendment of the , by way of alteration of duties, inter alia, on unmanufactured tobacco by imposing an excise duty of 8 annas per 1b.
Under the provisions of the , the duty could become leviable as from the date of the introduction of the Bill and it was so made.
In accordance therewith the appellants paid excise duty on tobacco in their possession at the rates mentioned in the Bill and obtained clearance certificates.
On April 28, 1951, the Bill was passed and became Finance Act, 1951, but as passed changes were effected as regards the duty proposed in the Bill.
Under section 7(1) of the Finance Act, the duty on unmanufactured tobacco was increased to 14 annas per lb.
Section 7 (2) thereof provided that "the amendments made in the , shall be deemed to have effect on and after March 1, 1951 and accordingly. . recoveries shall be made of all duties which have not been collected but which would have been collected if the amendment had so come into force.
" In pursuance of section 7(2) a demand was made upon the appellants on June 22, 1951, for payment of the excess of the 2 excise duty payable on tobacco cleared out of the warehouse from March 1, 1951, to April 28, 1951.
The appellants challenged the legality of the demand on the grounds, inter alia, that (1) excise duty was a tax on goods which must exist at the time when the tax was levied and it must have been intended and expected by the legislature that it would be passed on to the consumer, and as the retrospective operation of the duties deprived the tax of these qualities they did not fall within the term "duties of excise" in Entry 84, List I of the Seventh Schedule to the Constitution of India, and, therefore, section 7(2) of the Finance Act, 1951, in so far as it imposed an excise duty retrospective before the date of its enactment was beyond the legislative competence of Parliament and (2) the impugned levy contravened article 19(1)(f), because a retrospective levy of an excise duty deprived the tax payer of the right of passing it on and recovering it from his buyer, and that this constituted a restraint on the right to hold property, which was not saved by cl.(5) of article 19.
^ HELD: (1) Parliament acting within its own legislative field had the powers of a sovereign legislature and could make a law prospectively as well retrospectively and the duties leviable under the , as provided by section 7(2) of the Finance Act, 1951, notwithstanding their imposition with retrospective effect and even if it be that they were incapable of being passed on to a buyer from the taxpayer, were "duties of excise" within the meaning of Entry 84, List I of the Seventh Schedule to the Constitution of India.
(2) The levy of the tax retrospectively under section 7(2) of the Finance Act, 1951, was valid and did not contravene article 19(1)(f) of the Constitution.
Per Kapur, J. (1) Entry 84 in List I deals with taxes on goods manufactured or produced, while Entry 60 in List II deals with the carrying on of trade i.e., an activity in the nature of buying and selling, and the , in its pith and substance relates to duty on goods manufactured or produced and has no relationship with Entry 60.
(2) Reasonableness of tax laws is not justiciable and therefore they cannot fall within cl.(5) of article 19.
article 19(1)(f) and the cl.(5) are part of one scheme and the former is incapable of operating where the latter is inoperative.
If considerations of article 19(5) are foreign to taxing laws article 19(1)(f) can have no application to them.
Case law reviewed.
| One B who held a large number of shares in the appellant company, transferred two blocks of 100 shares each to his son and daughter in law.
The transferees applied to the company to register the transfers.
Purporting to act under article 47B of the Articles of Association of the company the directors of the company resolved not to register the transfers.
Against this resolution the transferees preferred appeals to the Central Government under section III(3) of the .
The Central Government, without giving any reasons for its decision, set aside the resolution of the directors and directed the company to register the transfers.
The company obtained special leave to appeal against the decision of the Central Government under article 136 of the Constitution and appealed to the Supreme Court on the ground that the Central Government acted in excess of its jurisdiction or otherwise acted illegally in directing the company to register the transfers.
The respondents raised a preliminary objection that the Central Government exercising appellate powers under section III of the Act (before its amendment in 1960) was not a tribunal exercising judicial functions and was not subject to the appellate jurisdiction of the Supreme Court under article 136.
Held, that the appeal was competent to the Supreme Court by special leave against the decision of the Central Government under section III (3) Of the .
The Central Government, when exercising powers under section III was a tribunal within the meaning of article 136 and was required to act judicially.
A person aggrieved by the refusal to register transfer of shares had two remedies under the Act, viz., (1) to apply to the court for rectification of the register under section 155 or (2) to prefer an appeal under section III.
The power of the Court under section 155, which has necessarily to be exercised judicially, and the power of the Central Government under section III have to be exercised subject to the same restrictions.
In both cases it has to be 340 decided whether the directors have acted oppressively, capriciously corruptly or malafide.
The decision has manifestly to stand those objective tests and has not merely to be founded on the subjective satisfaction of the authority.
In an appeal under section III(3) there is a lis or dispute between the contesting parties relating to their civil rights, and the Central Government has to determine the dispute according to law in the light of the evidence and not on grounds of policy or expediency.
There was thus a duty imposed on the Central Government to act judicially.
The proviso to sub section
(8) of section III which provided for the award of reasonable compensation in lieu of the shares in certain circumstances also fortifies that view.
Shivji Nathubhai vs The Union of India, ; , Re Bell Brothers Ltd. Ex Parte Hodgson, , The Province of Bombay vs Kusaldas section Advani, [1950] S.C.R. 621, The King vs London County Council, and The Bharat Bank Ltd., Delhi vs Employees of the Bharat Bank Ltd., Delhi, ; , referred to.
In an appeal under section 111(3) of the Act the Central Govern ment has to determine whether the exercise of the discretion by the directors refusing to register the transfer is malafide, arbitrary or capricious and whether it is in the interest of the company.
The decision of the Central Government is subject to appeal to the Supreme Court under article 136; the Supreme Court cannot effectively exercise its power if the Central Government gives no reasons in support of its order.
The mere fact that the proceedings before the Central Government are to be treated as confidential does not dispense with a judicial approach, nor does it obviate the disclosure of sufficient grounds and evidence in support of the order.
In the present case no reasons have been given in Support of the orders and the appeals have to be remanded to the Central Government for rehearing.
In re Gresham Life Assurance Society, Ex Parte Penney, (1 872) Law Rep. 8 Ch.
446 and In re Smith and Fawcett, Ltd., L. R. , referred to.
Per Hidayatullah, J.
The appeal to the Supreme Court under article 136 was competent.
The Act and the Rules showed that the function of the Central Government under section 11(3) was curial and not executive; there was provision for filing a memorandum of appeal setting out the grounds, for the company making representations against the appeal, for tendering evidence and award of costs.
There was provision for a hearing and a decision on evidence.
The Central Government acted as a tribunal within the meaning of article 136.
Huddart, Parker & Co. Pyoprietar Ltd. vs Moorehead, (108) ; , Shell Company of Australia vs Federal Commissioner of Taxation, , Rex vs Electricity Commissioners, Royal Aquarium and Summer and Winter Garden 341 Society vs Parkinson, , Shivji Nathubai vs The Union of India; , and Province of Bombay vs Kushaldas section Advani, ; , referred to.
But special leave should not ordinarily be granted in such cases.
The directors were not required to give reasons for their decision and there was a presumption that they had acted properly and in the interest of the company.
In the appeal under section 111 of the Act all allegations and counter allegations were confidential and the Central Government could not make them public in its decision.
An appeal against such a decision could rarely be effective.
In the present case the appeal under section III(3) was confined to the ground that the refusal to register was without giving any reasons; there was no question of confidential allegations and there was no evidence to consider.
The Articles of Association gave the directors absolute discretion to refuse to register the transfers without giving any reasons and there was a presumption that the directors had acted honestly.
There was thus no reason for the Central Government to reverse the decision of the directors.
In re Gresham Life Assurance Society; Ex Parte Penney, (1872) Law Rep. 8 Ch.
446, In re Hannan 's King (Browning) Gold Mining Company Limited, and Moses vs Parkar Ex parte Moses, , referred to.
| The appellant in this appeal had been assessed to Income Tax which was reduced on appeal but that assessment was set aside by the Income Tax Appellate Tribunal on the ground that the Indian Finance Act of 1939 was not in force during the assessment year in Chota Nagpur.
On a reference by the Tribunal the High Court con firmed the setting aside of this assessment.
By the promulgation of Bihar Regulation IV of 1942 by the Governor of Bihar (which was assented to by the Governor General) the Indian Finance Act of 1939 was brought into force in Chota Nagpur retrospectively as from the 30th March 1939.
On the 8th February 1944 the Income Tax Officer passed an order in pursuance of which a fresh notice was issued under section 34 which resulted in the assessment of the appellant to income tax.
The question for determination in this appeal was whether the notice under section 34 was validly issued.
Held (i) that for the purposes of section 34 of the Act the income, profits or gains sought to be assessed were chargeable to income tax according to the scheme of the Act and the provisions of sections 3 and 4 of the Act; (ii) that it was a case of chargeable income escaping assessment within the meaning of section 34 and was not a case of mere non assessment of income tax because the earlier assessment proceedings in the present case had in fact been taken but failed to result in a valid assessment owing to some lacuna which was not attributable to the assessing authorities.
C.I.T., Bombay vs Sir Mahomed Yusuf Ismail ([1944] , Fazal Dhala vs C.I.T., B. & O. ([1944] 12 I.T.R. 341), Baghavalu Naidu & Sons vs C.I.T., Madras ([1945] , Raja Benoy Kumar Sahas Boy vs C.I.T., West Bengal ([1953] , Chatturam vs C.I.T., Bihar ([1947] F.C.R. 116), Whitney vs Commissioners of Inland Revenue ([1926] A.C. 37), C.I.T. Bombay & Aden vs Khemchand Ramdas ([1938] at 428), Sir Rajendranath Mukherjee vs C.I.T., Bengal ([1934] , Madan Mohan Lal vs C.I.T., Punjab ([1935] , C.I.T., Bombay vs Pirojbai N. Contractor ([1937] , Kunwar 291 Bishwanath Singh vs C.I.T., C.P. ([1942] , Raja Bahadur Kamakshya Narain Singh vs C.I.T. B. & 0.
([1946] and Chatturam vs C.I.T., B. & 0.
([1946] , referred to.
| Under section 35 of the Central Excise and Salt Act, 1944 (Excise Act) a person aggrieved by any decision or order under the Act and rules has an unfettered right of appeal.
Under section 12 of the Act, the Central Government may apply to appeals under the Excise Act the provisions of the (Customs Act) dealing with the procedure relating to appeals, In exercise of this power, the provisions of section 129 of the Customs Act were made applicable to Appeals under the Excise Act.
The section requires an appellant to deposit, pending the appeal, the duty or penalty imposed, and empowers the appellate authority, in his discretion, to dispense with such deposit pending the appeal in any particular case.
The respondent filed an appeal against the duty imposed on him under the Excise Act and prayed for dispensation of the deposit.
The Collector, who was the appellate authority, rejected the prayer and.
when no deposit was made within the time fixed, dismissed the appeal.
The respondent filed a writ petition in the High Court which was allowed, and the Collector, was directed to hear the appeal on merits.
The Collector appealed to this Court.
HELD:Since section 35 of the Excise Act gave a right of appeal and section 129 of the Customs Act whittled down that substantive right, section 129 could not be regarded as "procedure relating to appeals" within section 12 of the Excise Act.
The High Court was therefore right in F holding that the application of section 129 of the Customs Act to appeals under the Excise Act was in excess of the powers conferred under section 12 of the Excise Act.
The facts that an alternative remedy was available to the respondent under the Excise Act, and that he invoked the dispensing power of the appellate authority under section 129 of the Customs Act, did not bar the jurisdiction of the High Court to entertain the writ petition, especially when the jurisdiction of the Collector to insist upon the deposit of duty pending appeal was itself questioned.
[84B D; 86F G] Hoosein Kasam Dada (India) Ltd, vs The State of Madhya Pra desh; , 4 S.T.C. 114, followed.
| The petitioners challenged the constitutional validity of the Bombay Tenancy and Agricultural Lands (Vidarbha Region and Kutch Area) Act, 1958, which extended the provisions of the Bombay Tenancy and Agricultural Lands (Amendment) Act, 1956, to Vidarbha and Kutch.
That Act was declared valid by this Court in Sri Ram Narain Medhi vs The State of Bombay, [1950] Supp. 1 S.C.R. 489, and one of the reason , for doing so was that the lands covered by that Act fell within the definition of the word 'estate ' contained in the Bombay Land Revenue Code, 1879.
The lands in question in the present petitions were situated in Amraoti and Yeotmal and the existing law relating to land tenures in force in that area was the Madha Pradesh Land Revenue Code, 1954.
This Code did not employ the word ,estate ' and it was contended by the petitioners that the impugned Act was not within the protection of article 31A of the Constitution.
Held, that the contention must fail.
Although the Madhya Pradesh Land Revenue Code, 1954, did not employ the word 'estate ', the relevant definition contained in sections 2(17) and 2(18) of impugned Act and sections 2(7), 2(20) of the Code read with sections 145 and I46 thereof leaves no manner of doubt that the lands in the possession of the petitioners were tenures and in substance ,in estate.
Since the petitioners held the lards tinder the State and paid land revenue for them, the lands fell within the class of local equivalents of the word 'estate. ' as contemplated by article 31A(2)(a) of the Constitution.
| The petitioners applied for the consent of the Central Government under section 87B of the Code of Civil Procedure to sue the Maharaja of Tripura, Ruler of a former Indian State, which has merged with India.
They wanted to implead the Union of India as well, as party to the suit as their case was that they were entitled, as members of a joint Hindu family to receive either from the said Ruler or from the Union appropriate maintenance allowance under the custom of the Ruling family.
Consent having been refused, they applied to this Court under article 32 of the Constitution.
Their case was that section 87B of the Code in granting exemption to Rulers of former Indian States from being sued except with the consent of the Central Government contravened articles 14 and 19(1)(f) of the Constitution.
Held, that in view of the previous decision of this Court section 87B of the Code of Civil Procedure was no longer open to challenge under article 14 of the Constitution.
Mohan Lal Jain vs His Highness Maharaja Shri Sawai Man Singhji [1962] 1 S.C.R. 702, referred to.
Regard being had to the legislative and historical back ground of section 87B of the Code, it could not be said that, that section in giving special treatment to ex Rulers had imposed an unreasonable restriction on the petitioner 's fundamental rights.
Motivated as it was by the sole object of bringing the entire country including the former Indian States under one Central Government, it must be held to be reasonable and in the interest of the general public.
But considered in the light of the basic principle of equality before law it would be odd to allow the section to continue prospectively for all time to come.
It would therefore, be for the Central Government to consider whether it should not be confined to dealings and transactions previous to January 26, 1950.
Nor should the section be used to stifle claims except such as are clearly far fetched or frivolous and consent should ordinarily if not as matter of course, be granted in the case of a genuine dispute which prima facie appears to be triable by a court of law such as the present one.
| (14 of 1947) section 18 Applicability of.
The appellant company had its establishments in a number of States in the country.
In its establishment at Kanpur there were two unions, one of which, the Shramik Sangh, was affiliated to the Federal Union comprising of some of the trade unions in the various establishments while the other, the Karamachari Union, was not.
A demand relating to revision of dearness allowance among others, was raised by both the Unions at Kanpur.
The Shramik Sangh and the appellant entered into a settlement.
Karamchari Union which was not a party to the settlement, made an application to the State Government to constitute a conciliation board for reference of the dispute.
The Board was constituted.
In the meantime, however, to bring the settlement within the purview of the U.P. the Shramik Sangh applied for the constitutation of a conciliation board.
A conciliation board was constituted and the memorandum of settlement arrived at between the parties was registered even though the dispute on the same point raised by the Karamchari Union was pending before the Conciliation Board all the while.
The dispute raised by the Karamchari Union was, therefore, referred to a Tribunal under s 4K of the Act.
The Tribunal rejected the appellant 's contention that it had no jurisdiction to adjudicate on the dispute.
On appeal to this Court it was contended that it was implicit in the various provisions of the U.P. Act that a settlement arrived at before a Conciliation Board by a Union of the majority of workmen was binding on all the workmen and that in the absence of a provision like section 18 of the it was not permissible for the Karamchari Union to contend that the settlement would bind only the members of the Shramik Sangh and in any event reference of the dispute to a Tribunal was without jurisdiction.
Dismissing the appeal, ^ HELD: 1.
The State Government rightly took the view that the controversy raised by the Karamchari Union was an industrial dispute.
[922 G H] 2.
A reading of the relevant provisions of the U.P. , clearly shows that there is nothing in the Act to require that the dispute 912 or difference should be raised by all the workmen of the industry, or by everyone of them, or even by a majority of them.
It is enough if the controversy is between the employer on the one side and workmen on the other.
There is also nothing in the Act to require that the workmen raising the controversy should form a majority of the employees, the reason being that where it is found that the controversy affects, or will affect, the interests of workmen as a class, the law envisages that, in the interest of industrial peace, it should be examined and decided in one of the modes provided by it.
[917 D F] 3.
An individual dispute cannot, however, be said to be an industrial dispute unless the other workmen associate themselves with it.
No hard and fast rule can be laid down to decide when and by how many workmen an industrial dispute could be raised within the meaning of the Act, or whether a minority union or even an unrecognised union, could raise an industrial dispute.
It is enough if there is a potential cause of disharmony which is likely to endanger industrial peace, and a substantial number of workmen raise a dispute about it, for then it is permissible to view it as an industrial dispute within the meaning of clause (1) of section 2 of the Act, and to refer it for adjudication to a tribunal.
[917 F H] 4.
The settlement arrived at with the Federal Union did not bind the Karamchari Union as it was not a party to it and was not affiliated to the Federal Union.
Section 18 of the Central Act provides that a settlement arrived at by agreement between the parties otherwise than in the course of conciliation proceedings shall be binding on the parties to the agreement.
[918 E] 5.
Moreover, the settlement arrived at with the Shramik Sangh was under the provisions of the U.P. Act and, therefore, section 18 of the Central Act had no application.
There is no provision similar to it in the U.P. Act.
[918 G] 6.
There was no occasion for invoking section 7 of the U.P. Act.
That section is mainly intended to serve the purposes contemplated by section 3 of the Act, namely, securing the public safety or convenience or the maintenance of public order or supplies and services essential to the life of the community or for maintaining employment etc.
It cannot therefore be said that the settlement arrived at by the Sangh became binding on all workmen including the Karamchari Union which was not a party to it nor is there any other provision in the Act or the Rules making the settlement binding on the Karamchari Union.
Nor again can it be said that section 3(d) of the U.P. Act justifies the argument that merely because a union, consisting of a majority of workers, can represent all the workmen, the settlement arrived at before a conciliation board would bind those who are not parties to it.
[919 B, C, F G] 7.
In the absence of any prohibitory provision in the Act it cannot be said that the State Government had no jurisdiction to make a general reference under section 4K of the U.P. Act merely because the settlement was made by a majority union and was binding on the Shramik Sangh.
The Tribunal has found it as a fact that the Karamchari Union represented a substantial number of the workmen of the company at Kanpur, and there is no reason why they should be debarred from raising a dispute for the benefit of all the workmen as a class.
It is well recognised, that "collective bargaining" can take place between the employer and a bona fide labour union and there is nothing on the record to show that the Karamchari Union was not a bona fide union.
[920 A C] 913 In the instant case the Shramik Sangh entered into the settlement in collusion with the company and the Conciliation Board finalised the settlement even though the Karamchari Union 's dispute was still pending.
No effort was made to make it a party to the proceedings.
Although, to begin with, a both the Shramik Sangh and the Karamchari Union were opposed to the settlement earlier arrived at by the Federal Union the Shramik Sangh changed its stand and endorsed the settlement of the Federal Union when it was placed on the notice board.
The Tribunal also found as a fact that the settlement was not even put on the notice board of the company.
In these circumstances if the State Government had decided to make a reference of the dispute to the Tribunal it could not be said that it did not apply its mind to the controversy or committed an illegality in doing so.
[920 H 921 C] 8.
Even assuming that the earlier settlements were in the nature of a package deal arrived at between the company and the Federal Union it cannot be said that there was any legal bar to the reference of the dispute regarding one particular item of the package deal for adjudication by the tribunal so as to vitiate the reference.
The company brought this aspect of the matter specifically to the notice of the State Government.
The point does not, however, relate to the jurisdiction or the maintainability of the reference under section 4K for it is essentially a matter for the Tribunal 's examination with due regard to the evidence before it.
[921 F G] Herbertsons Ltd. vs Workmen of Herbertsons Ltd. & Ors. ; and New Standard Engg.
Co. Ltd. vs M. L. Abhyankar & Ors., ; held inapplicable.
| The appellants who carry on the business in vegetable ghee purchased vegetable ghee from outside U. P. in the name of four fictitious firms.
In their return of sales tax they did not include the sale proceeds of these transactions on the ground that they had purchased from the four firms and that under a notification made under section 3A of the U. P. Sales Tax Act, tax was leviable only at a single point on the sale by the outside suppliers to these four firms.
In support of this the appellant No. 1 made a false statement before the Sales tax Officer and also filed forged bill,.
before him.
The return was accepted by the Sales Tax Officer with the result that the sales covered by these transactions were not taxed.
The appellants were tried and convicted for offence under section 471 Indian Penal Code for using forged documents and under section 14(d) of the Act for fraudulently evading payment of tax due under the Act.
The appellants contended that the trial for the offence under section 471 was illegal as no complaint had been made by the Sales Fax Officer as required by section 14 (d) of the Act was not made out as no tax was payable under 'section 3A because the notification issued thereunder was invalid.
Held, that the Sales Tax Officer was not a Court within the meaning of section 195 Code of Criminal Procedure and it was not necessary for him to make a complaint for the prosecution of the Appellants under section 471 Indian Penal Code.
A Sales Tax Officer was merely an instrumentality of the State for purposes of assessment and collection of tax and even if he was required to perform certain quasi judicial functions, he was not a part of the judiciary.
The nature of the functions, of a Sales Tax Officer and the manner prescribed for their 851 performance showed that he could not be equated with a Court.
Nor could he be said to be a Revenue Court.
Though the definition of Court in section 195 of the Code Was enlarged by the substitution of the word "include" for the word "means" by the amendment of 1923, it did not change the definition of "Revenue Court.
" Smt.
Ujjam Bai vs The State of U. P. (1963) 1 S.C.R. 778), Shell Co. of Australia Ltd. vs Federal Commissioner of Taxation and Brajnandan Sinha vs Jyoti Narain ' ; , applied.
Krishna vs Gocerdhanaiah, A. I. R. , approved.
In re: Punamchand Maneklal (1914) 1. L. R. and State vs Nemchand Pashvir Patel, (1956) 7 section T. C. 404 not approved.
In re : R. Nataraja Iyer (1914) 1. L. R. and Shri Virender, Kumar Satyawadi vs The Sate of Punjab,[1955] 2 section C. R. 1013 referred to.
Held, further that the appellants were rightly convicted under section 14 (d) of the Act.
Sales tax was payable under s.3 of the Act in respect of all sales.
But under s.3A it was leviable only at a single point if the Government issued a notification declaring the point at which tax was payable and it was so prescribed by the rules.
Under the notification issued by the Government tax was payable only by the dealer who imported the goods and sold them.
The appellants having imported the ghee were liable to pay the tax on the sales of this ghee which they fraudulently evaded.
Though the notification was ineffective as no rules were made under the Act prescribing the single point, it did not help the appellants, as the only effect of this was that section 3A did not come into play.
In trying to get the benefit of the ineffective notification under section 3 A the appellants evaded payment of tax under section 3 which they were liable to pay.
|
ION: Criminal Appeals Nos. 75 and 77 of 1961.
Appeal by special leave from the judgment and order dated December 22 23, 1960, and from the order dated March 17, 1961 of the Calcutta High Court in Cr.
Revision Nos. 1019 and 681 of 1959.
C.K. Daphtary, Solicitor General of India, and I. N. Shroff, for the appellant (in Cr. A. No. 75/61).
Purushottam Trikamdas, Prasunchandra Ghosh, S.C. Mitter and I. N. Shroff, for the appellant (in Cr. A. No. 77 of 1961).
M. C. Setalvad, Attorney General of India, Alak Gupta, S.N. Andley, Rameshwar Nath and P.L. Vohra for the respondents.
December 21.
The judgment was delivered by S.K. Das, J. I regret that I have come to a conclusion different from that of my learned brethren in these appeals.
I proceed now to state the necessary facts, the arguments advanced before us and my conclusions on the various questions urged.
By an order dated April 10, 1961 this Court granted special leave asked for by the two appellants herein, Pramatha Nath Talukdar and Saurindra Mohan Basu, to appeal to this Court from two orders made by the High Court of Calcutta, one dated December 22/23, 1960 and the other dated March 17, 1961.
By the first order a Special 301 Bench of the Calcutta High Court dismissed two applications in revision which the appellants had made to the said High Court against an order of the Chief Presidency Magistrate of Calcutta dated April 11, 1959 by which the said Magistrate issued processes against the two appellants for offences alleged to have been committed by them under sections 467 and 471 read with section 109 of the Indian penal Code on a complaint made by Saroj Ranjan Sarkar, respondent herein.
By the second order a Division Bench of the said High Court refused the prayer of the appellants for a certificate under article 134(1)(c) of the Constitution of India that the case was a fit one for appeal to this Court.
This refusal was based primarily on the ground that the order sought to be appealed from was not a final order within the meaning of the Article aforesaid.
In pursuance of the special leave granted by this Court four appeals were filed, two against the order dated December 22/23, 1960 and the other two against the order dated March 17, 1961.
The two appeals numbered 76 and 78 of 1961 from the order dated March 17, 1961 were withdrawn on the ground that special leave having been granted against the order of the Special Bench dated December 22/23, 1960, the appellants did not wish to press the appeals from the later order dated March, 17, 1961.
Therefore, the present judgment relates to the two appeals numbered 75 and 77 of 1961 which are from the judgment and order of the Special Bench dated December 22/23, 1960.
The principal question which arises for decision in these two appeals is whether a second complaint can be entertained by a Magistrate who or whose predecessor had, on the same or similar allegation, dismissed a previous complaint, and if so in what circumstances should such a second complaint be entertained.
The question is one of 302 general importance and has given rise to some divergence of opinion in the High Courts.
Let me first state the facts which have led to the filing of the second complaint in the present case.
Saroj Ranjan Sarkar, who is the youngest brother of the late Nalini Ranjan Sakar a well known public man, financier and industrialist of Bengal filed a petition of complaint in the court of the Chief Presidency Magistrate, Calcutta.
On April 3, 1959, I do not pause here to state the allegations made in that petition, a shall have occasion to refer to them in detail later on.
The complaint was filed against four persons the appellants herein and two other persons, Narendra Nath Law and Amiya Chakravarty.
A previous complaint on more or less the same allegations was made by Promode Ranjan Sarkar, second brother of the late Nalini Ranjan Sarkar.
That complaint was made on March 17, 1954 and was dismissed under section 203 of the Code of Criminal Procedure by the then Chief Presidency Magistrate, Shri N. C. Chakravarti, on August 6, 1954.
Thereafter, an application in revision was made by Promode Ranjan Sarkar to the High Court of Calcutta, which gave rise to Revision Case No. 1059 of 1954.
This application in revision was dismissed on July 8, 1955 by Debabrata Mookerjee, J. Promode Ranjan Sarkar then applied for a certificate under article 134(1)(c) of the Constitution, but such a certificate was refused by a Bench of the Calcutta High Court on September 1, 1955.
Promode Ranjan Sarkar applied for special leave from this Court and obtained such leave on February 13, 1956.
An appeal was filed in pursuance of that special leave, but ultimately Promode Ranjan Sarkar withdrew his appeal by filing a petition on February 3, 1959.
In that petition he stated that at the intervention of Common friends and well wishers of the parties, he had settled his disputes with the respondents therein and did not want to proceed with the appeal 303 The appeal was accordingly withdrawn on March 12, 1959.
Then, within about 22 days of that order, Saroj Ranjan Sarkar filed the complaint which has given rise to the present proceedings.
For convenience and brevity, I shall refer to Promode Ranjan Sarkar 's complaint as the first complaint and Saroj Ranjan Sarkar 's as the second complaint.
It is necessary here to give a little more of the background history of the second complaint.
As stated earlier, the late Nalini Ranjan Sarkar was a well known person in Bengal.
He was the Governing or Managing Director of N. R. Sarkar & Co. Ltd., which managed several public limited companies, such as, Hindustan Development Corporation Ltd., Hindustan Heavy Chemicals Ltd., and Hindusthan Pilkington Glass Works Ltd. He was also closely connected with the Hindusthan Co operative Insurance Society Ltd., of which he held a large number of shares.
On January 4, 1948 he obtained leave of absence from the Directors of N. R. Sarkar & Co. Ltd. for a period of one year with a view to joining the Ministry in West Bengal and he assumed office as Finance Minister of the West Bengal Government on January 23, 1948.
Later, the leave granted to him for one year was extended.
He owned 4649 shares of N. R. Sarkar & Co. Ltd. Pramatha Nath Talukdar, who was a paid employee of the Hindusthan Co operative Insurance Society Ltd. up to the end of July, 1953 was also a Director of N. R. Sarkar & Co. Ltd. He held 299 shares of the said company.
Promode Rajan Sarkar held 50 shares.
Santi Ranjan Sarkar; son of a deceased brother of Nalini Ranjan Sarkar, held one share.
Thus, it would appear that Nalini Ranjan Sarkar was the owner of the largest number of shares of N. R. Sarkar & Co., Ltd., and for all practical purposes he controlled the affairs of that company.
On July 31, 1951 Nalini Ranjan Sarkar executed a deed of trust in respect of 3649 shares out of the 304 shares held by him in N. R. Sarkar & Co. Ltd. By the said trust deed he appointed Promode Ranjan Sarkar, Pramatha Nath Talukdar and Narendra Nath Law as the trustees; but the beneficiaries under the trust deed were his four brothers, namely, Promode Ranjan Sarkar, Pabitra Ranjan Sarkar, Prafulla Ranjan Sarkar and Saroj Ranjan Sarkar, as also Santi Ranjan Sarkar, the son of a deceased brother.
It was alleged that the balance of 1000 shares held by Nalini Ranjan Sarkar was kept in custody with Pramatha Nath Talukdar and according to the case of the complainant these shares were kept in deposit with Pramatha Nath Talukdar for the benefit of the complainant and this brothers.
Nalini Ranjan Sarkar died on January 25, 1953.
It was alleged that a few days after the funeral ceremony had been performed, Saurindra Mohan Basu casually informed Promode Ranjan Sarkar that his brother Nalini Ranjan Sarkar had executed two documents to wit, an unregistered deed of agreement dated January 19, 1948 by which Pramatha Nath Talukdar was appointed Managing Director of N.R. Sarkar & Co. Ltd. and a deed of transfer of 1000 shares dated February 5, 1951 in favour of Pramatha Nath Talukdar.
Promode Ranjan Sarkar and his brothers did not give credence to the information conveyed, and wanted to see the documents.
It was alleged that this request was not complied with.
On July 31, 1953, i.e. about six months after the death of Nalini Ranjan Sarkar Pramatha Nath Talukdar resigned from his salaried post under the Hindusthan Co operative Insurance Society Ltd. and sought to assume control of N. R. Sarkar & Co. Ltd. as its Managing Director.
This led to some trouble between Promode Ranjan Sarkar and the appellants and also to some correspondence between Promode Ranjan Sarkar on one side and N. R. Sarkar & Co. Ltd. on the other, details whereof are not necessary for our purpose.
305 On September 22, 1953 a meeting of the Board of Directors of N.R. Sarkar & Co. Ltd. was held.
It was alleged that the meeting was held irregularly without any agenda and a resolution was adopted, despite Promode Ranjan Sarkar 's protest, by which the appointment of Pramatha Nath Talukdar as Managing Director of N. R. Sarkar & Co. Ltd. was renewed for seven years.
In September, 1953 Promode Ranjan Sarkar formally wrote to N.R. Sarkar & Co. Ltd. for inspection of the alleged deeds of agreement and transfer.
On October 1, 1953 an inspection was taken, and on October 13, 1953 Promode Ranjan Sarkar was allowed to take photographs of the relevant portions of the documents.
On this occasion Promode Ranjan Sarkar also inspected the minutes of the proceedings of N. R. Sarkar & Co. Ltd. and it was alleged that the proceedings dated January 16, 1948 purporting to bear the signature of Nalini Ranjan Sarkar were forged.
The main allegations in the first and second complaints related to three documents and were to the effect "that in order to assume complete control over N. R. Sarkar & Co. Ltd. and the concerns under its managing agency, the accused persons entered into a criminal conspiracy with one another and others unknown, to dishonestly and fraudulently forge a deed of agreement, a deed of transfer and make a false document, to wit, minute book of N. R. Sarkar & Co. Ltd. and in pursuance thereof dishonestly and fraudulently forged and or caused to be forged and used as genuine the said documents".
It will be noticed that three documents were stated to have been forged, and they were (1) An unregistered deed of agreement purporting to have been executed by the late Nalini Ranjan Sarkar as Governing Director of N. R. Sarkar & Co. Ltd. on January 19, 1948 appointing Pramatha Nath Talukdar as the Managing Director of N. R. Sarkar & Co. Ltd. on a remuneration of Rs. 1500 100 2000 per month.
This document bore 306 the signature of Saurindra Mohan Basu as a witness attesting the signature of Nalini Ranjan Sarkar, which signature was stated to have been forged.
(2) A transfer deed in respect of 1000 shares of N. R. Sarkar & Co. Ltd. which were said to have been entrusted to Pramatha Nath Talukdar, transfering them to the latter for and alleged consideration of rupees one lac purporting to have been executed by the late Nalini Ranjan Sarkar on February 5, 1951 with Saurindra Mohan Basu as the attesting witness both for the transferor and the transferee.
(3) Minutes of the proceedings of the Board meeting of N.R. Sarkar & Co. Ltd. dated January 16, 1948 purporting to bear the signature of the late Nalini Ranjan Sarkar and containing a resolution to the effect that the Governing Director approved of a draft agreement of appointment between the Company and Pramatha Nath Talukdar for appointing the latter as Managing Director of the Company and that the Board of Directors approved of the said draft agreement.
Of the aforesaid three documents the one relating to the alleged transfer of 1000 shares referred to as (2) above, is the subject of a separate suit stated to be now pending in the Calcutta High Court.
That document is not, therefore, directly the subject matter of the second complaint.
As to the unregistered deed of agreement referred to as (1) above, it may be stated that the original document could not be later found, and on behalf of the appellants and other accused persons it was stated that the document was not in their possession or control.
As stated earlier, Promode Ranjan Sarkar had obtained a photostatic copy of the relevant portions of the document.
As to this document the main allegation of the complainant was that it was engrossed on a rupee stamp paper which had been issued, on renewal, in the name of P.D. Himatsinghka & Co., a firm of solicitors in Calcutta 307 and evidence was led at the enquiry into the first complaint that the paper was stolen from that firm and furthermore that the signature on the document purporting to be that of Nalini Ranjan Sarkar was not his signature at all.
With regard to the minutes of the proceedings dated January 16, 1948 the allegation was that the minutes were typed on a sheet of paper bearing the letter head N.R. Sarkar & Co. Ltd. with telephone number "City 6091" printed thereon; but the City Exchange did not come into existence until December, 1948 and the telephone connection relating to number "City 6091" was obtained for the first time by the Hindusthan Co operative Insurance Society Ltd. on or about March 18, 1949; and therefore the paper with the letter head N. R. Sarkar & Co. Ltd. with telephone number "City 6091" printed thereon could not have been in existence on the alleged date of the proceeding of the Board of Directors, namely January 16, 1948.
In the second complaint certain other circumstances were also alleged in support of the allegation that the unregistered deed of agreement dated January 19, 1948 and the minutes of the proceedings dated January, 16, 1948 were forged.
It is, however, unnecessary to refer to those circumstances in detail here.
The learned Chief Presidency Magistrate, Shri Bijayesh Mukherjee, who dealt with the second complaint considered all the relevant materials and came to the following conclusions: (1) there was no delay in making the second complaint, if one had regard to the circumstances which led to the first complaint and the withdrawal of the appeal in the Supreme Court on March 12, 1959 arising out of the order made on the first complaint; (2) the dismissal of the first complaint and the application in revision arising therefrom by Debabrata Mookerjee, J. did not, as a matter of law, 308 operate as a bar to the entertainment of the second complaint.
(3) the second complaint was not an attempt at blackmail; and (4) the relevant materials in the record showed prima facie that the minutes of the proceedings dated January 16, 1948 were forged and so also the unregistered deed of agreement dated January, 19, 1948.
The learned Chief Presidency Magistrate then said: "Prima facie, I am satisfied about the truth of the allegations the complaint makes.
That apart, the complaint is for an offence triable by a Court of sessions.
And the materials I see before me are such as in my opinion may lead a reasonable body of men to believe the truth thereof.
Judged so, there is in my opinion sufficient ground for proceeding within the meaning of section 204 of the procedure Code.
On the question as to which of the four accused persons against whom process should issue, the learned Chief Presidency Magistrate came to the conclusion that there was a prima facie case against two of the accused persons only, namely, Pramatha Nath Talukdar and Saurindra Mohan Basu.
Saurindra Mohan Basu, it may be stated here, was a solicitor of N.R. Sarkar & Co. Ltd. and had attested the signature of Nalini Ranjan Sarkar on the unregistered deed of agreement.
The learned Chief Presidency Magistrate held that there was no sufficient ground for proceedings against the other two accused persons, namely, Narendra Nath Law and Amiya Chakravarty.
Against the aforesaid order of the Chief Presidency Magistrate two applications in revision were filed by the appellants herein.
These applications 309 in revision were first heard by a division Bench of two Judges of the Calcutta High Court, P. B. Mukherjee and H. K. Bose, JJ.
In view of the importance of the questions raised in the two applications in revision and some earlier decisions of the Calcutta High Court bearing on those questions to which I shall presently refer, P.B. Mukherjee, J. came to the conclusion that the applications should be referred to a larger Bench to be constituted by the Chief Justice under the rules of the Court.
H.K. Bose.
J. (as he then was) was inclined to take the view that the applications in revision must fail, but in deference to the views expressed by P.B. Mukherjee, J. agreed that the applications should be referred to the Chief Justice for constituting a larger Bench.
The matter was then referred to the learned Chief Justice, who constituted a Special Bench of three Judges to hear the two applications in revision.
This Special Bench heard the two applications in revision and dismissed them by its order dated December 22/23, 1960.
Three questions were agitated before the Special Bench.
The first was whether the Special Bench was lawfully in seizin of the case and was competent to deal with the applications in revision.
The second was whether the learned Chief Presidency Magistrate had jurisdiction to take cognizance of the offences alleged, in the absence of a sanction under section 196A of the Code of Criminal Procedure.
The third and the principal question was whether it was open to the learned Chief Presidency Magistrate to entertain a second complaint on the same allegations when his predecessor had dismissed the first complaint; and if it was open to him to entertain the second complaint should he have entertained it in the circumstances of the present case ? The Special Bench unanimously decided these three questions against the appellants and further came to the conclusion that there was no undue delay in making the second 310 complaint; neither was it frivolous nor made in bad faith.
It further expressed the view that it saw no reasons to differ from the finding of the learned Chief Presidency Magistrate that there was a prima facie case against the two appellants.
Now, as to the first question.
Chapter II of Rules of the High Court at Calcutta (Appellate Side) deals with the constitution and powers of the Benches of the Court.
Rule 1 of the said chapter says in effect that a Division Bench for the hearing of appeals from decrees or orders of the Subordinate Civil Courts shall consist of two or more Judges as the Chief Justice may think fit; there is a proviso [proviso (ii)] to the rule which says that on the requisition of any Division Bench, or whenever he thinks fit, the Chief Justice may appoint a special Division Bench to consist of three or more Judges for the hearing of any particular appeal, or any particular question of law arising in an appeal, or of the any other matter.
It is clear that the rule and the proviso deal with the hearing of appeals from decrees or orders of the Subordinate Civil Courts; in other words, they deal with civil matters.
Rule 9 of the same chapter deals with criminal matter and sub r.
(1) of the said rule says that a Division Bench for the hearing of cases on appeal, reference, or revision in respect of the sentence or order of any Criminal Court shall consist of two or more Judges.
There is no proviso to this rule similar to the proviso to r. 1, referred to earlier, and the argument is that in the absence of such a proviso it was not open to the Division Bench consisting of Mukherjee and Bose, JJ.
to refer the case back to the Chief Justice for the constitution of a larger Bench (though it was open to the Chief Justice to constitute originally a Division Bench of three Judges to hear the case), and if the Judges were equally divided in opinion, section 429 of the Code of Criminal procedure would apply and the case had to be laid before another Judge and judgment given according to the 311 opinion of the third Judge.
I am unable to accept this argument as correct.
It is clear from the rules in Chapter II that the constitution of Benches is a matter for the Chief Justice and r. 13 in Chapter II says that a Full Bench appointed for any of the purposes mentioned in Chapter VII, rr. 1 to 5, shall consist of five Judges or three Judges as the Chief Justice may appoint.
Now, r. 1 in Ch.
VII says inter alia that whenever one Division Bench shall differ from any other Division Bench upon a point of law or usage having the force of law, the case shall be referred for decision by a Full Bench and r. 5 says that if any such question arises in any case coming before a Division Bench as Court of Criminal Appeal, Reference or Revision, the Court referring the case shall state the point or points on which they differ from the decision of a former Division Bench, and shall refer the case to a Full Bench, for such orders as to such Bench seem fit.
In his judgment P.B. Mukherjee, J. referred to two earlier decisions of the Calcutta High Court, Nilratan Sen vs Jogesh Chandra Bhattacharia(1) and Kamal Chandra Pal vs Gourchand Adhikary (2) and observed that the question as to whether those decisions were good law arose in the case and he gave that as a reason for referring the case to the Chief Justice for the constitution of a larger Bench.
Even if rr. 1 and 5 in Chapter VII may not, strictly speaking, apply to the present case because the Division Bench consisting of Mukerjee and Bose JJ.
did not formulate the point or points on which they differed from the earlier Division Bench decisions referred to by Mukherjee, J., I think that the principle of those rules would apply and it was open to the Chief Justice, on a reference by the Division Bench, to constitute a larger Bench to consider the case.
I am also in agreement with the view expressed by the Special Bench that the absence of a proviso to r. 9 in Chapter II correspon 312 ding to the proviso to r.
I does not take away the inherent power of the Chief Justice to refer any matter to Bench of three Judges.
Sub rule(1) of r. 9 itself provides that a Division Bench for the hearing of cases on appeal, reference, or revision in respect of the sentence or order of any Criminal Court shall consist of two or more Judges.
Therefore, it was open to the Chief Justice to constituted Bench of three Judges for the hearing of the case and in my view it made no difference whether he constituted such a Bench originally or on a reference back by the Division Bench.
I further think that the Chief Justice must have the inherent power to constitute a larger Bench in special circumstances.
Take, for instance, a case where one Judge of the Division Bench feels, for a sufficient and good reason, that he should not hear the case.
It is obvious that in such a case the matter must be referred back to the Chief Justice for the constitution of another Bench.
The Chief Justice, I think, must possess such an inherent power in the matter of constitution of Benches and in the exercise thereof he can surely constitute a larger Bench in a case of importance where the Division Bench hearing it considers that a question of the correctness or Otherwise of earlier Division Bench decisions of the same Court will fall for consideration in the case.
Section 229 of the Code of Criminal Procedure does not apply to such a case because it is not a case where the Judges composing the Court are equally divided in opinion.
Rather it is a case where the Judges composing the Division Bench consider that the case is one of such importance that it should be heard by a larger Bench.
My conclusion, therefore, is that there was nothing illegal in the Division Bench consisting of Mukherjee and Bose.
referring the case back to the Chief Justice; nor was there anything illegal in the Chief Justice constituting a special Bench of 313 three Judges to hear the applications in revision.
The special Bench constituted by the Chief Justice was lawfully in seizin of the case and was competent to deal with it.
The objection as to the jurisdiction of the special Bench to hear the case was, in my opinion, rightly overruled by it.
Now, as to section.
Section 196A of the Code of Criminal Procedure may be read first.
That section is in these terms: "196A. No Court shall take cognizance of the offence of criminal conspiracy punishable under section 120B of the Indian Penal Code.
(1) in a case where the object of the conspiracy is to commit either an illegal act other than an offence, or a legal act by illegal means, or an offence to which the provisions of section 196 apply, unless authority from the "State Govern upon complaint made by order or under authority from the "State Government" or some officer empowered by the "State Government" in this behalf, or (2) in a case where the object of the conspiracy is to commit any non cognizable offence, or a cognizable offence not punishable with death, imprisonment for life or rigorous imprisonment for a term of two years or upwards, unless the "State Government", or a Chief Presidency Magistrate or District Magistrate empowered in this behalf by the "State Government", has, by order in writing, consented to the initiation of the proceedings: Provided that where the criminal conspiracy is one to which the provisions of subsection (4) of section 195 apply no such consent shall be necessary." 314 The argument before us on behalf of the appellants has proceeded on the footing that in para 5 of the second complaint Saroj Ranjan Sarkar had alleged that the accused persons had entered into a criminal conspiracy with one another and other persons unknown, to dishonestly and fraudulently forge certain documents and in pursuance thereof either forged or caused to be forged those documents and used them as genuine.
This allegation, it is argued attracted cl.
(2) of section 196A inasmuch as the object of the conspiracy was to commit non cognizable offences under sections 467 and 471 of the Indian Penal Code; therefore, it was necessary to obtain, by order in writing, the consent of the State Government or of the Chief Presidency Magistrate to the initiation of the proceedings and such consent not having been obtained, the issue of processes by the Chief Presidency Magistrate violated the provisions of section 196A of the Code of Criminal procedure.
The special Bench repelled this argument on the following grounds.
It pointed out the distinction between the offence of criminal conspiracy as defined in section 120A and punishable by section 120B and the offence of abetment by conspiracy as defined in the clause, secondly, in section 107 of the Indian Penal Code.
It then pointed out that the Chief Presidency Magistrate did not take cognizance of the offence of criminal conspiracy to commit forgery which would be punishable under section 120B read with section 467 of the Indian Penal Code, but he took cognizance of the offence of abetment of forgery punishable under section 467 read with section 109 of the Indian Penal Code and for this offence no sanction under section 196A of the Code of Criminal Procedure was necessary.
The special Bench further expressed the view that the primary offences which the second complaint disclosed where the offence of forgery, of using forged documents as genuine, and of abetment of the said offences and as cognizance of these offences did not require sanction or 315 prior consent of the authorities mentioned in section 196A, the order of the Chief Presidency Magistrate could not be said to have violated the provisions of that section.
The correctness of these views of the special Bench has been very seriously contested.
I may make it clear at the very outset that the mandatory provisions of section 196A of the Code of Criminal Procedure cannot be evaded by resorting to a mere device or camouflage.
The test whether sanction is or is not necessary does not depend on mere astuteness of drafting the petition of complaint.
For example, in the second petition of complaint under consideration before us the heading indicated that the offences in respect of which the petition of complaint was filed were offences under sections 467, 471 and 109 of the Indian Penal Code; but in para.
5 of the petition the allegation was that the accused persons had entered into a criminal conspiracy with one another and others unknown, to forge certain documents.
It would not be proper to decide the question of sanction merely by taking into consideration the offences mentioned in the heading or the use of the expression "criminal conspiracy" in para.
The proper test should be whether the allegations made in the petition of complaint disclosed primarily and essentially an offence or offences for which a consent in writing would be necessary to the initiation of the proceedings within the meaning of section 196A(2) of the Code of Criminal Procedure.
It is from that point of view that the petition of complaint must be examined.
There is another principle laid down by this Court which should be kept in mind.
The allegations made in the complaint may have more than one aspect; and may disclose more than one offence.
What would be the position when some of the offences disclosed do not require any sanction while others require sanction ? This question was considered by this Court in 316 Basir ul huq vs State of West Bengal(1).
That was case in which the accused person lodged information at a police station that X had beaten and throttled his mother to death and when the funeral pyre was in flames, he entered the cremation ground with police; the dead body was examined and the complaint was found to be false.
On the complaint of X the accused person was charged with offences under section 297, Indian Penal Code (trespass to wound religious feelings) and section 500, Indian Penal Code (defamation).
It was contended that as the complaint disclosed offences under section 182 and 211, Indian Penal Code, the Court could not take cognizance of the case except on a complaint by the proper authority under section 195 of the Code of Criminal Procedure.
It was held that the facts which constituted the offence under section 297 where distinct from those which constituted an offences under section 182, as the act of trespass was alleged to have been committed after the making of the false report, so section 195 was no bar to the trial of the charge under section 297.
It was further held that as regards the charge under section 500 where the allegations made in a false report disclose two distinct offences, one against a public servant and the other against a private individual, the latter is not debarred by provisions of section 195 of the Code of Criminal Procedure from seeking redress for the offence committed against him.
Referring to section 195 of the Code of Criminal Procedure Mahajan, J. who delivered the judgment of the Court said: "The statute thus requires that without a complaint in writing of the public servant concerned no prosecution for an offence under section 182 can be taken cognizance of.
It does not further provide that if in the course of the commission of that offence other distinct offences are committed, the magistrate is debarred from taking cognizance in respect of those offences as well.
The allegation made 317 in a complaint may have a double aspect, that is on the one hand these may constitute an offence against the authority of the public servant or public justice, and on the other hand, they may also constitute the offence of defamation or some other distinct offence.
The section does not per se bar the cognizance by the magistrate of that offence, even if no action is taken by the public servant to whom the false report has been made.
x x x x As regards the charge under section 500, Indian Penal Code, it seems fairly clear both on principle and authority that where the allegations made in a false report disclose two distinct offences, one against the public servant and the other against a private individual, that other is not debarred by the provisions of section 195 from seeking redress for the offence committed against him.
" Keeping the aforesaid two principles in mind let me examine the second complaint in this case in order to find out what essential offences the allegations made therein disclosed.
Paragraph 5 of the petition of complaint on which much reliance has been placed on behalf of the appellant alleges (1) that the accused persons entered into a criminal conspiracy with one another and others unknown, to forge certain documents; (2) that in pursuance of the conspiracy those documents were forged; or caused to be forged; and (3) that the documents so forged were used as genuine.
The paragraph then recited three documents which were said to have been forged.
It is thus clear that apart from the conspiracy, the second complaint alleged that offences under sections 467 and 471 of the Indian Penal Code had also been committed.
The special Bench rightly pointed out that the offences under sections 467 and 471 of the Indian Penal Code were distinct from the offence of criminal conspiracy and did not require any prior consent for the initiation of 318 Proceedings therefor under section 196A(2) of the Code of Criminal Procedure.
The question, of therefore, boils down to this: in view of the allegation that there was a criminal conspiracy, was the chief Presidency Magistrate debarred from taking cognizance of the case even though certain other distinct offences were alleged which did not require sanction ? I am in agreement with the special Bench that the answer to the question must be in the negative.
Furthermore, it appears to me that though the expression "criminal conspiracy" occurs in para.
5 of the complaint, the facts alleged in the petition of complaint essentially disclose an offence of abetment by conspiracy.
This brings us to the distinction between the offence of criminal conspiracy as defined in section 120A and the offence of abetment by conspiracy as defined in section 107 of the Indian Penal Code.
Section 120A which defines the offence of criminal conspiracy and section 120B which punishes the offence are in Ch.
VA of the Indian Penal Code.
This Chapter introduced into the criminal law of India a new offence, namely, the offence of criminal conspiracy.
It was introduced by the criminal Law Amendment Act, 1913 (VIII of 1913).
Before that, the sections of the Indian Penal Code which directly dealt with the subject of conspiracy were these contained in Ch.
V and section 121 (Ch.
VI) of the Code.
The present case is not concerned with the kind of conspiracy referred to in section 121A.
The point before us is the distinction between the offence of abetment as defined in section 107 (Ch. V) and the offence of criminal conspiracy as defined in section 120A (Ch. VA).
Under section 107, second clause, a person abets the doing of a thing, who engages with one or more other person or persons in any conspiracy for the doing of that thing, if an act or illegal omission takes place in pursuance of that conspiracy, and an order to the doing of that thing.
Therefore, in order to constitute the offence of abetment by conspiracy, there 319 must first be a combining together of two or more persons in the conspiracy; secondly, an act or illegal omission must take place in pursuance of that conspiracy, and in order to the doing of that thing.
It is not necessary that the abettor should concert the offence with the person who commits it.
It is sufficient if he engages in the conspiracy in pursuance of which the offence is committed.
It is worthy of note that a mere conspiracy or a combination of persons for the doing of a thing does not amount to an abetment.
Something more is necessary, namely, an act or illegal omission must take place in pursuance of the conspiracy and in order to the doing of the thing for which the conspiracy was made.
Before the introduction of Ch.
VA conspiracy, except in cases provided by sections 121A, 311, 400, 401 and 402 of the Indian Penal Code, was a mere species of abetment where an act or an illegal omission took place in pursuance of that conspiracy, and amounted to a distinct offence.
Chapter VA, however, introduced a new offence defined by section 120A.
That offence is called the offence of criminal conspiracy and consists in a mere agreement by two or more persons to do or cause to be done an illegal act or an act which is not illegal by illegal means; there is a proviso to the section which says that no agreement except an agreement to commit an offence shall amount to a criminal conspiracy unless some act besides the agreement is done by one or more parties to such agreement in pursuance thereof.
The position, therefore comes to this.
The gist of the offence of criminal conspiracy is in the agreement to do an illegal act or an act which is not illegal by illegal means.
When the agreement is to commit an offence, the agreement itself becomes the offence of criminal conspiracy.
Where, however, the agreement is to do an illegal act which is not an offence or an act which is not illegal by illegal means, some act besides the agreement is necessary.
320 Therefore, the distinction between the offence of abetment by conspiracy and the offence of criminal conspiracy, so far as the agreement to commit an offence is concerned, lies in this.
For abetment by conspiracy mere agreement is not enough.
An act or illegal omission must take place in pursuance of the conspiracy and in order to the doing of the thing conspired for.
But in the offence of criminal conspiracy the very agreement or plot is an act in itself and is the gist of the offence.
Willes, J. observed in Mulcahy vs The Queen (1): "When to agree to carry it into effect, the very plot is an act in itself, and the act of each of the parties, promise against promise, actus contra actum, capable of being enforced, if lawful, punishable if for a criminal object or for the use of criminal means.
" Put very briefly, the distinction between the offence of abetment under the second clause of section 107 and that of criminal conspiracy under section 120A is this.
In the former offence a mere combination of persons or agreement between them is not enough.
An act or illegal omission must take place in pursuance of the conspiracy and in order to the doing of the thing conspired for; in the latter offence the mere agreement is enough, if the agreement is to commit an offence.
So far as abetment by conspiracy is concerned the abettor will be liable to punishment under varying circumstances detailed in sections 108 to 117.
It is unnecessary to detail those circumstances for the present case.
For the offence of criminal conspiracy it is punishable under section 120B. Having regard to the distinction pointed out above, I am of the opinion that para.
5 of the second complaint, though it used the expression "criminal conspiracy" really disclosed an offence of abetment by conspiracy.
It made no allegation 321 of any agreement between the several persons at a particular place or time.
It said that the accused persons complained against entered into a conspiracy to forge certain documents were forged or caused to be forged.
In other words, an illegal act was done in pursuance of the conspiracy and furthermore the documents so forged were used as genuine.
Having regard to these allegations in para.
5 of the second complaint, I am unable to hold that the learned 'Chief Presidency Magistrate was wrong in taking cognizance of the offence of abetment by conspiracy, for which offence no consent or sanction under section 196A of the Code of Criminal Procedure was necessary.
Therefore, there was violation of the provisions of that section.
In this view of the matter it is unnecessary to consider the correctness or otherwise of the further view expressed in some of the decisions (see, for example, State of Bihar vs Srilal Kejriwal (1) to which the special Bench has referred) that there the matter has gone beyond a mere conspiracy and substantive offences are alleged to have been actually committed in pursuance thereof, sections 120A and 120B are wholly irrelevant.
That view has not been accepted as correct by some of the other High Courts.
In the State of Andhra Pradesh vs Kandimalla Subbaiah (2) this Court held that offences created by sections 109 and 120B, Indian Penal Code were distinct offences, though for a reason stated somewhat differently from what I have stated.
It further held that where a number of offences were committed by several persons in pursuance of a conspiracy, it was not illegal to charge them with those offences as well as with the offence of conspiracy to commit those offences, though it was not desirable to charge the accused persons with conspiracy with the ulterior object of letting in evidence which would otherwise be inadmissible and furthermore, it was undesirable to complicate a 322 trial by introducing a large number of charges spread over a long period.
The question was treated as one of propriety rather than of legality.
The question of sanction was also considered in that case, but in view of the order of remand passed, no opinion was expressed thereon.
The special Bench expressed the view that it was not necessary to go to the extent of saying that in a case of this nature sections 120A and 120B became wholly irrelevant.
The special Bench proceeded on the footing that irrespective of whether sections 120A and 120B became wholly irrelevant or not the second complaint undoubtedly disclosed an offence of abetment by conspiracy and it was open to the Chief Presidency Magistrate to take cognizance of that offence.
I think that there are no good reasons for holding that the view taken by the special Bench is not correct.
In my opinion, the special Bench rightly overruled the objection as to the alleged violation of the provisions of section 196A of the Code of Criminal Procedure.
Now, I come to the third and principal question agitated in these appeals.
On behalf of one of the appellants, Saurindra Mohan Basu, Mr. Purushottam Trikumdas has argued before us that when the first complaint containing more or less the same allegations was dismissed under section 203 of the Code of Criminal Procedure by the Chief Presidency Magistrate, it was not at all open to his successor to entertain the second complaint.
He has put the matter as one of law and has argued that the only way of getting rid of an order of dismissal under section 203 of the Code of Criminal Procedure known to the Code of Criminal Procedure is to have it act aside in accordance with the procedure laid down in sections 436 and 439 of the Code.
He has further argued that, as a matter of law, a second complaint is not entertainable as long as the order of dismissal under section 203 of the Code 323 of Criminal Procedure is not set aside by a competent authority.
His argument is that the two decisions in Nilratan Sen vs Jogesh Chandra Bhattacharjee(1) and Kamal Chandra Pal vs Gourchand Adhikary (2) should be held as good law.
Section 403 of the Code of Criminal Procedure is relevant to this argument.
It embodies the well established rule of common law that a man may not be put twice in peril for the same offence and that no man should be vexed with several trials for offences arising out of identical acts.
An Explanation appended to the section says inter alia that the dismissal of complaint or the discharge of accused person is not an acquittal for the purposes of the section.
If the Legislature had intended that the dismissal of complaint or the discharge of an accused person would be a bar to fresh proceeding on the same allegations unless the order of dismissal or discharge were set aside by a higher court, it would have said so either explicitly or by omitting the Explanation altogether.
Therefore, the effect of the Explanation is that under section 403 a fresh trial is barred only in cases of acquittal or conviction by a court of competent jurisdiction, coming within the purview of sub section
(1) thereof.
This aspect of the question was considered in Queen Empress vs Dolegobind Dass (3), which was a case dealing with a previous order of discharge of the accused person.
In that case, Maclean, C. J. referred to the decision in Nilratan Sen 's case and said: "There is no express provision in the Code to the effect that the dismissal of a complaint shall be a bar to a fresh complaint being entertained so long as the order of dismissal remains unreversed ' (see per Benerjee, J. in Nilratan Sens ' vs Jogesh Chandra Bhattacharjee (supra).
I agree in that.
If, then there be no express provision 324 in the Code, what is there to warrant us in implying or in effect introducing into the Code a provision of such serious import x x x? In the absence of any other provision in the Code to justify such an implication x x x x I can appreciate no sound ground for the Court so acting; were it to do so it would go perilously near to legislating, instead of confining itself to construing the Acts of the Legislature.
" The question was then considered by a Full Bench of the Calcutta High Court in Dwarka Nath Mondul vs Beni Madhab Banerjee (1) and it was held by the Full Bench (Ghose, J. dissenting) that a Presidency Magistrate was competent to rehear a warrant case triable under Ch.
XXI of the Code of Criminal Procedure in which he had earlier discharged the accused person.
Nilratan Sen 's case(2) and Kamal Chandra Pal 's case(3) were referred to in the arguments as summarised in the report, but the view expressed therein was not accepted.
Dealing with the question Princep, J. said: "There is no bar to further proceedings under the law, and, therefore, a Magistrate to whom a complaint has been made under such circumstances, is bound to proceed in the manner set out in section 200, that is, to examine the complaint, and, unless he has reason to distrust the truth of the complaint, or for some other reason expressly recognised by law, such as, if he finds that no offence had been committed, he is bound to take cognizance of the offence on a complaint, and, unless he has good reason to doubt the truth of the complaint, he is bound to do justice to the complainant, to summon his witness and to hear them in the presence of the accused." 325 The same view was expressed by the Madras High Court in In re.
Koyassan Kutty (1) and it was observed that there was nothing in law against the entertainment of a second complaint on the same facts on which a person had already been discharged, inasmuch as a discharge was not equivalent to an acquittal.
This view was reiterated in Kumariah vs Chinna Naicker (2), where it was held that the fact that a previous complaint had been dismissed under section 203 of the Code of Criminal Procedure was no bar to the entertainment of a second complaint.
In Hansabai Sayaji vs Ananda Ganuji (3) the question was examined with reference to a large number of earlier decisions of several High Courts on the subject and it was held that there was nothing in law against the entertainment of a second complaint on the same facts.
The same view was also expressed in Ram Narain vs Panachand Jain (4), Ramanand vs Sheri (5), and Allah Ditta vs Karam Baksh (6).
In all these decisions it was recognised further that though there was nothing in law to bar the entertainment of a second complaint on the same facts, exceptional circumstances must exist for entertainment of a second complaint when on the same allegations a previous complaint had been dismissed.
The question of the existence of exceptional circumstances for the entertainment of a second complaint is a question to which I shall come later.
At the present moment, I am considering the argument of Mr. Purshottam Tricumdas that the law prohibits altogether the entertainment of a second complaint when a previous complaint on the same allegations had been dismissed under section 203 of the Code of Criminal Procedure.
On this question the High Courts appear to me to be almost unanimously against the contention of Mr. Purshottam Tricumdas, and for the reasons given in the decisions to which I have earlier referred, I 326 am unable to accept his contention.
I accept the view expressed by the High Courts that there is nothing in law which prohibits the entertainment of a second complaint on the same allegations when a previous complaint had been dismissed under section 203 of the Code of Criminal Procedure.
I also accept the view that as a rule of necessary caution and of proper exercise of the discretion given to a Magistrate under section 204(1) of the Code of Criminal Procedure, exceptional circumstances must exist for the entertainment of a second complaint on the same allegations; in other words, there must be good reasons why the Magistrate thinks that there is "sufficient ground for proceeding" with the second complaint, when a previous complaint on the same allegations was dismissed under section 203 of the Code of Criminal Procedure.
The question now is, what should be those exceptional circumstances ? In Queen Empress vs Dolagobind Dass (1), Maclean, C. J. said: "I only desire to add that no Presidency Magistrate ought, in my opinion, to rehear a case previously dealt with by a Magistrate of coordinate jurisdiction upon the same evidence only, unless he is plainly satisfied that there has been some manifest error or manifest miscarriage of justice." Thus, according to this decision, the exceptional circumstance must be such as would lead the Magistrate to think that the previous order of dismissal was due to a manifest error or resulted in a manifest miscarriage of justice.
In re.
Koyassan Kutty (2) Sadasiva Aiyar, J. formulated the test of exceptional circumstances in the following words: "Taking it then that the discharge was proper and legal, there is no doubt nothing in law against the entertainment of a second 327 complaint on the same facts as a discharge is not equivalent to an acquittal; but I think that unless very strong grounds are shown a person who has been charged once and discharged ought not to be harassed again on the same charge.
It is not alleged that new facts have been discovered which the police did not know when they brought the first charge.
" In this decision the test formulated was the discovery of new facts which were not known when the first charge of complaint was made.
In Kumariah vs Chinna Naicker(1) the same test was again applied when it was observed: "There is nothing to indicate that there was no proper investigation on the previous complaint or that there was any necessity for investigating the second complaint.
x x x No additional witness had been cited in the second complaint, nor, as pointed out by the Additional Magistrate, was it alleged that any other kind of evidence had been discovered or was likely to be forthcoming.
" It is worthy of note, however, that Kuppuswami Aiyar, J. did not say that the discovery of a new fact or new evidence must be of such a character that it was not known to the complainant when the prior complaint was brought and dismissed.
In Hansabai Sayaji vs Ananda Ganuji (2) it was pointed out that the circumstance that the second complaint was filed by a person other than the one who made the first complaint made no difference and the test laid down in some early Rangoon High Court decisions [Ma The Kin vs Nga E Tha (3) and U Shwe vs Ma Sein Bwin (4) ], was accepted as the correct test.
In Ma The Kin 's case (supra) the test was thus expressed: 328 "It is the duty of a Magistrate, therefore, who receives a complaint in a case where there has been a previous order of dismissal or discharge, not to issue process, unless he is plainly satisfied that there has been some manifest error or manifest miscarriage of justice, or unless new facts are adduced which the complainant had not knowledge of or could not with reasonable diligence have brought forward in the previous proceedings.
" It will be noticed that in the test thus laid down the exceptional circumstances are brought under three categories; (1) manifest error, (2) manifest miscarriage of justice, and (3) new facts which the complainant had no knowledge of or could not with reasonable diligence have brought forward in the previous proceedings.
Any exceptional circumstances coming within any one or more of the aforesaid three categories would fulfil the test.
In Ram Narain vs Panachand Jain (1) it was observed that an exhaustive list of the exceptional circumstances could not be given though some of the categories were mentioned.
One new category mentioned was where the previous order of dismissal was passed on an incomplete record or a misunderstanding of the nature of the complaint.
This new category would perhaps fall within the category of manifest error or miscarriage of justice.
It appears to me that the test laid down in the earliest of the aforesaid decisions.
Queen Empress vs Dolegobind Dass (2), is really wide enough to cover the other categories mentioned in the later decisions.
Whenever a Magistrate is satisfied that the previous order of dismissal was due to a manifest error or has resulted in a miscarriage of justice, he can entertain a second complaint on the same allegations even though an earlier complaint was dismissed under section 203 329 of the Code of Criminal Procedure.
I do not think that in a matter of this kind it is either possible or even desirable that the exceptional circumstances must be stated with any more particularity or precision.
The learned Advocate for the respondent argued before us that a new category should be added and he called it "frustration of justice".
I am of the view that apart from any question of felicity of this new expression, this new category does not give any more assistance towards explaining the exceptional circumstances which must exist before a second complaint on the same allegations can be entertained.
I am content in this case to proceed on the footing that, the Magistrate must be satisfied that there was a manifest error or a miscarriage of justice before he can entertain a second complaint on the same facts.
In this case, two exceptional circumstances were adverted to before us.
One is that the learned Chief Presidency Magistrate who dealt with the first complaint completely misdirected himself as to the true scope and effect of sections 203 and 204 of the Code of Criminal Procedure and this, it is contended, resulted in a manifest miscarriage of justice when he dismissed the first complaint under section 203 of the Code of Criminal Procedure.
I am of the view that there is substance in this contention.
Section 203 of the Code of Criminal Procedure states that the Magistrate may dismiss the complaint, if, after considering the statement on oath, if any, of the complainant and the witnesses and the result of the investigation or enquiry, if any, under section 202, there is in his judgment no sufficient ground for proceeding.
Section 204 lays down that if in the opinion of the Magistrate taking cognizance of an offence there is sufficient ground for proceeding, he shall issue a summon or a warrant, as the case may require.
What is the true scope and effect of the expression 330 "sufficient ground for proceeding" occurring in the aforesaid two sections ? This was considered by this Court in Vadilal Panchal vs Dattatraya Dulaji Ghadigaonker (1).
With reference to sections 200, 202 and 203 of the Code of Criminal Procedure it was there observed: "The inquiry is for the purpose of ascertaining the truth or falsehood of the complaint; that is, for ascertaining whether there is evidence in support of the complaint so as to justify the issue of process and commencement of proceedings against the person concerned.
The section does not any that a regular trial for adjudging the guilt or otherwise of the person complained against should take place at that stage; for the person complained against can be legally called upon to answer the accusation made against him only when a process has issued and he is put on trial.
" It was further observed that if the Magistrate had not misdirected himself as to the scope of an enquiry under section 202 and had applied his mind judicially to the materials before him, it would be erroneous in law to hold that a plea based on an exception could not be accepted by in arriving at his judgment.
In another decisions of this Court Ramgopal Genapatria Ruia vs State of Bombay (2) the expression "sufficient grounds" occurring in sections 209, 210 and 213 of the Code of Criminal Procedure was considered and it was held that the expression did not mean sufficient grounds for the purpose of conviction but meant such evidence as would be sufficient to put the accused upon trial by the jury dealing with the first complaint the learned Chief Presidency Magistrate proceeded to consider not whether there was 331 sufficient ground for proceeding within the meaning of sections 203 and 204 of the Code of Criminal Procedure but whether there was sufficient evidence for conviction of the accused persons.
In my opinion, this approach was completely wrong and resulted in a manifest miscarriage of justice.
The learned Chief President Magistrate said: "In cases depending on circumstantial evidence in order to justify any inference that an offence has been committed the incriminating facts must be incompatible with innocence of the person accused and incapable of explanation upon any other reasonable hypothesis than that of his guilt.
If the circumstances are found to be as consistent with the guilt of the accused, no inference of guilt can be drawn.
In the present case the circumstances above equally may lead to the inference that the document was ante dated and might or might not have been forged.
Therefore the circumstances are not precise to be of any value as evidence.
" These observations clearly show that the learned Chief Presidency Magistrate misdirected himself as to the true scope and effect of sections 203 and 204 of the Code of Criminal Procedure.
He did not keep in mind the true purpose of the enquiry before him which was to ascertain whether there was evidence in support of the complaint so as to justify the issue of process and commencement of proceedings against the accused persons.
He further failed to keep in mind that sections 203 and 204 of the Code of Criminal Procedure did not say that a regular trial for judging the guilt or otherwise of the person complained against should take place at that stage.
It was not for learned Chief Presidency Magistrate to apply the test whether the circumstances were or were not incompatible with the, innocence of the accused persons.
The 332 purpose of the enquiry before him was merely to ascertain prime facie the truth or falsehood of the complaint.
Instead of holding an enquiry into the complaint, the learned Chief Presidency Magistrate proceeded as though he was trying the ease itself on merits.
I consider that this mistake on the part of the learned Chief Presidency Magistrate gave a wrong direction to the whole proceedings on the first complaint and the order of dismissal passed by him was due to a manifest error and resulted in miscarriage of justice.
The second exceptional circumstance is as to the presence of the telephone number "City 6091" printed on the sheet of paper on which were typed the minutes of the proceedings dated January 16, 1948.
When the first complaint was dealt with by the Chief Presidency Magistrate no evidence was led to show that the City Exchange did not come into existence until December, 1948 and that the telephone connection relating to that particular number was obtained for the first time by the Hindusthan Co operative Insurance Society Ltd. on or about March 18, 1949.
This I think, would be a new matter which was not considered when the first complaint was dismissed under section 203 of the Code of Criminal Procedure.
There was a good deal of argument as to whether this matter relating to the City Exchange was known to the complainant and his brothers from before, and if so, why they did not bring it to the notice of the learned Chief Presidency Magistrate who dealt with the first complaint.
it appears that an application dated June 7, 1955 was made before Debabrata Mookerjee J. who heard the application in revision with regard to the first complaint.
In that application certain statements were made with regard to the City Exchange.
Those statements did not, however, include any averment as to the knowledge of the complainant, Promode Ranjan Sarkar, about 333 the facts relating to the City Exchange and telephone number "City 6091".
The application merely stated that the facts stated therein were matters of public history and it was essential in the ends of justice to take judicial notice thereof.
Debabrata Mookerji, J. apparently rejected this application but did not record any formal orders on that date.
He recorded formal orders after he had dismissed the application in revision.
He said therein that he was not prepared to take into consideration the facts alleged in the application dated June 7, 1955 as they related to new matters.
The argument on behalf of the appellants before us is that the facts relating to the City Exchange were not new matters, because the complainant, Saroj Ranjan Sarkar, nowhere said that he did not know them before.
The argument, therefore is that it does not fulfil the test of "new facts which the complainant have no knowledge of or could not with reasonable diligence have brought forward in the previous proceedings".
The learned Advocate for the respondent has, in my opinion, rightly submitted that it is somewhat illogical to say at one stage of the proceedings that the matter was a new matter and could not, therefore, be taken into consideration and at a later stage to say that it is not a new matter and therefore could not be taken into consideration.
This much, however, is clear that the matter relating to the City Exchange and in particular telephone number "City 6091" was not at all considered when the first complaint was dismissed under section 203 of the Code of Criminal Procedure.
This matter is of some importance because if there was no such telephone number on January 16, 1948, the minutes of the proceedings purporting to be of that date must have come into existence on a later date.
This would have great relevance and bearing on the allegation of forgery made with regard to the minutes of the proceedings dated January 16, 1948.
334 On behalf of Saurindra Mohan Basu it was further contended that there was not even prima facie evidence against him and the learned Chief Presidency Magistrate was wrong in issuing process against him.
It is only necessary to point out that the learned Chief Presidency Magistrate found that there was a prima facie case against Saurindra Mohan Basu.
He had attested the signature of the late Nalini Ranjan Sarkar and if that signature was forged, then that would be prima facie evidence against Saurindra Mohan Basu also.
My learned brethren have taken the view that the entertaining of the second complaint in the circumstances of this case is a gross abuse of the processes of the Court.
I find myself unable to subscribe to that view.
My conclusion is just the opposite, namely, that the entertaining of the second complaint fully serves the interests of justice.
I am further of the opinion that its dismissal would defeat the ends of justice.
In this connection, I have already referred to the two exceptional circumstances which exist: one is that the learned Chief Presidency Magistrate who dealt with the first complaint completely misdirected himself as to the true scope and effect of sections 203 and 204 of the Code of Criminal Procedure; the second is that Debabrata Mookerjee, J. wrongly refused to take into consideration the circumstances relating to the installation of the City Exchange and telephone number "City 6091", circumstances which had a decisive bearing on the allegation of forgery made with regard to the minutes of the proceedings dated January 16, 1948.
Even a cursory perusal of the order of the Chief President Magistrate (Shri N. C. Chakravarti) dated August 6, 1954 with regard to the first complaint shows that the learned Chief Presidency Magistrate proceeded on the footing as though he was trying a case based entirely on circumstantial evidence; he formulated 335 the tests for drawing conclusions from circumstantial evidence and applying those tests, he came to the conclusion that the complaint was not true.
He rejected the evidence of the hand writing expert as though it was his function to try the case.
He rejected the enquiry report of Shri A. B. Syam (who held that there was a prima facie case for the issue of process) on very insufficient grounds.
He even went to the length of judging for himself the peculiar characteristics of Nalini Ranjan Sarkar 's hand writing depending on the personality of the writer.
In my view, in all these matters the learned Chief Presidency Magistrate misdirected himself as to the true scope of the enquiry before him and he forgot that what he had to find was whether prima facie there was believable evidence in support of the allegations made in the complaint.
This does not necessarily mean that a Magistrate dealing with a complaint is obliged "to bind himself to a mere mechanical or a wholly uncritical acceptance of the complainant 's story".
Indeed, it is the duty of the Magistrate to judge the materials on which he has to make up his mind as to the sufficiency or otherwise of the ground for proceeding further with the complaint and in judging the materials he must sift them and submit them to a critical examination.
This aspect of the question was argued before Debabrata Mookerjee, J. and he referred to it in his judgment.
I say this without meaning any disrespect to the learned Judge, but it appears to me that he missed the distinction which was pointed out by this Court in Ramgopal Ganpatrai Ruia vs The State of Bombay(1) namely that the expression "sufficient grounds" occuring in sections 209, 210 and 213 of the Code of Criminal Procedure does not mean sufficient grounds for the purpose of conviction, but means such evidence as is sufficient to put the accused person upon trial by the jury.
In sections 203 and 204, Criminal Procedure Code, the expres 336 sion is "sufficient ground for proceeding" which really means sufficient ground for proceeding with the complaint.
Sufficient ground for proceeding with the complaint is one matter and sufficient ground for convicting an accused person is quite a different matter.
It is this distinction which has to be kept in mind and the failure to keep such a distinction in mind in the present case has resulted in a manifest error.
Debabrata Mookerjee, J. detailed seven circumstances as those on which the complainant relied in support of the allegation of forgery.
He then went on to deal those circumstances as though the function of the Court then was to find out whether there was sufficient ground for convicting the accused person.
I refer particularly to the view expressed by the learned Chief Presidency Magistrate to the effect that one of the documents in question might have been ante dated by Nalini Ranjan Sarkar himself.
This was a suggestion made on behalf of the accused persons as a possible defence to the charge of forgery and it was not the function of the Chief Presidency Magistrate to consider the defence at that stage.
Debabrata Mookerjee, J. himself said: "If, on the other hand, the Magistrate has met the facts alleged by the complainant by anticipating possible defences to the charge, thus travelling beyond the facts themselves and the inferences and the probabilities legitimately raised by them, he must be held to have exceeded the allowable limits of an initial test of the complainant 's story." Yet, the possible defence that Nalini Ranjan Sarkar might have himself ante dated the document was not only considered by the learned Chief Presidency Magistrate but was accepted by Debabrate Mookerjee J. This, in my opinion, clearly demonstrates the manifest error or injustice which has taken place in this case, though in the concluding part of his 337 judgment Debabrata Mookerjee, J. expressed the view that he did not consider that the learned Chief Presidency Magistrate had over stepped the permissible limits of a preliminary probe into the truth or otherwise of the complainant 's story.
He further said that in his view the learned Chief Presidency Magistrate in sifting the materials offered did not dispose of them by anticipating a possible defence of the parties; yet the one possible defence to the charge of forgery was that Nalini Ranjan Sarkar might himself have antedated the document in question and that very defence was considered and accepted not only by the learned Chief Presidency Magistrate but by Debabrata Mookarjee, J. also.
The second mistake which led to a manifest injustice was the refusal to take into consideration the circumstances relating to the installation of the City Exchange and the telephone number "City 6091".
Debabrata Mookerjee, J. made no orders on the application dated June 7, 1955.
In his final order he said: "The application speaks for itself.
I was not prepared on that date to take any notice of the new matters mentioned in that application and I adhere to my decision.
" In my view Debabrata Mookerjee, J. was grievously in error in rejecting the application.
As I have said earlier, the circumstances relating to the installation of the City Exchange and telephone number "City 6091" had a decisive bearing on the truth or otherwise of the allegation of forgery and to reject the application to take those circumstances into consideration really amounted to a denial of justice.
Debabrata Mookerjee, J. took the view that it was a new matter which could not be taken into consideration and, pradoxically enough, the argument before us is that not being a new matter, it should not have been taken into consideration 338 in connection with the second complaint.
This paradox clearly demonstrates the injustice that will result from a failure to take into consideration circumstances which are decisive of the allegations made in the complaint.
When the complainant made an application for a certificate for appeal to the Supreme Court against the order passed by Dababrata Mookerjee.
J., he forcefully contended that the refusal to take notice of the circumstances relating to the installation of the City Exchange amounted to a denial of justice.
This application was dealt with by a Bench of two Judges of the Calcutta High Court (Das Gupta and Bachawat, JJ.).
The learned Judges expressed the view that if they were dealing with the matter, they would have thought it right to refer to the appropriate books for ascertaining the date on which the City Exchange came into existence.
They, however, felt that the matter was within the discretion of Debarata Mookerjee, J. and they were not prepared to give a certificate in a matter of discretion.
Another point which was urged before that Bench was this.
The complaint was for offences triable by the Court of sessions and the question which the learned Chief Presidency Magistrate had to put himself was not whether he, for himself, believed the allegations to be true but whether the materials before him were such that thereupon a reasonable body of men might believe the allegations to be true.
The learned Judge said: "In our judgment there is considerable force in this argument, but at the same time we have to take notice of the fact that this question does not appear to have been decided by the courts." Since those observations were made, a decision has been given by this Court and that decision supports the contention urged on behalf of the complainant.
The matter then came to this Court on an applica 339 tion for special leave, and special leave was granted by this Court on February 13, 1956.
An appeal was filed in pursuance of that special leave, but ultimately Promode Ranjan Sarkar withdrew his appeal by filing a petition on February 3, 1959.
In that petition he stated that at the intervention of common friends and well wishers of the parties, he had settled his disputes with the respondents therein and did not want to proceed with the appeal a statement which, in the circumstances of this case, amounts almost to compounding a felony.
The appeal was accordingly withdrawn on March 12, 1959.
The present complaint, Saroj Ranjan Sarkar, alleged in his petition of complaint that the withdrawal of the appeal filed in this Court in the circumstances stated above was due to undue influence exercised by the accused persons.
Whether that allegation is correct or not can only be determined after evidence has been led.
There are, however, circumstances which seem to me indicate that the withdrawal of the appeal in this Court was for the purpose of defeating the ends of justice.
The accused persons must have realised that if the evidence relating to the installation of the City Exchange and telephone No. "City 6091" was available and considered, then there would be no escape from the position that the minutes of the proceedings of the Board meeting of N.R. Sarkar and Co. Ltd., dated January 16, 1948 must have been forged and this aspect of the matter was very rightly emphasised by the learned Chief Presidency Magistrate (Shri Bijayesh Mukherjee) who dealt with the second complaint as also by the Special Bench of three Judges who dealt with the matter on the revision applications made against the order of the learned Chief Presidency Magistrate on the second complaint.
It is also worthy of note that this Court must have granted special leave in respect of the order passed on the first complaint, because it felt that there were arguable points in support of the 340 application for special leave, one of such points apparently being the refusal to consider the circumstances relating to the installation of the City Exchange.
On the second complaint the learned Chief Presidency Magistrate, as also the High Court, took those circumstances into consideration and rightly held that those circumstances clearly indicated that the allegations made in the complaint were prima facie true.
The learned Chief Presidency Magistrate further held that having regard to the antecedent circumstances, there was no undue delay in filing the second complaint.
He further held that there was no intention to blackmail, in the sense that one brother having failed on the first complaint, another brother was fraudulently trying to start afresh the criminal law in motion.
These findings of the learned Chief Presidency Magistrate were accepted by a Special Bench of three Judges of the Calcutta High Court.
I have heard nothing in the course of the arguments addressed before us which would justify me to go behind those findings, particularly in an appeal filed by special leave under article 136 of the Constitution.
The learned Chief Presidency Magistrate and a Bench of three Judges of the Calcutta High Court held specifically on the second complaint that there was a prima facie case and the dismissal of the first complaint resulted in manifest injustice.
I see no reasons to differ from the view thus expressed by the learned Chief Presidency Magistrate and the High Court.
For these reasons I have come to the conclusion that there are no good grounds for interfering with the judgment and order of the Special Bench dated December 22/33, 1960.
I would accordingly dismiss the two appeals.
The Judgment of Kapur and Hidayatullah, JJ., was delivered by KAPUR, J. There are two appeals against the judgment and order of the High Court of 341 Calcutta which raise the question of competency of a second complaint in regard to the same matter after the first complaint has been dismissed under section 203 of the Code of Criminal Procedure.
The respective appellants in the two appeals are P. N. Taluqdar and Sourindra Mohan Basu an attorney of Calcutta against whom process has been issued by the Chief Presidency Magistrate Calcutta on a complaint filed by the respondent Saroj Ranjan Sarkar.
The facts of these appeals are these: In 1944 a private limited company N. R. Sarkar & Co., Ltd. was formed by the late Mr. N. R. Sarkar, who was a well known financier and industrialist and a public man of Bengal.
This company was the Managing Agent of several public limited companies such as Hindusthan Development Corporation Ltd., Hindusthan Chemicals Limited, Hindusthan Pilkington Glass Works Limited etc.
Mr. N. R Sarkar was the Managing Director of N. R. Sarkar & Co., Ltd. Out of the share capital of this company he held 4649 shares.
His younger brother Promode Ranjan Sarkar held 50 shares.
Appellant P. N. Taluqdar who was a paid employee of the Hindusthan Cooperative Insurance Co., Ltd. held 300 shares and was a director of the Company and Shanti Ranjan Sarkar, a son of N. R. Sarkar 's deceased brother, held one share.
As Mr. N. R. Sarkar became the Finance Minister in the West Bengal Government, he obtained leave of absence on January 4, 1948, from the directors of N. R. Sarkar & Co. Ltd. for a period of one year which was subsequently extended for another year.
This was by a resolution passed on March 10, 1948.
Mr. N. R. Sarkar joined the Government on January 23, 1948 and in August 1948 Dr. N. N. Law became a director of N. R. Sarkar & Co., Ltd. On July 31, 1951 Mr. N. R. Sarkar executed a deed of trust in respect of 2920 shares out of his 342 holding in Hindusthan Cooperative Society Ltd. and 3649 shares out of the shares held by him in N. R. Sarkar & Co. Ltd. By this deed he appointed as trustees his younger brother Promode Ranjan Sarkar, appellant P. N. Taluqdar and Dr. N. N. Law and the beneficiaries under the trust deed were his four younger brothers including the complainant and Shanti Ranjan Sarkar, his nephew.
It is alleged that the balance of 1,000 shares was to be kept in trust by the appellant P. N. Taluqdar for the benefit of his brothers and nephew.
N. R. Sarkar died on January 25, 1953.
It is alleged that a few days after the death of Mr. N. R. Sarkar, the appellant, Sourindra Mohan Basu in a casual manner informed Promode Ranjan Sarkar that his brother N. R. Sarkar had executed two documents one an unregistered deed of agreement dated January 19, 1948, appointing the appellant P. N. Taluqdar as the Managing Director of N. R. Sarkar & Co., Ltd. and a deed of transfer dated February 5, 1951, transferring 1,000 shares in N. R. Sarkar & Co. Ltd., in his P. N. Taluqdar 's) favour.
Promode Ranjan Sarkar and his brothers without giving much credence to this information wanted to see the documents but they were not allowed to do so.
On July 31, 1953, appellant P. N. Taluqdar resigned from the Hindusthan Cooperative Insurance Society Ltd., in order to take control of N. R. Sarkar & Co Ltd., as it Managing Director.
This led to trouble between Promode Ranjan Sarkar and the appellant P. N. Taluqdar and there was some correspondence between Promode Ranjan Sarkar and the appellant P. N. Taluqdar which it is unnecessary to refer to.
At a meeting of the Board of Directors of N. R. Sarkar & Co., held on September 22, 1953, the appointment of appellant P. N. Taluqdar as Managing Director of N. R. Sarkar & Co. Ltd., was renewed for a period of seven years.
This in spite of the 343 protest of Promode Ranjan Sarkar and in spite of the fact that that item was not on the agenda of the meeting.
On October 1,1953, Promode Ranjan Sarkar took inspection of the agreement.
On October 13, 1953, he took inspection of the Minute book and took photostat copies of some of the documents but not of the resolution of January 16, 1948.
It is alleged that the appellants and other entered into a criminal conspiracy and fraudulently forged certain documents which in the complaint are described thus: (a) "An unregistered deed of agreement purporting to have been executed by the late Sri Nalini Ranjan Sarkar as Governing Director of N. R. Sarkar & Company Limited on 19th January 1948, (while he was on leave as stated above) appointing accused No. 1 (P. N. Taluqdar) as the Managing Director of N. R. Sarkar & Company Limited on a remuneration of Rs. 1,500 100 2,000/ per month and the deed bears the signature of accused No. 2 (section N. Basu) as the sole attesting witness.
(b) A transfer deed in respect of 1000 shares of N. R. Sarkar & Co. Ltd., which has been entrusted to accused No. 1 as stated before, transferring them to accused No. 1 for an alleged consideration of Rs. 1,00,000(Rupees One Lakh) also purporting to have been executed by the late Sri Nalini Ranjan Sarkar on 5th February, 1951, with accused No. 2 as attesting witness both for the transferor and transferee.
344 (c) Minutes of the proceedings of the Board.
Meetings of the said N. R. Sarkar & Company Limited including those of a meeting dated 16th January, 1948, purporting to bear the signature of the aforesaid late Sri Nalini Ranjan Sarkar.
" These documents, it is alleged, are forged and have been used and by the use of these forged documents a fraud has been perpetrated.
On April 3, 1959, respondent filed in the Court of the Chief Presidency Magistrate, Calcutta, a complaint under sections 467, 471 read with section 109 of the Indian Panel Code against the two appellants, Dr. N. N. Law and A. Chakravarti.
Document No. (b) above is not the subject matter of the complaint because a suit in regard to it has been filed and is pending in the Calcutta High Court.
On May 7, 1959, process was issued against the appellants by the Chief Presidency Magistrate.
Before dealing with the allegations in this complaint it is necessary to give some further facts of the case.
On December 12, 1953 Pramode Rajan Sarkar laid an information with the Commissioner of Police, Calcutta, against the persons against whom the above mentioned complaint was later filed.
It appears that the matter was investigated by the police and by a letter dated February 16, 1954, the Police Commissioner expressed the opinion that there was no substance in the allegations which were being made by Pramode Ranjan Sarkar against the appellants and two others.
He stated ".
I have given this matter very careful consideration gone through various reports and papers and even examined an important witness myself.
My examination has led me to conclusion that allegations are false and vexations.
" On March 17, 1954, Pramode Ranjan Sarkar filed a complaint under sections 467, 471 and ss.457, 471 read with section 109.
After setting out the facts which have 345 been given above and after referring to the three documents which were alleged to have been forged it was stated that the deed of agreement was engrossed on a stamp paper purchased in the name of P.D. Himmatsinghka & Co., a firm of solicitors, instead of in the name of the parties; that the resolution of January 16, 1948, which purported to bear the signature of the deceased was in fact not signed by him; that during the lifetime of Nalini Ranjan Sarkar and after a considerable period after his death the appellant, P. N. Taluqdar, never alleged that he had been appointed the Managing Director of N. R. Sarkar & Co. Ltd., nor did even appear from any resolution of the Board of N. R. Sarkar & Co., that he was appointed the Managing Director until September, 1953.
Certain other allegations which need not be set out at this stage were also made in this complaint for the purpose of showing that the appellants had been guilty of forgery and for using forged documents and for conspiracy.
The matter was heard by the Chief Presidency Magistrate Mr. N. C. Chakraborty who after examining all the witnesses who were produced before him dismissed the complaint by an order dated August 6, 1954.
The learned Chief Presidency Magistrate examined the handwriting expert and after taking all the facts into consideration he held: "that the evidence on handwriting including the opinion of the Handwriting Expert does not support the complainant 's version." Against this order the complainant Pramode Ranjan Sarkar took a revision to the Calcutta High Court which was heard by Debabrata Mookerjee, J. Before him three contentions were raised (1) that the Chief Presidency Magistrate erred in examining the witnesses himself after he had received the result of the enquiry held by Mr. A. B. Shyam, 346 another Magistrate, under section 202, Code of Criminal Procedure; (2) the learned Magistrate misunderstood the scope of sections 202 and 203 and misdirected himself by insisting upon a standard of proof which the law did not require at the initial stage when the only question was whether the process should issue or not and the third contention related to the power of revision of High Court under section 439 when dealing with orders of a Chief Presidency Magistrate.
The learned Judge held against the complainant, Pramode Ranjan Sarkar on the points that were raised before him.
He held that it was open to the Chief Presidency Magistrate to examine witnesses; (2) the learned Magistrate had not misdirected himself in regard to the scope of sections 202 and 203 and that he could dismiss the complaint if in his judgment there was no sufficient ground for proceeding.
He also held that the order of Magistrate was liable to be interfered with if it was made in disregard of the rules of procedure or it was so grossly improper or so palpably incorrect as to require a revision in the interest of justice.
The learned judge then examined the evidence which had been produced before the Magistrate and taking the various circumstances into consideration discharged the rule and dismissed the revision, holding that the complainant Pramode Ranjan Sarkar was guilty of undue delay in taking action against the appellants, because he came to know on October 13, 1953, as to the forged nature of the documents and did not take any action till he wrote to the Police Commissioner to which he got reply on February 16, 1954, and he did not file any complaint or take any action till march 17, 1954, and this delay was unexplained.
He also held that the complainant Pramode Ranjan Sarkar 's belief in regard to forgery was not established by the evidence which had been produced because (1) he came to know about the agreement complained of in February, 1953, but he discredited it and did 347 not take any action; (2) that when the agreement came up for renewal on September 22, 1953, for another term of the 7 years he did not oppose it on the ground that it was a forgery but on legal grounds.
The learned judge did not believe the evidence of Pramode Ranjan Sarkar that up to February, 1954, he considered it absurd that there could be such a document.
He referred to the correspondence which passed between the complainant and the appellant P. N. Taluqdar.
He also considered the evidence relating to the watermark and the circumstances in support of the allegation of the theory of forgery and not being satisfied with the evidence he dismissed the revision petition and thus the order of the Chief Presidency Magistrate Mr. Chakraborti was upheld.
It may be pointed out that on behalf of complainant Pramode Ranjan Sarkar an application was made on June 6, 1955, drawing the attention of the Court to the fact that on the sheet of a paper on which the minutes of the meeting held on January 16, 1948, had been typed there was printed Telephone "City 6091" and that Exchange had not come into existence till December, 1948.
It was not stated when the complainant came to know of this fact.
The learned Judge did not pass any separate order on this application and did not take it into consideration in his judgment.
Against this order an application was made for a certificate under article 134(1)(c) which was dismissed but in that order this fact as to the City Exchange coming into existence in December, 1948, has been taken note of.
Pramode Ranjan Sarkar then applied to this Court for Special Leave which was granted on February 13, 1956, but the appeal was withdrawn and was therefore dismissed or March 2, 1959.
The present respondent Saroj Ranjan Sarkar then brought a complaint under the same sections 348 on April 3, 1959, making the same allegations as were made by his elder brother Pramode Ranjan Sarkar but there is one further allegation as to the Telephone City Exchange which did not find place in the previous complaint, In this complaint after referring to the facts which have been set out above it was alleged in paragraph 5 as follows : "That in order to assume complete control over N. R. Sarkar & Co., Ltd. and the concerns under its Managing Agency, the accused, entered into a criminal conspiracy with each other and others unknown, to dishonestly and fraudulently forged a Deed of Agreement, a Deed of Transfer and make a false document, to wit, minute book of N. R. Sarkar & Co. Ltd., and in pursuance thereof dishonestly and fraudulently forged and/or caused to be forged and used as genuine the said documents.
" The grounds for forgery were that the unregistered deed dated January 19, 1948, was engrossed on a stamp paper purchased in the name of M/s. P. D. Himmatsinghka & Co; that the late N. R. Sarkar was on leave granted by the company and he never attended any meeting of the Board for more than four years as long as he was a Finance Minister; that the signature of Mr. N. R. Sarkar on the resolution dated January 16, 1948, was forged; that during the lifetime of N.R. Sarkar it was never given out by the appellant P. N. Taluqdar that he had been appointed a Managing Director, that in none of the papers and correspondence and resolutions of the Board until September, 1953, does it appear that the appellant, P. N. Taluqdar, was its Managing Director; that the appellant, P. N. Taluqdar continued to hold his post in the Hindusthan Cooperative Insurance Society Ltd. up to the end of July, 1953; that the signature in the deed of appointment was halting and appeared to be a forgery even to the naked eyes; that the resolution 349 for renewal for seven years was passed in spite of the protest of Pramode Ranjan Sarkar who was a director of N. R. Sarkar & Co. Ltd., and inspection of the deed of appointment was not given to Pramode Ranjan Sarkar in spite of his demands.
It was further alleged that the resolutions of the Board of Directors were all on loose sheets of paper, that the signature on the resolutions were forged; that there was internal evidence to show that the genuine minutes book had been dishonestly changed; that the minutes of the proceeding of the Board of Directors said to have been held on January 16, 1948, were on a typed sheet; that the Telephone No. "City 6091" was printed thereon and the City Exchange was not in existence in January, 1948, but came into existence in December, 1948.
It was prayed that the accused named therein which included the two appellants be proceeded against under sections 467, 471 read with section 109 of the Indian Penal Code.
It will be noticed therefore that all the allegations made by Saroj Ranjan Sarkar are the same as those made by Pramode Ranjan Sarkar except in regard to the City Exchange Telephone Number.
This complaint was accompanied by an affidavit not of complainant Saroj Ranjan Sarkar but of Shanti Ranjan Sarkar, his nephew.
In paragraphs 1 to 7 of this affidavit he stated that the facts in regard to the Calcutta City Exchange were matters of public history as they were duly published in the columns of "statesman" dated December 29, 1948, and he also stated "that I am aware of the facts and circumstances stated above," but he did not say as to when he came to know about the City Exchange matter.
It may also be noted that in the application which was made by the complainant Pramode Ranjan Sarkar in the High Court before Debabrata Mookarjee J., it was submitted that judicial notice be taken of the new 350 telephone exchange under section 57 but it was not stated as to when that complainant came to know about the new Telephone Exchange Number.
That fact has been stated in the affidavit of Shanti Ranjan Sarkar in almost the same vague manner.
The learned Chief Presidency Magistrate, who took cognizance of the second complaint, Mr. Bijoyesh Mookerjee, after considering the whole material placed before him issued process against the appellants only.
He held that there was no delay on the part of the respondent in making the complaint that the previous complaint and the result thereof was no bar to the filing of the second complaint; that the complaint was not brought with a view to blackmail the accused including the appellants, that what the brother of the respondent did, did not lay the respondent open to the charge of blackmail.
On the merits he took into consideration the fact in regard to the City Exchange of which according to the learned Magistrate he could take judicial notice under section 57 of the Evidence Act.
He compared various signatures of the late N. R. Sarkar and after considering the elaborate order of his predecessor he said : "I have read and re read it and with respect too due to one of his eminence, but it is my misfortune that I have not been persuaded.
There are various other considerations which point to the ineluctable prima facie conclusion of forgery.
But it is not proper that I burden my order with all that at this stage." He held that he was satisfied about the truth of the allegations and there was sufficient ground for proceeding against the appellants under section 204, Criminal Procedure Code and he therefore issued process against them but did not issue any process against Dr. N. N. Law and Amiya Chakravarty who were accused Nos. 3 and 4. 351 Against this order a revision was taken by the appellants to the High Court and rule was issued against the Chief Presidency Magistrate to show cause why his order should not be set aside.
He showed cause and the matter was heard by a Division Bench consisting of P. B. Mukerjee and H. K. Bose, JJ., and the matter was referred to a larger Bench because of the importance of the questions of law which arose in the case.
Three questions were raised before the Special Bench, (1) whether under the appellate side rules of the High Court it was competent for a Division Bench consisting of two judges to refer any matter to a larger bench for decision in a criminal matter; (2) whether a second complaint could be entertained on the same facts after a previous complaint had been dismissed; and (3) whether the complaint could be taken cognizance of by the Magistrate in the absence of a sanction under section 196A of the Criminal Procedure Code.
On all these three points the finding of the Special Bench was against the appellants.
It held that the attention of the Chief Justice having been drawn to the fact that the case involved questions of importance it was open to him in the exercise of his inherent jurisdiction to refer the case to a larger bench and therefore the reference was not illegal.
In regard to the filing of a second complaint it held that a fresh complaint could be entertained after the dismissal of previous complaint under section 203 Criminal Procedure Code when there was manifest error or manifest miscarriage of justice or when fresh evidence was forthcoming.
The Bench was of the opinion that the fact in regard to the City Telephone Exchange was a new matter and because Pramode Ranjan Sarkar was not permitted to take a photostat copy of the Minutes Book, it was possible that his attention was not drawn to the City Telephone Exchange which was not in existence at the relevant time and that there was sufficient reason for Pramode 352 Ranjan Sarkar for not mentioning the matter of City Exchange in his complaint.
It also held that the previous Chief Presidency Magistrate Mr. Chakraborty had altogether ignored the evidence of a large number of witnesses who were competent to prove the handwriting and signature of N. R. Sarkar and he had no good reasons for not accepting their evidence.
It could not be said therefore that there was a judicial enquiry of the matter before the previous Chief Presidency Magistrate; the decision was rather arbitrary and so resulted in manifest miscarriage of justice.
The Court was of the opinion therefore that there was no reason to differ from the finding of the Chief Presidency Magistrate Mr. Bijoyesh Mukerjee and that there was a prima facie case against the appellants.
The rules were therefore discharged.
It is against this judgment and that the appellants have come in appeal to this court by Special Leave.
Four appeals were filed by the two appellants, two against the order of the High Court of Calcutta dismissing the revision petition and two against the order of the High Court refusing a certificate under article 134 (1) (c) of the Constitution.
As this Court granted special leave against the order of the High Court dismissing the Revision Petition the two appeals against the order refusing a certificate under article 134 (1) (c) became infructuous and therefore were not pressed.
It is only the appeals against the judgment and order of the High Court refusing to quash the order of the learned Chief Presidency Magistrate, Mr. Bijoyesh Mukerjee, which survive for decision.
The first question to be decided and that is the most vital question in the case is, whether the second complaint filed by Saroj Ranjan Sarkar respondent should have been entertained ? This complaint was brought on April 3, 1959, the appeal in this Court brought by Pramode Ranjan Sarkar 353 the complainant in the previous complaint, having been withdrawn on March 2, 1959.
The respondent holds no shares in N. R. Sarkar & Co. Ltd. He is a beneficiary under the deed of trust in trust in regard to certain number of shares.
In regard to the unregistered deed of agreement appointing P. N. Taluqdar as Managing Director of N.R. Sarkar & Co. Ltd., he can have no interest.
As regards the transfer deed of 1,000 shares of N. R. Sarkar & Co. Ltd., which it is claimed were entrusted to P. N. Taluqdar appellant for the benefit of the respondent and his brothers, a separate suit has been brought and is not the subject matter of the criminal complaint.
There then remains the resolution of the Board dated January 16, 1948, which stands on the same footing as the appointment to Managing Directorship and is connected with that matter and relates to it.
Under the Code of Criminal Procedure the subject of "Complaints to Magistrates" is dealt with in Chapter XVI of the Code of Criminal Procedure.
The provisions relevant for the purpose of this case are ss.200, 202 and 203.
Section 200 deals with examination of complainants and sections 202, 203 and 204 with the powers of the Magistrate in regard to the dismissal of complaint or the issuing of process.
The scope and extent of sections 202 and 203 were laid down in Vadilal Panchal vs Dattatraya Dulaji Chadigaonker(1).
The scope of enquiry under section 202 is limited to finding out the truth or otherwise of the complaint in order to determine whether process should issue or not and section 203 lays down what materials are to be considered for the purpose.
Under section 103 Criminal Procedure Code the judgment which Magistrate has to form must be based on the statements of the complainant and of his witnesses and the result of the investigation or enquiry if any.
He must apply his mind to materials and from his judgment whether or 354 not there is sufficient ground for proceeding.
Therefore if he has not misdirected himself as to the scope of the enquiry made under section 202, Criminal Procedure Code, and has judicially applied him mind to the material before him and then proceeds to make his order it cannot be said that he has acted erroneously.
An order of dismissal under section 203, Criminal Procedure Code, is, however, no bar to the entertainment of a second complaint on the same facts but it will be entertained only in exceptional circumstances, e.g, where the previous order was passed on an incomplete record or on a misunderstanding of the nature of the complaint or it was manifestly absurd, unjust or foolish or where new facts which could not, with reasonable diligence, have been brought on the record in the previous proceedings have been adduced.
It cannot be said to be in the interests of justice that after a decision has been given against the complainant upon a full consideration of his case, he or any other person should be given another opportunity to have his complaint enquired into Allah Ditta vs Karam Baksh(1), Ram Narain Chaubey vs Panachand Jain(2), Hansabai vs Ananda(3), Doraisami vs Subramania (4).
In regard to the adducing of new facts for the bringing of a fresh complaint the Special Bench in the judgment under appeal did not accept the view of the Bombay High Court or the Patna High Court in cases above quoted and adopted the opinion of Macleam, C. J. in Queen Empress vs Dolegobinda Das (5) affirmed by a full Bench in Dwarka Nath Mandal vs Benimadhab Banerji (6).
It held therefore that a fresh complaint can be entertained where there is manifest error, or manifest miscarriage of justice in the previous order or when fresh evidence is forthcoming.
The Chief Presidency Magistrate in the complaint filed by respondent, held that the second complaint was not unduly delayed; that section 203 is not a bar to the second complaint and that the 355 complaint was not with a view to blackmail the persons accused.
On the merits he held that the minutes of the proceedings of January 16, 1948 were typed on a sheet of paper with Telephone No. "City 6091" and the City Exchange case into existence later in the year and that on his comparing the signatures of N. R. Sarkar it appeared that the signature was a forgery.
He said: "And governing myself by this test, I held that forgery is there prima facie and only prima facie.
" These then were to facts on which the learned Presidency Magistrate Mr. B. Mukherjee came to a conclusion different from that of his predecessor Mr. Chakravorti, who had inquired into the complaint of Pramode Ranjan Sarkar, as to the forged nature of the signatures of Mr. N. R. Sarkar.
Taking first the question of fresh evidence, the view of some of the High Courts that it should be such that it could not with reasonable diligence have been adduced is, in our opinion, a correct view of the law.
It cannot be the law that the complainant may first place before the Magistrate some of the facts and evidence in his possession and if he fails he can then adduce some more evidence and so on.
That in our opinion, is not a correct view of the law.
The next point to be considered is, was the mention of the telephone number "City 6091" on the note paper on which the resolution was typed a matter of which the previous complainant Pramode Ranjan Sarkar was unaware and was it a fact which with reasonable diligence he could not place before the Magistrate.
In the complaint filed by Pramode Ranjan Sarkar no reference was made to the City Exchange.
It is true that the question was sought to be raised as a fresh piece of evidence before Debabrata Mookerjee, J. and it was not 356 considered by him but it was not stated before him when the then complainant came to know of this fact.
According to a copy of the Day Book entry by Mr. Bimal Chandra Chakravarty, Solicitor for the previous complainant Pramode Ranjan Sarkar, dated October 13, 1953, photostat copies were taken of the share transfer deed and portions of the agreement dated January 19, 1948 and inspection of the Minutes Book was also taken but the request of the complainant to take photostat copies of certain resolutions was refused, by the appellant section M. Basu.
It is significant that according to this entry, Santi Ranjan Sarkar was acting as the agent of Pramode Ranjan Sarkar and was present at the time of the inspection.
After this inspection was taken, Pramode Ranjan Sarkar discussed with his Legal Advisers the peculiarities noted in the impugned documents.
This is what he (Pramode Ranjan Sarkar) stated as a witness before the Chief Presidency Magistrate.
His evidence also shows that he inspected the Minutes Book though after much "recriminations." Witness Shibakali Bagchi stated that Minutes Book of N. R. Sarkar & Co. Ltd., was examined by him and that it appeared to him that the book was not genuine and Pramode Ranjan Sarkar complained that some of the signatures were forged.
It appears from the statement of Pramode Ranjan Sarkar that the appellant section N. Basu, did not let them take photographs of some of the pages of the Minutes Book.
It is not stated by either Bagchi or Pramode Ranjan Sarkar of what documents they wanted to take photographs which were refused.
In the statement of Bimal Chandra Chakrabarty, the Solicitor, the same statement is made i. e, they wanted to take photographs of some documents which were not allowed to be taken.
The correspondence produced by Pramode Ranjan Sarkar in his complaint proceedings shows that the Minutes Book was produced for his inspection and was inspected.
Debabrata Mookarjee, J., in dealing with the 357 resolution of January 16, 1948, said that it was not possible on the materials available considered prima facie that the Magistrate 's finding suffered from such a grave impropriety as to require interference by the Court.
He was of the opinion that the complainant could not have been unaware of the resolution of January 16, 1948.
This he concluded from the following; that on his own case Pramode Ranjan managed the affairs of the Company along with the appellant P. N. Taluqdar; that although the proceedings of the Board dated September 22, 1953, referred to the resolution of January 16, 1948 yet the only protest made against it by Pramode Ranjan Sarkar was the alleged legal difficulties consequent on renewal of the appointment but its genuineness was not then questioned and it was questioned for the first time on March 17, 1954, when the complaint was lodged.
Against the judgment and order of Debabrata Mookerjee J., Special Leave to appeal to this Court was obtained and one of the points taken in the application was that the resolution was typed on a sheet of paper bearing Telephone No. City 6091 although this Telephone Exchange did not come into existence till December 28, 1948.
It is significant that Pramode Ranjan Sarkar did not mention when he came to know about the existence of this new fact.
It was not, therefore, made clear to the learned Judge at least upto that stage as to when, before or after the filing of the first complaint Pramode Ranjan Sarkar came to know about the existence of this piece of evidence to which so much importance is attached.
Debabrata Mookerjee, J., also said in his judgment that the affairs of the Company were managed by Pramode Ranjan Sarkar and the appellant P. N. Taluqdar and that it was difficult to believe that he (Pramode Ranjan) had no access to the Minutes Book which showed that he himself 358 had presided over several meetings and also that there was nothing extraordinary about the proceedings being typed on separate sheets of paper and the sheets of paper being pasted in that Minutes Book because on some of them there were his own signatures and it was, difficult to believe that tampering with the records went on "systematically" for several months without Pramode Ranjan Sarkar having seen the book or detected the tampering.
It was, therefore, impossible to blame the previous Chief Presidency Magistrate if he held in those circumstances that there was no forgery in the Minutes Book or tampering with it.
The following passage from the learned Judge 's judgment is significant: "Photographs of the impugned documents were taken on the 13th October when the Minutes Book was inspected.
On the last mentioned date the complainant was certain about the entire book having been tampered with; but nothing appears to have been said about it, no challenge made, no protest entered until full five months passed when at last the silence was broken and the complaint was lodged on the 17th March, 1954.
It is of course not known what was said about it in the information to the police.
These circumstances are explicit in the complainant 's case.
That case has only to be presented for these features to be seen, and the Magistrate could not possible have overlooked them.
His clear finding is that the Minute Book is genuine.
I am not in a position to say it is improper on a prima facie consideration of the evidence offered.
" Dealing with the question whether the signatures of N. R. Sarkar were forged, the learned Judge agreed after considering the whole evidence that the signatures were not forged.
359 The complaint of the present complaint Saroj Rajan Sarkar specifically mention the City Exchange and that it came into existence later.
He also alleges that this fact was not known to the previous complaint, Pramode Ranjan Sarkar, and in support there is the affidavit of Santi Ranjan Sarkar.
Significantly enough in that affidavit also it is not stated as to when the deponent came to know about this alleged new fact of the Telephone City Exchange.
All that the affidavit says is that it is a matter of history and was published in the Statesman of December 29, 1948.
There is no evidence on the record to show as to when the matter of "City Exchange" came to be known to the persons who were then and two those who are now prosecuting the criminal complaints.
The document which we have referred to above i.e., the letter written by the Solicitor dated October 13, 1953 shows that Santi Ranjan Sarkar was present as agent of Pramode Ranjan Sarkar at the time of the inspection.
The complaint filed by Saroj Ranjan Sarkar states: "That with great difficulty the documents in question were inspected, certified true copies of the alleged resolutions of the Board meetings were obtained and photostatic copies of material portions including alleged signatures of late Sri Sarkar on the said Deed of Agreement and on the Deed of Transfer could be obtained, as will appear from correspondence in this respect.
" In the complaint filed by Pramode Ranjan Sarkar exactly the same language was used in paragraph 10 of the previous complaint.
If certified copies were obtained by the complainant Pramode Ranjan Sarkar and inspection was taken by Santi Ranjan Sarkar for Pramode Ranjan Sarkar and by his Solicitor and the facts are as they are 360 stated above, it is difficult to hold that the fact in regard to the City Exchange was not know to the complainant in the first complaint and was a new fact which could not, with reasonable diligence, be adduced by him.
The next question which arises is whether the order of the previous Chief Presidency Magistrate who decided Pramode Ranjan 's complaint, was manifestly absurd or unjust and resulted in a manifestly unjust order.
The Special Bench of the High Court has held that it was so because (1) the Magistrate ignored the evidence of a large number of witnesses who were competent to prove the handwriting and signature of the late Mr. N. R. Sarkar; (2) he "set aside" the report of the enquiring Magistrate, Mr. A.B. Syam for reasons which cannot be held to be proper and judicial reasons; (3) He said in his order that Mr. N. R. Sarkar might himself have ante dated the documents thus accepting a possible defence for which there was no basis before him; and (4) he relied upon his own comparison of the disputed signatures of Mr. N. R. Sarkar.
On these grounds the Special Bench was of the opinion that the decision of the first Magistrate was rather arbitrary and so resulted in manifest miscarriage of justice.
The question is whether Mr. N. C. Chakrabarti, the previous Presidency Magistrate had applied his mind to the evidence which was produced before him and keeping in view his functions as a Magistrate, he gave his decision.
It is not necessary to refer to the various findings given by him.
Thy are set out and considered in the judgment of Debabrata Mookerjee, J. and he (that learned Judge) has commented upon all the infirmities in that order which were brought to his notice.
The previous Chief Presidency Magistrate found that the Deed of Agreement dated January 19, 1948 was not a forged document.
He referred 361 to the evidence without analyzing it.
He said that the complainant examined persons who know the signature of the late Nalini Ranjan Sarkar and they deposed as to the manner in which Nalini Ranjan Sarkar used to sign.
After making a reference to the gist of the evidence submitted before him and to the report of Mr. A. B. Syam, Presidency Magistrate, he (the learned Chief Presidency Magistrate) came to the conclusion: "For the reasons above, I find that the evidence on handwriting including the opinion of the Handwriting Expert does not support the complainant 's version.
" Again in a later part of his order he found that the resolution of the Board of Directors dated January 16, 1948 also was not forged and that the endorsement of the appellant section M. Basu, was nothing more or less then the authentication of the common seal of the Co., and he, therefore, agreed with the finding of Mr. A.B. Syam that there was no case against section M. Basu, appellant but disagreed with him in regard to the other appellant, P. N. Talukdar.
When the matter went to the High Court, Debabrata Mookerjee, J., first considered as to when the revisional power of Court to interfere should be exercised.
Then he discussed the seven circumstances which were relied upon by the then complainant Promode Ranjan Sarkar in support of the allegations of forgery.
After dealing with these various points raised he held: "It may be that one or two items of evidence were not specifically referred to in the Order but that does not necessarily imply that those items of evidence were not present to the mind of the Magistrate.
After all a Magistrate is only required to record briefly his reasons for dismissing 362 a complaint.
The Magistrate 's order, I think, is fairly well.
" The learned Judge then discussed the question of delay and held that Pramode Ranjan Sarkar had considerably delayed the bringing of the complaint.
He also held that the Deed of Agreement which was alleged to be a forgery had not been so proved and he gave various reasons, one of them being that at the meeting of the Board of Directors dated September 22, 1953, the then complainant did not oppose the renewal on the ground that the Agreement was forged or did not exist, but on legal grounds.
Then the learned Judge referred to the correspondence which had passed between the then complainant Pramode Ranjan Sarkar and the appellant P.N. Talukdar and said: "It is therefore clear that the evidence which the complainant offered in support of his case contained prima facie on the first aspect sufficient materials for distrusting the truth of the story and I cannot see how the Magistrate 's order can be challenged in revision on the ground of impropriety as respects the Deed of Agreement.
The learned Judge then referred to other aspects of the case i.e., the evidence of the Deputy Controller of Stationery, P.W. 15.
He also referred to finding of the previous Chief Presidency Magistrate that it was difficult to believe that the complainant should have been unaware of the resolution of January 16, 1948 and after referring to all these various questions raised, he dismissed the petition.
Can it be said in these circumstances that there has been a manifest error resulting in the passing of an unjust order ? That in our opinion, has not been made out.
The order of Debabrata Mookerjee J., who reviewed the findings of the previous Chief Presidency Magistrate, shows that the criticism that that the learned Magistrate did not 363 consider the whole evidence is not justified.
Taking the evidence into consideration he came to the conclusion that there was no ground to proceed and, therefore, refused to issue process.
In his opinion the evidence was not worthy of credit and he was not satisfied with the correctness of the complaint and dismissed it as he was entitled to do on those findings.
See Gulab Khan vs Gulam Mohammad Khan (1) which was approved in Vadilal Panchal v Dattatraya Dulaji Chadigaonker(2).
In the circumstances the order made by the previous Chief Presidency Magistrate was not any manner manifestly absurd unjust or foolish, nor can it be said that the Magistrate ignored in any principles which were necessary to apply under sections 202 and 203 of the Criminal Procedure Code nor is the order contrary to what was said in Ramgopal Ganpatrai Ruia vs State of Bombay (3).
That was a case in which the rule in regard to the commitment proceedings and the power of the Committing Magistrate to commit was discused and the expression "sufficient grounds" in sections 209, 210 and 213 of the Code of Criminal Procedure was interpreted.
That was not a case dealing with the powers of the Magistrate under sections 202 and 203 which was specifically raised and decided in Vadilal Panchal 's case (3).
In Ramgopal Ganpatrai Ruia 's case (3) the following observations of Sinha J., (as he then was) in regard to the expression "sufficient grounds" are pertinent: "The controversy has centred round interpretation of the words "sufficient ground", occurring in the relevant sections of the Code, set out above.
In the earliest case of Lachman vs Juala All. 161, decided by Mr. Justice Mahmood in the Allahabad High Court, governed by section 195 of the Criminal Procedure Code of 364 1872 (Act No. X of 1872), the eminent judge took the view that the expression "sufficient grounds" has to be understood in a wide sense including the power of the magistrate to weigh evidence.
In that view of the matter, he ruled that if in the opinion of the magistrate, the evidence against the accused "cannot possibly justify a conviction" there was nothing in the Code to prevent the Magistrate from discharging the accused even though the evidence consisted of statements of witnesses.
who claimed to be eye witnesses, but whom the magistrate entirely discredited.
He also held that the High Court could interfere only if it came to the conclusion that the Magistrate had committed a material error in discharging the accused or had illegally or improperly underrated the value of the evidence.
Thus, he overruled the contention raised on behalf of the prosecution that the powers of the committing Magistrate did not extent to weighing the evidence and that the expression "sufficient ground" did not include the power of discrediting eye witnesses.
Though the Code of Criminal Procedure was several times substantially amended after the date of that decision, the basic words "sufficient grounds" have continued throughout.
That decision was approved by a Division Bench of the Bombay High Court In re Bai Parvati Bom.
163 and the observations aforesaid in the Allahabad decision were held to be an accurate statement of the law as contained in section 201 of the Code, as it now stands.
The High Court of Bombay held in that case where the evidence tendered for the prosecution is 365 totally unworthy of credit, it is the duty of the Magistrate to discharge the accused.
It also added that where the magistrate entertains any doubt as to the weight or quality of the evidence, he should commit the case to the Court of Session which is the proper authority to resolve that doubt and to assess the value of that evidence." Debabrata Mookerjee J., in the revision against the order of the previous Chief Presidency Magistrate accepted the finding of that Magistrate in regard to the delay.
The present complaint out of which this appeal has arisen was filed after the appeal in this Court arising out of this complaint was withdrawn by Pramode Ranjan Sarkar.
Can it be said that this is not an abuse of the process of tho Court one brother who was a director of the Company and who would be interested in the Managing Directorship of the Company and the resolutions passed in regard to that office, brought a complaint in 1954 which was dismissed both by the Magistrate and the High court.
Appeal against the order of dismissal brought in this court was withdrawn on March 12, 1959.
It was alleged in his complaint by Pramode Ranjan Sarkar that the present respondent was celluding with appellant, P. N. Talukdar, who had offered his some kind of monetary inducement and that fact was deposed to by the present respondent himself as a witness in the previous complaint.
He waited all this time although he knew about the forged signatures of his late brother on various documents and after at least the lapse of five years he brought a fresh complaint on the same facts.
Neither he has disclosed as to when he came to know about the City Exchange nor have Santi Ranjan Sarkar and Pramode Ranjan Sarkar, which cannot therefore be said to be a fact which could not with reasonable diligence be adduced at the time of the previous complaint.
366 The argument that this Court gave Special Leave in the case of Pramode Ranjan Sarkar and therefore there were points of importance is, in the circumstances of this case, a neutral circumstance and that fact cannot be used as a point in favour of the respondent.
In these circumstances, we are of the opinion that the bringing of the fresh complaint is a gross abuse of the process of the Court and is not with the object of furthering the interests of justice.
In regard to the power of reference to a larger Bench, we are in agreement with section K. Das, J, and in the circumstances it is unnecessary to express an opinion as to the applicability of section 196A Criminal Procedure code to the facts of this case.
For these reasons we allow the appeals, set aside the order of the High Court and of the learned Chief Presidency Magistrate and dismiss the complaint.
BY COURT: In accordance with the judgment of the majority, the appeal is allowed.
Appeal allowed.
| On March 17, 1954, Promode Ranjan a brother of N. R. Sarkar filed a complaint under section 200 Code of Criminal Procedure against Pramathanath and section M. Basu alleging offences punishable under sections 467, 471 and 109 of the Indian Penal Code, before the Chief Presidency Magistrate in respect of a document appointing Pramathanath as the Managing Director of N. R. Sarkar & Co. and the minutes of the Board meeting resolving the same.
It was alleged therein that the signatures of N. R. Sarkar on those documents were forgeries.
After considering the evidence of the Handwriting Expert the Magistrate dismissed the complaint.
Promode Ranjan preferred a revision petition to the High Court.
The High Court dismissed the revision Petition.
By an application dated January 6, 1956, when the revision petition was pending, attention of the High Court was drawn to the fact that the minutes dated January 16, 1948, had been typed on a letter bearing at the top in print "Telephone City 6091" where as the City Exchange had not come into existence till December 1948.
The Supreme Court granted special leave against the dismissal of the revision petition by the High Court but the appeal was withdrawn.
On April 3, 1959, Saroj Ranjan, another brother of N.R. Sarkar, laid a complaint on the same facts and allegations 298 against the appellants, in addition alleging the further fact about the City Exchange in support of the allegation that the minutes were forged dishonestly and fraudulently and used as genuine.
Neither in this complaint nor before the High Court had it been stated as to when it came to be known that on the purported date of the minutes the City Exchange was not in existence.
The Presidency Magistrate issued process against the appellants.
The appellants went up in revision to the High Court.
The matter was first heard by a Division Bench and was later referred to a larger Bench of three Judges which dismissed the revision petition.
In these appeals on special leave it was contended by the appellants that the second complaint ought not to have been entertained, that the constitution of the special Bench was illegal and that as the complaint alleged criminal conspiracy sanction under section 196A of the Code of Criminal Procedure was required.
^ Held, that the enquiry contemplated by sections 200 to 204 Code of Criminal Procedure is for the purpose of enabling the Magistrate to find out if sufficient grounds exist for issuing process.
Vadilal Panchal vs Daltaraja Dulaji Chandigaonkar, , Gulab Khan vs Gulab Mohammad Khan A.I.R. 1927 Lah.
30 and Ram Gopal Ganpat Ruia vs State of Bombay, referred to.
Per section K. Das, J.
The law does not prohibit altogether the entertainment of a second complaint when a previous complaint on the same allegations has been dismissed under section 203 of the Code of Criminal Procedure.
But a second complaint containing more or less the same allegations can be entertained only in exceptional circumstances.
It is not possible nor desirable that the exceptional circumstances must be stated with particularity or precision.
Generally speaking, the exceptional circumstances may be classified under three categories: (1) manifest error in the earlier proceeding, (2) resulting miscarriage of justice, and (3) new facts which the complainant had no knowledge of or could not with reasonable diligence have brought forward in the previous proceedings.
Where the previous order of dismissal was passed on an incomplete record or on a misunderstanding of the nature of the complaint, a second complaint may be entertained.
Where a Magistrate misdirects himself as to the scope of an enquiry under s 202, Code of Criminal Procedure, and the mistake, made gives a wrong direction to the whole proceeding on the first complaint, the order of dismissal passed thereon would be due.
to a manifest error resulting in a miscarriage of justice.
In such a case, a second complaint is entertainable.
299 Per Kapur and Hidayatullah, JJ.
There is no legal bar to the entertainability of a second complaint.
It is only when the Magistrate had misdirected himself, with regard to the scope of the enquiry under section 203, Code of Criminal Procedure, or has passed an order misunderstanding the nature of the complaint or the order is manifestly unjust or absurd or the order is based on an incomplete record can it be said that there is such a manifest error or a manifest miscarriage of justice that a second complaint on the same allegations may be entertained.
The other exceptional circumstances in which a second complaint may be entertained is when it is supported by fresh and further evidence.
Case law referred to.
In the case of fresh evidence it must be such as could not have been with due diligence on the part of the complaint adduced on the earlier occasion.
Queen Empress vs Dole Gobinda Das I.L.R , Dwarkanath Mandal vs Daniradha banerjee, I.L.R. disapproved.
Allah Ditta vs Karam Bakshi, Ram, Narain Chowdhary vs Punachand Jain, AIR 1949 Pat. 255, Hansabai vs Ananda, A.I.R. 1949 Bom.
384 and Doraiswami vs Subramania, A I. R. , approved.
In the present case permitting the second complaint to proceed would be a gross abuse of process.
Held, further, concurring with S.K. Das, J., that the Special Bench was properly constituted.
Per section K. Das, J.
On the first complaint the Presidency Magistrate had misdirected himself regarding the scope of the enquiry under sections 203 and 204 of the Code of Criminal Procedure and it was a manifest error.
The facts about the City Exchange urged and fresh evidence were decisive of a prima facie case for issuing process and it was an exceptional circumstance justifying entertaining the second complaint and not to permit the trial of the case in such circumstances would be a denial of justice.
Kumariah vs C. Naicker, A.I.R. 1946 Mad, 167 and Ramanand vs Sheri, I.L.R. 1. 56 All 425, referred to.
Though Chapter II of the Rules of the High Court (Appellate Side) in terms applies to Civil cases, their substance could be applied to criminal cases by the Chief Justice in constituting a larger bench.
The substance of the allegations in the complaint amounted to an offence of abetment by conspiracy under 300 section 107 Indian Penal Code and not the offence of Criminal Conspiracy as defined by section 120A and therefore sanction under section 196A of the Code of Criminal Procedure was not necessary.
The distinction between the two offences lies in that the first requires an overt act in pursuance of the agreement whereas the second makes the agreement to do the unlawful act itself punishable.
Basirul Hag vs State of West Bengal and Mulachy vs The Queen, , referred to.
| The petitioner was serving as an officiating Teleprinter Supervisor at Jaipur when the employees of the Posts and Telegraphs Department went on strike from the midnight of July 11, 1960, throughout India and there was a similar strike at Jaipur.
The petitioner 's case was that he was on duty that day from 12 noon to 8 p.m. and after his duty was over, he did not go home but went to the dormitory where he fell asleep as he was tired.
On hearing some noise he woke up at 11 30 p.m. and wanted to go home but was arrested by the police under the Essential Services Maintenance Ordinance, No. 1 of 1960.
The criminal charge was however withdrawn.
On July 21, 1960, a chargesheet was served on the petitioner in the following terms: "That Shri Radhey Shyam Sharma I C/S Telegraphist, CTO Jaipur committed gross misconduct in that on the midnight of the 11th July, 1960, he took part in a demonstration in furtherance of the strike of the P. & T. Employees in violation of the orders dated 8 7 1960 issued by the Government of India under the 'Essential Services Maintenance Ordinance, 1960 (1 of 1960) ' prohibiting strikes in any Postal, telegraph or telephone service".
The enquiry officer found him guilty of the charge and ordered that his pay should be reduced in the time scale by three stage,% for a period of two years and on restoration the period of reduction was not to operate to postpone his future increments.
0n appeal, the Director General considered the whole matter on merits and rejected the appeal.
In this Court it was urged that the punishment imposed upon the petitioner was violative of his fundamental rights under articles 19(1)(a) and (b), reliance being placed on two cases of this court in Kameshwar Prasad vs State of Bihar and O. K. Ghosh vs E. X. Joseph; that sections 3, 4 and 5 of the Ordinance were ultra vires, as they contravened article 19(1.)(a) and (b) and that in any case there was no evidence on which it could ' be found that the charge against him had been proved.
Held: The provisions of the Ordinance in sections 3, 4 and 5 did not violate the fundamental rights enshrined in article 19(1)(a) and (b).
A perusal of article 19(1) shows that there is no fundamental right to strike, and all that the ordinance provided was with respect to any illegal strike as provided in the Ordinance.
There was no provision in the Ordinance which in any way restricted those fundamental rights.
It was not in dispute that Parliament had the competence to make a law in the terms of the Ordinance and therefore the President had also the power to promulgate, such an Ordinance.
404 The competence of the legislature therefore being not in dispute it cannot be held that the Ordinance violated the fundamental rights guaranteed under article 19(1)(a) and (b).
All India Bank Employees Association vs National Industrial Tribunal, ; , referred to.
The two cases relied on by the petitioner have no relevance in connection with the charge in the present case.
The punishment given to the petitioner cannot therefore be set aside on the ground that the charge was in violation of the fundamental rights guaranteed under article 19(1)(a) and (b).
Kameshwar Prasad vs State of Bihar, [1962] Supp. 3 S.C.R. 369 and O. K. Ghosh vs E. X. Joseph, [1963] Supp. 1 S.C.R. 789, held inapplicable.
If on the undisputed facts the authorities came to the con clusion that the petitioner acted in furtherance of the strike 'Which was to commence half an hour later and was thus guilty of gross misconduct, it could not be said that there was no evidence on which the authorities concerned could find the charge framed against the petititoner proved.
| The appellant filed a suit in the Calcutta High Court challenging his; removal, after a departmental enquiry, from the post of Assistant Director of Fire Services and Regional Officer Calcutta Industrial Area.
The suit was decreed in his favour,by the Civil Judge but the Division Bench reversed the decree.
In appeal to this Court, by certificate the question was whether the appellant had been denied a reasonable opportunity to defend himself inasmuch as the charges were vague and no statement of allegations as required by Fundamental Rule 55 of the Central Service (Classification Control & Appeal) Rules was furnished to him.
HELD: The appeal must be allowed: The appellant repeatedly and at every stage brought to the notice of the authorities concerned that he had not been supplied the statement of allegations and that the charges were extremely vague and indefinite.
In spite of this he was not informed of the facts and Circumstances and particulars relevant to the charges.
The entire proceedings showed a complete disregard of Fundamental Rule 55 in so far as it lays down in an almost mandatory manner that the charges must be accompanied by a statement of allegations.
There could be no doubt that the appellant was denied a proper and reasonable chance to defend himself by reason of the charges being altogether vague and indefinite and the statement of allegations containing the material facts and particulars not having been supplied to him.
[6 H; 7 D]
| On an application made by the appellant, the Calcutta High Court granted a certificate on May 18, 1956, enabling him to appeal to the Supreme Court against the judgment and decree of the High Court.
Under 0. 45, r. 7(1)(a), of the Code of Civil Procedure, 1908, the appellant had to deposit the security amount for costs of the respondent within ninety days or such further period, not exceeding sixty days, as the court may upon cause shown allow, from the date of the decree complained of, or within six weeks from the date of the grant of the certificate, whichever was the later date.
Being unable to deposit 644 the amount on the due date, the appellant filed an application on July 4, 1956, before the High Court praying that the amount tendered by him be accepted after condoning the delay, but the High Court rejected it on the ground that according to the uniform current of decisions of that Court it had no jurisdiction to extend the time for depositing the amount.
Held, that reading 0.
45" r. 7, of the Code of Civil Procedure, 1908, along with the other relevant provisions Of the said Order, a High Court has jurisdiction to extend time for furnishing security under the rule, and that the decisions of the Calcutta High Court to the contrary are erroneous.
Order XII, r. 3, of the Supreme Court Rules, 1950, expressly recognises and gives jurisdiction to the High Courts to extend the time for furnishing the security in a proper case.
Raja Kumar Govind Narayan Singh and others vs Shamlal Singh and others, 1 and Akimuddin Chowdhury vs Fateh Chand Mahesri & others, , disap proved.
Roy Jyotindranath Chowdhury & Ors.
vs Rai Prasanna Kumar Banerjee Bahadur, (1906) 11 C.W.N. I 104, Harendra Lal Choudhry vs Sm.
Hari Dasi Debei, , Nilkanth Balwant Natu & Ors.
vs Shri Satchidanand Vidya Narsinha Bharati & Ors., Bom.
430, Bishnath Singh & Ors.
vs Balwant Rao Naik Kalia & Ors., I.L.R. [1939] All 549, Ismail Piperdi vs Momin BiBi & Ors, , Lachmeshway Prasad Shukul vs Girdhari Lal Choudhuri, Pat. 123, Ghulam Rasul vs Ghulam Qutabud din, (1942) I.L.R.23 Lah.447, Gulam Hussain vs Mansurbeg & Ors., I.L.R. and Thota Pitchaiah Andhra 55, approved.
| The petitioners were found guilty under section 167(8) of the Sea Customs Act and the currency and other goods recovered from their possession were confiscated and heavy personal penalties imposed on them by the Collector of Central Excise and Land Customs.
Complaints were thereafter lodged against them by the Customs authorities before the Additional District Magistrate under section 120B of the Indian Penal Code, read with section 23/23B of the Foreign Exchange Regulations Act, 1947, and section i67(8i) of the Sea Customs Act, as also under other sections of the two latter Acts.
The Magistrate granted bail but they could not furnish the requisite security and were, therefore, kept in judicial custody.
By two petitions under article 32 Of the Constitution they prayed for the issue of writs of certiorari and/or prohibition for quashing the proceedings pending against them in the Court of the Magistrate as also for the issue of writs of habeas corpus.
It was contended on their behalf that in view of the provision of article 20(2) Of the Constitution they could not be prosecuted and punished twice over for the same offence and the proceedings pending before the Additional Magistrate violated the protection afforded by article 20(2) of the Constitution.
Held, that the contention was without substance and the petitions must be dismissed.
The fact that in imposing confiscation and penalties under section 167(8) of the Sea Customs Act, the Collector of Customs acts 823 judicially is not decisive and does not attract the protection of article 20(2) of the Constitution.
Section 186 of the Act does not prevent the infliction of any other punishment to which the person concerned may be liable under any other law.
F. N. Roy vs Collectoy of Customs, Petition NO.
438 Of 955, decided on May 16, 1957, referred to.
Criminal conspiracy is an offence under section 120B of the Indian Penal Code but not so under the Sea Customs Act, and the petitioners were not and could not be charged with it before the Collector of Customs.
It is an offence separate from the crime which it may have for its object and is complete even before the crime is attempted or completed, and even when attempted or completed, it forms no ingredient of such crime.
United States vs Rabinowith, ; , referred to.
| The appellant was an Overseer in the Public Works Department of the Central Provinces and Berar Government.
In 1947 he was suspended from service and prosecuted under section 161 I.P.C. Ultimately, on orders from the High Court, the prosecution was dropped.
In a departmental enquiry also the appellant was exonerated, By an order dated December 1960, the Government held that the suspension of the appellant and the ' departmental enquiry against him "were not wholly unjustified".
The order then directed that the appellant should be reinstated in service with effect from the date of the order and retired from the date, he, having already attained superannuation age on September 5, 1952 and that the entire period of absence from duty should be treated as period spent on duty under F.R. 54(5) for purposes of pension only, but that he should not be allowed any pay beyond what he had actually received or what was allowed to him, by way of subsistence allowance during the period of his suspension.
The appellant filed a petition under article 226 of the Constitution contending that F. Rule 54(2) governed his case and not F. Rule 54(5).
The High Court decided against him but granted him certificate to appeal to this Court.
It was contended on behalf of the appellant that before deciding which rule applied to his case the Government should have given him an opportunity to be heard.
The respondent urged that in passing a consequential order a hearing is not necessary.
Held: An order passed under F R. 54 is not always a consequential order nor is such order necessarily a continuation of the departmental proceeding taken against the employee.
[359E F] Consideration under F.R. 54 depending as it does on facts and circumstances in their entirety, passing an order on the basis of factual finding arrived at from such facts and circumstances and such an order resulting in pecuniary loss to the Government servant must be held to be an objective rather than a subjective function.
The very nature of the function implies the duty to act judicially.
In such a case if an opportunity to show cause against the action proposed is not afforded, as admittedly it was not done in the pre sent case, the order is liable to be struck down as invalid on the ground that it was one in breach of the principles of natural justice.
State of Orissa vs Dr. (Miss) Binapani Devi and Ors. ; , relied on.
[359H; 360A B] V. R. Gokhale vs State of Maharashtra, I.L.R. [1963] Bom.
537, approved.
| The appellant was enrolled as a Constable in the BSF and was serving as such since 1966.
He was confirmed in the said post.
In 1971, he was granted leave from October :25, 1971 to October 30, 1971 on account of the death of his father.
As the Shrad ceremony could not be performed within the aforesaid time, and he was suffering from serious illness he made an application requesting for extension of leave sup ported by a medical certificate.
On December 12, 1971, the appellant received a communication from the Commandant stating that as he was absent without leave from October 31, 1971, that because of such absence without leave for a long period his further retention in service was undesirable, and that it was proposed to dismiss him from service.
He was asked to submit his explanation against the imposition of this penalty.
The appellant sent a telegram on December 21, 1971, but without any redress.
On January 5, 1972 he re ceived an order of the Commandant informing him that he had been dismissed from service.
On January 10, 1972, the appel lant again sent an application requesting that he may be permitted to join his service, but he was not allowed to do so.
The appellant preferred an appeal to the Inspector General, BSF on February 1, 1972 but no relief was granted.
The appellant after serving a notice under section 80 of the Code of Civil Procedure filed a civil suit for a decla ration that the order of dismissal from service was illegal and he was still in service.
The respondent contested the suit and pleaded that the appellant was absent from duty from October 31, 1971 without any leave at a critical time when India was at war with Pakistan, and that the Commandant by his notice dated 15 December 1971 intimated: that his retention in service was undesirable because of his absence for a long period, that he was given an opportunity to urge his defence which he did not avail of by sending 272 any reply, and that the Commandant had therefore dismissed him from service by his order dated January 5, 1972.
The Munsiff held that the appellant had been given a reasonable opportunity before the Commandant dismissed him from serv ice, and dismissed the civil suit.
The appeal filed by the appellant was allowed by the Additional District Judge and the suit was decreed.
It was held that the order of dismissal from service was illegal and bad, as the same was not made by the Security Force Court and no such court had been constituted.
The Order passed by the Commandant under section 11(2) of the Border Security Force Act and read with rule 177 of the Rules could not therefore be upheld.
It was further held that the order was bad as it was contrary to the constitutional mandate embodied in Article 311 of the Constitution, as no opportu nity of hearing was given, and the procedural safeguards contained in Chapters VII to XI of the Border Security Rules were not followed.
The High Court decreed the second appeal preferred by the respondents, reversed the judgment and decree of the lower appellate court, and dismissed the suit.
It was held that the order of dismissal of the appellant from service had been made in accordance with the powers conferred on the Commandant, BSF under the provisions of section 11(2) and (4) of the read with rule 177 of the Border Security Forces Rules, 1969.
It was fur ther held that this was an independent power conferred upon the Commandant apart from the power conferred upon the Security Force Court under section 28 for imposition of the punishment for dismissal from service in respect of offences specified in section 19 of the Act.
In the appellant 's appeal to this Court, it was contend ed that unless and until the offence of absence without leave or overstaying leave granted to a member of the serv ice, without sufficient cause is tried by the Security Force Court and punishment is awarded therefor as provided in sections 48 and 50 of the Act, the order of dismissal from service by the Commandant is illegal and as such it is liable to be quashed and set aside.
Dismissing the appeal, it was, HELD: 1.
The Prescribed Authority i.e. the Commandant is competent to exercise the power under section 11(2) of the BSF Act and to dismiss any person under his command as prescribed under Rule 177 of the BSF Rules.
[281E F] 273 2.
The has been enacted with a view to provide for the constitution and regulation of an armed force of the Union for ensuring the security of the borders of India and for matters connected therewith.
The services of the enrolled persons under the Act are governed by the provisions of the Act as well as the Rules framed thereunder.
[276D E] 3.
All the offences mentioned under sections 14 and 19 of the Act are to be tried by the Security Force Court, which will punish the offenders with sentences as provided in the Act.
A procedure has been provided by the BSF Rules for trial of the offences by the Security Force Court and for awarding of punishment.
[279E; 280B] 4.
The power under Section 11(2) empowering the Comman dant who is the Prescribed Authority to dismiss or remove from service any person under his command other than an officer or a subordinate officer read with rule 177 of the Rules is an independent power which can be validly exercised by the Commandant as a Prescribed Officer, and it has noth ing to do with the power of the Security Force Court for dealing with the offences, such as absence from duty without leave or overstaying leave granted to a member of the Force without sufficient cause and to award punishment for the same.
[281B D] 5.
Rule 6 of the Rules has specifically provided that in regard to matters not specifically provided in the Rules it shall be lawful for the Competent Authority to do such thing or take such action as may be just and proper in the circum stances of the case.
[281F] In the instant case, though any procedure has not been prescribed by the Rules, still the Commandant duly gave an opportunity to the appellant to submit his explanation against the proposed punishment for dismissal from service for his absence from duty without any leave and overstaying leave without sufficient cause.
The appellant did not avail of this opportunity and he did not file any show cause to the said notice.
Thus the principle of natural justice was not violated as has been rightly held by the High Court.
[281G H]
| The appellant was convicted under section 304 Part I of the Indian Penal Code and sentenced to imprisonment for life by the trial Court.
His appeal to the High Court was admitted only on the question of sentence and at the hearing the sentence was reduced to 10 years ' imprisonment.
On appeal by special leave the appellant contended that his appeal in the High Court could not, in law, be admitted on the question of sentence only and that he was entitled to be heard on the merits of the case also.
Held, that having regard to the provisions of the Code of Criminal Procedure while an Appellate Court had power to dismiss an appeal summarily if it considered that there was no sufficient ground for interfering, it had no power to direct the appeal to be heard on the question of sentence only.
The Appellate Court, after hearing the appeal had the power in finally disposing of the appeal to reduce the sentence but was not entitled to direct the appeal to be admitted only on the question of sentence.
The appellant was entitled to have his appeal heard on the merits in the High Court.
The King Emperor vs Dahu Raut, (1935) L.R. 62 I.A. 129, followed.
Nafar Sheikh vs Emperor, Cal.
606, Gaya Singh vs King Emperor, Pat. 254, and Sudhir Kumar Neogi and Another vs Emperor, A.I.R. (1942) Pat.
46, approved.
Bai Dhankor vs Emperor, , not appli cable.
|
Civil Appeal No. 207 of 1956.
Appeal from the judgment and decree dated November 5, 1952, of the Madras High Court in Appeal No. 852 of 1948.
R. Thiagarajan and G. Gopalakrishnan, for the appellant.
Ganapathy Iyer, for respondent No. 3. 1962.
January 11.
The Judgment of the Court was delivered by VENKATARAMA AIYAR, J.
This is an appeal against the Judgment of the High Court of Madras, dismissing the suit filed by the appellant, as Muthavalli of the Jumma Masjid, Mercara for possession of a half share in the properties specified in the plaint.
The facts are not in dispute.
There was a joint family consisting of three brothers, Santhappa, Nanjundappa and Basappa.
Of these, Santhappa died unmarried, Basappa died in 1901, leaving behind a widow Gangamma, and Najundappa died in 1907 leaving him surviving his widow Ammakka, who succeeded to all the family properties as his heir.
On the death of Ammakka, which took place in 1910, the estate devolved on Basappa, Mallappa and Santhappa, the sister 's grandsons of 557 Nanjundappa as his next reversioners.
The relationship of the parties is shown in the following genealogical table.
Basappa | | | | | Santhappa Nanjundappa Basappa Mallammal d. 1907 d. 1901 | =Ammakka =Gangamma | d.1910 | | Ramegowda Mallegowda | | | | | | Basappa Mallappa Santhappa On August 5, 1900, Nanjundappa and Basappa executed a usufructuary mortgage over the properties which form the subject matter of this litigation, and one Appanna Shetty, having obtained an assignment thereof, filed a suit to enforce it, O.S. 9 of 1903, in the court of the Subordinate Judge, Coorg.
That ended in a compromise decree, which provided that Appanna Shetty was to enjoy the usufruct from the hypotheca till August, 1920, in full satisfaction of all his claims under the mortgage, and that the properties were thereafter to revert to the family of the mortgagors.
By a sale deed dated November 18, 1920, exhibit III, the three reversioners, Basappa, Nallappa and Santhappa, sold the suit properties to one Ganapathi, under whom the respondents claim, for a consideration of Rs. 2,000.
Therein the vendors recite that the properties in question belonged to the joint family of Nanjundappa and his brother Basappa, that on the death of Nanjundappa, Ammakka inherited them as his widow, and on her death, they had devolved on them as the next reversioners of the last male 558 owner.
On March 12, 1921, the vendors executed another deed, exhibit IV, by which exhibit III was rectified by inclusion of certain items of properties, which were stated to have been left out by oversight.
It is on these documents that the title of the respondents rests.
On the strength of these two deeds, Ganapathi sued to recover possession of the properties comprised therein.
The suit was contested by Gangamma, who claimed that the properties in question were the self acquisitions of her husband Basappa, and that she, as his heir, was entitled to them.
The Subordinate Judge of Coorg who tried the suit accepted this contention, and his finding was affirmed by the District Judge on appeal, and by the, Judicial Commissioner in second appeal.
But before the second appeal was finally disposed of, Gangamma died on February 17, 1933.
Thereupon Ganapathi applied to the revenue authorities to transfer the patta for the lands standing in the name of Gangamma to his own name, in accordance with the sale deed exhibit III.
The appellant intervened in these proceedings and claimed that the Jumma Masjid, Mercara, had become entitled to the properties held by Gangamma, firstly, under a Sadakah or gift alleged to have been made by her on September 5, 1932, and, secondly, under a deed of release executed on March 3, 1933, by Santhappa, one of the reversioners, relinquishing his half share in the properties to the mosque for a consideration of Rs. 300.
By an order dated September 9, 1933, exhibit II, the revenue authorities declined to accept the title of the appellant and directed that the name of Ganapathi should be entered as the owner of the properties.
Pursuant to this order, Ganapathi got into possession of the properties.
The suit out of which the present appeal arises was instituted by the appellant on January 2, 1945, for recovery of a half share in the properties that 559 had been held by Gangamma and for mesne profits.
In the plaint, the title of the appellant to the properties is based both on the gift which Gangamma is alleged to have made on September 5, 1932, and on the release deed executed by Santhappa, the reversioner, on March 3, 1933.
With reference to the title put forward by the respondents on the basis of exhibit III and exhibit IV, the claim made in the plaint is that as the vendors had only a spes succession is in the properties during the lifetime of Gangamma, the transfer was void and conferred no title.
The defence of the respondents to the suit was that as Santhappa had sold the properties to Ganapathi on a representation that he had become entitled to them as reversioner of Nanjundappa, on the death of Ammakka in 1910, he was estopped from asserting that they were in fact the self acquisitions of Basappa, and that he had, in consequence, no title at the dates of exhibit III and exhibit IV.
The appellant, it was contended, could, therefore, get no title as against them under the release deed exhibit A, dated March 3, 1933.
The District Judge of Coorg who heard the action held that the alleged gift by Gangamma on September 5, 1932, had not been established, and as this ground of title was abandoned by the appellant in the High Court, no further notice will be taken of it.
Dealing next with the title claimed by the appellant under the release deed, exhibit A executed by Santhappa, the District Judge held that as Ganapathi had purchased the properties under exhibit III on the faith of the representation contained therein that the vendors had become entitled to them on the death of Ammakka in 1910, he acquired a good title under section 43 of the , and that exhibit A could not prevail as against it.
He accordingly dismissed the suit.
The plaintiff took the matter in appeal to the High Court, Madras, and in view of the conflict of authorities on the question in that Court, the case was refer 560 red for the decision of a Full Bench.
The learned Judges who heard the reference agreed with the court below that the purchaser under exhibit III had, in taking the sale, acted on the representation as to title contained therein, and held that as the sale by the vendors was of properties in which they claimed a present interest and not of a mere right to succeed in future, section 43 of the applied, and the sale became operative when the vendors acquired title to the properties on the death of Gangamma on February 17, 1933.
In the result, the appeal was dismissed.
The appellant then applied for leave to appeal to this Court under article 133(1)(c), and the same was granted by the High Court of Mysore to which the matter had become transferred under section 4 of Act 72 of 1952.
That is how the appeal comes before us.
The sole point for determination in this appeal is, whether a transfer of property for consideration made by a person who represents that he has a present and transferable interest therein, while he possesses, in fact, only a spes successionis, is within the protection of section 43 of the .
If it is, then on the facts found by the courts below, the title of the respondents under exhibit III and exhibit IV must prevail over that of the appellant under exhibit A.
If it is not, then the appellant succeeds on the basis of Ex A. Section 43 of the runs as follows: "Where a person fraudulently or erroneously represents that he is authorised to transfer certain immovable property and professes to transfer such property for consideration such transfer shall, at the option of the transferee, operate on any interest which the transferor may acquire in such property at any time during which the contact of transfer subsists.
561 Nothing in this section shall impair the right of transferees in good faith for consideration without notice of the existence of the said option.
" Considering the scope of the section on its terms, it clearly applies whenever a person transfers property to which he has no title on a representation that he has a present and transferable interes therein, and acting on that representation, the transferee takes a transfer for consideration.
When these conditions are satisfied, the section enacts that if the transferor subsequently acquires the property, the transferee becomes entitled to it, if the transfer has not meantime been thrown up or cancelled and is subsisting.
There is an exception in favour of transferees for consideration in good faith and without notice of the rights under the prior transfer.
But apart from that, the section is absolute and unqualified in its operation.
It applies to all transfers which fulfil the conditions prescribed therein, and it makes 1.
O difference in its application, whether the defect of title in the transferor arises by reason of his having no interest whatsoever in the property, or of his interest therein being that of an expectant heir.
The contention on behalf of the appellant is that section 43 must be read subject to section 6 (a) of the which enacts that, "The chance of an heir apparent succeeding to an estate, the chance of a relation obtaining a legacy on the death of a kinsman or any other mere possibility of a like nature, cannot be transferred.
" The argument is that if section 43 is to be interpreted as having application to Cases of what are in fact transfers of spes successionis, that will have the effect of nullifying section 6 (a), and that therefore it would be proper to construe section 43 as limited to cases of transfers other than those falling within .
In effect, this argument involves importing 562 into the section a new exception to the following effect; "Nothing in this section shall operate to confer on the transferee any title, if the transferor had at the date of the transfer an interest of the kind mentioned in section 6 (a).
" If we accede.
to this contention we will not be construing s.43.
but rewriting it.
"We are not entitled", observed Lord Loreburn L. C., in Vickers vs Evans (1), "to read words into an Act of Parliament unless clear reason for it is to be found within the four corners of the Act itself." Now the compelling reason urged by the appellant for reading a further exception in section 43 is that if it is construed as applicable to transfers by persons who have only spes successionis at the date of transfer, it would have the effect of nullifying section 6(a).
But section 6(a) and section 4 relate to two different, subjects, and there is no necessary conflict between them; Section 6 (a) deals with certain kinds of interests in property mentioned therein, and prohibits a transfer simpliciter of those interests.
Section 43 deals with representations as to title made by a transferor who had no title at the time of transfer, and provides that the transfer shall fasten itself on the title which the transferor subsequently acquires.
Section 6 (a) enacts a rule of substantive law, while section 43 enacts a rule of estoppel which is one of evidence.
The two provisions operate on different fields, and under different conditions, and we see no ground for reading a conflict between them or for outing down the ambit of the one by reference to the other.
In our opinion, both of them can he given full effect on their own terms, in their respective spheres.
To hold that transfers by persons who have only a spes successionis at the date of transfer are not within the protection afforded by section 43 would destroy its utility to a large extent.
It is also contended that as under the law there can be no estoppel against a statute transfers 563 which are prohibited by section (6a) could not be held to be protected by section 43.
There would have been considerable force in this argument if the question The fell to be decided solely on the terms of section 6 (a).
Rules of estoppel are not to be resorted to for defeating or circumventing prohibitions enacted by Statutes on grounds of public policy.
But here the matter does not rest only on section 6 (a).
We have in addition, section 43, which enacts a special provision for the protection of transferees for consideration from persons who represent that they have present title, which, in fact, they have not.
And the point for decision is simply whether on then facts the respondents are entitled to the benefit of this section.
If they are, as found by the courts below, then the plea of estoppel raised by them on the terms of the section is one pleaded under, and not against the statute, The appellant also sought to rely on the decisions wherein it has been held that a plea of estoppel could not be raised against a millor who had transferred property on a representation that he was of age, and that section 43 was inapplicable to such transfers, vide Sadiq Ali Khan vs Jai Kishori Gadigeppa vs Balanagauda (2) Ajudhia Prasad vs Chandan Lal(3)But the short answer to this contention is that section 43 deals with transfers which fail forwant of title in the transferor and not want of capacity in him at the time of transfer.
It may further be observed in this connection that the doctrine of estoppel has been held to have no application to persons who have no contractual capacity where the claim is based on contract, vide Mahomed Syedol Ariffin, vs Yeoh Oai Gark (4); Levine vs Brougham (5), Leslie Ltd. section Sheil); Khan Gul vs Lakha Singh (7).
Decisions on transfers by minors therefore are of no assistance in ascertaining the true scope of section 43.
564 So far we have discussed the question on the language of the section and on the principles applicable thereto.
There is an illustration appended.to section 43, and we have deferred consideration thereof to the last as there has been a controversy as to how far it is admissible in construing the section.
It is as follows: "A, a Hindu, who has separated from his father B, sells to C three fields, X, Y and Z, representing that A is authorized to transfer the same.
Of these fields Z does not belong to A, it having been retained by B on the partition; but on B 's dying A as heir obtains Z. C, not having rescinded the contract of sale, may require A to deliver Z to him.
In this illustration, when A sold the field Z to C, he had only a spes successionis.
But he having subsequently inherited it, became entitled to it.
This would appear to conclude the question against the appellant.
But it is argued that the illustration is repugnant to the section and must be rejected.
If the language of the section clearly excluded from its purview transfers in which the transferor had only such interest as is specified in section 6(a), then it would undoubtedly not be legitimate to use the illustration to enlarge it.
But far from being restricted in its scope as contended for by the appellant, the section is, in our view, general in its terms and of sufficient amplitude to take in the class of transfers now in question.
Its is not to be readily assumed that all illustration to a section is repugnant to it and rejected.
Reference may, in this connection, be made to the following observations of the judicial Committee in Mahomed Shedol Ariffin vs Yeoh Ooi Gark (1) as to the value to given to illustrations appended to a section, in ascertaining its true scope: 565 "It is the duty of a court of law to accept, if that can be done, the illustrations given as being both of relevance and value in the construction of the text.
The illustrations should in no case be rejected because they do not square with ideas possibly derived from an other system of jurisprudence as to the law with which they are the sections deal And it would require a very special case to warrant their rejection on the ground of their assumed repugnancy to the sections themselves.
It would be the very last resort of construction to make any such assumption.
The great usefulness of the illustrations, which have, although no part of the sections, been expressly furnished by the Legislature as helpful in the working and application of the statute, should not be thus impaired.
" We shall now proceed to consider the more important cases wherein the present question has been considered.
One of the earliest of them is the decision of the Madras High court in Alamanaya Kunigari Nabi Sab vs Murukuti Papiah (1).
That arose out of a suit to enforce a mortgage executed by the son over properties belonging to the father while he was alive.
The father died pending the suit, and the properties devolved on the son as his heir.
The point for decision was whether the mortgagee could claim the protection of section 43 of the .
The argument against is was that "section 43 could not be so construed as to nullify section 6(a) of the , by validating a transfer initially void under s 6(a)".
In rejecting this contention, the Court observed: "This argument, however, neglects the distinction between purporting to transfer `the chance of an heir apparent, ' and `erroneously representing that he (the transferor) is 566 authorised to transfer certain immoveable property.
" It is the latter course that was followed in the present case.
It was represented to the transferee that the transferor was in praesenti entitled to and thus authorise to transfer the property." (p. 736) On this reasoning if a transfer is statedly of an interest of the character mentioned in section 6(a), it would be void, whereas, if it purports to be of an interest in praesenti, it is within the protection afforded by section 43 Then we come to the decision in The official Assignee, Madras vs Sampath Naidu (1), where a different view was taken.
The facts were that one vs Chetti had executed two mortgages over properties in respect of which he had only spes successionis.
Then he succeeded to those properties as heir and then sold them to one Ananda Mohan.
A mortgagee claiming under Ananda Mohan filed a suit for a declaration that the two mortgages created by Chetty before he had become entitled to them as heir, were void as offending section 6(a) of the .
The mortgagee contended that in the events that had happened the mortgages had become enforceable under section 43 of the Act.
The Court negatived this contention and held that as the mortgages, when executed, contravened section 6(a), they could not become valid under section 43.
Referring to the decision in Alamanaya Kunigari Nabi Sab vs Murkuti Papiah (2), the Court observed that no distinction could be drawn between a transfer of what is on the face of it spes successionis, and what purports to be an interest in praesenti.
"If such a distinction were allowed", observed Bardswell, J., delivering the Judgment of the Court, "the effect would be that by a clever description of the property dealt with in a deed of transfer one would be allowed to conceal the real nature of the transaction and evade a clear statutory prohibition.
" 567 This reasoning is open to the criticism that it ignores the principle underlying section 43.
That section embodies, as already stated, a rule of estoppel and enacts that a person who makes a representation shall not be heard to allege the contrary as against a person who acts on that representation.
It is immaterial whether the transferor acts bona fide or fraudulently in making the representation.
It is only material to find out whether in fact the transferee has been misled.
It is to be noted that when the decision under consideration was given, the relevant word of section 43 were, "where a person erroneously represents", and now, a amended by Act 20 of 1929, they are "where a person fraudulently or erroneously represents", and that emphasises that for the purpose of the section it matters not whether the transferor act fraudulently or innocently in making the representation, and that what is material is that he did made representation and the transferee has acted on it.
Where the transferee knew as a fact that the transferor did not possess the title which he represents he has, then he cannot be said to have acted on it when taking a transfer.
Section 43 would then have no application, and the transfer will fail under section 6(a).
But where the transferee does act on the representation, there is no reason why he should not have the benefit of the equitable doctrine embodied in section 43, however fraudulent the act of the transferor might have been.
The learned Judges were further of the opinion that in view of the decision of the Privy Council in Ananda Mohan Roy vs Gour Mohan Mullick (1) and the decision in Sri Jagannada Raju vs Sri Rajah Prasada Rao (2), which was approved therein, the illustration to section 43 must be rejected as repugnant to it.
In Sri Jagannada Raju 's case (2), the question was whether a contract entered into by certain 568 presumptive reversioners to sell the estate which was then held by a widow as heir could be specifically enforced, after the succession had opened.
It was held that as section 6(a) forbade transfers of spes successionis, contracts to make such transfers would be void under section 23 of the contract Act, and could not be enforced.
This decision was approved by the Privy Council in Ananda Mohan Roy vs Gour Mohan Mullick(1), where also the question was whether a contract by the nearest reversioner to sell property which was in the possession of a widow as heir was valid and enforceable, and it was held that the prohibition under section 6(a) would became futile, if agreements to transfer could be enforced.
These decisions have no bearing on the question now under consideration, as to the right of a person who for consideration takes a transfer of what is represented to be an interest in praesenti.
The decision in The Official Assinee, Madras vs Sampatha Naidu (2) is, in our view, erroneous, and was rightly over ruled in the decision now under appeal.
Proceeding on to the decisions of the other High Courts, the point under discussion arose directly for decision in Shyam Narain vs Mangal Prasad (3).
The facts were similar to those in The official Assignee, Madras section Sampath Naidu(2) One Ram Narayan, who was the daughter 's son of the last male owner sold the properties in 1910 to the respondents, while they were vested in the daughter Akashi.
On her death in 1926, he succeeded to the properties as heir and sold them in 1927 to the appellants.
The appellants claimed the estate on the ground that the sale in 1910 conferred no title on the respondents as Ram Narayan had then only a spes successionis.
The respondents contended that they became entitled to the properties when Ram Narayan acquired them as heir in 1926.
The learned Judge, Sir section M. Sulaiman, C. J., and Rachhpal, J., held, agreeing with 569 the decision in Alamanaya Kunigari, Nabi Sab vs Murukuti Papiah (1),and deffering from The official Assignee, Madras vs Sampath Naidu (2),and Bindeshwari Singh vs Har Narain Singh (3), that s.43 applied and that the respondents, had acquired a good title.
In coming to this, conclusion, they relied on the illustration to section 43 as, indicating its, true scope, and observed: "Section 6 (a) would, therefore, apply to cases, where professedly there is, a transfer of a mere spes successionis, the parties knowing that the transferor has, no more right than that of a mere expectant heir.
The result, of course, would be the same where the parties, knowing the full facts, fraudulently clothe the transaction in the garb of a an out and out sale of the property, and there is, no erroneous representation made by the transferor to the transferor as, to his, ownership. "But where an erroneous, representation is, made by the transferor to the transferee that he is, the full owner of the property transferred and is authorized to transfer it and the property transferred is not a mere chance of succession but immovable property itself, and the transferee acts, upon such erroneous representation, then if the transferor happens, later, before the contract of transfer comes, to an end, to acquire an interest in that property, no matter whether by private purchase, gift, legacy or by inheritance or otherwise, the previous transfer can at the option of the transferee operate on the interest which has, been subsequently acquired, although it did not exit at the time of the transfer." (pp. 478,479).
This decision was followed by the Bombay High Court in Vithabai vs Malhar Shankar (4) and by the 570 Patna High Court in Ram Japan vs Jagesara Kuer(1).
A similar view had been taken by the Nagpur High Court in Syed, Bismilla vs Manulal Chabildas(2).
The preponderance of judicial opinion is in favour of the view taken by the Madras High Court in Alamanaya Kunigari Nabi Sab vs Murukuti Papiah (3), and approved by the Full Bench in the decision now under appeal.
In our judgment, the interpretation placed on section 43 in those decisions correct and the contrary opinion is erroneous.
We accordingly hold that when a person transfers property representing that he has a present interest therein, whereas he has, in fact, only a spes successionis, the transferee is entitled to the benefit of section 43, if he has taken the transfer on the faith of that representation and for consideration.
In the present case, Santhappa, the vendor in exhibit III, represented that he was entitled to the property in praesenti, and it has been found that the purchaser entered into the transaction acting on that representation.
He therefore acquired title to the properties under section 44 of the , when Santhappa became in titulo on the death of Gangamma on February 17, 1933, and the subsequent dealing with them by Santhappa by way of release under exhibit A did not operate to vest any title in the appellant.
The Courts below were right in upholding the title of the respondents, and this appeal must be dismissed with costs of the third respondent, who alone appears.
Appeal dismissed.
| M and S claiming to be reversioners to the estate of N sold the property in dispute to G predecessor in interest of the respondents.
The sale deed recited that the property belonged to the joint family of two brothers N and B, and on the death of N it was inherited by his widow and on her death it had devolved upon them as reversioners to the state.
G sued to recover possession of the properties.
The suit was contested by the widow of B(brother of N) claiming that the property was the self acquired property of her husband.
During the pendency of the litigation the widow died, and G applied to the revenue authorities to transfer the 'pattas ' in his name.
The appellants intervened alleging that the property was gifted to them by the widow, and S one of the reversioners had also executed a release of the said property for a consideration.
This objection was rejected.
The appellants then sued for possession of a half share in the properties held by the widow of B, relying upon the gift by the widow, and the deed of surrender by S one of the two reversioners to the estate of N.
They contended that the Vendors of the property to G had 555 only a spes successionis during the life time of the widow of B, and the transfer was on that account void and conferred no title.
The heirs of contended that the property was sold to by M and S on a representation that the Vendor had become entitled thereto, and the appellants as transferees from S were estopped from asserting that it was in fact the self acquisition of and that in consequence he had no title at the date of the sale.
^ Held, that where a person transfers property representing that he has a present interest therein, whereas he has, in fact, only a spes successions, the transferee is entitled to the benefit of section 43 of the , if he has taken the transfer for consideration and on the faith of the representation.
Held, further, that apart from the exception in favour of transferees for consideration in good faith and without notice of the rights under the prior transfer section 43 of the is absolute and unqualified in its operation.
It applies to all transfers which fulfil the conditions prescribed therein, and it makes no difference in its application whether the defect of title in the transferor arises by reason of his having no interest in the property, or of his interest therein being that of an expectant heir.
The section deals with transfers which fail for want of title in the transferor and not want of capacity in him at the time of transfer.
It embodies a rule of estoppel and enacts that a person who makes a representation shall not be heard to allege the contrary as against a person who acts on the representation.
It is immaterial whether the transferor acts bona fide or fraudulently in making the representation.
It is only material to find out whether in fact the transferee has been misled.
In view of the specific provision of section 43 the principle of estoppel against a statute does not apply to transfers prohibited by section 6 (a) of the Act.
The two provisions operate in different fields and under different conditions.
There is no necessary conflict between them, and the ambit of one cannot be cut down by reference to the other.
Section 6(a) enacts a rule of substantive law, while section 43 enacts a rule of estoppel which is one of evidence.
Held, also, that if the language of the section clearly excludes from its purview certain matters, it would not be legitimate to use the illustration to the section to enlarge it.
It is not to be readily assumed that an illustration to a section is repugnant to it and rejected.
Vickers vs Evans, (1910)79 L.J.K.B. 955, relied on.
556 Sadiq Ali Khan vs Jai Kishori, A.I.R. 1928 P.C. 152, Gadigeppa vs Balangauda, (1931) I.L.R. , Ajudhia Prasad vs Chandan Lal, I.L.R. (1937) All.
860 F.B.; Mohomed Syedol Ariffin vs Yeoh Ooi Gark; (1916) L.R. 43 I.A. 256; Levine vs Brougham, ; Leslie Ltd. vs Sheill, and Khan Gul vs Lakha Singh Lah.
701(F.B.), referred to.
Alamanaya Kunigari Nabi Sab vs Murukuti Papiah, , Shyam Narain vs Mangal Prasad, All. 474, Vithabai vs Mathar Shankar, I.L.R. , Ram Japan vs Jagesara Kuer, A.I.R. 1939 Pat. 116 and Syed Bismilla vs Munulal Chabildas, A.I R. , approved.
Official Assignee, Madras vs Sampath Naidu, and Bindeshwari Singh vs Har Narain Singh, Luck.
622, disapproved.
| The appellant.
was tried by the Sessions judge and acquitted of the charge of murder.
On appeal the High Court convicted him and sentenced him to imprisonment for life.
The appellant applied for and was granted a certificate under Art 134 (1) (c) of the Constitution for appeal to the Supreme Court on the ground that there was unusual delay in delivering the judgment of the High Court and that the judg ment failed to deal with certain questions of fact which were raised at the hearing of the appeal.
Held, that the certificate granted by the High Court was not a proper certificate.
The mere ground of delay in giving judgment did not fall within the words "fit one for appeal to the Supreme Court" in article 134 (1) (c).
The points raised in the appeal before the High Court were questions of fact and the High Court was not justified in passing such questions on to the Supreme Court for further consideration thus converting the Supreme Court into a court of appeal on facts.
Haripada Dev vs State of.
West Bengal; , and Sidheswar Ganguly vs State of West Bengal, [1958] section C. R. 749, followed.
Banaswmi Parshed vs Kashi Krishna Narain, (1900) L. R. 23 1.
A I I and Radhakrishna Ayyar vs Swaminathna Ayyar, (1920) L. R. 48 I. A. 31, referred to.
| The plaintiffs (appellants herein) obtained settlements of certain land owned by a deity in village Siripur Majrahia in Bihar.
The contesting defendants (respondents herein) owned lands in the villages of Kazi Dumra and Shankarpur which were separated from Siripur Majrahia by a river.
The plaintiffs claimed that in consequence of the changes in the channel of the aforesaid river the lands in suit were lost to villages Kazi Dumra and Shankarpur by diluvion and were annexed to their land in village Siripur Majrahia by gradual increment and accretion.
The deity was also made defendant No. 18 in the suit although no relief was claimed against it.
The trial court dismissed the suit and the plaintiffs appealed to High Court, again impleading the deity as a respondent.
They, however, failed to deposit the cost of the guardian ad litem of the deity appointed by the High Court and the Court thereupon dismissed the appeal as against the deity.
The contesting defendants urged at the hearing that the entire appeal had become incompetent in view of the dismissal of the appeal against the deity.
Accepting the contention the High Court dismissed the appeal.
It held inter alia, that the appeal had abated against the deity.
The plaintiffs filed appeal, with certificate, in this Court.
On behalf of the respondents reliance was placed on Muni Bibi vs Trilokinath and it was urged that the decision of the trial court on the question whether the suit lands appertained to village Siripur Majrahia operated as res judicata between the deity and the contesting co defendants, that the appellate court could not record an inconsistent finding that the suit lands appertained.
to village Siripur Majrahia and that in the circumstances, the entire appeal before the High Court had become incompetent.
HELD: (i) The High Court was in error in holding that the appeal had abated either wholly or in part.
None of the parties to the appeal had died and there was no question of abatement of the appeal.
[973 E] (ii) The deity was not a necessary party to the appeal and the plaintiffs were entitled to prosecute: their appeal against the contesting defendants in the absence of the deity.
[973 G H; 974 A B] (iii) The case of Muni Bibi vs Trilokinath shows that a decision operates as res judicata between co defendants if (1) there is a conflict of interest between them; (2) it is necessary to decide that conflict in order to give the plaintiffs the reliefs which they claim and (3) the question between the co defendants is finally decided.
In the present case the third condition was not satisfied.
The question whether the suit lands appertained to Siripur Majrahia was not finally decided between the deity and the co defendants.
On the filing of the appeal by the plaintiffs, the question became once more the subject of judicial enquiry between the deity and the contesting defendants.
[974 B D] Muni Bibi vs Trilokinath, L.R. 58 I.A. 158, referred to.
972 (iv) Before the appeal was finally heard and decided, it was dismissed as against the deity for non payment of its guardian 's costs.
The appellate court did not give any decision on the merits of the case in the presence of the deity.
There was no final decision against the deity on the question of title to the suit lands.
The decision of the appellate court against the contesting defendants would not lead to conflicting and inconsistant decrees.
The High Court was in error in holding that the appeal against the contesting defendants became incompetent.
[974 D E]
| A Hindu father executed a registered deed of trust giving away his properties to public charities and appointed himself and two others as trustees.
The son in assertion by his right to a moiety share therein started to alienate them.
There was litigation between the trustees and the son which ultimately ended in a compromise decree for partition between the father and the son, the two other trustees having retired pending litigation.
After the death of both the father and the son a suit was brought under 1123 section 92 of the Code of Civil Procedure for the framing of a scheme for the administration of the trust.
The trial court held that the trust deed had been substituted by the compromise decree which itself created a trust and decreed the suit on that basis.
On appeal by two of the defendants who were transferees in possession of some of the properties in suit, the High Court affirmed the decision of the trial court holding that the compromise decree created a trust for public charities in respect of the properties allotted to the third plaintiff, meaning the father.
The said defendants appealed to this Court.
The principal question for decision was one of construction of the compromise decree, whether it created a trust or a charge.
The relevant terms of the compromise decree were as follows: " that as regards the aforesaid schedule property, the third plaintiff should be the 'sole trustee ' till his lifetime for the purpose of conducting 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 Rainalingeswara Rao, the said guardian should take possession of the property and conduct 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 conduct the above mentioned charities and enjoy the properties :" Hald, that the courts below were in error in construing the compromise decree in the way they did and the appeal must succeed.
There can be no doubt from the terms of the compromise decree read as a whole that what was intended to be created was a charge and not a trust in respect of the properties allotted to the father which retained their private character.
The principles of Hindu Law applicable to questions relating to charitable trust are well settled.
Whether or not a dedication to charity is complete must depend on the intention of the donor which has to be gathered from the terms of the document in any particular case read as a whole.
If the dedication is complete, a trust is created, if not, a charge follows.
The mere use of the word 'trust ' or 'trustee ' cannot by itself be conclusive as to the intention of the donor and the real test is whether private title 1124 over the property is sought to be extinguished by a complete transfer of it to the charity.
Maharani Hemanta Kumati Debi vs Gauri Shankar Tewari, (1940) L. R. 68 I.A. 53, Jadu Nath Singh vs Thakur Sita Ramji, (1917) L.R. 44 I.A. 187, Pande Har Narayan vs Surja Kunwari, (1921) L.R. 48 I.A. 143, Sonatun Bysack vs Sreemutti juggul soondyee Dossee, 8 Moo.
I.A. 66 and Gopal Lal Sett vs Purna Chandya Basak, (1921) L.R. 49 I.A. 100, applied.
| The appellants obtained a decree against the respondent in the court of Sub Judge, Bankura (West Bengal) on December 3, 1949.
On March 28, 1950 they applied to the court which passed the decree to transfer the decree with a certificate of non satisfaction of the court at Morgan in the then State of Madhya Bharat.
It was ordered accordingly.
The Judgment debtors resisted the execute on the ground that the court had no jurisdiction to execute the same as the decree was that of a foreign court and that the same had been passed ex parte.
The court accepted that contention and dismissed the execution petition on December 29, 1950.
On April , 1951 the Code of Civil Procedure (Amendment) Act 2 of 1951 came into force.
By this Act the Code was extended to the former State of Madhya Bharat as well as various other places.
Meanwhile the appellants appealed against the order of the Additional District Judge Morena dismissing the execution petition to the High Court of Madhya pradesh.
The appeal was allowed.
In further appeal this Court 'restored the order of the Addl.
District Judge, Morena.
Thereafter on February 15, 1963 the appellants filed another execution case before the Bankura Court praying for the transfer of the decree to the Molrena Court for execution.
The Bankura Court again ordered the transfer of the decree of the Morena Court.
The judgment debtors resisted execute on the flowing grounds : (1) that it was barred by yes judicature in view of the aforesaid decision of this Court; (2) that it was barred by section 48 of the Code of Civil Procedure; (3) that it was barred by limitation and (4) that it was not executable because it was the decree of a foreign court.
The Addl.
District Judge rejected the objections.
The High Court in appeal agreed with the executing court that the execution petition was neiber barred by resjudicata nor was there any bar of limitation but it disagreed with that court and held that the decree was not executable as the court which passed the decree was a foreign court.
The decree holders filed the present appeal by special leave.
The questions which fell for consideration were : (i) whether the decree under execution was not executable by courts situate in the area comprised in the former State of Madhya Bharat; (ii) whether the decree was barred by section 48 of the Code.
HELD:Per Sikri C.J., Mitter, Hyde and Bhargava JJ.
(1) (a) On the date when the decree under execution was passed foreign court ' was 8 1 100 SupCII71 816 defined in section 2(5) of the Code as a court situate beyond the limits of British India which had no authority in British India and was not established or continued by the Central Government.
After the amendment of the Code of Civil Procedure in 1951. 'foreign court ' under the Code means a court situate outside India and not established or continued by the authority of the Central Government.
Whether we take the earlier definition or the present definition the Bankura Court could not be considered as a foreign court within the meaning of that expression in the Code. 'Foreign judgment ' is defined as the 'judgment of a foreign court '.
Hence the decree under execution could not be considered as a foreign decree for the purpose of the Code.
[820 D G] Accordingly the judgment debtors could not take advantage of the provision in section 13(b) of the Code under which the ex parte decree of a foreign court is not conclusive.
Nor could they take advantage of section 13(d).
They were served with notice of suit but did not choose to appear before the court.
Hence, there was Po basis for the contention that any principle of natural justice has been contravened.
Further section 13(d) was not applicable because the judgment in question was not a foreign judgment.
[821 D] (b) Under Private International Law a decree passed by a foreign court to whose juri diction a judgment debtor had not submitted is an absolute nullity only if the local legislature had not conferred jurisdiction on the domestic courts over the foreigners either generally or in specified circumstances.
Clause (c) of section 20 of the Code provides that subject to the limitations mentioned in the earlier sections of the Code a suit can be instituted in a court within the local limits of whose jurisdiction the cause of action wholly or in part, arises.
This provision confers jurisdiction on a court in India over foreigners when the cause of action arises within its jurisdiction.
There was not dispute in the present case that the cause of action for the suit which led up to the decree under execution arose within the jurisdict on of the Bankura Court.
Hence, it must be held that the suit in question was properly instituted.
Accordingly the decree in question was a valid decree though it might not have been executable at one stage in courts in the former Indian States [822 B F] Sardar Gurdyal Singh vs The Rajah of Faridkot, 21 I.A. 171, referred to.
(c) A combined reading of sections 2(12), 38, 39 and 40 of the Code shows that a decree can be transferred for execution only to a court to which the Code apple .
This is what was ruled by this Court in Hansraj Nathu Ram 's case.
But by the date the transfer in the present case was made, the Code had been extended to the whole of India.
It followed that the transfer of the decree in question which was not a foreign decree, to the Morena Court, was in accordance with the provisions of the Code.
[823 B D] Hansraj Nathu Ram vs Lalii Raja & Sons of Bankura, , applied.
Narsingh Rao Shitole vs Shri Shankar Saran & Ors., ; , distinguished.
(d) Section 20(1)(b) of the Code of Civil Procedure Amendment Act, 1951 by which the Code was extended to Madhya Bharat and other areas undoubtedly protects the right acquired and privileges accrued under the law repealed by the amending Act.
But even by straining the language of the provision it cannot be said that the non executabilitv of the decree within a particular territory can be considered a privilege [824 E F] 817 Nor is it a 'right accrued ' within the meaning of section 20(1) (b) of the Code of Civil Procedure (Amendment) Act, 1950.
In the first peace in order to get the benefit of this provision the non executability of the decree must be a right, and secondly it must be a right that had accrued from the provisions of the repealed law.
It Was difficult to consider the non executability of the decree in Madhya Bharat as a vested right of the judgment debtors.
The non executability in question pertained to the jurisdiction of certain courts and not to the "rights of the judgment debtors.
Further the relevant provision of the Code of Civil Proedue in force in Madhya Bharat did not confer the, right claimed by the judgment debtors.
All that had happened in view of the extension of +he Code to the whole of India in 1951 was that the decrees which could have been executed only by courts in British India were made ' executable in the whole of India.
The change made was one relating to procedure and jury diction.
By the extension of the Code to Madhya Bharat, want of jurisdiction on the part of the Morena Court was remedied and that court was now competent to execute the decree [825 A E] Hamilton Gell vs White , Abbot vs Minister for Lands, and G. Ogden Industries Pvt. Ltd. vs Lucas, , applied.
(ii)The execution was also not barred, by section 48 of the Cod .
For considering the true impact of cl.
(b) of sub section
2 of section 48 of the Code provisions of articles 181 and 182 of the Limitation Act, 1908 have also to be taken into consideration.
These provisions clearly go to indicate that the period prescribed under section 48(1) of the Code is a period of limitation.
This interpretation is strengthened by the subsequent history of the legislation.
By the section 48 of the Code is deleted.
It , place has not been taken by article 136 of the Limtation Act of 1963 The High Courts also are now unanimous that section 48 of tile (ode is controlled by the provisions of the Limitation Act, 1908.
[828 A C] Kandaswami Pillai vs Kamappa Chetty, A I R, , Durg vs Poncham, I.L.R. [1939] All.
647, Sitaram vs Chunnilalsa, I.L.R. , Amarendra vs Manindra, A.I.R. '1955 Cal.
269, Krishna Chandra v Parovatamma, A.I.R. 1953 Orissa 13 and Ramgopal vs Sidram, A.I.R. 1943 Bom.
164 referred to.
Per Jaganmohan Reddy, J. (Concurring) No question of 'a vested right or privilege arose to entitle the respondent to challenge execution proceedings in Morena Court.
The decree granted by the Bankura Court was executable by the Courts governed by the same Code, by talk Court which passed it or by the Court to which it was transferred.
One the Code was made applicable to the whole of India by Amendment Act 11 of 1951 the decree was no longer a foreign decree qua the Morena Court which was a court under the Code to which the Bankura Court could transfer the decree for execution.
No doubt in ' Shitole 's case it was observed that section 13 of the Code creates substantive rights and not merely procedural and therefore defenses that were open to the resno dents were not taken away by any constitutional changes, but the ratio of the decision was that the Gwalior Court not being a court that passed the decree after the coming into force of Act 11 of 1951 the Allahabad Court could not execute it.
The impediment did not exist now in that the Bankura Court bad transferred the decree to a court under the Code.
the plea that section 48 Civil Procedure Code presents a bar of limitation was also not tenable.
[831 F H] 818 Kishendas vs Indo Carnatic Bank Ltd. A.I.R. 1958 A.P. 407 Sardar Gurdayal Singh V. Raja of Firidkote, 21 I.A. 171, Rai Rajendra Sardar Maloji Narsingh Rao Shirole vs Shri Shankar Saran, ; and Hansaj Nathuram Y. Lalji Raja
| The tenant of the appellant a Jagirdar, died without leaving any male issues.
His distant relations the respondents, took possession of his properties.
Thereupon the appellant brought a suit claiming possession.
of the properties as he was the owner.
The trial court dismissed the suit holding that the civil court has no jurisdiction to entertain the suit, and that in view of the Jagir Abolition Act, 1951 which was enacted during the pendency of the sit and with the vesting of the suit properties in the State, the appellant was not entitled to claim.
The first appellate court reversed these findings and held that though the suit properties had vested in the State, it was for the State to get itself impleaded, and as the State had not got itself impleaded, it was open to the appellant to press the suit.
In view of these conclusions, the appellate court demanded the suit to decide the other undecided issues.
After the remand, the trial court negatived the respondents defendants contention and decreed the suit.
In appeal that decree was affirmed.
In second appeal, the High Court agreed with the courts below on all issues except that relating to the effect of abolition of Jagirs.
It held that under the Jagir Abolition Act, the appellant lost his title to the suit properties.
In its view that issue was not concluded by the decision of the appellate court made before remand as the same had not been appealed against, since the court had inherent power to consider the correctness of that order.
In appeal, this Court: HELD : The case must be remanded for determination of the right of all the parties after impleading the State as a party.
The correctness of the remand order was not open to review by the High Court.
The order in question was made under rule 23, Order 41, Civil Procedure Code.
That order was appealable under Order 43 of that Code.
As the same was not appealed against, its correctness was no more open to examination in view of section 105 (2) of the Code which lays down that where any party aggrieved by an order of remand from which an appeal lies does not appeal therefrom he shall thereafter be precluded from disputing its correctness.
The High Court has misconceived the scope of its inherent powers.
Under the inherent power of courts recognised by section 151, Civil Procedure Code, a court has no power to do that which is prohibited by the Code.
Inherent jurisdiction of court must be exercised subject to the rule that if the Code does contain specific provisions which would meet the necessities of the case, such provisions should be followed and inherent jurisdiction should not be involved.
In other words the court cannot make use of the special provisions of section 151 of the Code where a party bad his remedy provided elsewhere in the Code and be neglected 208 to avail himself of the same.
Further the power under section 151 of the Code cannot be exercised as an appellate power.
The appellant Jagirdar had not lost all rights in the suit properties.
The suit properties vested in the State in view of the Jagir Abolition Act.
But it was conceded at the bar that if the appellant was proved to have been the owner of the suit properties on the day the Jagir Abolition Act came into force, he was entitled to the compensation provided in that Act.
Therefore the appellant was interested in establishing that on the date Jagir Abolition Act came into force, he was the full owner of the suit properties.
[210 C] Himatrao vs Jaikishandas and Ors. ; followed.
| FACTS
lakshminarayana iyer, a hindu brahmin in the tirunelveli district, died leaving him a surviving widow ranganayaki, and a married daughter ramalakshmi.
ramalakshmi had married the plaintiff and had a number of children from him.
they were all alive in december, 1924, when lakshminarayana died.
by this will he gave the following directions "after my lifetime, you, the aforesaid ranganayaki amminal, my wife, shall till your lifetime, enjoy the aforesaid entire properties , enjoy the aforesaid entire properties, the outstandings due to me, the debts payable by me, and the chit amounts payable by me. after your lifetime ramalakshmi ammal, our daughter and wife of rama ayyar avergal of melagaram village, and her heirs shall enjoy them with absolute rights and powers of alienation such as gift, exchange, and sale from son to grandson and so on for generations. as regards the payment of maintenance to be made to chinnanmal alias lakshmi ammal, wife of my late son hariharamayyan, my wife ranganayaki ammal shall pay the same as she pleases, and obtain a release deed".
ranganayaki entered into possession of the properties on the death of her husband.
she settled the maintenance claim of lakshmi ammal and obtained a deed of release from her.
ramalakshmi died during the lifetime of the widow.
the widow describing herself as an absolute owner of the properties of her husband sold one of the items of the property to the 2nd defendant.
on the 18th september, 1945, the suit out of which this appeal arises was instituted by the plaintiff, the husband and the sole heir of ramalakshmi, for a declaration that the said sale would not be binding on him beyond the lifetime of the widow.
a prayer was made that the widow be restrained from alienating the other properties in her possession.
an ad interim injunction was issued by the high court restraining the widow from alienating the properties in her possession and forming part of her husband's estate.
inspite of this injunction, she executed two deeds of settlement in favour of the other defendants comprising a number of properties.
the main issue in the suit was whether the widow took under the will an absolute estate or an estate like the hindu widow's estate and whether the daughter's interest therein was in the nature of a contingent remainder, or whether she got in the properties a vested interest.
ARGUMENT
it was urged by mr. rajah iyer that as no express or implied power of alienation for purposes of all legal necessities was conferred on the widow, that circumstance negatived the view that the testator intended to confer upon his widow a hindu widow's estate as she would get in case of intestacy. he also emphasized that the words of the gift over to the daughter as supporting his construction which was further reinforced by the words of the will limiting the widow's estate " till your lifetime " and of the omission from therein of words such as nialik etc., while describing the widow's estate. mr. krisbnaswami lyengar, on the other hand, contended that the absence of any words in the will restricting her powers of alienation and putting a restraint on them, suggested a contrary intention and that the daughter's estate was described as coming into being after the estate of the widow and was not conferred on her simultaneously with the widow, and this connoted according to the notions of hindus a full hindu widow's estate.
ISSUE
the construction of will is in controversy in this appeal.
the substantial question to decide in the appeal is whether the estate granted by the testator to his widow was a fall woman's estate under hindu law or merely a limited life estate in the english sense of that expression
ANALYSIS
the decision of the appeal turns upon the question whether the testator's intention was to give to his widow ail ordinary life, estate or an estate analogous to that of a hindu widow.
at one time it was a moot point whether a hindu widow's estate could be created by will, it being an estate created by law, but it is now settled that a hindu can confer by means of a will oil his widow the same estate which she would get by inheritance.
the court's primary duty in such cases is to ascertain from the language employed by the testator "what were his intentions", keeping in view the surrounding circumstances, his ordinary notions as a hindu in respect to devolution of his property, his family relationships etc.
considering the will in the light of these principles, it seems that lakshminarayan iyer intended by his will to direct that his entire properties should be enjoyed by his widow during her lifetime but her interest in these properties should come to an end on her death, that all these properties in their entirety should thereafter be enjoyed as absolute owners by his daughter and her heirs with powers of alienation, gift, exchange and sale from generation to generation.
he wished to make his daughter a fresh stock of descent so that her issue, male or female, may have the benefit of his property.
they were the real persons whom he earmarked with certainty as the ultimate recipients of his bounty.
if not, the testator would clearly have said that the daughter would only take the properties remaining after the death of the widow.
the widow cannot be held to have been given a full hindu widow's estate under the will unless power of alienation in express terms was not conferred on her.
the properties disposed of by the will and mentioned in the schedule were considerable in extent and it seems that they fetched sufficient income to enable the widow to fulfil the obligations under the will.
she represents the estate in all respects and enjoys very wide power except that she cannot alienate except for necessity and her necessities have to be judged on a variety of considerations.
though the daughter was not entitled to immediate possession of the property it was indicated with certainty that she should get the entire estate at the proper time and she thus got an interest in it on the testator's death
in ram bahadur v. jager nath prasad 3 pat. l. j. 199., will was construed as conveying an absolute estate to the son and the daughter of the niece. it was remarked that in spite of an express restriction against alienation, the estate taken by s. (the niece) was an estate such as a woman ordinarily acquires by inheritance under the hindu law which she holds in a completely representative character but is unable to alienate except in case of legal necessity and that such a construction was in accordance with the ordinary notions that a hindu has in regard to devolution of his property.
in pavani subbamma v. ammala rama naidu (1937) 1 m.l.j. 268. 1936 ind law mad 236 the question for decision in that case was whether widow was at all entitled to sell anything more than her life interest even for purposes of meeting a necessity binding upon the estate. varadachari j. held that since in the will the gift over to the grand-children was of the entire properties, and not a mere gift by way of defeasance, it had to be held that it indicated that the prior gift in favour of the widow was only of a limited interest.
generally speaking, there will be no point in making a will if what is to be given to a widow is what she would get on intestacy and cases do arise where a hindu wishes to give to his widow a more restricted estate than she would get on intestacy or a much larger estate than that.
what is given must be gathered from the language of the will in the light of the surrounding circumstances.
the language used in the will was consistent with the testator's intention of conferring a life estate in the english sense as well as with the intention of conferring a hindu widow's estate.
| The Ziarat Shareef of Hazrat Baba Ibrahim, a holy place of worship, in the Rakhbahu area of Jammu City was granted certain land to the Ziarat by the State Government vide two orders dated September 22, 1955 and November 29, 1958.
The Ziarat was being managed by the 1st appellant and his brothers, since the death of their father in 1963.
The Committee of Muslim Wakf, incorporated under the Jammu and Kashmir Muslim Wakf Act, which came into force in 1959, file a suit for restraining them from alienating, raising construction or recovering the rent from the Wakf land in dispute vested in the Ziarat, on the allegation that the appellants defendants were treating the lands granted to the Ziarat, as their personal property and mismanaging and also alienating the same.
Resisting the suit, the appellants, defendants contended, inter alia, that notwithstanding the use of the word "Ziarat" in the two Government orders the transfer of the land in dispute was in their father 's favour in his personal capacity, in lieu of his possessory right over about 400/500 kanals of land which was taken over by the Government, and not in the form of any dedication, and as such the land was not the property of the Ziarat but their father 's absolute property, and had devolved upon them by succession and, therefore, they had the right to deal with the property in any manner they liked.
The trial court dismissed the suit, holding that the two grants were in fact made in favour of defendants ' father and not the Ziarat.
254 The first appellate court upheld the trial court 's findings.
However, in second appeal, the High Court held that from the recitals of the two orders of the Government of 1955 and 1958 it was clear that the two grants were in favour of the Ziarat.
Hence, the appellants defendants filed the appeal, by special leave before this Court contending that the High Court had erred in upsetting the findings of the courts below, based on appreciation of the evidence that, as a fact, the appellants defendants were the owners of the property, the subject matter of the Government grants.
Dismissing the appeal, the Court, HELD: 1.1 The two orders of the Government dated September 22, 1955 and November 29, 1958 are absolutely clear and unambiguous and can admit one and only one interpretation that the Government intended to grant the land to the Ziarat alone and not to the appellants defendants in their personal capacity.
In fact the names of the appellants defendants or their ancestors are not even mentioned in the two orders.
The order of 1955 specifically stated that the lands in Rakhbahu surrounding the Ziarat Shareef of Baba Ibrahim Shah be granted to the said Ziarat permanently.
The later order of 1958 also says the same thing.
It is nowhere mentioned in any of those orders that the land was given not to the Ziarat but to the father of the appellants defendants, who was Majawar of the Ziarat, either in his personal capacity or in lieu of compensation for his personal lands acquired by the Government.
[259A, B C] 1.2 A manager or a trustee in possession of a religious shrine cannot be allowed to assert a hostile title unless he formally surrenders possession to the lawful authority.
[260B] In the instant case, there was no justification for the appellants defendants to cast their covetous eyes on the property of the Ziarat, taking advantage of their possession over the same, which was as managers or trustees and assert a hostile title to it.
Even if they were in possession of the lands, it would have to be referable to a lawful title and cannot be treated to be adverse to the Ziarat.
In other words, the possession would be for.
the benefit of the Ziarat.
[259H, 260A, E] 1.3 In the face of clear and unambiguous terms of the Government orders, it was not permissible for the appellants defendants to adduce evidence to show that the grant was made to them and not to the 255 Ziarat.
The question was of interpretation of two Government orders, which was essentially a question of law.
[260G] In the circumstances, the High Court was not in error in upsetting the findings of the courts below.
[260F]
|
titions Nos. 110 to 115 of 1960.
(Under Article 32 of the Constitution of India for enforcement of Fundamental Rights) A. V. Viswanatha Sastri, R. K. Garg, D. P. Singh, section C. Aggarwal and M. K. Ramamurthi, for the Petitioner.
B. Sen, B. K. B. Naidu and I. N. Shroff, for the Respondents.
December 21.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
These six petitions under article 32 of the Constitution have been filed by one Bhaiyalal Shukla, who was doing business of construction of buildings, roads, bridges etc.
as contractor for the Public Works Department in Rewa Circle of the former Vindhya Pradesh State, now a part of the State of Madhya Pradesh.
By these petitions, he challenges the levy of sales tax on building materials supplied by him in the construction of buildings, roads and bridges for the years, 1953 54 to 1958 59.
For the first year in question, sales tax amounting to Rs. 1,840 5 0 has 260 already been charged and paid.
He seeks refund of this amount.
For the remaining years except the last two, proceedings for assessment have been completed, but the amounts have not been paid.
For the remaining two years, proceedings are pending for assessment of the tax.
The respondents in the case are the State of Madhya Pradesh, which stands substituted for the State of Vindhya Pradesh, and diverse officers connected with the assessment and levy of the tax.
The contention of the petitioner is that the tax is not leviable in view of the decisions of this Court in two cases reported in The State of Madras vs Gannon Dunkerley and Co. (Madras) Ltd.(1) and Pandit Banarsidas vs The State of Madhya Pradesh (2).
The respondents, however, claim that the tax is leviable, because the case falls within the decision of this Court reported in Mithan Lal vs The State of Delhi (3).
The United State of Vindhya Pradesh was formed by the Rulers of the States in Baghelkhand and Bundhelkhand, who agreed to unite into a common State, with the Maharaja of Rewa as the Rajpramukh.
By the Covenant which was entered into by them at that time, it was provided that until a Constitution for the United State would vest in the Rajpramukh, and he was authorised to make and promulgate Ordinances for the peace and good government of the United State of any part thereof, and any Ordinance made by him had the force of an Act passed by the legislature of the United State.
The Rajpramukh, in exercise of his powers drawn from the Covenant, promulgated the Vindhya Pradesh Sales Tax Ordinance 2 of 1949 for the levy of a tax on the sale of goods in Vindhya Pradesh.
On the inauguration of the present Constitution of 261 India, Vindhya Pradesh became, at first, a part B State but later by the Constitution (Amendment of the First and Fourth Schedules) Order, 1950, it was transferred from Part B to Part C of the Constitution.
The ordinance of the Rajpramukh was applied to the whole of Vindhya Pradesh with effect from April 1, 1950 by Notification No. 7 of March 28, 1950 by the Chief Commissioner, Vindhya Pradesh, acting under section 1(2) of the ordinance.
Parliament then passed the Part C States (Laws) Act, 1950.
Section 2 of that Act provided: "Power to extend enactments to certain Part C States: The Central Government may, by notification in the Official Gazette extend to any Part C State. or to any part of such State, with such restrictions and modifications as it thinks fit, any enactment which is in force in a Part A State at the date of the notification and provision may be made in any enactment so extended for the repeal or amendment of any corresponding law(other than a Central Act) which is for the time being applicable to that Part C State," In exercise of the power conferred by the above section, the Central Government by Notification No. S.R.O. 6 dated December 29, 1950, extended to the State of Vindhya Pradesh the Central Provinces and Berar Sales Tax Act, 1947 (21 of 1947) as in force for the time being in the State of Madhya Pradesh, subject to certain modifications necessitated by the application of the Act to this new area.
By the same Notification, a new section was added to the Madhya Pradesh Act, which read as follows: "29.
Repeal and Saving: The Vindhya Pradesh Sales Tax Ordinance 2 of 1949 is here by repealed, provided that. . " and here follow certain provisions saving the previous operation of the Ordinance.
262 On March 20, 1951, the Central Government issued Notification No. 52/ECON.
in exercise of the powers conferred by sub section
(3) of section 1 of the Central Provinces and Berar Sales Tax Act, 1947, as extended to the State of Vindhya Pradesh by Notification No. S.R.O. 6, ordering that from April 1, 1951 the extended Act would come into force in the State of Vindhya Pradesh.
On May 23, 1951, this Court rendered its judgment in In re the Delhi Laws Act 1912(1).
It was held by majority by this Court that section 2 of the Part C States (Laws) Act, 1950 was intra vires, except for the concluding sentence, "provision may be made in any enactment so extended for the repeal or amendment of any corresponding law (other than a Central Act) which is for the time being applicable to that Part C State", inasmuch as it was ultra vires the Indian Parliament.
Parliament then passed the (49 of 1951) on September 6, 1951.
Under that Act, Legislative Assemblies were set up, and under section 21, they were invested, subject to certain limitations, with Powers of legislation with respect to any of the matters enumerated in the State List or in the Concurrent List.
Section 22 of that Act provided: "If any provision of a law made by the Legislative Assembly of a State is repugnant to any provision of a law made by Parliament, then the law made by Parliament whether passed before or after the law made by the Legislative Assembly of the State, shall prevail and the law made by the Legislative Assembly of the State shall, to the extent of the repugnancy, be void.
Explanation: For the purposes of this section, the expression 'law made by Parliament ' shall not include any law which provides 263 for the extension to the State of any law in force in any other part of the territory of India.
" In view of the decision of this Court in the case(1) the States (Miscellaneous Law) Repealing Act, 1951 (66 of 1951) was enacted by Parliament on October 31, 1951.
By section 2 of that Act, laws described in Column 2 of its Schedule were repealed or were deemed to have been repealed with effect from the dates specified in the corresponding entry in column 3 of that Schedule.
In the Schedule, the Vindhya Pradesh Sales Tax Ordinance, 1949 (2 of 1949) was repealed from December 29, 1950.
The Vindhya Pradesh Legislative Assembly, which was set up, then passed the Vindhya Pradesh Laws (Validating) Act, 1952 (6 of 1952).
By that Act, which was to extend to the whole of Vindhya Pradesh and to come into force on January 8,1953, it was provided as follows: "2.
For the removal of all doubts it is hereby declared that. .
Central Provinces and Berar Sales Tax Act, 1947 as extended to Vindhya Pradesh under section 2 of the Part C States Laws Act, 1950 (has been) and shall be deemed to be in force in Vindhya Pradesh from April 1, 1951.
Repeal and savings: As from the dates of the actual enforcement of the Acts specified in section 2 of this Act the corresponding laws in force in Vindhya Pradesh immediately before the said dates shall be deemed to have been repealed without prejudice to anything done or suffered thereunder or any right, privilege, obligation or liability acquired, accrued or incurred thereunder before the aforesaid dates.
" Section 2 of the Central Provinces and Berar Sales Tax Act, 1947, which was extended to 264 Vindhya Pradesh, defined "contract" to mean any agreement for the carrying out for cash or deferred payment or other valuable consideration, the construction, fitting out, improvement or repair of any building, road, bridge or other immovable property, and further defined "goods" to mean all kinds of property including all materials, articles and commodities, whether or not to be used in the construction, fitting out, improvement or repair of immovable property, and finally defined "sale" as including transfer of property in goods made in the course of the execution of a contract.
By these definitions, the materials used or supplied by a building contractor in the construction of buildings, roads, bridges, etc. were made liable to sales tax in accordance with a schedule of rates to which reference seems unnecessary.
The legality of these and similar provisions of law purporting to impose sales tax on building materials in State Acts came up for consideration before High Courts in India, and two well defined views were expressed, one holding that the power to disentangle in a building contract the sale of materials from the execution of works with a view to taxing such a sale, was not beyond the legislative power of the States acting under Entry 48, List II, Seventh Schedule of the Government of India Act, 1935, corresponding to Entry 54 of the like List in the Constitution.
It was held in those cases that a building contract, though entire, involved labour plus materials and in respect of the materials there was a sale involving transfer of property for consideration, and that the legislature had the power to frame a definition of "sale" to separate the two.
The other view was that building contracts were entire, and that there was no sale of goods as contemplated by the Indian Sale of Goods Act, which was the sense in which the Entry was framed, a sense which had a well recognised legal import.
265 This Court in Gannon Dunkerley 's case (1) approved the latter view, which is found in the decision of the Madras High Court in sub nom Gannon Dunkerley vs State of Madras(2), and disapproved the contrary view.
It was pointed out that though in a popular sense there was a sale of the materials, there was none in the sense in which the expression "sale of goods" is used in the Indian Sale of Goods Act, since there was no agreement to sell or sale of materials as such, nor did the property pass therein as movables.
In Pandit Banarsi Das 's case (3), which was a case from the State of Madhya Pradesh and which was heard simultaneously, it was held that if the parties entered into distinct and separate contracts, one for transfer of materials for money consideration and the other, for payment of remuneration for services or works done, then there was a sale within the meaning of the Sale of Goods Act and the levy of tax was valid; but that if the contract was an entire one, the levy was without competence.
The sections of the Central Provinces and Berar Sales Tax Act making such a division and taxing the so called sales of materials were declared to be beyond the powers of the State Legislature.
The petitioner contends that the impugned sections of the Central Provinces and Berar Sales Tax Act, as applied to Vindhya Pradesh, fell within these two rulings, and must also be declared ultra vires the Vindhya Pradesh State Legislature, when the latter enacted the Vindhya Pradesh Laws (Validating) Act, 1952.
As against this, the respondents contend that the Notification S.R.O. No. 6, which added section 29 repealing the Vindhya Pradesh Sales Tax Ordinance 2 of 1949, the Part C States (Miscellaneous Laws) Repealing Act, 1951 and the Vindhya Pradesh Laws (Validating) Act, 1952 all concurred in repealing 266 Ordinance 2 of 1949 from December 29, 1950, but left intact the operation of the Central Provinces and Berar Sales Tax Act as extended to Vindhya Pradesh by section R. O. No. 6 of 1950.
The Vindhya Pradesh Laws (Validating) Act, 1952 merely removed the doubts by stating again that the Central Provinces and Berar Sales Tax Act had been and "shall be deemed to be in force in Vindhya Pradesh from April 1, 1951", but did not re enact that Act.
According to the respondents, the Central Provinces and Berar Sales Tax Act was in force in Vindhya Pradesh as a result of its extension by Notification section R. O. 6 and Notification No. 52 (Econ), the repeal of Ordinance 2 of 1949 being achieved by the Part C States (Miscellaneous Laws) Repealing Act, 1951 from December 29, 1950.
The respondents, therefore, seek to uphold the impugned provisions on the basis of the ruling of this Court in Mithan Lal 's case(1), where it was pointed out that whatever might be said of the State Legislatures operating under List II did not hold good in the case of Parliament which derived its powers in relation to legislation in Part C States, not only from all the Lists but also from the residuary powers of taxation mentioned in article 248(2).
It was also held that section 2 of the Part C States (Laws) Act, 1950 was not repugnant to article 248(2), that the extended law became incorporated by reference in the Part C States (Laws) Act, and that the tax was thus one imposed by Parliament itself.
The respondents, therefore, contend that, as held in Mithan Lal 's case(1) when parliament enacted the Part C States (Laws) Act, 1950 and conferred power on the Central Government to extend any Act of a Part A State to any Part C State, that power of extension carried with it the plenary powers of Parliament, and even though the law so extended might have been outside the competence of the State Legislature which enacted it, when extended under the 267 authority of Parliament was a valid piece of law in Part C State.
The rival contentions may be reduced to the proposition that if the State Legislature of Vindhya Pradesh extended the Central Provinces and Berar Sales Tax Act, then the extended Act would suffer from the disability pointed out in Gannon Dunkerley 's case (1), but if the Central Provinces and Berar Act was extended by the Notification under the Part States (Laws) Act, 1950, then it must be treated as incorporated in that Act and to have the authority of Parliament which, in relation to Part C States, had no limitations whatever.
We have, therefore, to see whether the Central Provinces and Berar Sales Tax Act, 1947 can be said to have been extended for the first time by the Vindhya Pradesh Legislature in 1952 when it passed the Vindhya Pradesh Laws (Validating) Act, 1952 to the exclusion of the order contained in the Notification No. section R. O. 6, or whether the Act continued to be in force in Vindhya Pradesh even before, and all that the Vindhya Pradesh Act did was to remove any doubts about its validity.
The contention on behalf of the petitioner is that the Notification dated December 29, 1950 was invalid in its latter part, as decided by this Court in the case (2).
That portion dealt with the repeal of Ordinance 2 of 1949, and if the Notification was invalid in that part, then the Central Provinces and Berar Sales Tax Act, which was extended by the opening part, never came into force.
Mr. Viswanatha Sastri contended that the notification must be looked at compendiously, and that it was impossible to think that the Central Government would have extended the Central Provinces and Berar Sales Tax Act, if the earlier Ordinance still continued to operate.
He relied in this connection upon the observations of this Court in Pesikaka 's case (3) to urge that the 268 Notification which was beyond the powers of the Central Government in its latter part must be regarded as a nullity, and contended that if the invalid portion of the Notification was fundamental to the operation of the valid, then the valid portion also must equally fail because it could not have been intended that two laws on the same topic were to operate simultaneously in Vindhya Pradesh.
According to him, the extension of the Central Provinces and Berar Act could not and would not have been made, if the Ordinance had not been first repealed.
Section 29 which was added, though composed of two parts, was, according to him, really a part of a single scheme and the repeal of the Ordinance and the extension of the Central Provinces and Berar Act could stand or fall together, and since the Ordinance was never validly repealed, it continued to operate in Vindhya Pradesh till its repeal on October 31, 1951, by the Part C States (Miscellaneous Laws) Repealing Act, 1951, and when the Act repealed it from December 29, 1950, the effect was that there was no sales tax law in operation in Vindhya Pradesh, because the Part C States (Miscellaneous Laws) Repealing Act, 1951, did not enact or extend any law on the subject of sales tax in or to Vindhya Pradesh.
According to him, till the enactment of the Vindhya Pradesh Laws (Validating) Act 6 of 1952 on January, 8, 1953 there was no law imposing sales tax in Vindhya Pradesh, and the law was then made by the Legislature of Vindhya Pradesh by extending the Central Provinces and Berar Sales Tax Act from April 1, 1951.
He therefore, contended that since the powers of the Vindhya Pradesh Legislature did not include the power of imposing sales tax on building materials, this Act of the Vindhya Pradesh Legislature, if it sought to impose sales tax on building materials, fell within the ruling in Gannon Dunkerley 's case (1) and must be declared as of no effect.
He also referred to Act 9 of 1953 269 passed by the Vindhya Pradesh State Legislature, by which the Act was further amended, and stated that the extended Act, as amended, owed its existence neither to Parliament nor to the Central Government acting under the Part C States (Laws) Act but to the Vindhya Pradesh Laws (Validating) Act, 1952 (6 to 1952) and the Vindhya Pradesh Amendment Act, 1953 (9 of 1953).
There is a fundamental fallacy involved in this reasoning.
We are considering the applicability of the Central Provinces and Berar Sales Tax Act as extended to Vindhya Pradesh.
The Vindhya Pradesh Amending Act made only verbal changes, but did not alter the structure of the tax.
No doubt, that Act, contained certain provisions under which sales of building materials are taxable, and if the authority to tax the so called sales emanated from a State Legislature, then the law would fail.
But we have to remember, in this connection, that the law was first extended to Vindhya Pradesh by the Central Government acting under the authority of Parliament legislating for a Part C State.
Parliament and the Central Government were not subject to the disabilities pointed out in Gannon Dunkerley 's case (1), and the matter was covered by the decision of this Court in Mithan Lal 's case (2).
Even if the Notification, section R. O. No. 6, failed to repeal ordinance 2 of 1949, Parliament by its own law effaced that Ordinance in Vindhya Pradesh from December 29, 1950, and enacted that the Ordinance shall be deemed to be repealed from that day.
After the passing of the Repealing Act by parliament, it is impossible to argue that Ordinance 2 of 1949 continued in Vindhya Pradesh down to January 8, 1953, because by fiction the Ordinance was repealed from December 29, 1950.
Parliamentary legislation, therefore, came to the rescue, so to speak, of the Notification by making room for the extension of the Central Provinces and 270 Berar Act by repealing Ordinance 2 of 1949 which the Notification proprio vigore was unable to achieve as laid down in the case(1).
The Notification of the Central Government (section R. O. No. 6) and Act 66 of 1951, therefore concurred in removing the Ordinance on December 29, 1950 and in extending the Central Provinces and Berar Sales Tax Act in its place on the same date.
Mr. Viswanatha Sastri argued, on the strength of ruling of this Court in Deepchand vs State of Uttar Pradesh (2) that the validity of a law must be judged as on the date on which it was passed, and if the law was invalid on that date, then the law must be deemed not to have existed at all, unless it was later re enacted.
The passage relied upon is as follows: "The validity of a statute is to be tested by the constitutional power of a legislature at the time of its enactment by that legislature and, if thus tested, it is beyond the legislative power, it is not rendered valid without re enactment if later, by constitutional amendment, the necessary legislative power is granted.
An after acquired power cannot, ex proprio vigore, validate a statute void when enacted." (p. 24).
This argument would be applicable if we were to consider that Notification No. section R. O. 6 in isolation, and the question was one of validation of that Notification.
The Notification is being questioned, because it sought to repeal Ordinance 2 of 1949, which it could not do.
But, today we are not in a position to say that Ordinance 2 of 1949 continued in Vindhya Pradesh, because Parliament by the Part C States (Miscellaneous Laws) Repealing Act, 1951 has enacted that the said ordinance must be deemed to have been repealed from December 29, 1950.
Indeed, in the ruling 271 of this Court at the same page are cited passages from Willoughby on Constitution of the United States (2nd Edn.) Vol. 1, p. 10 based on the decision in John M. Wilkerson vs Charles A. Rahrer (1) to the effect that if the cause of the unconstitutionality is removed then the law does not need to be re enacted.
The facts of this case are entirely different from those in Deepchand 's case (2).
The extended law did not depend on the repeal of the earlier law for its validity.
It would have been operative, even if the earlier law was not repealed; but the earlier law was, in fact, repealed from December, 29,1950, and no question of conflict between the new and the old law ever arose.
Parliament by repealing the ordinance rendered the ineffective portion of the Notification a mere surplusage.
The necessary result thus was that its operative part survived and the Central Provinces and Berar Sales Tax Act, 1947 was validly extended to Vindhya Pradesh, and was valid law as laid down in Mithanlal 's case (3).
It did not suffer from the defects pointed out by the this Court in Gannon Dunkerley 's case (4), as it was not enacted or extended by the State Legislature.
It remains to consider the last argument on this point, and it is that the Central Provinces and Berar Sales Tax Act was re extended to Vindhya Pradesh by Act 6 of 1952, and thus owed its existence to a law made by a State Legislature which was incompetent to enact a law that building materials in a works contract, which was entire, were liable to sales tax.
The preamble of the Act shows that it was enacted to remove certain doubts which were entertained as to whether the extended Sales Tax Act became operative only from October 31, 1951 when Act 66 of 1951 was passed, or from an earlier date, viz., April 1, 1951, from which date it was brought into force in 272 Vindhya Pradesh by Notification No. 52 (Econ.), dated March 20, 1951.
To remove these doubts, the Vindhya Pradesh Laws (Validating) Act, 1952, enacted with the assent of the President, declared by section 2 (already quoted) that the Central Provinces and Berar Sales Tax Act had been and "shall be deemed to be in force in Vindhya Pradesh from April 1, 1951.
" This declaration did not extend prorio vigore the Central Provinces and Berar Sales Tax Act, but only declared that it must be deemed to be validly in force from April 1, 1951.
Section 7, on which much reliance has been placed, may be quoted again: "Repeal and savings: As from the dates of the actual enforcement of the Acts specified in Section 2 of this Act the corresponding laws in force in Vindhya Pradesh immediately before the said dates shall be deemed to have been repealed without prejudice to anything done or suffered thereunder or any right, privilege, obligation or liability acquired, accrued or incurred thereunder before the aforesaid dates" It is said that, if the two sections are read together they mean that the Central Provinces and Berar Sales Tax Act was freshly extended from April 1, 1951 by the Vindhya Pradesh Act and any law made by any authority earlier was freshly repealed to make room for the extension.
This argument, in our opinion, is erroneous.
To begin with, the powers of the Vindhya Pradesh Legislature were circumscribed by section 22 of the Government of part C States Act, 1951, quoted earlier.
Under that section, the powers of the State Legislatures did not extend to making laws repugnant to any law made by Parliament.
The Explanation defines the expression "law made by Parliament", and excludes a law which provides for the extension to the State of any law in force 273 in any other part of the territory of India.
The Vindhya Pradesh Legislature, however, did not repeal either section 2 of the Part C States (Laws) Act or the Notification, and all that the Legislature did was to add its own authority by a declaration, to the laws earlier extended.
The law was extended first by Notification S.R.O. No. 6 on December 29, 1950, but it was brought into force only by Notification No. 52 (Econ.) dated March 20, 1950 from April 1, 1951.
The Notification, section R. O. No. 6 had substituted for sub s.(3) of section 1 of the Central Provinces and Berar Sales Tax Act, the following: "(3) It shall come into force on such date as may be notified by the Central Government in the Official Gazette.
" Till the Notification No. 52 (Econ.) was made, the Act was extended but was not in force in Vindhya Pradesh.
There is a difference between the extension of a law subject to its being brought into force latter and its coming into force on a later date.
Section 7 of Act 6 of 1952 repealed only the laws in force prior to the date on which the Central Provinces and Berar Sales Tax Act was brought into force.
It speaks of "laws in force in Vindhya Pradesh immediately before April 1, 1951", and the law which was in force immediately before that date was not the Central Provinces and Berar Sales Tax Act which had not been brought into force, but might be Ordinance 2 of 1949, if it had not been successfully repealed earlier.
The former Act was extended on December 29, 1950, but was not brought into force till April 1, 1951, and the section speaks of "laws in force".
The section, therefore, refers to Ordinance 2 of 1949, which would be in force immediately before April 1, 1951, if not successfully repealed, but not to the Central Provinces and Berar Sales Tax Act which was only extended before that date but had not been brought into force.
In other words, section 7 of the Act does no more than replea 274 from April 1, 1951 (if repeal was at all necessary) Ordinance 2 of 1949, which might be supposed to have continued as law till October 31, 1951, when it was repealed by Act 66 of 1951.
In point of fact and also in law, it was really repealed from December 29, 1950 under the Repealing Act 66 of 1951.
The Vindhya Pradesh Act 6 of 1952 cannot, therefore, be said to have enacted for the first time that the Central Provinces and Berar Sales Tax Act shall come into force from April 1, 1951 in Vindhya Pradesh.
It only declared what was a legal fact even without this declaration.
Nor did the Central Provinces and Berar Sales Tax Act owe its existence to Act 6 of of 1952 only declared what the result of the earlier laws was, and added the authority of the Vindhya Pradesh Legislature to remove doubts and to save the law from any attack on the ground that the wrong Legislature had repealed the Ordinance or extended the Central Provinces and Berar Sales Tax Act.
In our opinion, this argument cannot be accepted.
One further argument was advanced to which we have not referred so far, and which may now be noticed.
It is that after the reorganisation of the States, Madhya Pradesh has as many as four Sales Tax Acts.
It is contended that a person belonging to the area of the former State of Madhya Pradesh is not liable to sales tax on building materials in a works contract under the Central Provinces and Berar Sales Tax Act because of the decision in Pandit Banarsi Das 's case(1), but another person living in the area forming part of the former Vindhya Pradesh is liable to sales tax under the same Act, as extended to Vindhya Pradesh.
This, it is said, is patently contrary to the spirit of the equal protection clause in article 14.
The laws in different portions of the new State of Madhya Pradesh were enacted by different Legislatures, and under section 119 of the States Reorganisation 275 Act, all laws in force are to continue until repealed or altered by the appropriate Legislature.
We have already held that the sale tax law in Vindhya Pradesh was validly enacted, and it brought its validity with it under section 119 of the States Reorganisation Act, when it became a part of the State of Madhya Pradesh.
Thereafter, the different laws in different parts of Madhya Pradesh can be sustained on the ground that the differentiation arises from historical reasons, and a geographical classification based on historical reasons has been upheld by this Court in M. K. Prithi Rajji vs The State of Rajasthan(1) and again in The State of Madhya Pradesh vs The Gwalior Sugar Co. Ltd.(2).
The latter case is important, because the sugarcane cess levied in the former Gwalior State but not in the rest of Madhya Bharat of which it formed a part, was challenged on the same ground as here, but was upheld as not affected by article 14.
We, therefore, reject this argument.
In the result, the Writ Petitions fail, and are dismissed; but in the circumstances of the case we make no order about costs.
| The appellant was doing business of construction as contractor under Public Works Department in Vindhya Pradesh, now Madhya Pradesh.
He challenged the levy of Sales Tax on building materials supplied by him for the year 1953 54 to 1958 59.
The contention of the Petitioner was that the tax was not leviable in view of the decision of the Supreme Court in Gannon Dunkerley 's case and Pandit Banarsi Das 's case.
The respondents claimed that the tax was leviable because the case fell within the derision in Mithan Lal 's case.
The Rajpramukh of the United State of Vindhya Pradesh promulgated the Vindhya Pradesh sales Tax Ordinance 2 of 1949.
On Vindhya Pradesh becoming Part C State of India the said ordinance of Rajpramukh was applied to the whole of it with effect from April 1, 1950, by notification No. 7 of March 28, 1951.
Under section 2 of the Part C States (Laws) Act, 1950, by notification No. S.R.O. 6 dated December 29, 1950, the Central Provinces & Berar Sales Tax Act 1947, was extended to Vindhya Pradesh.
The notification also added section 29 to the Madhya Pradesh Act so extended, by which ordinance 2 of 1949 was repealed.
By reason of the decision of this Court in the Delhi Laws Act case the addition of section 29 was unconstitutional.
Parliament then enacted the Part C States (Misc.
Laws) Repealing Act (66 of 1951).
By section 2 of the Act the Vindhya Pradesh Sales Tax ordinance, 1949, was deemed to have been repealed from December 29, 1950.
The Vindhya Pradesh Laws (Validity) Act, 1952, also provided and declared that Central Provinces & Berar Sales Tax Act, 1947, which was extended to Vindhya Pradesh under section 2 of the Part C States Laws Act, 1950, has been and shall be deemed to be in force in Vindhya Pradesh from April 1, 1951.
The said C. P. & Berar Sales Tax Act defined contract, goods, sales etc, and by these definition the materials used or supplied by 258 a building contractor in the constructions etc, were made liable to Sales Tax in accordance with the schedule rates.
The question is, whether C. P. been extended for the first time by the Vindhya Pradesh legislature in 1952, when it passed the Vindhya Pradesh Laws (Validating) Act, 1952, to the exclusion of the order contained in the notification No. S.R.O. 6 or whether the Act continued to be in force in Vindhya Pradesh even before and all that the Vindhya Pradesh Act did as to remove any doubts about its validity.
The rival contentions of the appellant and the respondents are reduced to the proposition that if the State Legislature of Vindhya Pradesh extended the Central Province and Berar Sales Tax Act, the extended Act would suffer from disability pointed out in Gannon Dunkerley 's case, but if the said Act was extended by the notification under Part C States (Laws) Act, 1950, then it must be treated as incorporated in the Act and to have the authority of Parliament which, in relation to Part C States, had no limitation whatever.
^ Held, that the extended law in the C. P. & Berar Sales Tax Act, 1947, did not depend on the repeal of the earlier law for its validity.
It would have been operative, even if the earlier law was not repealed, but the earlier law was in fact repealed from December 29, 1950, and no question of conflict between the new and the old law ever arose.
Held, further, that the Vindhya Pradesh Amending Act made only verbal changes, but did not alter the structure of the tax.
No doubt, that Act contained certain provisions under which sales of building materials are taxable, and if the authority to tax the so called sales emanated from a State Legislature, then the law would fail.
The law was first extended to the Vindhya Pradesh by the Central Government acting under the authority of Parliament legislating for a Part C State.
Parliament and the Central Government were not subject to the disabilities pointed out in Gannon Dunkerley 's case, and the matter was covered by Mithan Lal 's case.
Even if the notification S.R.O. No. 6 failed to repeal ordinance 2 of 1949 Parliament by its own law effaced that ordinance in Vindhya Pradesh from December 29, 1950, and enacted that ordinance shall be deemed to be repealed from that day.
The ordinance 2 of 1949 did not continue in Vindhya Pradesh down to January 8, 1953 because by fiction the ordinance was repealed from December 29, 1950.
Held, also, that the laws in different portions of new State of Madhya Pradesh were enacted by different legislatures and under section 119 of the States Reorganisation Act, all 259 laws in force in a state were to continue until repealed or altered by the appropriate Legislature.
The different sales tax laws in different parts of Madhya Pradesh are valid on the ground that the differentiation arises from historical reasons, and a geographical classification based on historical reasons is not affected by article 14 of the Constitution.
State of Madras vs Gannon Dunkerley & Co. ; , Pandit Banarsidas vs State of Madhya Pradesh, ; , Mithan Lal vs State of Delhi; , In re the ; , , Gannon Dunkerley vs State of Madras, , Behram Khurshed Pesikaka vs The State of Bombay, , Deepchand vs State of Uttar Pradesh, [1959] Supp. 2 S.C.R. S, John M. Wilkerson vs Charles A. Rahrer, (1891) 140 U. section 545, M. K. Prithi Rajji vs State of Rajasthan C. A. No. 327/56 decided on 2 11 60 and State of Madhya Pradesh vs The Gwalior Sugar Co. Ltd. C. A. Nos. 98 and 99 of 1957 decided on 30 11 1960, referred to.
| Allowing the appeal by special leave and answering against the assessee, the Court.
^ HELD: Per Bhagwati,J. (Concurring with Sen and Venkataramiah, JJ.) (1) The expression "Registered dealer" is used in section 8 (ii) in its definitional sense to mean a dealer registered under section 22 of the Bombay Sales Tax Act and it does not include a dealer under the Central Sales Tax Act.
[875A] (2) The object of section 8 is to prevent a multiple point taxation on goods specified in Schedule C and for imposition of single point tax on them under the Act.
If a dealer is registered only under the Central Act and not under the Bombay Act, it would mean that he is not liable to pay tax under the Bombay Act and in that event, even if he has sold goods specified in Schedule 'C ', to a registered dealer under an intra State sale, no tax would be payable by him on such sale and if the purchasing dealer is also to be exempt from tax in respect of re sale effected by him, the result would be that the goods would escape tax altogether and not suffer even single point tax.
That is not the intendment of the legislature in enacting section 8(ii); on the contrary it would frustrate the very object of that section.
The situation would be the same even where the sale effected by the dealer registered under the Central Act is an inter State sale.
That sale would undoubtedly be taxable under the Central Act but there is no reason why the Gujarat State would give exemption to re sale of goods in respect of which, at the time of the first sale tax has been levied under the Central Act of which the benefit has gone to another State.
Moreover, in such a case, the first sale being an inter State sale, would be taxable at a fixed concessional rate under section 8(1)(a) or at the rate of 7% or at a rate equal to or twice the rate applicable to the sale of such goods in the State of the selling dealer, under clause (a) or (b) of sub section (2) of section 8 of the Central Act and if that be so, it is difficult to understand why the Legislature should have insisted, for attracting the applicability of section 8(ii), that the goods re sold by the dealer should at the time of their first sale be goods specified in Schedule 'C '.
[873F G, 874C G] 871 (3) Sections 4 and 8(ii) of the Bombay Act are distinct and independent provisions operating on totally different areas.
The legal fiction in sub section (1) of section (4) is created for a specific purpose and it is limited by the terms of sub section (2) of section 4 and it cannot be projected in section 8(ii).
If a dealer is not registered under the Bombay Act, it could only be on the basis that he is not liable to pay tax under the Bombay Act, but even so, section 4 sub section (1) provides that if he is registered under the Central Act, he would be liable to pay tax under the Bombay Act in respect of the transactions of sale set out in that section.
This liability arises despite the fact that the dealer, not being liable to pay tax under section 3 of the Bombay Act, is not registered under that Act.
The dealer not being registered under the Bombay Act, the machinery of the Bombay Act would not of itself apply for the recovery of tax from him.
Section 4 sub section 2, therefore, enacts that every dealer who is liable to pay tax under sub section (1) shall, for the purpose of sections 32 to 38 and 46 to 48 be deemed to be a registered dealer.
Sections 32 to 38 and 46 to 48 are machinery sections and it is for the purpose of making the machinery of these sections applicable for recovery of the tax imposed on the dealer under sub section (1) of section 4 that an artificial fiction is created deeming the dealer to be a registered dealer, that is, a dealer registered under section 22 of the Bombay Act.
Per Sen, J. (On behalf of himself and Venkataramiah, J.).
(1) It is a well settled principle that when a word or phrase has been defined in the interpretation clause, prima facie that definition governs whenever that word or phrase is used in the body of the statute.
But where the context makes the definition clause inapplicable, a defined word when used in the body of the statute may have to be given a meaning different from that contained in the interpretation clause; all definitions given in an interpretation clause, are, therefore, normally, enacted subject to the usual qualification "unless there is anything repugnant in the subject or context", or "unless the context otherwise requires".
Even in the absence of an express qualification to that effect such a qualification is always implied.
The expression "registered dealer" having been defined in section 2(25) of the Bombay Act as having a particular meaning, that is, a dealer registered under section 22 of the Act, it is that meaning alone which must be given to it in interpreting clause (ii) of section 8 of the Bombay Act unless there is anything repugnant to the context [880B D] There being no obscurity in the language of clause (ii) of section 8 of the Bombay Act, it is clear that no deduction is claimable in respect of re sales of goods purchased from a dealer registered under the Central Act, who is not a registered dealer within the meaning of section 2(25) of the Act.
It follows that the expression "registered dealer" in clause (ii) of section 8 of the Act must bear the meaning of that expression as given in section 2(25) of the Act.
If the meaning of the section is plain it is to be applied whatever the result, [879H 880A] (2) The meaning of a word or expression defined may have to be departed from on account of the subject or context in which the word had been used and that will be giving effect to the opening sentence in definition section, namely, "unless the context otherwise requires".
In view of this qualification, the Court has not only to look at the words but also to look at the context, the collocation and the object of such words relating to such matter and interpret the meaning intended to be conveyed by the use of the words in a particular section.
But where there is no obscurity in the language of the section, 872 there is no scope for the application of the rule ex visceribus actus.
This rule is never allowed to alter the meaning of what is of itself clear and explicit.
[881E G] Bywater vs Brandling, ; Rein vs Lane, and Jobbins vs Middlesex County Council, Craies, , held inapplicable.
(3) The provisions of section 4, sub section (3) of section 7 and clause (ii) of section 8 of the Bombay Act operate in three different fields.
While section 4 of the Act provides that a registered dealer under the Central Act who may not be liable to pay tax under section 3 of the Act may nevertheless in certain contingencies be liable to pay tax, sub section (3) of section 7 provides for the levy of a single point tax on sale in the course of inter State trade and commerce of declared goods, to bring the Act in conformity with clause (a) of section 15 of the Central Act.
The object and purpose of enacting the provisions of section 8 are entirely different, namely, to lay down the mode of computation of the turnover of sales or purchases of a registered dealer for the imposition of a tax.
Clause (ii) of section 8 allows for deduction of re sale from the turnover of such registered dealer when the goods are purchased from a registered dealer, that is, a dealer registered under section 22 of the Act.
In effect, section 8 deals with transactions of sale or purchase taking place within the State.
The disallowance of deduction claimed by the assessee under clause (ii) of section 8 of the Act, therefore, would not result in double taxation of the same goods.
[881H 882C, 883C] While it is true that the Baroda dealer being a dealer registered under section 7 of the Central Sales Tax Act, in the instant case, was in certain contingencies, liable to pay tax under section 4 of the Act, but that circumstance by itself would not make him a "registered dealer" within the meaning of section 2(25) of the Act.
If the legislature really intended that the expression "registered dealer" in clause (ii) of section 8 should take within its ambit a dealer registered under the Central Sales Tax Act, upon whom liability to pay sales tax is imposed by section 4 of the Bombay Act, it would have said so in the clear words section (2) of section 4.
The legal fiction in sub section
(2) of section 4 is created for a limited purpose, namely, to make section 4 a self contained code which not only imposes a charge of tax and lays down the rate structure, but also provides the machinery for assessment and recovery of tax and penalty.
The legal fiction contained in sub section
(2) of section 4 of the Act cannot be stretched any further.
[883D E, G]
| The Petitioner, representing a Social Organisation, has written a letter alleging environment pollution in some villages and the adjoining Sarnath Temple.
The letter was treated as Writ Petition under Article 32 of the Constitu tion of India.
It was alleged that the smoke and dust emit ted from the Chimneys of Respondent No. 3, viz., an oil Mill and a refinery plant in the area, and the effluents dis charged by the plants has been causing serious environmental pollution in the thickly populated area, leading to epidemic diseases.
It was further alleged that even the flora was badly affected by pollution.
Petitioner prayed for direc tions to check the pollution.
On behalf of Respondent No. 3, it was contended that it had complied with the provisions of Air (Prevention and Control of Pollution) Act, 1981 and the and there was no com plaint whatsoever.
It was further stated that the petitioner was an anti social element and his only aim was to blackmail and extract money from people like Respondent No. 3, and that a criminal case has already been filed against him, for such activities.
Dismissing the writ petition, HELD: 1.
Article 32 is a great and salutary safeguard for preservation of fundamental rights of the citizens.
Every citizen has a fundamental right to have the enjoyment of quality of life and living as contemplated by Article 21 of the Constitution of India.
Anything which 740 endangers or impairs by conduct of anybody either in viola tion or in derogation of laws, that quality of life and living by the people is entitled to be taken recourse of Article 32 of the Constitution.
But this can only be done by any person interested genuinely in the protection of the society on behalf of the society or community.
This weapon as a safeguard must be utilised and invoked by the Court with great deal of circumspection and caution.
Where it appears that this is only a cloak to "feed fat ancient grudge" and enemity, this should not only be refused but strongly discouraged.
While it is the duty of this Court to enforce fundamental rights, it is also the duty of this Court to ensure that this weapon under Article 32 should not be misused or permitted to be misused creating a bottleneck in the superior Court preventing other genuine violation of fundamental rights being considered by the Court.
That would be an act or a conduct which will defeat the very purpose of preservation of fundamental rights.
[743B E] Bandhu Mukti Morchay.
Union of lndia & Ors.; , , referred to.
This petition is legally devoid of any merit or principles of public interest and public protection.
There was no fundamental right violation or could be violative if the allegations of the so called champions on behalf of the society are scrutinised.
[743G] 2.2.
Prima facie the provisions of the relevant Act, namely, the Air Pollution Control Act have been complied with and there is no conduct which is attributable to re spondent No. 3 herein leading to pollution of air or ecolog ical imbalances calling for interference by this Court.
The orders passed by the Pollution Control Board also indicate that there were no instances of any violation.
There was no complaint from anybody apart from the petitioner, or any authority as to the non compliance of any statute by Re spondent No. 3.
[743A B; 742G]
| The appellant, a dealer in pulses in Vijayawada in Madras State made certain sales outside the State during the assessment year 1949 50.
The appellant claimed exemption from sales tax of sales effected outside the State during the year but the Deputy Commercial Tax Officer disallowed the claim.
A first appeal and a revision petition to the Board of Revenue were unsuccessful.
The appellant thereafter brought a suit for the recovery of tax collected from him with interest contending that part of sales effected outside the State could not be taxed under article 285(1)(a) of the Constitution.
The Trial Court held that the assessment to tax of the sales during the period from April 1, 1949 to January 25, 1950 ' could not be impeached but the sales from January 26 to March 31 outside the State were not liable to sales tax; as there was a single order of assessment 'for the whole year, the entire assessment was illegal.
In appeal to the High Court, and upon a direction from that Court, the Trial Court gave a finding that deliveries of the goods were not made for purposes of consumption within the delivery State only.
The High Court.
therefore.
allowed the appeal holding that the appellant could not claim the benefit under Article 286(1)(a) in the absence of evidence as to how the whole sales disposed of the goods after obtaining delivery and therefore the entire turn over for the year 1949 50 would be assessable to tax.
In the appeal to this Court, it was contended inter alia (i) that the High Court was in error in holding that the burden of proof was on the appellant to show that there was not only delivery of goods for consumption within the delivery States but there was actual consumption of goods in those States: (ii) the assessment must be treated as an indivisible one and if a part of the assessment was illegal, the entire assessment must be deemed to be infected and treated as invalid.
HELD: Allowing the appeal, (i) The part of the turnover which related to sales from January 26, 1960 to March 31.
1960 was not liable to sales tax and the levy of sales tax from the appellant to this extent was illegal.
It was rightly contended that the appellant did not carry the burden of showing that there was not only delivery of goods for consumption within the States but that the goods were actually consumed in those States.
[749 C] India Copper Corporation Ltd. vs The State of Bihar, 12 S.T.C. 56 relied upon.
744 (ii) In the present case though there was a single order of assessment for the period from April 1, 1949 to March 31, 1950, the assessment could be split up and dissected and the items of sales separated and taxed for different periods.
It was possible to ascertain the turnover of the appellant for the pre Constitution and post Constitution periods from the figures furnished in the plaint by the appellant himself.
It was, therefore.
open to the Court in these circumstances to sever the illegal part of the assessment and give a declaration with regard to the illegal part alone instead of1 declaring the entire assessment void.
[752 B] Case law referred to.
| The respondent Society formed a housing colony, laid out public roads and set apart public common places for parks.
play grounds, schools, library, hospital and club for the benefit of the members of the colony.
The respondent passed a resolution for handing over the roads and the other common places to the appellant Panchayat, but later, passed another resolution cancelling it.
The appellant, thereupon, filed a suit for an injunction restraining the respondent from obstructing the appellant in the exercise of its statutory duties in relation to the roads and other common places.
The High Court, on appeal, held that the streets and the roads in the colony alone would vest in the appellant under the Madras Village Panchayats Act, 1950 and that, an injunction could be granted only with respect to them, but not, with respect to the other amenities which the respondent had provided for the residents of the colony.
In appeal to this Court, it was contended that the amenities excluded would also vest in the appellant under section 58 of the Act, especially because they had been dedicated to the public.
HELD:The scope of the section must be confined to communal property and income of the Panchayat which, by custom, belong to the villagers in common, or, has been administered for their benefit as a matter of custom.
Therefore, the section cannot be extended to amenities such as parks, play grounds etc.
provided by the respondent for the benefit of the members of the colony; and dedication is not a relevant circumstance in considering its scope and meaning.
[121 E F; 122 A B].
| In a suit filed in the High Court for a declaration and relief in respect of several properties, the Official Receiver of the High Court was appointed Receiver.
On the request of the parties, the official Receiver, decided to sell one of the properties with the permission of the Court.
The price of the property was fixed at Rs. 3.5 lakhs.
The appellant offered a sum of Rs. 4 lakhs for purchase of the property, and by his advocate 's letter enclosed a draft for Rs. 1 lakh, being 1/4 of the amount.
A meeting was held in the presence of the plaintiff and their counsel, and at the meeting the offer received from the appellant was considered and it was decided that the offer of Rs. 4 lakh by bank draft.
The Official Receiver accepted the offer of the appellant, communicated the acceptance and requested the appellant to deposit the balance amount.
The Official Receiver, thereafter moved the High Court for directions to remove respondents 1 to 4 on the ground that they had trespassed into the property a few months earlier.
Respondents 1 to 4 moved an application for being impleaded in the suit and contended that they were residing with their families under a licence since 1975 and had constructed pucca huts thereon and that with the knowledge of this continuous possession, the parties to the suit have filed the suit among themselves without impleading them (respondents 1 to 4).
583 The Single Judge rejected the aforesaid contentions of respondents 1 to 4 and held that though they were prepared to offer the sum of Rs. 1 lakh more than the appellant the property could not be sold to them.
The Division Bench, however allowed their appeal, directed respondents 1 to 4 to pay to the Official Receiver a sum of Rs. 1.25 lakhs immediately and the balance of Rs. 3.75 lakhs thereafter and on such payment ordered sale of the disputed property to respondents 1 to 4 and their 34 nominees on the ground that the Court should do social justice and in doing such justice no technicality of law would stand in its way.
Dismissing the Appeal to this Court, ^ HELD: [Per Fazal Ali & Sabyasachi Mukharji, JJ Majority] In administering justice social or legal jurisprudence has shifted away from finespun technicalities and abstract rules to recognition of human beings as human beings.
The Division Bench of the High Court had adopted the above approach, and no law is breached by the view taken by it.
It is improper for this Court in exercise of the discretion vested under article 136 of the Constitution to interfere with that decision.
[595 FG; 622A B] [Per Fazal Ali, J.] 1.
In our opinion, there appears to be some misapprehension about what actually social justice is.
There is no ritualistic formula or any magical charm in the concept of social justice.
All that it means is that as between two parties if a deal is made with one party without serious detriment to the other, then the Court would lean in favour of the weaker section of the society.
Social justice is the recognition of greater good to larger number without deprivation of accrued legal rights of anybody.
If such a thing can be done then indeed social justice must prevail over any technical rule.
It is in response to the felt necessities of time and situation in order to do greater good to a larger number even though it might detract from some technical rule in favour of a party.
Living accommodation is a human problem for vast millions in our country.[595B D] 2.
Call it social justice or solving a socioeconomic problem or give it any other name or nomenclature, the fact of the matter is that this was the best course in the circumstances that could have been adopted by the court.
Justice social, economic and political is preamble to our Constitution.
Administration of justice can no longer be merely protector of legal rights but must whenever possible be dispenser of social justice.
[595H 596A] 4.
The Division Bench of the High Court has done substantial justice by throwing aboard the technicalities particularly for the reason that courts frown over a champartous litigation or agreement even though the same may be valid.
The Division Bench by its decision got more 584 money for the owners on the one hand and one the other sought to rehabilitate the 38 families of the respondent who had already built permanent structures.
[597G H] In the instant case, the Division Bench was perfectly justified in accepting the offer of the respondents because: (a) the respondents were prepared to pay Rs. 1 lakh more than the appellant and the appellant did not pay the balance of Rs. 3 lakhs, (b) possession being 9/10th of title, the respondents being in actual possession would have no difficulty in becoming the owners, (c) respondents were prepared to purchase the property notwithstanding litigation, because if they became owners no one could challenge their title or possession.
The Single Judge completely ignored two material aspects: (a) that a bulk of the consideration money viz. Rs. 3 lakhs out of Rs. 4 lakhs was not paid by the appellant, and (b) that an owner also has right to impose certain conditions, and in exercise of that, the condition that the purchase would have to buy the land subject to the pending litigation was imposed [579C F; 5 6A D] (Per Varadarajan, J. dissenting) 1.
The Division Bench had no right or justification to alter or modify the earlier order made for the sale of the property which had become final, or to hold that a subsequent offer made by respondents 1 to 4 to purchase the property for Rs. 5 lakhs should be accepted merely because it appears to be advantageous to the owners of the property in the name of social justice.
[612F] 2.
The benefit claimed on behalf of respondents 1 to 4 which cannot called a right, for there is no corresponding obligation cannot be equated with or even brought anywhere near the social justice mentioned in the preamble of the Constitution.
[612G] 3.
Respondents 1 to 4 are trespassers in respect of the property which is in custodia legis and they are in contempt of the Court.
They cannot be allowed to continue to be in contempt and urge it as a ground for obtaining the benefit of the sale of the property in their favour.
If the appellant has not complied with any condition it may be ground for the owners and the Official Receiver not to accept his offer and refuse to sell the property to him and not for respondents 1 to 4 to raise any objection.
The offer has been accepted rightly or wrongly more than once and there fore the appellant may have a right to sue for specific performance of the contract on the basis of that acceptance by the official Receiver given with the approval of the parties.
The same is the position in regard to the delay of about a month in paying the balance of Rs.3 lakhs by the appellant.
[611D F] In the instant case, the property has been agreed to be sold by private treaty and the Official Receiver has been authorised to sell the property either by public auction or by private treaty.
The Court does not come into the picture in such a case and there is no need for the Court to approve 585 or confirm such sale.
The parties who are sui juris must be deemed to have known their interest best when they chose to approve the sale of the property for Rs. 4 lakhs in favour of the appellant notwithstanding the fact that respondents 1 to 4 had offered to purchase the property for Rs.5 lakhs.
The appeal has therefore to be allowed.
[612E; 613B] Everest Coal Company (P) Ltd vs State of Bihar & Others, [1974] 1 SCR P. 571 at P. 573, Kayjay Industries (P) Ltd. vs Asnew Drums (P) Ltd & Others, [1974] 3 SCR P. 678, Jibon Krishna Mukherjee vs New Bhee bhum Coal Co. Ltd. & Apr., [1960] 2 SCR P. 198.
Tarinikamal Pandit & Others vs Prafulla Kumar Chatterjee, [1979] 3 SCR P. 340, referred to.
(Per Sabyasachi Mukherji, J) 1.
The pendency of the proceedings under Section 145 of the Code of Criminal procedure and order, if any, passed thereon does not in any way affect the title of the parties to the disputed premises though it reflects the factum of possession.
[616D] Bhinka and Others vs Charan Singh, [1959] Supp. 2 S.C.R. P.798 referred to.
When the property is in custody of a receiver appointed by the court, the property is in the custody of the court and interference with such possession should not be encouraged and no party can acquire any title or right by coming in or over the property which is in the possession of the receiver or sanction of the court[618F] Halsbury 's Laws of England, 4th Edn., Vol, 39 pages 451,452 paragraph 890,891: Kerr On Receivers 16th Edn.
pages 121 referred to.
The concept to social justice is not foreign to legal justice or social well being or benefit to the community rooted in the concept of justice in the 20th century.
The challenge of social justice is primarily a challenge to the society at large more than to the court immediately.
Social justice is one of the aspirations of our Constitution.
But the courts, are pledged to administer justice as by law established.[620F] In the instant case, in formulating the concept of justice, however, the inarticulate factor that large number of human beings should not be dislodged from their possession if it is otherwise possible to do so cannot but be a factor which must and should influence the minds of judges.
It is true that the persons who were alleged to be in possession are with unclean hands, but they came for shelter and built in hutments.
They do not want to be rehabilitated at competitive bargain price.
In the circumstances they should not be denied rehabilitation on the ground of their original illegitimacy.
The felt necessities of time and in this case the convenience of the situation and the need for adjusting the rights of a larger number of 586 people without deprivation of any accrued right of anybody would be justice according to law.
Before social justice as something alien to legal justice, is rejected, it should be remembered that a meaningful definition of the rule of law must be based on the realities of contemporary societies and the realities and the realities of the contemporary societies are men are in acute shortage of living accommodation and if they are prepared to bargain and rehabilitate themselves on competitive terms, they should be encouraged and no technical rules should stand in their way.
That would be justice by highways ' and not infiltration 'by bye lanes '.
[621H 622B]
| The appellant Corporation assessed the immovable properties of the respondents to property tax for the year 1964 65 and 1965 66 on the basis of the 'flat rate ' method under the Bombay Provincial Municipal Corporation Act, 1949.
The assessments were challenged in the High Court but the petitions were dismissed.
While appeals were pending in this Court, the appellant initiated proceedings for the recovery of the taxes and attached the properties of the respondents.
The respondents challenged the attachment proceedings but their petitions were again dismissed.
In appeals against those orders in this Court the respondents prayed for interim stay, but this Court did not grant stay because the appellant undertook to return the amounts if the respondents succeeded.
This Court thereafter allowed the appeals by the respondents.
Meanwhile an amending Act entitled the Bombay Provincial Municipal Corporation (Gujarat, Amendment) Act, 1968, was passed introducing section 152A into the 1949 Act, but that provision was not brought to the notice of this Court.
However, when.
the respondents demanded refund of the amounts illegally collected from them the appellant did not comply and hence the respondents moved the High Court again.
Those petitions were allowed and the appellant appealed to this Court.
While the appeals were pending, the Bombay Provincial Municipal Corporation (Gujarat Amendment and Validity Provisions) Ordinance, 1969, was passed and sub section
(3) was introduced in s 152A. HELD : Under section 152A before a Corporation can retain any amount collected as property tax, there must be an, assessment according to law.
But in the present case there Were no 'assessment orders in accordance with the provisions of the 1949 Act and the rules as amended by the, Amending Act, 1968.
Therefore, the appellant was not entitled to retain, the amounts collected as the section does not authorise the Corporation to retain amounts illegally collected.
[293 G; 294 D] (2) Sub Section (3) of section 152A, commands the Corporation to refuse to refund the amount illegally collected despite the orders of this Court and the High Court.
It markes a direct inroad into the judicial powers of the State.
The Legislatures under the Constitution have, within prescribed limits, powers to make laws prospectively as well as retrospectively.
By exercise of those powers the legislature can remove the basis of a decision rendered by a competent, court thereby rendering the decision ineffective.
But, no legislature in this Country has power to ask the instrumentalities of the State to disobey or disregard the decisions given by courts.
Therefore, section 152A(3), introduced by the Ordinance is repugnant to the Constitution.
1294 H; 295 A C; 297 F] Shri Prithvi Cotton Mills Ltd. vs Broach Borough Municipality [1970] 1 S.C.R. Mahal Chand Sethia vs State of West Bengal Cr.
No. 75/69 dt.
289 10 9 69 and Janpada Sabha, Chhindwara vs Central Provinces Syndicate Ltd. and State of Madhya Pradesh vs Amalgamated Coal Fields Ltd. ; , followed.
The apart it authorises the Corporation to retain the amounts illegally collected and ' treat them as loans, that is, authorises the collection of forced loans which is impermissible under the Constitution.
State of Madhya Pradesh vs Ranojirao Shinde, [1968] 3 S.C.R. 489, followed.
| The appellant State of West Bengal was carrying on trade as owner and occupier of a market at Calcutta without obtaining a licence as required under section 218 of the Calcutta Municipal Act, 1951.
The respondent Corporation of Calcutta filed a complaint against the State for contravention thereof.
The trial Magistrate, accepting the State 's contention that the State was not bound by the provisions of the Act acquitted the State.
on appeal, theHigh Court convicted the State and sentenced it to a fine, holding thatthe State was as much bound as a private citizen to take out a licence.
In appeal to this Court the appellant, relying on this Court 's decision inDirector of Rationing vs Corporation of Calcutta, ; ,contended that the State was not bound by the provisions of a statute unless it was expressly named or brought in by necessary implication and this common law rule of construction, accepted as the law in India was "law in force" within the meaning of article 372 of the Constitution and that in any event by necessary implication the State was excluded from the operation of section 218 of the Act.
Held:Per Subba Rao C.J., Wanchoo, Sikri, Bachawat, Ramaswami, Shelat, Bhargava and Vaidialingam, JJ.
(Shah, J. dissenting) : The State was not exempt from the operation of section 218 of the Calcutta Municipal Act, 1951 and was rightly convicted.
Per Subba Rao C. J. Wanchoo, Sikri, Ramaswami.
Shelat, Bhargava and Vaidialingam, JJ.
(i) The Common Law rule of construction that the Crown is not, unless expressly named or clearly intended, bound by a statute,, was not accepted as a rule of construction throughout India and even in the Presidency Towns, it was not regarded as an inflexible rule of construction.
It was not statutorily recognized either by incorporating it in different Acts or in any General Clauses Act; at the most, it was relied upon as a rule of general guidance in some parts of the country.
The legislative practice establishes that the various legislatures of country provided specifically, exemptions in favour of the Crown 171 whenever they intended to do so indicating thereby that they did not rely upon any presumption but only on express exemptions.
Even those courts that accepted it considered it only as a simple canon of construction and not as a rule of substantive law.
In the City of Calcutta there was no universal recognition of the rule of construction in favour of the Crown.
The Privy Council, in Province of Bombay vs Corporation of the City of Bombay, (1946) L.R. 73 I.A. 27 gave its approval to the rule mainly on concession made by counsel.
[180 D G; 183 H; 184 E F; 186 D G] The archaic rule based on the prerogative and perfection of the Crown has no 'relevance to a democratic republic it is inconsistent with the rule of law based on the, doctrine of equality and introduces conflicts and anomalies.
The normal construction, namely, that an enactment applies to citizens as well as to State unless it expressly or by necessary implication exempts the State from its operation, steers clear of all the anomalies and is consistent with the philosophy of equality enshrined in the Constitution.
B] If a rule of construction accepted by this Court is inconsistent with the legal philosophy of the Constitution it is the duty of this Court to correct its self and lay down the right rule.
This Court must more readily do so in constitutional matters than in other branches of law.
[176 B C] Director of Rationing vs Corporation of Calcutta, ; ,, reversed.
Province of Bombay vs Corporation of the City of Bombay, (1946) L.R. 73 I.A. 271, held inapplicable.
Bengal Immunity Co. vs State of Bihar, , referred to.
Case law discussed.
(ii)Even assuming that the common law rule of construction was accepted as a canon of interpretation throughout India the rule is not "law in force" within the meaning of Article 372 of the Constitution.
There is an essential distinction between a law and a rule of construction.
A rule of construction adopted to ascertain the intention of the legislature is not a rule of law.
[187 D] (iii)The State is not excluded from the operation of section 218 of the Act by necessary implication.
The State is not the payer as well as the receiver of the fine, or the fine, when levied goes to the municipal fund.
Though the expression fine ' is used, in effect and substance, section 541 is a mode of realization of the, fee payable in respect of the licence.
The provision for imprisonment in default of fine is only an enabling provision and the court is not bound to direct the imprisonment of the defaulter.
[189 D H; 190 A B] Per Bachawat, J : (i) This Court should have in Director of Rationing and Distribution vs Corporation of Calcutta, , refused to recognise the rule that the Crown is not bound by a statute save by express words or by necessary implication.
In India the Crown never enjoyed the general prerogative of overriding a statute and 'standing outside it.
The doctrine of the general immunity of the Crown from the operation of statutes so far as it is based upon the 'royal prerogative was never imported into India.
Nor is there any compelling reason why the courts in India should not give full effect to the general words of a statute on the basis of some artificial rule of construction prevailing in England.
The bulk of the Indian legislation proceeds upon the assumption that the Government will be bound unless the contrary is stated.
The 172 rule,as rule of construction, never gained a firm foothold in untilthe Privy Council decision in Province of Bombay vs Municipal Corporation for the City of Bombay, (1946) L.R. 73 I.A. 271, in 1946, till which time there was no settled course of decisions of the Indian courts necessitating or justifying the application of this rule to the construction of Indian statutes; and even in this decision the propriety of applying the rule to Indian legislation was not considered.
The imposition of this strict rule of construction by the Privy Council was received very unfavourably in India till this Court 's decision in the Director of Rationing case wherein Province of Bombay was held to have laid down the correct law.
But subsequent decisions of this Court disclosed a tendency to relax and soften the rigour of the rule.
Further, in a country having a federal system of government it is difficult to apply the rule of Crown exemption from statutes.
This rule was not in force in India and therefore was not "law in force" within the meaning of article 372 of the Constitution.
[201 D E; 202 C; 210 A B, C D; C, H; 210 H; 211 F] This Court has power to reconsider its previous decisions and this is a fit case where this power should be exercised.
[211 E] Director of Rationing vs Corporation of Calcutta, ; , reversed.
Province of Bombay vs Municipal Corporation for the City of Bombay, (1946) L.R. 73 I.A. 271, held inapplicable.
Shivenkata Seetararnanjaneya Rice & Oil Mills vs State of Andhra Pradesh, ; and Bengal Immunity Co. vs State of Bihar, , referred to.
Case law discussed.
(ii)On a question of construction of a statute no rational distinction can be made between the trading and non trading activities of the State.
[210 G] (iii)There is nothing in the Act to indicate that the State should be excluded from the purview of section 218(1) 'requiring the taking out of a licence on payment of the prescribed fee and section 5441(1) providing the remedy for the recovery of fee in face of default.
If the State is to be exempt from the application of section 541(1)(b) it would lead to the anomaly that the State is liable to pay the licence fee but the Municipality will have no remedy for the recovery of the fee.
Also, the fact that under section 547(A) the court is competent to direct imprisonment in default of fine is no reason why section 5411 1) (b) should not be applied to the State.
The special provisions of section 541(2) indicate that the fine realizable under section 541 is receivable by the Municipality.
It follows that the State Government is the payer but is not the receiver of the fine.
The fine, when levied, is taken by the Municipality in full satisfaction of the demand on account of the licence fee.
[212 H; 213B] State of Bihar vs Rani Sonavati Kumari ; , relied on.
Shah, J. (Dissenting); (i) The English Common Law rule that the Crown is not, unless expressly named or clearly intended, bound by a statute, is a rule of construction and was settled law in India before the Constitution.
[197 F; 198 D] The Common Law of England was adopted in this country subject to local variations and the personal law of the parties and the courts which functioned in the former British India territory were enjoined to cases not governed by any specific statutory rules according to equity and good conscience,, which meant rules of English Common Law 173 in so far as they were applicable to Indian society.
Them was practically a consistent course of decisions of the High Courts in India, prior to the Constitution, in support of the view, affirmed by the Judicial Committee in Province of Bombay vs Municipal Corporation of the City of Bombay, (1946) L.R. 73 I.A. 271, that the rule that the Crown is not unless expressly named or clearly intended bound by a statute applied to India.
It was accepted as a rule of interpretation ofstatutes applicable to all statutes governing state action, authority or property.
A difference may have prevailed in Parts of the territories now comprising theIndian Union.
But this is not peculiar to this rule of interpretation adoptedby the Courts in British India.
Where uniform statutes do not apply differences do arise and must be determined according to the law and jurisdiction inherited by the courts administering justice.
The present case concerns the administration of law in the town of Calcutta which has for more than two centuries been governed by the English Common Law as adopted by the various Acts, Regulations and finally by the Letters Patent.
[191 A D; 192 D E; D F] Director of Rationing and Distribution vs The Corporation of Calcutta, ; , followed.
Province of Bombay vs Municipal Corporation of the City of Bom.
bay, L.R. 73 I.A. 271, applied.
State of West Bengal vs Union, [1964] 1 S.C.R. 371 Srivenkata Seetaramanjaneya Rice & Oil Mills vs State of Andhra Pradesh, ; , Builders Supply Corporation vs Union of India, ; , referred to.
Case law referred to.
There is no reason to hold that the rule which previously applied to the interpretation of a statute ceased to apply.
on the date on which the Constitution came into force.
The Constitution has not so fundamentally altered our concept of 'State ' as to abandon the traditional view about State privileges, immunities and rights because they had a foreign origin and on the supposed theory of equality between the State and its citizens.
The guarantee of equal protection clause of the Constitution does not extend to any differential treatment which may result in the application of a special rule of interpretation between the State and the citizens nor has the Constitution predicated in all respects equality in matters of interpretation between the State and its citizens.
A State can, in the interest of public good, select itself for special treatment.
This being so, there is no reason to suppose that a Statute which was framed on the basis of a well settled rule of pre Constitution days which accorded the State a special treatment in the matter of interpretation.
of statutes must be deemed to have a different meaning on the supposition that the Constitution has sought to impose equality between the State and the citizens.
[198 H 199 F] The fact that in the Indian federal set up sovereignty is divided between the Union and the States, and in the application of the rule that the State is not bound by a Statute, unless expressly named or clearly implied, conflict between the State enacting a law and the Union,, or another State, may arise, does not give rise to any insuperable difficulty which renders the rule inapplicable to the changed circumstances, for, it is the State which enacts a legislation in terms general which alone may claim benefit of the rule of interpretation and not any other State.
[199 G] (ii)The rule of interpretation being a settled rule is "law in force" within Me meaning of article 372 of the Constitution.
A rule is not any 174 the less a rule of law because it is a rule for determination of the intention of the legislature and for its application requires determination of facts and circumstances outside the statute.
Acceptance of the proposition that a decision of the highest judicial tribunal before the Constitution, is law, does not involve the view that it is immutable.
A statue may be repealed, ' and even retrospectively, it would then cease to be in ,operation; a decision which in the view of this Court is erroneous may be overruled and may cease to be regarded as law, but till then it was law in force.
[198 D G] (iii)The application of the rule cannot be restricted to cases where an action of the State in its sovereign capacity is in issue.
In the context of modem notions of the functions of a welfare State, it is difficult to regard any particular activity of the State as exclusively trading.
[200 A B] (iv)The State of West Bengal was not bound by the provisions relating to the issue of licences for occupation or conduct of a market.
[200 F] There is no, express reference to the State, nor is there anything peculiar in the nature purpose and object or in the language used in the enactment relating to the issue of licences, which may suggest that the State must by necessary implication be bound by its provision.
[200 E]
|
n No. 128 of 1958.
Petition under article 32 of the Constitution of India for enforcement of Fundamental Rights.
K.M. Munshi, R. J. Joshi, G.K. Munshi, T.S.N. Diwanji, J.B. Dadachanji, S.N. Andley, Rameshwar Nath and P. L. Vohra, for the petitioner.
M. C. Setalvad, Attorney General of India, C.K. Daphtary, Solicitor General of India, H.N. Sanyal, Additional Solictor General of India, B. Sen and R. H. Dhebar, for the respondent.
I N. Shroff, for the intervener.
January 9 Sinha.
C.J., delivered his own Judgment.
The Judgment of Sarkar, Das Gupta and Mudholkar, JJ., was delivered by Das Gupta, J. Ayyangar J. delivered a separate Judgment.
500 SINHA, C. J.
By this petition under article 32 of the Constitution, the petitioner, who is the 51st Dai ul Mutlaq and head of the Dawoodi Bohra Community challenges the constitutionality of the Bombay Prevention of Excommunication Act, 1949 (Bombay Act XLII of 1949) (hereinafter referred to as the Act) on the ground that the provisions of the Act infringe articles 25 and 26 of the Constitution.
The sole respondent in this case is the State of Bombay.
The petition is founded on the following allegations.
The Dawoodi Bohra Community consist of Muslims of the Shia sect, holding in common with all members of that sect the belief that there is one God, that Mohammed is His Prophet to whom He revealed the Holy Koran; that Ali, the son in law of Mohammed, was the Wasi (executor) of the Prophet, and that the said Ali succeeded the Prophet by Nas e Jali.
The Dawoodi Bohras believe that the said Ali was succeeded by a line of Imams, each of whom in turn was appointed by Nas e Jali by his immediate predecessor.
The Shia sect itself became divided into two sub sects, known respectively as Ismailis and Isna Asharia.
The Dawoodi Bohras belong to the former sect, and believe that owing to persecution Imam Type (the 21st Imam) went into seclusion and that an Iman from his line appear, it being their belief that an Iman always exists although at times he may be invisible to his believers, while in seclusion; that owing to the impending seclusion of the 21st Imam (Imam Tyeb) his predecessor, the 20th Imam, directed his Hujjat (a dignitary ranking next to an Imam), one Hurra tul Malaka, to appoint a Dai, a Mazoon (a dignitary next to a Dai) and a Mukasir (a dignitary ranking next to a Mazoon) to carry on the Dawal (mission) of the Imam so long as the Imam should remain in seclusion, and to take and receive from the faithful an oath of allegiance.
The Dais are 501 known as Dai ul Mutlaq.
The petitioner, as the Head Priest of the community of Dawoodi Bohras, is the vice gerent of Imam on Earth in seclusion.
The petitioner is a citizen of India.
As Dai ul Mutlaq and the vicegerent of Imam on Earth in seclusion, the Dai has not only civil powers as head of the sect and as trustee of the property, but also ecclesiastical powers as religious leader of the community.
It is the right and privilege of the petitioner as Dai ul Muntlaq to regulate the exercise of religious rights in places where such rights and ceremonies are carried out and in which religious exercises are performed.
In his capacity as the Dai ul Mutlaq, that is to say, as religious leader as well as trustee of the property of the community, one of his duties is to manage the properties which are all under his directions and control.
He has also the power of excommunication.
This power of excommunication is not an absolute, arbitrary and untrammelled power, but has to be exercised according to the usage and tenets of the community.
Save in exceptional circumstances, expulsion from the community can be effected only at a meeting of the Jamat, after the person concerned has given due warning of the fault complained of and an opportunity of mending, and after a public statement of the grounds of expulsion.
The result of excommunication properly and legally effected involves exclusion from the exercise of religious rights in places under the trusteeship of the Dai ul Mustlaq.
The petitioner claims that as the head of the Dawoodi Bohra community and as Dai ul Mutlaq, he has the right and power, in a proper case and subject to the conditions of legal exercise of that power, to excommunicate a member of the Dawoodi Bohra community, and this power of excommunication is an integral part of the religious faith and belief of the Dawoodi Bohra community.
The petitioner further affirms that the exercise of the right of 502 excommunication is a matter of religion, and that, in any event, the right is an incident of the management of the affairs of the Dawoodi Bohra community in matters of religion.
He also asserts that the Dawoodi Bohra community constitutes a religious denomination within the meaning of article 26 of the Constitution; the said right of the petitioner to excommunicate a member of the community, for reasons of which the petitioner is the sole judge in the exercise of his position as the religious head, is a guaranteed right under articles 25 and 26 of the Constitution.
The Bombay Legislature enacted the Act, which came into force on November 1, 1949.
The petitioner asserts that the Act violates his right and power, as Dai ul Mutlaq and religious leader of the Dawoodi Bohra community, to excommunicate such members of the community as he may think fit and proper to do; the said right of excommunication and the exercise of that right by the petitioner in the manner aforesaid are matters of religion within the meaning of article 26(b) of the Constitution.
It is submitted by the petitioner that the said Act violates or infringes both the articles 25 and 26 of the Constitution, and to that extent, after the coming into force of the Constitution, has become void under article 13 of the Constitution.
The petitioner claims that notwithstanding the provisions of the Act, he, as the religious leader and Dai ul Mutlaq of the community, is entitled to excommunicate any member of the Dawoodi Bohra community for an offence, which according to his religious sense justifies expulsion; and insofar as the Act interferes with the said right of the petitioner, it is ultra vires the Legislature.
The Act is also challenged on the ground of legislative incompetence of the then Legislature of Bombay, inasmuch as it is contended that such a power is not contained in any of the entries in the Seventh Schedule of the Government of India Act, 1935.
503 One Tayebhai Moosaji Koicha (Mandivala) instituted a suit, being suit No. 1262 of 1949, in the High Court of Judicature at Bombay, praying inter alia, for a declaration that certain orders of excommunication passed by the petitioner against him prior to the enactment of the Act were void and illegal and of no effect, and that the plaintiff continued to remain a member of the Dawoodi Bohra community.
The said suit was heard by J.C. Shah, J., who, by his judgment dated February 21, 1952, held that the Act was not inconsistent with article 26 of the Constitution, and was not ultra vires the Legislature of the Province of Bombay.
The petitioner, being dissatisfied with the judgment of the learned Judge, preferred an appeal that came up for hearing before the Court of Appeal, composed of Chagla, C. J., and Bhagwati J.
By its judgment dated August 26, 1952, the Court of Appeal upheld the judgment of the learned single Judge, though on different grounds.
The petitioner obtained leave from the High Court to appeal to this Court, and ultimately filed the appeal, being Civil Appeal No. 99 of 1954.
During the pendency of the appeal, the plaintiff respondent aforesaid died and an application made on behalf of his heirs for being brought on the record was not granted by the High Court of Bombay.
This Court dismissed the said appeal on the ground that the plaintiff having died, the cause of action did not survive.
The petitioner further alleges that parties inimical to him and to the Dawoodi Community have written scurrilous articles challenging and defying the position, power or authority of the petitioner as the religious head of the community; the challenge to the petitioner 's position and his power to excommunicate as the head of the Dawoodi Bohra community is violative of the petitioner 's guaranteed rights under articles 25 and 26 of the Constitution.
It is, therefore, claimed that it 504 is incumbent upon the respondent, in its public character, to forbear from enforcing the provisions of the Act against the petitioner.
By the petitioner 's attorney 's letter, annexure B to the petition, dated July 18, 1958, the petitioner pointed out to the respondent the unconstitutionality of the Act and requested the latter to desist from enforcing the provisions of the Act against the petitioner or against the Dawoodi Bohra community.
In the premises, a writ of Mandamus or a writ in the nature of Mandamus or other appropriate writ, direction or order under article 32 of the Constitution was prayed for against the respondent restraining it, its officers, servants and agents from enforcing the provisions of the Act.
The answer of the State of Bombay, the sole respondent, is contained in the affidavit sworn to by Shri V.N. Kalghatgi, Assistant Secretary to the Government of Bombay, Home Department, to the effect that the petitioner not having taken any proceedings to excommunicate any member of the community had no cause of action or right to institute the proceedings under article 32 of the Constitution; that it was not admitted that the Dai ul Mutlaq, as the head of the community, has civil powers, including the power to excommunicate any member of the community; that, alternatively, such power is not in conformity with the policy of the State, as defined in the Constitution; that the petitioner, as the head of the community may have the right to regulate religious rights at appropriate places and occasions, but those rights do not include the right to excommunicate any person and to deprive him of his civil rights and privileges; and that, in any event, after the coming into effect of the impugned Act, the petitioner has no such rights of excommunication; that it was denied that the right to excommunicate springs from or has its foundation in religion and religious doctrines, tenets and faith of the Dawoodi Bohra community that, at 505 any rate, it was denied that the right to excommunicate was an essential part of the religion of the community; that, alternatively, assuming that it was part of a religious practice, it runs counter to public order, morality and health.
It was also asserted that the impugned Act was a valid piece of legislation enacted by a competent legislature and within the limits of article 25 and 26 of the Constitution; and that the right to manage its own affairs vested in a religious community is not an absolute or untrammelled right but subject to a regulation in the interest of public order, morality and health.
It was denied that the alleged right of the petitioner to excommunicate a member of the community is guaranteed by articles 25 and 26 of the Constitution.
In the premises, it was denied that the petitioner had any right to the declaration sought or the relief claimed that the provisions of the Act should not be enforced.
At a very late stage of the pendency of the proceedings in this Court, in April 1961, one Kurbanhusein Sanchawala of Bombay, made an application either for being added as a party to the Writ Petition or, alternatively, for being granted leave to intervene in the proceedings.
In his petition for intervention, he stated that he was a citizen of India and was by birth a member of the Dawoodi Bohra community and as such had been taking an active part in social activities for bettering the conditions of the members of the community.
He asserted that members of the community accepted that up to the 46th Dai ul Mutlaq there was no controversy, that each one of them had been properly nominated and appointed, but that a controversy arose as regards the propriety and validity of the appointment of the 47th Dia ul Mutlaq, which controversy continued all along until the present time so that opinion is divided amongst the members of the Dawoodi Bohra community as to the validity of appointments and 506 existence of Dai ul Mutlaq, from the 47th to the 51st Dai ul Mutlaq, including the present petitioner.
The intervener also alleged that but for the impugned Act, the petitioner would have lost no time in excommunicating him.
In the premises, he claims that he is not only a proper but necessary party to the writ Petition.
He, therefore, prayed to be added as a party respondent, or, at any rate, granted leave to intervene at the hearing of the Writ Petition.
We have to dispose of this petition because no orders have been passed until the hearing of the main case before us.
In answer to the petitioner 's claims, the intervener has raised the following grounds, namely, that the Holy Koran does not permit excommunication, which is against the spirit of Islam; that, in any event, the Dai ul Mutlaq had no right or power to excommunicate any member of the community, and alternatively, that such a right, assuming that it was there, was wholly "out of date in modern times and deserves to be abrogated and was rightly abrogated by the said Act.
" It was further asserted that the alleged right of excommunication was opposed to the universally accepted fundamentals of human rights as embodied in the "Universal Declaration of Human Rights.
" It was also asserted that the Act was passed by a competent legislature and was in consonance with the provisions of articles 25 and 26 of the Constitution.
The intervener further claims that the rights to belief, faith and worship and the right to a decent burial were basic human rights and were wholly inconsistent with the right of excommunication claimed by the petitioner, and that the practice of excommunication is opposed to public order and morality; that the practice of excommunication was a secular activity associated with religious practice and that the abolition of the said practice is within the saving cl. 2(a) of article 25 of the Constitution.
It was also asserted that, under the Mohamadan Law, properties attached to 507 institutions for religious and charitable purposes vested in the Almighty God and not in the petitioner, and that all the members of the Dawoodi Bohra community had the right to establish and maintain such institutions, in consonance with article 26 of the Constitution; that is to say that article 26 guarantees the right of the denomination as a whole and not an individual like the petitioner.
It was also asserted that the provisions of the Act prohibiting excommunication was in furtherance of public order and morality and was just and reasonable restriction on a secular aspect of a religious practice.
The petitioner challenged the right of the intervener either to intervene or to be added as the party respondent.
In his rejoinder to the petition for intervention, the petitioner further alleged that the practice of excommunication was essential to the purity of religious denominations because it could be secured only by removal of persons who were unsuitable for membership of the community.
It was, therefore, asserted that those who did not accept the headship of the Dal ul Mutlaq, including the petitioner, must go out of the community and anyone openly defying the authority of the Dai ul Mutlaq was liable to be excommunicated from the membership of the community, entailing loss of rights and privileges belonging to such members.
It was, therefore, claimed that the practice of excommunication was, and is, an essential and integral part of the religion and religious belief, faith and tenets of Dawoodi Bohra community, which have been guaranteed by article 26 of the Constitution.
It has been urged on behalf of the petitioner, in support of the petition, that the Dawoodi Bohra community, of which the petitioner is the religious head, as also a trustee in respect of the property belonging to the community, is a religious denomination within the meaning of article 26 of the Constitution; that as such a religious denomination it is 508 entitled to ensure its continuity by maintaining the bond of religious unity and discipline, which would secure the continued acceptance by its adherents of certain essential tenets, doctrines and practices; the right to such continuity involves the right to enforce discipline, if necessary by taking the extreme step of excommunication; that the petitioner as the religious head of the denomination is invested with certain powers, including the right to excommunicate dissidents, which power is a matter of religion within the meaning of article 26(b) of the Constitution that the impugned Act, insofar as it takes away the power to enforce religious discipline and thus compels the denomination to accept dissidents as having full rights as a member of the community, including the right to use the properties and funds of the community dedicated to religious use, violates the fundamental rights of the petitioner guaranteed under article 26.
In this connection, reliance was placed on the decision of this Court in The Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt (1), which, it is contended, has laid down that the guarantee under the Constitution not only protects the freedom of opinion, but also acts done in pursuance of such religious opinion, and that it is the denomination itself which has a right to determine what are essential parts of its religion, as protected by the provisions of articles 25 and 26 of the Constitution.
It was further contended that the right to worship in the mosque belonging to the community and of burial in the graveyard dedicated to the community were religious rights which could not be enjoyed by a person who had been rightly excommunicated.
Insofar as the Act took away the right of the petitioner as the head of the community to excommunicate a particular member of the community and thus to deprive him of the use of the funds and property belonging to the commu 509 nity for religious purposes, had the effect of depriving the petitioner of his right as the religious head to regulate the right to the use of funds and property dedicated to religious uses of the community.
It has also been contended that religious reform, if that is the intention of the impugned Act, is outside the ambit of article 25(2) (b) of the Constitution.
The learned Attorney General for the respondent contended on the other hand, that the right to excommunicate, which has been rendered invalid by the impugned Act, was not a matter of religion within the meaning of article 26(b) of the Constitution; that what the Act really intended was to put a stop to the practice indulged in by a caste or a denomination to deprive its members of their civil rights as such members, as distinguished from matters of religion, which were within the protection of article 25 and 26.
Alternatively, it was also argued that even assuming that excommunication was concerned with matters of religion, the Act would not be void because it was a matter of reform in the interest of public welfare.
It was also argued that there was no evidence on the record to show, that excommunication was an essential matter of religion.
The right to worship at a particular place or the right of burial in a particular burial ground were questions of civil nature, a dispute in respect of which was within the cognizance of the Civil Courts.
The legislation in question, in its real aspects, was a matter of social welfare and social reform and not within the prohibitions of article 25(1) or article 26.
Excommunication involving deprivation of rights of worship or burial and the like were not matters of religion within the meaning of article 26(b), and finally, article 26(b) was controlled by article 25(2) (b) of the Constitution, and, therefore, even if excommunication touched certain religious matters, the Act, insofar as it had abolished it, was in consonance with modern notions of human dignity 510 and individual liberty of action even in matters of religious opinion and faith and practice.
Shri Shroff, appearing for the intervener, attempted to reopen the question whether the petitioner as Dai ul Mutlaq, assuming that he had been properly elected as such, had the power to excommunicate, in spite of the decision of their Lordships of the Judicial Committee of the Privy Council in Hasan Ali vs Mansoor Ali (1).
He also supported the provisions of the impugned Act on the ground that they were in furtherance of public order.
As we are not here directly concerned with the question whether or not the petitioner as the head of the religious community had the power to excommunicate, we did not hear Mr. Shroff at any length with reference to that question.
We shall proceed to determine the controversy in this case on the assumption that the petitioner had that power.
We are only directly concerned with the questions whether the provisions of the Act, insofar as they have rendered invalid the practice of excommunication, are unconstitutional as infringing article 26(b), and enacted by a legislature which was not competent to do so, as contended on behalf of the petitioner.
We will, therefore, confine our attention to those questions.
Keeping in view the limited scope of the controversy, we have first to determine the ambit and effect of the impugned Act.
The Bombay Prevention of Excommunication Act (Bombay Act XLII of 1949) is an Act to prohibit excommunication in the province of Bombay.
Its preamble, which shortly states the background of the legislation, is in these terms: "Whereas it has come to the notice of Government that the practice prevailing in certain communities of excommunicating its members is often followed in a manner which results in the deprivation of legitimate rights and privileges of its members; 511 And whereas in keeping with the spirit of changing times and in the public interest it is expedient to stop the practice; it is hereby enacted is follows".
The definition of "Community" as given in section 2(a) would include the Dawoodi Bohra community, because admittedly its members are knit together by reason of certain common religious doctrines.
and admittedly its members belong to the same religion or religious creed of a section of the Shia community of Muslims.
The term 'community" includes a caste or a sub caste also.
"Excommunication" has been defined by section 2 (b) as meaning "the expulsion of a person from any community of which he is member depriving him of rights and privileges which are legally enforceable by a suit of civil nature. ", and the explanation to the definition makes it clear that the rights and privileges within the meaning of the definition include the right to office or property or to worship in any religious place or a right of burial or cremation, notwithstanding the fact that the determination of such right depends entirely on the decision of the question as to any religious rites or ceremonies or rule or usage of a community.
By section 3, excommunication of a member of a community has been declared to be invalid and of no effect, notwithstanding any law, custom or usage to the contrary.
Any act of excommunication, or any act in furtherance of excommunication, of any member of a community has been made a penal offence liable to a punishment, on conviction, of fine which may extend to one thousand rupees.
The explanation has made it clear that any person who has voted in favour of a decision of excommunication at a meeting of a body or an association of a particular denomination is deemed to have committed the offence made punishable by section 4, as aforesaid.
Sections 5 and 6 lay down the procedure for the trial of an offence under the Act, the limit of time 512 within which the prosecution must be launched and the necessity of previous sanction of the authority indicated therein.
These, in short, are the provisions of the impugned Act.
It will be noticed that the Act is a culmination of the history of social reform which began more than a century ago with the enactment of section 9 of Regulation VII of 1832 of the Bengal Code, which provided, inter alia, that the laws of Hindus and Muslims shall not be permitted to operate to deprive the parties of any property to which, but for the operation of such laws, they would have been entitled.
Those provisions were subsequently incorporated in the India Act (XXI of 1850) known as the Caste Disabilities Removal Act which provided that a person shall not be deprived of his rights or property by reason of his or her renouncing or exclusion from the communion of any religion or being deprived of caste, and that any such forfeiture shall not be enforced as the law in the Courts.
The impugned Act, thus, has given full effect to modern notions of individual freedom to choose one 's way of life and to do away with all those undue and outmoded interferences with liberty of conscience, faith and belief.
It is also aimed at ensuring human dignity and removing all those restrictions which prevent a person from living his own life so long as he did not interfere with similar rights of others.
The legislature had to take the logical final step of creating a new offence by laying down that nobody had the right to deprive others of their civil rights simply because the latter did not conform to a particular pattern of conduct.
The Act, in substance, has added a new offence to the penal law of the country by penalising any action which has the effect of depriving a person of his human dignity and rights appurtenant thereto.
It also adds to the provisions of the Criminal Procedure Code and has insisted upon the previous sanction of the prescribed 513 authority as a condition precedent to launching a prosecution for an alleged offence against the provisions of the Act.
In my opinion, therefore, the enactment, in pith and substance, would come within Entries 1 & 2 of List III of the Concurrent Legislative List of the Constitution Act of 1935.
It is true that "excommunication" does not, in terms, figure as one of the entries in any one of the three lists.
The legislative competence of the Bombay Legislature to enact the Act has not been seriously challenged before us, and, therefore, no particular argument was addressed to us to show that the legislation in question could not be within the purview of Entries 1 & 2 of List III aforesaid.
What was seriously challenged before us was the constitutionality of the Act, in the light of the Constitution with particular reference to articles 25 & 26, and I shall presently deal with that aspect of the controversy.
But before I do that, it is convenient to set out the background of the litigation culminating in the present proceedings.
The first reported case in relation to some aspects of Shia Imami Ismailis is that of the Advocate General ex relation Dave Muhammad vs Muhammad vs Husen Huseni (1).
That was a suit commenced before the coming into existence of the Bombay High Court, on the Equity Side of the late Supreme Court, instituted by an information and bill, filed by the relators and plaintiffs, representing a minority of the Khoja community, against the defendants representing the majority of that community.
The prayer in the action was that an account be taken of all property belonging to or held in trust for the Khoja community of Bombay in the hands of the treasurer and the accountant, respectively called Mukhi and Kamaria, and other cognate reliefs not relevant to the present controversy.
In that case, which was heard on the Original side by Arnould J., judgment was delivered in November 1866, after a 514 prolonged hearing.
In that case, the learned Judge went into a detailed history of the several sects amongst Muslims, including the Shia Imami Ismailis, with particular reference to the Aga Khan and his relation with the Jamat of the Khojas of Bombay.
In that case it was laid down that there was no public property impressed with a trust, either express or implied, for the benefit of the whole Khoja community and that Aga Khan, as the spiritual head of the Khojas was entitled to determine on religious grounds who shall or shall not remain members of the Khoja community.
In that case, the learned Judge, with reference to authoritative texts, went into the detailed history of the two sects of the Sunnis and Shias.
He discussed the origin of the Ismailis as an offshoot of the Shias, and traced the hereditary succession of the unrevealed Imams in unbroken line down to Agha Khan.
Except for its historical aspect, the case does not deal with any matter relevant to the present controversy.
The next reported case which was brought to our notice is the case of the Advocate General of Bombay vs Yusufalli Ebrahim (1).
That was a case directly in relation to the Dawoodi Bohra community, with which we are concerned in this case.
In that case, there was a dispute as regards a mosque and a tomb, and was heard by Marten J., on the Original side in 1921.
We are not concerned with the details of the controversy in that case.
But the learned Judge has noticed the history of this community, with particular reference to the position of the Dai ul Mutlaq, and how the differences between the majority of the community and the minority arose on the question of the regularity of the succession of the 47th Dai in 1840.
The learned Judge has pointed out that the powers of the Dai are at least thrice delegated, 515 namely, by God to Prophet Mohammad, by the latter to the Imam, and by the Imam to the Dai ul Mutlaq.
The more directly in point is the litigation which was concluded by the judgment of their Lordships of the Judicial Committee of the privy Council in the case of Hasanali vs Mansoorali (1).
In that case, the powers of the Dai ul Mutlaq to excommunicate were directly in controversy.
The petitioner was the first defendant in that action, which had been commenced in October, 1925, and was decided by the judgment of the Subordinate Judge of Burhanpur, dated January 2, 1931.
That decision was reversed by the Judicial Commissioner of Central Provinces & Berar (later the High Court at Nagpur) by his judgment dated October 25, 1934.
That judgment was taken on appeal to the Privy Council and the judgment of the Privy Council very succinctly traces the history of the Dawoodi Bohra community until we come to the 51st Dai, who was the first defendant in that action, and is the petitioner before us.
In that case, certain orders of excommunication were under challenge.
As a result of those orders of excommunication, the plaintiffs had been obstructed in, and prevented from, entering the property in suit for the purposes of worship, burial and resting in the rest house.
In that case, their Lordships did not uphold the claim of the Dai ul Mutlaq that he had unrestricted power of excommunication, though they found that he could be regarded as Dai ul Mutlaq.
As regards the power to excommunicate, it was held that though the power was there, it was not absolute, arbitrary and untrammelled; and then their Lordships laid down the conditions for the valid exercise of that power.
The effect of a valid excommunication in their Lordships ' view, was exclusion from the exercise of religious rights in places under the trusteeship of the head of the community, because the Dai was not only a religious 516 leader but also a trustee of the property of the community.
After examining the evidence in that case, their Lordships held that the persons alleged to have been excommunicated had not been validly expelled from the community.
The judgment of the Privy Council was given on December 1, 1947.
Within two years of that judgment the impugned Act was passed, and soon after a suit on the Original side of the Bombay High Court was commenced (being suit No. 1262 of 1949).
That was a suit by a member of the Dawoodi Bohra community, who had been excommunicated by the petitioner, functioning as the Dai ul Mutlaq, by two orders of excommunication, one passed in 1934 and the other in 1948, soon after the judgment of the Privy Council.
The suit was, inter alia, for a declaration that the orders of excommunication were void in view of the Act.
A number of issues were raised at the trial, which was heard by Shah J. Two questions, by way of preliminary issues, with which we are immediately concerned in the present proceedings, were raised before the learned Judge of the Bombay High Court, namely: (1) Was the Act within the legislative competence of the Legislature of the Province of Bombay ? (2) Whether after the coming into force of the Constitution, the Act was invalid in view of articles 25 and 26 of the Constitution? The learned Judge, after an elaborate examination of the Constitution Act of 1935, came to the conclusion that the Bombay Legislature was competent to enact the Act, and that it was not unconstitutional even after the coming into effect of the Constitution because it was not inconsistent with the provisions of articles 25 and 26.
An appeal was taken to the Court of Appeal, which was heard by Chagla C. J. and Bhagwati J.
The Court of 517 Appeal upheld the decision of Shah J.
The matter was brought up on appeal to this Court in Civil Appeal 99 of 1954.
During the pendency of the appeal in this Court, the plaintiff died and it was held, without deciding the merits of the controversy, that the suit giving rise to the appeal in this Court had abated by reason of the fact that the plaintiff had died and the cause of action being personal to him was also dead.
The Order of this Court dismissing the appeal as not maintainable is dated November 27, 1957.
This Writ Petition was filed on August 18, 1958 by the petitioner as the 51st Dai ul Mutlaq and head of the Dawoodi Bohra community, for a declaration that the Act was void so far as the petitioner and the Dawoodi Bohra community were concerned, and that a writ of mandamus or a writ in the nature of mandamus or other appropriate write direction or order under article 32 of the Constitution be issued restraining the respondent, its officers, servants and agents from enforcing the provisions of the Act, against the petitioner or the Dawoodi Bohra community, or in any manner interfering with the right of the petitioner, as the religious leader and Dai ul Mutlaq of the Dawoodi Bohra community, to excommunicate any member of the community for an offence which the petitioner, in the exercise of his religious sense as the religious head of the community may determine as justifying such as expulsion.
It is not disputed that the petitioner is the head of the Dawoodi Bohra community or that the Dawoodi Bohra community is a religious denomination within the meaning of article 26 of the Constitution.
It is not even disputed by the State, the only respondent in the case, that the petitioner as the head of the community had the right, as found by the Privy Council in the case of Hasanali vs Mansoorali(1), to excommunicate a particular member of the community for reasons and in the 518 manner indicated in the judgment of their Lordships of the Privy Council.
But what is contended is that, as a result of the enactment in question, excommunication has been completely banned by the Legislature, which was competent to do so, and that the ban in no way infringes articles 25 and 26 of the Constitution.
I have already indicated my considered opinion that the Bombay Legislature was competent to enact the Act.
It now remains to consider the main point in controversy, which was, as a matter of fact, the only point urged in support of the petition, namely, that the Act is void in so far as it is repugnant to the guaranteed rights under articles 25 and 26 of the Constitution.
article 25 guarantees the right to every person, whether citizen or non citizen, the freedom of conscience and the right freely to profess, practise and propagate religion.
But this guaranteed right is not an absolute one.
It is subject to (1) public order, morality and health, (2) the other provisions of Part III of the Constitution, (3) any existing law regulating or restricting an economic, financial, political or other secular activity which may be associated with religious practice, (4) a law providing for social welfare and reform, and (5) any law that may be made by the State regulating or restricting the activities aforesaid or providing for social welfare and reform.
I have omitted reference to the provisions of Explanations I and II and other parts of article 25 which are not material to our present purpose.
It is noteworthy that the right guaranteed by article 25 is an individual right as distinguished from the right of an organised body like a religious denomination or any section thereof, dealt with by article 26.
Hence, every member of the community has the right, so long as he does not in any way interfere with the corresponding rights of others, to profess, practise and propagate his religion, and everyone is guaranteed his freedom of conscience.
The 519 question naturally arises: Can an individual be compelled to have a particular belief on pain of a penalty, like excommunication? One is entitled to believe or not to believe a particular tenet or to follow or not to follow a particular practice in the matters of religion.
No one can, therefore, be compelled, against his own judgment and belief, to hold any particular creed or follow a set of religious practices.
The Constitution has left every person free in the matter of his relation to his Creator, if he believes in one.
It is, thus, clear that a person is left completely free to worship God according to the dictates of his conscience, and that his right to worship as he pleased is unfettered so long as it does not come into conflict with any restraints, as aforesaid, imposed by the State in the interest of public order, etc.
A person is not liable to answer for the verity of his religious views, and he cannot be questioned as to his religious beliefs, by the State or by any other person.
Thus, though his religious beliefs are entirely his own and his freedom to hold those beliefs is absolute, he has not the absolute right to act in any way he pleased in exercise of his religious beliefs.
He has been guaranteed the right to practise and propagate his religion subject to the limitations aforesaid.
His right to practise his religion must also be subject to the criminal laws of the country, validly passed with reference to actions which the Legislature has declared to be of a penal character.
Laws made by a competent legislature in the interest of public order and the like, restricting religious practices, would come within the regulating power of the State.
For example, there may be religious practices of sacrifice of human beings, or sacrifice of animals in a way deleterious to the well being of the community at large.
It is open to the State to intervene, by legislation, to restrict or to regulate to the extent of completely stopping such deleterious practices.
It must, therefore, be held 520 that though the freedom of conscience is guaranteed to every individual so that he may hold any beliefs he likes, his actions in pursuance of those beliefs may be liable to restrictions in the interest of the community at large, as may be determined by common consent, that is to say, by a competent legislature.
It was on such humanitarian grounds, and for the purpose of social reform, that so called religious practices like immolating a widow at the pyre of her deceased husband, or of dedicating a virgin girl of tender years to a god to function as a devadasi, or of ostracising a person from all social contacts and religious communion on account of his having eaten forbidden food or taboo, were stopped by legislation.
But it has been contended on behalf of the petitioner that the right guaranteed, under article 25, to freedom of conscience and the freedom to profess, practise and propagate religion is available not only to an individual but to the community at large, acting through its religious head; the petitioner, as such a religious head has, therefore, the right to excommunicate, according to the tenets of his religion, any person who goes against the beliefs and practice connected with those beliefs.
The right of the petitioner to excommunicate is, therefore, a fundamental right, which cannot be affected by the impugned Act.
In this connection, reference was made to the following observations in the leading judgment of this Court, bearing upon the interpretations of articles 25 and 26 (vide The Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt) (1): "A religion may not only lay down a code of ethical rules for its followers to accept, it might prescribe rituals and observances, ceremonies and modes of worship which are regarded as integral parts of religion, and 521 these forms and observances might extent even to matters of food and dress.
The guarantee under our Constitution not only protects the freedom of religious opinion but it protects also acts done in pursuance of a religion and this is made clear by the use of the expression 'practice of religion ' in Article 25.
" On the strength of those observations, it is contended on behalf of the petitioner that this practice of ex communication is a part of the religion of the community with which we are concerned in the present controversy, article 26, in no uncertain terms, has guaranteed the right to every religious denomination or a section thereof "to manage its own affairs in matters of religion" (article 26(b)).
Now what are matters of religion and what are not is not an easy question to decide.
It must vary in each individual case according to the tenets of the religious denomination concerned.
The expression "matters of religion" in Art 26(b) and "activities associated with religious practice" do not cover exactly the same ground.
What are exactly matters of religion are completely outside State interference, subject of course to public order, morality and health.
But activities associated with religious practices may have many ramifications and varieties economic, financial, political and other as recognised by article 25(2)(a).
Such activities, as are contemplated by the clause aforesaid cover a field much wider than that covered by either article 25(1) or article 26(b).
Those provisions have, therefore, to be so construed as to create no conflict between them.
We have, therefore, to classify practices into such as are essentially and purely of a religious character, and those which are not essentially such.
But it has been contended on behalf of the petitioner that it is for the religious denomination itself to determine what are essentially reli 522 gious practices and what are not.
In this connection, reliance is placed on the following observations of this Court in the leading case, aforesaid, of The Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt (1): "As we have already indicated, freedom of religion in our Constitution is not confined to religious beliefs only; it extends to religious practices as well subject to the restrictions which the Constitution itself has laid down.
Under article 26(b), therefore, a religious denomination or organisation enjoys complete autonomy in the matter of deciding as to what rites and ceremonies are essential according to the tenets of the religion they hold and no outside authority has any jurisdiction to interfere with their decision in such matters.
" It should be noted that the complete autonomy which a religious denomination enjoys under article 26(b) is in 'matters of religion ', which has been interpreted as including rites and ceremonies which are essential according to the tenets of the religion.
Now, article 26(b) itself would seem to indicate that a religious denomination has to deal not only with matters of religion, but other matters connected with religion, like laying down rules and regulations for the conduct of its members and the penalties attached to infringement of those rules, managing property owned and possessed by the religious community, etc., etc.
We have therefore, to draw a line of demarcation between practices consisting of rites and ceremonies connected with the particular kind of worship, which is the tenet of the religious community, and practices in other matters which may touch the religious institutions at several points, but which are not intimately concerned with rites and ceremonies the performance of which is an 523 essential part of the religion.
In this connection, the following observations of this Court in The Durgah Committee, Ajmer vs Syed Hussain Ali (1) which were made with reference to the earlier decisions of this Court in The Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt (2) and in Sri Venkataramana Devaru vs The State of Mysore (3), that "matters of religion" in article 26(b) include even practices which are regarded by the community as part of its religion, may be noted: "Whilst we are dealing with this point it may not be out of place incidentally to strike a note of caution and observe that in order that the practices in question should be treated as a part of religion they must be regarded by the said religion as its essential and integral part; otherwise even purely secular practices which are not an essential or an integral part of religion are apt to be clothed with a religious form and may make a claim for being treated as religious practices within the meaning of article 26.
Similarly, even practices though religious may have sprung from merely superstitious beliefs and may in that sense be extraneous and unessential accretions to religion itself.
Unless such practices are found to constitute an essential and integral part of a religion their claim for the protection under article 26 may have to be carefully scrutinised; in other words, the protection must be confined to such religious practices as are an essential and an integral part of it and no other.
" But then it is contended that a religious denomination is a quasi personality, which has to ensure its continuity and has, therefore, to lay down rules for observance by members of its community, and, in order to maintain proper and strict 524 discipline, has to lay down sanctions; the right to excommunicate a recusant member is an illustration of that sanction.
In this connection, it was contended that the Privy Council had laid down in the case of Hasanali vs Mansoorali (1) that the power of excommunication was a religious power exercisable by the Dai.
In my opinion, those passages in the judgment of the Privy Council do not establish the proposition that the right which the Privy Council found inhered in the Dai was a purely religious right.
That it was not a purely religious right becomes clear from the judgment of the Judicial Committee of the Privy Council, which laid down the appropriate procedure and the manner of expulsion, which had to be according to justice, equity and good conscience, and that it was justiciable.
A matter which is purely religious could not come within the purview of the Courts.
That conclusion is further strengthened by the consideration that the effect of the excommunication or expulsion from the community is that the expelled person is excluded from the exercise of rights in connection not only with places of worship but also from burying the dead in the community burial ground and other rights to property belonging to the community, which are all disputes of a civil nature and are not purely religious matters.
In the case before their Lordships of the Privy Council, their Lordships enquired into the regularity of the proceedings resulting in the excommunication challenged in that case, and they held that the plaintiff had not been validly expelled.
It cannot, therefore, be asserted that the Privy Council held the matter of excommunication as a purely religious one.
If it were so, the Courts would be out of the controversy.
The same argument was advanced in another form by contending that excommunication is not a social question and that, therefore, article 25(2)(b) could not be invoked in aid of holding the Act to be constitutional.
In this connection, it has to be 525 borne in mind that the Dai ul Mutlaq is not only the head of the religious community but also the trustee of the property of the community in which the community as a whole is interested.
Even a theological head has got to perform acts which are not wholly religious but may be said to be quasi religious or matters which are connected with religious practices, though not purely religious.
Actions of the Dai ul Mutlaq in the purely religious aspect are not a concern of the courts, but his actions touching the civil rights of the members of the community are justiciable and not outside the pale of interference by the legislature or the judiciary.
I am not called upon to decide, nor am I competent to do so, as to what are the religious matters in which the Dai ul Mutlaq functions according to his religious sense.
I am only concerned with the civil aspect of the controversy relating to the constitutionality of the Act, and I have to determine only that controversy.
It has further been argued on behalf of the petitioner that an excommunicated person has not the right to say his prayers in the mosque or to bury his dead in the community burial ground or to the use of other communal property.
Those may be the result of excommunication, but I am concerned with the question whether the Legislature was competent and constitutionally justified in enacting the law declaring excommunication to be void.
As already indicated, I am not concerned in this case with the purely religious aspect of excommunication.
I am only concerned with the civil rights of the members of the community, which rights they will continue to enjoy as such members if excommunication was held to be invalid in accordance with the provision of the Act.
Hence, though the Act may have its repercussions on the religious aspect of excommunication, in so far as it protects the civil rights of the members of the community 526 it has not gone beyond the provisions of article 25(2)(b) of the constitution.
Then it is argued that the guaranteed right of a religious denomination to manage its own affairs in matters of religion (article 26(b) is subject only to public order, morality and health and is not subject to legislation contemplated by article 25(2)(b).
This very argument was advanced in the case of Shri Venkataramana Devaru vs The State of Mysore(1).
At page 916 this argument has been specifically dealt with and negatived.
This Court observed as follows: "The answer to this contention is that it is impossible to read any such limitation into the language of Art.25(2)(b).
It applies in terms to all religious institutions of a public character without qualification or reserve.
As already stated, public institutions would mean not merely temples dedicated to the public as a whole but also those founded for the benefit of sections thereof, and denominational temples would be comprised therein.
The language of the Article being plain and unambiguous, it is not open to us to read into it limitations which are not there, based on a priori reasoning as to the probable intention of the Legislature.
Such intention can be gathered only from the words actually used in the statute; and in a Court of law, what is unexpressed has the same value as what is unintended.
We must therefore hold that denominational institutions are within article 25(2)(b).
" In that case also, as in the present case, reference was made to the earlier decision of this Court in 527 The Commissioner, Hindu Religious endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Mutt (1), but the latter decision had explained the legal position with reference to the earlier decision, and after examining the arguments for and against the proposition at pages 916 918, it has been distinctly laid down that article 26 (b) must be read subject to article 25 (2) (b) of the Constitution.
It has further been contended that a person who has been excommunicated as a result of his non conformity to religious practices is not entitled to use the communal mosque or the communal burial ground or other communal property, thus showing that for all practical purposes he was no more to be treated as a member of the community, and is thus an outcast.
Another result of excommunication is that no other member of the community can have any contacts, social or religious, with the person who has been excommunicated.
All that is true.
But the Act is intended to do away with all that mischief of treating a human being as a pariah, and of depriving him of his human dignity and of his sight to follow the dictates of his own conscience.
The Act is, thus, aimed at fulfilment of the individual liberty of conscience guaranteed by article 25 (1) of the Constitution, and not in derogation of it.
In so far as the Act has any repercussions on the right of the petitioner, as trustee of communal property, to deal with such property, the Act could come under the protection of article 26 (d), in the sense that his right to administer the property is not questioned, but he has to administer the property in accordance with law.
The law, in the present instance, tells the petitioner not to withhold the civil rights of a member of the community to a communal property.
But as against this it is argued on behalf of the petitioner that his right to excommunicate is so bound up with religion that it is protected by cl.
(b) of article 26, and is thus completely out of the 528 regulation of law, in accordance with the provisions of cl.
(d) of that Article.
But, I am not satisfied on the pleadings and on the evidence placed before us that the right of excommunication is a purely religious matter.
As already pointed out, the indications are all to the contrary, particularly the judgment to the Privy Council in the case of Hasanali vs Mansoorali (1) on which great reliance was placed on behalf of the petitioner.
On the social aspect of excommunication, one is inclined to think that the position of an excommunicated person becomes that of an untouchable in his community, and if that is so, the Act in declaring such practices to be void has only carried out the strict injunction of article 17 of the Constitution, by which untouchability has been abolished and its practice in any form forbidden.
The Article further provides that the enforcement of any disability arising out of untouchability shall be an offence punishable in accordance with law.
The Act, in this sense, is its logical corollary and must, therefore, be upheld.
In my opinion, it has not been established that the Act has been passed by a legislature which was not competent to legislate on the subject, or that it infringes any of the provisions of the Constitution.
This petition must, therefore, fail.
DAS GUPTA, J.
In our opinion this petition should succeed.
The petitioner is the head of the Dawoodi Bohras who form one of the several sub sects of the Shia sect of Musalmans.
Dawoodi Bohras believe that, since the 21st Imam went to seclusion, the rights, power and authority of the Imam have been rightfully exercised by the Dai ul Imam as the vice regent of the Imam in seclusion.
One of such rights is the exercise of disciplinary powers including the right to excommunicate any 529 member of the Dawoodi Bohra community.
The existence of such a right in the Dai ul Mutlaq who is for the sake of convenience often mentioned as the Dai was questioned before the courts in a case which went up to the Privy Council.
But since the decision of the Privy Council in that case, viz., Hasanali vs Mansoorali (1) that question may be taken to have been finally settled, and it is no longer open to dispute that the Dai, as the head of the Dawoodi Bohra community has the right to excommunicate any member of the community.
The claim of the present petitioner to be the 51st Dai ul Mutlaq of the community was also upheld in that case and is no longer in dispute.
The Privy Council had also to consider in that case the question whether this power to excommunicate could be exercised by the Dai in any manner he liked and held after consideration of the previous cases of excommunication and also a document composed about 1200 A.D. that normally members of the community can be expelled "only at a meeting of the Jamat after being given due warning of the fault complained of and an opportunity of amendment, and after a public statement of the grounds of expulsion.
" Speaking about the effect of excommunication their Lordships said: "Excommunication. . necessarily involve exclusion from the exercise of religious rights in places under the trusteeship of the head of the community in which religious exercises are performed.
" The present petitioner, it may be mentioned, was a party to that litigation.
This decision was given on December, 1, 1947; shortly after that, the Bombay Legislature it may be mentioned that there is a large concentration of Dawoodi Bohras in the State of Bombay stepped in to prevent, as mentioned in the preamble, the practice of excommunication "which 530 results in the deprivation of legitimate rights and privileges of" members of certain religious communities and enacted the Bombay Act No. XLII of 1949.
It is a short Act of six sections.
Section 3 the main operative section invalidates all excommunication of members of any religious community.
Excommunication is defined in section 2 to mean "the expulsion of a person from any community of which he is a member depriving him of rights and privileges which are legally enforceable by a suit of a civil nature by him or on his behalf as such member".
The explanation to the definition to this section makes it clear that a right to office or property or to worship in any religious place or a right to burial or cremation is included as a right legally enforceable by suit even though the determination of such right may depend entirely on the decision of the question as to any religious rites or ceremonies or rule or usage of a community.
Section 4 makes a person who does any act which amounts to excommunication or is in furtherance of the excommunication liable to punishment which may extend to one thousand rupees.
Faced with the position that the legislation wholly destroys his right of excommunicating any member of the Dawoodi Bohra community, the Dai has presented this petition under article 32 of the Constitution.
He contends that the Act violates the fundamental right of the Dawoodi Bohras, including himself, freely to practise religion according to their own faith and practice a right guaranteed by article 25 of the Constitution, and further that it violates the right of the Dawoodi Bohra community to manage its own affairs in matters of religion guaranteed by article 26.
Therefore, says he, the Act is void and prays for a declaration that the Act is void and the 531 issue of an appropriate writ restraining the respondent, the State of Bombay, its officers, servants and agents from enforcing the provisions of the Act against the petitioner and/or any other member of the Dawoodi Bohra community.
It may be mentioned that in the petition the legislative competence of the Bombay legislature to enact the Bombay Prevention of excommunication 1949 was also challenged.
This, however was not pressed at the time of the hearing.
The respondent contends that neither the right guaranteed under article 25 nor that under article 26(b) is contravened by the impugned Act.
Briefly stated, the respondent 's case is that the right and privilege of the petitioner as Dai ul Mutlaq to regulate the exercise of religious rights do not include the right to excommunicate any person so as to deprive him of his civil rights and privileges.
It was denied that the petitioner 's power to excommunicate was an essential part of the religion of the Dawoodi Bohra community and that the right has its foundation in religion and religious doctrines, tenets and faith of the Dawoodi Bohra community.
It was also denied that the right to excommunicate is the religious practice and it was further pleaded that assuming that it was a religious practice, it was certainly not a part of religion of the Dawoodi Bohra community.
The same points were urged on behalf of the intervener, except that the learned counsel for the intervener wanted to reopen the question whether the petitioner as the head of the Dawoodi Bohra community had the power to excommunicate.
As already stated, however, this question is hardly open to dispute in the face of the decision of the Privy Council in Hasanali vs Mansoorali (1) and the point was not pressed.
The content of articles 25 and 26 of the Constitution came up for consideration before this Court 532 in the Commissioner, Hindu Religious Endowments Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shirur Matt (1); Mahant Jagannath Ramanuj Das vs The State of Orissa (2); Sri Venkatamana Devaru vs The State of Mysore (3); Durgah Committee, Ajmer vs Syed Hussain Ali (4) and several other cases and the main principles underlying these provisions have by these decisions been placed beyond controversy.
The first is that the protection of these articles is not limited to matters of doctrine or belief they extend also to acts done in pursuance of religion and therefore contain a guarantee for rituals and observances, ceremonies and modes of worship which are integral parts of religion.
The second is that what constitutes an essential part of a religious or religious practice has to be decided by the courts with reference to the doctrine of a particular religion and include practices which are regarded by the community as a part of its religion.
Before however we can give a proper answer to the two questions raised, viz., (i) Has the impugned Act interfered with a right freely to practise religion and (ii) Has it interfered with the right of the Dawoodi Bohra Community to manage its own affairs in matters of religion; it is necessary to examine first the place of excommunication in the life of a religious community.
Much valuable information about this is furnished by an article in the Encyclopaedia of the Social Sciences from the pen of Prof. Hazeltine.
"Excommunication", says Prof. Hazeltine, in one or another of the several different meanings of the term has always and in all civilizations been one of the principal means of maintaining discipline within religious organizations and hence of preserving and strengthening their solidarity.
" Druids in old Britain are said to have claimed the power to exclude offenders from sacrifice.
The early Chiristian Church exercised 533 this power very largely and expelled and excluded from the Christian association, those members who proved to be unworthy of its aims or infringed its rules of governance.
During the middle ages the Pope used this power frequently to secure the observance of what was considered the proper religious rights and practices of Christianity by excommunicating even the kings of some European countries when they introduced or tried to introduce different forms of divine worship.
The power was often used not perhaps always fairly and justly, as a weapon in the struggle for the principle that the Church was above the State.
Impartial historians have recognised, however, that many of the instances of excommunication were for the purpose of securing the adherence to the orthodox creed and doctrine of Christianity as pronounced by the Catholic Church.
(Vide The Catholic Encyclopedia, Vol.
V, articles on England and Excommunication).
Turning to the Canon law we find that excommunication may be inflicted as a punishment for a number of crimes, the most serious of these being, heresy, apostasy or schism.
Canon 1325, section 2 defines a heretic to be a man who while remaining nominally a Christian, pertinaciously denies or doubts any one of the truths which must be believed de fide divina et catholica; if he falls away entirely from the Christian faith, he is an apostate; finally if he rejects the authority of the Supreme Pontiff or refuses communion with the members of the Church who are subject to him, he is a schismatic.
(Vide Canon Law by Bouscaren and Ellis).
Among the Muslims also the right of excommunication appears to have been practised from the earliest times.
The Prophet and the Imam, had this right; and it is not disputed that the Dais have also in the past exercised it on a number of 534 occasions.
There can be little doubt that heresy or apostasy was a crime for which excommunication was in force among the Dawoodi Bohras also.
It may be pointed out in this connection that excommunication in the case of Hasanali vs Mansoorali (1) which was upheld by the Privy Council) was based on the failure to comply with the tenets and traditions of the Dawoodi Bohra community and certain other faults.
According to the petitioner it is "an integral part of the religion and religious faith and belief of the Dawoodi Bohra community" that excommunication should be pronounced by him in suitable cases.
It was urged that even if this right to excommunicate is considered to be a religious practice as distinct from religious faith such religious practice is also a part of the religion of the Dawoodi Bohra community.
It does appear to be a fact that unquestioning faith in the Dai as the head of community is part of the creed of the Dawoodi Bohras.
It is unnecessary to trace the historical reason for this extraordinary position of the Dai as it does not appear to be seriously disputed that the Dai is considered to be the vice regent of Imam so long as the rightful Imam continues in seclusion.
Mention must be made in this connection of the Mishak which every Dawoodi Bohra takes at the time of his initiation, This includes among other things, an oath of unquestioning faith in and loyalty to the Dai.
It is urged therefore that faith in the existence of the disciplinary power of the Dai including his power to excommunicate forms one of the religious tenets of this community.
The argument that article 25 has been contravened by the impugned Act is based mainly on this contention and the further contention that in any case excommunication is a religious practice in this community.
As regards article 26(b) the argument is that excommunication among the 535 Dawoodi Bohras forms such an integral part of the management of the community by the religious head that interference with that right cannot but amount to an interference with the right of the community to the manage its own affairs in matters of religion.
Let us consider first whether the impugned Act contravenes the provisions of article 26 (b).
It is unnecessary for the purpose of the present case to enter into the difficult question whether every case of excommunication by the Dai on whatever grounds inflicted is a matter of religion.
What appears however to be clear is that where an excommunication is itself based on religious grounds such as lapse from the orthodox religious creed or doctrine (similar to what is considered heresy, apostasy or schism under the Canon Law) or breach of some practice considered as an essential part of the religion by the Dawoodi Bohras in general, excommunication cannot but be held to be for the purpose of maintaining the strength of the religion.
It necessarily follows that the exercise of this power of excommunication on religious grounds forms part of the management by the community, through its religious head, "of its own affairs in matters of religion.
" The impugned Act makes even such excommunications invalid and takes away the power of the Dai as the head of the community to excommunicate even on religious grounds.
It therefore, clearly interferes with the right of the Dawoodi Bohra community under cl.
(b) of article 26 of the Constitution.
That excommunication of a member of a community will affect many of his civil rights is undoubtedly true.
This particular religious denomination is possessed of properties and the necessary consequence of excommunication will be that the excommunicated member will lose his rights of enjoyment of such property.
It might be thought undesirable that the head of a religious community 536 would have the power to take away in this manner the civil rights of any person.
The right given under article 26 (b) has not however been made subject to preservation of civil rights.
The express limitation in article 26 itself is that this right under the several clauses of the article will exist subject to public order, morality and health.
It has been held by this Court in Sri Venkataramana Devaru vs The State of Mysore (1) that the right under article 26(b) is subject further to cl. 2 of article 25 of the Constitution.
We shall presently consider whether these limitations on the rights of a religious community to manage its own affairs in matters of religion can come to the help of the impugned Act.
It is clear however that apart from these limitations the Constitution has not imposed any limit on the right of a religious community to manage its own affairs in matters of religion.
The fact that civil rights of a person are affected by the exercise of this fundamental right under article 26(b) is therefore of no consequence.
Nor is it possible to say that excommunication is prejudicial to public order, morality and health.
Though there was a statement in paragraph 10 of the respondent 's counter affidavit that "the religious practice, which runs counter to the public order, morality and health must give way before the good of the people of the State", the learned Attorney General did not advance any argument in support of this plea.
It remains to consider whether the impugned Act comes within the saving provisions embodied in cl. 2 of article 25.
The clause is in these words: "Nothing in this Article shall affect the operation of any existing law or prevent the State from making any law 537 (a) regulating or restricting any economic, financial, political or other secular activity which may be associated with religious practice; (b) providing for social welfare and reform or the throwing open of Hindu religious institutions of a public character to all classes and sections of Hindus." Quite clearly, the impugned Act cannot be regarded as a law regulating or restricting any economic, financial, political or other secular activity.
Indeed that was not even suggested on behalf of the respondent State.
It was faintly suggested however that the Act should be considered to be a law "providing for social welfare and reform.
" The mere fact that certain civil rights which might be lost by members of the Dawoodi Bohra community as a result of excommunication even though made on religious grounds and that the Act prevents such loss, does not offer sufficient basis for a conclusion that it is a law "providing for social welfare and reform.
" The barring of excommunication on grounds other than religious grounds, say on the breach of some obnoxious social rule or practice might be a measure of social reform and a law which bars such excommunication merely might conceivably come within the saving provisions of cl. 2(b) of article 25.
But barring of excommunication on religious grounds pure and simple, cannot however be considered to promote social welfare and reform and consequently the law in so far as it invalidates excommunication on religious grounds and takes away the Dai 's power to impose such excommunication cannot reasonably be considered to be a measure of social welfare and reform.
As the Act invalidates excommunication on any ground whatsoever, including religious grounds, it must be held to be in clear violation of the right of the Dawoodi Bohra community under article 26(b) of the Constitution.
538 It is unnecessary to consider the other attack on the basis of article 25 of the Constitution.
Our conclusion is that the Act is void being in violation of article 26 of the Constitution.
The contrary view taken by the Bombay High Court in Taher Saifuddin vs Tyebbhai Moosaji (1) is not correct.
We would, therefore, allow the petition, declare the Act to be void and direct the issue of a writ in the nature of mandamus on the respondent, the State of Bombay, not to enforce the provisions of the Act.
The petitioner will get his costs.
AYYANGAR, J. I agree that the petition should succeed and I generally concur in the reasoning of Das Gupta J., by which he has reached this conclusion.
In view, however, of the importance of the case I consider it proper to state in my own words the grounds for my concurrence.
It was not in dispute that the Dawoodi Bohras who form a sub sect of the Shia sect of Muslims is a "religious denomination" within the opening words of article 26 of the Constitution.
There are a few further matters which were not in controversy on the basis of which the contentions urged in support of the petition have to be viewed.
These might now be briefly stated: (1) It was the accepted tenet of the Dawoodi Bohra faith that God always had and still has a representative on earth through whom His commands are conveyed to His people.
That representative was the Imam.
The Dai was the representative of the Imam and conveyed God 's message to His people.
The powers of the Dai were approximated to those of the Imam.
When the Imam came out of seclusion, the powers of the Dai would cease.
The chain of intercession with the Almighty was as follows: The Dai the Imam 539 the Holy Prophet and the one God (See Per Marten J. in Advocate General of Bombay vs Yusufalli Ebrahim (1).
(2) The position and status of the petitioner as the Dai ul Mutlaq was not contested since the same had been upheld by the Privy council the decision reported as Hasanali vs Mansoorali (2).
(3) It was not in dispute that subject to certain limitations and to the observance of particular formalities which were pointed out by the Privy Council in the decision just referred to, that the Dai ul Mutlaq has the power of excommunication and indeed, as observed by Lord Porter in that judgment, "the right of excommunication by a Dai ul Mutlaq was not so strenuously contested as were the limits within which it is confined." (4) The Dai ul Mutlaq was not merely a religious leader the religious head of the denomination but was the trustee of the property of the community.
(5) The previous history of the community shows that excommunicated persons were deprived of the exercise of religious rights.
It was contended before the Privy Council that the effect of an excommunication was in the nature merely of social ostracism but this was rejected and it was held to have a larger effect as involving an exclusion from the right to the enjoyment of property dedicated for the benefit of the denomination and of worship in places of worship similarly dedicated or set apart.
The validity of Bombay Act 42 of 1949 (which I shall hereafter refer to as the impugned Act) has to be judged in the light of these admitted premises.
Articles 25 and 26, which are urged as violated by the impugned Act run: 540 "25.
(1) Subject to public order, morality and health and to the other provisions of this Part, all persons are equally entitled to freedom of conscience and the right freely to profess, practice and propagate religion.
(2) Nothing in this article shall affect operation of any existing law or prevent the State from making any law (a) regulating or restricting any economic, financial, political or other secular activity which may be associated with religious practice; (b) providing for social welfare and reform or the throwing open of Hindu religious institutions of a public character to all classes and sections of Hindus.
Explanation I. The wearing and carrying of kirpans shall be deemed to be included in the profession of the Sikh religion.
Explanation II In sub clause (b) of clause (2), the reference to Hindus shall be construed as including a reference to persons professing the Sikh, Jaina or Buddhist religion, and the reference to Hindu religious institutions shall be construed accordingly.
Subject to public order, morality and health, every religious denomination or any section thereof shall have the right (a) to establish and maintain institutions for religious and charitable purposes; (b) to manage its own affairs in matters of religion; (c) to own and acquire movable and immovable property; and (d) to administer such property in accordance with law.
" 541 I would add that these Articles embody the principle of religious toleration that has been the characteristic feature of Indian civilization from the start of history.
the instances and periods when this feature was absent being merely temporary aberrations.
Besides, they serve to emphasize the secular nature of Indian Democracy which the founding fathers considered should be the very basis of the Constitution.
I now proceed to the details of the provisions of the impugned Act which are stated to infringe the rights guaranteed by these two Articles.
The preamble to the impugned Act recites: "Whereas it has come to the notice of Government that the practice prevailing in certain communities of excommunicating its members is often followed in a manner which results in the deprivation of legitimate rights and privileges of its members; And whereas in keeping with the spirit of changing times and in the public interest, it is expedient to stop the practice; it is hereby enacted as follows : " Section 3 is the operative provision which enacts: "3.
Notwithstanding anything contained in any law, custom or usage for the time being in force to the contrary, no excommunication of a member of any community shall be valid and shall be of any effect.
" Section 4 penalises any person who does "any act which amounts to or is in furtherance of the excommunication" and subjects him to criminal 542 proceedings as regards which provision is made in sections 5 and 6.
Section 2 contains two definitions: (1) of the word "community" which would include the religious denomination of Dawoodi Bohras, and (2) of "excommunication" as meaning: "the expulsion of a person from any community of which he is a member depriving him of rights and privileges which are legally enforceable by a suit of civil nature by him or on his behalf as such member; Explanation.
For the purposes of clause a right legally enforceable by a suit of civil nature shall include the right to office or property or to worship in any religious place or a right of burial or cremation, notwithstanding the fact that the determination of such right depends entirely on the decision of the question as to any religious rites or ceremonies or rule or usage of a community.
" The question to consider is whether a law which penalises excommunication by a religious denomination or by its head whether or not the excommunication be for non conformity to the basic essentials of the religion of that denomination and effects the nullification of such excommunication as regards the rights of the person excommunicated would or would not infringe the rights guaranteed by articles 25 and 26.
First as to article 25, as regards cl (1) it was not in dispute that the guarantee under it protected not merely freedom to entertain religious beliefs but also acts done in pursuance of that religion, this being made clear by the use of the expression 543 "practice of religion".
No doubt, the right to freedom of conscience and the right to profess, practise and propagate religion are all subject to "public order, morality or health and to the other provisions of this Part" but it was not suggested that (subject to an argument about the matter being a measure of social reform) the practice of excommunication offended public order, morality or health or any other part of the Constitution.
Here is a religious denomination within Art.26.
The Dai ul Mutlaq is its spiritual leader, the religious head of the denomination and in accordance with the tenets of that denomination he had invested in him the power to excommunicate dissidents.
Pausing here, it is necessary to examine the rational basis of the excommunication of persons who dissent from the fundamental tenets of a faith.
The identity of a religious denomination consists in the identity of its doctrines, creeds and tenets and these are intended to ensure the unity of the faith which its adherents profess and the identity of the religious views are the bonds of the union which binds them together as one community.
As Smith B. said in Dill vs Watson (1) in a passage quoted by Lord Halsbury in Free Church of Scotland vs Overtoun (2) "In the absence of conformity to essentials, the denomination would not be an entity cemented into solidity by harmonious uniformity of opinion, it would be a mere incongruous heap of, as it were, grains of sand, thrown together without being united, each of these intellectual and isolated grains differing from every other, and the whole forming a but nominally united while really unconnected mass; fraught with nothing but internal dissimilitude, and mutual and reciprocal contradiction and dissension.
" 544 A denomination within article 26 and persons who are members of that denomination are under in article 25 entitled to ensure the continuity of the denomination and such continuity is possible only may by maintaining the bond of religious discipline which would secure the continued adherence of its members to certain essentials like faith, doctrine, tenets and practices.
The right to such continued existence involves the right to maintain discipline by taking suitable action inter alia of excommunicating those who deny the fundamental bases of the religion.
The consequences of the exercise of that power vested in the denomination or in its head a power which is essential for maintaing the existence and unity of denomination must necessarily be the exclusion of the person excommunicated from participation in the religious life of the denomination, which would include the use of places of worship or consecrated places for burial dedicated for the use of the members of the denomination and which are vested in the religious head as a trustee for the denomination.
The learned Attorney General who appeared for the respondent submitted three points: (1) Assuming that excommunication was part of the religious practice of the denomination, still there was no averment in the petition that the civil results flowing from excommunication in the shape of exclusion from the beneficial use of denominational property was itself a matter of religion.
In other words, there was no pleading that the deprivation of the civil rights of a person excommunicated was a matter of religion or of religious practice.
(2) The "excommunication" defined by the Act deals with rights of civil nature as distinguished from religious or social rights or obligations and a law dealing with the civil consequence of an excommunication does not violate the freedom protected by article 25 or article 26.
(3) Even on the basis that the civil consequences of an excommunication are a matter of religion, still it is a 545 measure of social reform and as such the legislation would be saved by the words in article 25(2)(b).
I am unable to accept any of these contentions as correct.
(1) First I do not agree that the pleadings do not sufficiently raise the point that if excommunication was part of the "practice of a religion" the consequences that flow therefrom were not also part of the "practice of religion".
The position of the Dai as the religious head of the denomination not being disputed and his power to excommunicate also not being in dispute and it also being admitted that places of worship and burial grounds were dedicated for the use of the members of the denomination, it appears to me that the consequence of the deprivation of the use of these properties by persons excommunicated would be logical and would flow from the order of excommunication.
It could not be contested that the consequence of a valid order of excommunication was that the person excommunicated would cease to be entitled to the benefits of the trusts created or founded for the denomination or to the beneficial use or enjoyment of denominational property.
If the property belongs to a community and if a person by excommunication ceased to be a member of that community, it is a little difficult to see how his right to the enjoyment of the denominational property could be divorced from the religious practice which resulted in his ceasing to be a member of the community.
When once it conceded that the right guaranteed by article 25 (1) is not confined to freedom of conscience in the sense of the right to hold a belief and to propagate that belief, but includes the right to the practice of religion, the consequences of that practice must also bear the same complexion and be the subject of a like guarantee.
(2) I shall reserve for later consideration the point about the legislation being saved as a matter 546 of social reform under article 25(2)(b), and continue to deal with the argument that the impugned enactment was valid since it dealt only with the consequences on the civil rights, of persons excommunicated.
It has, however, to be pointed out that though in the definition of "excommunication" under section 2(b) of the impugned Act the consequences on the civil rights of the excommunicated persons is set out, that is for the purpose of defining an "excommunication".
What I desire to point out is that it is not as if the impugned enactment saves only the civil consequences of an excommunication not interfering with other consequences of an excommunication falling within the definition.
Taking the case of the Dawoodi Bohra community, if the Dai excommunicated a person on the ground of forswearing the basic tenets of that religious community the Dai would be committing an offence under section 4, because the consequences according to the law of that religious denomination would be the exclusion from civil rights of the excommunicated person.
The learned Attorney General is therefore not right in the submission that the Act is concerned only with the civil rights of the excommunicated person.
On the other hand, it would be correct to say that the Act is concerned with excommunications which might have religious significance but which also operate to deprive persons of their civil rights.
Article 26 confers on every religious denomination two rights which are relevant in the present context, by cl.
(b) "to manage its own affairs in matters of religion" and by the last clause cl.
(d) "to administer such property" which the denomination owns or has acquired (vide cl.
(c) (d) "in accordance with law.
" In considering the scope of article 26 one has to bear in mind two basic postulates: First that a religious denomination is possessed of property which is dedicated for definite uses and which under article 26 (d) the religious 547 denomination has the right to administer.
From this it would follow that subject to any law grounded on public order, morality or health the limitations with which article 26 opens, the denomination has a right to have the property used for the purposes for which it was dedicated.
So far as the present case is concerned, the management of the property and the right and the duty to ensure the proper application of that property is admitedly vested in the Dai as the religious head of the denomination.
Article 26 (d) speaks of the administration of the property being in accordance with law and the learned Attorney General suggested that a valid law could be enacted which would permit the diversion of those funds to purposes which the legislature in its wisdom thought it fit to appropriate.
I feel wholly unable to accept this argument.
A law which provides for or permits the diversion of the property for the use of persons who have been excluded from the denomination would not be "a law" contemplated by article 26(d).
Leaving aside for the moment the right of excommunicated persons to the enjoyment of property dedicated for the use of a denomination let me take the case of a person who has renounced that religion, and in passing it might be observed that even in cases of an apostate according to the principles governing the Dawoodi Bohra denomination there is no ipso facto loss of rights, only apostasy is a ground for excommunication which however could take place without service of notice or an enquiry.
It could not be contended that an apostate would be entitled to the beneficial use of property, dedicated to the Dawoodi Bohra community be it the mosque where worship goes on or other types of property like consecrated burial grounds etc.
It would be obvious that if the Dai permitted the use of the property by an apostate without excommunicating him he would be committing a dereliction of his duty as the supreme head 548 of the religion in fact an act of sacrilege besides being guilty of a breach of trust.
I consider that it hardly needs any argument to show that if a law permitted or enjoined the use of the property belonging to the denomination by an apostate it would be a wholly unauthorised diversion which would be a violation of article 26(d) and also of article 26(c), not to speak of article 25(1).
The other postulate is the position of the Dai as the head of the religious denomination and as the medium through which spiritual grace is brought to the community and that this is the central part of the religion as well as one of the principal articles of that faith.
Any denial of this position is virtually tantamount to a denial of the very foundation of the faith of the religious denomination.
The attack on the constitutionality of the Act has to be judged on the basis of these two fundamental points.
The practice of excommunication is of ancient origin.
History records the existence of that practice from Pagan times and Aeschyles records "The exclusion from purification with holy water of an offender whose hands were defiled with bloodshed.
" Later the Druids are said to have claimed the right of excluding offenders from sacrifice.
Such customary exclusions are stated to have obtained in primitive semitic tribes but it is hardly necessary to deal in detail with this point, because so far as the Muslims, and particularly among the religious denomination with which this petition is concerned, enough material has been set out in the judgment of the Privy Council already referred.
Pausing here, it might be mentioned that excommunication might bear two aspects: (1) as a punishment for crimes which the religious community justifies putting one out of its fold.
In this connection it may be pointed out that in a theocratic State the punitive aspect of excommunication 549 might get emphasized and might almost take the form of a general administration by religious dignitaries of ordinary civil law.
But there is another aspect which is of real relevance to the point now under consideration.
From this point of view excommunication might be defined as the judicial exclusion from the right and privileges of the religious community to whom the offender belongs.
Here it is not so much as a punishment that excommunication is inflicted but is used as a measure of discipline for the maintenance of the integrity of the community, for in the ultimate analysis the binding force which holds together a religious community and imparts to it a unity which makes it a denomination is a common faith, common belief and a belief in a common creed, doctrines and dogma.
A community has a right to insist that those who claim to be within its fold are those who believe in the essentials of its creed and that one who asserts that he is a member of the denomination does not, at least, openly denounce the essentials of the creed, for if everyone were at liberty to deny these essentials, the community as a group would soon cease to exist.
It is in this sense that it is a matter of the very life of a denomination that it exercises discipline over its members for the purpose of preserving unity of faith, at least so far as the basic creed or doctrines are concerned.
The impugned enactment by depriving the head of the power and the right to excommunicate and penalising the exercise of the power, strikes at the very life of the community by rendering it impotent to protect itself against dissidents and schismatics.
It is thus a violation of the right to practice religion guaranteed by article 25(1) and is also violative of article 26 in that it interfers with the rights of the Dai as the trustee of the property of the denomination to so administer it as to exclude dissidents and excommunicated persons from the beneficial use of such property.
550 It is admitted however in the present case that the Dai as the head of the denomination has vested in him the power, subject to the procedural requirements indicated in the judgment of the Privy Council, to excommunicate such of the members of the community as do not adhere to the basic essentials of the faith and in particular those who repudiate him as the head of the denomination and as a medium through which the community derives spiritual satisfaction or efficiency mediately from the God head.
It might be that if the enactment had confined itself to dealing with excommunication as a punishment for secular offences merely and not as an instrument for the self preservation of a religious denomination the position would have been different and in such an event the question as to whether articles 25 and 26 would be sufficient to render such legislation unconstitutional might require serious consideration.
That is not the position here.
The Act is not confined in its operation to the eventualities just now mentioned but even excommunication with a view to the preservation of the identity of the community and to pervent what might be schism in the denomination is also brought within the mischief of the enactment.
It is not possible, in the definition of excommunication which the Act carries, to read down the Act so as to confine excommunication as a punishment of offences which are unrelated to the practice of the religion which do not touch and concern the very existence of the faith of the denomination as such.
Such an exclusion cannot be achieved except by rewriting the section.
The next question is whether the impugned enactment could be sustained as a measure of social welfare and reform under article 25 (2) (b).
The learned Attorney General is, no doubt, right in his submission that on the decision of this Court in the 551 Mulki Temple case (Venkataramana Devaru vs State of Mysore(1), the right guaranteed under article 26(b) is subject to a law protected by article 25(2)(b) The question then before the Court related to the validity of a law which threw open all public temples, even those belonging to "a religious denomination" to "every community of Hindus including 'untouchable ' " and it was held that, notwithstanding that the exclusion of these communities from worship in such a temple was an essential part of the "practice of religion" of the denomination, the constitutionality of the law was saved by the second part of the provision in article 25(2)(b) reading: "the throwing open of Hindu religious institutions of a public character to all classes and section of Hindus".
The learned Attorney General sought support from this ruling for the proposition that article 25(2)(b) could be invoked to protect the validity of a law which was "a measure of social welfare and reform" notwithstanding that it involved an abrogation of the whole or part of the essentials of a religious belief or of a religious practice.
I feel unable to accept the deduction as flowing from the Mulki Temple case.
That decision proceeded on two bases : (1) As regards the position of "untouchables", article 17 had made express provision stating: " 'Untouchability ' is abolished and its practice in any form is forbidden.
The enforcement of any disability arising out of 'Untouchability ' shall be an offence punishable in accordance with law." and that had to be recognised as a limitation on the rights of religious denominations however basic and essential the practice of the exclusion of untouchables might be in its tenets or creed.
(2) There was a special saving as regards laws providing for "throwing open of public Hindu Religious Institu 552 tions to all classes and sections of Hindus" in article 25(2)(b), and effect had to be given to the wide language in which this provision was couched.
In the face of the language used, no distinction could be drawn between beliefs that were basic to a religion, or religious practices that were considered to be essential by a religious sect, on the one hand, and on the other beliefs and practices that did not form the core of a religion or of the practices of that religion.
The phraseology employed cut across and effaced these distinctions.
But very different considerations arise when one has to deal with legislation which is claimed to be merely a measure "providing for social welfare and reform".
To start with, it has to be admitted that this phrase is as contrasted with the second portion of article 25(2)(b), far from precise and is flexible in its content.
In this connection it has to be borne in mind that limitations imposed on religious practices on the ground of public order, morality or health have already been saved by the opening words of article 25(1) and the saving would cover beliefs and practices even though considered essential or vital by those professing the religion.
I consider that in the context in which the phrase occurs, it is intended to save the validity only of those laws which do not invade the basic and essential practices of religion which are guaranteed by the operative portion of article 25(1) for two reasons: (1) To read the saving as covering even the basic essential practices of religion, would in effect nullify and render meaningless the entire guarantee of religious freedom a freedom not merely to profess, but to practice religion, for very few pieces of legislation for abrogating religious practices could fail to be subsumed under the caption of "a provision for social welfare or reform".
(2) If the phrase just quoted was intended to have such a wide operation as cutting at even the essentials guaranteed by article 25(1), there 553 would have been no need for the special provision as to "throwing open of Hindu religious institutions" to all classes and sections of Hindus since the legislation contemplated by this provision would be par excellence one of social reform.
In my view by the phrase "laws providing for social welfare and reform" it was not intended to enable the legislature to "reform", a religion out of existence or identity.
Article 25 (2)(a) having provided for legislation dealing with "economic, financial, political or secular activity which may be associated with religious practices", the succeeding clause proceeds to deal with other activities of religious groups and these also must be those which are associated with religion.
Just as the activities referred to in article 25(2)(a) are obviously not of the essence of the religion, similarly the saving in article 25(2)(b) is not intended to cover the basic essentials of the creed of a religion which is protected by article 25(1).
Coming back to the facts of the present petition, the position of the Dai ul Mutlaq, is an essential part of the creed of the Dawoodi Bohra sect.
Faith in his spiritual mission and in the efficacy of his ministration is one of the bonds that hold the community together as a unit.
The power of excommunication is vested in him for the purpose of enforcing discipline and keep the denomination together as an entity.
The purity of the fellowship is secured by the removal of persons who had rendered themselves unfit and unsuitable for membership of the sect.
The power of excommunication for the purpose of ensuring the preservation of the community, has therefore a prime significance in the religious life of every member of the group.
A legislation which penalises this power even when exercised for the purpose above indicated cannot be sustained as a measure of social welfare or social reform without eviscerating the 554 guarantee under article 25(1) and rendering the protection illusory.
In my view the petitioner is entitled to the relief that he seeks and the petition will accordingly be allowed.
BY COURT: In accordance with the majority view of this Court, the petition is allowed.
The petitioner is entitled to his costs.
Petition allowed.
| section 3 of the Bombay Prevention of Excommunication Act, 1949 (Bom.
42 of 1949), it is provided that "Notwithstanding anything contained in any law, custom or usage for the time being in force, to the contrary, no excommunication of member of any community shall be valid and shall be of any effect.
" The preamble to the Act state, inter alia, that in keeping with the changing times and in the public interest, it was expedient to stop the practice of excommunication prevalent in certain communities and the definition of the word "community" contained in section 2 of the Act included the included the religious denomination of Dawoodi Bohras.
The petitioner, who was the religious head of the Dawoodi Bohra community and trustee of its property, challenged the constitutional validity of the Act on the ground that it violated its fundamental rights guaranteed by articles 25 and 26 of the Constitution.
Reliance was placed on behalf of the petitioner on the decision of Judicial Committee of the Privy Council in Hasan Ali vs Mansoor Ali, (1947) L. R. 75 I.A. 1, to which he was a party, as recognising his right as the 51st Dai ul Mutlaq of the community to excommunicate any of its members under prescribed limits.
^ Held, (Per Sarkar, Das Gupta and Mudholkar, JJ., Sinha, C. J., dissenting), that the impugned Act violated articles 25 and 26 of the Constitution and was, therefore, void.
It was evident from the religious faith and tenets of the Dawoodi Bohra community that the exercise of the power of excommunication by its religious head on religious grounds formed part of the management of its affairs in matters of religion and the impugned Act in making even such excommunication invalid infringed the right of the community under article 26(b) of the Constitution.
Hasan Ali vs Mansoorali, (1947) L. R. 75 I. A. 1, referred to.
497 It is well settled that that articles 25 and 26 of the Constitution protect not merely religious doctrines and beliefs but also acts done in pursuance of religion and thus guarantee rituals and observances, ceremonies and modes of worship which are integral parts of religion.
What is essential part of a religion or what its religious practice has to be judged in the light of its doctrine and such practices as are regarded by the community as a part of its religion must also be included in them.
Commissioner of Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shrur Mutt, ; , Mahant Jagannath Ramanuj Das vs The State of Orissa, [1954] S.C.R. 1046, Sri Venkataramana Devaru vs State of Mysore, ; and Durgah Committee, Ajmer vs Syed Hussain Ali; , , relied on.
The fundamental right under article 26(b) is not subjected to preservation of civil rights and its only limitations are those expressly mentioned by the Article itself i.e. public order, morality and health and those mentioned by cl. 2 of article 25 as has been held by this court.
The fact that in the instant case civil rights of an excommunicated person would be affected by the exercise of the fundamental right under article 26(b) can, therefore, be of no consequence nor could it be said that excommunication was prejudicial to public order, morality and health.
The impugned Act did not fall within article 25(2)(a) nor could it be said to be a law "providing for social welfare and reform" within the meaning of article 25(2)(b) of the Constitution.
It barred excommunication even on religious grounds and could not be said to promote social welfare and reform even though it sought to prevent consequent loss of civil rights.
Sri Venkataramana Devaru vs State of Mysore, ; , referred to.
Taher Saifuddin vs Tyebbhai Moosaji, A. I. R. , disapproved.
Per Sinha, C. J.
It was not correct to say that the Privy Council in Hasanali vs Mansoorali, held that the right of the Dai ul Mutlaq to excommunicate a member of the community was a purely religious matter.
The Dai was not merely the head of a religious community but also the trustee of its property.
While his actions in the purely religious aspect could be no concern of the Courts, those touching the civil rights of the members of the community were justiciable and liable to interference by the legislature and the judiciary.
498 The impugned Act, therefore, in seeking to protect the civil rights of the members of the community was within the saving provisions of article 25(2) (b) of the constitution since the right of a religious denomination under article 26(b) was subject to legislation under article 25(2)(b) of the Constitution.
Sri Venkataramana Devaru vs State of Mysore, ; , relied on.
The Commissioner of Hindu Religious Endowments, Madras vs Sri Lakshmindra Thirtha Swamiar of Sri Shrur Mutt, ; , considered.
The Durgah Committee, Ajmer vs Syed Hussain Ali, ; , referred to.
Case law discussed.
The Act had for its purpose the fulfilment of individual liberty of conscience guaranteed by Art 25(1) and sought to implement article 17 of the Constitution in attempting to save an excommunicated person from virtually becoming an untouchable in his community and its constitutional validity could not, therefore, be questioned.
Held, further, that the Act in pith and substance fell within Entries 1 and 2 of List III of the Legislative Lists of the Constitution Act of 1935, and there could be no doubt as to the competency of the Legislature in enacting it.
Per Ayyangar, J. The right of Dai ul Mutlaq to exercise the right of excommunication against a member of the denomination as recognised by the Privy Council in Hasanali vs Mansoorali, could not be in doubt.
A denomination under article 26 and its members under article 25 have the right to ensure its existence by maintaining discipline and ensuring adherence to its tenets and practices by such suitable action as excommunication of those who denied the fundamental bases of the religion.
The consequence of such action must necessarily involve the exclusion of an excommunicated person from participation in the religious life of the denomination including the use of places of worship or burial grounds dedicated for the use of the members and vested in the religious head as trustee for the denomination.
Dill vs Watson, (1836) 3 Jones Rep. (Ir. exhibit) 48 and Free Church of Scotland vs Overtoun, , referred to.
It was not correct to say, in view of the definition of the word 'excommunication ' contained in the Act., that it merely sought to save the civil rights of an excommunicated person and had no concern with excommunication on religious 499 grounds entailing, under the laws of the denomination, deprivation of civil rights.
The impugned Act by depriving the Dai of the right to excommunicate and making its exercise a penal offence struck at the very life of the denomination and rendered it impotent to protect itself against dissidents and schismatics and thereby contravened article 25 and 26 of the Constitution.
The impugned Act cannot also to sustained as a measure of social welfare and reform under article 25(2)(b) or under article 17 of the Constitution.
Venkatarama Devaru vs State of Mysore, ; , distinguished.
The expression "laws providing for social welfare and reform" in article 25(2)(1) of the Constitution was not intended to enable the legislature to "reform" a religion out of existence or identity.
The activities referred to in article 25(2)(a) are obviously not of the essence of the religion nor was article 25(2)(b) intended to cover the essentials of a religion which are protected by article 25(1).
Faith in the Dai ul Mutlaq being an essential part of the creed of the denomination that held it together, the impugned Act clearly contravened article 25(1) of the Constitution by taking away his power of excommunicate by which he kept the denomination together and maintained the purity of its fellowship.
| The petitioner, the editor of a newspaper, was detained under r. 30(1)(b) of the Defence of India Rules, 1962.
He filed a petition under article 32 of the Constitution for a writ of habeas corpus challenging the legality of the detention order on various grounds.
Dismissing the petition, HELD:Rule 30 (1) (b) cannot be said to be ultra vires of section 3 (2) (15)(i) of the Defence of India Act for the reason that it does not state that the satisfaction of the authority making the order of detention has to be on grounds appearing to it to be reasonable.
The rule requires only that the detaining authority must be satisfied that the detention is necessary for the purposes mentioned and that is what the latter part of the section under which it was made also says.
This part does not contain any requirement as to satisfaction on reasonable grounds.
The rule has clearly been made in terms of the section authorising it.
[211 F] Article 352 of the Constitution does not require the proclamation to state the satisfaction of the President about the Emergency.
The Article requires only a declaration of emergency threatening the security of India by one of the causes mentioned.
The words "to that effect" can have no other meaning.
A proclamation ceases to have effect only by one of the events mentioned in cl. 2 of article 352 of the Constitution.[212 C] Section 3(2)(15)(iv) of the Defence of India Act and r. 30 A of the Defence of India Rules, does not give a right to make a representation.
Their effect is to provide a review of the detention order by the authorities and in the manner mentioned.
Rule 23 of the Defence of India (Delhi Detenus) Rules, 1964, states that a detente will be allowed to interview a legal practitioner for the Purpose of drafting his representation against his detention.
[213 C D].
The fact that newspapers and men connected with them may be dealt with under other provisions of the Art and Rules does not prevent detention of such persons under r. 30(1)(b) of the Defence of India Rules.
[213 H] The order need not mention the part of India which was to be Prejudicially affected by the acts of the detenue.
| In exorcise of the powers conferred by section 29 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 (Tamil Nadu Act 18 of 1960), the Government of Tamil Nadu by a Notification No. II (2) H. O. 6060/76 dated 21 t November, 1976 exempted the Buildings owned, inter alia by all the co operative societies from all the provisions of the said Act.
Since the protection available to the petitioners, who wore tenants in a building belonging to respondent No. 2, an Apex Society registered under the Tamil Nadu Co operative Societies Act, 1961 and covered by the said notification.
had been withdrawn and since the petitioners were facing the imminent prospect of suffering eviction decrees against them, they filed the present writ petitions challenging the constitutional validity of the impugned notification on the ground that the same was violative of article 14 of the Constitution.
The petitioners contended that treating the buildings owned by all the co operative societies in the State of Tamil Nadu as falling into one group while exercising the power under sec.
29 of the Act will have to be regarded as a rational classification based on an intelligible differentia but the differentia on which this classification was based had no excuse with the object of curbing the two evils of rack renting and unreasonable eviction for which the power to grant exemption had been conferred upon the State Government under sec.
29 of the Act and since the impugned notification did not satisfy be test of nexus the exemption granted to all such buildings could not be sustained and Will have to be regarded as discriminatory and violative of article 14.
In other words Counsel urged that there was and is up warrant OF any presumption that co operative societies qua landlords will not indulge in rack renting or will not unreasonably evict tenants; in fact they would not be different from other private landlords so far as the two evils sought to be curbed by the Act are concerned and therefore Counsel urged that the exemption granted could not be said to be in conformity with the guidance afforded by the scheme and the previsions of the Act.
417 Dismissing the petitions, ^ HELD: It is true that under sec.
4 of the Tamil Nadu Co operative Societies Act the very object of every co operative society registered thereunder is the promotion of economic interests of its members and sec.
62 of the Act provides for payment of dividends on shares to its members as also for payment of bonus to its members and paid employees.
But these aspects of a co operative society do not mean that it could be likened to any other body undertaking similar activities on commercial lines and to do so would be to miss the very basis on which the co operative movement was launched and propagated and has been making progress in the country during the last several decades.
Indisputably, co operative societies which carry on their activities in various fields do so for the purpose of attaining the social and economic welfare of a large section of the people belonging to the middle class and the rural class by encouraging thrift, self help and mutual aid amongst them, especially by eliminating the middle man.
But the object of promoting the economic interrupts of the members has to be achieved by following co operative principles where the profit motive will be restricted to a reasonable level unlike other commercial bodies where sky is the limit so far as their desire to earn profits is concerned.
Sections 4 and 62 of the Act and Rule 46 of the Rules make it clear that in the matter of distribution of profits by way of payment of dividend to members and payment of bonus to members as well as paid employees restrictions have been placed by law and the same is maintained at a reasonable level and considerable portion of the net profits is apportioned and required to be carried to various kinds of funds, like co operative development fund, co operative education fund, reserve fund etc.
In fact it is such statutory appropriations and restrictions on payment of dividends and bonus which differentiates co operative societies from other bodies undertaking similar activities on commercial lines and therefore, the buildings belonging to such co operative societies are substantially different from the buildings owned by private landlords.
Further it has to be appreciated that these statutory provisions are applicable to all types of co operative societies specified in Rule 14 whatever be their nature or functions.
The profit element being maintained at a reasonable level by provisions of law in all types of co operative societies there is every justification for the assumption that no co operative society will indulge in rack renting or unreasonable eviction.
In this view of the matter if the State Government came to the conclusion that in the case of co operative societies there being no apprehension that they would indulge in either of these two evils exemption from the provisions of the Tamil Nadu Act No. 18 of 1960 should be granted in favour of buildings belonging to such co operative societies it will have to be regarded is a legitimate exercise of the power conferred on it under sec.
29 of the Act the same being in conformity with the guidance afforded by the preamble and provisions of the Act in that behalf.
[422D 5; 424C G] Besides, on the factual side of the issue the facts and circumstances put forward by the State Government in its counter affidavit which have gone unchallenged clearly show that the differentia on the basis of which the classification was made had a clear nexus with the object with which the power to grant exemption has been conferred upon the State and therefore the impugned notification will have to be regarded as valid.
[425E F] 418
| In a petition under article 32 of the Constitution the petitioner detenu complained that though the grounds of detention were served on the detenu on the date of arrest (October 20, 1980) the materials and documents on which the order of detention was based were not supplied to him till November 5, 1980 and that his representation dated November 18, 1980 was disposed of nearly a month later (December 15, 1980) and that the failure on the part of the detaining authority to supply the requisite documents and materials and the unexplained delay in the disposal of the representation constituted violation of the safeguards contained in Art, 22(5) of the Constitution which vitiated the order of detention.
Allowing the petition, ^ HELD: It is well settled that the law of preventive detention has to satisfy a two fold test: (1) that the protection and the guarantee afforded under article 22(5) of the Constitution are complied with, and (2) that the procedure is just and reasonable.
[463G] Before an "effective representation" could be made by the detenu he must be supplied with the documents and materials which form the basis of the grounds of detention and unless this is done there could be no question of making any representation, much less an "effective representation" against the order of detention.
The documents and materials relied upon in the order of detention form an integral part of the grounds and must be supplied to the detenu pari passu the grounds of detention.
[461B] Smt.
Icchu Devi Choraria vs Union of India & Ors. ; and Smt.
Shalini Soni & Ors.
vs Union of India & Ors.
; referred to.
If procedure under article 21 has to be reasonable, fair and just, then the words 'effective representation ' appearing in article 22(5) must be construed so as to provide a real and meaningful opportunity to the detenu to explain his case to the detaining authority in his representation.
If the words 'effective representation ' are interpreted in an artificial or fanciful manner, then it would defeat the very object not only of article 22(5) but also of article 21 of the Constitution.
It is settled law that it is of the utmost importance that all the necessary safeguards laid down by the Constitution under article 21 or article 22(5) should be complied with fully and strictly and any departure from any of the safeguards would vitiate the order of detention.
[463E F] Maneka Gandhi vs Union of India [1978] 2 SCR 621 referred to.
460 In the instant case not only were the documents and materials not supplied to the detenu alongwith the order of detention but there had been an unexplained delay of about 25 days in disposing of the representation of the detenu.
[465B] [Despite repeated warnings by this Court the detaining authorities do not care to comply with the spirit and tenor of the safeguards contained in article 22(5) of the Constitution.
There should be no difficulty in keeping copies of the documents and materials referred to in the order of detention and supplying them to the detenu along with the order of detention.
This dereliction on the part of the detaining authorities results in the release of persons indulging in such anti national activities as smuggling though on merits the detentions in suitable cases may be justified.]
| The Customs officials intercepted a ship off Bombay and seized from it various articles worth several lakhs of rupees.
None of the seven persons on board the ship possessed any documents authorising them to import the goods.
On August 19, 1981, section one of the seven persons on board the ship, was detained under the provisions of ; but the Advisory Board reported that there was in its opinion no sufficient cause for his detention.
He was therefore released.
By an order dated November 7, 1981 the petitioner, who was also one of the persons on board the same ship, was detained under the COFEPOSA in respect of the same transaction.
While dismissing the habeas corpus petition filed by the petitioner 's wife, the High Court was of opinion that three out of the four grounds on which the petitioner was detained were bad for one reason or the other but that the first ground was enough to sustain the order of detention in that important material relevant to that ground was neither placed before nor considered by the detaining authority while passing the order of detention.
In the petition under Article 32 of the Constitution it was contended on behalf of the petitioner that had the detaining authority in the instant case been apprised that the Advisory Board, on examining an identical ground in the case of S had reported that there was no sufficient cause for detention of S who was involved in the same transaction, it might not have passed the order of detention against the petitioner which is based on similar facts and that its failure to place such highly relevant and important material before the detaining authority has vitiated the order of detention.
Allowing the petition, ^ HELD: The failure of the State Government to place before the detaining authority the opinion which the Advisory Board had recorded in favour of another detenu who was detained partly on a ground relating to 615 the same incident deprived the detaining authority of an opportunity to apply its mind to a piece of evidence which was relevant, if not binding.
In other words, the detaining authority did not, because it could not, apply its mind to a circumstance which reasonably could have affected its decision whether or not to pass an order of detention against the petitioner.
[618 B H] The opinion of the Board may not have been binding on the detaining authority but it cannot be gain said that the fact that the Board had recorded such an opinion on identical facts involving a common ground was at least a relevant circumstance which ought to have been placed before the detaining authority in the case.
The ground on which the High Court upheld the order of detention was similar to one of the grounds on which S was detained, the transaction being one and the same as also the incident on which the two orders of detention were based.
This is why the opinion of the Board in the earlier case became relevant in the present case.
[618 D F] It may be that there were other grounds on which S was detained and that the Advisory Board might have come to the conclusion that since these grounds were not enough to justify his detention there was no sufficient cause for detaining him.
But it is not as if the opinion of the Board was binding on the detaining authority.
The substance of the matter is that the detaining authority in this case failed to apply its mind to a highly relevant circumstance that an order of detention passed on the ground on which the detention of the petitioner rested, in addition to something more, was not sustained by the Advisory Board in the case of section The reasonable probability that, since the Advisory Board had not sustained S 's detention on a ground which was common to him and the petitioner, the detaining authority would have, if at all, passed the order of detention against the petitioner on the remaining three grounds only cannot be excluded.
Those three grounds had been held to be bad by the High Court.
[619 E H] The explanation of the detaining authority that the Board 's opinion dated October 19, 1981 came into existence after he had passed the order of detention on October 8, 1981 is not correct.
When the order of detention was passed on November 7, 1981 the Board 's opinion in Ss ' case was available to the State Government nearly three weeks before that date and it was the duty of the State Government to place that opinion before the detaining authority.
[620 E F]
| The appellant failed to prepare a budget of the Waqf Estate of which he was the mutawalli, for the year 1952 53 and send a copy of it to the Majlis before January 15, 1952, as he was bound to do under section 58(1) of the Bihar Waqfs Act, 1947, and was convicted by the 'Magistrate under section 65(1) of the Act and sentenced to pay a fine of Rs. 100, in default to undergo fifteen days simple imprisonment.
It was contended for him that the conviction and sentence were not valid because (1) section 58 of the Act contravened article 19(1) (g) of the Constitution of India, as it gave unrestricted power to the Majlis to alter or modify the budget prepared by the mutawalli without a right of appeal against the action of the Majlis and so imposed an unreasonable restriction on the mutawalli in carrying on his occupation as such, and (2) section 65 Of the Act did not provide for any imprisonment in default of payment of fine.
Held, that having regard to the fact that a mutawalli occupies the position of a manager or custodian and the supervision over him by the Majlis with respect to due administration of the waqf property is necessary and that the powers of the Majlis to alter or modify the budget prepared by the mutawalli are controlled by sub section
(6) Of section 58 of the Act, the restrictions imposed by section 58 Of the Act on the exercise of his powers 1033 by a mutawalli are reasonable.
Accordingly, the provisions Of section 58 'of the Act do not offend article 19 (i) (g) of the Constitution.
Commissioner, Hindu Religious Endowments, Madras vs Sri Lakshmindya Thirtha Swamiar of Sri Shirur Mutt, ; , relied on.
The order of the Magistrate providing for imprisonment in default of payment of fine is not invalid in view Of section 33 of the Code of Criminal Procedure read with sections 4o and 67 of the Indian Penal Code.
| The appellant instituted a suit for the recovery of money against the respondents in a Court in Gwalior State in May 1947.
The respondents who were residents in U. P. did not appear before the court and in November 1948 the Gwalior Court passed an ex partc decree.
On September 14, 1951, the Gwalior Court transferred the decree for execution to Allahabad, and on October 16, 1951, the appellant filed an application for execution of the decree before the Allahabad Court.
The respondents contended that the decree being a decree of a Foreign Court to whose jurisdiction they had not submitted was a nullity and the execution application in respect thereof was not maintainable.
Held, that the decree was not executable at Allahabad.
Per Kapur, Ayyangar and Mudholkar, JJ.The decree of the Court in Gwalior State sought to be executed was a foreign decree which not change its nationality inspite of subsequent constitutional changes or amendments in the Code of Civil Procedure.
On the day on which it passed the decree the Gwalior Court was a foreign Court within the meaning of section 2 (5) of the Code.
None of the conditions necessary to give its judgment extra territorial validity existed (i) the respondents were not the subjects of Gwalior; (ii) they were not residents in Gwalior at the time the suit was filed, (iii) they were not temporarily present in gwalior when the process was served upon them, (iv) they did not select the forum which passed the decree against them, (v) they did not voluntarily appear before the court, and (vi) they had not contracted to submit to the jurisdiction of the 579 by the Indian Code, was a different court from that which passed the decree under the Local Code, and was not the court.
which passed the decree within the meaning of section 39.
Sections 37 to 42 of the Code deal with execution of decree., passed by the courts governed by the Indian Code.
The decree could not be executed under the provisions of section 43 of the Code at any time.
After its adaptation in June 1950, section 43 applied to "a decree passed by a Civil Court in a Part B State".
There were no Part B States at the time when the decree was passed and these words could not be read as "a decree passed by a civil court in what became a Part B State".
Nor could the decree be executed under section 44 as that section was also inapplicable to this decree.
Article 261 (3) which provides that the final judgments or orders of Civil Courts in any part of the territory of India shall be capable of execution anywhere within that territory is inapplicable to the decree of the Gwalior court as the, provision is prospective and not retrospective.
Per Sarkar and Das Gupta, JJ.
Even in the decree passed by Gwalior Court was not a foreign decree the Allahabad Court had no power to execute it either under section 38 or under sections 43 or 44 of the Code of Civil Procedure.
Section 38 provides that a decree may be executed either by the court which passed it or by the court to which it is sent for execution.
The Allahabad Court was not the court which passed the decree.
Section 39 empowers the court which passed the decree to transfer it for execution to another court.
The word "court" in the phrase "court which passed the decree" in section 39 contemplates only courts governed by the Indian Code of Civil Procedure.
The Gwalior ,.Court which was governed by the Gwalior Code when it passed the decree had a distinct identity from the court at Gwalior after it came to be governed by the Indian Code.
The Court which transferred the decree was accordingly not the court which passed the decree and the order of transfer was not a valid order.
Section 43 of the Code provided for the execution of decrees passed by the Civil Courts in places where the Indian Code did not extend.
The decree of the Gwalior Court did not fall within this section as it stood before the Constitution.
A, After the adaptation in 1950 the section applied to a decree passed "by a Civil Court in a Part B State".
These words could not be read as "by a civil court in an Indian State which has later been included in a Part B State".
The Gwalior Court which passed the decree was not a Civil Court in a Part B State. 'Section 44 was equally inapplicable to the decree,.
The section after adaptation in 1950 580 applied only to decrees of revenue courts.
Before the adap tation it could apply only if there was a notification issued by the U. P. Government but no such notification was issued.
| % These petitions under Article 32 of the Constitution India challenge the constitutional validity of the Bihar Non Government Secondary Schools (taking over of Management and Control) Act, 1981 (Bihar Act No. 33 of 1982) as violative of Article 30 of the Constitution.
The petitioner No. 1, the All Bihar Christian Schools ' Association, is a religious minority registered society, and the petitioner No. 2, the Secretary cum Treasurer of the petitioner No. 1.
The petitioner association had set up a number of secondary schools in Bihar, which were managed by the Christian dioceases societies and these institutions were recognised by the Education Department Development of the State of Bihar.
In Bihar, a number of private secondary schools were established and managed by private individuals or societies.
The State Government considered it necessary to take over the management and Control of the Non Government Secondary Schools for better organisation and development of the Secondary Education in the State, and it enacted the Bihar Non Government Secondary Schools (Taking over of Management and Control) Act, 1981.
The Act provides for the taking over of the management and control of the Non Government Secondary Schools by the State Government for improvement, better organisation and development of the secondary education in Bihar.
The scheme of the Act shows that after the take over of the nongovernment secondary Schools by the State Government, the management and control of such schools would be carried on in accordance with the provisions of the Act.
While the impugned Act provides for taking over the management and control of the Non Government Secondary Schools, the 50 management and control of the remaining categories of schools have not been taken over.
Although the Act contained provisions for the taking over of other secondary schools, yet so far as the minority secondary schools are concerned, the Act does not provide for any compulsory acquisition or taking over of the management and control of such schools.
The petitioners contended that (i) the provisions of the Act directly interfere with the management and control of the Christian minority schools, (ii) section 3(2) of the Act which provides for the taking over of minority secondary schools by the Government interferes with the petitioners ' fundamental right under Article 30(i) of the Constitution, (iii) the provisions of section 18(2) are violative of Articles 30 and 14 of the Constitution of India and (iv) the clauses (a) to (k) of section 18(3) of the Act interfere with the management of the minority secondary schools in violation of Article 30(i) of the Constitution.
The respondent urged inter alia that the Government has no intention to interfere with fundamental rights of the minority community to establish schools of its choice; the provisions of the impugned Act are directed to ensure academic excellence and good management; the management of the minority institutions had been given free hand in managing their institutions, but in order to maintain education excellence and discipline, regulatory provisions have been made in section 18 of the Act, the purpose of which is to ensure that the minority schools are managed by the properly constituted managing committees; security of the services of the staff is ensured, and in the matter of taking disciplinary action, the managing committees should conform to the principles of natural justice, etc.
Dismissing the writ petitions, the Court, ^ HELD: By the various decisions of this Court, it is now well settled that the minorities based on religion or language, have fundamental freedom to establish and manage educational institutions of their own choice, but the State has the right to provide regulatory provisions for ensuring educational excellence, conditions of employment of the teachers, ensuring health, hygiene and discipline and allied matters.
Such regulatory provisions do not interfere with the minorities ' fundamental right of administering their educational institutions; instead, they seek to ensure that such institutions are administered efficiently and that students who come out of the 51 minority institutions after completion of their studies are well equipped with knowledge and training so as to stand at par in their avocation in life without any handicap.
If the regulatory provisions indirectly impinge upon minorities ' right of administration of their institutions, it would not amount to interference with the fundamental freedom of the minorities as the regulatory provisions are in the interest of the minority institutions themselves.
If the minority institution seeks affiliation or recognition from the State or the Education Board, the State has the right to prescribe syllabi and terms and conditions for giving such affiliation or recognition or extending the grants in aid.
On the one hand, the State is under an obligation to ensure that educational standards in the recognised institutions must be according to the need of the society and according to the standards which ensure the development of personality of the students turning out to be civilised, useful members of the society and to ensure that the public funds disbursed to the minority institutions are properly utilised for the given purpose.
On the other hand, the State has to respect and honour minority rights under Article 30(1) of the Constitution in the matter of establishing and carrying the administration of institution of their choice.
In order to reconcile these two conflicting, the State has to strike a balance; the statutory provisions should serve both the objects and such statutory provisions have to withstand the test of Article 30(l) of the Constitution.
These principles have to be borne in mind in considering the question of the validity of the statutory provisions relating to the minority educational institutions.
[63D G; 64E G] The petitioners challenged the constitutional validity of sections 3 and 18 of the Act on the ground of interfering with their fundamental rights guaranteed under Article 30(1) of the Constitution.
Section 3 provides inter alia for the compulsory taking over of the management and control of the recognised non government secondary schools.
After elaborately going through the provisions of the said two sections, dealing with the various aspects of the management, administration and working of a minority institution; the conclusion was that the two sections were not violative of Article 30(1) of the Constitution and do not encroach upon the fundamental rights of a minority institution guaranteed under Article 30(i) of the Constitution.
[53D; 68E; 69G] Guarantee of freedom to a minority institution under Article 30(l) of the Constitution does not permit the minority institution to act contrary to law and order, law of contract, industrial laws or other general laws enacted for the welfare of the society.
If the minorities ' 52 claim for immunity from the law of the land is upheld, that would be unreasonable and against the interest of the minority institutions themselves.
[79D E] The impugned Act does not violate the petitioners ' rights guaranteed under Article 30(I) of the Constitution.
[80G] In Re.
The Kerala Education Bill, 1957(1959)SCR 995; Rev. Sidhajbhai Sabhai and others vs State of Bombay, ; ; State of Kerala vs Very Rev. Mother Provincial, ; ; The Ahmedabad St. Xavier 's College Society Lilly Kurian vs Sr. Lewine & Ors., ; ; Frank Anthony Public School Employees ' Association case; , ; Mrs. Y. Theclamma 's Case, and All Saints High School, Hyderabad vs Government of Andhra Pradesh & Ors., ; , referred to.
|
Civil Appeals Nos. 201 and 202 of 1961.
404 Appeals from the judgment and decree dated May, 16, 1958 of the Patna High Court in L. P. As.
Nos 13 and 14 of 1957.
A. V. Viswanatha Sastri, R. K. Garg, M. K. Ramamurthi, D. P. Singh and section C. Agarwala, for the appellants.
M. C. Setalvad, Attorney General for India.
B. P. Rajgarhia and K. K. Sinha, for the respondents.
December 22.
The Judgment of the Court was delivered by DAS GUPTA, J.
These appeals raise a question as to the manner in which a creditor company can validly cast its vote at a meeting of the creditors held under the provisions of section 153 of the Indian Companies Act, 1913.
The question arises in connection with such a meeting held of the creditors of the Gaya Sugar Mills Ltd. On November 14, 1951, an order was made by the Company Judge in the Patna High Court for the winding up of the Gaya Sugar Mills Ltd.
On October 6, 1953, an order was made by the learned Judge for action to be taken under section 153 of the Indian Companies Act.
Mr. G. C. Banerjee, who was appointed Chairman to hold the meeting of the creditors held separate meetings of the debenture holders, secured creditors and of the unsecured creditors.
In his Report he stated as regards the meeting of the unsecured creditors that "thirty unsecured creditors either in person or through proxy attended and took part in the meeting," and that ultimately a resolution proposed by one of the creditors, the Standard Vacuum Oil Company and seconded by another creditor Shri K. C. Agarwal was passed "by the creditors present by majority in number as well as three fourth in value.
" It appears that at this meeting one Arjun Prasad claiming to represent two creditor companies, viz., Bhandani Bros., and the Hindustan 405 Coal Company Ltd., cast his votes on behalf of these two companies, in support of the resolution.
No objection was taken at the meeting to the validity of these votes by any of the creditors who opposed the resolution and the Chairman proceeded on the basis that these votes were validly cast.
It is not disputed that if these votes were not validly cast the requisite majority of three fourths in value would not be obtained.
When the application came up for final hearing before the Court an objection was taken on behalf of creditors who opposed the scheme that the votes cast by Arjun Prasad on behalf of the two creditor companies, viz., Bhandani Brothers and the Hindustan Coal Company were not valid votes and so the requisite majority of three fourths in value of the creditors had not been obtained.
The Company Judge was of the opinion that there was no sufficient explanation as to why the objection as to the validity of the votes was not taken earlier and so the objection raised at the late stage could not be entertained.
On the merits also he held that the resolution passed by the creditor companies authorising Arjun Prasad, to attend the meeting of the unsecured creditors of the Gaya Sugar Mills Ltd., and vote on behalf of the companies, were sufficient in law to make his attendance at the meeting the attendance of the companies "in person" and his voting on behalf of the companies valid voting of the companies.
Accordingly, he rejected this objection.
On appeal a Division Bench of the Patna High Court has allowed the objection, being of opinion that the delay in raising the objection would not entitle the Court to ignore the legal defect of the votes and that in law the votes cast by Arjun Prasad were not valid votes of these two creditor companies, viz., Bhandani Brothers and the Hindustan Coal Company.
A contention that no appeal 406 lay to the High Court from the order of the Company Judge was rejected.
Therefore, the learned Judges set aside the order of the Company Judge as to this part of the case.
They, however, gave a certificate that as regards the value and nature of the case, it fulfils the requirements of article 133(1)(a) of the Constitution and is a fit one for appeal to this Court.
On this certificate the present appeals have been filed.
Three points were raised before us by Mr. Sastri in support of the appeals.
The first is that from the decision of the Company Judge, an appeal lay to this Court and not to the High Court.
Secondly, it was urged that the objection to the validity of the votes not having been taken earlier should not be allowed to be raised for the first time during arguments at the final hearing of the application.
Lastly, it was urged that the votes were valid.
As regards the first point it is to be noticed that sub section 7 of section 153, which was added in 1936 provides that an appeal shall lie from any order made by the court exercising original jurisdiction under the section to the authority authorised to hear appeals from the decisions of the Court.
It therefore could not be disputed and was not disputed that an appeal did lie from the order made by the Company Judge on October 6, 1953.
The controversy is whether the appeal lay to this Court or the High Court.
In other words, the question is, which is the authority authorised to hear appeals from the decisions of the Court ? The "Court" here cannot but mean the Court exercising original jurisdiction.
When the Company Judge exercises the jurisdiction he does it under the provisions of section 3 of the Companies Act which says that the Court having jurisdiction under this Act shall be the High Court having jurisdiction in the place at which the registered office of the company is situate.
The authority authorised to hear appeals from 407 appealable decisions of a Single Judge of the Patna High Court when exercising original jurisdiction lie to the High Court and not to this Court.
(Vide Clause 10 of the Letters Patent).
It necessarily follows that the appeal from the order of the Company Judge lay to the High Court and not to this Court.
There is, therefore, no substance in the first point raised on behalf of the appellant.
The next contention that the objection cannot be entertained for the first time at the final hearing of the application appears to us to be equally unsound.
It is undoubtedly true that the opposing creditors were guilty of negligence in not drawing the attention of the Chairman to what they considered to be a defect in the voting on behalf of the two creditor companies, viz., Bhandani Brothers and the Hindustan Coal Co., and no less negligence in not bringing this to the Court 's notice at the earliest opportunity.
Laches on the part of some creditors cannot however justify the Chairman or the Court in disobeying the requirements of the Act.
If in law the two votes cast by Arjun Prasad for these two creditor companies were not validly cast he three fourth majority requisite under section 153, sub section 2, would not be there and so no further action under section 153 could be taken by the Court in the matter.
How can the Court turn a blind eye to the fact, if proved, that on the basis of valid votes at the meeting the requisite majority was not obtained, merely because the Chairman 's attention was not drawn to the defect or it was not brought to the Court 's notice earlier ? In our opinion, the learned Judges who heard the appeal were right in thinking that however deplorable the delay by opposing creditors in raising the objection might be, that would not be a sufficient reason for refusing to entertain the objection.
This brings us to the main question in controversy, viz., whether the resolutions passed by the 408 two creditor companies, viz., Bhandani Brothers and the Hindustan Coal Company, authorising Arjun Prasad to attend the meeting on their behalf and to vote there on their behalf made Arjun Prasad 's voting valid voting.
Section 153(2) of the Indian Companies Act is in these words : "If a majority in number representing three fourths in value of the creditors or class of creditors, or members or class of members, as the case may be, present either in person, or by proxy at the meeting, agree to any compromise or arrangement, the compromise or arrangement shall, if sanctioned by the Court be binding on all the creditors or the class of creditors, or on all members or class of members, as the case may be, and also on the company, or, in the case of a company in the course of being wound up, on the liquidator and contributories of the Company.
" The agreement has to be of a majority in number representing three fourths in value of those who are present either in person or by proxy at the meeting.
The agreement of those who are not present at the meeting either in person or by proxy cannot be taken into consideration.
Any creditor whether a corporation or a natural person can be present at a meeting by proxy.
A natural person can of course be present at a meeting "in person".
Can a corporation be present at a meeting "in person"? It appears to us that unless there is some special provision by a law, a company which is not a physical person cannot "be present" at any place "in person.
" It is true that under the , a company is a "Person", so that whenever the word "person" is used in any statute a company would be included thereunder.
The definition in the can however be of no assistance in interpreting the words "to be present in person", and the difficulty in the way of a company being present in person can be obviated only by statutory provisions or rules having the force of law.
409 Nor can the appellant derive any assistance from the English Case In re Kelantan Coco, Limited and Reduced cited by the learned counsel.
In that case, the Court was dealing with a petition for reduction of capital.
In deciding whether the special resolution to reduce the capital of the company had been duly passed, the Court had to consider whether there was a quorum at the confirmatory meeting, at which one member of the company and one representative appointed under s.68 of the Companies (Consolidation) Act, 1908, to represent a shareholder of the company, the Eastern Development Corporation, Limited, were present.
The articles of Association provided: "two members personally present shall be a quorum.
" It was held that a representative appointed under section 68 should be taken into account in considering whether there was a quorum.
The provisions of section 68 were similar to those of section 80 of the Indian Companies Act, 1913, and thereunder a company which is a member of another company may, act as its representative at any meeting of that other company.
The presence of such a representative was taken in the above case to amount to personal presence of a member of the company.
The case does not deal with the question of a creditor company.
In the , a provision has been introduced under which a company which is a creditor of another company may by resolution of its directors, authorises such person as it thinks fit to act its representative at any meeting of any creditors of the company held in pursuance of the Act and a person authorised in this manner shall be entitled to exercise the same rights and powers (including the right to vote by proxy) on behalf of the company, (section 187(1)(b) and 2).
No such provision however is to be found in the Indian Companies Act, 1913.
It is unnecessary for us to 410 consider whether under this new provision the attendance of a person authorised in this manner at a meeting of the creditors will amount to attendance of the creditor company "in person".
For, the present case is governed by the provisions of the Indian Companies Act, 1913, and not by this new provision.
When the Companies Act was amended in 1936, an addition was made in section 246 which empowers the High Court to make rules, concerning the mode of proceedings inter alia "for the holding of meetings of creditors and members in connection with proceedings under section 153 of this Act." Accordingly, a number of Rules were framed by the Patna High Court in exercise of this additional power.
Rule 144 of the Rules states that a creditor or contributor may vote either in person or by proxy.
Rules 145 to 153 deal with various questions as regards proxies.
Of these Rule 150 lays down how a proxy is to be given where a creditor is a corporation.
Admittedly, no proxy in accordance with Rule 150 was given by the two creditor companies, Bhandani Brothers and the Hindustan Coal Company, in the present case.
There is nothing in these rules which can assist Mr. Sastri 's argument that a resolution by the directors of the company authorising a director or some other person to represent the company at the creditors ' meeting makes him a "present in person" in law for that company at the meeting.
Mr. Sastri 's last argument was that as the business of the company has to be managed by the directors and the directors can delegate any of their powers to any one of themselves, the attendance of Arjun Prasad at the meeting should reasonably be construed as the attendance of all the directors and so the attendance of the company "in person".
As we have already indicated it does not appear to us that in the Act of 1913 their is any provision 411 for attendance of the company "in person", but apart from that we wish to point out that the resolution made by the two companies do not appear to us to delegate the powers of the directors to Arjun Prasad.
The conclusion of the High Court that the votes cast by Arjun Prasad on behalf of the two companies., viz., Bhandani Brothers and the Hindustan Coal Company, were not valid votes in our opinion, correct.
The appeals are accordingly dismissed with costs.
One set of hearing fee.
Appeals dismissed.
| Subsequent to an order made for the winding up of a company, the Company Judge made a direction for action to be taken under provisions of section 153 of the Indian Companies At the meeting of the unsecured creditors of the company a resolution was passed by the creditors present, either in person or through proxy, by majority in number as well as three fourths in value.
At this meeting the appellant claiming to represent two of the creditor companies cast his votes on behalf of the said companies in support of the resolution.
No objection was taken at the meeting to the validity of the votes by any of the creditors who opposed the resolution.
When the matter came up for orders before the Company Judge an objection was raised that the votes cast by the appellant on behalf of the two creditor companies were not valid, inasmuch as section 153(2) of the Act requires that the creditors should be present either in person or by proxy at the meeting and that, in the present case, the two creditor companies, being corporations, could not be considered to have been present at the meeting "in person".
The Company Judge overruled the objection on the grounds that it was raised at a late stage and that, in any case, the votes were valid because the appellant 's attendance at the meeting amounted to the attendance of the companies "in person".
On appeal, a Division Bench of the Patna High Court rejected the contention that no appeal lay to the High Court from the order of the Company Judge but only to the Supreme Court and, on the merits, set aside his order. ^ Held, that: (1) the word "Court" in section 153(7) of the Indian Companies Act, 1913, means the Court exercising original jurisdiction, and.
therefore, an appeal from the order of the Company Judge lay to the High Court under cl. 10 of the Letters Patent; (2) though under the , a company is a "person" so that whenever the word "person" is used in any statute a company would be included thereunder, unless there is some special provision by a law a company which is not a physical person cannot "be present" at any place "in person"; and (3) in the present case the votes cast by the appellant were not valid in law and it being admitted that if the votes were invalid the requisite majority of three fourths in value requisite under section 153(2) of the Indian Companies Act, 1913, would not be obtained and therefore no further action could be taken by the Court in the matter, the delay in raising the objection would not entitle the Court to ignore the legal defect of the votes.
| In exercise of the powers under section 3 Of the Essential Com modities Act, 1955, and under cl. 5 of the Sugar (Control) Order, 1955, the Government of India issued a notification dated July 30, 1958, fixing the ex factory price per maund of sugar produced in Punjab, Uttar Pradesh and North Bihar.
The petitioners challenged the legality of the notification on the grounds (1) that it was beyond the ambit of authority conferred on the Central Government under section 3 of the Essential Commodities Act, 955, and clause 5 Of the Sugar (Control) Order, 1955, and that, in any case, it was bad as it could not subserve the purposes of the Act ensuring equitable distribution of the commodity to the consumer at a fair price, (2) that the Act and the Order did not authorise the Central Government to fix ex factory prices, and,, in any case, the notification failed to fix prices for the ultimate consumer, (3) that it imposed an unreasonable restriction on the right to trade under article 10(1)(g), inasmuch as it fixed the price arbitrarily, and there was no reasonable safeguard against the abuse of power, and (4) that it was discriminatory because it fixed ex factory prices only for factories in Punjab, Uttar Pradesh and North Bihar and not for factories in other parts of India and there was no reasonable classification discernible on any intelligible differentia on the basis of which prices had been controlled in certain regions only.
Held, (1) The notification dated July 30, 1958, is within the authority conferred on the Central Government by section 3 Of the , and cl. 5 of the Sugar (Control) Order,1955.
(2) Section 3 of the Act which provides for control of price is very general in terms and authorises the Central Government to fix the ex factory price of sugar without fixing the wholesale or retail prices; and, since fair prices for the consumer are ensured by fixing the ex factory price, the notification in question subserves the purposes of the Act, and is valid.
(3) Clause 5 of the Sugar (Control) Order, 1955, lays down the factors which have to be taken into consideration in fixing prices, and as the prices were fixed in accordance therewith, the 124 action taken by the Government in the interests of the general public could not be challenged on the ground that it was an unreasonable restriction on the right to carry on trade under article 19(1)(g) of the Constitution.
(4) Though under the notification prices are fixed for fac tories only in Punjab, Uttar Pradesh and North Bihar, in effect, they are fixed for the whole of India, as the other States are deficit ; consequently, the notification brought about no discrimination between different regions.
| The Company after regular enquiry and pending permission of the Industrial Tribunal under section 33 of the , suspended some workmen without pay, whereupon the workmen filed applications under section 33A of the Act before the 'Industrial Tribunal on the ground that their suspension without pay beyond ten days was against the provisions of the Standing Orders governing their conditions of service to the effect that an employee might be suspended provided the suspension without pay, whether as punishment or pending enquiry, did not exceed ten days.
The Tribunal dismissed the workmen 's applications under section 33A and granted permission to the Company to dismiss the workmen concerned.
The workmen appealed.
The Appellate Tribunal upheld the order granting permission to dismiss the workmen but came to the conclusion that the words " pending enquiry " in cl. 27 Of the Standing Orders included proceedings before the Industrial Tribunal and that there was breach of the Standing Orders.
Held, that the employer could apply under section 33 Of the , for permission to dismiss an employee when after a regular enquiry he had come to the finding that the case against the employee was proved and that the punishment of dismissal was the proper punishment.
The Industrial Tribunal had not to enquire into the conduct of the employee or the merits of dismissal but see whether a Prima facie case had been made out and a fair enquiry made by the employer.
The time taken before the Tribunal in such proceedings was beyond the control of the employer.
Standing Orders were concerned with employers and employees and not with Tribunals.
In the instant case, the words " pending enquiry " in cl. 27 of the Standing Orders, referred only to the enquiry by the employer and not to the pro ceedings before the Tribunal.
The principle laid down in Lakshmi Devi Sugar Mill 's case that workmen would not be entitled to payment of wages during the whole period of suspension if the Tribunal gave permission to, dismiss them, would apply only to cases where there was a ban under section 33 and the employer had to apply under that section for lifting the ban after completing the enquiry.
720 Rampalat Chamay vs The Assam Oil Co. Ltd., (195 4) L.A.C. 78, dissented from.
The Automobile Products of India Ltd. vs Rukamji Bala, , referred to.
Lakshmi Devi SugaR Mills Ltd. vs Pt.
Ram Sarup, ; , followed and explained.
| The appellant manufactures steel tubes in the outskirts of Ahmedabad city.
It started its business in 1960, went into production since 1964 and waggled from infancy to adulthood with smiling profits and growling workers, punctuated by smouldering demands, strikes and settlement until there brewed a confrontation culminating in a head on collision following upon certain unhappy happenings.
A total strike ensued whose chain reaction was a whole sale termination of all employees followed by fresh recruitment of workmen defacto breakdown of the strike and dispute over restoration of the removed workmen.
As per the last settlement between the management and the workmen of 4th August, 1972, it was not open to the workmen to resort to a strike till the expiry of a period of five years; nor could the management declare a lock out till then.
Any dispute arising between the parties, according to the terms arrived at were to be sorted out through negotiation or, failing that by recourse to arbitration.
The matter was therefore, referred to an arbitrator and the arbitrator by his award held the action cf the management warranted.
The respondent challenged the decision of the arbitrator under Article 226/227 of the Constitution and the High Court of Gujarat reversed the award and substantially directed reinstatement.
Hence the appeals both by the Management and the workmen.
Dismissing the appeals and modifying the awards substantially, the Court ^ HELD: (By Majority) Per Iyer J.
On behalf of D. A. Desai J. and himself.
(i) The basic assumption is that the strike was not only illegal but also unjustified.
[210 H] 147 (ii) The management did punish its 853 workmen when it discharged them for reasons of misconduct set out in separate but integrated proceedings; even though with legal finesse, the formal order was phrased in harmless verbalism.
[211 A] (iii) The action taken under the general law or the standing orders, was illegal in the absence of individualised charge sheets, proper hearing and personalise punishment if found guilty.
None of these steps having been taken, the discharge orders were still born.
But, the management could, as in this case it did, offer to make out the delinquency of the employees and the arbitrator had, in such cases, the full jurisdiction to adjudge de novo both guilt and punishment.
[211 B C] (iv) Section 11A of the does take in an arbitrator too, and in this case, the arbitral reference, apart from section 11A is plenary in scope.
[211 C D] (v) Article 226 of the Constitution, however restrictive in practice Is a power wide enough in all conscience, to be a friend in need when the summons comes in a crisis from a victim of injustice; and more importantly this extra ordinary reserve power is unsheathed to grant final relief without necessary recourse to a remand.
What the Tribunal may in its discretion do the High Court too under Article 226, can, if facts compel so.
[211 D E] (vi) The Award, in the instant case, suffers from a fundamental flaw that it equates an illegal and unjustified strike with brozen misconduct by every workman without so much as identification of the charge against each, after adverting to the gravamen of his misconduct meriting dismissal.
Passive participation in a strike which is both illegal and unjustified does not ipso facto invite dismissal or punitive discharge.
There must be active individual excess such as master minding the unjustified aspects of the strike, e.g., violence, sabotage or other reprehensible role.
Absent such gravamen in the accusation, the extreme economic penalty of discharge is wrong.
An indicator of the absence of such grievous guilt is that the management, after stating in strong terms all the sins of workmen, took back over 400 of them as they trickled back slowly and beyond the time set, with continuity of service, suggestive of the dubiety of the inflated accusations and awareness of the minor role of the mass of workmen in the lingering strike.
Furthermore, even though all sanctions short of punitive discharge may be employed by a Management, low wages and high cost of living, dismissal of several hundreds with disastrous impact on numerous families is of such sensitive social concern that, save in exceptional situations, the law will inhibit such a lethal step for the peace of the industry, the welfare of the workmen and the broader justice that transcends transcient disputes.
The human dimensions have decisional relevance.
The discharge orders though approved by the Arbitrator are invalid.
[211 E H, 212 A B] HELD FURTHER: 1.
In a society, capital shall be the brother and keeper of labour and cannot disown this obligation of a partner in management, especially because social justice and Articles 43 and 43A are constitutional mandates.
The policy directions in Articles 39, 41, 42, 43 and 43A speak af the right to an adequate means of livelihood, the right to work, humane conditions of work, living wages ensuring a decent standard of life and enjoyment of leisure and participation of workers in management of industries.
De hors these 148 mandates, law will fail functionally.
Suck is the value vision of Indian Industrial Jurisprudence.
[155 B, G H, 156 A] 2.
Jural resolution of labour disputes must be sought in the law life complex beyond the factual blinkers of decided cases, beneath the lexical littleness of statutory tests, in the economic basics of industrial justice which must enliven the consciousness of the Court and the corpus juris.
[154 F G] The golden rule for the judicial resolution of an industrial dispute is first to persuade fighting parties, by judicious suggestions, into the peace making zone, disentangle the differences, narrow the mistrust gap and convert them through consensual steps, into negotiated justice.
Law is not the last word in justice, especially social justice.
Moreover in an hierarchical system, the little man lives in the short run but most litigation lives in the long run.
So it is that negotiation first and adjudication next, is a welcome formula for the Bench and the Bar, the Management and Union.
[157 C E] The anatomy of a dismissal order is not a mystery, once it is agreed that substance, not semblance, governs the decision.
Legal criteria are not so slippery that verbal manipulations may outwit the Court.
The fact is the index of the mind and an order fair on its face may be taken at its face value.
But there is more to it than that, because sometimes words are designed to conceal deeds by linguistic engineering.
The form of the order of the language in which it is couched is not conclusive.
The Court will lift the veil to see the the nature of the order.
[171 G H. 172 A] If two factors motive and foundation of the order co exist, an interference of punishment is reasonable though not inevitable.
If the severance of service is effected the first condition is fulfilled and if the foundation or causa causans of such severance is the servant 's misconduct, the second is fulfilled.
If the basis or foundation for the order of termination is clearly not turpitudes or stigmatic or rooted in misconduct or visited with evil pecuniary effects, then the inference of dismissal stands negated and vice versa.
These canons run right through the disciplinary branch of master and servant jurisprudence, both under Article 311 and in other cases including workmen under managements.
The law cannot be stultified by verbal haberdashery because the Court will lift the mask and discover the true face.
[172 C E] Masters and servants cannot be permitted to play hide and seek with the law of dismissals and the plain and proper criteria are not to be misdirected by terminological cover ups or by appeal to psychic processes but must be grounded on the substantive reason for the order, whether disclosed or undisclosed.
The Court will find out from other proceedings or documents connected with the formal order of termination what the true ground for the termination is.
If thus scrutinised the; order has a punitive flavour in cause or consequence, it is dismissal.
If it falls short of this test, it cannot be called a punishment.
A termination effected because the master is satisfied of the misconduct and of the consequent desirability of terminating the service of the delinquent servant, it is a dismissal even if he had the right in law to terminate with an innocent order under the standing order or otherwise.
Whether, in such a case the grounds are recorded in a different proceeding from the formal order does not detract from its nature.
Nor the fact that, after being satisfied of the guilt, the master abandons the enquiry and proceeds to terminate.
Given 149 an alleged misconduct and a live nexus between it and the termination of service the conclusion is dismissal, even if full benefits as on simple termination are given and non injurious terminology is used.
[173 E H, 174 A] On the contrary, even if there is suspicion of misconduct, the master may say that he does not wish to bother about it and may not go into his guilt but may feel like not keeping a man he is not happy with.
He may not like to investigate nor take the risk of continuing a dubious servant.
There it is not n dismissal, but termination simpliciter, if no injurious record of reasons or punitive pecuniary cut back on his full terminal benefits is found.
For, in fact, misconduct is not then the moving factor in the discharge, What is decisive is the plain reason for the discharge, not the strategy of a non enquiry or clever avoidance of stigmatising epithets.
If the basis is not misconduct, the order is saved.
[174 B D] Management of Murugan Mills vs Industrial Tribunal ; ; Chartered Bank vs Employees ' Union ; ; Western India Automobile Association vs Industrial Tribunal, Bombay ; Assam Oil Co. vs Workmen; , ; Tata Oil Mills Co. vs Workmen, ; @ 130; Tata Engineering & Locomotive Co. Ltd. vs S.C. Prasad & Anr. ; L. Michael and Anr.
vs M/s. Johnson Pumps India Ltd., ; Workmen of Sudder Office, Cinnamore vs Management, , Municipal Corporation of Greater Bombay vs P.S. Malvankar; , ; referred to.
Every wrong order cannot be righted merely because it was wrong.
It can be quashed only if it is vitiated by the fundamental flaws of gross miscarriage of justice, absence of legal evidence, perverse misreading of facts, serious errors of law on the face of the order, jurisdictional failure and the like.
[182 P G] While the remedy under article 226 is extraordinary and is of Anglosaxon vintage, it is not a carbon copy of English processes.
Article 226 is a sparing surgery but the lancet operates where injustice suppurates.
While traditional restraints like availability of alternative remedy hold back the Court, and judicial power should not ordinarily rush in where the other two branches fear to tread.
judicial daring is not daunted where glaring injustice demands even affirmative action.
The wide words of Article 226 are designed for service of the lowly numbers in their grievances if the subject belongs to the Court 's province and the remedy is appropriate to the judicial process.
There is a native hue about article 226, without being anglophilic or anglophobic in attitude.
Viewed from this jurisprudential perspective the Court should be cautious both in not over stepping as if Article 226 were as large as an appeal and not failing to intervene where a grave error has crept in.
And an appellate power interferes not when the order appealed is not right but only when it is dearly wrong.
The difference is real, though fine.
[182 G H, 183 A B] The principle of law is that the jurisdiction of the High Court under Article 226 of the Constitution is limited to holding the judicial or quasi judicial powers within the leading sings of legality and to see that they do not exceed their statutory jurisdiction and correctly administer the law laid down by the statute under the Act.
So long as the hierarchy of officers and appellate authorities created by the statute function within their ambit the manner in which they do so can be no ground for interference.
The power of judicial supervision of the High Court under Article 227 of tho Constitution (as it then stood) is not 150 greater than those under Article 226 and it must be limited to seeing that a tribunal functions within the limits of its authority.
The writ power is large, given illegality and injustice even if its use is severely disciplinary.
The amended Article 226 would enable the High Court to interfere with an Award of the industrial adjudicator if that is based on a complete misconception of law or it is based on no evidence, or that no reasonable man would come to the conclusion to which the Arbitrator has arrived.
[15 E G 1 86 D E] Navinchandra Shanker Chand Shah vs Manager, Ahmedabad Cooperative Department Stores Ltd., @ 140; approved.
Rohtas Industries & Anr.
vs Rohtas Industries Staff Union and Ors. ; followed.
Nagendranath Bata and Anr.
vs The Commissioner of Hills Divisions and Appeals, Assam & Ors.
, ; ; Engineering Mazdoor Sabha vs Hind Cycle Lrd.
[1963] Suppl.
1 SCR 625; State of A.P. vs Sreeeama Rao, ; @ 33; P. H. Kalyani vs M/s Air France, Calcutta, ; ; referred to. "Tribunal" simpliciter has a sweeping signification and does not exclude Arbitrator.
A tribunal literally means a seat of justice, may be, a commission, a Court or other adjudicatory organ created by the State.
All these are tribunal and naturally the import of the word, in Section 2(r) of the , embraces an arbitration tribunal.
[188 E F H 189 A] Dawking vs Rokely, L.R. 8 Q.B. 255; quoted with approval.
An Arbitrator has all the powers under the terms of reference, to which both sides are party, confer.
In the instant case, the Arbitrator had the authority to investigate into the propriety of the discharge and the veracity of the mis conduct.
Even if section 11A of the is not applicable, an Arbitrator under Section 10A is bound to act in the spirit of the legislation under which he is to function.
A commercial Arbitrator who derives his jurisdiction from the terms of reference will by necessary implication be bound to decide according to law and when one says "according to law", it only means existing law and the law laid down by the Supreme Court being the law of land, an Arbitrator under section 10A will have to decide keeping in view the spirit of section 11A. [196 B D] Union of India vs Bungo Steel Furniture (P) Ltd. ; ; referred to.
Per Koshal J. (Contra) 1.
The orders of discharge could not be regarded as orders of their dismissal and were on the other hand, orders of discharge simpliciter properly passed under Model Standing order 23.
[235 C D] (a) Clauses (3) and (4) of M.S.O. 25 speak of an inquiry only in the case of an order falling under sub clause (g) of clause (1) of that M.S.O. The only sub clause of clause (1) of M.S.O. 25 to which the provisions of clauses (3) and (4) of that M.S.O. would be attracted is sub clause (g) and if an order of discharge falls under M.S.O. 23, an inquiry under clauses (3) and 151 (4) of M.S.O. 25 would not be a pre requisite thereto even though such an a older is mentioned in sub clause (f) clause (1) of that M.S.O. [222 H, 223 A] (b) Under M.S.O.s.
23 and 25, the Management has the powers to effect termination of the services of an employee by having recourse to either or them.
In action taken under M.S.O. 23, no element of punishment is involved and the discharge is a discharge simpliciter; and that is why no opportunity to the concerned employee to show cause against the termination is provided for.
Dismissal, however, which an employer may order is in its very nature, a punishment, the infliction of which therefore has been made subject to the result of an inquiry (having the semblance of a trial in a criminal proceeding).
Exercise of each of the two powers has the effect of the termination of the services of the concerned employee but must be regarded, because of the manner in which each has been dealt with by the M.S.O. as separate and distinct from the other.
[223 C E] (c) To contend that once it was proved that the order of discharge of a workman was passed by reason of a misconduct attributed to him by the management, the order cannot but amount to an order of dismissal is wrong for two reasons.
For one thing, clause (1) of M.S.O. 25 specifically states in sub clauses (f) that a workman guilty of misconduct may be discharged under M.S.O. 23.
This clearly means that when the employer is satisfied that a workman has been guilty of misconduct he may [apart from visiting the workman with any of the punishments specified in sub clauses (a), (b), (c), (d) and (e) of clause (1) of M.S.O. 25] either pass against him an order of discharge for which no inquiry precedent as, provided for in clauses (3) and (4) of M.S.O. 25 would be necessary, or may dismiss him after holding such an inquiry which of the two kinds of order, the employer shall pass is left entirely to his discretion.
[223 E H] It is true that the employer cannot pass a real order of dismissal in the garb of one of discharge.
But that only means that if the order of termination of services of an employee is in reality intended to push an employee and not merely to get rid of him because he is considered useless, inconvenient or troublesome, the order even though specified to be an order of dismissal covered by sub clause (g) of clause (1) of M.S.O. 25.
On the other hand if no such intention is made out the order would remain one of discharge simpliciter even though it has been passed for the sole reason that a misconduct is imputed to the employee.
That is how M.S.Os. 23 and 25 have to be interpreted.
M.S.O. 25 specifically gives to the employer the power to get rid of "a workman guilty of misconduct ' by passing an order of his discharge under M.S.O. 23.
[224 A D] Secondly, the reasons for the termination of service of a permanent workman under M.S.O. 23 have to be recorded in writing and communicated to him if he so desires, under clause (4 A) thereof.
Such reasons must obviously consist of an opinion derogatory to the workman in relation to the performance of his duties, and whether such reasons consist of negligence, work shirking or of serious overt acts like theft or embezzlement, they would in and case amount to misconduct for which he may be punished under M.S.O. 25.
There being no case in which such reasons would not amount to misconduct, the result is that M.S.O. 23 would be render otiose if termination of service thereunder for misconduct could be regarded as a dismissal and such a result strikes at the very root of accepted canons of interpretation.
If it was open to the Court to.
"lift 152 the veil" and to hold an order of discharge to amount to dismissal merely because the motive behind it was a misconduct attributed to the employee, the services of an employee could be terminated without holding against him an inquiry such as is contemplated by clauses (3) and (4) of M.S.O. 25.
[224 D G] Bombay Corporation vs Malvankar ; ; applied.
Merely because it is the reason which weighed with the employer in effective the termination of services would not male the order of such termination as one founded on misconduct, for such a proposition would run counter to the plain meaning of clause (1) of M.S.O. 25.
For an order to be "founded" an misconduct, it must be intended to have been passed by way of punishment, that is, it must be intended to chastise, or cause pain in body or mind or harm or loss in reputation or money to the concerned worker.
If such an intention cannot be spelled out of the prevailing circumstances, the order of discharge or the reasons for which it was ostensibly passed, it cannot be regarded as an order of dismissal.
Such would be the case when the employer orders discharge or the interests of the factory or of the general body of workers.
[226 A C] Chartered Bank, Bombay vs The Chartered Bank Employees Union, ; ; The Tata Oil Mills Co. Ltd. [1964] 2 SCR p. 123; The Tara Engineering and Locomotives Co. Ltd. vs S.C. Prasad, ; Workmen of Sudder Office, Cinnamore vs Management, followed.
The real criterion which formed the touchstone of a test to determine whether an order of termination of services is an order of discharge simpliciter or amounts to dismissal is the real nature of the order, that is, the intention with which it was passed.
If the intention was to punish, that is to chastise, the order may be regarded as an order of dismissal; and for judging the intention, the question of mala fides (which is the same thing as colourable exercise of power) becomes all important.
If no mala fides can be attributed to the management, the order of discharge must be regarded as one having been passed under M.S.O. 23 even though the reason for its passage is serious misconduct.
(2) The arbitrator could not exercise tho power conferred on a Tribunal under section 11A of the 1947 Act and could not therefore interfere with the punishment awarded by the Management to the workmen (even if the discharge could be regarded a punishment).
[235 D E] Throughout the I.D. Act, while 'arbitrator ' would include an umpire, a Tribunal would not include an arbitrator but would mean only an Industrial Tribunal constituted under the Act unless the context makes it necessary to give the word a different connotation.
In sub section (1) of section 11, the word 'Tribunal ' has been used in accordance with the definition appearing in clause (r) section 2 because an arbitrator is separately mentioned in that sub section.
In sub sections (2) and (3) of that section a Board, a Labour Court, a Tribunal and a National Tribunal have been invested with certain powers.
A Tribunal as contemplated by sub sections (2) and (3) then, would not include an arbitrator.
[233 A B] It is a well settled canon of interpretation of statutes that the language used by the Legislature must be regarded as the only source of its intention unless such language is ambiguous, in which situation the Preamble to the Act, the statement of objects of and Reasons for bringing it on the statute book and 153 the purpose underlying the legislation may be taken into consideration for ascertaining such intention.
That the purpose of the legislation is to fulfil a socio economic need, or the express object underlying it does not come into the picture till an ambiguity is detected in the language and the Court must steer clear of the temptation to mould the written word according to its own concept of what should have been enacted.
It is thus not permissible for the Supreme Court to take the statements of objects and Reasons or the purpose underlying the enactment into consideration, while interpreting section 11A of the I.D. Act.
[231 F G, 234 Cl 3.
The High Court exceeded the limits of its jurisdiction in interfering with the said punishment, in the instant case, purporting to act in the exercise of its powers under Article 227 of the Constitution of India.
[235 E F] The High Court, while discharging its functions as envisaged by that Article, does not sit as a Court of Appeal over the Award of the Arbitrator but exercises limited jurisdiction which extends only to seeing that the arbitrator has functioned within the scope of his legal authority.
In this view of the matter it was not open to the High Court to revise the punishment (if the discharge is regarded as such) meted out by the Management to the delinquent workmen and left intact by the arbitrator whose authority in doing so has not been shown to have been exercised beyond the limits of his jurisdiction.
[234 G E, 235 A C] Nagendra Nath Bora and Anr.
vs The Commissioner of Hills Division and Appeals, Assam and Ors.
, ; ; P. H. Kalyani vs M/s Air France, Calcutta, ; , of A.P. vs Sree Rama Rao, ; ; Navinchandra Shakerchand Shakerchand Shah vs Manager Ahmedabad Cooperative Stores Ltd, ; referred to.
| The first respondent filed a writ petition in the High Court challenging the grant of a mining lease to the appellant on the ground of a direct.
infringement of his right to be granted a mining lease over an area for which he applied for a mining lease and which, according to him, formed part of the area for which the appellant was given the lease.
But in fact, the first respondent 's application was not in respect of any part of the area for which the appellant was granted a mining lease.
Though the appellant was made party to the proceeding, he did not appear as notices were not served on him.
The High Court allowed the petition in the view that there was a violation: of section 31 of the , and rr. 58 and 59 of the Mineral Concession Rules 1960.
Allowing the appeal to this Court, HELD : The first respondent had no interest in the subject matter of the lease, and the petition was not maintainable.
[618 G H] Though this contention was not urged before the High Court as the appellant did not appear in the High Court, this Court, in appeal, can not only determine the soundness of the decision, but has jurisdiction to determine any point raised before, it, such as, whether the appeal is competent, whether a party has a locus standi to present the petition and whether the petitioner was maintainable.
Ordinarily, the foundation for exercising the jurisdiction under Article 32 or Article 226, is the personal or individual right of the petitioner himself, though in cases of writs of habeas corpus or quo warranto, the rule may be relaxed.
In respect of persons who are not aggrieved and who seek to invoke the jurisdiction of the High Court or this Court, the matter rests ultimately on the discretion of the Court, and depends on the nature and extent of the right or interest said to have been infringed and whether the infringement affects the petitioner in some way.
[619 A B, D, G H] In the present case, the first respondent only alleged direct infringement of his right,but it was found that no right of his had been affected.
He was neither aparty nor a person aggrieved or affected and hence had no locus standi to file the petition.
[620 B C] Ebrahim Aboobakar and Another vs Custodian General of Evacuee Property, ; , Chiranjit Lal Chowdhuri, vs The , Union of India, ; , The State of Orissa vs Madan Gopal Rungta, [1952] S.C.R. 28, The Calcutta Gas Company (Proprietary) Ltd. vs The State of West Bengal and Others [1962] Supp.
3 S.C.R. 1, Godde Venkateswara Rao vs Government of Andhra Pradesh and Others ; and R. vs Thamples Magistrates ' Court ex.
p. Greenbaum, [19571 in Yardley Source Book of English Administrative Law, , referred to.
| Gaya Sugar Mills Ltd. went into liquidation and the sugar factory owned by it was leased out to the appellant by the liquidator with the permission of the Court on December 6, 1954, to be worked in terms of the lease which provided, inter alia, that the lessee would neither be liable for any of the liabilities of the company, or of the liquidator or the outgoing lessees nor bound to engage any of their employees or those working from before except those specifically mentioned in the lease.
On December 2, 1954, i.e. four days before the appellant came into possession of the sugar factory, the Bihar Government issued a notification referring a dispute between the managements of certain specified sugar factories, including Gaya Sugar Mills Ltd., and their workmen represented by their Unions, for adjudication to the Industrial Tribunal constituted by the respondent No. i. No notice was given to the appellant and proceedings against it were all exparte.
Complaints, however, were made before the Industrial Tribunal by two batches of workmen against the appellant under section 33A of the Industrial Disputes Act alleging in one case that they had been discharged and in the other that the conditions of their service had been changed by the appellant without first obtaining the permission of the Tribunal under section 33 Of the Act.
It was asserted on behalf of the appellant that there was no breach of the terms of the lease and no contravention of section 33 Of the Act.
After unsuccessfully moving the High Court under articles 226 and 227 Of the Constitution for a writ of certiorari quashing the said proceedings, the appellant came up to this Court by special leave and it was contended on its behalf that (1) no leave of the Court having been obtained under section 171 Of the Indian Companies Act by the State Government before it made the reference under section 10(1) of the Industrial Disputes Act, the reference was bad in law and that (2) the word 'employer ' in sections 33 and 33A of the Industrial Disputes Act meant only such employer as was actually concerned with the industrial dispute which was the subject matter of the reference and the appellant having come into possession of the Mills after the reference, could not be an employer within the meaning of those sections.
255 Held, that the terms of the notification properly construed clearly showed that what was sought to be made a party to the reference was not the company itself but its management at the date of the reference and, therefore, no question of leave of the court under section 171 Of the Indian Companies Act could arise.
The word 'employer ' occurring in sections 33 and 33A of the Industrial Disputes Act meant the identical employer concerned with the industrial dispute, which was the subject matter of the adjudication, and could not include an employer who merely happened to discharge or punish or alter the conditions of service of workmen unless such employer could be shown to be a mere nominee or bentamiday of the former or fell within the category of his heirs, successors or assigns within the meaning Of section 18(3)(c) of the Act.
Since, in the instant case, the appellant satisfied none of these tests, it was not bound to seek the permission of the Tribunal under section 33 Of the Act and the proceedings under section 33A of the Act against it must be quashed.
| The Government referred an industrial dispute to Labour Court, Patna, and subsequently issued an order by way of corrigendum substituting "Ranchi" for "Patna".
In proceedings before the Labour Court, Ranchi, objection was raised that once having made the reference to the Labour Court, Patna, the Government was not competent to cancel or withdraw that reference, so the Labour Court, Ranchi had no jurisdiction.
The Labour Court, Ranchi rejected the objection.
The High Court also rejected this Contention.
In appeal to this Court: HELD: The alteration in the order of reference was a mere correction of a clerical error.
because, by mistake, Patna had been mentioned in place of Ranchi in the first notification and the second notification merely corrected that mistake.
Such a clerical error can always be corrected and such a correction does not amount either to the withdrawal of the reference from, or cancellation of the re ference to the Labour Court, Patna.
[63F H]
| The appellant was dismissed from the post of "Branch Manager" by respondent No. 3, Bank, after an inquiry relating to fraudulent encasement of a draft by one Labh singh.
His demand in regard to his dismissal, was referred by the Govt.
of Punjab to the Conciliation Officer, who recommended that the appellant 's case should be forwarded for adjudication on the question whether his dismissal from service was justified.
The Labour Commissioner, exercising the powers of the State Government, declined to refer the dispute to the Labour Court for adjudication but without giving any reasons for his conclusion that the appellant was not a "workman".
The appellant challenged before the High Court the decision of the Labour Commissioner in writ petition which was dismissed summarily.
Hence this appeal.
The grievance of the appellant is that the Labour Commissioner ought to have given reasons in support of his decision.
Allowing the appeal, ^ HELD: 1.
All that the Labour Commissioner has stated in the order is that the post held by the appellant did not fall within the category of "workman" but no reasons are given to justify that conclusion.
He ought to have given reasons why he came to the conclusion that the appellant is not a "workman" within the meaning of section 2(s) of the .
[319 D E] 2.
In the instant case, the Court keeping in view that remanding the matter to the Labour Commissioner for giving his reasons will entail delay, directed the Labour Commissioner, Chandigarh to make a reference either to the Labour Court or to the Industrial Tribunal section 12(5) of the Industrial 318 Disputes Act 1947 for adjudication of the question as to whether the dismissal of the appellant from the service of the Bank is legal and justified.
[319 E E]
|
iminal Appeal No. 79 of 1952.
Appeal by special leave from & Judgment and Order dated 16th April, 1951, of the High Court of Judicature at Allahabad Dayal and Desai JJ.) in Criminal Miscellaneous No. 17 of 1950.
K. section Krishnaswami Iyengar (H. B. Asthana, with him) for the appellants.
N. C. Sen for the respondent.
February 5.
The Judgment of the Court was delivered by MAHAJAN J.
This is an appeal by special leave from the judgment and order dated the 16th April, 1951 of the Allahabad High Court in Criminal Miscellaneous Petition No. 17 of 1950.
The two appellants are members of the Uttar Pradesh Civil Service.
583 In March, 1950, appellant No. 1 (Rizwan ul Hasan) was posted as District Magistrate, Jalaun, and appellant No. 2, Mohammad Munawar, was posted as a Magistrate in the same district, having officiated as District Magistrate for some time in the early part of March, 1960.
On 2nd March, 1,950, one Phundi Singh commenced proceedings under section 145 of the Code of Criminal Procedure in the Court of the Sub Divisional Magistrate of Jalaun on the allegation that Kedarnath and Matadin were about to cut his standing crop by force and 'that there was an imminent danger of a breach of the peace.
The magistrate issued notices to the parties complained against and ordered attachment of the standing crop.
On 4th March, 1950, one Shriram, brother of Kedarnath, filed a counter application before the court making certain allegations against one Thakur Pratap Singh, said to be the real person behind the proceedings commenced by Phundi Singh.
Kedarnath and Matadin, the respondents in Phundi Singh 's application, also filed an application similar to that of Shriram before the District Magistrate on the same date.
This application was accompanied by a recommendatory letter written to the District Magistrate by Lalla Ram Dwivedi, Secretary, District Congress Committee.
It was received by the second appellant who was then officiating as District Magistrate and was sent by him to the Sub Divisional Magistrate, Jalaun, in whose court Phundi Singh 's application was pending, for report.
The Sub Divisional Magistrate returned it with the remark that a proper com plaint should be made in his court in the ordinary way on the allegations made in the application.
Thereupon the second appellant returned the application to Kedarnath and Matadin and advised them to move the Sub Divisional Magistrate in as formal and proper manner.
On the application of Phundi Singh made before the High Court of Allahabad under section 3 of the 584 Contempt of Courts Act, the second appellant was held guilty of contempt of the Sub Divisional Magistrate on the following reasoning Shri Mohammad Munawar opposite party No. 5 forwarded application given by the opposite parties Nos ' 2 and 3 together with introductory letter to the Sub Divisional Magistrate,Jalaun.
We do not think that he had any intention to influence the Sub Divisional Magistrate with respect to his action in the case under section 145, Criminal Procedure Code.
But intention is not 'of importance so far as the question of commission of contempt is concerned.
He certainly acted without due circumspection and thought.
It must have been clear to him that the application contained expression which affected the due considerations of the points in dispute in the proceeding under section 145, Criminal Procedure Code.
He says in his affidavit and we can accept it that he sent this application to the Sub Divisional Magistrate just for taking action for the protection of opposite parties No. 2 and No. 3 and their crop about which an allegation was made that some action was to be taken by the other party the night following.
He should in the circumstances either pass an order for the police himself which he could have very well done, or he could have just conveyed a gist of the complaint necessitating protection of life and property immediately.
His conduct in transmitting the allegations made by the opposite parties No. 2 and 3 to the Sub Divisional Magistrate, Jalaun, in whose court the case under section 145, Criminal Procedure Code, was pending, did amount to the commission of contempt of that court." As regards the first appellant, the facts are that on 22nd March an application was received by post in the office of the District Magistrate signed by Shriram containing allegations against the trying Magistrate.
On 25th March, 1950, this application was sent by the appellant for report to the Sub Divisional Magistrate with the following endorsement 585 section D.C.
Please look into these allegations and let me have a report.
" On 4th April, 1950, the Sub Divisional Magistrate submitted a report and the first appellant having been satisfied that the allegations were baseless passed the following order: " I do not see any reason to withdraw the case from your file." On the application of Phundi Singh mentioned above made before the High Court of Allahabad under section 3 of the Contempt of Courts Act this appellant along with others was also held guilty of contempt of the Sub Divisional Magistrate 's Court, on the following reasoning : "Similarly transmission of the application sent by Shriram on the 25th March to the Sub Divisional Magistrate, Jalaun, amounted to commission of contempt of court by opposite party No. 6.
The mere fact that he had to take action in view of the allegations against the magistrate in that application would not affect this question.
The application contained, as already stated, expressions showing that Phundi Singh was a history sheeter and that the case under section 145, Criminal Procedure Code, was fictitious and was instituted at the instance of Pratap Singh.
He should not have transmitted the entire application.
He could have necessary extracts which related to the allegations against the magistrate sent to the ' court concerned in the circumstances when the applicants introduced matter irrelevant for transfer application.
It may also be mentioned here that the application could be treated as a transfer application though no such request was made in that application.
The application was neither properly presented nor was it accompanied by an affidavit nor was it stamped.
The applicant wanted some action for the protection of his crop from bad characters." Having found both the appellants guilty of contempt of court of the Sub Divisional Magistrate, Jalaun, the High Court took no action against them because they happened to commit contempt of court rather due to their carelessness Find lack of vigilance 586 than with any deliberate intention to commit it.
It was observed that officers who have to transmit communications to courts of justice should be vigilant and careful to see that nothing is transmitted which can have any effect, even remotely on, the merits of a case.
In our judgment, the proceedings for contempt of court against the two appellants on the facts stated are misconceived and have to be quashed.
Both the appellants were superior officers of the Sub Divisional Magistrate at the time when they sent the applications of Kedarnath and Matadin for report.
They were under a duty to supervise his work.
It is difficult to see how by transmitting the applications received by them to him, and asking him for his views they were in any way interfering with the course of justice and were committing contempt of his court.
Their action cannot be characterized as having a tendency to interfere with the course of justice.
The applications were transmitted to the Sub Divisional Magistrate in the usual and normal course of the official practice and we 'cannot subscribe to the view of the High Court that only extracts of these applications should have been sent to him for his views and not the applications as such as they contained material which had a tendency to interfere with the course of justice.
The second appellant, when he was officiating as District Magistrate, received the application of Kedarnath and Matadin with a letter of recommendation from the Secretary of the Congress Committee.
This application was in the nature of a counter complaint, and the appellant acted properly in sending it to the magistrate who was seised of the original application.
He was under no duty to censor it and to out it into pieces and then forward the relevant parts only to the magistrate.
The recommendatory letter was an annexure to the application and it had to go with it.
The conduct of the Secretary of the Congress Committee in writing a recommendatory letter about the facts of the case to the District 587 Magistrate was undoubtedly a communication for the purpose of influencing his decision and was rightly reprobated by the High Court.
Such 9, course is calculated, if tolerated, to divert the course of justice and ought more frequently than it is, to be treated as what it really is ' namely, a high contempt of court.
The Congress Secretary has been rightly held guilty of contempt and punished.
He has not come to this Court and we are no longer concerned with him.
But we are unable to find how the conduct of the appellant in sending the application which, as we have already stated, was in the nature of counter charge to the Sub Divisional Magistrate who was seised of the original complaint in any way amounted to contempt of court.
There are three different sorts of contempts known to law in such matters.
One kind of contempt is scandalizing the court itself.
There may likewise be a contempt of the court in abusing parties who are concerned in causes in that court.
There may also be a contempt of court in prejudicing mankind against persons before the cause is heard.
The act of the appellant could not fall in either of these three categories.
So far as the first appellant is concerned, under the provisions of section 528 of the Code of Criminal Procedure, he had authority to withdraw the case under section 145 of the Code pending in the court of the Sub Divisional Magistrate.
On the application of 22nd March made by Kedarnath and Matadin containing allegations against the Sub Divisional Magistrate he was entitled to use his powers under that section if the allegations contained therein were substantiated.
It is usual to send such applications to the court concerned for its remarks and that is precisely what he did.
and as soon as the remarks were received and he was satisfied that the allegations were baseless, he declined to withdraw the case.
We have not been able to see how such an action on the part of the District Magistrate, done in the normal and usual course of the discharge of his duties as such magistrate, could be held to interfere with the 76 588 course of administration of justice or to create pre re judice of any kind against the complainant in the proceedings under section 145 of the Code of Criminal Procedure.
There is nothing in section 528 of the Criminal Procedure Code which disables a magistrate from taking action unless he is set in motion by the petition of one of the parties and nothing in the Code prevents any person from bringing facts to the notice of the District Magistrate which might suggest to that magistrate that it was advisable to see whether the magistrate should remain in charge of a particular case.
In our judgment, therefore, the High Court was in error in thinking that the two appellants acted without due circumspection and thought and were guilty of contempt of the court of the Sub Divisional Magistrate.
We are further of the opinion that it was not possible to hold on those facts that any prejudice &rose in the case by these two applications being sent by the appellants to the Sub Divisional Magistrate or that any action was necessary for the protection of the tribunal which was engaged in hearing the case under section 145, Criminal Procedure Code.
As observed by Rankin C.J. in Anantalal Singha vs Alfred Henry Watson (1), the jurisdiction in contempt is not to be invoked unless there is real prejudice which can be regarded as a, substantial interference with the due course of justice and that the purpose of the court 's action is a practical purpose and it is reasonably clear on the authorities that the court will not exercise its juris diction upon a mere question of propriety.
The result is that we allow the appeal, set aside the judgment of the High Court against the two appellants and acquit them of the charge under section 3 of the Contempt of Courts Act.
Appeal allowed.
Agent for the appellant : section Subramanian.
| The jurisdiction in contempt of court is not to be invoke a unless there is real prejudice which can be regarded as a substantial interference with the due course of justice.
The purport of the court 's action is a practical purpose and the Court will not exercise its jurisdiction upon a mere question of propriety.
During the pendency of proceedings against A and B under section 145, Criminal Procedure Code, in the court of a Sub Divisional Magistrate, A and B made an application to the District Magistrate alleging that the proceedings were not bona fide and 582 containing statements in the nature of a countercharge.
The 2nd appellant who was then officiating as the District Magistrate sent this application to the Sub Divisional Magistrate for report and on receiving a report from him that A and B should be asked to file a formal complaint before him, advised them to do so.
A brother of A sent a similar petition to the District Magistrate containing also allegations against the trying Magistrate.
The 1st appellant, who was the District Magistrate, forwarded them to the Sub Divisional Magistrate for report, and on receiving his report passed an order that he saw no reason to withdraw the file from the Sub Divisional Magistrate.
The High Court of Allahabad held that as the applications contained allegations which might interfere with the course of the trial of the proceedings under section 145, in transmitting the applications the appellants had acted without due circumspection and thought though they had no intention to influence the Sub Divisional Magistrate and the appellants were therefore guilty of contempt of court: Held, (i) that in transmitting the applications received by them to the Sub Divisional Magistrate and calling for a report the appellants were not in any way interfering with the course of justice but were only doing their duty as superior officers; (ii) it was not possible to hold that any prejudice had been caused by the two applications being sent by the appellants to the Sub,Divisional Magistrate or that any action was necessary to protect the Sub Divisional Magistrate who was hearing the case and the appellants were not guilty of any contempt of court.
Anantalal Singha vs Alfred Henry Watson ([1931] I.L.R. referred to.
| The appellant held an office under the Government and was dismissed from service on January 24, 1956, for a reason other than corruption or disloyalty to the State.
He filed his nomination paper for election to Parliament which did not disclose any disqualifications.
No objection was taken to the nomination and it was accepted without making any enquiry.
After the poll the appellant was declared duly elected.
The respondent filed an election petition challenging the election of the appellant on the ground, inter alia, that the nomination of the appellant had been improperly accepted as he was dismissed from Government service and he had failed to obtain a certificate from the Election Commission that he had not been dismissed for corruption or disloyalty to the State.
After limitation for filing the petition had expired, the respondent applied to the Election Tribunal for amendment of the petition seeking to add to this ground the statement that the nomination paper was not accompanied by the prescribed certificate.
The Tribunal disallowed the amendment on the ground that the amendment sought to introduce a 290 new ground after the period of limitation and then dismissed the election petition holding that the appellant was qualified to stand for the election and his nomination was not improperly accepted.
On appeal, the High Court held that the amendment should have been allowed as it merely asked for a clarification and not the introduction of a new ground and consequently it set aside tile order of the Tribunal and directed a retrial of the issue involving.
The appellant obtained special leave and appealed.
Held, that the amendment could not be allowed as it sought to introduce a new ground in the petition after the period of limitation.
The ground taken in the petition was that there was an improper acceptance of the nomination covered by section 100(1)(d)(1) of the Representation of the People Act, 1951.
But there was no improper acceptance of the nomination for the nomination paper ex facie did not disclose any defect or disqualification.
There being no subsisting prayer seeking to raise the ground under section 100(1)(d)(iv) for non compliance with the Provisions of section 33(3) of the Act, the amendment was foreign to the scope of the, enquiry under the ground covered by section 100(1)(d)(1).
Durga Shankar Mehta vs Thakur Raghuraj Singh, [1955] 1 S.C.R. 267 and Harish Chandra Bajpai vs Triloki Singh ; , followed.
Veluswami vs Raja Nainay, ; , referred to.
There was no jurisdiction in the High Court to interfere with the discretion of the Election Tribunal refusing to allow the amendment after the entire petition had been disposed of.
It is undesirable for an appellate Court to interfere with the order of a subordinate Tribunal made in the exercise of its discretion without exceeding the limits of its powers, unless it has acted perversely or has taken a view which is clearly wrong.
| An industrial dispute was referred by the Government of Uttar Pradesh for adjudication to the Adjudicator, Kanpur.
,Me Adjudicator held that the Malis were workmen under the U.p.
but they were not Industrial employees and hence were not entitled to claim dear food allowance under the Government order dated December 6, 1948.
The claims of the Malis with regard to weekly holidays and leave with wages were also rejected by the Adjudicator.
725 Two crow appeals were filed against the order of the Adjudicator before the Labour Appellate Tribunal.
The appeal of the appellant was dismissed.
As regards the appeal of respondents, the Tribunal gave the Malis benefit of dear food allowance.
Their claim for leave with wages was also allowed on the ground of social justice.
However, their claim for weekly holiday was rejected.
The appellant filed a writ petition in the Allahabad High Court but that was dismissed as in fructuous.
The appellant came to this court by special leave.
The contentions raised by the appellant in this court were that the Malis were not workers within the meaning of section 2 of the U.P. , that Malis were not industrial employees within the meaning of Government order dated December 6, 1948, and hence were not entitled to dear food allowance and that the Labour Appellate Tribunal should not have granted the demand of the respondents for leave on ground of fair play and social justice.
Held that the Malis were workers within the meaning of section 2, of the U.P.
They were employed by the appellant, were paid by it and were, subject, to its control and supervision and *discharged the function of looking after the properties of the appellant.
Their conditions, of service were also determined by the appellant and the continuance of their service also depended upon the pleasure of the appellant.
The bungalows and gardens on which they worked were a kind of amenity supplied by the appellant to its officers.
Hence, the Malis were engaged in operations which were incidentally connected with the main industry carried on by the employers The case of the Malis was similar to that of the bus drivers.
The relation of the work carried on by the Malis with the industry was not remote, indirect or far fetched.
The employee who is engaged in any work or operation which is incidentally,connected with the main industry of the employer is a workman, provided the other requirements of section 2 (s) of the industrial Disputes Act are satisfied.
Held also, that the Malis were industrial employees within the meaning of the Government order dated December 6, 1948, and hence were entitled to claim the benefit of dear food allowance.
The Tribunal was in error in limiting the scope of the expression, " Industrial , employees" by reference to the definition of the word "worker" as given in the Factories Act, 726 Held also, that the Tribunal was justified in granting the demand of the respondents for leave on grounds of fair play and social justice.
The concept of social justice has now become such an integral part of industrial law that it is idle for any party to suggest that industrial adjudication can or should ignore the claims of social justice in dealing with industrial disputes.
The concept of social justice is not narrow, one sided or pedantic and is not confined to industrial adjudication alone.
Its sweep is comprehensive.
It is founded on the basic ideal of socioeconomic equality and its aim is to assist the removal of socioeconomic disparities and inequalities.
In dealing with industrial matters, it does not adopt a doctrinaire approach and refuses to yield blindly to abstract notions, but adopts a realistic and pragmatic approach.
It endeavors to resolve the competing claims of employers and employees by finding a solution which is just and fair to both parties with the object of establishing harmony between capita i labour and relationship.
Shri Bhikari, Kanpur vs Messrs. Cooper Allen & Co., Kanpur, ; The Upper India Chini Mills Mazdoor Union vs The Upper India Sugar Mills ; The Suti Mill Mazdoor Sabha, Kanpur vs Messrs.
The British India Corporation Ltd., Kanpur, ; J.K. Iron& Steel Co. Lid, Kanpur vs The Iron and Steel Masdoor Union, Kanpur, ; Muir Mills Co. Ltd. vs Suti Mills Mazdoor Union, Kanpur, ; ; Messrs. Crown Aluminium Works vs Their Workmen, ; and The State of Mysore vs The Workers of Gold Mines, [1959] S.C.R. 895, referred to.
| The Banaras Bank Ltd. was ordered by the Allahabad High Court to be compulsorily wound up.
The High Court passed an order under section 187 of the Indian Companies Act, 1913, directing the appellants, whose names had been placed on the list of contributors, to pay a certain sum of money to the official Liquidator.
The official Liquidator applied for execution of the order more than three years after the making thereof.
The appellants contended that the execution application, not having Been preferred within three years as prescribed by article 182 of the Limitation Act was barred.
The official Liquidator contended that the order was made in the exercise of ordinary original civil jurisdiction by the High Court and the application was governed by article 183 which prescribed a period of limitation of twelve years.
^ Held, that article 183 was applicable to the case and the application for execution was within time.
The order was Made by the High Court in the exercise of its ordinary original civil jurisdiction as contemplated in article 183.
Though the Letters Patent did not invest the High Court with any original jurisdiction it could be conferred by legislation.
The Indian Companies Act, 1913, invested the High Court with the jurisdiction to order payment of amounts due by debtors of companies ordered to be wound up.
The jurisdiction was ordinary, it did not depend on and extraordinary action on the part of the High Court.
It was original as a petition for the exercise of it was entertained by the High Court as a court of: first instance and not as an appellate court, and since the High Court adjudicated upon the liability of the debtor to pay debts due by him to the company the jurisdiction was civil.
In the matter of Candas Narondas, Navivahu and C. A; Turner, I. L. R. and P. T. Munia Cervai 74 vs The Hunuman Bnak Ltd., I.L.R , referred to
| Thakur Sangram Singh, the father of the appellant was a jagirdar of Thikana Diggi in the erstwhile State of Jaipur.
His jagir was resumed on 1st of July, 1954 under section 21 of the Rajasthan Land Reforms and Resumption of Jagirs Act, 1952 entitling him to compensation on the date of resumption of his jagir under section 26 of the Jagirs Act.
The compensation was to be determined according to the principles laid down in the Second Schedule attached to the Act.
If the jagir was a settled one the compensation would be assessed on the basis of the rent rates as settled in settlement operation which were prevalent on the date of resumption and as entered in the Revenue records of the village within the meaning of section 6(3) (a)(i) read with the definition of "settled village" contained in section 2(n).
If on the other hand, the jagir was an unsettled one the compensation would have to be assessed on the actual income from the rents during the three agricultural years: 1949 50, 1950 51 and 1951 52 as provided in section 7 of the Act.
Prior to the date of resumption settlement operation were going on under the Jaipur State Grants Land Tenures Act, 1947 in respect of the jagir.
The rent rates proposed by the Settlement Officer were published in the Rajasthan Gazette dated 23rd of August, 1952.
The rent rates fixed were made applicable with effect from Ist of July 1953 and, therefore, on the date of resumption, namely, on Ist July, 1955, rent rates assessed by the Settlement Officer and approved by the Government were in force, for the purpose of payment of compensation under the Jagirs Act.
Sangram Singh challenged the validity of the rent rates fixed under the settlement operation by means of a writ petition No. 308 of 1953.
The High Court quashed the order settling the rent rates being in flagrant violations of sec.
82 (1) (a) and (b) of the Jaipur State Grants Land Tenures Act, 1947 with a direction to settle fresh rent rates in accordance with the said provision.
Pursuant to the order of the High Court fresh rent rates were settled by the Settlement Officer on 6th of June, 1955 with retrospective operation from Ist July, 1953.
According to the new settlement the total rental income from the jagir was reduced from Rs. 1,31,657.48 to Rs. 82,501 50.
475 The Jagir Commissioner by his order dated 25th November, 1960 granted compensation on the basis of the rent rates assessed in 1955.
The Jagirdar unsuccessfully preferred an appeal before the Board of Revenue.
Sangram Singh died in the mean time so his son the appellant challenged the order of the Board of Revenue on two grounds: (1) that the compensation should have been assessed on the basis of rent rates determined in 1953 as it stood on the date of resumption.
(2) or in the absence of a valid settlement on the basis of actual income from rents during the three agricultural years.
Treating the Jagir as unsettled, the High Court rejected both the grounds.
Hence the appeal by certificate under Article 133 (1) (a) of the Constitution.
Allowing the appeal and remanding the case, the Court ^ HELD: 1.
As a result of the quashing of the order of Settlement of rent rates of 1953 by the High Court, the jagir would be taken as an unsettled one on the date of resumption.
The quashing of the order of Settlement only means tabula rasa (clean slate) as if there was no determination of rent rates in 1953.
[479 E F] 2.
The criterion to determine whether a particular jagir is a settled one or not is to see whether the rent rates determined in settlement operations have been made applicable.
It is only from the date of effectuation of a valid settlement of rent rates in respect of a particular jagir which makes the jagir a settled one.
[480 C D] 3.
Section 86 of the Jaipur State Grants Land Tenures Act, 1947 clearly indicates that the rent fixed by the Settlement Officer shall normally be payable from the first of July next following the date of such order and further authorises the Settlement Officer to make the same shall be payable from some earlier date.
The realisation of rent from a retrospective date will not make the jagir in question a settled one as from that date.
The settlement of rent rates is one thing and the realisation of rent on the basis of the settlement is quite another.
In the case of a settled village the compensation would be determined on the basis of the rent rates settled during the settlement operation recorded in the Revenue Papers on the date of resumption.
Thus it is the effectuation of the rent rates determined during the settlement made prior to the date of resumption which would make the village a settled village as on that date.
[480 F H] In the instant case, the jagirdar became entitled to compensation on the date of resumption.
If the village was an unsettled village on the date of resumption he would be entitled to compensation on the basis of the village being unsettled.
The right of compensation vested in the jagirdar on the date of resumption and he could not be deprived of his right by a subsequent amendment unless the amendment in law specifically or by necessary implication provided for depriving the jagirdar of his vested right.
There is nothing in the definition of the term "settled" under sec 2 (n) of the Act or in sec.
86 of the Jaipur State Grants Land Tenures Act to indicate that the Legislature intended to affect the vested right.
[481 A D]
| The Chief Commissioner, Delhi, referred an industrial dispute for adjudication to the Industrial Tribunal, Delhi, which gave its award on March 16, 1959.
Both the appellant and the respondents were dissatisfied with the award and they came to this Court by special leave.
The award was challenged by the appellant with regard to scales of pay, dearness allowance, adjustments, leave rules, gratuity and retrospective effect of the award.
The respondents attacked the award as regards the working hours, leave rules and retirement age.
Held, that while social justice demands that workmen should get a fair share of the national income which they help to produce, it has also to be seen that that does not result in the drying up of the source of national income itself.
Inroads 235 on the profits of the capitalists should not be such as have a tendency to drive capital away from fruitful employment and thereby affect prejudicially capital formation itself The Tribunal had applied the correct principles and the award should not be disturbed, Held, also, that the Tribunal had erred in awarding a fixed dearness allowance of Rs. 25 / .
The object of dearness allowance being to neutralise part of the rise or fall in the cost of living, it should ordinarily be on a sliding scale.
Held, that the contention of the appellant that in view of the provisions of the , no provision need be made about sickness leave at all, was rejected.
It was pointed out that in providing for periodical payments to an insured worker in case of sickness or for medical treatment or attendance to him or the members of his family under the Act of 1948, the Legislature did not intend to substitute any of these benefits for the workmen 's right to get leave on full 'Pay on the ground of sickness.
Held, that as regards those workmen to whom the Delhi Shops and Establishments Act, 1954, applied,.
the Tribunal had acted illegally in fixing the period of sick leave at 15 days and permitting accumulation.
The appellant shall allow to the workmen to whom the Delhi Shops and Establishments Act applied, sickness or casual leave for a total period of 12 days with full pay and allowances, and such leave shall not accumulate.
As it was not desirable to have two separate leave rules for two classes of workmen, one to whom the Act of 1954 applied and tile other to whom the Act did not apply, it was held that the same rule should apply to other workers also.
Held, also, that tile scheme of gratuity as framed by the tribunal was not unduly favourable to workmen and it also did not place any undue strain on the financial resources of tile Company.
As regards the provision in the gratuity scheme that an employee who is dismissed for misconduct shall not be entitled to any gratuity; it was held that the proper provision should be that where an employee is dismissed for misconduct which has resulted in financial loss to the employer, the amount of loss should be deducted from the amount of gratuity due.
The award of the Tribunal on tile question of retirement age was set aside and the retirement age was fixed at 58, subject to the proviso that it would be open to the company to continue in its employment a workmen who had passed that age, The rule was to apply to all tile employees of the Company.
236 No general formula could be laid down as to the date from which a Tribunal should make its award effective.
That question has to be decided by the Tribunal on consideration of the circumstances of each case.
There was no justification for interfering with the direction of the Tribunal that in this case the reliefs given by it should become effective from the date of the reference.
Standard Vacuum Refining Co., of India vs Its workmen, , M/s. Crown Aluminium Works vs Its workmen; , , Express Newspapers Ltd. vs Union of India, , M/S. Lipton Ltd. vs Their Workmen [1959] Supp. 2 section C. R. 150, Workmen Hindustan Motors vs Hidustan Motors, 52, French Motor Car Co. vs Their Workmen, and Guest Keen, Williams (P) Ltd. vs P. J. Sterling [1961] 1 section C. R. 348, referred to.
| In response to a show cause notice dated March 15, 1957, under section 28(1)(c) of the Income Tax Act, before imposing a penalty for deliberate concealment of its income, the appellant, through its authorised representative, voluntarily agreed to a slum of Rs. 15,000/ being treated as income of Hindu Undivided Family.
The Income Tax officer, by his order dated March 20,1958, added a sum of Rs. 68,550/ to the income of the appellant and imposed on it a penalty of Rs. 26,000/ which on appeal was reduced to Rs. 15,000/ .
Meanwhile, on March 19, 1957, the appellant filed an application under section 25A of the Act for an order recording partition of joint family property in definite portions from June 22, 1956, claiming that date to be the date of partition.
The Income Tax officer, after due enquiries, accepted the disruption of the Hindu Undivided Family as claimed by his order dated March 26, 1962.
This led the appellant to contend that, in view of ' the orders dated March 26, 1962, of the Income Tax officer, the imposition of the penalty by him on March 20, 1958 was bad in law and could not be sustained.
The Tribunal uphold the contentions of the appellant resulting in a reference under section 66(1) of the Act to the High Court of Allahabad (Lucknow Bench), which reversed the decision or the Tribunal.
However, the High Court granted a certificate of fitness for appeal to this Court.
Dismissing the appeals the Court, ^ HELD: Sub section (3) of section 25A of the Income Tax Act embodies a legal fiction according to which a Hindu family which has been previously assessed as "undivided" is to be continued to be treated as "undivided" till the passing of the order under sub section
(1) of section 25A.
So long as no order under section 25(A)(1) 1 of the Act is recorded, the jurisdiction of the Income Tax officer to continue to assess as undivided despite a partition under personal law, a Hindu family which has hitherto been assessed in that status, remain unaffected.
[508G H] Additional Income Tax Officer, Quddapah vs A. Thimmayya vs Commissioner of Income Tax, Gujrat , applied.
Commissioner of Income Tax vs Sanchar Sah Bhim Sah section A. Raju Chattiar & Ors.
vs Collector of Madras & Anr. ; Mahankali Subba Rao Mahankali Nageswara Rao & Anr.
v, Commissioner of income Tax.
Hyderabad and Commissioner of Income Tax, Punjab vs Mothu Ram Prem Chand , not applicable
| The appellants, who were during the relevant period, the Minister for Industries and Secretary to the Government respectively of the State of Vindhya Pradesh, were tried by a Special Judge under the Vindhya Pradesh Criminal Law Amendment (Special Courts) Ordinance (No. V of 1949) for charges under sections 120 B, 161, 465 and 466 of the Indian Penal Code as adapted by the Vindhya Pradesh Ordinance No. XLVIII of 1949, the facts alleged against them being that they entered into a conspiracy in February, 1949, at Rewa to obtain illegal gratification for revoking a previous Government Order and in pursuance of that conspiracy the second appellant demanded such gratification on 8th March, 1949, at Rewa and the first appellant received Rs. 25,000 towards it on the 11th April, 1949, at New Delhi and forged certain documents purporting to be official orders.
They were acquitted by the Special Judge but on appeal the first appellant was convicted by the Judicial Commissioner on all the charges and the second as under sections 120 B and 161 of the Indian 1189 Penal Code.
The validity of the trial and convictions was challenged on appeal to the Supreme Court inter alia on the ground that they contravened articles 14 and 20 of the Constitution and on the ground that no appeal lay to the Judicial Commissioner from the order of the Special Judge.
Held (i) that, as section 5 (2) of the Vindhya Pradesh Ordinance, 1949, provided that the provisions of the Criminal Procedure Code shall apply to the proceedings of a Special Court and that the Special Judge shall be deemed to be a court of session, the normal right of appeal provided by section 410 or section 417, as the case may be, of the Criminal Procedure Code must betaken to have been expressly provided by reference, and the order of the Special Judge was appealable to the Judicial Commissioner.
Attorney General vs Herman James Sillem (11 H. L. C. 704) distinguished.
(ii) That the trial of the appellants did not contravene article 14 of the Constitution inasmuch as in the Vindbya Pradesh Criminal Procedure Code (as amended) which was in force at the commencement of the trial (namely 2nd December, 1949) there was no provision requiring all trials before Courts of Sessions to be either by jury or with the aid of assessors, and the fact that the entire Criminal Procedure Code including section 268 thereof was extended to Vindhya Pradesh on the 16th April, 1950, by the Part C States (Laws) Act, 1950, could not affect the validity of the trial after that date as section 4 of the said Act provides that the repeal of the earlier law by that Act shall not affect pending proceedings, and pending proceedings being a class in themselves, a provision saving such proceedings could not contravene article 14.
Syed Qasim Razvi vs State of Hyderabad ([1952] S.C.R. 710) referred to.
(iii) The prohibition contained in article 20 of the Constitution against convictions and subjections to penalty under ex post facto laws is not confined in its operation to post Constitution laws but applies also to ex post facto laws passed before the Constitution in their application to pending proceedings.
[The difference between Indian and American law in this respect pointed out.] (iv) Article 20, however, prohibits only conviction or sentence under an ex post facto law, and not the trial thereof.
Such trial under a procedure different from what obtained at the time of the offence or by a court different from that which had competence at that time cannot ipso facto be held to be unconstitutional.
(V) The expression " law in force " in article 20 means a law which was in fact in existence and in operation at the time of the commission of the offence (or, in other words, the then existing 154 1190 law) and does not include a law which by subsequent legislation has to be deemed to have been in force at that time.
(vi) Though the charges against the appellants were specifically framed with reference to the offence under Ordinance No. XLVIII of 1949, as the acts charged as offences did not become such only by virtue of the said Ordinance and as they were offences even under the law which prevailed at the time when the acts were committed, they could not be regarded as convictions for violation of a law which was not in force at the time of the commission of the acts charged.
(vii) By virtue of the Orders of the Regent of Row& of 1921 and 1922, the Indian Penal Code and the Criminal Procedure Code with the necessary adaptations were in force in the Rewa State and either became extended to the entire Vindhya Pradesh State from the 9th August, 1948, by Ordinance No. IV of 1948, or continued to be in force in the Rewa portion of that State by virtue of the principle laid down in Mayor of Lyons vs Bast India Co. (1 M.I. A. 175), and were the penal law in force in the relevant area when the acts were committed.
(viii) The amendment of the definition of "public servant" in S.21 of the Penal Code, made by Ordinance No. XLVIII of 1949 brought about no substantial change in the position of the first appellant as a public servant.
(ix) The Ruler of the Rewa State had prior to 1947 the authority to pass extra territorial laws relating to offences committed by his own subjects and vesting in his own courts the power to try them, that power was not in any way curtailed either by the integration covenant or the Instrument of Accession, and sections 3 and 4 of the Indian Penal Code and section 188 of the Criminal Procedure Code, at least in so far as they affected the subjects and courts of the State, were within the legislative competence of the State.
(x) The conviction of the appellants in respect of all the offences with which they were charged including the extra territorial offence said to have been committed by the first appellant at New Delhi was not illegal under article 220 on the ground that the conviction was under an ex post facto law.
|
Appeal No. 185 of 1956.
Appeal by special leave from the judgment and decree dated November 25, 1954, of the Bombay High Court in Second Appeal No. 1003 of 1952.
H. R. Gokhale, J. B. Dadachanji, section N. Andley, Rameshwar Nath and P. L. Vohra, for the appellants.
C. B. Agarwala and A. G. Ratnaparkhi, for the respondent No. 1.
April 19.
The Judgment of the Court was delivered by SINHA, C. J.
The only question for determination in this appeal is whether the defendants appellants are 'protected tenants ' within the meaning of the Bombay Tenancy Act (Bombay Act XXIX of 1939) (which hereinafter will be referred to, for the sake of brevity, as the Act of 1939), whose rights as such were not affected by the repeal of that Act by the Bombay Tenancy and Agricultural Lands Act (Bombay Act LXVII of 1948) which hereinafter will be referred to as the Act of 1948).
The Courts below have decreed the plaintiff 's suit for possession of the lands in dispute, holding that the defendants were not entitled to the protection claimed by them as 'protected tenants '.
This appeal is by special leave granted by this Court on April 4, 1965.
The facts of this case are not in dispute.
Shortly stated, they are as follows.
By virtue of a lease dated October 30, 1939, the defendants obtained a lease of the disputed lands from the plaintiff for a period of 10 years, expiring on October 30, 1949.
The lands in 61 dispute have been found to lie within two miles of the limits of Poona Municipality.
The landlord gave notice on October 22, 1948, terminating the tenancy as from October 30, 1949.
As the defendants did not vacate the land, in terms of the notice aforesaid, the plaintiff instituted the suit for ejectment in the Court of the Civil Judge, Junior Division, at Poona in Civil Suit No. 86 of 1950.
The Act of 1939 became law on March 27, 1940, but the Act was applied to Poona area with effect from April 11, 1946.
Under section 3 of the Act, a tenant shall be deemed to be a ' protected tenant ' in respect of any land if he has hold such land continuously for a period of not less than six years immediately preceding either the first day of January, 1938, or the first day of January, 1945, (added by the Amending Act of 1946) and has cultivated such land personally during the aforesaid period.
It is not disputed that the defen dants appellants became entitled to the status of 'protected tenants ' as a result of the operation of the Act, as amended by the Bombay Tenancy (Amendment) Act, 1946 (Bombay Act XXVI of 1946), and under section 3A(1) the defendants were deemed to be 'protected tenants ' under the Act and their rights as such were recorded in the Record of Rights.
Sections 3 and 3A(1), aforesaid, are set out below: "3.
A tenant shall be deemed to be a protected tenant in respect of any land if (a) he has held such land continuously for a period of not less than six years immediately preceding either (i) the first day of January 1938 or (ii) the first day of January 1945 and (b) has cultivated such land personally during the aforesaid period.
3A(1) Every tenant shall, on the expiry of one year from the date of the coming into force of the Bombay Tenancy Amendment Act of 1946, be deemed to be a protected tenant for the purposes of this Act and his rights as such protected tenant shall be recorded in the Record of Rights, unless his landlord has within the said period made an application to 62 the Mamlatdar within whose jurisdiction the land is situated for a declaration that the tenant is not a protected tenant".
Under section 3A(1) aforesaid, it was open to the landlord, within one year of the date of the commencement of the Amending Act of 1946, to make an application to the Mamlatdar for a declaration that the tenant was not a 'protected tenant '.
No such proceeding appears to have been taken.
As a result of the expiration of one year from November 8, 1946the date of the coming into operation of the Amending Act of 1946 the defendants were deemed to be 'protected tenants ' and it is not disputed that they were recorded as such.
Section 4 of the Act, with which we are not concerned in the present case, made further provisions for recovery of possession by tenants who had been evicted from their holdings in circumstances set out in that section.
The Act, therefore, in its terms, was intended for the protection of tenants in certain areas in the Province of Bombay (as it then was).
If nothing had happened later, the defendants would have had the status of 'protected tenants ' and could not have been evicted from their holdings, except in accordance with the provisions of the Tenancy Law.
But the Act of 1939 was replaced by the Act of 1948.
The question that arises now for determination is whether the Act of 1948 wiped out the defendant 's status as 'protected tenants '.
For determining this question, we have naturally to examine the relevant provisions of the later Act.
The Act of 1948, by section 2 cl.
(14) prior to its amendment by Bombay Act XIII of 1956, provides that " protected tenant ' means a person who is recognised to be a protected tenant under section 31".
Section 31 runs as follows: "For the purposes of this Act, a person shall be recognised to be a protected tenant if such person has been deemed to be a protected tenant under section 3, 3A or 4 of the Bombay Tenancy Act, 1939.
" The force and effect of section 31 will have to be discussed later while dealing with the arguments raised 63 on behalf of the landlord respondent.
The next relevant provisions of the Act of 1948 are those of section 88(1)(c) which reads: "Nothing in the foregoing provisions of this Act shall apply: . . . . . . . . . . . . . . . (c) to any area within the limits of Greater Bombay and within the limits of the municipal boroughs of Poona City and Suburban, Ahmedabad, Sholapur, Surat and Hubli and within a distance of two miles of the limits of such boroughs; or. .
As already observed, the lands in dispute in the present controversy have been found to be situate within two miles of the limits of the Poona Municipal Borough, which, for the purpose of this case, has been equated to 'Borough of Poona City and Suburban '.
It has been contended on behalf of the respondent that under the later Act the disputed lands are outside the purview of the Act and that, therefore, the defendants appellants are not entitled to claim the status of 'protected tenants '.
The appellants have answered this contention by reference to the provisions of section 89, which may now be set out (in so far as they are necessary for the purpose of this case): "89(1) The enactment specified in the Schedule is hereby repealed to the extent mentioned in the fourth column thereof (2) But nothing in this Act or any repeal effected thereby . . . . . . . `. (b) shall, save as expressly provided in this Act, affect or be deemed to affect, (i) any right, title, interest, obligation or liability already acquired, accrued or incurred before the commencement of this Act, or (ii) any legal proceeding or remedy in respect of any such right, title, interest, obligation, or liability or anything done or suffered before the commencement of this Act, and any such proceeding shall be continued and disposed of, as if this Act was not passed . ".
64 It has been contended on behalf of the appellants that the repealing section 89, read with the Schedule, makes it clear that the whole of sections 3, 3A and 4 of the Act of 1939 have been saved, subject to certain modifications, which are not relevant to the present purpose; and that sub section 2(b) of section 89 has in terms, saved the appellants ' rights as 'protected tenants ' because those rights had already accrued to them under the Act of 1939.
But this contention is countered by the learned counsel for the plaintiff respondent on three grounds, namely, (1) that section 88 expressly provides that sections 1 to 87 of the later Act shall not apply to lands situate in the Municipal Borough of Poona City and Suburban and within a distance of two miles of the limits of such borough; (2) that what has been saved by cl.
(b) of sub section
(2) of section 89 is not every right but only such rights as had been actually exercised and recognised; and (3) that the terms of the saving clause, as contained section 89(2)(b) were not identical with section 7 of the Bombay General Clauses Act, inasmuch as cl.
(b) aforesaid only speaks of such proceedings being continued and disposed of, without reference to the institution of such proceedings.
Shortly put, the arguments on behalf of the appellants is that the taking away of the status of a protected tenant ' from certain lands, as specified in section 88, is only prospective and not retrospective, whereas the argument on behalf of the respondent is that the repeal was with retrospective effect and only so much was saved as would come directly within the terms of el.
(b) of section 89(2), and that the right claimed by the appellants was in express terms taken away by section 88.
The argument based on the second ground may be disposed of at the outset in order to clear the ground for a further consideration of the effect of sections 88 and 89, on which the whole case depends.
The learned counsel for the plaintiff respondent placed strong reliance upon the following observations of the Lord Chancellor in the case of Abbot vs The Minister for Lands (1): "They think that the mere right (assuming it to (1) ,431. 65 be properly so called)existing in the members of the community or any class of them to take advantage of an enactment, without any act done by an individual towards availing himself of that right, cannot properly be deemed a "right accrued" within the meaning of the enactment." The contention is that in order that the defendants appellants could claim the status of 'protected tenants ' as a right accrued under the Act of 1939, they should have taken certain steps to enforce that right and got the relevant authorities to pronounce upon those rights, and as no such steps had admittedly been taken by the appellants, they could not claim that they had a 'right accrued ' to them as claimed.
In our opinion, there is no substance in this contention.
The observations, quoted above, made by the Lord Chancellor, with all respect, are entirely correct, but have been made in the context of the statute under which the controversy had arisen.
In that case, the appellant had obtained a grant in fee simple of certain lands under the Crown Lands Alienation Act, 1861.
By virtue of the original grant, he would have been entitled to claim settlement of additional areas ' if he satisfied certain conditions laid down in the relevant provisions of the statute.
The original settle had the right to claim the additional settlements, if he so desired, on fulfillment of those conditions.
He had those rights to acquire the additional lands under the provisions of the Crown Lands Alienation Act,, 1861, but the Crown Lands Act of 1884, repealed the previous Act, subject to a saving provision to the effect that all rights accrued by virtue of the repealed, enactment shall, subject to any express provisions of the repealing Act in relation thereto, remain unaffected by such repeal.
The appellants ' contention that under the saving clause of the repealed enactment he had the right to make additional conditional purchases and that was a 'right accrued ' within the meaning of the saving clause contained in the repealing Act of 1884, was negatived by the Privy Council.
It is, thus;, clear that the context in which the observations relied upon by the respondent, as quoted above, were made is entirely different 9 66 from the context of the present controversy.
That decision is only authority for the proposition that 'the mere right, existing at the date of a repealing statute, to take advantage of provisions of the statute repealed is not a 'right accrued ' within the meaning of the usual saving clause '.
In that ruling, their Lordships of the Privy Council assumed that the contingent right of the original grantee was a right but it was not a right accrued ' within the meaning of the repealed statute.
It was held not to have accrued because the option given to the original grantee to make additional purchases had not been exercised before the repeal.
In other words, the right which was sought to be exercised was not in existence at the date of the repealing Act, which had restricted those rights.
In the instant case, the right of a 'protected tenant ' had accrued to the appellants while the Act of 1939 was still in force, without any act on their part being necessary.
That right had been recognised by the public authorities by making the relevant entries in the Record of Rights, as aforesaid.
On the other hand, as already indicated, section 3A(1) of the 'Act of 1939 had given the right to the landlord respondent to take proceedings to have the necessary declaration made by the mamlatdar that the tenant had not acquired the status of a 'protected tenant '.
He did not proceed in that behalf.
Hence, it is clear that so far as the appellants were concerned, their status as 'protected tenants ' had been recognised by the public authorities under the Act of 1939, and they bad to do nothing more to bring their case within the expression 'right accrued ', in el.
(b) of section 89(2) of the Act of 1948.
It having been held that the second ground of attack against the claim made by the appellants is not well founded in law, it now remains to consider whether the first ground, namely, that there is an express provision in section 88, within the meaning of section 89(2)(b), taking away the appellants ' right, is supported by the terms of sections and 89.
In this connection, it was pointed out on behalf of the respondent that section 88(1) in terms provides that sections 1 to 87 of 67 the Act of 1948 shall not apply to lands of the situation of the disputed lands; and section 31 has been further pressed in laid of this argument.
Section 31 has already "been quoted, and it begins with the words "For the purposes of this Act".
The provisions of the Act of 1948 relating to the rights and liabilities of a protected tenant ' are not the same as those under the Act of 1939.
Hence, though the provisions of sections 3, 3 A and 4 of the earlier Act of 1939 have been adopt.
ed by the later Act, it has been so done in the context of the later Act, granting greater facilities and larger rights to what are described as 'Protected tenants '.
In other words section 31 has been enacted not to do away with the rights contained in sections 3, 3 A and 4 of the earlier statute, but with a view to apply that nomenclature to larger rights conferred 'under the Act of 1948.
The provisions of section 88 are entirely prospective.
They apply to lands of the description contained in cls.
(a) to (d) of a. 88(1) from the date on which the Act came into operation, that is to say, from December 28, 1948.
They are not intended in any sense to be of a confiscatory character.
They do not show an intention to take away what had already accrued to tenants acquiring the status of 'protected tenants '.
On the other hand, section 89(2)(b), quoted above, clearly shows an intention to conserve such rights as had, been acquired or had accrued before the commencement of the repealing Act.
But it has further been contended on behalf of the respondent, in ground 3 of the attack, that sub cl.
(ii) of cl.
(b) of section 89(2) would indicate that the legislature did not intend completely to re enact the provisions of section 7 of the Bombay General Clauses Act.
This argument is based on the absence of the word instituted ' before the words 'continued and disposed of '.
In our opinion there are several answers to this contention.
In the first place, sub cl.
(i) is independent of sub el.
(ii) of ol.
(b) of section 89(2).
Therefore, sub el.
(ii), which has reference to pending litigation, cannot cut down the legal significance and ambit of the words used in sub cl.
Sub cl.
(ii) may have reference to the forum of the proceedings, whether the Civil Court or the Revenue Court shall have seizin of 68 proceedings taken under, the repealed Act.
;We have already held that the expression 'right accrued ' in sub el.
(i) does not exclude the rights of 'protected tenants"claimed by the appellants.
It is well settled that where there is a right recognised by law, there is a remedy,; and, therefore, in ' the absence of any special provisions indicating the particular forum for enforcing a particular right, the general law of the land will naturally take its course.
In this connection, it is relevant to refer to the observations of the High Court that "even if it were to be assumed that the right as a 'protected tenant ' remained vested in the defendants even after the enactment of section 88(1), that right, in its enforcement;against the plaintiff, must be regarded as illusory".
In our opinion, those observations are not well founded.
Courts will be 'very slow to assume a right and then to regard it as illusory, because no particular forum has been indicated.
Lastly, the legal effect of the provisions of sub el.
(ii) aforesaid is only this that any legal proceeding! in ' respect of the, right claimed by, the defendants shall be continued and disposed of as if the Act of 1948 had not been passed.
Applying those words to the present litigation the inference is clear that the controversy has to be resolved with reference to the provisions of the repealed statute.
That being so, in Our Opinion, the intention of the legislature was that the litigation we are now dealing with should be disposed of in terms of the repealed statute of 1939.
It has not been disputed before us that if that. is done, there is only one answer to this suit, namely, that it must be dismissed with costs.
Accordingly, we allow the appeal, set aside the judgments below and dismiss the suit with costs throughout, to the contesting defendants appellants.
| The appellants had acquired the rights of protected tenants under section 3A(1) of the Bombay Tenancy Act, 1939, as amended by the Bombay Tenancy (Amendment) Act, 1946, and their rights as protected tenants were recorded in the Record of Rights.
That Act was repealed by the Bombay Tenancy and Agricultural Lands Act, 1948, which by section 31 recognised the rights of a protected tenant acquired under the Act of 1939 for its own purposes, by section 88(1)(c) provided, that nothing in the foregoing provisions of the Act should apply to any area within the limits of the Municipal borough of Poona City and Suburban as also some other boroughs and within a distance of two miles of the limits of such boroughs, and by section 89(2) that "nothing in this Act or any repeal effected thereby . (b) shall, save as expressly provided in this Act, affect or be deemed to affect (i) any right, title, interest, obligation or liability already acquired, accrued or incurred before the commencement of this Act, or . . . . . . . . . or . . . . . . . . . (ii) any legal proceeding or remedy in respect of any such right, title, interest, obligation, or liability or anything done or suffered before the commencement of this Act, and any such proceeding shall be continued and disposed of, as if this Act was not passed The lands in dispute were situated within two miles of the limits of the Poona Municipal Borough, i.e. Poona City and Suburban, and the question was whether the rights of the appellants as protected tenants therein were.
I affected by the repeal.
Held, that the provisions of section 88 of the Bombay Tenancy and Agricultural Lands Act, 1948, are entirely prospective and apply to such lands as are described in cls.
(a) to (d) of section 88(1) from 60 the date on which the Act came into operation i.e. December 28, 1948, and are not of a confiscatory nature so as to take away from the tenant the status of a protected tenant already accrued to him.
Section 89(2)(b) of the Act clearly intends to conserve such rights as were acquired or accrued before its commencement and that any legal proceeding in respect of such rights was to be disposed of in terms of the Act of 1939.
Abbot vs The Minister for Lands, , distin guished.
| % Appellant took the tenancy of the premises in question on an agreed monthly rent of Rs.22 + Rs.2.20 per month on account of Education Cess.
Respondent purchased the house on December 3, 1976.
Appellant was in arrears of rent from 1.6.1976 to 30.11.76.
In response to the notice issued by the Respondent, appellant sent a money order to Respondent treating him as the Muktyar or agent of the previous landlord.
The respondent refused the money order.
Thereafter the appellant filed an application in the trial court for fixing the standard rent of the premises under the provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947.
The Respondent filed a suit claiming arrears of rent and possession of the suit premises on the ground of non payment of arrears of rent and bona fide requirement under section 12(3) and section 13(1) of the Act.
Trial Court passed an order fixing the interim rent of Rs.20 and directed the appellant to pay all arrears of rent and future rent accordingly.
Appellant deposited the arrears and thereafter made payment not monthly but at some irregular intervals.
The Trial Court held that the respondent had failed to prove that he was in bona fide need of the suit premises, but passed a decree for eviction on the ground that the Appellant had committed default in payment of rent as contemplated under section 12(3)(b) of the Act.
On appeal these findings were confirmed by the Additional District Judge.
The Appellant filed a Writ Petition in the High Court, which was dismissed.
In the appeal by special leave, it was contended on behalf of the appellant that payments of rents were made with substantial regularity and that no decree for eviction could be passed against the Appellant.
The contention of the Respondent was that there was irregularity in the deposit of the rent and that the appellant was liable to be evicted on the ground of default in payment of rent.
462 Disposing of the appeal this Court, ^ HELD: 1.
Section 12(3)(a) of the Act will not be applicable since there was dispute regarding the amount of standard rent.
Section 12(3)(b) is applicable, which makes it clear that no decree for eviction can be passed in a suit for recovery of possession on the ground of non payment of standard rent or permitted increases instituted by the landlord against the tenant, if on the first day of the hearing of the suit or on or before such a date, as the court may fix, the tenant pays or deposits in court the standard rent and permitted increases then due and thereafter continues to pay or deposits in court regularly such rent and permitted increases till the suit is finally decided and also pays the costs of the suit as directed by the court.
[466E F] 2.
As ordered by the Trial Court, the monthly rent should have been deposited on the fifth day of each succeeding month.
There were a few defaults committed by the Appellant varying from 2 to 3 days into a maximum of 23 days.
On the other hand, rent for most of the months had been deposited in advance.
In the circumstances of the case the Appellant had been depositing the rent with reasonable punctuality and can be regarded as having deposited the rent 'regularly ' as contemplated in Section 12(3)(b) and it is incorrect to say that exact or mathematical punctuality was required in the deposit of rent by a tenant to take advantage of the provisions of Section 12(3)(b).
[467G H; 468A C] (Mranalini B Shah and another vs Bapalal Mohanlal Shah, , followed.
[The decree for eviction was set aside and the court directed that the suit filed by the Respondent shall stand dismissed.]
| The appellant landlord executed a lease in respect of the disputed premises in favour of respondent 2 for three years as far back as 1 4 1942.
In 1948, a suit was brought by the appellant for eviction of the tenant for non payment of rent on the ground of conversion of the user of the premises.
The suit for possession was however dismissed but a decree dated 31 11 1948 for arrears of rent was passed and it was held that Laxmi Bank was the real tenant.
Subsequently, the Bombay High Court ordered the Bank to be wound up and in the winding up proceedings, the High Court appointed an Official Liquidator who on 16 2 1961 sold the tenancy rights to respondent No. 1.
The sale was confirmed by the High Court on the same date and as a result thereof respondent No. 1 took possession the premises on 24 2 1961.
On 5 1 1961, the landlord appellant filed an application under the Delhi Rent Control Act for eviction of Laxmi Bank.
On 31 7 1961, a decree for eviction was passed in favour of the appellant.
On 22 1 1963, respondent No. 1 filed a suit for declaration that he was a tenant of the landlord appellant.
The suit was dismissed for non prosecution on 5 5 1964 and an application to set aside the ex parte order was also dismissed and the appeal against that order also failed.
Thereafter respondent No. 1 filed an application under Section 25 of the Delhi Rent Control Act for recalling the warrant of possession issued by the Court in pursuance of the decree dated 31 7 1961 in favour of the appellant.
The Rent Controller allowed it on 20 12 1966.
An appeal to the Rent Controller Tribunal was ordered by order dated 25 11 1968 in favour of the appellant.
A second appeal filed by respondent No. 1 to the High Court was allowed in his favour and the Rent Controller 's order allowing recalling of the warrant of possession was restored.
Hence the appeal by special leave by the landlord.
Allowing the appeal, the Court ^ HELD: 1.
The application of respondent No. 1 under Section 25 of the Delhi Rent Control Act is clearly barred by the principle contained in order IX Rule 9 Civil Procedure Code.
It was the appellant who brought the previous suit which resulted in a decree for eviction of the tenant on 31 7 1961 a date when the Ist respondent had already taken possession of the premises by virtue of transfer made by the Official Liquidator.
There is nothing to show that respondent No. 1 was a tenant within the meaning of Delhi Rent Control 445 Act so as to maintain an application under section 25 of the Act, when in fact he was an unlawful sub lessee.
[447A, E, F G] Suraj Ratan Thirani and Ors.
vs Azamabad Tea Co. and Ors. ; ; applied.
The language of section 14(b) of the Delhi Rent Control Act is wide enough not only to include any sub lease but even an assignment or any other mode by which possession of the tenanted premises is parted.
In view of the wide amplitude of section 14 (b), it does not exclude even in involuntary sale.
[448D E] In the instant case, the official Liquidator had merely stepped into the shoes of Laxmi Bank which was the original tenant and even if the official liquidator had transferred the tenancy interest to respondent No. 1 under the order of the Court, it was on behalf of the original tenant.
It was undoubtedly a voluntary sale which clearly fell within the mischief of section 14 (1) (b) of the Delhi Rent Control Act.
Assuming that the sale by the Official Liquidator was an involuntary sale, then it undoubtedly became an assignment as provided for by section 14 (b) of Delhi Rent Control Act.
[448A C] Krishna Das Nandy vs Bidhan Chandra Roy, A.I.R. 1959 Cal.
181 Overruled.
| In the first three appeals the tenants were in default in paying rents for three years and due notices had been served by the landlords terminating the tenancies.
The landlords thus acquired statutory rights to eject the tenants and applied to the Mamlatdar, as required by section 29 of the Bombay Tenancy and Agricultural Lands Act, 1948, for possession over the lands.
The Mamlatdar refused to make an order for possession on the ground that the tenants were entitled to relief against forfeiture on equitable principles.
In the fourth appeal also the tenants had defaulted in paying rents for three years.
In respect of the default in the first year the tenant had been granted relief against forfeiture under section 25(1) of the Act.
The tenant contended that the default in the first year had merged in the order under section 25(1) and could not be relied upon far holding that he had defaulted for three years.
^ Held, that the landlords were entitled to orders for possession in all the four cases.
Upon default in payment of rent for three years a statutory right accrued to the landlords under section 25(2) to terminate the tenancy and to obtain possession.
There was no provision in the Act for granting relief against forfeiture in such a case; the provision in section 29(3) that the Mamlatdar "shall pass such orders as he deems fit" did not give him such a power.
The Act merely empowered him to grant relief where the tenant was not in arrears for more than two years.
No relief against forfeiture could be granted to the 740 tenants on equitable grounds; relief on equitable grounds could only be granted in cases of contractual rights and not in cases of statutory rights.
Nor could relief be granted under section 114 Transfer of Property Act as that provision was inconsistent with the provisions of the Bombay Act and was therefore inapplicable.
R. V. Boteler, (1864) 33 L. I. M. C. 101, referred to.
Raghuvir, Vyasaraya Acharya vs Govind Mogre Bandekar, , disapproved.
Held, further, that in the fourth appeal the default in the first year could also be taken into consideration in computing of three years inspite of the tenant having been relieved against forfeiture for that year.
The order granting the relief did not wipe out the default, it only prevented the termination of the tenancy for that default alone.
| In 1865, the Government of Bombay called upon the prede cessor in title of the Corporation of Bombay to remove some markets from a certain site and vacate it, and on the appli cation of the then Municipal Commissioner the Government passed a resolution approving and authorising the grant of another site to the Municipality.
The resolution stated further that "the Government do not consider that any rent should be charged to the Municipality as the markets will be, like other public buildings, for the benefit of the whole community.
" The Corporation gave up the sites on which the old markets were situated and spent a sum of over 17 lacs in erecting and maintaining markets on the new site.
In 1940 the Collector of Bombay, overruling the objection of the Corporation, assessed the new site under section 8 of the Bombay City Land Revenue Act to land revenue rising from Rs. 7,500 to Rs. 30,000 in 50 years.
The Corporation sued for a declaration that the order of assessment was ultra vires and that it was entitled to hold the land for ever without payment of any assessment.
The High Court of Bombay held applying the principle of Ramsden vs Dyson(1) that the Government had lost its right to assess the land in question by reason of the equity arising on the facts of the case in favour of the Corporation and there was thus a limitation on the right of the Government to assess under section 8 of the said Act: Held per KANIA C.J., DAS, CHANDRASEKHARA AIYAR and BOsE JJ.
(PATANJALI SASTRI J. dissenting) that the Govern ment was not, under the circumstances of the case, entitled to assess land revenue on the land in question.
Per KANIA C.J., DAS and Bose JJ.
Though there was no effectual grant by the Government passing title in the land to the Corporation by reason of non compliance with the statutory formalities, yet, inasmuch as the Corporation had never the less taken possession of the land in terms of the Government resolution and continued in such possession openly, uninterruptedly and as of right for over 70 years, the Corporation had acquired the (1) (1866)L.R. 44 limited title it had been prescribing for during the period, that is to say, the right to hold the land in perpetuity free of rent, but only for the purposes of a market and for no other purposes.
The right acquired included as part of it an immunity from payment of rent which constituted a right in limitation of the Government 's right to assess in excess of the specific limit established and preserved by the Government Resolution within the meaning of section 8 of the Bombay City Land Revenue Act (II of 1876) there being for the purposes of this case no distinction between rent and revenue.
Per CHANDRASEKHARA AIYAR J.
If the Resolution of 1865 can be read as meaning that the grant was of rent free land the case would come strictly within the doctrine of estoppel enunciated in section 115 of the Indian Evidence Act.
Even otherwise, if there was merely the holding out of a promise that no rent will be charged in the future the Government must be deemed to have bound themselves to fulfil it.
The right to levy assessment is a prerogative right of the Government and it is hard to conceive of a ease where it could be said to be lost by adverse possession.
A court of equity must prevent the perpetration of a legal fraud.
PATANJALI SASTRI J. (contra) The principle of Ramsden vs Dyson cannot prevail against statutory requirements regarding disposition of property or making of contracts by Government.
No question of estoppel by representation arises, as the Government made no representation of fact which it now seeks to deny.
Nor can any case of estoppel by acquiescence be rounded on the facts of the case as there was no lying by and letting another run into a trap.
No right of exemption has been established either on the basis of express or implied contract or on the basis of equitable principles of part performance or estoppel by acquiescence.
The right to levy land revenue is no part of the Govern ment 's right to property but a prerogative of the Crown and adverse possession of the land could not destroy the Crown 's prerogative to impose assessment on the land.
| The appellant was a tenant of the respondents in respect of certain residential premises.
The tenancy was by the Indian Calendar.
The appellant did not pay arrears of rent for about 5 years and the landlords gave him notice to quit as he was in arrears of rent for more than six months and asked him to quit on the last day of the Indian month.
On the appellant 's failure to comply the landlords filed a suit for ejectment under section 12 (3) (a) of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947.
Within two months of the institution of the suit the appellant deposited the arrears of rent.
The suit for ejectment was decreed.
The appellant contended that in view of section 27 of the Act and r. 4 the tenancy was deemed to be by the British Calendar and the notice to quit expiring with the end of the Indian month was invalid and that he should have been relieved against forfeiture.
The landlords contended that no notice to quit was necessary for filing the suit, that the notice given was valid and that there could be no relief against forfeiture.
Held, that the suit for ejectment was rightly decreed.
it was incumbent upon the landlords to determine the contractual tenancy by a proper notice before they could file a suit for the ejectment of the tenant on the ground of non.
payment of arrears under section 12(3) (a) of the Act.
The Act did not create a new right in the landlord to evict the tenant for nonpayment of rent; the right to evict was dependent upon a proper termination of the tenancy.
The Act gave extra protection to the tenant which he could avail of after his tenancy was determined.
There was nothing in section 12 of the Act which overrode the provisions of the transfer of Property Act.
The right to possession had to be distinguished from 313 the right to recover possession.
The right to possession arose on the determination of the tenancy and the right to recover possession arose under the Act after the right to possession had arisen.
Dr. K.A. Dhairyawan, vs J.R. Thakur, ; , Baghubir Narayan Lotlikar vs Fernandiz, (1952) Bom.
L.R. 505, Karsandas vs Karsanji, A.I.R. (1953) Sau.
113, Meghji Lakhamahi vs Furniture Workshop, and Ebner vs Lascelles, , referred to.
Bai Brij Bai Krishna vs S.K. Shaw and Bros. [1951] S.C.R. 145 and Shri Hem Chand vs Shrimati Sham Devi, I.L.R. 1955) Punj.
36, distinguished.
The notice to quit was a valid notice.
The original tenancy was according to the Indian Calendar and there was nothing in section 27 of the Act or in r.4 which converted it into a tenancy according to the British Calendar.
Section 27 and r. 4 merely provided for the recoverability of rent according to the British Calendar.
In view of the provisions of section 12 there could be no relief against forfeiture in the present case.
Section 12(3)(a) empowered the court to pass a decree for eviction in case of rent payable month by month if the arrears of rent had been for a period of six months and the tenant had neglected to make the payment within a month of the service of the notice of demand.
The payment of arrears after institution of the suit did not affect his liability to eviction and the court 's power to pass the decree.
The Court was bound to pass the decree when the requirments of the section were satisfied.where the ' legislature intended to give relief against forfeiture it made a specific provision.
| The father of the first respondent sold his lands to the second respondent but continued to be in possession.
The second respondent sold them to the appellants who were put in possession in 1934.
In August 1945, the first respondent filed a petition against the second respondent, before the Debt Adjustment Board, under Ss. 17, 18 and 45 of the Bombay Agricultural Debtors Relief Act, 1939, within the time prescribed by section 17, alleging that the transaction with the second respondent was a mortgage and that the debt was liable to be adjusted under the Act.
The first appellant was impleaded as a party to the petition in December 1945, beyond the time specified in section 17.
No appeal was filed against that order, and in 1947, the Board disposed of the petition for adjustment of debt by directing the second respondent to render accounts.
He appealed and, pending the appeal, the 1939 Art was repealed by the Bombay Agricultural Debtors Relief Act of 1947.
In 1949, the appellate Court set aside the Board 's order and remanded the case to the Civil Judge, for deciding the nature of the transaction, because, under the 1947 Act, the Board was dissolved and its jurisdiction was vested in the Civil Judge.
In 1950, the first respondent 's application to the Civil Judge for impleading the second respondent also as a party to the petition for adjustment of the debt, was allowed, and thereafter, the matter was disposed of on merits.
On the questions: (i) Whether the orders impleading the appellants were without jurisdiction.
and (ii) whether the appellants had acquired title to the lands by adverse possession, HELD: (i) The orders were not without jurisdiction.
Under the repealed Act, if a party was added beyond the period prescribed under section 17 of the Act, if he was added as a necessary party to a petition filed in time, the said order might be improper but not without jurisdiction.
[151 C D] Under section 56 of the 1947 Act, original and appellate proceedings initiated under the repealed Act but pending at the time the 1947 Act came into force will have to be disposed of in accordance with the substantive and procedural sections of the 1947 Act.
Under section 46 of the 1947 Act, the court is empowered.
in a suitable case, to add Parties under 0.1, r. 10, Civil Procedure Code, and they may be added irrespective of the time limit prescribed under the repealed Act, or the time specified in Ss. 4 and 24 of the 1947 Act.
[152 A C] Case law referred to.
(ii) The appellants had not acquired any title by adverse Possession, as the petition for adjustment of debt was filed within 12 years from the date of their occupation of the suit lands.
| The appellant obtained lease of an open land for construction of buildings.
After the constructions, the appellant applied for determination of standard rent under the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947.
The application was rejected holding that the provi sions of the Act did not apply to open land let for construction.
This view was confirmed by the High Court.
Sometime thereafter in another case the High Court held that the question whether the provisions of the Act applied to any particular lease must be determined on its terms and a building lease in respect of an open plot was not excluded from the provisions of the Act solely because open land may be used from residence or educational purposes only after a structure is built thereon.
Relying upon this judgment, the appellant filed a fresh application for determining the standard rent.
The Trial Judge rejected the application holding that question of the applicability of the Act was res judicata since it had been finally decided by the High Court between the same parties in respect of the same land in the earlier proceeding for fixation of standard rent.
The order was confirmed by first appellate court and on further appeal by the High Court.
HELD:The judgment did not operate as res judicata.
A question relating.
to the jurisdiction of a Court cannot be deemed to have been finally determined by an erroneous decision of the Court.
If by an erroneous interpretation of the statute the court holds that it has no jurisdiction, the decision will not, operate as res judicata.
Similarly by an erroneous decision if the Court assumes jurisdiction which it does not possess under the statute, the decision will not operate as res judicata between the same parties, whether the cause of action in the subsequent litigation is the same or otherwise.
in determining the application of the rule of res judicata the court is not concerned with the correctness or otherwise of the earlier judgment.
The matter in issue, if it is one purely of fact, decided in the earlier proceeding by a competent court must in a subsequent litigation between the same parties be regarded as finally decided and cannot be reopened.
A mixed question of law and fact determined in the earlier proceeding between the same parties may not, for the same reason, be questioned in a subsequent proceeding between the same parties where the cause of action is the same, for the expression "the matter in issue" in section 11, Code of Civil Procedure means the right litigated between the parties, i.e., the facts on which the right is claimed or denied and the law applicable to the determination of that issue.
Where, however, the question is one purely of law and it relates to the jurisdiction of the Court or a decision of the Court sanctioning something which is illegal, by resort to the rule of res judicata a party affected by the decision will not be precluded_ from challenging the validity of that order because of the rule of res judicata, for a rule of procedure cannot supersede the law of the land.
83 1 if the decision in the previous proceeding be regarded as conclusive it will assume the status of a special rule of law applicable to the parties relating to the jurisdiction of_the Court, in derogation of the rule declared by the Legislature.
[835G 836 F] Parthasardhi Ayyangar vs Chinnakrishna Ayyangar, I.L.R. , Chamanlal vs Bapubhai, I.L.R. , Kanta Devi vs Kalawati, A.I.R. 1946 Lah.
419,, Tarini Charan Bhattacharjee vs Kedar Nath Haldar, I.L.R. , and Broken Hill Proprietary Company Ltd. vs Municipal Council of Broken Hill, , approved.
Chandi Prasad vs Maharaja Mahendra Mahendra Singh, I.L.R. 23 All.
,5, disapproved.
Bindeshwari Charan Singh vs Bageshwari, Charan Singh, L.R. 63 I.A. 53, doubted.
|
n No. 143 of 1961.
Petition under article 32 of the Constitution of India for the enforcement of Fundamental rights.
section Swaminathan and R. Gopalakrishnan, for the petitioner.
K. N. Rajagopala Sastri and P. D. Menon, for the respondents.
595 1962.
January 16.
The Judgment of the Court was delivered by KAPUR,J.
This is a petition by the assessee under article 32 of the Constitution challenging the constitutionality of the second proviso to section 10(2) (vi b) of Income tax Act introduced by The Taxation Laws (Amendment) Act (28 of 1960).
The relevant section with the proviso is as follows: section 10(1) "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.
(2) Such profits or gains shall be computed after making the following allowances, namely: . . . . . . . . . . . . . . . . . . . (vi b) in respect of machinery or plant being new, which has been installed after the 31st day of March, 1954, and which is wholly used for the purposes of the business carried on by the assessee, a sum by way of development rebate in respect of the year of installation equivalent to twenty five per cent of the actual cost of such machinery or plant to the assessee : Provided that no allowance under this clause shall be made unless the particulars prescribed for the purpose of clause (vi) have been furnished by the assessee in respect of such machinery or plant; Provided further that no allowance under this clause shall be made in respect of any machinery or plant which consist of office appliances or road transport vehicles.
" The petitioner is a limited company with its registered office at Madurai in the State of Madras 596 which owns a fleet of buses and lorries and carries on the business of transport In respect of assessment year 1960 61 it claimed a development rebate on all its plants and machinery including business.
The Income tax Officer disallowed the claim of rebate on transport vehicles under the proviso above quoted and computed the tax payable without such rebate.
It was contended on behalf of the petitioner that the proviso offends article 14 in that it discriminates between machinery which is office appliance or road transport vehicles and other kind of machinery.
It is difficult to accept such a contention because there is nothing in the Constitution which prevents the legislature from choosing the object of taxation from amongst various classes of machinery for the purpose of giving development rebate.
The Constitution does not prohibit any such classification which has been made in the pressnt case.
The petition is wholly without merit and is therefore dismissed and the rule is discharged.
The petitioner will pay the costs of the respondent.
Petition dismissed.
| The assessee company owned a fleet of buses and carried on the business of transport.
The income tax officer disallowed development rebate on the transport vehicles owned by the company as provided by the second proviso to section 10(2) (vi b) of the Income tax Act.
The company challenged the section on the ground that the said proviso offends article 14 in that it discriminates between machinery which is office appliances or road transport vehicles and other kinds of machinery.
^ Held, that there is nothing in the Constitution which prevents the Legislature from choosing the objects of taxation from amongst various classes of machinery for purpose of giving development rebate.
| The appellant who was defeated by the first respondent in the General Election of 1967 to the Punjab Vidhan Sabha, challenged the latter 's election on the ground that he was disqualified from being chosen as a member of the Assembly because he was holding an office of profit under the State Government at the relevant time.
It was admired that the respondent was the Chairman of a Panchayat Samiti and it was contended by the appellant that the allowances paid to the Chairman under Rules 3 to 7 of the Punjab panchayat Samitis and Zila Parishads, Non Official Members (Payment of Allowances) Rules, 1965, made that office an office of profit.
The High Court dismissed that election petition and on appeal to this Court, HELD: The High Court came to a correct conclusion in holding that the allowances paid under Rules 3 to 7 did not convert the office of Chairman of Panchayat Samiti into an office of profit.
The payment to a Chairman under r. 3 is described in the rule as a monthly consolidated allowance in lieu of all other allowances for performing all official duties and journeys concerning the Panchayat Samiti within the district.
This provision clearly shows that the allowance paid is not salary, remuneration or honorarium but an allowance paid for the purpose of ensuring that the Chairman of a Panchayat Samiti does not have to spend money out of his own pocket for the discharge of his duties.
The burden which lay on the appellant to show that the allowance of Rs. 100/ per month was excessive and was not required to compensate the Chairman for his actual expenses had not been discharged.
[426 F G, 427 B C] Rules 4 to 7 only provide for payment of traveling allowance and daily allowance when a Chairman performs a journey in connection with his official duties outside the district.
There is again no evidence from which it could be inferred that the amount received by a Chairman was in excess of his actual expenditure.
[427 H 428 B] There was no force in the contention that the payment of traveling allowance under Rules 3 to 7 was in addition to the payment of the consolidated monthly allowance under Rule 3 and payment of two sets of allowances must necessarily result in profit to the payee.
Rule 3 only covers payment to compensate a Chairman for journeys performed by him for his official duties within the district in which the Panchayat is situated, while rules 4 to 7 govern cases where the journey is performed outside the district.
[428 F G] Ravanna Subanna vs G. section Kaggeerappa, A.I.R. 1954 S.C. 653 at p. 656; distinguished.
| The assessee firm consisted of two partners who were managers of their respective Hindu Undivided Families.
The firm sold its goods to the aforesaid families and the families again sold the goods on their own account.
In income tax proceedings for the years 1959 60, 1960 61 and 1961 62 the firm and the Hindu Undivided Families were separately assessed in respect of their incomes.
Subsequently the Income tax Authorities took view that the sale of goods by the firm to the families was only a device to divert the profits of the firm and on this view issued notices under section 147 of the Incometax Act, 1961 requiring the assessee to show cause why the assessments for the years 1959 60, 1960 61 and 1961 62 should not be reopened.
The High Court of Gujarat in a petition for a writ under article 226 of the Constitution quashed those notices and restrained the Income tax Officer from taking proceedings in pursuance thereof.
With special leave granted by this Court, the Revenue appealed.
Held:(i) The High Court may issue a high prerogative writ prohibiting the Income tax Officer from proceeding with reassessment when it appears that the Income tax Officer had no jurisdiction to commence proceedings because the conditions precedent do not exist.
[12G H; 13B C] Calcutta Discount Co. Ltd. vs Income tax Officer, Companies District 1, Calcutta, & Anr. , followed.
It is however not open to the High Court exercising powers under article 226 to set aside or vacate the notice for reassessment by itself re appraising the evidence.
[15B] (ii)The condition which invests the Income tax Officer with jurisdiction has two branches: (i) that the Income tax Officer has reason to believe that income chargeable to tax has escaped assessment; and (ii) that it is in consequence of information which he has in his possession and that he has reason so to believe.
The expression 'information ' in the context of which it occurs must mean instruction or knowledge derived from an external source concerning facts or particulars, or as to law relating to a matter bearing on the assessment.
If he has such information the Income tax Officer may commence proceedings under section 147(1)(b).
But to commence such a proceeding it is not necessary that on the materials which came to the notice of the Income tax Officer, the previous order of assessment was vitiated by some error of fact or law.
[13C G] (iii)In the present case however the pre conditions for the issue of a notice of re assessment did not exist.
The law does not oblige a trader to make the maximum profit that he can out of his 11 trading transactions.
Income which accrues to a trader is taxable in his hands: income which he could have, but has not earned is not made taxable as income accrued to him.
Avoidance of tax liability by so arranging commercial affairs that charge of tax is distributed is not prohibited.
[15D G]
| Respondent No. 1, the owner of a public service vehicle, made an application to the Regional Transport Authority for the grant of a `special permit ' under section 63(6) of the Motor vehicles Act, 1939.
The Regional Transport Authority rejected the said application on the ground that the provisions of the Karnataka Contract Carriages (Acquisition) Act, 1976 prohibited the grant of such permit.
Aggrieved by the aforesaid order of refusal, respondent No. 1 filed a writ petition in the High Court and a Single Judge of the High Court allowed writ petition and directed the Regional Transport Authority to consider the application of responded No.1 for the grant of a special permit.
The Regional Transport Authority preferred a writ appeal.
The Division Bench of the High Court taking the view that the intention of the legislature was that only a public service vehicle in relation to which a special permit held been issued when the 1976 Act came into force and which was not operating as a stage carriage should be acquired, held that a public service vehicle in relation to which a special permit had not been issued when the Act came into force would not come within the definition of `contract carriage under section 3(g) of the Act and the prohibition contained in section 20 of the Act against the grant of contract carriage permit would not extend to the grant of special PG NO 1038 PG NO 1039 permit under sub section 6 of section 63 of the .
The Division Bench dismissed the appeal.
The Regional Transport Authority appealed by special leave to this Court.
On the question whether after the coming into force of the Karnataka Contract Carriages (Acquisition) Act, 1976, a special permit under section 63(6) of the can be granted under the Act.
Allowing the appeals, HELD: 1.
Section 14 read with Section 20(3) of the Karnataka Contract Carriages (Acquisition) Act, 1976 confers a monopoly on the Karnataka State Road Transport Corporation to run vehicles as contract carriages.
[1050A] 2.
Section 14 read with section 20(3) of the Act clearly prohibits the grant of renewal of any permit for the running of any contract carriage.
[1049C] 3.
The High Court was not therefore right in its view that a public service vehicle in relation to which a special permit had not been issued when the Act came into force, would not come within the definition of `contract carriage ' in section (g) and the prohibition contained in Section 20 of the Act against the grant of contract carriage permit cannot extend to grant of special permit under Section 63(6) of the .
[1050B C] 4.
Under clauses (i) and (ii) of Section 3(g) of the Act if a special permit under Section 63(6) or a temporary permit under Section 62(1) or sub section ( I C) of Section 68 F of the has been issued, it will came within the purview of the definition of `contract carriage '.
[1046C D] 5.
If a special permit under Section 62(1) or under Section 63(6) of the was in force on January 30, 1976 in respect of a stage carriage, such a stage carriage will not be a `contract carriage ' within the meaning of Section 3(g) of the Act.
[1046 D] 6.
Whether the expression `has been ' occurring in a provision of a statute denotes transaction prior to the enactment of the statute in question or a transaction after the coming into force of the statute will depend upon the intention of the Legislature to be gathered from the provision in which the said expression occurs or from the other provisions of the statute.
[1046H; 1047A] PG NO 1040 In the instant case, the words `has been ' contemplate the issuance of a special permit or a temporary permit as preferred to in clauses (i) and (ii) of Section 3(g) of the Act after the enactment of the Act which is clear from exclusion clause (ii) of Section 3(g) which excludes a stage carriage from the definition of `contract carriage ', if special permits issued under section 62(1) or Section 63(6) of the were in force on January 30, 1976.
[1049F] 7.
The words `contract carriage ' occurring in Section 3(m) must be read in the light of the definition as contained in section 3(g) of the Act.
So read, it is manifest that section 14 read with section 20(3) of the Act clearly bars the making of any application for a permit or for renewal of an existing permit for the running of a vehicle, whether a contract carriage or a stage carriage, as a contract carriage.
[1049D E] State of Karnataka vs Shri Ranganatha Reddy.
and Athlumney Ex pate Wilson, referred to.
| The respondent assessee claimed deductions in his assessments relating to the assessment years 1962 63 to 1964 65 in respect of payments of interest on loans taken from Kalinga Foundation Trust and others and certain dividend transactions relating to the shares of Kalinga Tubes, Ltd. The Income Tax officer issued a letter to the assessee requesting him, inter alia, to produce evidence and prove (i) that the cash credits appearing in his account in the name of Kalinga Foundation Trust were genuine; and (ii) that 39,000 shares of Kalinga Tubes Ltd. standing in the names of shareholders were not really his own investment.
After examining the assessee 's evidence and on the basis of documentary evidence and government records and on the basis of local enquiries made, the Income Tax officer came to the conclusion that no trust in the name of Kalinga Foundation Trust really existed and even if it existed, it had no funds of its own and that the name "Kalinga Foundation Trust" was used by the assessee as a camouflage to put through his unaccounted money.
Accordingly, all cash credits appearing in the books of accounts of the assessee himself or in the books of other concerns or persons or remittances of actual payments in the name of Trust were treated by the Income Tax officer as moneys coming out of the undisclosed sources of the assessee and accordingly assessed the same as his income from undisclosed sources.
All interest and dividend received in the name of the Trust were included by the Income Tax officer in the assessment of the assessee as his own income.
The Income Tax officer was also of the opinion that the moneys advanced in the name of the Trust to several persons in connection with the acquisition of 39,000 shares of Kalinga Tubes Ltd. which were 27 issued in 1358 actually belonged to the assessee.
Accordingly, the dividend of the said shares was treated as the income of the assessee and the expenses incurred in that connection were allowed as deduction.
The persons m whose names the 39,000 shares of Kalinga Tubes Ltd. stood, were treated by the Income tax officer as benamidars of the assessee.
Against the orders of assessment, appeals were filed by the assessee before the Appellate Assistant Commissioner who set aside the assessments for the years under consideration and remanded the matters back, to Income tax officer to frame issues and give due opportunity to the assessee to cross examine the witnesses in the light of the observations made m the order.
Again, against the order of the Appellate Assistant Commissioner, the appeals were filed.
It was argued before the Tribunal on behalf of the appellant assessee; (i) that on the basis of the facts emerging on an examination of assessee 's evidence and facts found on the basis of documentary evidence, the Appellate Assistant Commissioner should have confirmed the assessments; (ii) that local inquiries and oral testimony had been used by the Income tax officer to support the conclusions already arrived at on an examination of assessee 's own evidence and corroborated by documentary evidence and therefore the Appellate Assistant Commissioner should not have set aside the assessment on the ground that the persons who were examined by the Income tax officer should have been allowed to be cross examined by the assessee; (iii) that the gist of the enquiries had been communicated to the assessee to enable him to meet the case against him and it was for the assessee to produce before the Income tax officer the persons who had collected the funds for the Kalinga Foundation Trust as the Income tax officer was not bound by the technical rules of evidence; (iv) that it had collected evidence to prove that these shares were purchased by the assessee benami in the names of the shareholders named; (v) that the assessee had created a private registered Trust in 1949 out of his own properties having the same name as Kalinga Foundation Trust and that a reference to Kalinga Foundation Trust m some of the documents produced by the assessee was to this private trust and not to any public trust of the same name alleged to have been created at a public function.
After considering the material, the Tribunal held (a) that the Kalinga Foundation Trust came into existence in 1947 and continued after its registration in 1353 under the same name and style and the fund of the Trust was built up by collection of donation from the public at large; (b) that seven persons who were designed by the Income tax officer as benamidars of the assessee for the purchase of the 28 shares of M/s Kalinga Tubes Ltd, were not benamidars and the money required for the purchase of these shares had been raised by themselves; (c) that the investments made by the Trust in the assessee 's group of industries or with the assessee were from its own resources and funds and such investments were guided by business expediency and prudence; (d) that the Trust was comprised of persons of public repute and the control and management of the trust styled as "Kalinga Foundation Trust" were under the effective control of the Board of Trustees comprised of persons of public reputation and (e) that the income from interest, dividend, or any other usufruct arising out of the investments made by the Trust in the various concerns and the investments of the Trust which were included in the assessments of the assessee in the years under reference should be excluded as appertaining to a separate and distinct entity and therefore directed the Income tax officer to exclude these amounts from the assessments of the assessee in all these three years.
The revenue did not accept the findings of the Tribunal as correct.
Several questions of law were sought for from the Tribunal to be referred out of the decision of the Tribunal under section 256(1) of the Income Tax Act, 1961.
The Tribunal refused to refer these questions.
An application was made under section 256(2) of the Act asking for reference on those questions from the High Court.
The High Court also rejected the application and refused to call for a statement of case on those questions.
Hence these appeals by sepcial leave.
Allowing the appeals, ^ HELD: 1.
The High Court, in the facts and circumstances of the case, was in error in not directing a reference under section 256(2) of the Act.
Therefore, the judgment and order of the High Court, are set aside and the Tribunal is directed to send a statement of case for the three years involved within six months of the date of receipt of this order on the questions mentioned in this judgment.
[44 C D] 2.
The Supreme Court in several decisions has laid down the following principles with regard to the scope of the jurisdiction of the High Court in directing reference on question of law where the decision rests primarily on appreciation of facts: (i) When the point for determination was a pure question of law, such as construction of a statute or document of title, the decision of the Tribunal was open to reference to the Court.
(ii) When the point for determination was a mixed question of law 29 and fact, while the finding of the Tribunal on the facts found was final, its decision as to the legal effect of those findings was a question of law which could be reviewed by the Court.
(iii) A finding on a question of fact was open to attack under reference under the relevant Act as erroneous in law when there was no evidence to support it or if it was perverse.
(iv) When the findings was one of facts, the fact that it is itself an inference from other basic facts will not alter its character as one of fact.
[36 F H; 37A] Sree Meenakshi Mills Limited vs Commissioner of Income Tax, Madras, , Gouri Prasad Bagaria and others vs Commissioner of Income Tax, West Bengal, , I.C.I. (India) Private Ltd. vs Commissioner of Income tax, West Bengal 111, , Commissioner of Income tax (Central), Calcutta vs Daulat Ram Rawatmull, , Commissioner of Income tax, Bihar and Orissa vs S.R. Jain, , relied upon.
The question as to whether the donations alleged were given by the assessee were the moneys raised by the Trust as donations from various people or not should be considered in its proper perspective but does not seem to have been done.
This is the most material portion and in not appreciating the material portion and discussing the evidence in respect of the same, there was non consideration of a relevant factor on a factual aspect and on this the question is whether the Tribunal 's decision was perverse in the sense that no man instructed properly at law could have acted as the Tribunal did, and secondly whether there was ignoring of all the materials and relevant facts in considering this aspect.
There was also evidence on record as to who had collected it to a certain extent, but no evidence on the other aspect.
Ignoring of that fact is a vital fact which influences the decision and a conclusion and must be judged in its proper perspective.
Therefore, the questions which arise on this aspect are questions of law, and the High Court should have directed the statement of a reference.
[41C G] 4.
Regarding the ownership of 39,000 shares in Kalinga Tubes Ltd. issued in 1958, this involved determination of two issues: (a) whether the ostensible holders of these 39,000 shares were real owners or benamidars and if they were benamidars, who were the real holders.
The Income tax officer was of the view, on facts suggested, that the 30 seven persons were benamidars of the assessee, whether they are so or not and what is the effect of the said fact is another question.
But these facts were not properly considered by the Tribunal to come to the conclusion as to whether, 39,000 shares of Kalinga Tubes Ltd. belonged to the assessee and not to the shareholders named.
[42 D E; 43 E F]
| The petitioner is the owner of certain land in Kanpur, U.P.
On a previous occasion land acquisition proceedings were taken regarding this land for acquiring it for an industrialist.
The petitioner questioned ' the validity of these proceedings and this Court by its judgment reported as R. L. Arora vs State of U.P; [1962] Supp. 2 S.C.R. 149, quashed the notification made under section 6 of Land Acquisition Act, 1894.
Thereafter certain amendments were made to sections 40 and 41 of that Act by the Land Acquisition (Amendment) Act, 1961.
The petitioner thereupon filed before this Court a petition under article 32 of the Constitution challenging the validity of the amended sections 40, 41 and section 7 of the amending Act.
The petitioner contended that the said sections violated article 31(2) and article 19(1)(f) of the Constitution inasmuch as cl.
(aa) of the amended section 40 provided that all acquisitions made for a company for construction of some building are permissible even though the building may not be for a public purpose.
The validity of section 7 of the amending Act was challenged on the ground ' that it contravened article 31(2) inasmuch as it makes acquisition for a company before July 20, 1962 as being for a public purpose even though it may not be so in fact.
Section 7 was also challenged on the ground that it contravenes article 14 inasmuch as it makes an unreasonable discrimination in the matter of acquisition for a company before July 20, 1962 and after that date insofar as the former acquisitions are validated on the basis of their being deemed to be for a public purpose while the latter acquisitions are not so deemed and have to satisfy the test of public purpose.
Held (per P. B. GAJENDRAGADKAR, C.J., K. N. WANCHOO, K. C. DAS GUPTA and J. C. SHAH JJ.): (i) If the language of a provision of law is capable of only one construction and if according to that construction the provision contravenes a constitutional provision it must be struck down.
A literal interpretation is not always the only interpretation of a provision in a statute and the court has to look at the setting in which the words are used and the circumstances in which the law came to be passed to decide whether there is something implicit behind the words actually used which would control the literal meaning of the words used.
The Mysore State Electricity Board vs Bangalore Woollen, Cotton ,and Silk Mills, [1963] Supp. 2 S.C.R. 127; followed.
(ii) It is well settled that if certain provisions of law construed in one way will be consistent with the Constitution and if another interpretation would render them unconstitutional the court would bear in favour of the former construction.
Kedar Nath Singh vs State of Bihar, [1962] Supp.
2 S.C.R. 769, followed.
134 159 S.C. 50 786 (iii) Applying the above principles of construction it cannot be paid that section 40(aa) contravenes article 31(2) for the public purpose required therein is present where land is acquired for the construction of a building or work which must subserve the public purpose of the industry or work in which a company is engaged or is about to be engaged.
Nor can it be said that the provision is hit by article 19(1)(f) or it would be a reasonable restriction on the right to hold property.
The amendments to section 41 are only consequential to the insertion of c.l (aa) in section 40(1) and would therefore be equally valid.
(IV) The first of the two fictions introduced by section 7 of the Amendment Act merely lays down that where a notification under section 6 of the Act cannot be justified under cl.
(a)1 and cl.
(b) of section 40(1) it will be juded in accordance with the provisions contained in cl.
(aa) and it satisfies those provisions the acquisition will be deemed for the purpose of that clause as if that clause existed at the relevant time,though in actual fact it did not.
The first fiction does not provide that even though the purpose of the acquisition does not fall within cl.
(aa) it will still be deemed to be a public purpose.
Therefore a. 7 does not violate article 31(2).
(v) The acquisition made before July 20, 1962 as well as the acquisitions made thereafter have to satisfy the conditions of cl.
(aa) of section 40 and section 7 of the Amendment Act validates only acquisitions before July 20, 1962 which actually satisfy the provisions in cl.
Therefore it cannot be said that section 7 violates article 14.
(vi) Section 7 specifically validates acquisition made before July 20.
1962 "notwithstanding any judgment, decree or orders of any court ' and therefore the petitioner 's contention that the acquisition of the petitioners land declared to be invalid by reason of the judgment of this Court reported as R. L. Arora vs State of U.P., [1962] Supp. 2 S.C.R. 149 is bad is rejected.
(vii) The various provisions in the agreement between the Government and the industrialist for whom the land in question has been acquired conclusively establish that the acquisition is for a public purpose within the meaning of cl.
(aa) of section 40.
Province of Bombay vs Kusaldas section Advant; , , distinguished.
(viii) A distinction in the matter of acquisition of land between public companies and Government companies on the one hand and private individuals and private companies on the other is justified considering the object behind cl.
(aa) of section 40 of the Act and therefore It does not violate article 14.
Per Ayyangar J. (dissenting) (i) The wording of cl.
(aa) of section 40 is not capable of two interpretations and there is no ambiguity in the wording It is a well established principle of construction that it is only when there is an ambiguity and the words are capable of 787 more than one construction that any extrinsic aid in the shape of the purpose of the legislature or the object of the legislation come in for consideration Where the language of an Act is clear and explicit the court must give effect to it whatever may be the consequence for in that case the words of the statute speak the intention of the legislature.
The intention of the legislature is not a matter to be speculated upon.
Interpretation or construction cannot mean that a court first reaches a conclusion as to what in its opinion the legislature intended, even though this involves attributing a meaning divorced from the words used and then adjust the meaning to the conclusion it has reached.
Warburton vs Loveland, 2 D. & Cl.
(H.L.) 480.
Salomon vs A. Salomon & Co., ; and Cox vs Hakes, 15 App.
506,followed.
(iv) The only way cl.
(aa) could be read is to relate the words "public purpose" to the nature of the industry carried on by the company and by no rule of construction with or without extrinsic aide or with reference to the context, not to speak of rules of grammer, can the reference to public purpose be related to the building or work for which the acquisition is permitted to be made (v) Where the provisions, as in the present case, gives a case blanche to Government to acquire land for any purpose it Is not possible to sustain the validity of such law and strike down merely the particular acquisition where land is acquired for a purpose which is not a public purpose, for here the vice is in the law itself and not merely in its application.
Clause (aa) of section 40 is violative of article 21(2) of the Constitution.
| The appellant is a bus operator in the State of Madras.
On an invitation for applications for the grant of two stage carriage permits he submitted his applications along with many others.
The State Transport Authority considered the merits of the application awarding marks in accordance with the principles prescribed by Madras G.O. No. 1298, dated April 28, 1956 issued under section 43A of the inserted by the Madras Amending Act 20 of 1948.
The Transport Authority on this basis granted the two permits to the appellant.
Against this order a number of appeals were filed by some of the unsuccessful applicants including respondents Nos. 2 and 3 in the present appeal.
The Appellate Tribunal re allotted marks in accordance with the above G.O. and respondents 2 and 3 having secured the maximum number of marks were granted the permits.
On the rejection of a petition under article 226 of the Constitution and after appealing without success to a Division Bench the appellant applied for a certificate to appeal to this Court which rejected.
The present appeal was filed on special leave granted by this Court.
It was contended on behalf of the appellant before this Court that since Madras G.O. No. 1298, dated April 28, 1956, purports to issue direction to the Transport Authority in the discharge of its quasi judicial functions it is beyond the powers conferred by section 43A of the which authorises only the issue of directions to the said authority in the discharge of its administrative functions and therefore it is bad.
Held, (i) Section 43A confers power on the State Government to issue orders and directions to the State Transport Authority only in relation to its administrative functions.
M/s. Raman and Raman vs The State of Madras [1959] 2 S.C.R. 227, relied on.
(ii)It is well settled that sections 47, 48, 57, 60, 64 and 64A deal with quasi judicial functions and when the transport authorities are dealing with applications for permits and evaluating the respective claims of the parties, the transport authorities are discharging quasi judicial functions and their orders are quasi judicial orders subject to the jurisdiction of the High Court under article 226.
L/P(D)1SCI 1 2 New Prakash Transport Co. Ltd. vs Suwarna Transport Co. Ltd. M/s Raman and Raman Ltd. vs State of Madras, , B. Abdulla Rowther vs State Transport Appellate Tribunal, Madras, A.I.R. 1959, S.C. 896, relied on.
(iii) In interpreting section 43A it is legitimate to assume that the legislature intended to respect the basic and elementary postulate of the, rule of law that in exercising their authority and discharging their quasi judicial functions, the tribunals constituted under the Act must be left absolutely free to deal with the matter according to their best judgement.
It is of the essence of fair and objective administration of law that the decision of judges or tribunals must be absolutely unfettered by any extraneous guidance by the executive or administrative wing of the State.
(iv) The impugned order is outside the purview of section 43A inasmuch as it purports to give directions in respect of matters which have been entrusted to the tribunals constituted under the Act and which have to be dealt with by them in quasi judicial manner.
(v) The decision of the appellate Tribunal is solely based on the provisions of the impugned order and since the said order is invalid, the decision is also bad.
| The petitioner an organisation, said to be committed to the upholding of fundamental rights of citizens, filed an application under Article 32 of the Constitution alleging that there was a dispute relating to possession of 26 deci mals of low lying land at Arwal between members of a rich Rajak family on one side and members of nine poor families on the other; and that on April 19, 1986, the members of one community mostly belonging to the backward classes assembled in the compound of Gandhi library at Arwal for holding a peaceful meeting.
At that time, the Superintendent of Police reached the spot with police force, surrounded the gathering and without any warning or provocation opened fire, as a result of which several people were injured and at least 21 persons including children died.
The police, it was also alleged, started a false case implicating several innocent people to cover up the aforesaid atrocities.
The petitioner in the writ petition prayed: (i) Full and proper compensation should be awarded to the victims rela tions of the dead and to those injured by the police firing; (ii) A direction be given for withdrawal of the police case; (iii) Direction for settlement of the land in dispute with the nine poor families; and (iv) transfer of the writ peti tion pending in the Patna High Court to this Court for hearing.
During the pendency of the Writ Petition, the State Government held a judicial inquiry into the aforesaid inci dent by a Member of the Board of Revenue, and, awarded compensation to the heirs and relations of a few of the dead people to the tune of Rs. 10,000 each.
Disposing of the writ petition, this Court, HELD: I.
It would be appropriate that the matter is examined by 632 the High Court.
It would be convenient to the parties to produce material before the High Court on account of proxim ity; the High Court will be in a position to call for docu ments and if necessary, affidavits of parties concerned as and when necessary while dealing with the matter.
Without notice and without affording a reasonable opportunity to the parties in the writ petition before the High Court an order of transfer may not be appropriate.
It would not be proper therefore to have the writ petition in the High Court trans ferred to this Court.
However, the petitioner is at liberty to get itself impleaded before the High Court in the pending writ petition or by filing an independent application.
[634F H] 2.
It is a normal feature that when such unfortunate consequences emerge in police firing, the State comes for ward to give compensation.
No justification has been indi cated as to why the said compensation has not been given in every case of death or injury.
Ordinarily in the case of death compensation of Rs.20,000 is paid and there is no reason as to why the quantum of compensation should be limited to Rs.10,000.
However, in the case of death the liability of the wrong doer is not absolved when compensa tion of Rs.20,000 is paid.
[635B D] 3.(a) Without prejudice to any just claim for compensa tion that may be advanced by the relations of the victims who have died or by the injured persons themselves, for every case of death compensation of Rs.20,000 and for every injured person compensation of Rs.5,000 shall be paid.
Where some compensation has already been paid, the same may be adjusted when the amount now directed is being paid.
[635D F] (b) In case the petitioner presses for disclosure of the report submitted by the Member, Board of Revenue, the High Court may examine the question as to whether the report will be made public and in the event of privilege being claimed the question of privilege will also be examined by the High Court.
[635F G] (c) The investigation of the pending police case shall be completed within three months.
In case charge sheet is submitted, it would be open to the petitioner or any other aggrieved party to challenge the maintainability of the charges in accordance with law.
[636B]
|
Civil Appeal No. 87 of 1959.
Appeal from the judgment and decree dated April 6, 1955, of the former Andhra High Court in A.S.O. No. 134/50.
T. V. R. Tatachari, for the appellants.
Bhimasankaram, K. R. Choudhuri and T. M. Sen, for the respondent.
December 21.
The Judgment of the Court was delivered by: RAGHUBAR DAYAL, J.
This is an appeal on a certificate granted by the High Court of Andhra Pradesh, against the judgment and order of the High Court reversing the judgment and order of the District Judge, Vizagapatam, holding that the place of worship in suit was not a temple as defined in the Madras Hindu Religious Endowments Act, 1926 (Madras Act II of 1927), hereinafter called the Act.
On March 28, 1947, the Board of Commissioners for Hindu Religious & Charitable Endowments, Madras, held the institution in suit to be a temple as defined in the Act.
The appellants, thereafter filed a petition under section 84(2) of the Act, in the Court of the District Judge, Vizagapatam, and prayed for the setting aside of the order of the Board.
They alleged that the institution, known as the Poohari Fakir Sadavarthy, at Bondilipuram, Chicacole, a ongstanding institution, was started by one Malukdas 278 Bavajee, some time during the reign of the Moghul Emperor, Aurangazeb.
The Emperor, in recognition of the Bavajee 's piety and devotion to God, made certain grants to him with the object and purpose of enabling him to maintain himself and carry on the distribution of Sadavarthy to Fakirs and Sadhus and to pray to God for the prosperity of the Empire and Emperor, according to what was stated in the well known historical works like Bhakthamala by Maharaja Raghunandha Singh Deo of Rewa.
The institution flourished and continues up to this day.
The original plaintiff No. 2, Rajaram Das Bavajee, was the ninth in succession from the founder Malukdas Bavajee.
He died during the pendency of the proceedings and is now represented by appellant No. 2, Mahant Gangaram Das Bavajee.
Sithaldas Bavajee, the sixth head of the institution, who lived in the first half of the Nineteenth Century built a temple and installed therein certain idols for his private worship.
The shrine was an adjunct of the institution Poohari Fakir Sadavarthy.
It is alleged to be a private temple known as Jagannadhaswami temple, Balaga, and is meant for the worship of the Mahant and his disciples, one of whom conducts the daily worship.
The income from the various properties granted to Malukdas Bavajee or his successors had been regularly utilised for the maintenance of the head of the institution and for distributing charities to the sadhus and pilgrims passing through Balaga.
A part of the income was, however spent on the expenses of the worship in the temple and the incidental expenses connected with it.
The respondent Board denied that Jagannadhaswami temple was a private place of worship, that the public had no access to it without the permission of the Bavajee and alleged that the temple possessed all the features of a place of public 279 religious worship and was dedicated to or for the benefit of or used as of right by the Hindu community as a place of religious worship.
The appellants examined five witnesses, including plaintiff No. 2, in support of their case.
The respondent examined one witness.
The plaintiffs also filed a number of documents.
The respondent filed a few documents which included the Board 's order dated March 28, 1947, and its enclosure.
The learned District Judge concluded, from the evidence, that Jagannadhaswami temple was not a temple as defined in the Act, it being a private temple existing for the benefit of the appellants only.
He therefore set aside the impugned order of the Board.
On appeal, the High Court came to a different conclusion and allowed the appeal.
It mainly relied on the entries in the Inam registers with respect to the institution and on the following facts which it considered to be established : (i) the temple is a very old temple constructed in or about the year 1750; (ii) the temple has the structure and polity of a public temple; (iii) there are utsava vigrahams and vahanams; (iv) it has a big compound wall with the gate opening into the Chinna Bazaar Road; (v) regular worship is performed every day at the scheduled time; (vi) there is an archaka who performs worship; (vii) a large number of pilgrims attend every day and partake in the food given after naivedyam to the God; 280 (viii) there are utsavams and the rathotsavam which is particularly conducted on large scale and is attended by members of the public.
The High Court relied on the statement of the solitary witness examined for the Board and rejected the statements of the witnesses examined for the appellants.
The sole question for determination in this appeal is whether this institution is a 'temple ' as defined in the Act.
Clause (12) of section 9 of the Act reads: " 'Temple ' means a place, by whatever designation known, used as a place of public religious worship and dedicated to, or for the benefit of, or used as of right by, the Hindu community, or any section thereof, as a place of religious worship.
" The institution in suit will be a temple if two conditions are satisfied.
One is that is a place of public religious worship and the other is that it is dedicated to or is for the benefit of, or is used as of right by, the Hindu community, or any section thereof, as a place of religious worship.
We are of opinion that the oral and documentary evidence fully establish the appellants ' case that it is not a temple as defined in the Act.
The documents on record and bearing dates from 1698 to 1803 A. D. mention the grants to be for the purposes of the Bavajee, i.e., the head of the institution.
The first document, Exhibit P 1, (is of the Hizri year 1117, corresponding to 1698 A.D., and purports to be executed by Ibrahim Khan, Bahadur, a humble servant of Badshah Alamgir Ghazi.
, i.e., Emperor Aurangazeb.
This order says: "The village of Cheedivalasa, Boonamali Pargana Haveli (town) towards Kaling of the 281 said Sirkar, has been fixed and continued as a complete inam in favour of Poohari (Poojari) Fakir Sadabarty in accordance with the Sanads of the previous rulers.
Meanwhile, in view of the claims of the said person it has been confirmed as per endorsement in accordance with momooli (usage) and mustamir (continuing, lasting long).
It is necessary that the said village be placed in the enjoyment of the said person so that, utilising the incomes thereof for his own maintenance, he may engage himself in praying for the stability of the State till eternity.
" The purpose of the other grants is stated in practically similar terms aud it is necessary to quote them.
None of the grants of land or other property on record bears a date subsequent to that of the year 1803 A.D.
The documents, Exhibits P 47, P 48 and P 49 are orders of the Collectors and refer to the villages of Cheedivalasa and Thallavalasa, and the last two state that the income of these two villages was given for sadavarty (feeding) for the respective year to Phalari (Phulhari) Bavaji.
There is no mention in any of these two documents that any grant was being made for the purposes of the temple or for the purposes of the Bavaji as well as for those of a temple.
The only reference to the construction of the temple is in Exhibit P 52, an extract from the Register of Inams dated May 22, 1865, with respect to village Vanzangi.
The name of the village, however, does not appear in the document itself.
It is stated in this document: "About century ago, the trustees built a temple of Jagannadhaswamy.
" According to this note, the temple may be said to have been built in about 1760 A.D.
The documents of the period from 1761 to 1803 A.D. Exhibits P 31 282 to P 49, do not record that the grants under them were for the expenses of the temple as well.
The grants simply mention them to be for the expenses of Fakirs, in the name of Poohari Fakir Sadavarthy, and not for the temple.
The non reference to the temple in the various documents is consistent with the temple being for the private worship of the head of the Sadavarti Institution and being an adjunct to that institution, as in that case there was to be no grant to the temple and the grant had to be to the Sadavarti institution or to its head.
It is also a matter for surprise that no independent grant to this temple was made subsequent to its coming into existence.
Some one religiously and charitably disposed could have thought of endowing some property to this public temple erected by the Head of a well known institution in that part of the country, where, it has been held judicially, there is a presumption of a temple being a public temple.
We may make it clear that among the documents referred to, we are not at the moment including entries in the Inam registers.
It follows from an examination of the various documents of the period between 1608 and 1803 A.D., that the various endowments were for the Fakir or Bavajee who ran the Sadavarti institution and that none of the grants was for the temple or even for the Sadavarti institution itself, it being always in the name of the Bavajee in charge of that institution.
Before discussing the entries in the inam registers which carry great weight, we may first refer to the Rules in pursuance of which the entries in the Inam registers were made, after due investigation.
The various extracts from the Inam registers which have been filed show that the proposals for the grant were confirmed under rule 3, clause (1), tax free.
This makes it of importance to consider the rule 283 thus referred to.
It is one of the rules for the adjudication and settlement of the inam lands of the Madras Presidency and is quoted at page 219 in the case reported as Arunachellam Chetty vs Venkatachalapathi Guruswamigal (1) "If the inam was given for religious or charitable objects, such as for the support of temples, mosques, colleges, choultries, and other public buildings or institutions, or for services therein, whether held in the names of the institutions or of the persons rendering the services; it will be continued to the present holders and their successors, and will not be subject to further interference, so long as the buildings or institutions are maintained in an efficient state, and the services continue to be performed according to the conditions of the grant.
" It was also said at page 217: "But the Inam Register for the year 1864 has been produced, and to it their Lordships attach importance.
It is true that the making of this Register was for the ultimate purpose of determining whether or not the lands were tax free.
But it must not be forgotten that the preparation of this Register was a great act of state, and its preparation and contents were the subject of much consideration under elaborately detailed reports and minutes.
It is to be remembered that the Inam Commissioners through their officials made inquiry on the spot, heard evidence and examined documents, and with regard to each individual property the Government was put in possession not only of the conclusion come to as to whether the land was tax free, but of a statement of the history and tenure of the property itself.
While their Lordships do not doubt that such a report would not displace actual 284 and authentic evidence in individual cases; yet the Board, when such is not available, cannot fail to attach the utmost importance, as part of the history of the property, to the information set forth in the Inam Register.
" Exhibit P 50 is the extract from the Inam Register No. 48 relating to village Tallavalasa in the Taluk of Chicacole in the district of Ganjam.
The note of the Deputy Collector, Inam Commissioner, records inter alia the following particulars: (1) The village was granted originally by the Nawab Mafuz Khan in Hiziri 1155 corresponding with A.D. 1739 to one Inamdar Bairagi; as the original sanad is not forthcoming it is impossible to mention here without entering into details, the object of the grant and the tenure of the village.
This mokhasa jahagiri is in possession of the person in column (II) who is known by the name of Palahara Mahant Bartudoss Bavaji, 'a Bairagi '.
(2) This Bartudoss Bavaji pleaded that this village and three other villages were granted in the district by the former Rulers for Sadavarti and for certain other Divine Service, and that the proceeds of them were appropriated to the expenses attendant on the temple of Sri Jagannadhaswami to some extent and to distributing Sadavarti or supplying victuals, fire wood, etc., or dressed food to Bairagis and others resorting to Rameswaram from Benaras and vice versa.
(3) This Bartudoss Bavaji produced a sanad of Sri Seetaram Ranzi Maharaja, the former zamindar of Vizianagaram in Vizagapatam district, granted to one Gopaladass Palahari Bavaji, dated Subhakrutu year, corresponding with A.D. 1782.
This Sanad 285 showed that the said Gopaladass was then a manager of the branch of charity and that this village was granted free from any tax in lieu of the income in the villages of Balaza, Petranivalasa and Serumohannadpuram which were granted originally by the authorities for the support of the charity and which were resumed and incorporated with circar lands.
The sanad explicitly stated that the proceeds of the village were to be appropriated for Sadavarti.
(4) On the whole it appears that this mokhasa was granted for 'Sadavarti ' and for the support of the temple of Sri Jagannadhaswami in Balaga.
There is a Bairagi Mattam in Balaga and a temple of Sri Jagannadhaswami.
This is therefore a charitable grant.
To keep up the object of grant, I think the village may be confirmed on its present tenure.
(5) Column 8, meant for noting the description of the inam, mentioned: 'Granted for the support for the Sadavarti Bairagi mattam in Balaga and of the temple of Sri Jagannadhaswami in the same village now efficiently kept up. ' (6) In column 10, under the heading 'hereditary, unconditional for life only or for two or yihre lives ' is mentioned 'hereditary '.
(7) Column 11 meant for recording the name of the grantor and the year of the grant, mentions, under it, Mafusu Khan Nawab, dated Hijiri 1155.
(8) In column 13, Mandasa Palahari Bairagi is mentioned as the original grantee.
(9) Under column 18, referring to relationship to original grantee or subsequent registered holders, is written 'Sadavarti 286 Bairagi mattam and the temple of Sri Jagannadhaswami in Balaga Trustee Palahara Mahant Barta Dasu Bavaji '.
It is clear from the fact that the grant was considered 'a charitable grant ' that the grant was not taken to be for the purposes of the temple, but was taken to be a grant for the purposes Sadavarti.
This is also clear from the Statement of Bartudoss Bavaji that it is only a part of the proceeds which is spent on the temple and not a major portion of the proceeds, as his statement is to the effect that the proceeds are appropriated to the expenses attendant on the temple 'to some extent '.
There is no suggestion that the temple was in existence in 1739 A. D. when the grant was made.
This makes it clear that no grant could have been made for the expenses of the temple and that a small portion of the proceeds was naturally spend on the temple by the Bavaji after the temple had been constructed.
Any statement in these entries about the grant being both for Sadavarti and for the expenses of the temple appears to be due to the wrong inference of the person making the enquiry.
He could easily commit such an error on account of the existence of a temple at the time of the enquiry and on account of the expression 'divine service '.
The 'divine service ' really meant, as would appear from the expression in the other documents of the period 1698 to 1802 A.D., service by way of prayers for the stability and continuity of the State '.
The expression that the grant was 'hereditary ' also supports the conclusion that the grant was to the Bavajee personally and not to the temple even if the temple existed at the time of the original grant.
In fact, the sanad granted by Seetaram Ranzi Maharaja and produced before the enquiry officers explicitly stated that the proceeds of the village were to be appropriated for Sadavarti.
287 This extract therefore supports the case of the appellants even though the name of the temple has been mentioned along with Sadavarti Bairagi.
The confirmation of the grant, tax free, was recommended by the Deputy Collector, Inam Commissioner, under Rule 3, Clause (1).
The order of the Officiating Inam Commissioner dated July 1864 is: 'Confirmed on present tenure ', and column 9 described the tenure as 'tax free '.
Exhibit P 51 is the extract from the Inam Register in the Zamindari estate of Tekkaly in the Chicacole Taluk, Ganjam District, and relates to the village Chinna Zavanapalli.
The report of the Deputy Collector shows that the claim of the then Bavajee was that the village was granted in the name of Gopaladass, trustee and priest of the mattam in Hijari 1165, corresponding to 1752 A.D.
It further records: "It is explained by the Zamindar 's shiristadar on behalf of the Zamindar that this was granted for the support of the mattam and this is not a personal grant.
This was entered in the permanent settlement account as an agrahar.
The object of the grant is to feed Bairagis and etc., who travel between Benaras and Rameswaram or supply victuals clothes and etc.
This branch of charity is known by the name of 'sadavarti '.
The proceeds of this village with the other villages, which granted for the support of the charity are appropriated to sadavarti and to worship the idols in the temple of the mattam.
As this is granted on the whole for the support of the charity branch, it should, I think, be confirmed on its present tenure.
" The entries under the various columns are practically on the lines of the entries in Exhibit P 50.
The entries in this register also support the case of the appellants to the extent that the original grant 288 in 1752 A. D., was to the then Bavajee and was for the purposes of the charity.
Exhibit P 52 is the extract from the Register of Inams with respect to village Vanzangi.
It records very clearly: "The object of this grant is to give 'sadavarti ' to travellers, that is, distributing alms and supplying victuals to travellers.
This grant was made during the reign of 'Alangir Padsha '.
Ever since the Inam is continued undisturbed.
About century ago, the trustees built a temple of Jagannadhaswamy.
Now in addition to distributing alms and giving Sadavarti to Bairagis and others, the idol in the temple is worshipped and annual festivals are made.
It appears that the Trustee is defraying charges to meet the object of the grant and that he is not mis appropriating the proceeds of the Inam in any way.
" The inam was confirmed as a charity grant to Mandasu Sadavarty Charity according to the terms of the grant.
This extract is of great importance as it, in clear terms, mentions that the object of the grant was to give sadavarti to travellers and that it was confirmed as a charity grant to this charity.
It speaks of the erection of the temple and still states that the Trustee was defraying the charges to meet the object of the grant.
This indicates that the expenses of the temple were taken to be incidental to the expenses of the entire sadavarti and that the temple was just an adjunct to the sadavarti institution.
Exhibit P 7, Parwana dated November 15, 1722, corresponding to 14th day of Rabial Awwal, 1135 Hijiri, refers to the grant of this village to Poohari Fakir Sadavarti.
Exhibit P 53 is the extract from the Register of Inams relating to village Ragolu in Chicacole 289 Taluk.
It records: 'In the sanad it was mentioned that the inam was given for the support of fakirs to the original grantee about a century ago.
The other notes in this extract are practically identical with those in Exhibit P 52.
The final order of the Inam Commissioner was also in terms similar, and was 'confirmed to the fakirs the sadavarti charity according to the grant, free, there being no excess.
It is interesting to note that in column 2 (general class to which inam belongs) is noted 'Dewadayam ', i.e., dedicated to God; that in column 8 meant for the description of the inam is noted: 'for the support of Pagoda of Sri Jagannadhaswami in Bondilipuram ', and that the entry in column 11 indicates that Anavaruddin Khan Bahadur made the grant in Hijiri 1171 corresponding to 1754 55 A. D.
It is clear that the note about the land being dedicated to God is wrong in view of the definite statement that the Sanad mentioned that the inam was given for the support of fakirs to the original grantee (Mandasa Palahari Bairagi in Column 13) about a century ago and that it was the trustees of the institution who constructed the temple.
When the temple was constructed by the trustees of the institution, viz., the Sadavarti institution, the original grant could not have been to the temple or to God.
The entries in this extract confirm the construction we have placed on similar entries in Exhibit P 52 and other extracts indicating the grant to the temple.
Exhibit P 54 is the extract from the Inam Register of No. 85 'Tallavalasa in the Taluk of Chicacole in the District of Ganjam.
It is mentioned in this that Pratapa Rudra Narayana Devu granted this village to Falar Gosayi for the support of the 'Bavajee ' or Swami, in Hiziri 1141 which would correspond to about 1747 A. D.
It is also noted in the report that the object of the grant was that the proceeds should be appropriated for divine purpose and that the proceeds were appropriated to the temple and sadavarti.
The note 'for the support 290 of the pagoda of Jagannadhaswami ' in column 8 meant for the description of the inam, again, appears to be an entry made under an erroneous impression.
There was no temple in existence when the grant was made in about 1747 A. D. Exhibit P 55 is an extract from the Register of Inams in the village of Balaga of Chicacole taluk dated August 13, 1881.
It mentions, under the heading 'by whom granted and in what year, "the grant was made by Rajah Narayana Gazapati raz Bahadur under orders of Alamgir Padsha on 14th May of Hiziri 1171 corresponding with English years 1754 55.
It is also noted: the Sanad granted is in existence. ' It is stated therein that as these lands appear from a former firman to have been granted to Sadavarti Mandass Bavaji for planting topes and raising buildings; they should be restored to him in pursuance of the long standing right.
This means that the firman, which was not forth coming during the inam enquiry, dated from very early time.
It must be noted again that this extract also describes the inam as Devadayam, i. e., dedicated to God.
Again, clearly, this entry is wrong in view of the sanad which was in existence clearly stating that the lands were granted under a firman to Sadavarti Mandass Bavaji for planting topes and raising buildings and also in view of what is recorded in Exhibit P 12, a parvana of 1742 A.D., under the seal of Nawab Jafer Ali Khan.
It records: "It has been proved that Mandas, the successor of Poohari (Poojari) Faqir Sadabarti has, per endorsement six kattis of land, free from assessment, in the village of Balaga and etc.
, villages of the said Haveli Sircar, fixed for the expenses of the coming and going Fakirs in accordance with the sanads of the previous rulers.
Therefore in consideration 291 of the blessings to follow, it has been confirmed as of yore.
" It was the result of this wrong view of the enquiry officer that the Inam Commissioner confirmed the grant free of quit rent so long as the service was kept up, presumably the service of the deity, as the distribution of charity would not be properly described as 'service. ' The fact that the Inam Commissioner treated the grant relating to Exhibit P 50 to be in support of Sadavarti and for support of the temple of Sri Jagannadhaswami, would not make the grant for the purposes of the temple when the temple was itself not in existence at the time the grant was made and when a later sanad referring to it definitely stated that the original villages were granted for the purposes of charity.
The observations of the Privy Council in Arunachellam 's Case (1) that in the absence of the original grant the Inam Register is of great evidentiary value, does not mean that the entry or entries in any particular column or columns be accepted at their face value without giving due consideration to other matters recorded in the entry itself.
We have already stated that the 'divine service ' referred to in this entry does not refer to any religious worship but to the prayers to be offered by the grantee for the preservation of the State.
We do not find anything on record to support the observations in the High Court judgment that the Bavajee, with the consent of the Ruler for the time being, constructed a temple and appropriated the income for carrying out the worship of the temple.
No document states that the temple was constructed by the Bavajee after obtaining the consent of the ruler for the time being.
Exhibits P 52 and P 55 just mentioned that the trustees built a temple of Sri Jagannadhaswami.
The 292 expression 'trustees ' refers to the trustees of the Sadavarti institution and not to the trustees of the temple as such.
There is nothing in these documents to support the view that the temple was built with the consent of the ruler for the time being.
The appellants examined five witnesses to support their case that the Hindu public have no right to offer worship in the temple which is a private temple.
The learned Judges described the statement of Janardhana Prasad Bhatt, P.W. 4, as worthless.
No particular reliance is placed on his statement by the appellants in this Court.
The appellants, however contend that the statements of the other witnesses have been rejected by the High Court for inadequate reasons.
The first witness is Iswara Satyanarayana Sarma, P.W. 1.
He was aged 63 at the time of his deposition in 1949.
He was a Sanskrit and Telugu Pandit in the Municipal High School and practised as an Ayurvedic Doctor.
He has given reasons for the view that the temple is not a public temple.
It is not necessary to refer to them.
His statement, has been rejected as he was considered to be interested in the Mahant who had been his patient and as the statement made by him that people including the sishyas, i.e., the disciples, take permission of the Mahant for worshipping, was considered artificial.
This witness did not state that even disciples had to take permission of the Mahant for worship and so the latter reason was based on an erroneous impression of his statement, The mere fact that the Mahant consults him for his ailments and the ailments of other sadhus is no ground for him to make false statements.
He is not under obligation to the Mahant.
It may be that the Mahant is under obligation to him.
The next witness is P. Kameswara Rao, P.W. 2.
He is aged about 30 years.
He was the 293 Additional Public Prosecutor of Vizagapatam, had been Municipal Councillor for a decade, President of the Co operative Central Bank and resided close to the temple.
He was in a very good position to know about the public worshipping at the temple as a matter of right.
He stated that he never found the public using the temple and that he himself might have visited the temple roughly about hundred times.
He was put a direct question in cross examination and gave a clear cut answer.
He denied from personal knowledge that the place was used as a place of public religious worship and that members of the public who were Hindus had a right of access to the temple for purposes of religious worship.
It may be mentioned that the question also referred to the temple being built as a place of public religious worship and the answer would include a denial of this fact.
It is obvious that the witness could not have known anything about it.
He seemed to have overlooked the significance of this part of the question.
We do not consider that his denying this fact on personal knowledge affects his veracity in any way, and especially, when he further stated that his personal knowledge consisted of three facts: (i) his attending the Rathayatra and seeing that no offerings of harati and dakshina were made; (ii) his not seeing any member of the public entering the temple whenever he entered into the temple; and (iii) whenever he entered the temple, he took the permission of the mahant.
The learned Judges rejected his testimony with this observation: "The evidence of this witness is more like an advocate supporting the case of mahant than that of a witness, who has come into the witness box to speak of facts.
The aforesaid facts based on his personal knowledge afford a very slender foundation for the conclusion which this witness has so boldly asserted in the witness box.
" 294 The expression 'the aforesaid facts ' had reference to the facts on which his personal knowledge was based.
These facts, in our opinion, afford good ground for the view expressed by him that the temple was not a public temple.
He visited the temple so many times, and never saw any member of the public visit it.
He himself took permission from the Mahant when he entered the temple.
Nothing could be better corroboration of his own statement than his own personal conduct in seeking permission from the Mahant.
We do not see any good reason for discrediting his testimony.
The next witness is G. Venkata Rao, P.W. 3, aged 48 years.
He is a chairman of the Municipal Council, Chicacole, Secretary & Vice President of the Co operative Central Bank.
His statement has been considered to be very artificial.
His statement that whenever he visited the temple he asked the permission of the Mahant is good corroboration of his statement that he considered the temple to be a private temple and not a public one.
The facts that the Mahant is also a Municipal Commissioner and consults him occasionally as a doctor, are no good grounds to discredit him.
The last witness the plaintiff No. 2, the predecessor of the appellant No. 2.
He is undoubtedly interested in the success of the proceedings started by him.
But that alone is no reason to ignore his statement altogether.
In fact, his statement should be accepted in view of the support it gets from the statements of the other three witnesses just referred to.
It is very significant, as pointed out by learned counsel for the appellants, that none from the Hindu public of the place has been examined for the respondent in support of its contention that the Hindu public go to this temple for worship as a matter of right.
Quite a good number of people 295 should have been available for the purpose if it was a fact.
The respondent, on the other hand, examined only M. Adinarayana Rao, who had been Inspector of Hindu Religious Endowments Board of the Chicacole division from 1946 to 1948.
He certainly states that the temple in suit is a public temple in which all people can go as a matter of right for worship.
It is a moot question as to how he can make such a statement even if he had seen a number of people entering the temple and worshipping there, which itself is not a fact.
When there be good evidence about the temple being a private one, the mere fact that a number of people worship at the temple is not sufficient to come to the conclusion that the temple must be a public temple to which those people go as a matter of right as it is not usual for the owner of the temple to disallow visitors to the temple, even if it be a private one.
He stated that there were several festivals like Nethroshasevam, the car festival and kalyanam.
In cross examination he had to admit that he had not visited the kalyan festival and did not know when it was celebrated.
This is sufficient to indicate that he is a zealous witness.
He stated that there was an archak, but he could not give the archak 's name.
Ordinarily, it need not have been expected of him to have known the archak 's name.
But, considering that he was an Inspector of the Board and had visited the temple officially also and had to submit a report, it is rather difficult to believe that if he had really found an archak, a priest other than the Mahant and his disciples, he would not have considered it essential for the purposes of his enquiry to know his name.
We see no reason to prefer his shaky statement to the statements of the witnesses examined for the appellants.
296 We need not consider the statements of the witnesses with respect to the features associated with the public temple and which are said to be absent in the temple in suit.
It is admitted by the respondent 's witness that there is a Tulsi plant before the shrine.
It is strenuously urged for the appellants that no public has a Tulsi Kotta, and this contention seems to find support from the statement made by the respondent 's witness in reexamination that generally, in Oriya temples no flag staffs are located and Tulsi plants are grown instead.
The description of the temple with respect to its construction, equipment, practices, observances and the forms of worship are not inconsistent with the inference from the other evidence that the temple is not a public temple.
The statement of the respondent 's witness that generally Oriya temples have no flag staffs and have Tulsi plants has significance in one other connection also.
It was said in Mundancheri Koman vs Achuthan Nair (1) at page 408 that in the greater part of the Madras Presidency, where private temples were practically unknown, the presumption is that temples and their endowments form public charitable trusts.
The presumption is certainly rebuttable.
The evidence in this case sufficiently rebuts it.
The temple is situate at a place which was practically at the boundary of the Madras Presidency, and close to the common boundary between that Presidency and Orissa.
The presumption with respect to the temple in the Madras Presidency, therefore, will be a very weak one with respect to the temple so situated.
We are therefore of opinion that the temple in suit is not a temple as defined in the Act as it is not used as of right by the Hindu community, or any section thereof, as a place of religious worship.
We therefore allow the appeal with costs throughout, set aside the order of the Court below and 297 restore the order of the District Judge, Vizagapatam, setting aside the order of the Board dated March 28, 1947.
Appeal allowed.
| The Emperor Aurangazeb made certain grants to one Mukuldas Babajee, founder of the institution Poohari Fakir Sadavarthy, for the purpose of his maintenance and to carry on the distribution of Sadavarthy to Fakirs etc.
The sixth head of the institution built a shrine for his private worship.
It was adjunct to the aforesaid institution, and the public had no access to it without the permission of Mahant.
The income from various properties granted to the founder and his disciples had been regularly utilised for the maintenance of the head of the institution and for distributing charities for the Sadhus and pilgrims; a part was spent on the expenses of the worship in the temple.
The Board of Commissioners for Hindu Religious and Charitable Endowments, Madras held that the temple in suit was a public temple.
The sole question for determination was whether this institution was a public temple as defined in the Act. ^ Held, that an institution would be a public temple within the Hindu Religious Endowments Act, 1926, if two conditions are satisfied; firstly, that it was a place of public religious worship and secondly, that it was dedicated to, or was for the benefit of, or was used as of right by the Hindu Community, or any section thereof, as a place of religious worship.
When there be good evidence about the temple being a private one, the mere fact that a number of people worship at the temple, is not sufficient to come to the conclusion to the temple must be a public temple to which those people as a matter of right as it is not usual for the owner of together temple to disallow visitors to the temple, even if it be private one.
In the present case the description of the temple with respect to its construction, equipment, practices, observances 277 and the form of worship are not inconsistent with the inference from the other evidence that the temple is not a public temple.
The temple is not a temple as defined in the Act and it is not used as of right by Hindu Community, or any section thereof, as a place of religious worship.
Held, further that the Inam Register is of great evidentiary value, but that does not mean that the entry or entries in any particular column or columns be accepted at their face value without giving due consideration to other matters recorded in the entry itself.
| The appellant owned certain self acquired properties which by a deed dated December 9, 1957 he threw into the common stock of his Hindu Joint Family.
The Gift Tax Officer held that he had thereby made it gift taxable under the Gift Tax Act, 1958.
After proceedings before the authorities under the Act the question whether the appellant had made 'transfer ' of the property so as to attract the provisions of the Act was referred to the High Court of Andhra Pradesh.
Following its earlier decision in Satyanarayanamurthy 's case the High Court held that the act of ' the appellant amounted to a 'transfer ' within the terms of section 2(xxiv)(d) of the Act and therefore was a gift such as envisaged in section 2(xii) and section 4(a) of the Act.
In Satyanarayanamurthy 's case aforesaid, it had been held that an act similar to that of the appellant would amount to "a 'transaction ' entered into by any person with intent thereby to diminish directly or indirectly the value of his own property and to increase the value of the property of any other person".
With certificate appeal against the judgment of the High Court was filed in this Court.
HELD:The appeal must be allowed since the declaration by which the assessee had impressed the character of joint Hindu family property on the self acquired properties owned by him did not amount to a transfer ' so as to attract provisions of the Act, [529 F] A Hindu Joint Family is not a creature of contract.
The doctrine of throwing into common stock inevitably postulates that the owner of the separate property is a copartner who has an interest in the coparcenary property and desires to blend his separate property with the coparcenary property.
The separate property of a member of a joint Hindu Family may be impressed with the character of Joint Family property if it is voluntarily thrown by him into the common stock with the intention of abandoning his separate claim therein.
The act by which the coparcener throws his separate property to the common stock is a unilateral act.
By his individual volition he renounces his individual right in that property and treats it as a property of the family.
As soon as he declares his intention to treat his self acquired property as that of the Joint Family, the property assumes the character of Joint Family Property.
The doctrine of throwing into common stock is a doctrine peculiar to the Mitakshara School of Hindu Law.
When a coparcener throws his separate property into common stock he makes no gift under Ch.
VII of the Transfer of Property Act.
In such a case there is no donor or done.
Further no question of acceptance of the property thrown into the common stock arises.
[526 A F] 523 It was not necessary in the present case to consider whether the act of the assessee could be said to have "diminished directly or indirectly the ' value of his own property and increased the value of the property" of his joint family, because his act could not he considered as a "transaction entered into".
Clause (d) of section 2(xxiv) contemplates a "transaction entered into" by one person with another.
It cannot apply to a unilateral act.
it must be an act to which two or more persons are parties.
Even though under the Act the undivided 'family is a 'person ' the assessee did not enter into any transaction with his family.
Therefore, it was not possible to agree with the High Court that the act of the assessee fell within the scope of section 2(xxiv) (d) of the Act.
[528 A B] The assessee 's act could also not be considered as a 'disposition ' under the main part of section 2(xxiv).
The word 'disposition ' is not a term of law.
Further it has no precise meaning.
Its meaning has to be gathered from the context in which it is used.
In the context in which the term is used in section 2(xxiv), it cannot mean to "dispose of.
Otherwise, even if a man abandons or destroys his property it would become a "gift" under the Act.
That could not have been the intention of the Legislature.
In section 2(xxiv) the word 'disposition ' is used along with words "conveyance, assignment, settlement, delivery, payment or other alienation of property".
It is clear ' from the context that the word 'disposition ' therein refers to a bilateral or multilateral act.
It does not refer to a unilateral act.
[528 D F] Mallesappa Bandeppa Desai & Ors.
v, Desai Mallappa & Ors.
; , Grimwade & Ors.
vs Federal Commissioner of Taxation, ; , Commissioner of Income tax, Madras vs M. K. Stremann, and M. K. Stremann vs Commissioner of Income tax, , applied.
Commissioner of Gift Tax, Madras vs P. Rangaswami Naidu T.C. 272 of 1964 : R. section R. M. Ramaswami Chettiar vs The Commissioner of Gift Tax, Madras.
Tax Case No.10 of 1966, Dr. A. R. Shukla vs Commissioner of Gift Tax, Gujarati, and Smt.
Laxmibai Narayana Rao Nerlekar vs Commissioner of Gift tax, , approved.
Commissioner of income tax, Hyderabad vs C. Satyanarayanamurthy, , G. V. Krishna Rao, & Ors.
vs First Addl.
Gift Tax Officer, Guntur, and Commissioner of Gift Tax vs Jagdish Saran, 75 I.T.R. 529, disapproved.
| This appeal is directed against the order of the Gujarat High Court upholding the order dated the 15th November, 1977 passed by the State of Gujarat whereby the amounts of gratu ity and pension payable to the appellant on superannuation were reduced by 50 per cent.
The appellant was born on January 15, 1909 and after obtaining a Degree in Bachelor of Engineering (Civil) joined the service in the former State of Junagarh and as such was governed by the Junagadh State Pension and Parwashi Allow ances Rules of 1932 which were duly codified and published in the Junagadh State Account Code, State of Junagadh was integrated into the State of Saurashtra on 20.1.1949 and the services of the appellant were absorbed in the State of Saurashtra.
The conditions of service of the absorbed serv ants were duly protected and a proclamation providing a guarantee that the service conditions of absorbed servants could not be varied to their disadvantage was issued on 20.1.49 that being the date of merger of the State.
The State of Saurashtra made the Saurashtra Covenanting State Servants (Superannuation Age) Rules, 1955.
Rule 3(i) thereof provided that a Government servant shall, unless for special reasons otherwise directed by Government retire from service on his completing 55 years of age.
After the merger of the State of Saurashtra with State of Bombay the old Bombay Civil Service Rules, 1959 were made applicable to Saurashtra area and on 1.7.59 the Bombay Civil Service Rules, 1959 were promulgated.
As per clause (c)(2)(ii)(1) of Rule 161, Government servants in the Bombay Service of Engineers Class I were to retire on reaching the age of 55 years.
215 The appellant was compulsorily retired by the State on 12.10.1961 with effect from 12.1.1962 when he had completed the age of 53 years.
The appellant challenged that order by means of writ before the High Court and having remained unsuccessful he took up the matter before this Court and this Court by its judgment dated 9.4.69 allowed the appeal and declared that the appellant was entitled to remain in service until he attained the age of 55 years and that the impugned order compulsorily retiring him at the age of 53 years was invalid and ineffective.
In order to give effect to this Court 's order mentioned above, the Government of Gujarat on 4.8.69 intimated the appellant that he will be deemed to have remained in service uptil 14.1.64, when he attained the age of 55 years.
as he had attained that age prior to the decision of this Court.
In the meantime the age of superannuation of the employ ees of the State of Gujarat had been raised from 55 years to 58 years.
The appellant in order to take benefit of the change moved a writ petition before the High Court of Guja rat but remained unsuccessful.
Thereupon he filed a special leave petition before this Court.
This Court by its order dated 21.7.1975 declined to interfere.
Thus the appellant was not entitled to continue in service beyond 55 years of age.
It may be mentioned that prior to his compulsory retire ment there were three departmental inquiries pending against the appellant, on grounds of slackness in supervision.
overpayment to contractors and loss to the Government and payment in advance of the receipt of goods.
The first in quiry was initiated on 6.2.61.
second on 11.4.1963 and the third on 17.8.63.
These inquiries remained pending against the appellant till 1971.
The appellant filed yet another Special Civil Applica tion No. 504 of 1971 before the High Court praying for issue of a writ of mandamus directing the State to pay to the appellant all his outstanding salary.
allowances.
including due increments after the efficiency bar from 12.1.
1902 to 14.1.
1964 together with 6% interest.
An application for interim relief was also filed but was withdrawn later on the representation perhaps made by the State that the enquiries had become infructuous consequent to appellant 's retirement.
In the meanwhile the State of Gujarat issued a show cause notice dated 17.7.1971 to the appellant intimating him that the Government 216 considered his service record and did not find the same thoroughly satisfactory for the reasons mentioned in the said notice and accordingly the Government proposed to make 50% reduction both in the payment of Gratuity and Pension admissible to him.
The appellant submitted his reply and these proceedings due to laches on the part of the appellant went on for a considerable time and the Government passed the final order on 15.11.1977 reducing the Pension and Gratuity by 50 per cent.
To challenge this Order the appellant again filed Spe cial Civil Application before the High Court for quashing the order reducing his Pension and gratuity.
The High Court dismissed the application in limine on 8.3.1978 observing that in the present case the Government recorded reasons why it came to the conclusion that the petitioner 's Service was unsatisfactory and therefore, put a proportionate cut in the Pension.
as no case of discrimination was made out.
The appellant, preferred Letters Patent Appeal.
against the order passed by the Single Judge.
His contention before the Division Bench was that he continued to be governed by the Junagadh Rules in spite of the fact that the Bombay Rules were sought to be made applicable to him.
His alternative contention was that even if the Bombay Rules were to be made applicable, so far as the question of payment was concerned, inasmuch as they were not less advantageous on compulsory retirement.
proportionate pension was payable to the appel lant under the Bombay Rules of 1959.
The Division Bench held that under either set of Rules, it was open to the State Government to reduce the amount of pension payable to the petitioner as his service had not been found satisfactory by the State under Junagadh Rules as also under Bombay Civil Service Rules.
The High Court accordingly dismissed the Letter Patent Appeal.
Hence this appeal.
It was contended on behalf of the appellant that the High Court went wrong in upholding the impugned order reduc ing the amounts of pension & gratuity in exercise of its power under Rules 188 and 189 of the Bombay Rules, as it had already been ruled by this Court in its judgment in Civil Appeal No. 409 of 1966, that Bombay Rules could not be made applicable to the appellant.
It was urged that the appellant was not governed by Saurashtra Rules either, and it was asserted that either in the show cause notice or in the impugned order.
it Is nowhere specifically stated as to under what set of Rules, the impugned order Imposing a cut in the Pension or Gratuity has been passed.
A contention was also raised based on clauses 3, 13 & 15 of Rule 241 A of Junagadh Rules stating that they operate in different fields.
It was added that no inquiry as contemplated under Rule 189 had been made and admittedly the State had stated before the High Court that 217 the departmental inquiries had become infructuous consequent upon the retirement of the appellant.
According to the counsel for the State the appellant having been retired in pursuance of a judicial order passed by this Court, he cannot now be heard that his retirement at the age of 55 years should be construed as compulsory re tirement the superannuation age having been increased to 60 years under Junagadh Rules, that the retirement of the appellant is normal one; he was entitled to pension under Rule 241 of the Junagadh Rules and the State has passed the impugned order after complying with the provisions of Rules or gratuity be not reduced.
Dismissing the appeal.
this Court, HELD: Rules 188 and 189 have expressly preserved the State Government 's power to reduce or withhold pension by taking proceedings against a Government Servant even after his retirement.
[229H; 230A] In the instant case, in accordance with the procedure specified in Note I to Rule 33 of the Bombay Civil Services Conduct, Discipline and Appeal Rules a show cause notice had been issued to the appellant on 17.7.71 calling upon him to show cause within 30 days from the date of the receipt of the notice as to why the proposed reduction should not be made in the Pension and death cum retirement gratuity.
The appellant failed to avail that opportunity to disprove the allegations and satisfy his appointing authority that he rendered satisfactory service throughout.
It was in those circumstances the appointing authority thought fit to impose reduction on the Pension and gratuity in accordance with Rules 188 and 189 of the Bombay Rules on the ground that the appellant had not rendered satisfactory service.
The appel lant is not entitled to take advantage of clause (b)(ii) of the proviso to Rule 189 A since the proceedings had been instituted long before his retirement.
Further as per clause (a) of the said proviso the proceedings were already insti tuted long before his retirement.
Further as per clause (a) of the said proviso, the proceedings already instituted while the Government servant was in service could be contin ued and concluded even after his retirement.
Therefore the order dated 15.11.1977 reducing the pension and gratuity cannot be said to contravene the Bombay Rules.
[231A E] A combined reading of clauses 3, 13 and 15 of Rule 241 A of 218 Junagadh Rules shows that clause 3 is an exception to the general scheme laid down in clauses 13 and 15.
[228C] Bholanath J. Thakar vs State of Saurashtra, AIR 1954 SC 680; Dalip Singh vs State of Punjab, ; Moti Ram Deka etc.
vs General Manager NEF Railways, Maligaon, Pandu etc.
; , ; State of Maharashtra vs M.H. Mazumdar; , and M. Narasimhachar vs State of Mysore, [1960] 1 SCR 981, referred to.
State of U.P.v.
Brahm Datt Sharma, [1987] 2 SCC 179, fol lowed.
| The Ziarat Shareef of Hazrat Baba Ibrahim, a holy place of worship, in the Rakhbahu area of Jammu City was granted certain land to the Ziarat by the State Government vide two orders dated September 22, 1955 and November 29, 1958.
The Ziarat was being managed by the 1st appellant and his brothers, since the death of their father in 1963.
The Committee of Muslim Wakf, incorporated under the Jammu and Kashmir Muslim Wakf Act, which came into force in 1959, file a suit for restraining them from alienating, raising construction or recovering the rent from the Wakf land in dispute vested in the Ziarat, on the allegation that the appellants defendants were treating the lands granted to the Ziarat, as their personal property and mismanaging and also alienating the same.
Resisting the suit, the appellants, defendants contended, inter alia, that notwithstanding the use of the word "Ziarat" in the two Government orders the transfer of the land in dispute was in their father 's favour in his personal capacity, in lieu of his possessory right over about 400/500 kanals of land which was taken over by the Government, and not in the form of any dedication, and as such the land was not the property of the Ziarat but their father 's absolute property, and had devolved upon them by succession and, therefore, they had the right to deal with the property in any manner they liked.
The trial court dismissed the suit, holding that the two grants were in fact made in favour of defendants ' father and not the Ziarat.
254 The first appellate court upheld the trial court 's findings.
However, in second appeal, the High Court held that from the recitals of the two orders of the Government of 1955 and 1958 it was clear that the two grants were in favour of the Ziarat.
Hence, the appellants defendants filed the appeal, by special leave before this Court contending that the High Court had erred in upsetting the findings of the courts below, based on appreciation of the evidence that, as a fact, the appellants defendants were the owners of the property, the subject matter of the Government grants.
Dismissing the appeal, the Court, HELD: 1.1 The two orders of the Government dated September 22, 1955 and November 29, 1958 are absolutely clear and unambiguous and can admit one and only one interpretation that the Government intended to grant the land to the Ziarat alone and not to the appellants defendants in their personal capacity.
In fact the names of the appellants defendants or their ancestors are not even mentioned in the two orders.
The order of 1955 specifically stated that the lands in Rakhbahu surrounding the Ziarat Shareef of Baba Ibrahim Shah be granted to the said Ziarat permanently.
The later order of 1958 also says the same thing.
It is nowhere mentioned in any of those orders that the land was given not to the Ziarat but to the father of the appellants defendants, who was Majawar of the Ziarat, either in his personal capacity or in lieu of compensation for his personal lands acquired by the Government.
[259A, B C] 1.2 A manager or a trustee in possession of a religious shrine cannot be allowed to assert a hostile title unless he formally surrenders possession to the lawful authority.
[260B] In the instant case, there was no justification for the appellants defendants to cast their covetous eyes on the property of the Ziarat, taking advantage of their possession over the same, which was as managers or trustees and assert a hostile title to it.
Even if they were in possession of the lands, it would have to be referable to a lawful title and cannot be treated to be adverse to the Ziarat.
In other words, the possession would be for.
the benefit of the Ziarat.
[259H, 260A, E] 1.3 In the face of clear and unambiguous terms of the Government orders, it was not permissible for the appellants defendants to adduce evidence to show that the grant was made to them and not to the 255 Ziarat.
The question was of interpretation of two Government orders, which was essentially a question of law.
[260G] In the circumstances, the High Court was not in error in upsetting the findings of the courts below.
[260F]
| The appellants, in execution of a decree passed in a suit filed by them under section 180 of the U.P. Tenancy Act, 1939, on December 2, 1948 took back possession of the land in dispute from the respondent Nos. 4 and 5 (respondents for short).
On the advent of the U.P. Zamindari Abolition and Land Reforms Act, 1950 ( '1950 Act ' for short) the respondents moved an application under section 232 of the 1950 Act to regain possession of the land on the ground that they hand acquired the status of adhivasis udder that Act.
The Assistant Collector dismissed the application.
The respondents appealed to the Additional Commissioner.
The appellants contended that since the village in which the land in dispute was situated was put into consolidation under the U.P. Consolidation of Holdings Act, 1953 ( '1953 Act ' for short), the Additional Commissioner had no jurisdiction to hear the appeal.
The appellants also submitted that a statement under section 8 and 8A of the 1953 Act was published in which they were shown as bhumidars of the land in question and the respondents had not objected to the entries.
The Additional Commissioner, by his order dated June 15, 1956, allowed the appeal.
Pursuant to that order the entries in the said statement were corrected and the respondents acquired possession of the land.
The Board of Revenue, before whom the Additional Commissioner 's order was challenged, held that the Additional Commissioner had no jurisdiction to hear the appeal on merits.
On September 11, 1958 the appellants moved an application under section 144 of the Code of Civil Procedure before the Sub Divisional officer praying for restitution of possession.
This application and the subsequent appeals were rejected by the authorities.
Dismissing a writ petition filed by the appellants the High Court held that the proceedings under section 144 of the Code of Civil Procedure could not succeed, but since the decision recorded by the authorities under the 1953 Act had become final, it was always open 288 to the petitioners to move the first appellate court to decide the appeal in terms of the decision of the consolidation authorities.
Thereupon, in August 1966, the appellants filed a suit under sections 209 and 229 (b) of the 1950 Act against the respondents for a decree for possession on the ground that they were bhumidhars of the land in question under the 1950 Act.
The Assistant Collector decreed the suit.
The Additional Commissioner allowed the appeal filed by the respondents.
The Board of Revenue dismissed the appellants ' second appeal.
The appellants filed a writ petition in the High Court.
A single Judge of the High Court dismissed the writ petition.
A Division Bench of the High Court dismissed the special appeal filed by the appellants.
Hence this appeal.
The respondents contended: (i) that the suit was barred by limitation and the appellants were not entitled to the benefit of section 14(1) of the ; and (ii) that the suit was barred by section 49 of the 1953 Act.
Dismissing the appeal, ^ HELD. 1.
The party seeking benefit of section 14 (1) of the must satisfy the three conditions laid down in the section, namely, (i) that the Party as the plaintiff was prosecuting another civil proceeding with due diligence (ii) that the former proceeding and the later proceeding relate to the same matter in issue; and (iii) that the former proceeding was being prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.[297G H] 2.
The expression 'other cause of a like nature ' will have to be read ejusdem generis with the expression 'defect of jurisdiction '.
So construed the expression other cause of a like nature must be so interpreted as to convey something analogous to the preceding words from defect of jurisdiction '.
The defect of jurisdiction goes to the root of the matter as the court is incompetent to entertain the proceeding.
The proceeding may as well fail for some other defect.
Not all such defects can be said to be analogous to defect of jurisdiction.
Therefore, the expression other cause of a like nature on which some light is shed by the Explanation (C) to section 14 which provides "misjoinder of parties or causes of action shall be deemed to be a cause of like nature with defect of jurisdiction", must take its colour and content from the just preceding expression, defect of jurisdiction '.
Prima facie it appears that there must be something taking to a preliminary objection which if it succeeds, the court would be incompetent to entertain the proceeding on merits.
Such defect could be said to be of the like nature ' as defect of jurisdiction.
Coversely if the party seeking benefit of the provision of section 14 failed to get the relief in earlier proceeding not with regard to anything connected with the jurisdiction of the court or some other defect of a like nature, it would not be entitled to the benefit of s 14.
[300C G] India Electric Works Ltd. vs James Mantosh & Anr., ; , referred to.
In a proceeding under section 144 of the Code of Civil Procedure, the party applying for restitution has to satisfy the court of first instance that a decree under which it was made to part with the property is varied or reversed or modified in appeal or revision or other proceeding or is set aside or modified in any suit instituted for the purpose and therefore, restitution 289 must be ordered.
In such a proceeding, the party seeking restitution is not required to satisfy the court about its title or right to the property save and except showing its deprivation under a decree and the reversal or variation of the decree.
[298C D; E] 4.
In the instant case, the High Court rightly declined to grant benefit of the provision of sec 14 of the to the appellants because the second and third condition laid down in section 14 (1) were not satisfied.
It may be assumed that the earlier proceeding under section 144 of Civil Procedure Code was a civil proceeding for the purpose of section 14 (1) and that the appellants were prosecuting the same with due diligence.
But it is difficult to accept that the subsequent proceeding relates to same matter in issue as was involved in the earlier proceeding.
The appellants merely claimed in their application under section 144 that in view of the reversal of the order by the Board of Revenue the respondents are not entitled to retain possession and that restitution should be evicted because the appellants lost possession under the order of the Additional Commissioner which was reversed by the Board of Revenue.
The cause of action was the reversal of the order of the Additional Commissioner.
When they failed to obtain restitution, the appellants filed a substantive suit under sections 209 and 229 (b) of the 1950 Act.
It was a suit on title as bhumidars for possession against respondents alleging unauthorised retention of possession.
It had nothing to do with the order of the Additional Commissioner.
Moreover, the appellants failed in the earlier proceeding not on the ground that the authority had no jurisdiction to entertain the application nor on the ground that there was any other defect of a like nature, but on merits inasmuch as the authorities and the High Court held that in view of the decision of the authorities under 1953 Act, the appellants are not entitled to restitution.
[301B; 299A; 298G H; 299A] 5.
Once an allotment under section 49 of the U.P. Consolidation of Holdings Act, 1953 became final, a suit would not lie before a civil or revenue court with respect to rights in lands or with respect to any other matter for which a proceeding could or ought to have been taken under that Act.
[301G] 6.
In the instant case, once the village was denotified, as found by the authorities and the High Court the allotment made under the 1953 ACI became final and it could not be questioned in a suit before civil or revenue Court in view of the bar enacted in section 49.
[302A B] 7.
The appellants ' submission that after reversal of the Additional Commissioner 's order dated June 15, 1956 the respondents had neither a legal nor equatable right to be in possession, has no force.
Assuming that the appellants had acquired the status of bhumidars the same was subject to the provision contained in section 20 (b) read with Explanation I of the U.P. Zamindari Abolition and Land Reforms Act, 1950 according to which, as correctly found by single Judge of the High Court, the respondents would become adhivasis of the land.
Such adhivasis if they had lost possession were entitled to regain the same by making an appropriate application under section 232 of that Act.
The respondents did move such an application which ultimately was accepted by the Additional Commissioner.
Therefore, primarily, legally and additionally in equity, respondents have an iron clad case to be in possession against appellants.
[294H; 296D G] 290
| The appellant as the Mahant of the Salouna asthal made an application in the High Court under article 226 of the Constitution praying inter alia for the issue of a writ quashing the order of the Bihar State Board of Religious Trusts requiring the appellant to submit a return of income and expenditure under section 59 Of the Bihar Hindu Religious Trusts Act, 1950, on the grounds, inter alia, that the Salouna as that was a private institution and not a religious trust within the meaning of the Act and that the Act did not apply to private trusts.
The High Court took the view that the language of section 2(1) of the Act, which defined a " religious trust ", was wide enough to cover within its ambit both private and public trusts recognised by Hindu law and that the Salouna asthal did not come within any of the two exceptions recognised by the section.
Held, that on a true and proper construction of the provi sions of the Act, considered in the background of previous legislative history with regard to religious, charitable or pious trusts in India, the definition clause in section 2(1) of the Act does not include within its ambit private trusts and that the provisions of the Act do not apply to such trusts.
The essential distinction in Hindu law between religious endowments which are public and those which are private is that in a public trust the beneficial interest is vested in an uncertain and fluctuating body of persons, either the public at large or some considerable portion of it answering a particular description ; in a private trust the beneficiaries are definite and ascertained individuals or who within a time can be definitely ascertained.
The fact that the uncertain and fluctuating body of persons is a section of the public following as particular religious faith or is only a sect of persons of a certain religious persuasion would not make any difference in the matter and would not make the trust a 'private trust.
| The respondent, State of Rajasthan through its District Rehabilitation Officer, Barmer filed a suit in the court of the District Judge, Balotra against the appellant, Union of India, and the Railway Administration claiming damages for the loss suffered by it on account of the damage caused to the goods transported by rail through the Railway Administration.
The appellant contended that the suit was not maintainable in the District Court in view of Article 131 of the Constitution which, according to it conferred exclusive jurisdiction on the Supreme Court to decide all disputes arising between a State and the Union.
The District Judge held that he had jurisdiction to try the suit.
A Revision Petition filed against the order of the District Judge was dismissed by the High Court.
Hence this petition for special leave to appeal.
Dismissing the petition, ^ HELD: The suit was entertainable by the District Court.
On a careful consideration of the whole matter in the light of the decisions of this Court, it is felt that Article 131 of the Constitution is attracted only when a dispute arises between or amongst the States and the Union in the context of the constitutional relationship that exists between them and the powers, rights, duties.
immunities, liabilities, disabilities etc.
flowing therefrom.
Any dispute 701 which may arise between a State in the capacity of an employer in a factory, a manufacturer of goods subject to exercise duty, a holder of a permit to run a stage carriage, a trader or businessman carrying on business not incidental to the ordinary functions of Government, a consumer of railway services etc.
like any other private party on the one hand and the Union of India on the other cannot be construed as a dispute arising between the State and the Union in discharge of their respective executive powers attracting Article 131 of the Constitution.
It could never have been the intention of the framers of the Constitution that any ordinary dispute of this nature would have to be decided exclusively by the Supreme Court.
[708G H; 709A B] State of Bihar vs Union of India & Anr., ; , Union of India vs State of Mysore, [1977] S.C.R. 842.
State of Mysore vs Union of India & Ors.
A.I.R. at pages 239 240, State of Rajasthan & Ors., etc.
vs Union of India etc.
; , , State of Karnataka vs Union of India & Anr., ; at page 92 and The Framing of India 's Constitution A Study by Shri B. Shiva Rao at page 483, referred to.
In the instant case, the State Government has made a claim like any other consignee of goods despatched through the railway for compensation and its success or failure in the suit depends on proof of facts which have to be established in the same way in which a private person would have to establish.
This is not even a case where a formal contract is entered into between the Union of India and the State of Rajasthan is accordance with the requirements of Article 299 of the Constitution.
It is just a commercial contract under which an officer of the State of Rajasthan was entitled to claim delivery of the goods consigned as any ordinary consignee.
The claim involved in this case is one based on section 80 of the Indian Railways Act, 1890.
Section 80 of the Indian Railways Act, 1890 indicates that the claim made under it is essentially against the Railway Administration concerned.
The Union of India is impleaded as a party to suits instituted thereunder being the owner of the Indian Railways by virtue of Article 300 of the Constitution.
The statute, however, treats the dispute as one between the Railway Administration concerned and the person instituting the suit.
Neither of the parties to these proceedings is questioning the applicability of the provisions of the Indian Railways Act, 1890 to these proceedings.
It is, therefore, difficult to hold that in these proceedings there is any question which falls within the scope of Article 131 of the Constitution.
[709H; 710A B; D; H; 711A B]
| Respondents 1 to 9 filed a suit against the Appellants and some of the other respondents for a declaration that they hid been carrying on, and were entitled to the worship without interference of the idol of Adeshwarji in the temple named after him at Paroli according to the tenets observed by the Digambri Sect of the Jain religion.
They further alleged : that the temple was constructed and the idol consecrated according to and by the followers of their sect; that in December, 1949, the defendants had attempted to convert the said idol into the idol of the Swetambri Sect by putting Chakshus (artificial eyes) thereon, but were prevented due to strong opposition of the followers of Digambri Sect.
It was claimed that although a temporary settlement was reached between the two sects while the rights in the temple were to be adjudicated upon by a Civil Court, the defendants had made arrangements to alter the temple according to their tenets and that they were intending to enclose the idol by doors and locks with the object of interfering with the free exercise of a Digambris ' right to worship the idol.
It was therefore prayed that the defendants be restrained by a permanent injunction from altering the nature and shape and appearance of the idol in any manner or from doing any act which would interfere with the right of worship of the followers of the Digambri Sect.
The defendants denied that the Digambri Sect had any right of worship of the idol or had ever exercised such a right and contended that the idol and the temple is in all respects a temple of the Jain Swetambri Sect.
The Trial Court decreed the suit and the District Judge in appeal as well as the High Court confirmed the decree.
The High Court also fixed three hours a day when the Digambris may use the temple for worship In appeal to this Court, it was contended inter alia on behalf of the appellant that the reliefs claimed made it clear that the dispute was not of a civil nature; and that the judgment of the Trial Court was wholly vitiated because the Trial Judge not having accepted the evidence produced before him, based his findings on his own inspection.
It was also contended that unless the ownership of the temple, was established or that the idol belonged to the Digambri Sect, no injunction could be given nor could the respondents be permitted to worship there; in the plaint the respondents had averred that the idol is a Digambri idol and as they had failed to prove this, their right to worship also failed.
HELD:Dismissing the appeal, (i)From the pleadings and the controversy between the parties it was clear that the issue was not one which was confined merely to rites and rituals but one which effected the rights of worship.
If the Digambries have a right to worship at the temple, the attempt of the Swetam 837 belies to put Chakshus or to place Dhwajadand or Kalash in accordance with their tenets and to claim that the idol is a Swetamberi idol was to preclude the Digamberies from exercising their right to worship at the temple, with respect to which a civil suit is maintainable under Section 9 of the Civil Procedure Code.
This position is well established.
[843 B] Sir Seth Hakam Chand & Ors.
vs Maharaj Bahadur Singh & Ors., 60 I.A. 313 and Nar Hari Sastri and Ors.
vs Shri Badrinath Temple Committee; , , referred to.
(ii)While, giving his findings the Trial Judge remarked that the evidence led by the Plaintiffs appeared to be correct.
These observations themselves show that the evidence on record was an element in the formulation of the Trial Court 's judgment buttressed by the observations of the learned Judge during the site inspection.
it was clear that the description given by the learned Judge of the idols in the Adeshwarji Temple and the Temple of the Swetemberies were observations made during an inspection at which both the Plaintiffs and Defendants Advocates were present and that there must have been notes also in respect of the inspection made on both the occasions.
There was therefore no validity in the contention that the finding of the Trial Judge was based entirely on the result of his inspection.
[844 G 845 C] (iii)The concurrent findings of the Courts below that the idol was Nirker ' (naked), that there were no Chakshus, no Mukat, no Armlet, no Dhwajadand or no Kalash, would show that the idol was consecrated by the Digamberies.
It was also clear that it was an ancient temple and that both the Digamberies and the Swetamberies worship the idol.
It was not denied that while the Digamberies will not worship an idol which has Chakshus or which has clothes or Mukat, the Swetamberies would worship a Digamberi idol without these and hence the right to worship a Digamberi idol by both the sects is possible and it has been rightly so held by all the courts.
[846 E] Once the right of worship of Digamberies was established they would be entitled to the injunction sought for by them against the Appellants from preventing them from worshiping or from interfering with that right by placing Chakshus in the idol, Dhwajadand, Kalash on the Temple.
The directions of the High Court extending the time for worship by Digamberi Sect from one hour to three hours was not unreasonable.
[848 A B]
|
Civil Appeal Nos. 545 and 546 of 1960.
Appeals from the judgment and order dated August 13, 1954, of the Madras High Court in Writ Petitions Nos. 743 and 748 of 1954.
K.N. Rajagopal Sastri and P. D. Menon, for the appellants.
The respondent did not appear.
January 17.
The Judgment of the court was delivered by SHAH, J.
These are two appeals with certificates of fitness granted by the High Court of Judicature at Madras against certain orders passed in Writ Petitions under article 226 of the Constitution.
One Ramaswami Iyer father of the respondent was assessed to income tax in the status of a Hindu Undivided Family.
Ramaswami Iyer died in 1949 and the respondent M.R. Vidyasagar became the manager of the family.
The family was a partner through its manager in a firm styled "The Madura Knitting Company", and the share in the profits of the partnership which was registered under the Indian Income tax Act was the principal source of its assessable income.
Under section 18A of the Indian Income tax Act, the Hindu undivided family was liable to pay advance tax for each of the assessment years 1946 47, 1947 48 and 1948 49.
The Income tax Officer, Madura, issued notices under section 18A (1) of the Indian Income tax Act for payment of advance tax on the basis of the preceding year 's income.
It was open to the assessee to submit a revised estimate of his income under section 18A (2) in respect of the year in question and Ramaswami Iyer who was at the material time the 615 manager availed himself of the option to submit a revised estimate and estimated the income for each of the assessment years 1946 47 and 1948 49 at Rs. 45,000/ .
The assessments of these two years were completed respectively on November 28, 1950 and February 29, 1951, and the income received from the Madura Knitting Company was included in the assessments under section 23(5).
The Income Tax Officer assessed the total income of the Hindu undivided family for the year 1946 47 at Rs. 1,01,335/ and for the year 1948 49 at Rs. 3,10,697/ .
As the total income assessed far exceeded the estimate of Rs. 45,000/ , submitted by the manager of the assessee family, the Income Tax Officer in making the assessment ordered the respondent to pay Rs. 6,999/12/ and Rs. 36,687/ respectively for the assessment years 1946 47 and 1948 49 as interest.
In appeals against the orders of assessment by the Madura Knitting Company, by order dated March 12, 1954 the Income tax Appellate Tribunal reduced the income of the firm, and on that basis reduced the share of the family in the income of the firm for the year 1946 47 to Rs. 83,335/ and for the year 1948 49 to Rs. 2,83,868/ .
The Income tax Officer, Madura, in giving effect to the orders passed by the Appellate Tribunal under the 3rd proviso to section 18A (6) reduced the interest to Rs. 4,358/ for the year 1946 47 and to Rs. 32,714/10/ for the year 1948 49, and called upon the respondent to pay the arrears of tax inclusive of interest so adjusted.
The respondent then called upon the Income Tax Officer not to levy interest under section 18A (6) submitting that the levy was illegal and unjustified, and in the alternative requested that the interest be waived under the powers vested under the 5th proviso to section 18A (6) which was added by section 13 of the Indian Income tax (Amendment) Act (25 of 1953).
The Income tax Officer declined to accede to the request and the respondent 's application to the 616 Inspecting Assistant Commissioner for cancelling the levy of interest was also rejected.
The respondent then moved two petitions (Nos. 743 and 748) under article 226 of the Constitution in the High Court of Judicature at Madras for writs cancelling the orders imposing liability for payment of interest, contending that the levy of penal interest was opposed to law and was prima facie, unjustified on the facts and circumstances of the case.
The respondent submitted that the levy of interest under section 18A(6) was penal in character and could not be imposed upon the legal representative of the deceased manager who was not in any manner responsible for the original return filed by the firm of which the manager was a partner.
He also contended that the levy was not warranted by the provisions of the Indian Income tax Act inasmuch as in respect of the assessment years in question the respondent was not the assessee, that the delay in completing the assessment was not attributable either to the then manager of the family, Ramaswami Iyer or to himself and therefore, no liability for payment of interest could be imposed, and that in any event refusal to cancel the levy of interest was arbitrary and not based on any judicial exercise of discretion vested in the Income tax Officer.
A Division Bench of the Madras High Court held that the provision imposing liability to pay interest under sub section
(6) of section 18A was not opposed to law and could be enforced against the legal representative of the deceased manager, who was a partner of the assessee firm.
The High Court, however, was of the view that as the Income tax Officer and the Inspecting Assistant Commissioner had failed to consider whether in the circumstances of the case, the reduction or waiver of the interest was justified, it be ordered that the Income tax Officer to decide whether the petitioner had made out a case for the exercise of the discretion vested in the 617 Income tax Officer to waive or reduce the interest under the powers conferred on him by the 5th proviso of cl.
(6) of section 18A.
Against that order with certificates of fitness these appeals are preferred by the Commissioner of Income Tax.
Section 18A which imposes liability upon the tax payer to make advance payment of tax was incorporated into the Indian Income tax Act by Act 11 of 1944.
That section enables the Income tax Officer on or after the 1st day of April in any financial year, by order in writing, to require an assessee to pay to the Central Government in specified instalments income tax and super tax payable on so much of such income as is included in the assessee 's total income of the previous year in respect of which he had been assessed.
Under sub section
(2), if the assessee who is required to pay tax by an order under sub section (1) estimates at any time before the last instalment is due that the part of his income to which the sub section applies for the period which would be the previous year for an assessment for the year next following is less than the income on which he is required to pay tax and accordingly wishes to pay tax which is less than amount he is required to pay, he may send to the Income Tax Officer an estimate of the tax payable by him, and pay tax as accords with his statement.
It is, however, provided by sub section
(6) inter alia that where in any year the assessee had paid tax under sub s.(2) on the basis of his own estimate and the tax paid is less than 80% of the tax determined on the basis of his regular assessment (so far as such tax relates to income to which the provisions of section 18 do not apply) simple interest at the rate of 6% per annum from the 1st day of January in the financial year in which the tax was paid upto the date of the said regular assessment shall be payable by the assessee upon the amount by which the tax so paid falls short of the said 80%.
As originally enacted the liability to pay interest upon 618 the amount by which the tax paid fell short of 80% of tax was absolute.
The Income tax Officer had no discretion in the matter, and was bound to impose liability for payment of interest.
But by section 13 of the Indian Income tax (Amendment) Act, 1953 (25 of 1953), an additional proviso was enacted to sub section
(6) in the following form: "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".
This proviso was given retrospective effect as from April 1, 1952.
Thereafter in exercise of powers conferred by section 59 the Central Board of Revenue added Rule 48 to the following effect: "48.
The Income tax Officer may reduce or waive the interest payable under section 18A in the cases and under the circumstances mentioned below, namely: (1) Where the relevant assessment is completed more than one year after the submission of the return, the delay in assessment not being attributable to the assessee.
(2) Where a person is under section 43 deemed to be an agent of another person and is assessed upon the latter 's income.
(3) 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.
(4) 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 could not be foreseen.
619 (5) Any case in which the Inspecting Assistant Commissioner considers that the circumstances are such that a reduction or waiver of the interest payable under section 18A (6) is justified.
The effect of the incorporation of the 5th proviso in section 18A (6) and of Rule 48 was manifestly to authorise the Income Tax Officer in exercise of his discretion to relieve against the rigour of the inflexible rule originally enacted in cl.
(6) about payment of interest by the assessee when the tax paid by him on his estimate fell below 80% of the tax payable on regular assessment.
The only question which falls to be determined in these appeals is whether the benefit of the fifth proviso to section 18A (6) could be claimed in respect of the assessments of the income of the respondent 's family which were completed by the Income tax Officer before April 1, 1952.
The High Court was of the view that even if the assessment by the Income Tax Officer was completed before April 1, 1952, if the final adjustment pursuant to the order of the Appellate Tribunal was made after that date the Income Tax Officer was competent, in exercise of the powers with which he was invested by the fifth proviso to cl.
(6) of section 18A to reduce or waive the interest payable by the assessee and the Income tax officer having failed to exercise his discretion a case was made out for the issue of a writ under article 226 of the Constitution directing that officer to consider whether in the circumstances of the case relief may be granted to the respondent.
On behalf of the Commissioner of Income tax it is urged that the power conferred by the fifth proviso may undoubtedly be exercised in those cases where assessment is completed on or after April 1, 1952, but where the assessment was completed and liability to pay interest had crystallized under 620 sub s.(6) as it originally stood, the Income tax Officer has no power under the amended sub section to reduce or waive the interest ordered to be paid by the assessee even if the proceedings in assessment are pending in appeal before the Appellate Assistant Commissioner or the Appellate Tribunal.
It was urged that the interest under section 18A(6) is payable upto the date of the regular assessment and if in the contingencies prescribed by section 18A(6), as originally enacted liability to pay interest crystallized, the Income tax Officer could not, in exercise of the power invested by the amending Act reopen the order, because the legislature had given to the amending statute only a partial retroactive operation and its retroactivity could not be enlarged; to do so, would be plainly to defeat the plain intendment of the Legislature.
It is unnecessary for the purpose of these appeals to consider whether an assessment which has become final before the date on which the fifth proviso came into operation, and which is not subject to any pending appeal, can be reopened and the benefit of the power conferred by the fifth proviso be afforded to an assessee.
The question which falls to be determined is whether in an assessment subject to an appeal which is pending, or which may be lawfully filed, the power to reduce or waive the interest can be exercised.
There is, in our judgment, inherent evidence in the rule indicating that such a power can be exercised even if the regular assessment is completed by the Income tax Officer before April 1, 1952.
The power vested in the Income tax Officer to reduce or waive interest payable by an assessee is exercisable "in such cases or such circumstances as may be prescribed" by the Rules.
By Rule 48 the Income tax Officer is given the power to reduce or waive interest payable under section 18A(6) in the events specified therein.
By the first clause of Rule 48 where the assessment is completed more than one year after the submission of the return the delay in assessment 621 not being attributable to the assessee the power of the Income tax Officer may be exercised There is nothing in the Rule which indicates that the power to grant relief may be exercised only before the regular assessment is completed by the Income tax Officer.
The terms of clauses (1) and (5) of the Rule clearly support the view that the order reducing or waiving interest may be passed even after the order of assessment is made, and interest is included.
Again, by making Act 25 of 1953 operative retrospectively from April 1, 1952, the Legislature has evinced an intention that to regular assessments made between April 1, 1952, and the date on which the Act was enacted, the fifth proviso to 18A(6) may apply.
The argument that liability to pay interest crystallizes when the Income tax Officer incorporates the direction for payment of interest, because the order is not made appealable has no force.
The order for payment of interest was liable to be modified if the assessment of income was varied by the Appellate Assistant Commissioner, or by the Tribunal.
It is true that interest could be charged upto to the date of regular assessment by the Income tax Officer but that does not support the theory of crystallization of liability.
If therefore the quantum of liability was capable of being altered even after the date of the regular assessment, the assumption that the power to give relief against a rigid statutory provision should be restricted to cases which are decided by the Income tax Officer only after April 1, 1952, is not warranted.
The power of the Income tax Officer arose only after April 1, 1952, but there is nothing in the act to show that it was to be exercised only in respect of assessments made by the Income tax Officer after that date.
In our judgment, the jurisdiction under the fifth proviso may be exercised by the Income tax Officer in all cases which are pending on April 1, 1952, before the Income tax Officer or any superior authority having under the Income tax Act power 622 to modify the assessment of income, or are commenced after that date.
In the present case, the original assessments made by the Income tax Officer in both the years in question were modified in view of the orders passed by the Appellate Tribunal in the assessment of the Madura Knitting Co. The order of the Appellate Tribunal was passed on April 12, 1953, i.e. after the date on which Act 25 of 1953 came into operation.
After that date the Income tax Officer was bound to give effect to the orders of the Appellate Tribunal and to adjust liability in computing the assessable income and the tax payable thereon.
The Income tax Officer being bound to adjust liability to pay interest under cl.
(6) of section 18A we see no reason why in adjusting that liability he may not exercise the powers with which he has been invested since April, 1952, if the circumstances of the case warrant such exercise.
In our view the High Court was right in holding that the Income tax officer had the power in the case of the assessments in question to exercise the authority conferred by the fifth proviso to section 18A(6) and he having failed to exercise the discretion, a writ requiring him to consider whether a case is made out for the exercise of his discretion was properly issued.
These appeals therefore fail and are dismissed.
Appeals dismissed.
| The Income tax Officer, Madura, issued notice under section 18A (1) of the Indian Income Tax Act, 1922, for payment of advance tax.
R, the then manager of the Hindu Undivided family availed of the option to submit a revised estimate for the years 1946 47 and 1948 49.
The assessment of these two years were completed respectively in November, 1950 and February, 1951, as the total income assessed far exceeded the estimate submitted by R, the Income tax Officer ordered the respondent, the legal representative of R, to pay the interest under section 18A (6) of the Act.
On appeal, the Income tax Appellate Tribunal reduced the income and the Income tax Officer in giving effect to the said order reduced the interest and called upon the respondent to make payment.
The respondent asked the Income tax Officer not to levy interest under section 18A (6), submitting that the levy was illegal and unjustified, alternatively he requested that the interest be waived by virtue of the powers vested on the Income tax Officer under proviso 5 to section 18A (6) which was added by section 13 of Act 25 of 1953, with retrospective effect from April 1952.
The Income tax Officer and the Inspection Assistant Commissioner declined to accede to the request.
The respondent then moved the High Court at Madras for a writ under article 226 cancelling the levy of interest on the ground among others that refusal by the Revenue authorities to cancel the levy was arbitrary and not based on any judicial exercise of the discretion vested by the Act.
The High Court upheld the plea, ordered the Income tax Officer to decide whether the respondent had made out a case for the exercise of the discretion.
The only question in the appeal before the Supreme Court was whether benefit of the said 5th proviso to section 18A (6) may be granted in respect of assessments of income which were completed by the Income tax officer before April 1952.
614 ^ Held, that the jurisdiction under 5th proviso of section 18A (6) of the Income tax Act may be exercised by the income tax Officer in all cases which were pending on April 1, 1952 before him or any superior authority having under the Act power to modify the assessment of income.
| The appellant firm M/s. Kishinchand Chellaram was assessed to tax for the assessment year 1947 48, the relevant accounting year being the year ending 6th April, 1947.
The concerned Income Tax Officer on an information that a sum of Rs. 1,07,350 purported to have been sent by the assessee by a telegraphic transfer through the Punjab National Bank Ltd., Madras, to its Bombay Branch favouring one Nathirmal on 16 10 1946, has escaped assessment, called upon the assessee, through his letters dated 24th February, 1955 and 4th March, 1955 to explain the same.
The Income Tax Officer did not refer to the letters dated 14th January, 1955 and 10th February, 1955 addressed by him to the Bank Manager nor the reply of the Manager dated 18th February, 1955 in the said two letters addressed to the assessee.
Nor were the copies supplied to the assessee nor even made available on record before all authorities including the Supreme Court.
The assessee through its letter dated 24th March, 1955 replied that as per its records no such remittance was ever sent by it from Madras to Nathirmal in Bombay.
On 2nd February, 1956, the Income Tax Officer for the second time called the very same particulars to which the assessee by its letter dated 9th February, 1956 once again denied the remittance by it.
Despite this, by his letter dated 4th March, 1957 addressed to the assessee, the Income Tax Officer repeated his earlier request to it to explain about the remittance, complaining at the same time of silence by the assessee to his letter dated 2nd February, 1956.
The assessee in its reply dated 13th March, 1957 while inviting attention to its earlier replies dated 24th March, 1955 & 9th February, 1956 reiterated that no amount of Rs. 1,07,350 was remitted by it from Madras to Nathirmal.
Disbelieving it, the Income Tax Officer, by his order brought to tax the amount of Rs. 1,07,350 on the ground that it represented the concealed income of the assessee and observed that "there was no reason to doubt the banker 's statement that the amount was remitted by M/s. Kishinchand Chellaram from Madras".
The assessee preferred an appeal to the Assistant Appellate Commissioner.
At this stage, it came to light that the purported telegraphic transfer was applied for by one "Tilok Chand C/o M/s. K. Chellaram, 181, Mount Road, Madras" and it was received at Bombay by one "N.B. Bani".
In spite of the plea of the assessee that the transaction did not relate to its firm, the Assistant Appellate 721 Commissioner holding that the assessee has not discharged the burden of proof lying on it to explain the amount, rejected the appeal.
Further appeal to the Tribunal and a reference called for by the High Court at the instance of the assessee was also answered against it.
Hence the appeal after obtaining special leave of the Court.
Allowing the appeal, the Court, ^ HELD: (1) There was no material evidence at all on the basis of which the Tribunal could come to the finding that the amount of Rs. 1,07,350 was remitted by the assessee from Madras and that it represented the concealed income of the assessee.
[731E].
In the face of the application for remittance signed in the name of Tilok Chand, that this amount was sent by the assessee and the finding to that effect reached by the Tribunal is unreasonable and perverse.
What at the highest could be said to be established by the material evidence on record is that Tilok Chand remitted the amount of Rs. 1,07,350 from Madras and this amount was received by Nathirmal in Bombay.
Even if it is accepted that Tilok Chand and Nathirmal were employees of the assessee as held by the Tribunal, the utmost that could be said is that an employee of the assessee in Madras remitted the amount of Rs. 1,07,350 to another employee in Bombay.
But, from this premise it does not at all follow that the remittance was made by the employee in Madras on behalf of the assessee or that it was received by the employee in Bombay on behalf of the assessee.
The burden was on the Revenue to show that the amount of Rs. 1,07,350 said to have been remitted from Madras to Bombay belonged to the assessee and it was not enough for the Revenue to show that the amount was remitted by Tilok Chand, an employee of the assessee, to Nathirmal, another employee of the assessee.
It is quite possible that Tilok Chand had resources of his own from which he could remit the amount of Rs. 1,07,350 to Nathirmal.
It was for the Revenue to rule out this possibility by bringing proper evidence on record, for the burden of showing that the amount was remitted by the assessee was on the Revenue.
[730H 731D] The two documents viz. the letters dated 18th February, 1955 and 9th March, 1957 did not constitute any material evidence which the Tribunal could legitimately have taken into account for the purpose of arriving at the finding that the amount of Rs. 1,07,350 was remitted by the assessee from Madras to Bombay because while the former was not disclosed to the assessee by the Revenue Authorities till the hearing before the Tribunal in regard to the preparation of the supplemental statement of the case, giving the assessee an opportunity to cross examine the Manager of the Bank, the latter was not disclosed to the assessee at any stage.
Further, there is no explanation given by the Revenue as to how these two important documents were not traceable earlier.
Even if these two letters were to be taken into account, they did not supply any reasonable basis for reaching the finding that it was the assessee which sent the remittance of Rs. 1,07,350.
There can be no doubt that if the amount had been remitted by Tilok Chand on behalf of the assessee he would have signed the application for telegraphic transfer on behalf of the assessee and not in his own name.
This apart it is impossible to believe that the Manager of the Bank could have failed to appear before the Income Tax Officer in answer to the summons dated 5th March, 1957 and there is no doubt that this statement must have been recorded and the said statement also withheld.
[729H 730A; 729B, C; 730B, E; 729F G] 722 (2) It is true that the proceedings under the Income Tax law are not governed by the strict rules of evidence and therefore it might be said that even without calling the Manager of the Bank in evidence to prove this letter, it could be taken into account as evidence.
But before the Income Tax Authorities could rely upon it, they were bound to produce it before the assessee so that the assessee could controvert the statements contained in it by asking for an opportunity to cross examine the Manager of the Bank with reference to the statements made by him.
Moreover, this letter was said to have been addressed by the Manager of the Bank to the Income Tax Officer on 18th February, 1955 in relation to a remittance alleged to have been sent on 16th October, 1946 and it is impossible to believe in the absence of any evidence to that effect, that the Manager who wrote this letter on 18th February, 1955 must have been incharge of the Madras Office on 16th October, 1946 so as to have personal knowledge as to who remitted the amount of Rs. 1,07,350.
The Revenue authorities ought to have called upon the Manager of the Bank to produce the documents and papers on the basis of which he made the statements contained in his letter and confronted the assessee with those documents and papers but instead of doing so, the Revenue authorities chose to rely merely on the statements contained in the letter and that too, without showing the letter to the assessee.
[728A F]
| Two groups known as the Singhania group and the Gupta Group were partners in M/s. India Supplies.
Both were also interested in the business of Lakshmi Ratan Cotton Mills.
In the present litigation the Gupta group was represented by the appellants and the Singhania group by the respondent.
In the year 1942 Lakshmi Rattan Cotton Mills was the creditor of M/s. India Supplies for the approximate sum of Rs. 4,00,000.
Lakshmi Ratan Cotton Mills was a debtor to the respondent for the approximate sum of Rs. 400,000.
Lakshmi Ratan Cotton Mills demanded the sum of Rs. 4,00,000 from India Supplies.
India Supplies could not repay Lakshmi Ratan Cotton Mills.
Thereafter India Supplies proposed that the respondent should deposit a sum of Rs. 4,00,000 with India Supplies to wipe out the indebtedness of the India Supplies to Lakshmi Ratan Cotton Mills.
The respondent accepted the 'said proposal and thereafter a letter dated 29, September 1942 was written by the head of the Gupta group on behalf of India Supplies to the respondent recording the agreement that "a sum of Rs. 4,00,000 should be debited to India Supplies as deposit at the usual rate of interest as agreed upon.
" The respondent was to place to the credit of Lakshmi Ratan Cotton Mills a sum of Rs. 4,00,000 in its account with the respondent thus reducing the indebtedness of Lakshmi Ratan Cotton Mills from Rs. 9,00,000 to Rs. 5,00,000.
Disputes and differences arose between the two groups thereafter.
In 1944 there was an arbitration award.
The Sing Hanias went out of both India Supplies and Lakshmi Ratan Cotton Mills, and the Gupta group carried on both the businesses.
The present suit was, filed by the respondent in 1953.
The claim was based on the aforesaid deposit of Rs. 4,00,000.
The suit though originally filed in the court of the Civil Judge, Kanpur was tried by the Allahabad High Court in its original jurisdiction.
The suit was decreed in favour of the respondent.
With certificate appeal was filed in this Court.
The questions for consideration were : (i) whether the money was deposited under an agreement and payable on demand so that limitation would commence from the date of demand within three years of which it was filed, or whether it was a loan made on 30th December 1942 in respect of which the suit was barred under article 59 by limitation, the same not having been filed within three years from the date of the loan; (ii) whether there was a demand for a part of the amount in 1943 and therefore limitation would start from that date.
HELD: (i) The amount was a deposit and not a loan.
The case of a deposit is something more than a mere loan of money.
It will depend on the facts of each case whether the transaction is clothed with the character of a deposit of money.
The surrounding circumstances, the relationship and character of the transaction and the manner in which the parties treated the transaction will throw light on the true form of the transaction.
[577 H] 574 V.E, A. Annamalai Chettiar & Anr.
vs section V. V. section Veerappa Chettiar, and Nawab Major Sir Mohammad Akbar Khan vs Attar Singh & Ors., 63 I.A. 279, referred to.
Some of the partners of the appellant and the respondent in the year 1942 were common.
It would be more explicable and natural course of events that monies would be kept in deposit with the appellant in order to enable them to have financial accommodation without immediate worry of repayment.
The mere fact that money in specie was not paid would not be destructive of the case of deposit.
The respondent acted as bankers.
The way in which the respondent made entries in the pass book of the appellant was consistent with the roznamcha, khata and nakalbahi books.
It was not a case of the respondent giving loan to the appellant for the obvious reason that the history of the transaction between the appellant and Lakshmi Cotton Mills showed that the appellant had to be put on a footing of financial stability by giving the appellant the use of the sum of Rs. 4,00,000 for a long time.
The absence of any negotiable instrument was significant.
A hundi or a promissory note would have been consistent with the case of a loan.
The relationship between the parties the surrounding circumstances at the time of the transaction, the pecuniary position of the appellant were all overwhelming features to corroborate the oral as well as the documentary evidence of the respondent that the amount was deposited with the appellant.
[580 E H] The arbitration award in the dispute between the parties gave directions on the basis that there were advances between the parties which were in the nature of deposit and were not covered by the award.
, [581 A B] In contemporarious documents the appellant never said that it was a case of advancing loan.
The non production of the appellant 's accounts coupled with the appellant 's staying away from the witness box indicated the inherent infirmities of the appellant 's case.
[581 D] (ii)There is a consensus among the High Courts that there must be an unqualified demand for the whole sum before the limitation can start in case of demand for return of the amount deposited.
Further, a demand in the year 1943 for a part of the amount would not be effective because there were common partners in the firms of respondent and the appellant.
1581 E G] Jogendranath Chakerbutty vs Dinkar Ram, A.I.R. 1921 Cal.
644, Motigauri vs Naranji, A.I.R. 1927 Bom.
362 and Subbaih Chetty & Ors.
The appeal must accordingly be dismissed.
| A Hindu Undivided Family consisting of Thakur Dan Singh and his son, Thakur Mohan Singh was carrying on business as forest contractors.
There was a total disruption of the family in March, 1956.
On that day, the written down value of three trucks owned by the Hindu Undivided Family was nil on account of depreciation allowance granted under the Income Tax Act, 1922.
On the same day when the joint family was disrupted, Thakur Dan Singh and his son Thakur Mohan Singh constituted a partnership firm.
The business of Hindu Undivided Family was taken over as a running concern by the firm.
The firm sold the three trucks for Rs. 24,252/ .
The Income Tax officer held that the entire sale proceeds should be deemed to be profits of the firm by virtue of the second proviso to section 10(2)(vii) of the Income Tax Act, 1922 and 1: he included that amount in the total income of the appellant.
The decision of the Income Tax officer was confirmed by the Appellate Assistant Commissioner, the Income Tax Appellate Tribunal and the High Court.
The High Court took the view that inasmuch as the partners of the appellants were the same individuals who were the members of the Hindu Undivided Family and as the business was taken over as a running concern by the appellants from the family, there was merely a change in the style and nature of the Hindu Undivided Family.
According to the High Court, the original cost of the trucks to the appellant would be the same as it was to the Hindu Undivided Family.
Allowing the appeal by the assessee, ^ HELD: The second proviso to section 10(2)(vii) seeks to recover back from the assessee the benefit allowed to him by way of depreciation allowance earlier.
It does so by imposing a balancing charge on the excess of the sale price over the written down value to the extent of the total depreciation allowance granted to the assessee in the past.
In the present case, the appellant could not have been allowed any depreciation allowance for the reason that from the outset when the three trucks became his property the written down value was nil.
No question of imposing a balancing charge, therefore, can arise in this case.
It is immaterial that the business was taken over as a running concern.
It is also immaterial that the partners of the firm are the same as the members of the Hindu Undivided Family.
Under s.2 of the Income Tax Act, a firm is a distinct assessable entity.
[226G H, 227A, B C] 225 Commissioner of Income Tax, Bengal vs A. W. Figgics & Co. and Ors., S.C.I. Raja Bejoy Singh Dudhuria vs Commissioner of Income Tax, Bengal, ; relied upon.
When depreciation allowance was allowed to the Hindu Undivided Family in its assessment proceedings, it was a step taken in determining the taxable Income of the family.
The depreciation allowance allowed to the family cannot be regarded as depreciation allowed to the appellant firm.
[227GH, 228A]
| The appellant company owns several estates wherein tea is grown and it was assessed to sales tax by the Sales Tax Officer in respect of the tea sold by it during the years 1954 55 and 1955 56.
An appeal filed by the appellant was rejected by the, Appellate Assistant commissioner on the ground that the tea when sold was admittedly in godowns in the State of Travancore Cochin and that consequently the sales must be deemed to have taken place within the State of Travancore Cochin and hence liable to be included in the taxable turn over.
When a further appeal was taken to the Sales Tax Appellate Tribunal, it was held that the property in the goods sold passed at Fort Cochin in Madras State on the fall of the hammer at the auction and hence the same was not taxable.
The State filed a revision petition to the High Court.
While the High Court accepted the finding of the Tribunal that the property in the goods sold passed at Fort.
Cochin on the fall of the hammer at the auction, it differed from the Tribunal as regards the effect of the circumstance that the tea sold was, at the point of sale, physically in godowns situated in the State of Travancore Cochin and held the sales to be taxable.
The appellant came to this Court after obtaining a certificate of fitness from the High Court.
The only question argued before this court was whether a sale of tea effected by the appellant by auction at Fort Cochin in Madras State was a sale outside the State of Travancore Cochin orinside it and whether the same was taxable or not.
Accepting.the appeal.
HELD: No sales tax was to be levied in this case as the sales took place outside the State of Travancore Cochin.
The test for determining whether a sale is inside or outside a State is where the property in the goods passed and in the present case the property in the goods passed in Fort Cochin in Madras State on the fall of the hammer at the auction.
The point about the property not having passed in the Madras State was not argued before the High Court and was also not urged in the statement of case filed by respondent and hence the same was not allowed to be argued in the Supreme Court.
Per Shah.
The property in the goods passed at Fort Cochin in Madras State and as the goods were delivered not for the purpose of consumption in any particular State, the sales were not inside Travancore Cochin but were outside the 392 State and were as held by this Court in A. V. Thomas & Co. vs Deputy Commissioner of Agricultural Income tax and Sales Tax Trivandrum, 14 S.T.C. 363, not liable to be taxed under the Travancore Cochin General Sales Tax Act, 1950.
The doctrine of territorial nexus had full play in sales tax legislation under the Government of India, Act, 1935 and was not abrogated by the enactment of Art, 286 of the Constitution.
It continued to be in operation in the interregnum between the promulgation of the Constitution and the amendment of article 286 by the Constitution (Sixth Amendment) Act, 1956.
It also applies now subject to certain modifications.
Parliament has been given the power to formulate principles for determining when a sale or purchase of goods takes place outside the State or in the course of the import of the goods into or export of the goods out of the territory of India.
Exercising the power under cl.
(2) Parliament has enacted the and by section 4(2) the doctrine of territorial nexus has been given legislative recognition though in somewhat limited form.
Deputy Commissioner of Agricultural Income tax and Salestax, Trivandrum vs A.V. Thomas & Co., I.L.R. 1960 Kerala 1395; India Copper Corporation Limited vs State of Bihar, ; ; A. V. Thomas & Co. Ltd. vs Deputy Commissioner of Agricultural Income tax and Sales tax, Trivandrum 1953 Supp.
2 S.C.R. 608 363; Poppat Lal Shah vs The State of Madras, ; ; and the Tata Iron & Steel Company Ltd. vs The State of Bihar , referred to.
| The appellant was a chartered accountant and a partner of a firm of auditors.
This firm acted as auditors of two companies, among others, registered under the Indian , the entirety of the shares of one of which are owned by the Union Government and the entirety of the shares of the other by the West Bengal Government.
The appellant was declared elected to the Lok Sabha.
His election was challenged by two voters of the constituency by means of an election petition.
The main ground raised was that the appellant was at the relevant period the holder of an office of profit under the Government of India as well as the State Government and hence he was disqualified from standing for election under article 102(1)(a) of the Constitution.
The Election Tribunal accepted this contention and declared the election of the appellant void.
The appellant filed an appeal before the High Court in which he did not succeed.
The present appeal was by virtue of a certificate granted by the High Court under article 133(1)(c) of the Constitution.
It was contended before this Court that on a true construction of the expression "under the Government of India or the Government of any State" occurring in cl.
(a) of article 102 (I.) of the Constitution the appellant could not be said to hold an office of profit under the Government of India or the Government of West Bengal.
It was argued that the various tests, namely, who has the power to appoint, who has the right to remove, who pays the remuneration, what are the functions and who exercises the control should all co exist and each must show subordination to the Government.
The fulfillment of some of the tests alone, would not be sufficient to determine that a person holds an office of profit under the Government.
It was contented on behalf of the respondent that the tests were not cumulative and that the court should look to the substance rather than to the form.
Held : (i)For holding an office of profit, under the Government a person need not be in the service of the Government and there need not be any relationship of master and servant between them.
312 (ii)The examination of the various provisions of the Com panies Act, 1956 (sections 224, 227, 618 and 619) showed that so far as the two companies in question were concerned the appellant was appointed as an auditor by the Central Government, was removable by the Central Government, that the Comptroller and the Auditor General of India exercised full control over him and that his remuneration was fixed by the Central Government under sub section
(8) of section 224 of the though it was paid by the companies concerned.
(iii)Where the several elements, the power to appoint, the power to dismiss, the power to control and give directions as to the manner in which the duties of the office are to be performed and the power to determine the question of remuneration are all present in a given case then the officer in question holds the office under the authority so empowered.
It is not necessary that all these must co exist nor is the fact that the source from which the remuneration is paid is not from public revenue decisive.
(iv)The appellant held an office of profit under the Government of India within the meaning of article 102(1)(a) of the Constitution of India and as such he was disqualified for being chosen as a member of Parliament.
Maulana Abdul Shakur vs Rikhab Chand, [1958] S.C.R. 387, distinguished.
Ramappa vs Sangappa, ; , referred to.
| Respondent No. 1 acquired tenancy rights in five plots in the villages of Biknaur and Samahuta situated in the area known as Lower Murli Hill in District Shahabad, Bihar.
In 1949 he filed a plaint in the Court of the Subordinate Judge Sasaram, against the State of Bihar and others, claiming inter alia that as a tenant he had a customary right to quarry limestone for trade purposes from the Lower Murli Hill.
The claim was based mainly on certain entries in the Custom sheets prepared at the time of the Cadastral Survey in 1913 under section 102 of the Bihar Tenancy Act, 1885.
The trial court rejected the claim but the High Court held the custom to be established by the evidence of the Customs sheets.
The defendants appealed.
Held The High Court was in error in holding that the plain tiff had established the custom pleaded by him or that it was reasonable.
(i) There was nothing to show that the practices and privileges recorded in the Custom Sheets were exercised as a matter of right.
The record has presumptive value.
But the revenue authorities were concerned to ascertain the existing state of affairs and not to determine whether the practices and privileges were ancient, certain, reasonable and continuous.
As evidence of local custom, the custom sheets had therefore not much value.
On the other hand there were indications that the exercise of the privileges recorded therein was permissive.
Even on the most liberal interpretation they did not provide evidence of the exercise of the privilege of commercial exploitation of limestone from the area in question.
[317D; 319G] (ii) Even granting that the Custom sheets recorded a local custom that the tenants in the villages of Baknaur and Samahuta excavated stones from the hills near the villages for purposes of trade, a claim of right founded on that custom must be held unreasonable and incapable of enforcement by the sanction of a court 's verdict, [320B] A claim in the nature of a profit a prendre operating in favour of an indeterminate class of persons and arising out of a local custom may be held enforceable only if it satisfies the tests of a valid custom.
A custom is a usage by virtue of which a class of persons belonging to a defined section in a locality are entitled to exercise specific rights against certain other persons or property in the same locality.
To the extent to which it is inconsistent with the general law undoubtedly the custom prevails.
But to be valid a custom must be ancient, certain and reasonable, and being in derogation of the general rules of law must be construed strictly.
A right in the nature of a profit a prendre in the exercise of which the residents of a locality are entitled to excavate stone for trade purposes would ex facie 313 314 be unreasonable, because the exercise of such a right ordinarily tends to the complete destruction of the subject matter of the profit.
The custom, if exercised in its amplitude as claimed, may also lead to breaches of the peace, for it would be open to all tenants to work any quarry simultaneously for trade purposes.
[321B D; 324D] Lord Rivers vs Adams, L.R.3 exhibit Div. 361, Harris & Anr.
vs Earl of Chesterfield and Anr.
, , Alfred F. Beckett Ltd. vs Lyons , referred to Lutchhmeeput Singh vs Sadaulla Nushyo & Ors., I.L.R. 9 Cal.
698 and Arjun Kaibarta vs Manoranjan De Bhoumick, I.L.R. , approved.
Henry Goodman vs The Mayor and Free Burgesses of the Borough of Saltash.
7 A.C. 633 and Mercer vs Denne, , 557 distinguished.
| The appellant in this appeal had been assessed to Income Tax which was reduced on appeal but that assessment was set aside by the Income Tax Appellate Tribunal on the ground that the Indian Finance Act of 1939 was not in force during the assessment year in Chota Nagpur.
On a reference by the Tribunal the High Court con firmed the setting aside of this assessment.
By the promulgation of Bihar Regulation IV of 1942 by the Governor of Bihar (which was assented to by the Governor General) the Indian Finance Act of 1939 was brought into force in Chota Nagpur retrospectively as from the 30th March 1939.
On the 8th February 1944 the Income Tax Officer passed an order in pursuance of which a fresh notice was issued under section 34 which resulted in the assessment of the appellant to income tax.
The question for determination in this appeal was whether the notice under section 34 was validly issued.
Held (i) that for the purposes of section 34 of the Act the income, profits or gains sought to be assessed were chargeable to income tax according to the scheme of the Act and the provisions of sections 3 and 4 of the Act; (ii) that it was a case of chargeable income escaping assessment within the meaning of section 34 and was not a case of mere non assessment of income tax because the earlier assessment proceedings in the present case had in fact been taken but failed to result in a valid assessment owing to some lacuna which was not attributable to the assessing authorities.
C.I.T., Bombay vs Sir Mahomed Yusuf Ismail ([1944] , Fazal Dhala vs C.I.T., B. & O. ([1944] 12 I.T.R. 341), Baghavalu Naidu & Sons vs C.I.T., Madras ([1945] , Raja Benoy Kumar Sahas Boy vs C.I.T., West Bengal ([1953] , Chatturam vs C.I.T., Bihar ([1947] F.C.R. 116), Whitney vs Commissioners of Inland Revenue ([1926] A.C. 37), C.I.T. Bombay & Aden vs Khemchand Ramdas ([1938] at 428), Sir Rajendranath Mukherjee vs C.I.T., Bengal ([1934] , Madan Mohan Lal vs C.I.T., Punjab ([1935] , C.I.T., Bombay vs Pirojbai N. Contractor ([1937] , Kunwar 291 Bishwanath Singh vs C.I.T., C.P. ([1942] , Raja Bahadur Kamakshya Narain Singh vs C.I.T. B. & 0.
([1946] and Chatturam vs C.I.T., B. & 0.
([1946] , referred to.
|
ION: Criminal Appeal No. 167 of 1961.
Appeal by special leave from the judgment and order dated September 29, and October 11, 1961, of the Bombay High Court in Criminal Appeal No. 906 of 1961.
section G. Patwardhan, J. B. Dadachanji, O. C. Mathur and Ravinder Narain for the appellant.
H. R. Khanna and P. D. Menon for the respondent.
January 18.
The Judgment of the Court was delivered by KAPUR J.
This is an appeal against the judgment and order of the High Court of Bombay secting aside the order of acquittal of the appellant and sentencing her to one year 's rigorous imprisonment and evicting her from the premises which she was occupying as a tenant.
The appellant was tried by the Additional Chief Presidency Magistrate, Esplanade, Bombay for offences under sections 3(2) and 4(1) of the Suppression of Immoral Traffic in Women and Girls Act (Act 104 of 1956) hereinafter called the 'Act '.
The charge against the appellant was that she supplied a girl to Manmohan Anandji Mehta who is a witness and she kept or managed a brothel at block No. 6, plot No. 144; Shivaji Park, Bombay; that she knowingly lived on the earnings of prostitution and that the procured women for the purpose of prostitution.
The story of the prosecution was that information was received by Police Superintendent Kanga that the premises were being used as a brothel and that the appellant was supplying 634 girls for the purpose of prostitution.
He thereupon laid a trap and sent two persons, Manmohan Anandji Mehta and Prabhakar K. Loke, the former was to ask for a girl for the purpose of prostitution and the latter was to be a panch i. e. a witness of that fact.
Sub Inspector Purohit, it is stated, gave two one hundred rupees marked currency notes to Manmohan Anandji Mehta with the instruction that he was to pay out of that to the appellant and thus to obtain a girl from her for the purpose of prostitution.
He along with Loke went to the house of the appellant, rang the bell and was admitted by her.
He then asked the appellant to arrange a girl for him and both Manmohan Anandji Mehta and Loke are alleged to have said that they wanted two girls for enjoyment.
Two girls were shown, one Kamal Govind and the other Indu Bapurao Salunke both of whom are witnesses.
The amount quoted by the appellant in the case of the former was Rs. 100/ and for the latter Rs. 50/ .
Manmohan Anandji Mehta selected Kamal and handed over heroine one hundred rupees currency note to the appellant which she put under her blouse.
Manmohan Anandji Mehta and the girl then went into the kitchen and there they undressed and were later found naked on the floor and in a rather compromising position.
On a signal being given the police i.e. Superintendent Kanga and Sub Inspector Purohit entered the premises and were told by Loke that Manmohan Anandji Mehta and the girl were in the kitchen.
The police officers opened the door of the kitchen and found both Manmohan Anandji Mehta and Kamal as stated above.
They then were asked to dress and come out.
Manmohan Anandji Mehta then returned the other one hundred rupees currency note to superintendent Kanga.
A woman Panch who had accompanied the police party searched the appellant and recovered the one hundred rupees currency note from under the blouse.
It is stated that the male members of the party were at that time in a passage adjoining the 635 hall where the appellant was searched.
The appellant was tried for the offences above mentioned but was acquitted by the Additional Chief Presidency Magistrate.
On appeal the High Court set aside the order of acquittal and sentenced her to a year 's rigorous imprisonment and also ordered her eviction from the premises she was occupying as a tenant.
The evidence mainly consists of Manmohan Anandji Mehta and Loke and the two police officers.
The testimony of Manmohan Anandji Mehta and Loke by itself may not, in the circumstances of the case, be of much value but their testimony receives corroboration and thus gives credence to the prosecution case.
The evidence of Police Superintendent Kanga shows that when the door of the kitchen was pushed open both Kamal and Manmohan Anandji Mehta were naked and were in a compromising position; their clothes were lying by the side of the mattress, The testimony of Sub Inspector Purohit is also to the same effect.
The other circumstances which is very much against the appellant is that there is evidence to show that when the woman panch accompanied the police party and searched the appellant a hundred rupees currency note was found from her person under her blouse.
The fact is deposed to by Sub Inspector Purohit and by Police Superintendent Kanga.
Loke has also deposed to the same effect.
But it was submitted on behalf of the appellant that this evidence should not be accepted as, according to law, no woman can be searched except by another woman and having regard to the emphasis on decency under sections 52 and 103 of the Criminal Procedure Code that cannot be done in the presence of men.
There is no evidence to show except that of Manmohan Anandji Mehta that the men were asked to move away from the hall or had actually left the hall during the search.
But assuming they were not in the hall even then it will not be an extraordinary circum 636 stance that one or all of them should have seen the hundred rupees, note being taken out from under the blouse of the appellant.
The High Court has, accepted the testimony of Loke and we find no reason to depart from the usual practice of this Court, of accepting such findings.
Besides, the High Court has also accepted the testimony of Loke in regard to the payment of a hundred rupees currency note to the appellant which proves that money was paid before the girl, Kamal Govind, was asked to go with Manmohan Anandji Mehta for the purpose of prostitution.
Counsel for the appellant emphasised two points: (1) that the woman, who was brought by the police to search the appellant and is alleged to have recovered the hundred rupees note from her person, has not been produced and (2) that considering that the person to be searched was a woman it must be presumed that in accordance with the requirements of law and of decency no man could have been present when the search of the appellant took place.
In support of the first contention reference is made to a judgment of this, Court in Purvez Ardeshir Poonawalla vs The State of Bombay(1), where the necessity of producing the search witness was emphasised and it was observed: "This is, one of those cases where the rule in regard to search witnesses becomes applicable and importance must be attached to the lack of that class, of search witnesses which are envisaged by the Criminal Procedure Code in section 103.
" The Privy Council also in Malak Khan vs Emperor(2) emphasised the necessity of the presence of search witnesses.
Lord Porter there said: "In their Lordship 's opinion the presence of witnesses, at a search is always desirable and their absence will weaken and may sometimes destroy the acceptance of the evidence as, to the finding of the articles. ." 637 The observations in Poonawalla 's case (1) and Lord Porter in Malikkhan vs Emperor (2) are not directly applicable in the present case.
As we have said above there is evidence in this case which has been accepted by the High Court that a hundred rupees note was given to the appellant by Manmohan Anandji Mehta.
There is also evidence that as a consequence of the payment of money Manmohan Anandji Mehta did hire Kamal Govind for prostitution and it is regrettable to say that with the money given to him by the police he acted not merely as a 'bogus customer ', as he has been described, but his participation was more active, reprehensible, immodest, indecent and indecorous.
If in any case the following observations of Lord Goddard, Chief Justice, in Brannan, vs Peek (3) are apposite it is this case: "The court observes with concern and disapproval the fact that the police authority as Derby thought it right to send a police officer into a public house to commit an offence.
It cannot be too strongly emphasised that,. it is wholly wrong for a police officer or any other person to be sent to commit an offence in order that an offence by another person may be detected.
" We have only to substitute the words "aid an act of prostitution" for "to commit an offence" and the analogy is complete.
In this case two youngmen were given money to go to the house of the appellant and also to use that money in rather an improper manner.
Manmohan Anandji Mehta seems to be a person of rather doubtful character and the employment of this class of persons for detection of offences is hardly a credit to any one.
What is more reprehensible and a matter of greater concern is the sending, with him a young student who was reading for his Matriculation.
To use students in 638 this manner should not be allowed by any governmental authority in a country like ours.
It is no justification to say that, in order to suppress immoral traffic in women and to stop prostitution somebody has to be used and the only class of people that can be employed are persons like Manmohan Anandji Mehta who is confessedly a police agent and Loke who is a youngman willing to be employed by the police.
After saving this we have still to see what is the consequence of the testimoney of these witness produced in this case.
The High Court has believed the testimony of Loke in regard to the payment of one hundred rupees and there is evidence to show that amount was used for the purpose of procuring Kamla for prostitution.
The payment must therefore be held to be proved.
It may be that the search was contrary to the spirit or even the letter of the Criminal Procedure Code but the fact remains that the High Court has accepted that there was a search and a hundred rupees currency note was recovered and even if the recovery of a hundred rupees currency note were held not proved, the payment of that amount will not thereby become unproved if there evidence which the High Court has accepted.
On the findings of the High Court we are unable to come to any other conclusion but the one to which the High Court came that the appellant is guilty of the offences of which she was accused.
The next submission of Counsel for the appellant was that the High Court in appeal could not order the appellant 's eviction because that power only a Magistrate has under section 18 of the Act.
The argument raised was that the powers of the appeal court under section 423, Criminal Procedure Code are to reverse the order of acquittal or to order a fresh enquiry or a retrial etc.
but not to order eviction.
But this argument is untenable in view of the fact that in the Act there is a specific provision in section 18 639 of the Act authorising the making of such an order by a court convicting a person of offences under section 3 or section 7 of the Act.
The relevant portion of section 18 is as follows: section 18 "Closure of brothels and eviction of offenders from the premises, (1). . ,and if after hearing the person concerned, the magistrate is satisfied that the house. . or portion is being used as a brothel or for carrying on prostitution then the magistrate may pass orders (a) directing eviction of the occupier within seven days of the passing of the order from the house. . (2) A court convicting a person of any offence under section 3 or section 7 may pass orders under sub section (1) without further notice to such person to show cause as required in that sub section.
" The High Court ordered the conviction of the appellant under section 3 of the Act and therefore it had the power to order her eviction.
The second contention is also without substance.
The appeal is therefore dismissed.
Appeal dismissed.
| On learning that the appellant was using her premises as a brothel and was supplying girls for the purpose of prostitution, the police arranged to lay a trap.
With two one hundred rupees marked currency notes given by the police two persons, M and L, went to the premises occupied by the appellant; M was to ask for a girl for the purpose of prostitution and L was to be a witness of the fact.
M selected a girl and gave the one hundred rupees note to the appellant who put it under her blouse.
When M and the girl were in the room, on signal being given, the police entered the room and found them in a rather compromising position.
A woman Panch who had accompanied the Police party searched the appellant and recovered the one hundred rupees currency note from under the blouse.
The appellant was tried for offences under ss.3(2) and 4(1) of the Suppression of Immoral Traffic in Women and Girls Act, 1956, by the Magistrate who, however, acquitted her.
On appeal, the High Court accepted the prosecution case and convicted the appellant and, further ordered her eviction.
The High Court accepted the testimoney of L in regard to the payment of the hundred rupees currency note to the appellant and also the evidence in the case to show that the amount was used for the purpose of prostitution.
The appellant contended (1) that the conviction was bad because it was based only on the evidence of the police and its agents, and the search was not conducted in accordance with the provisions of the Code of Criminal Procedure, and (2) that, in any case, only the Magistrate was given the power of eviction under section 18 of the Act.
^ Held, that on the evidence accepted by the High Court, the conviction of the appellant was valid.
The practice of the Governmental authority, like the police, employing young men, particularly students studying at the educational institutions, as in the present case, in 633 order to suppress immoral traffic in women and to stop prostitution, condemned.
Held, further, that the High Court having ordered the conviction of the appellant, had the power to evict her under section 18 of the Act.
| The appellant filed a petition for execution of the money decree obtained by her in High Court against the judgment debtor and attachment was levied in execution on open land and a portion of the premises in question belong ing to the judgment debtor.
Subsequently, the judgment debtor sold a portion of the attached property.
The purchas er in turn, sold a portion thereof to the respondents.
The aforesaid execution petition was dismissed for default but later on an application by the appellant, the said Execution Case was restored, and the said property was again attached, and a proclamation for sale of the said property was issued under Order 21 Rule 66 of the Code of Civil Procedure.
The respondents ' petition under Order 21, Rule 58 of C.P.C. for releasing the property purchased by the respondents from attachment was dismissed.
The High Court allowed the appeal.
In appeal to this Court, it was urged on behalf of the appellant that in view of the provisions of Section 64 of the Code of Civil procedure, the sale of the property by the judgment debtor to the purchaser and the sale thereafter by him to the respondents, which were both effected during the subsistence of the attachment, were void as against the appellant decree holder, and although the attachment ceased on the dismissal of the Title Execution Case, on May 9, 1972, it was revived by restoration of the case.
Allowing the appeal, this Court, HELD: An order of restoration of a suit dismissed for default would certainly restore or revive the attachment for the period during which it was in subsistence, namely, prior to the dismissal of the suit or execution application.
[ 1043D] 1039 In the present case both transactions, sale by the judgment debtor and subsequent sale by the purchaser to the respondents, were effected during the subsistence of the attachment and before the Title Execution Case was dismissed for default.
[1043C] The Division Bench of the High Court was in error in taking the view that by reason of the dismissal of the said Title Execution Case, the attachment came to an end and the order of restoration of the said case would not affect any alienations made before the restoration, although such alienations might have been made during the subsistence of the attachment.
[1044C] Sushila Bala Dasi vs Guest Keen Williams Ltd., I.L.R. 1949 Vol.
1 Calcutta, p. 177 Annapuma Patrani & Ors.
vs Lakshmana Kara & Anr., A.I.R. 1950, Madras, p. 740; Pradyut Natwarlal Shah vs Suryakant H. Sangani & Ors., A.I.R. 1979 Bombay, p. 166; Tavvala Veeraswami vs Pulim Ramanna & Ors., A.I.R. 1935 Madras, p. 365 and Patringa koer vs Madhavanand Ram & Ors., Calcutta Law Journal, 1911, Vol.
14 p. 476, referred to.
| % This Criminal Appeal against the judgment and order of the Gujarat High Court and the connected Special Leave Petitions against the orders of the various Designated Courts in the State constituted under the Terrorist & Disruptive Activities (Prevention) Act, 1987, raised common questions for consideration.
It was enough to set out the facts in the appeal.
There was an armed clash involving the appellants, as a result whereof the police apprehended the appellants and produced them before the Designated Court.
The appellants moved an application for bail which was rejected by the Designated Court.
The appellants moved the High Court under section 439 read with section 482 of the Code.
The High Court rejected the bail application on the ground that it had no jurisdiction to entertain such an application under section 439 of the Code or by recourse to its inherent powers under section 482.
Aggrieved by the decision of the High Court, the appellants appealed to this Court for relief by special leave.
On the view the Court took as to the nature of the function of the Designated Courts in dealing with the bail applications within the constraints of section 20(8), it was not necessary to deal with the facts of the connected special leave petitions directed against the orders of the different Designated Courts, rejecting the bail applications.
Allowing, the appeal and the special leave petitions partly, the Court, ^ HELD: These cases mainly raised two questions of substantial 226 importance.
The first was as to the jurisdiction and powers of the High Court to grant bail under section 439 of the Code of Criminal Procedure, 1973 or by recourse to its inherent powers under section 482 to a person held in custody for an offence under sections 3 and 4 of the Terrorist & Disruptive Activities (Prevention) Act, 1987, and secondly, as to the nature of the restraint placed on the power of the Designated Courts to grant bail to such a person in view of the limitations placed on such power under section 20(8) of the Act.
[246G H] The Act being a special Act must prevail in respect of the jurisdiction and power of the High Court to entertain an application for bail under section 439 of the Code or by recourse to its inherent powers under section 482.
Under the scheme of the Act, there is complete exclusion of the jurisdiction of the High Court in any case involving the arrest of any person for an offence punishable under the Act or any rule made thereunder.
There is contrariety between the provisions of the Act and the Code.
Under the Code, the High Court is invested with the various functions and duties in relation to any judgment or order passed by a criminal court subordinate to it.
The Act creates a new class of offences called terrorist acts and disruptive activities and provides for a special procedure for the trial of such offences.
The jurisdiction and power of a Designated Court are derived from the Act and it is the Act that must primarily be looked to in deciding the question before the Court.
Where an enactment provides for a special procedure for the trial of certain offences, it is that procedure that must be followed and not the one prescribed by the Code.
[239B C; 240A,D] No doubt, the legislature has, by the use of the words 'as if it were ' in section 14(3) of the Act, vested a Designated Court with the status of a Court of Session, but the legal fiction contained therein must be restricted to the procedure to be followed for the trial of an offence under the Act i.e. such trial must be in accordance with the procedure prescribed under the Code for the trial before a Court of Session, in so far as applicable.
[240D F] Though there is no express provision excluding the applicability of section 439 of the Code similar to the one contained in section 20(7) of the Act in relation to a case involving the arrest of any person for an offence punishable under the Act or any rule thereunder, yet that result must, by necessary implication, follow.
The source of power of a Designated Court to grant bail is not section 20(8) of the Act, as it only places limitations on such power, but it does not necessarily follow that the power of a Designated Court to grant bail is relatable to section 439 of the Code.
The 227 Designated Court is a 'court other than the High Court or the Court of Session ' within the meaning of section 437 of the Code.
The exercise of the power to grant bail by a Designated Court is not only subject to the limitations placed by section 20(9) which in terms provides that the limitations on grant of bail specified in section 20(8) are in addition to the limitations under the Code or any other law for the time being in force on the grant of bail.
It, therefore, follows that the power derived by a Designated Court to grant bail to a person for an offence under the Act is derived from the Code and not section 20(8) of the Act.
The controversy as to the power of the High Court to grant bail under section 439 of the Code must also turn on the construction of section 20(8) of the Act.
[241B E] In view of the explicit bar in section 19(2), there is exclusion of the jurisdiction of the High Court.
It interdicts that no appeal or revision shall lie to any court, including the High Court, against any judgment, sentence or order, not being an inter locutory order, of a Designated Court.
While it is true that Chapter XXXIII of the Code is still preserved, as otherwise the Designated Court would have no power to grant bail, still the source of power is not section 439 of the Code but section 437, being a court other than the High Court or the Court of Session.
Any other view would lead to an anomalous situation.
If it were to be held that the power of a Designated Court to grant bail was relatable to section 439, it would imply that not only the High Court but also the Court of Session would be entitled to grant bail.
The power to grant bail under section 439 is unfettered by any conditions and limitations like section 437.
It would run counter to the express prohibition contained in section 20(8) of the Act.
The Court upheld the view of the High Court that it had no jurisdiction to entertain an application for bail under section 439 or under section 482 of the Code.
[243G H; 244A B,D] As regards the approach which a Designated Court has to adopt while granting bail in view of the limitations placed on such power under section 20(8), the sub section in terms places fetters on the power of a Designated Court on the grant of bail and limitations specified therein are in addition to the limitations under the Code.
In view of these more stringent conditions, a Designated Court should carefully examine every case before it for finding out whether the provisions of the Act apply or not.
A prayer for bail ought not to be rejected in a mechanical manner.
[244E G] The Designated Courts had not in these cases carefully considered the facts and circumstances and had rejected the bail applications mechanically.
In the criminal appeal, the facts were already set out.
In 228 the special leave petitions Nos.
2369 and 2469 of 1967, the prosecution had been started at the instance of the management of a textile mill.
The other cases had arisen out of communal riots.
Normally, such cases have to be dealt with under the ordinary procedure prescribed by the Code, unless offences under sections 3 and 4 of the Act are made out.
The Designated Courts are under a duty to examine the circumstances closely from this angle.
That had not been done.
It was, therefore desirable to set aside the orders passed by the various Designated Courts and remit the cases for fresh consideration.
[246D F] The appeal and the special leave petitions partly succeeded.
While upholding the judgment and order of the High Court, dismissing the applications for bail under section 439 of the Code of Criminal Procedure, 1973, the Court granted leave and set aside the impugned orders passed by the various Designated Courts in the State, dismissing the applications for bail, and directed them to consider each particular case on merits as to whether it fell within the purview of section 3 and/or section 4 of the Act, and if so, whether the accused in the facts and circumstances of the case were entitled to bail while keeping in view the limitations on their powers under section 20(8) of the Act.
Where the Designated Courts find that the acts alleged in the police report or complaint of facts under section 14(1) do not fall within the purview of section 3 and/or section 4 of the Act, they shall in exercise of the powers under section 10 of the Act transfer the cases for trial to the ordinary criminal courts.
The accused persons, enlarged on bail by this Court, should continue to remain on bail until their applications for bail were dealt with by the Designated Courts with advertence to the observations made above.
[246F H; 247A B] In Re the Special Courts Bill, 1978, [1979] 2 S.C.R. 476; Balchand Jain vs State of Madhya Pradesh, ; ; Ishwar Chand vs State of Himachal Pradesh, I.L.R. (1975) H.P. 569 and V.C. Shukla vs State through C.B.I., , referred to.
| The respondent landlord filed a suit for eviction against the appellant under section 13 (1) (k) of the Delhi and Ajmer Rent Control Act, 1952, on the ground that the appellant had caused damage to the premises.
The trial court ordered ejectment in February, 1959, and the appellate authority dismissed an appeal in November, 1959.
The Delhi Rent Control Act 1958 came into force in February, 1959.
In a revision application before the High Court, the appellant invoked the provisions of the 1958 Act and relied upon section 14(1) (j) read with section 57 of the new Act.
The High Court, acting under section 14(1)(j) and sub section (10) of the same section gave the appellant the alternative to pay compensation for the damages caused.
The landlord then filed an application for review of the High Court order pointing out that the new Act was not applicable to the case in view of the first proviso of section 57(2).
The High Court granted the review and reversed its earlier orders.
In appeal to this Court it was contended on behalf of the appellant that by virtue of the first proviso of section 57(2) the High Court was bound to have regard to the provisions of the 1958 Act even in proceedings pending and governed by the 1952 Act.
HELD:Dismissing the appeal, The language of the first proviso to section 57(2) clearly shows that the proviso applies to those cases only in which 'Section 54 cannot be made applicable.
The area in the present case is admittedly subjected to the , which is one of the enactments mentioned in section 54.
Accordingly the terms of the proviso would have no application in this case.
[857 G; 859 B] The High Court had rightly held that the phrase "to which section 54 does not apply", governs the word "premises" and is not connected with the words "in any such suit or proceedings".
(858A B]
| A truck was seized with its content of contraband goods for foreign make, on which no duty had been paid.
The appellant who was in charge of the goods, was arrested while escaping from the truck and Rs. 2000/ were seized from him.
His statement was recorded under section 108, .
The appellant and the driver of the truck.
were convicted by the Trial Court under Ss. 135 (a) and 135 (b) of the , and section 5 of the Imports & Exports (Control) Act, 1947.
The High Court upheld their conviction under section 135 (a) of the , and acquitted them of the other charges.
In appeal by leave granted under article 134(1) (c) of the Constitution, the appellant contended before this Court that his statement taken under section 108, , could not be used against him; firstly, as it was hit by article 20(3) of the Constitution on account of its having been taken while he was already an `accused ' under section 124, Bombay Police Act, and secondly.
it was barred under section 24, Evidence Act, the same being a confession obtained under compulsion of law.
It was also contended that in the absence of the requisite notification under section 123(2), , the statutory presumption under section 123 could not be invoked by the prosecution, and without the same, the facts of the case were insufficient to establish an offence against the appellant under section 135, .
Dismissing the appeal, the Court, ^ HELD: (1) To claim the benefit of the guarantee against testimonial compulsion embodied in clause (3) of article 20, it must be shown, firstly, that the person who made the statement was `accused of any offence ', secondly, that he made this statement under compulsion.
Only a person against whom a formal accusation relating to the commission of an offence has been levelled would fall within its ambit.
[674C D] R.C. Mehta vs State of West Bengal, [1969] 2 S.C.R. 461, applied.
(2) To attract the prohibition enacted in section 24 Evidence Act, these facts must be established.
(i) that the statement in question is a confession; (ii) that such confession has been made by an accused person; (iii)that it has been made to a person in authority; (iv) that the confession has been obtained by reason of any inducement threat or promise proceeding from a person in authority.
(v) Such inducement, threat or promise, must have reference to the charge against the accused person; (vi) The inducement, threat or promise must in the opinion of the Court be sufficient to give the accused person ground, which would appear to him reasonable, for supposing that by making it he would gain any advantage or avoid any evil of temporal nature in reference to the proceedings against him.
[676F H, 677A] 673 (3) A statement in order to amount to a `confession ' must either admit in terms the offence, or at any rate substantially all the facts which constitute the offence.
An admission of an incriminating fact, however grave, is not by itself a confession.
A statement which contains an exculpatory assertion of some fact, which if true, would negative the offence alleged, cannot amount to a `confession '.
[677A C] Pakala Narayana vs R. 66 I. A. 66 Palvinder kaur vs State of Punjab , Om Prakash vs State, A.I.R. 1960 S.C. 409, referred to.
| The respondents filed a suit against the petitioner in 1954 for the possession of certain property and for mesne profits and obtained decree in their favour.
The petitioner 's appeal to the High Court was dismissed in April 1959 and a petition for special leave to appeal to this Court was granted in June, 1959.
Thereafter, the 7th respondent died in November 1959.
The petitioner filed the present applications in October 1964 for bringing on record the legal representatives of the 7th respondent and for condonation of delay on various grounds.
It was also contended on behalf of the petitioner that in view of the fact that after the preliminary decree for mesne profits had been passed, the respondents/plaintiffs brought the heirs and legal representatives of the deceased 7th respondent on record in the final decree proceedings within the time prescribed, and as the legal representatives were brought on record at one stage of the suit on the basis of the rule laid down by the Privy Council in Brij Inder Singh vs Kanshi Ram, 44 I.A. 218, no question of abatement would arise in respect of the appeal; that the final decree proceedings are a stage in the suit and the appeal is another stage in the suit and, therefore, the bringing on record of the legal representatives in one stage of the suit will enure for all stages of the suit.
HELD: (i) On the facts of the case there were no sufficient grounds for condoning the delay in bringing the legal representatives of the 7th respondent on the record.
(ii) The order bringing the legal representatives of the respondent on record in the final decree proceedings cannot enure for the benefit of the appeal filed against the preliminary decree.
The appeal therefore abated so far as the 7th respondent was concerned.
[217D] An order bringing the legal representatives of a deceased party on the record passed at the stage of an interlocutory application in a suit, or passed while an appeal is pending where the suit is subsequently remanded to the trial court or if passed while an appeal is pending against an interlocutory order in passed while an appeal the subsequent stages of the suit ' in all that suit, would enure for made at one stage of the suit be it the suit these.
cases the order is final appeal against the interlocutory order or final order in the suit, for here the appeal is only a continuation of the suit.
But the same legal position cannot be invoked where an order is made in a suit subsequent to the filing of an appeal at an earlier stage.
Such an order cannot be Projected,backwards into the appeal that has already been filed so as to become an order in that appeal [216F 217D] Brij Inder Singh vs Kanshi Ram, 44 I.A. 218 distinguished.
Shankarnaraina Saralaya vs Laxmi Hengsu, A.I.R. 1931 referred to.
N)3S.C.I. 1 212
| The first respondent, the then Commissioner of the Corpora tion of Calcutta, was after a protracted trial for an alleged offence under section 497 of the Indian Penal Code discharged by the Magistrate under section 253(1) of the Code of Criminal Procedure.
The Sessions judge, on a petition in revision filed by the complainant, holding that the said respondent had suborned the complainants witnesses, set aside the order of discharge and directed further enquiry by another Magistrate who permitted the complainant to tender further evidence.
The respondent moved the High Court in revision and a Division Bench issued a Rule and stayed further proceedings.
While the matter was thus pending before the High Court, the Corporation of Calcutta by a resolution appointed the three appellants members of a Special Committee which ran as follows : " That a Special Committee consisting of Councillors Shri section K. Gupta, Shri R. N. Majumdar and Shri section K. Roy be set up to enquire into the allegations levelled against certain officials of the, Corporation who are alleged to have been taking advantage of, their high offices in carrying on business in their own names, The Committee will take up only those matters that relate to the Corporation.
" Subsequent to the passing of the said resolution, the Mayor handed over to the Committee certain papers from a Councillor containing certain allegations against the Commissioner.
It was the case of the said respondent that the Special Committee there, upon examined the complainant and another and issued to him a notice along with a questionnaire, the relevant portions of which were as follows: "As you probably know, we have been appointed to make an enquiry into certain allegations relating to the administration of the Corporation of Calcutta and specially into certain steps taken by you in the matter of assessment and appointments and few order matters, we are giving you a synopsis of the cases in which the enquiry is being held and we shall Se glad if you kindly give us some time between 10 a. m. and 11 a. m. tomorrow (the 16th instant) so that we can get the facts from you." * * * 461 " III (a).
It is alleged that between 4th January, 1956, and 20th September, 1957, i.e., at or about the time when the case under section 497, I.P.C., was being tried, you gave appointments to the following persons: (1) Anil Koyal (2) jogendra Nath Mondal (3) Ahi Kanta Choudhury (4) Govinda Banerjee (5) Narendra Nath Naskar, who are related respectively to Palan Koyal, Haradhan (alias Haridhan) Mondal, Tripti Choudhury, Thakur Raj Smriti Tirtha and Upendra Naskar, who were cited as witnesses in the case.
(b)It is alleged that about the same time you gave appoint ments to Tarak Nath Day, Hardhan Day, Pradip Bhaduri, Ardharigsu Mondal etc.
and condoned the punishment previously inflicted on Dhiren Mondal as they were helping you in conducting your defence in the case.
(c) It is alleged that you were instrumental in securing the appointment of another probable prosecution witness Kamakshya Chatterjee through one M. L. Ghose against whom a demolition case was pending.
" Thereupon the first respondent filed a complaint in the High Court charging the appellants with contempt of the High Court as well as the trial court.
The High Court found the appellants guilty and convicted them for contempt of Court.
Hence this appeal.
Held (per Imam and Raghubar Dayal, JJ., Subba Rao, J. dissenting), that the appellants were not guilty of contempt of Court and the appeal must succeed.
It could not be said that the Special Committee had consti tuted itself a court of parallel enquiry with regard to matters in issue either before the trial Magistrate or the High Court.
There can be no comparison between the present case and a trial conducted by a newspaper.
The Special Committee was directed by the Corporation to enquire into malpractices on the part of its employees, necessarily including unworthy appointments, and the ascertainment of the motive could only be incidental to the main purpose of the enquiry and could not lead to the conclusion that the Special Committee was holding a parallel enquiry on matters pending before the Court and thereby intended to interfere with the course of justice.
The record clearly showed that the appellants had at no time intended to interfere with the course of justice, nor had their conduct tended to do so.
They had taken care not to comment on any proceedings pending in I court or the issues arising out of them.
Per Subba Rao, J. The appellants obviously initiated an enquiry which went beyond the scope of the resolution passed by the Corporation.
With the knowledge that criminal proceedings were pending, they examined witnesses and served the 462 questionnaire.
They permitted councillors and others to attend the enquiry which was in no sense confidential.
It is settled law that a person is guilty of contempt of court if the act done by him is intended or calculated or likely to interfere with the course of justice.
Re Read & Huggonson, ; , The Queen V. Payne, , The Queen vs Gray, , R. V. Odham 's Press Ltd., , R. vs Duffy Mohapatra, I.L.R. [1955] Cuttack 305 and Ganesh Shankay Vidyarthi 's case, A.I.R. 1929 All.81, referred to.
It could not be said in the instant case that the enquiry, initiated by the committee to ascertain whether the first respondent had suborned witnesses cited or examined against him, could not have serious repercussions on the proceedings pending in the Magistrate 's court or in the High Court.
Although a strong willed ' Magistrate might not be influenced by the enquiry, it might unconsciously affect a weaker mind and thug obstruct the even course of justice.
Even though a judge of the High Court might withstand the effect of such an enquiry, that would not prevent the public and the parties, especially in a criminal case, from reasonably apprehending that the enquiry or the findings made by the committee might affect a fair hearing of the matter.
The contempt, in the instant case, was not merely of a technical nature but of a serious character calculated to interfere with and obstruct the due course of justice and as such was preeminently one against which the court must take action.
| In this appeal by special leave brought by the auction purchaser against the Judgment of the Madras High Court the sole question for consideration is as regards the period of limitation for making a deposit to make an application under Rule 89 of Order XXI of the Civil Procedure Code, 1908 to set aside the sale of immovable property sold in execution of a decree.
Whether the deposit is to be made within 30 days from the date of the sale as required by sub rule (2) of Rule 92 of Order XXI or within 60 days from the date of sale as provided in Article 127 of the ? Following its earlier decision in Thangammal & Ors. vs V.K. Dhanalakshmi & Anr.
and the decision of this Court in Basavantappa vs Gangadhar Narayan Dharwadkar & Anr., the High Court had held that Article 127 governed the period of limitation to make a deposit in terms of Rule 89.
Setting aside the judgment of the High Court on the question of limitation, this Court in allowing the appeal, HELD: The correct construction of Rule 92(2) of Order XXI of the Civil Procedure Code, 1908 leads to the irresist ible conclusion that the time for making a deposit in terms of Rule 89 of Order XXI is 30 days, and Article 127 of the prescribing the period for making an application under Rule 89 has no relevance to the prescribed time for making the deposit.
Neither provision has any effect on the other as to time.
[489G H; 490A] Basavantappa vs Gandadhar Narayan Dharwadkar & Anr., ; , over ruled.
Nalinakaya Bysack vs Shyam Sunder Haldar & Ors.
, ; at 545; Mersey Docks vs Henderson, [1988] 13 App.
595,602; 484 SUPREME COURT REPORTS [1990] 1 S.C.R. Crawford vs Spooner, [1846] 6 Morre P.C. 1, 8, 9; Seaford Court Estates vs Asher, All E.R., [1949] 2.155 at 164 M. Pentiah & Ors.
vs Muddala Veeramallappa & Ors., ; at 314 Heydon 's case ; 76 ER 637; Dakshayini & Ors.
vs Madhavan, AIR 1982 Kerala 126, referred to.
|
Civil appeal No. 646 of 1961.
Appeal by special leave from the judgment and decree dated April 7, 1961, of the Punjab High Court in Civil Revision No. 354 of 1959.
Gopal Singh, for the appellates.
Bishan Narain and Naunit lal, for the respondent No. 1. 1962.
January, 17.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
This is an appeal by special leave against an order of the High Court of Punjab at Chandigarh, dated April 7, 1961.
The appellants are five tenants, who have been evicted from certain shops and chobaras in the town of Patiala, on the application of the first respondent, the landlord.
The application by the landlord was made in June, 1957, under section 13 of the Patiala and East Punjab States Union Urban Rent Restriction ordinance, 2006 BK (No. VIII of 2006 BK).
The grounds urged by the landlord were (a) non payment of rent by the tenants, (b) non payment of house tax by the tenants and (c) that the shops were in a state of great disrepair and were dilapidated, and the landlord wished to rebuild them after dismantling the structures.
The landlord averred that he had obtained sanction of the Municipal Committee to a proposed plan of construction, and accumulated some building material before making the application.
The tenants resisted the application.
The Rent Controller framed issues relating to the three 625 grounds; but the first two have ceased to be material now.
On the issue relating to the third ground, the Rent Controller held that in deciding whether the tenants should be ordered to hand over possession to the landlord, the Courts must have regard to the bona fides of the request of the landlord, which meant that the desire to rebuild the premises should be honestly held by the landlord, but that the condition of the building also played an important part in determining whether the landlord had the intention genuinely and was not using this excuse as a devise to get rid of the tenants.
In this connection, the Rent Controller observed that the state of the building, the means of the landlord, and the possibility of a better yield by way of rent, all entered into the appraisal of the landlord 's state of mind.
Examining the case from this angle, the Rent Controller held that there was hardly any proof that the building was in a dilapidated condition.
One solitary witness who testified to this, admitted that he had not seen the building from the inside.
The landlord himself did not give evidence.
On the other hand, there was ample evidence that the building was good.
As regards the financial status of the landlord, the witnesses who stated on his behalf that, he could spend Rs. 5,000 to Rs. 10,000 knew nothing about his means.
Even the landlord 's brother.
who conducted this case on behalf of the landlord, could not give any details.
The plan showed a building requiring about Rs. 20,000 to build.
The landlord had an income of Rs. 200/ per month and his family consisted of his wife and five children.
The Rent Controller, therefore, held that he had no means to rebuild the premises.
The Rent Controller did not feel impressed by the alleged purchase of 40 bags of cement, because a greater part of the cement was used up already in building two or three latrines, and the quantity left was wholly insufficient for the proposed building.
He, therefore, decided the issue against the landlord.
626 On appeal, these findings were confirmed by the appellate authority, who held that the shops and chobaras were in good condition, and that the landlord was not, in good faith, wanting to replace the building, when he had no means to built it.
Against the order of the appellate authority, an application for revision purporting to be under section 15(5) of the East Punjab Urban Rent Restriction Act, 1949 (3 of 1949), was filed in the High Court.
This application was allowed.
The learned single Judge posed the question thus: "The question in the present case is whether there is a bona fide desire to rebuild the premises?".
He referred to an earlier decision of a Divisional Bench of that Court (Civil Revision No. 223 of 1960), in which Gosain, J., laid down the law in the following words: "It is pertinent to note that the word 'building ' in the aforesaid clause is not qualified by the words 'requiring reconstruction ' or 'requiring rebuilding '.
The landlord can, in these circumstances, require any building for the re erection of the same, and when in any case a claim to that effect is made by him the only point that has to be determined is whether on the facts and circumstances of that case his requirement is bona fide.
A building, for instance, may not be immediately unsafe, but its condition may be such that unless it is reconstructed it may involve the landlord at a later date very heavy expenditure.
All round a particular building different types of buildings may have been constructed of an entirely different design and the particular building in question may then be looking very ugly and the landlord may want to bring the same in conformity with the structures around it.
" 627 After quoting this passage, the learned Judge observed that the consideration which must weigh in determining the question of ejectment is whether the landlord genuinely wants to rebuild the premises, and further, that the actual condition of the premises is "a wholly irrelevant factor".
In dealing with the merits of the case, the learned Judge referred to the offer of the landlord to put back the tenants in possession, if the premises were not demolished within a month of his obtaining possession thereof, and concluded, without discussing the evidence, as follows: "Upon the evidence on record it seems to me established beyond all doubt that the landlord genuinely and bona fide requires these premises for rebuilding." He, therefore, set aside the concurrent orders of the two Tribunals, and ordered the eviction of the tenants, giving them two month 's time in which to vacate the premises.
Two questions have been argued in this appeal.
The first is that the revision application is incompetent, because under s.16(4) of the Patiala and East Punjab States Union Urban Rent Restriction ordinance, 'the decision of the appellate authority and subject only to such decision, an order of the Controller shall be final and shall not be liable to be called in question in any court of law whether in a suit or other proceeding by way of appeal or revision".
It is contended that s.15(5) of the East Punjab Urban Rent Restriction Act, which conferred a power of revision on the High Court does not apply to the present case, because this case did not arise in proceedings taken under the Act.
The next contention is that the interpretation placed by the learned Judge upon section 13(3) (a) (iii) read with section 13 (3) (b) is erroneous, and that the High Court had no power to reverse a concurrent finding of fact without itself re appraising the evidence, if at all.
628 On the first point, the learned counsel for the respondents relies upon a decision of this court reported in Moti Ram vs Suraj Bhan (1), where it was held that a revision application in analogous circumstances was maintainable.
In our opinion, even if a revision application lay, the learned single Judge was in error in his interpretation of the relevant sections of the ordinance, and in reversing a concurrent finding of fact, without giving any substantial reasons.
Section 13 of the ordinance, omitting portions which are irrelevant here, reads as follows: "13.
(1) Notwithstanding anything contained in any other law for the time being in force, a tenant in possession of a building or rented land shall not be evicted therefrom in execution of a decree passed before or after the commencement of this ordinance or otherwise and whether before or after the termination of the tenancy, except in accordance with the provisions of this section.
x x x (3) (a) A landlord may apply to the Controller for an order directing the tenant to put the landlord in possession.
x x x (iii)in the case of any building, if he requires it for the re erection of that building or for its replacement by another building, or for the erection of other building; x x x (b) The Controller shall, if he is satisfied that the claim of the landlord is bonafide, make an order directing the tenant to put the landlord in possession of the building or rented land on such date as 629 may be specified by the Controller, and if the Controller is not so satisfied, he shall make an order rejecting the application; x x x (4) where a landlord who has obtained possession of building or rented land in pursuance of an order under. sub paragraph (iii) of the aforesaid paragraph (a) put that building to any use or lets it out to any tenant other then the tenant evicted from it, the tenant who has been evicted may apply to the Controller for an order directing that he shall be restored to possession of such building or rented land and the Controller shall make an order accordingly. " Reading these provisions as a whole, it is obvious that if the landlord 's need be genuine and he satisfies the Controller, he can obtain possession of the building or the land, as the case may be.
If, however, he does not re erect the building and puts it to any other use or lets it out to another tenant, the former tenant can apply to be put back in possession.
Clause (b) clearly shows both affirmatively and negatively that the landlord must satisfy the Controller about his claim, before he can obtain an order in his favour.
The Controller has to be satisfied about the genuineness of the claim.
To reach this conclusion, obviously the Controller must be satisfied about the reality of the claim made by the landlord, and this can only be established by looking at all the surrounding circumstances, such as the condition of the building, its situation, the possibility of its being put to a more profitable use after construction, the means of the landlord and so on.
It is not enough that the landlord comes forward, and says that he entertains a particular intention, however strongly, 630 said to be entertained by him.
The clause speaks not of the bona fides of the landlord, but says, on the other hand, that the claim of the landlord that he requires the building for reconstruction and re erection must be bona fide, that is to say.
honest in the circumstances.
It is impossible, therefore, to hold that the investigation by the Controller should be confined only to the existance of an intention to reconstruct, in the mind of the landlord.
This intention must be honestly held in relation to the surrounding circumstances.
In our opinion, the interpretation placed by the Punjab High Court (in the decision of Gosain, J.) puts too narrow a construction, and leaves very little for the Controller to decide.
It is well known that Rent Restriction Acts were passed in view of the shortage of houses and the High rents which were being demanded by landlords.
The very purpose of the Rent Restriction Acts would be defeated, if the landlords were to come forward and to get tenants turned out, on the bare plea that they want to reconstruct the houses, without first establishing that the plea is bona fide with regard to all the circumstances, viz., that the houses need reconstruction or that they have the means to reconstruct them, etc.
The two Tribunals below had gone into the matter thoroughly, and had agreed that the landlord had neither the means to reconstruct the building nor had he made any attempt to face cross examination as a party.
They were also of the opinion that the building was in a good state and did not need to be pulled down or reconstructed.
With such clear findings, one would expect that a revising Court, however vide its powers may be, would, at least, go into the question over again, if it was going to depart from this unanimous conclusion.
It is hardly necessary to go into the question of the extent of the powers of the High Court under section 15(5) of the Rent Restriction Act.
They have been adverted to in the ruling of this Court, above mentioned.
They 631 do not, however, include the power to reverse concurrent findings, without showing how those findings are erroneous.
In the present case, the learned Judge has given his conclusion without adverting to single piece of evidence, from which his conclusion was drawn.
In these circumstances it cannot be said that he had examined the propriety of the order sought to be revised, even under the provisions of the law he was administering.
Learned counsel relying upon the case to which we have already referred, said that there the sanction by the Municipal Committee was taken into consideration in deciding the need of the landlord.
The facts in that case are not fully stated, and from the observations, it would appear that there was other evidence besides the sanction by the Municipal Committee, on which the conclusion of the High Court was supported.
In any event, a case cannot be an authority on a point of fact, and each case will have to be examined in the light of the circumstances existing in it.
In the present case, the two Tribunals specially appointed to consider these matters, went thoroughly into the question, and discussed it from a correct angle.
If they had examined they facts after instructing themselves correctly about the law, a Court of revision should be slow to interfere with the decision thus reached, unless it demonstrates by its own decision, the impropriety of the order, which it seeks to revise.
No attempt of this kind has been made in this case, and in our opinion, the High Court was not justified in reversing the clear finding.
In the result, this appeal must be allowed.
The order of the High Court is set aside, and that of the appellate authority is restored.
The landlord shall pay the costs here and in the High Court.
Appeal allowed.
| The application for eviction against the appellant was based inter alia on the ground that the premises in suit were dilapidated and the landlord wished to rebuild them after dismantling the structure.
The Rent Controller dismissed the application observing that there was hardly any proof that the building was in a dilapidated condition and that the landlord had no means to rebuild the premises.
The appellate authority confirmed the finding holding that the premises were in good condition and that the landlord was not, in good faith, wanting to replace the building.
An applications purporting to be under section 15(5) of the East Punjab Urban Rent Restriction Act, 1949, was made before the High Court.
The High Court following an earlier decision of the same Court allowed the revision petition holding that in determining the question of ejectment, what needs alone to be considered is whether the landlord genuinely wants to rebuild the permises and that the condition of the premises is 'a wholly irrelevant factor '.
^ Held, that the investigation by the Rent Controller cannot be confined only to the existence of an intention in the mind of the landlord to reconstruct.
This intention must be honestly held in relation to the surrounding circumstances, otherwise the very purpose of the Rent Restriction Act would be defeated, if the landlords were to come forward and to get tenants turned out, on the bare plea that they want to reconstruct the house without first establishing, that the plea is bona fide with regard to all circumstances, viz. that the houses need reconstruction or that they have the means to reconstruct them.
Held, further, that when the Tribunals have examined the facts after instructing themselves correctly about law, a Court of Revision should be slow to interfere with the decision, thus reached, unless it demonstrates by its own decision the impropriety of the order which it seeks to revise.
Under section 15(5) of the East Punjab Urban Rent Restriction Act, 1949, the powers of the High Court do not include 624 powers to perverse a concurrent finding without showing how those finding are erroneous and without giving any substantial reasons for its finding.
Held, also, that a case cannot be an authority on a point of fact and reach case has to be examined in the light of the circumstances existing.
Moti Ram vs Suraj Bhan, [1960] 2 section C. R. 896, referred to.
| The premises in question had been let out in April, 1968 to the appellant at a monthly rent of Rs.340 by the husband of respondent No. 1 and the father of respondents Nos. 2 to 8.
In July, 1977 the landlord filed an eviction petition against the appellant on the ground of bona fide require ment.
In September, 1978 appellant 's wife was allotted a Government quarter due to her employment as a teacher In the Government school.
In March, 1986 the first respondent filed a petition before the Rent Controller that the wife of the appellant having been allotted a residential quarter came within the mischief of clause (h) of Section 14(1) of the Act and was, therefore, liable for eviction.
The appellant contended that he had not acquired any house and that the quarter in question was allotted to his wife on joint allotment basis on compassionate grounds and that the same had been surrendered and, therefore, the appellant was not liable to be evicted.
It was further contended that the allotted accommodation could not be treated as alternative accommodation for the appellant and his family.
The Additional Rent Controller held that having regard to the provisions of law, as the tenant had acquired vacant possession for residence, he became disentitled to retain the premises in question and, therefore, passed an order of eviction.
The Rent Control Tribunal dismissed the appeal of the appellant.
The High Court rejected the second appeal.
In the appeal to this Court, the question for considera tion was: whether under clause (h) of Section 14(1) of the Act allotment of a house to the wife, who was a Government employee, in all circumstances disentitled the tenant to retain the tenanted premises.
1185 Allowing the appeal, this Court, HELD: 1.
The premises in question which the wife occu pied was indisputably not the matrimonial home.
The husband would not, therefore, have any statutory or legal right against the Government to use and enjoy the allotted prem ises to the wife of the tenant because of her job.
The tenant cannot be made to lose his tenancy because of the wife acquiring possession of a flat or allotment of a flat because of her official duties over which the husband has no right or domain or occupation.
[1194C D] 2.1 The purpose of the Delhi Rent Control Act is to control rents and evictions; in other words, to control unreasonable evictions and to ensure that in an atmosphere of acute shortage of accommodation, there is proper enjoy ment of available spaces by those who want and deserve.
[1189G H] 2.2 Unless acquisition of a premises or allotment of a premises or a part of a premises by the tenant in which he has domain which he can reasonably and alternatively use as substitute for the place he is using in the tenancy, it cannot lead to forfeiture of his right to occupy his tenant ed premises.
The case would be otherwise, however, if a tenant comes into possession of a premises or is allotted a piece of residence or acquires vacant possession of the premises then such a tenant cannot prevent, if other condi tions are fulfilled under Section 14(1)(h) of the Act being liable to forfeiture of his tenancy.
[1190B C] 2.3 Tenancy is a right vested in the tenant.
The main purpose of the Act is the protection of tenants from evic tion.
The various provisos to sub section (1) of section 14 laid down the exception to this rule.
The intention of the Legislature in divesting the tenant of his right was based upon the fact that the tenant had legally acquired another residence as of right.
There is no law according to which husband and wife could be deemed to be one person.
[1191E F] 2.4 The acquisition of other residence must be by the tenant himself before proviso (h) of sub section
(1) of section 14 of the Act would apply.
[1191D] 2.5 If a wife or husband acquires a property and the other spouse if he/she is the tenant, has a legal right by virtue of such acquisition and stay there, then only can such acquisition or allotment of premises would disentitle or attract the provisions of cl.
(h) of section 14(1) of the Act, otherwise the whole purpose would be defeated.
That is the rationale behind the scheme.
[1191F G] 1186 2.6 From the fact that the wife of the tenant was allot ted a temporary Government accommodation, it cannot be said that there was admission by virtue of which the tenant could lose his tenancy that the wife has acquired a house which is available to the husband over which the husband has a domain which could be a substitute to the tenanted premises.
This fact of acquisition or allotment of fiat in the name of wife (which incidentally she has lost having given up the job) can be in certain circumstances a factor in judging the bona fide needs of the landlord; but the same indisputably cannot be any ground to evict the tenant on the ground that he has acquired vacant possession or allotted residence in terms of cl.
(h) of section 14(1).
[1192E F, 1193A B] 3.
The rights, if any, of the parties in the eviction petition on the ground of bona fide need of the landlord will not in any manner be prejudicially affected.
[1194F] [In England the rights of the spouses to the matrimonial home are now governed by the provisions of the Matrimonial Homes Act, 1967.
Where one spouse is entitled to occupy a dwelling house by virtue of any estate or interest or con tract or by virtue of any enactment giving him or her the right to remain in occupation, and the other spouse is not so entitled, then the spouse not so entitled has the certain rights (known as "rights of occupation"), that is to say, if in occupation, a right not to be evicted or excluded from the dwelling house or any part of it by the other spouse except with the leave of the court given by an order; if not in occupation, a right with the leave of the court so given to enter into and occupy the dwelling house.
[1193D G] Such rights are not granted in India.
But with the change of situation and complex problems arising, it is high time to give the wife or the spouse a right of occupation in a truly matrimonial home, in case of marriage breaking up or in case of strained relationship between the husband and the wife.] [1193G] Prem Chand and another vs Sher Singh, [1981] Delhi Rent Judgment 287; Smt.
Revti Devi vs Kishan Lal, ; Phiroze Bamanji Desai vs Chandrakant M. Patel and others; , ; Galanan Dattatraya vs Sherbanu Hosang Patel and others, [1976] 1 SCR 535 and Halsbury 's Laws of England, Fourth Edition, Vol.
22 page 650, referred to.
| K, H and M filed four suits each against four sets of defendants in respect of different sets of plots under section 175 U. P. Tenancy Act, 1939.
Since similar points were involved the twelve suits were tried together and were disposed of by a common judgment decreeing them.
Twelve decrees were prepared and the defendants preferred twelve appeals to the Additional Commissioner.
Three appeals by one set of the defendants B were dismissed for default and the remaining nine were dismissed on merits.
Against the dismissal of the nine appeals on merits the three sets of defendants preferred nine second appeals before the Board of Revenue but they were dismissed as barred by res judicata on May 7, 1954.
In November, 1954, the appellants filed petitions for special leave before the Supreme Court and on April 18, 1955, special leave was granted.
In July 1954, the villages in Which the lands in suit were situate came under consolidation operations under the U. P. Consolidation of Holdings Act, 1953, and the operations were completed by the publication of a notification 218 under section 52 of the Act on October 17, 1953.
The appellants did not file any objections before the consolidation authorities.
The respondent contended that in view of the consolidation operations the appeals before the Supreme Court had become infructuous.
Held, that the appeals had not become infructuous.
There was nothing in the U. P. Consolidation of Holdings Act, 1953, as it stood during the period the village in suit was under consolidation operations which could have in any way affected these appeals, during or after the consolidation operations.
The subsequent Amending Acts did not affect the appeals as they were prospective in operation and applied only to cases where the consolidation operations were started after the Amending Acts had come into force.
Held, further that the appeals before the Board of Revenue were not barred by resjudicata.
It was essential for the bar of res judicata that the previous and judication must have been between the same parties.
The three suits in which judgments had become final were against one B and not against any of the appellants .
The matter in issue in those three suits was different from that in the other nine suits as each of the suits related to different plots.
The common judgment was really twelve judgments in the twelve suits.
Badri Narayan Singh vs Kamdeo Prasad Singh, (1962) 3. section C. R. 759 referred to.
| The appellants, who had let out the premises in question to the respondent Riled a suit for eviction inter alia on the ground that the tenant had erected unauthorised struc tures of a permanent nature in violation of the provisions of cl.
(p) of section 108 of the and section 13(1)(b) of the Bombay Rents.
Hotel and Lodging House Rates Control Act, 1974 and was using the premises for unauthorised purposes.
The alleged permanent structures consisted of lofts and rooms which had been constructed by sinking pillars and stanchions into the flooring and the tenant admitted that these had been constructed after it had taken the premises from the landlord.
After discussing the evidence tendered in detail, including the deposition of the architect who had prepared the plan of the constructions in question and who had deposed that the constructions consist ed of permanent structures, the Judge of the Court of Small Causes held that the structures were of a permanent nature and ordered eviction of the tenant on the ground of perma nent construction.
The respondent 's appeal was dismissed by the Appellate Bench of the Court of Small Causes which, on a detailed reappraisal of the evidence on record, not only confirmed the decree for eviction on the ground of permanent construction but granted eviction on the ground of change of user as well.
The respondent went in appeal against the order of the appellate court.
The High Court, dealing with the matter under article 227 of the Constitution, reversed the concurrent findings of the courts below and allowed the respondent 's petition.
Allowing the appeal and restoring the order of the lower appellate court, 594 HELD: 1.
(a) Interference by the High Courts under article 227 of the Constitution must be within limits.
This question has been considered by this Court from time to time and principles laid down.
The power under article 227 is one of judicial superintendence and it cannot be exercised to upset the conclusions of facts, however erroneous these may be.
It is possible that another Court may be able to take a differ ent view of the matter by appreciating the evidence in a different manner, if it determinedly chooses to do so.
That will not be justice administered according to law to which courts are committed.
[605D E] (b) In exercise of jurisdiction under article 227 ' of the Constitution, the High Court can go into questions of facts or look into the evidence if justice so requires it.
But the High Court should decline to exercise that jurisdiction to look into the facts in the absence of clear cut reasons where the question depends upon the appreciation of evi dence.
The High Court should not interfere with a finding within the jurisdiction of the inferior tribunal or court except where the finding is perverse in law, in the sense that no reasonable person properly instructed in law could have come to such a finding, or there is misdirection in law, or view of fact has been taken in the teeth of prepon derance of evidence, or the finding is not based on any material evidence or it resulted in manifest injustice.
Except to the extent indicated above the High Court has no jurisdiction.
[606B D] Satyanarayan Laxminarayan Hegde & Ors.
vs Mallikarjun Bhavanappa Tirumale, [1960] 1 S.C.R. 890; India Pipe Fitting Co. vs Fakruddin M.A. Baker & Anr., ; ; Ganpat Ladha vs Shashikant Vishnu Shinde, [1978] 3 S.C.R. 198; Mrs. Labhkuwar Bhagwani Shah & Ors.
vs Janardan Mahadeo Kalan & Anr., and Chandavarkar Sita Ratna Rao vs Ashalata section Guram, ; ; re ferred to. 2.
No hard and fast rule can be laid down for determin ing the question whether a particular structure put up by the tenant is a permanent structure for the purpose of cl.
(p) of section 108 of the as it is dependent on the facts of each case.
One must look to the nature of the structure, the purpose for which it was in tended and take a whole perspective as to how it affects the enjoyment, the durability of the building, etc.
and other relevant factors and come to a conclusion.
[601D E; 602D E] Surya Properties Private Ltd. & Ors.
vs Bimalendu Nath Sarkar & Ors., and M/s Surya Proper ties Private Ltd. 595 vs Bimalendu Nath Sarkar, A.I.R. 1965 Calcutta 408, ap proved.
Khureshi Ibrahim Ahmed vs Ahmed Haji Khanmahomad, A.I.R. 1965 Gujarat 152 and Ramji Virji & Ors.
vs Kadarbhai Esufa li, A.I.R.1973 Gujarat 110, referred to.
In this case, on an analysis of the evidence the trial court as well as the appellate court had held that the structures were permanent.
All the relevant factors had been borne in mind by the learned trial Judge as well as the Appellate Bench of the Court of Small Causes.
The view taken by them was a possible view.
A different view might have been taken but that is no ground which would justify the High Court to interfere with the findings.
[600F]
| The appellant was a displaced person from West Pakistan.
In 1949 he was allotted 42 standard acres and 11 units of land which were later consolidated.
In 1958 claiming to be a small holder he made an application under section 14 A(1) of the Punjab Security of Land Tenures Act 1953 before the Assistant Collector for the ejectment of respondent No. 4 who was a tenant of the land.
The Assistant Collector rejected application on the ground that because of improvements the income from the lands had risen considerably and consequently the land had become equivalent to more than 50 standard acres, and therefore the applica tion was untenable under section 14 A.
In appeal the Collector held that since the appellant was allotted only 42 standard acres and 11 units he was entitled to be treated as a small land holder.
The Collector 's order was upheld by the Commissioner and by the Financial Commissioner.
The tenant thereupon filed a writ petition before the High Court.
According to the High Court the status of a landlord had to be ascertained as existing on the date of the application under section 14 A of the Act and not on the date of the allotment.
Farther according to the High Court what is 'permissible area ' available to a landlord under the Act had also to be determined as obtaining on the date of the application for eviction made by the landlord.
On this view the High Court allowed the tenant 's writ petition.
In appeal by special leave to this Court, HELD: Under the provisions of the Act the entire land held by the landowner in the State of Punjab on the date of the commencement of the Act must be evaluated as on that date and the status of the landowner and his surplus area must then be ascertained.
If he is then found to be 'a small landowner, he continues to be so for the purpose of the Act, until he acquires more land and on taking into account the value of the land in terms of standard acres on the date of the acquisition, he is found to be a big landowner.
The landowner is required to make the necessary reservations or selections and to give the necessary declarations so that his status and the surplus area, if any, held by him may be so determined.
If he is a small landowner at the commencement of the Act, his status is not altered by reason of improvements in the value of his land or re allotment of land on compulsory consolidation of holdings.
section 19 F(b) which was introduced into the Act during the pendency of the appeal clarified the position to the same effect.
[514 B D; 515 F] The appellant did not acquire any land after the commencement of the Act.
His status as a small landowner was not altered by reason of subsequent improvements or re allotments of land on compulsory consolidation of holdings.
On the date of the application, he therefore continued to be a small landowner.
The High Court was in error in holding that the status of the appellant should be determined by evaluating his 5 12 land in terms of standard acres on the dates of the application for eviction.
[515 H; 516 A B] Per Mudholkar J : Provisions relating to the valuation of lands under the Act are to be found in section 19 F(a) and 19F(b).
The former did not apply to the present case as it applies only to the ascertainment of ,surplus area ' held by a landowner at the commencement of the Act; the appellant held only 'permissible area ' and no 'surplus are at all.
Under section 19 F(b) fresh evaluation of land can take place "at any time" but the power under that section is exercisable only in the context of special circumstances, that is to say, where the landlord owns land after the commencement of the Act by inheritance, bequest or gift.
These special circumstances did not exist in the present case.
[519 H; 520 H; 521 B, D] When the provisions of section 19F are thus not attracted, the Revenue Assistant before whom an application under section 14 A for ejectment of a tenant is made by a landlord, is not entitled to evaluate the land of the landlord afresh for ascertaining whether he is in possession of land in excess of the permissible area.
[521 F] Elaborate rules have been framed under the Act and elaborate provisions are also contained in the Act with a view to extend its protection as far as possible to tenants cultivating land.
The omission, therefore, to make any provision as to what has to be done, if as a result of improvements made by the landlord or by reason of the rise in the yield of the land through other causes would point only to one conclusion and that is that this circumstance is not to be taken into account for evaluating the land afresh and recalculating the standard acreage.
[521 G H] It would follow that the High Court was in error and its order must be set aside.
| The Delhi Rent Control Act, 1958 was amended by Act 57 of 1988 which introduced Sections 14B to 14D to the Act carving out thereby classified landlords from the general class of landlords with specified rights to recover immediate possession of the premises let out by them if these are required for their own residence.
The released or retired persons from armed forces or the dependents of the member of armed forces killed in action are covered by Section 14B, the retired employees of the Central Government and of the Delhi Administration are covered by Section 14C, and the landlords who are widows are covered by Section 14D.
These classified landlords are also given the benefit of summary trial under Chapter IIIA by introducing Sections 14B to 14D in Sub section (1) of Section 25B, but there are no corresponding amendments to sub sections (2) to (5) of Section 25B.
The two petitioners, who are tenants, were in occupation of the premises belonging to two Army Officers (respondent landlords).
In the 365 action for eviction brought by the landlords on the ground that they needed the premises for their occupation, the tenants sought leave to contest the application which the Rent Controller being not satisfied with the facts disclosed by the tenants in their affidavits denied.
The Rent Controller accepted the case of the landlords and ordered eviction of the tenants.
The two tenants challenged the eviction orders by filing separate revision petitions in the High Court.
They also challenged the validity of Section 14B of the Act before the High Court by means of two separate writ petitions under Article 226 of the Constitution.
The High Court dismissed the writ petition and the revision petition filed by one of the tenants who being aggrieved moved this Court by way of special Leave Petition Nos.
7146 Court following its decision in the first case dismissed the writ petition filed by him, though the revision petition filed by him was still pending.
The tenant challenged the decision of the High Court by preferring Special Leave Petition No. 7364 of 1990 to this Court.
It was contended on behalf of the petitioners that the tenant 's right to contest the application for eviction on the grounds specified in Section 14(l)(e) cannot be denied even as against the classified landlords falling under Sections 14B to 14D.
The tenant is entitled to leave to contest the application by disclosing such facts in the affidavit as would disentitle the landlord from obtaining an order of eviction under Section 14(l)(e).
This is because of retention of sub section (5) of Section 25B without any amendment and absence of amendment to Section 25C(2).
It was also contended that sub sections (4) and (5) of Section 25B are a composite scheme and since that scheme has been left untouched the tenant 's right thereunder cannot be denied.
It was further contended that sub section (6) of Section 14 is attracted to applications under Sections 14B to 14D.
Dismissing the Petitions, the Court, HELD: 1.
Section 14B is a special provision made by the legislature conferring certain rights to persons belonging to Armed Forces to recover from their tenants immediate possession of the premises for their occupation.
[369E] 2.1 The Tenant cannot claim right to contest an application for eviction on the grounds specified in Section 14(l)(e) against the classified landlords falling under Sections 14B to 14D. Acceptance of such a claim would practically obliterate the purpose and object of classification of landlords under Sections 14B to 14D who are carved out from 366 the general landlords; indeed it would render the whole exercise of creating special classes of landlords with specified rights to recover immediate of the premises let out by them nugatory.
[371H 372C] 2.2 The remedy under Section 14(l)(e) is available only to landlords in general or the landlords who are not classified landlords under Sections 14B to 14D.
The classified landlords have been conferred with certain rights which are different from and independent of the rights under Section 14(l)(e).
[372E F] 2.3 Sections 14B to 14D are markedly different from Section 14(1)(e).[375E F] 3.1 The argument that the absence of amendments to sub sections (4) and (5) of Section 25B preserves the tenant 's right to contest the application of even a classified landlord on the grounds specified under Section 14(l)(e) is not sustainable.
Sub section (4) of Section 25B provides that the tenant has to obtain leave from the Controller "as hereinafter provided", which in the contest means as provided under sub section (5).
This is the only sub section under which the Controller could give leave to the tenant to contest the application if the affidavit filed by the tenant discloses such facts as would disentitle the landlord from obtaining an order for the recovery of possession of the premises.
[376G, F] 3.2 The form specified in the Third Schedule refers only to application filed under Section 14(l)(e) or Section 14A.
Therefore, when an application is filed under Section 14B, a copy of the application should be sent to the tenant by making necessary amendment to the prescribed form and omitting the other references which are not relevant and the summons should state that the application is filed under Section 14B and not under Section 14(l)(e) or 14A. Likewise if the applications are under Sections 14C to 14D, the summons should state accordingly.
That would indicate the scope of defence of the tenant for obtaining leave referred to in sub section (5) of Section 25B. [377G 378A] 3.3 Under sub section (5), the tenant could contest the application by obtaining leave with reference to the particular claim in the application of the landlord depending upon whether it is under Sections 14A, 14B, 14C or 14D or under Section 14(l)(e).
[378B] The tenant cannot be allowed to take up defence under Section 14(l)(e) as against an application under Section 14B. There cannot be 367 any defence unconnected with or unrelated to the claim or right of the plaintiff or applicant.
That would be against our jurisprudence and would be a mechanical interpretation of the enactment defeating its purpose.
The courts have always adopted a purposive approach to the interpretation of statutes.
[378C D] 3.4 Section 14B and other allied provisions ought to receive a purposeful construction and sub section (5) of Section 25B should be so construed as to implement the object and purpose of Sections 14B to 14D.
It is the duty of the Court to give effect to the intention of the legislature as expressed in Sections 148 to 14D. [378E] 4.
The tenant is entitled to raise all relevant contentions as against the claim of the classified landlords.
The fact that there is no reference to the word bona fide requirement in Sections 14B to 14D do not absolve the landlord from proving that the requirement is bona fide or the tenant from showing that it is not bona fide.
In fact every claim for eviction against a tenant must be a bona fide one.
There is also enough indication in support of this construction from the title of section 25B which states "special procedure for the disposal of applications for eviction on the ground of bonafide requirement".
[378H 379B] 5.
Section 14B and other allied provisions refer to the premises let out and not acquired by transfer.
One may become an owner of the premises by transfer but the tenant in occupation of the transferred property cannot be evicted by resorting to Sections 14B to 14D.
If the transferee wants to evict the tenant he must take action only under Section 14(l)(e).
Equally Sub section (7) of Section 14 has no application to eviction under Sections 14B to 14D, nor the amended provisions under Section 25C(2).
But that does not mean that the tenants covered under Sections 14B to 14D are not entitled to any time for surrendering possession of the premises.
It is always left to the Controller who is a quasi judicial authority to exercise his discretion having regard to the facts and circumstances of each case and grant a reasonable time to the tenant.
[379E G] 6.
The Controller 's power to give leave to contest the application filed under Section 14(l)(e) or Section 14A is cribbed by the condition that the 'affidavit filed by the tenant discloses such facts as would disentitle the landlord from obtaining an order for the recovery of possession of the premises on the ground specified ' in the respective sections.
Therefore, if an application is filed under Section 14B or 14C or 14D, the tenant 's right to contest the application is narrowed down 368 and is restricted to the parameters of the respective Sections.
He cannot widen the scope of his defence by relying upon Section 14(l)(e).
Subsection (5) of Section 25B is self contained and Order 37 Rule 3 CPC has no part to play there.
[38OB C] Busching Schmitz Private Ltd. vs P.T. Menghani & Anr.,[1977] 2 SCC 835, affirmed and reiterated.
Precision Steel & Engineering Works and Anr.
vs Prem Deva Niranjan Deva Tayal, , harmonised.
The landlord in SLP No. 11425/90 is living in a rented house and is paying a rent of Rs.2,000 p.m. and requires the premises for himself and the members of his family.
The landlord cannot be denied possession of his own premises under section 14B when he is residing in a rented premises.
[38OD E] 8.
The contention that the concerned landlord has taken voluntary retirement long earlier and has become a part of the Society just like any other landlord and Section 14B was not intended to confer such landlord the special right to recover immediate possession of the premises is not maintainable because Section 14B(l) states that the persons who have already retired may within one year from the date of their release or retirement from such Armed Forces or, within a period of one year from the date of introduction of Section 14B, whichever is later, apply to the controller for recovering the immediate possession of their premises.
That is the legislative wisdom.
[38OF G] 9.
True it is not permissible to read words in a statute which are not there, but "where the alternative lies between either supplying by implication words which appear to have been accidentally omitted, or adopting a construction which deprives certain existing words of all meanings, it is permissible to supply the words".
Having regard to the context in which a provision appears and, the object of the statute in which the said provision is enacted, the court should construe it in a harmonious way to make it meaningful.
An attempt must always be made so to reconcile the relevant provisions as to advance the remedy intended by the statute.
[378E G] Craies Statute Law, 7th Edition, P. 109; Hameedia Hardware Stores V. B. Mohan Lal Sowcar, ; at 524 25, and Sirajul Haq Khan & Ors.
vs The Sunni Central Board of Waqf, [1959].1 SCR 1287 at 1299, relied upon.
| The appellant was the tenant of respondent in Quarter No. IV H/46 Lajpat Nagar from 1 7 1967.
On 2 6 1976, the respondent filed an application under sections 14A(1), 14(1)(e) and 14(1)(f) of the Delhi Rent Control Act, for eviction of the appellant firstly on the ground that as her husband was required by the Government to vacate the Government quarters or pay the penal rent, the husband of the respondent had to shift to the house of his wife which was in the tenancy of the defendant.
A prayer was also made that even otherwise the premises were required for a bonafide necessity of the landlord and also as the premises had become unfit for human habitation the respondent required the same for carrying out repairs which could not be done unless the premises were vacated.
On 3 6 76 the respondent filed an application withdrawing the cause of action mentioned by her regarding bonafide necessity and repairs as contemplated by Section 14(1)(e) and 14(1)(f) of the Act.
The Rent Controller accordingly allowed the plaintiff to withdraw the two causes of action mentioned in the application since no notice was served at this time on the appellant.
Thereafter notice was served on the appellant.
On 4 6 1976, the plaintiff again sought to amend her petition by deleting the cause of action mentioned under section 14A(1) of the Act i.e. requirement of the respondent because her husband had been directed to vacate the Government Quarter.
On 13 8 1976 the appellant appeared before the Rent Controller and filed an application under section 25B, sub sections 4 and 5 requesting the Rent Controller to give him permission to defend the suit, on the ground that as the landlady was not a Government servant she was not entitled to maintain the eviction petition under Section 14A(1) of the Act.
On 6 10 76 the husband of the respondent filed an application for being impleaded as a party, but this application was rejected on 22 11 76.
The respondent thereafter again filed another application on 27 1 77 praying for amendment of her eviction application by re inserting the cause of action contained in section 14(1)(e) of the Act and sought to claim eviction on the ground of bonafide requirement.
This application was contested by the appellant but was allowed by the Rent Controller by his order dated 19 2 77 leaving open to the appellant to file his objection by a fresh application if he wanted to defend the suit.
The appellant accordingly filed an application on 9 3 77 for permission to defend the suit on the ground that the amendment sought for by the plaintiff was uncalled for and illegal and could not be allowed.
Ultimately, the Rent 855 controller by his order dated 27 7 77 rejected the application for leave to appear and defend the suit and passed an order evicting the appellant from the premises.
The revision petition filed by the appellant under Section 25B(8) in the Delhi High Court was dismissed on 6 4 1978 and hence the appeal by special leave of the Court.
It was contended: (a) that the second application given by the respondent for re amending her plaint by inserting the relief under section 14(1)(e) which she had given up at a prior occasion when she had based her suit under section 14A(1) was barred by the principles of Order II Rule 2 C.P.C. (b) that even if order II Rule 2 C.P.C., had no application, the second application filed by the respondent was barred by the doctrine of constructive res judicata and (c) Section 25B which lays down the procedure for disposing of the applications filed by the landlord under the provisions of Section 14A and 14(1)(e) are violative of Article 14 of the Constitution in as much as the provisions are arbitrary and discriminatory in nature, and seek to provide two different procedures for tenants similarly situated.
Dismissing the appeal by special leave, the Court ^ HELD: 1.
A perusal of order II Rule 2 C.P.C. would clearly reveal that this provision applies to cases where a plaintiff omits to sue a portion of the cause of action on which the suit is based either by relinquishing, the cause of action or by omitting a part of it.
The provision has, therefore, no application to cases where the plaintiff has based his suit on separate and distinct causes of action and chooses to relinquish one or the other of them.
In such cases, it is always open to the plaintiff to file a fresh suit on the basis of a distinct cause of action [860 E F] In the instant case, the second amendment application was rot barred by the principles of order II, Rule 2 C.P.C.
The respondent had first based her suit on three distinct causes of action, but later confined the suit only to the first cause of action, namely the one mentioned in Section 14A(1) of the Act and gave up the cause of action relating to section 14(1) (e) and (f).
Subsequently by virtue of an amendment she relinquished the first cause of action arising out of section 14A(1) and sought to revive her cause of action based on section 14(1)(e).
At the time when the respondent relinquished the cause of action arising out of Section 14(1)(e), the applicant was not in the picture at all.
Therefore it was not open to the appellant to raise any objection to the amount sought by the respondent.
1861 G H. 862 A C] Mohammed Khalil Khan and Ors.
vs Mahbub Alikhan and Ors.
75 I.A 121 P.C.; applied.
One of the essential conditions of res judicata is that there must be a normal adjudication between the parties after full hearing.
In other words, the matter must be finally decided between the parties.
[862 C] In the instant case, the doctrine of constructive res judicata has no application whatsoever, since at the time when the respondent relinquished her first cause of action, the appellant was no where in the picture and there was no adjudication between the parties.
The second amendment application was made in the same proceedings on a case of action that she was allowed to insert with the permission of the Court.
Although both the parties went to the Court on the basis of 856 these facts, neither the bar of res judicata nor that of Order II Rule 2 C.P.C. was raised before the Rent Controller.
[862 C, E] 3.
It is well settled that what Article 14 forbids is hostile discrimination and not reasonable classification.
Discrimination may take place in many ways and what Article 14 requires is that equals must be treated alike.
If equals and unequals one also treated alike then also Article 14 is clearly attracted and discrimination results.
[862 F G] (b) A reasonable classification based on grounds having a clear nexus with the objective to be achieved and grouping certain persons in a separate category in view of their special peculiarities is undoubtedly permissible.
Of course, classification should not be purely a class legislation.
[862 G H] (c) It is also well settled that there is always a presumption in favour of tho constitutionality of a statute and any party who seeks to challenge the legislation on the ground of applicability of Article 14 must plead and prove tho necessary facts.
In making a classification, the Court must presume matters of common knowledge, common report, history of the time and every other relevant fact.
[862 H, 863 A] Chiranjit Lal Chowdhari vs Union of India and Ors.
; , State of West Bengal vs Anwar Ali Sarkar ; ; Sri Ramkrishna Dalmia vs Shri Justice S.R. Tandolkar and Ors.
; Mahant Moti Das vs section P. Sahi the Special Officer in charoe of Hindu Religious Trust and Ors., [1959] 2 Supp.
S.C.R. 563, A. C. Aggarwal Sub Divisional Magistrate Delhi and Anr.
vs Mst.
Ram Kali etc.
[1968] 1 S.C.R. 205; referred to. 4.
The Rent Control Act is a piece of social legislation and is meant mainly to protect the tenants from frivolous evictions.
At the same time, in order to do justice to the landlords and to avoid such restrictions on their right to evict the tenant so as to destroy their legal right to property certain salutary provisions have been made by the legislature which give relief to the landlord.
In the absence of such a legislation a landlord has a common law right to evict the tenant either on the determination of the tenancy by efflux of time or for default in payment cf rent or other grounds after giving notice under the Transfer of Property Act.
Their broad right has been curtailed by the Rent Control Legislation with a view to give protection to the tenants having regard to their genuine and dire needs.
[864 C E] While the rent control legislation has given a number of facilities to the tenants, it should not be construed so as to destroy the limited relief which it seeks to give to the landlord also, like the question of landlord 's bonafide personal necessity.
The concept of bonafide necessity should be meaningfully construed so as to make the relief granted to the landlord real and practical.
[864 E G] Bega Begum and Ors.
vs Abdul Ahmed Khan (dead) by 1. rs and Ors. ; ; referred to.
Section 25B of the Delhi Rent Control Act was inserted in the statute by Act 18 of 5976 and was given retrospective effect from 1 12 75, with the sole object of simplifying the procedure for eviction of tenants in case the landlord requires the premises bonafide for his personal occupation.
The Legislature in its wisdom thought that a short and simple procedure should be provided 857 for those landlords who generally want the premises for their bonafide necessity so that they may be able to get quick and expeditious relief.
[865 G H, 866 A B] Section 25B does not govern all grounds open to a landlord for evicting the tenant but it is confined only to the ground in section 14A and proviso to section 14(1)(e).
In other words, the bonafide necessity of the landlord has been put in a separate class or category having regard to the peculiar incidents of his right.
Section 14A also relates to a special situation where the landlord under the Government Rules is asked to shift to his own house, if he has one or in a house that belongs to his spouse, failing which he has to pay a penal rent which almost takes away a major part of his salary.
Thus, such a landlord becomes a class by himself.
The statute thus puts personal necessity of the landlord as a special class requiring special treatment for quick eviction of the tenant and cuts out delays and plugs all the loopholes, which may cause delay in getting the relief by the landlord.
The classification made by the legislature is in public interest and is in complete consonance with the objectives sought to be achieved.
The landlords having personal necessity have been brought together as a separate class because of their special needs and such a classification cannot be said to be unreasonable particularly where the legislature in its obvious wisdom feels that the Landlords should get this relief as quickly as possible.
[868 A E] Even though a summary procedure has been evolved the tenant has been afforded full opportunity to defend the application provided he can disclose good grounds for negating the case of the landlord.
No litigant has a right to protract the legal proceedings by taking frivolous, irrelevant, irrational or uncalled for pleas.
This is what Section 25B seeks to prevent.
[869 E F] An appeal is purely a creature of the statute and this right has not been given in order to cut out unnecessary delay.
Indeed the highest Court of the state has been given a wide power of revision where the said Court can examine the case of the tenant and the landlord and the validity of the order passed by the Controller.
The right of the tenant, therefore, is sufficiently safeguarded by the proviso to sub section 8 of Section 25B of the Act.
In order to give the relief to the tenant against any apparent error of law or fact where no revision has been filed in the High Court, the statute confers power of review on the Controller.
[869 G H, 870 A] Thus, taking an overall picture of the situation, the circumstances under which the landlord 's needs have been classified and the safeguards given by the statute it cannot be said by any stretch of imagination that Section 25B and its sub sections are violative of Article 14 of the Constitution.
In fact, Section 25B contains valuable and sufficient guidelines which completely exclude the exercise of uncanalised or arbitrary powers of the Rent Controller.
[870 A B] Section 25B is constitutionally valid.
The legislature has not taken, away the right of the tenant at all but has merely simplified the procedure for eviction of the tenant in cases falling within the ambit of sections 14A and 14(1)(e) of the Act.
A tenant cannot challenge the validity of such a provision enacted by the legislature from which the tenant itself derive such rights.
If the legislature considered in its wisdom to confer certain rights or facilities on that tenants, it could due to changed circumstances curtail, modify, alter or even take away such rights or the procedure enacted for the purpose of eviction and leave the tenants to seek their remedy under the common law.
[870 G H, 871 A, B C] 858
| A residential house was let out to the petitioner by the respondent.
The respondent was initially employed as Accounts Officer with the Finance Department of the Government.
In 1969, he went on deputation with the Haryana Agricultural University.
While he was employed on the post of Comptroller in the University he retired from service with effect from February 28, 1991.
Claiming to be a "specified landlord" within the meaning of Section 2(hh) of the East Punjab Urban Rent Restriction Act, 1949, the respondent moved a petition seeking eviction of the petitioner under section 13A of the Act before the Rent Controller.
The petition was dismissed by the Rent Controller on the view that the respondent did not fall within the ambit of the definition of "specified landlord", since he failed to show that he was holding or had held an appointment in a public service or post in connection with the affairs of the Union or of the State.
The respondent filed a revision petition before the High Court under section 18 A(8) of the Act, which was allowed by the High Court on March, 1992.
The High Court held that the respondent, at the time of his retirement from the post of Comptroller in the University, was holding an appointment in connection with the affairs of the State and hence he was a specified landlord within the meaning of section 2(hh) of the Act and that the respondent had fully satisfied the conditions as contained in section 13 A of the Act and he was entitled to recover the possession of the premises in dispute from the petitioner.
The High Court allowed one month 's time for the petitioner to vacate the premises subject to his paying the entire arrears of rent within 15 days from the date of the order and filing an undertaking that he would hand over the vacant possession of the premises on the expiry of the aforesaid period.
On March 16, 1992, the petitioner moved a petition in the High Court under section 151 CPC seeking three months ' time to vacate the house and for waiving the requirement of filing of an undertaking.
The High Court rejected the petition.
Thereafter, the petitioner submitted an undertaking dated March 20, 1992 before the Rent Controller wherein the petitioner referred to the direction contained in the order of the High Court dated March 6, 1992.
On March 21, 1992, the petitioner filed the special leave petition under Article 136 of the Constitution in this Court and succeeded to get an order staying dispossession on March 26, 1992.
In response to the notice issued on the Special Leave Petition, the respondent filed a counter affidavit raising an objection that in view of the undertaking given by the petitioner, the jurisdiction of this Court under Article 136 of the Constitution could not be invoked.
The respondent landlord submitted that in view of petitioner tenant 's having taken the benefit of direction contained to the order of the High Court allowing him one month 's time to vacate the premises on his filing an undertaking that vacant possession of the premises would be handed over on the expiry of the period and his having submitted a written undertaking in accordance with the direction, the petitioner was precluded from assailing the judgment of the High Court by invoking the jurisdiction of this Court under Article 136 of the Constitution.
The petitioner tenant submitted that he did not take any undue advantage by giving the undertaking; that prior to the undertaking, he had moved an application for extension of time before the High Court wherein he had clearly indicated that he intended to file a special leave petition in this Court against the order of the High Court dated March 6, 1992 and that it was also expressly stated in the undertaking filed in the Court wherein it is mentioned that the undertaking was subject to his right to file the special leave petition in this Court against the order of eviction.
Dismissing the special leave petition, this Court, HELD: 1.01 Law does not permit a person to both approbate and reprobate.
This principle is based on the doctrine of election which postulates that no party can accept and reject the same instrument.
[263 F] 1.02 The petitioner, having given an undertaking in pursuance to the directions given by the High Court in the judgment dated March 6, 1992 and having availed the protection from eviction on the basis of the said undertaking, cannot be permitted to invoke the jurisdiction of this Court under Article 136 of the Constitution and assail the said judgment of the High Court.
[264 H] 1.03 The statement in the undertaking, that it was subject to the rights of the petitioner to file special leave petition in this Court against the order of eviction, does not have any effect on the legal consequencew flowing as a result of the filing of the undertaking by the petitioner.
[263 D] Verschures Creameries Ltd. vs Hull and Netherlands Steamship Co. E Ltd., at p. 612; Thacker Hariram Motiram vs Balkrishan Chatbrabhu Thacker & Ors., [1989] Supp.
2 SCC 655 and Vidhi Shanker vs Heera Lal 1987 Supp.
SCC 200; Ramchandra Jai Ram Randive vs Chandanmal Rupshand & Ors., [1987] Supp.
SCC 254, referred to.
Halsbuly 's Laws of England, 4th Edn.
16, para 1508, referred to.
|
Civil Appeal No. 466 of 1960.
Appeal from the judgment and order dated October 31, 1958 of the Kerala High Court in I. T. R. No. 2 of 1956 (K).
K. N. Rajagopal Sastri and P. D. Menon, for appellant.
The respondent did not appear.
January 16.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
The Commissioner of Income Tax, Kerala and Coimbatore, has filed this appeal against the judgment and order of the High Court of Kerala dated October 31, 1958, by which the High Court answered in favour of the respondent (Helen Rubber Industries, Ltd., Kottayam) the following question: "Whether under the provisions of the Indian Income tax Act the petitioner is entitled to carry forward the loss for a period of six years notwithstanding the fact that during the period when the loss had occurred, the law applicable was the Travancore Income tax Act ?" The High Court has granted a certificate under section 66A(2) of the Income tax Act.
Two questions were referred to the High Court in compliance with an earlier order of the High Court under section 66(2); 607 but with the other question, we are not concerned in this appeal.
Messrs. Helen Rubber Industries, Ltd. is a Company, which was incorporated in the former State of Travancore with its registered office at Kottayam.
In the year 1941, the assessee Company granted a lease of the factory to certain persons for a period of 15 years.
From that year, the rent and royalty received from the lessees were the only source of income.
Disputes having arisen, the lessees suspended payment from June 1946.
Litigation followed; but the dispute was settled by the assessee Company receiving Rs. 23,000/ odd in full satisfaction.
With the details of these disputes and their settlement, we are not concerned.
The year of account of the assessee Company is the Calendar year.
Before the extension of the Indian Income tax Act, there was in force in Travancore State, the Travancore Income tax Act, 1121 M. E. (Act XXIII of 1121 M. E.), which came into force on the first day of Chingom 1122 M. E. (August 17, 1946).
The assessment year under the Travancore Act ended on the last day of Karkadakom, which corresponds to August 16, 1947.
Thus for the account year, 1 1 1946 to 31 12 1946 of the firm the assessment year was 1123 M. E. (17 8 1947 to 16 8 1948).
The assessee Company declared losses in the account years, 1946, 1947 and 1948.
These losses, together with the dates of the account years and the assessment years are tabulated below: Year of account Year of assessment.
Loss 1946(1 1 1946 to 1123 M. E. (17 8 1947 Rs. 4031 10 0 31 12 1946) to 16 8 1948) 1947(1 1 1947 to 1124 M. E.(17 8 1948 Rs. 6605 1 6 31 12 1947) to 16 8 1949) 1948 (1 1 1948 to 1125 M. E. (17 8 1949 Rs. 2604 13 9 31 12 1948) to 16 8 1950) Total Rs. 13241 9 3 608 The dispute in this case is about the right of the assessee Company to carry forward the loss of the year 1946 under the provisions of the Travancore Act read with section 24(2) of the Indian Income tax Act and the Taxation Laws (Part B States) (Removal of Difficulties) Order, 1950 to the assessment year, 1951 52, in the assessment of the Company for its year of account, the Calendar Year, 1950.
The Income tax Officer held that the loss of the year 1946 could not be carried forward to that year, since it had lapsed after two years under section 32 of the Travancore Act, and section 24(2) was not applicable, in view of paragraph 3 of the Order, mentioned above.
The order of the Income tax Officer was confirmed in appeal by the Appellate Assistant Commissioner and the Appellate Tribunal.
The Tribunal was moved for a case, but declined to state one; but the High Court called for a statement of the case under section 66(2) and the above mentioned question was decided in favour of the assessee Company.
The only question argued in this appeal is whether the High Court was right in the answer it gave.
The assessee Company was not represented at the hearing before this Court.
The Indian Income tax Act was extended to Travancore Cochin by section 3 of the Indian Finance Act, 1950.
By section 13(1) of the same Act, it was provided: "If immediately before the 1st day of April, 1950, there is in force in any part B State. any law relating to income tax that law shall cease to have effect except for the purposes of the levy, assessment and collection of income tax. . in respect of any period not included in the previous year for the purposes of assessment under the Indian Income tax Act, 1922 (XI of 1922), for the year ending on the 31st day of March, 1951, or for any subsequent year. " 609 By this section a clear division was made between the operation of the prior law and the Indian Income tax Act.
The assessment for the year, 1951 52, was thus made on the assessee Company under the Indian Income tax Act.
Under section 24(2) of the Indian Income tax Act, as it existed prior to its amendment by the Finance Act, 1955, it was provided: "Where any assessee sustains a loss of profits or gains in any year, being a previous year not earlier than the previous year for the assessment for the year ending on the 31st day of March 1940, under the head 'Profits and gains of business, profession or vocation ' and the loss cannot be wholly set off under sub section(1), the portion not so set off shall be carried forward to the following year, and so on, but no loss shall be so carried forward for more than six years, and a loss arising in the previous years for the assessment for "the years ending on the 31st day of March, 1940, the 31st day of March, 1941, the 31st day of March, 1942, the 31st day of March, 1943, and the 31st day of March 1944 respectively shall be carried forward only for one, two, three, four and five years respectively.
" Since we are concerned with the loss for the year, which does not correspond to the years named in the latter part of the section above quoted, that part of the section does not apply to the assessee Company 's case.
What was thus claimed was the benefit of the earlier part, where the loss was allowed to be carried forward for six years.
This position taken by the assessee Company can hardly be considered in view of the provisions of section 32 of the Travancore Act, read with the Removal of Difficulties Order passed in 1950.
Section 32 of the Travancore Act was a reproduction of the Indian section 24(2) except for a change of the 610 dates mentioned therein, due obviously to the fact that the Travancore Act came into force on the first day of Chingom, 1122 M. E. (August, 17, 1946).
It is enough to point out that instead of "31st March", wherever they occurred, the words "the last day of Karkadakom" (August, 16) were substituted, and instead of the years, 1940, 1941, 1942, 1943 and 1944, were substituted the Malayalam years, 1122 (17 8 1946 to 16 8 1947), 1123 (17 8 1947 to 16 8 1948), 1124 (17 8 1948 to 16 8 1949), 1125 (17 8 1949 to 16 8 1950), and 1126 (17 8 1950 to 16 8 1951).
These were the only differences between the two sections, and section 24(2) of the Indian Income tax Act, so modified, can be read as section 32 of the Travancore Act.
The existance of these two sections in the two Acts was likely to lead to some difficulty, and a question was likely to arise which law was to prevail.
Section 12 of the Indian Finance Act, 1950, therefore, enabled the Central Government to pass an Order removing any such difficulty.
The Taxation Laws (Part B States) (Removal of Difficulties) Order, 1950 was thus passed.
Paragraph 3 of that order provided: "3.
Carry forward and set off of previous losses where in any previous year prior to the previous year for "the assessment for the year ending on the 31st day of March 1950, an assessee has sustained a loss of profits or gains in any business, profession or vocation carried on by him, and such loss would, had the State law continued to be in force, have been set off against the profits and gains, if any, from the same business chargeable to tax in the said year of assessment or in any year subsequent thereto, such loss would be so set off in the same manner, to the same extent, and up to the same year of assessment as it would have been set off had the State law continued to be in force.
" 611 The critical words are those contained in the later part, namely, "in the same manner, to the same extent, and up to the same year of assessment, as it would have been set off had the State law continued to be in force".
They show that the law to apply to the loss of "any previous year prior to the previous year for the assessment for the year ending on the 31st day of March, 1950" was the law in force in a Part B State here, the Travancore Act.
Now, taking the case of the assessee Company, we shall indicate which previous year or years would be governed by the Travancore Act.
The previous year of the assessee Company for the assessment year ending 31st day of March 1950 would be the Calendar year, 1 1 1949 to 31 12 1949.
To that, the Indian Income tax Act would apply.
The application of the Travancore Act by para 3 of the order was limited to the previous year before 1 1 1949 and other earlier previous years.
The previous year, with which we are concerned, 1 1 1946 to 31 12 1946, is so clearly a previous year, to which the Travancore Act applies.
that it does not admit of any doubt or difference.
The matter is thus governed by the Travancore Act.
The Travancore Act laid down, inter alia, that a loss arising in the previous year for the assessment for the year ending on the last day of Karkadakom, 1123, could be carried forward for two years.
The assessment year for 1123, M.E. covered the period, 17 8 1947 to 16 8 1948, and the previous year of the assessee Company relative to that assessment year was 1 1 1946 to 31 12 1946.
The loss of the Calendar year, 1946 could be carried forward to the Calendar years, 1947 and 1948 and given effect to, till the assessment year, 1125 (17 8 1949 to 16 8 1950).
The assessment year, 1 4 1951 to 31 3 1952, corresponded to the account year of the assessee Company, 1 1 1950 to 31 12 1950, and that is beyond two years, whether one takes 612 the account year or the assessment year as the basis of the calculation of two years.
The High Court, with all due respect, was not right in thinking that the Removal of Difficulties Order, 1950 was meant to enlarge the rights of the new assessees brought within the reach of the Indian Income tax law.
The intention of the law was to make a dividing line between those previous years to which the provisions of the earlier law would apply, and those previous years to which the provisions of the Indian Income tax Act would apply.
The rights were neither enlarged nor curtailed.
As pointed out by Chagla, C.J. in the Indore Malwa United Mills Ltd. vs Commissioner of Income tax (1).
"the only right integration has given to an assessee is the right contained in clauses (sic) 3 of the (Removal of Difficulties) Order, 1950 and that right is that if the law of his own State permitted him to carry forward the losses, then that right is preserved under the Indian Income tax Act.
" paragraph 3 of the Order clearly said that the right was available in the same manner, to the same extent and up to the year of assessment, as laid down in the State law (here, the Travancore Act).
Since in this case, the carry forward of the loss was for only two years and those years were before the previous year from which the Indian Income tax Act began to apply, there is no question of the application of the Indian Income tax Act.
The appeal thus succeeds, and is allowed.
The assessee Company shall pay the costs of the appeal in the High Court, but there shall be no order about costs in this Court.
Appeal allowed.
| The respondent company was incorporated in the former State of Travancore.
The dispute was about the right of the respondent assessee company to carry forward the loss of the years 1946 under the provisions of the Travancore Act read with section 24 (2) of the Indian Income tax Act and the Taxation laws (Part B States)(Removal of Difficulties) Order, 1950, to the assessment year 1951 52 in the assessment of the company for its year of account.
The Income tax Officer held that the loss of the year 1946 could not be carried forward to that year, since it had lapsed after two years under section 32 of the Travancore Act and section 24 (2) was not applicable, in view of para 3 of the order. ^ Held, that the Taxation laws (Part B State) (Removal of Difficulties) Order, 1950, passed under section 12 of the Indian 606 Finance Act, 1950, was not intended to make a dividing line between those previous years to which the provisions of the earlier law would apply, and those previous years to which the provisions of the Income tax Act would apply.
The rights were neither enlarged or curtailed by para 3 of the order.
That paragraph said that the right was available in the same manner, to the same extent and upto the same year of assessment as laid down in the State law.
The law to apply was thus the State law and the carry forward could only be for two years.
Indore Malwa United Mills Ltd. vs Commissioner of Income tax, (1959) 35 I. T. R. 271, approved.
| The respondent company was a manufacturer of edible and non edible oils and was registered as a " dealer " under the United Provinces Sales Tax Act, 1948.
Its year of account commenced on June 1, and ended on May 31 of the next year.
Under section 7(1) of the Act read.
with rule 39 of the rules framed thereunder the respondent exercised the option of being assessed on the turnover of the previous year and submitted its return for the assessment year 1948 49 on its taxable turnover of the previous year ending May 31, 1947.
The Sales Tax Officer assessed the turnover in respect of edible oil at 3 pies per rupee under section 3, but in respect of non edible oil he held that since a notification dated June 8, 1948, issued under section 3(A) had come into force from June 9, of the assessment year providing for the levy of tax at 6 pies per rupee, the assessee was liable to be assessed at 3 pies per rupee on the turnover during the first 69 days of the year and at 6 pies per rupee for the remaining days of the year.
On appeal by the assessee the appellate authority modified the order and directed that the tax be levied at a flat rate of 3 Pies on both edible and non edible oils.
This order was set aside by the revising authority and the order of the Sales Tax Officer was restored.
On a direction made by the High Court the revising authority submitted a question for opinion.
The High Court held that the assessee was liable to pay the tax at a flat rate of 3 pies per rupee.
On appeal by the Commissioner of Sales Tax by special leave, Held (per Hidayatullah, Das Gupta and Sliah, jj.), affirming the view of the High Court, that the assessee who elected to submit his return on the turnover of the previous year, is liable to be assessed to sales tax at the rate in force on the first day of the year of assessment because the liability arises on that date, and any subsequent enhancement of the rate by virtue of a notification under section 3(A) does not alter that liability.
A taxing statute must be interpreted in the light of what 190 is clearly expressed therein and nothing can be implied nor can provisions be imported into them so as to supply an assumed deficiency.
Per section K. Das and Ayyangar, JJ.
The rate of tax as applied by the sales tax officer was in accordance with law.
Having regard to the scheme underlying the option to elect for a previous year turnover conferred by section 7(1) of the Act the change in the law and in the rate of tax effected during the assessment year must apply to the turnover of the previous year which is deemed to be the turnover of the assessment year and sales effected during that period have to be assessed at the rate prevailing in that year.
Although the notification was prospective and was made with the object of changing the rate of taxation during the assessment year, the date mentioned therein did not prevent the application of the assessment year rate to the opted previous year turnover.
It is not correct to say that there is absence of machinery for reassessment and refund of tax to justify the conclusion that the basis of the tax liablity for an assessment year is that which prevailed on the first day of that year since there are provisions in the Act such as for instance sections 10 and 22 which provide for reductions, refunds and rectification of errors regarding taxation and even for enhancement of the tax already levied.
There was no ambiguity in the notification and the principle of resolving ambiguities in favour of the assessee could not be applied in this case.
| The assessee was running a business of plying buses and during its previous year ending on August 16, 1959, the buses had been plied for part of the year but were sold thereafter.
The Income tax Officer assessed the difference between the sale price of the buses and their written down value to tax as profit under the second proviso to section 10(2) (vii).
In appeal, the Appellate Assistant Commissioner rejected the assessee 's contention that the business had been transferred as a whole and therefore the profit in question could not be taxed.
The Tribunal also dismissed an appeal taking the view that the buses had been plied by the assessee for part of the previous yea.r and the profit on the sale of these buses was taxable under the said provision.
However, the High Court, upon a reference, held that the amount in question was not assessable as profit under section 10(2)(vii) on the assumption that the whole of the bus service business had been wound up during the relevant period.
On appeal to this Court.
HELD: allowing the appeal: Even on the assumption that the sale of the buses was a closing down or a realization sale it would nonetheless be taxable since the sale was made after the amendment of the second proviso.
section 10(2)(vii) by Act 67 of 1949.
[533 F G] According to the law laid down by this Court the view of the High Court would have been sustainable if the sale in the present case had been effected during the assessment year prior to the amendment of the proviso by Act 67 of 1949.
The critical words which were inserted by that proviso namely, "whether during the continuance of the business or after the cessation thereof", must be given their proper meaning.
It is quite plain that if the building, machinery or plant is sold during the continuance of the business or after the business ceases, the sale proceeds would be liable to tax in accordance with the proviso.
When the legislature clearly provided that the proviso would apply even if the sale was made, after the cessation of the business, it is difficult to conceive that it was intended to exclude from the ambit of the proviso a sale made for the purpose of closing down the business or effecting its cessation.
[535 F H] Commissioner of Income tax, Madras Iv.
Express Newspapers Ltd., Madras, , 195; Commissioner of Income tax, Kerala vs West Coast Chemicals and Industries Ltd. ; Commissioner of Income tax, Kerala vs
R.R. Ramakrishna Pillai, and The Liquidators of Pursa Limited vs Commissioner of Income tax, Bihar; , ; distinguished.
Commissioner of Income tax vs Ajax Products Ltd., ; ; referred LI 3Sup.
CI/68 3 532
| Between September 1974 and May 1977 the appellant re ceived more than 6 lakh rupees from its customers by issue of debit notes over and above the amounts received under regular invoices for manufacturing aluminium wire rods on job basis on their behalf.
The Excise Authorities issued notice under Rule 10(i)(c) of the Central Excise Rules, 1944, to the appellant to show cause why the aforesaid amount called as "handling charges" should not be added to the invoice price and differential duty recovered.
The Assistant Collector confirmed the demand after cause was shown which was upheld by the Appellate Collector and confirmed by the Tribunal.
In the appeal to this Court, on behalf of the appellant it was contended; (1) that on the basis of Rule 6(b)(i) of the Valuation Rules the statutory levy price of aluminium should be adopted as being the price of comparable goods and with effect from 1.10.75 the assessable value should have been fixed under proviso (ii) to s.4(1)(a) or s.4(1)(b) at the same amount,.
(2) that Rs.60 which was collected as handling charges was not to be taken into account for com puting duty and (3) that the notice was barred by limita tion.
Dismissing the appeal, HELD: (1) With effect from 1.10.1975 a new s.4 has been inserted into the Central Excise & Salt Act, 1944 providing for the mode of valuation.
The period involved in this appeal is from 27.9.1974 upto 31.5.1977.
Therefore, the period upto 30.9.1975 would be covered by the old s.4 and from 1.10.1975 till 31.5.1977 the provisions of new section would apply for determining the assessable value.
[320E] 319 (2) As per arrangement between the appellant and its customers, the appellant was permitted to lift the allotted ingots directly and after carrying out the manufacturing process it used to deliver the same to the customers.
[321C D] (3) There has been no sale of the material between the appellant and the customers.
The appellant was collecting Rs.600 per metric ton as conversion charges and Rs.60 per metric ton as handling charges.
[320G] (4) The handling charges were intended to cover the appellant 's expenses in lifting the ingots.
The Tribunal has come to the right conclusion in holding that the handling charges represented pre manufacturing cost and became part of the value for computation of duty.
[321D E] (5) Rule 9 which corresponds to s.11 A of the Act pro vided a period of one year for taking of proceedings while Rule 10 corresponding to the present section 11 of the Act pre scribed a period of three months for such purpose.
With effect from 6.8.1977, the period of six months was substi tuted for the period of three months and the period of five years substituted for the period of one year.
[321B C] (6) The rule is intended to relate back and cover a period of five years from the date jurisdiction under the rule is invoked.
The provision, is therefore, retrospective in operation.
[321G] (7) Once the rule comes into existence and jurisdiction under the rule is invoked, it has got to cover a period upto five years preceding the date of issue of notice.
[321H]
| Meriappa Gounder respondent No. 1 in C.A. 466/69 and appellant 1 in C.A. 2375/69 filed a suit on August 23, 1950 in the District Court, Trichur, for specific performance of an agreement dated May 22, 1950 made by one Soliappa Chettiar.
The said Soliappa Chettiar pleaded inability to perform the contract in view of the refusal of one Neelakanta Iyer a lessee of the factory to give up possession.
Pending the suit Late Kochivareed, husband of the appellant in C.A. 466/69 obtained an assignment of the lease from Neelakanta Iyer on March 5, 1951.
On March 8, 1951 Soliappa Chettiar executed a sale deed of the suit property in favour of one George Thatil, a nephew of Kochivareed.
In the course of the proceedings the trial court appointed a Receiver to manage the suit property.
On March 21, 1951, Late Kochivareed obtained a lease, of the suit property at a rent of Rs. 15,000/ for a period of one year which was renewed for another year from the Receiver and a sum of Rs. 30,000/ SO collected as rent for two years was deposited in the Court by the Receiver.
The District Court on August 28, 1952 decreed the suit for specific performance and mesne profits at a reduced rate of Rs. 15,000/ per annum, instead of at Rs. 30,000/ per annum as claimed.
Against the decree two appeals were filed in the High Court by Kochivareed and George Thatil.
The High Court allowed the appeals and dismissed the suit by its judgment dated March 21, 1953.
The appeal filed by Meriappa Gounder (CA 129/56) was allowed by this Court as per its judgment and decree dated April 22, 1958.
On the question of the liability of the mesne profits, the present appeals arose out of interpretation of the direction (e) of this Court 's decree dated April 22, 1958.
Allowing the appeals by certificate in part the Court ^ HELD: 1.
Mesne profits being in the nature of damages, no invariable rule governing their award and assessment in every case can be laid down and the "Court may mould it according to the justice of the case".
Even so one broad basic principle governing the liability for mesne profits is discernible 59 from section 2(12) of the Code of Civil Procedure which defines 'mesne profits ' to mean 'those profits which the person in wrongful possession of property actually received or might with ordinary deligence have received therefrom together with interest on such profits, but shall not include profits due to improvements made by the person in wrongful possession." [68G H, 69A] Wrongful possession of the defendant is the very essence of a claim for mesne profits and the very foundation of the defandant 's liability therefor, Generally, the person in wrongful possession and enjoyment of the immovable property is liable for mesne profits.
But, where the plaintiff 's dispossession, or his being kept out of possession can be regarded as a joint or concreted act of several persons, each of them who participants in the Commission of that act would be liable for mesne profits even though he was not in actual possession and the profits were received not by him but by some of his confederates.
Possession through another, such as a tenant may be sufficient to create liability for mesne profits, if such possession is wrongful.
[69A C and G] 2.
In such a case, where the claim for mesne profits is against several tresoassers who had combined to Keep the plaintiff out of possession, it Is open to the Court to adopt either of the two courses.
It may by its decree hold all such trespassers jointly and severally liable for mesne profits leaving them to have their respective rights adjusted in a separate suit for contribution; or it may, if there is proper material before it ascertain and apportion the liability of each of them on a proper application made by the defendant during the same proceedings.
[69C D] 3.
A decree under Order XX Rule 12 of C.P.C., directing enquiry into mesne profits, howsoever expressed must be construed to be a decree directing the enquiry in conformity with the requirements of Rule 12(1)(c), 80 that the decreeholder is not entitled to mesne profits for a period (commencing from the date of the institution of the suit) extending beyond three years from the date of the preliminary decree.
[69E Fl Chitturi Subhanna vs Kudappa Subbanna, ; ; referred to.
The words "whichever event first occurs" in sub clause (c)(iii) of clause I of Rule 12 of Order XX Civil Procedure Code imply that the maximum period for which future mesne profits can be awarded is three years from the date of the decree for possession and mesne profits, finally passed.
The period of three years is to be computed from the date of decree of this Court i.e. from April 22, 1958 and it will expire on the date on which possession was delivered or relinquished by the defendant in favour of the decreeholder pursuant to that decree.
In other words, the decree mentioned in sub clause (iii) of clause (c) would be the appellate decree dated April 22, 1958 of this Court.
The period of three years mentioned in the said subclause is, therefore, to be reckoned from April 22, 1958.
[73G H, 74A B] 5.
Section 144 of the Code of Civil Procedure, in terms, says that for the purpose of the restitution, the Court may make any orders, including orders for the payment of interest, damages compensation and mesne profits which are properly consequential on variation or reversal of the decree.
[77A B] There is nothing in the decree, dated April 22, 1958 of this Court which expressly or by implication, prohibits the payment of interest on the sum of 60 Rs. 30,000/ withdrawn by defendant 3 by way of restitution.
The trial court had rightly allowed interest.
[77B C] 6.
The decree dated April 22, 1958 of this Court was a composite decree, partly final, and party preliminary.
It was final in so far as it granted the reliefs of specific performance and possession on deposit of the price by the Plaintiff.
It was preliminary in as much as it directed an inquiry with regard to the assessment of mesne profits and as to who out of the defendants was/were liable for payment of those mesne profits.
But? it laid down in no uncertain terms that only such of the defendants would be liable for mesne profits "as may have been in possession of the property".
This direction in the decree means that only the defendant or defendants found in actual possession and enjoyment of the property would be liable for mesne profits.
[70A C] In the instant case: (a) The third defendant was in sole, actual possession and control of the suit property from March 3, 1951, when he obtained the alleged assignment of lease in his favour from Neelakanta Iyer.
In terms of the decree of this Court, therefore defendant 3 alone is liable for mesne profits in respect of the period he was in possession (excepting the period during which the property was under the management of the Court Receiver).
[71E F] (b) The contention that the possession of defendant 2 was the legal possession of an owner while that of defendant 3 was derivative possession of a lessee or licensee under the former is not correct, since at no stage, in the Courts below defendant 3 took up the position that he was in derivative possession of the property under defendant 2.
Nor was there even a whisper in the pleadings that defendant 2 and defendant 3 were joint tortfeasors and therefore jointly and severally liable for mesne profits.
[69H, 70C, G] (c) There is nothing in the decree of this Court dated April 22 1958, indicating that the amount deposited by the plaintiff towards the price should have been sel off against the liability of defendant 3 for mesne profits.
On the contrary, it allowed deduction of the amounts found due against defendant 1 and defendant 2 from the deposit of Rs. 85.000/ to be made by the plaintiff towards the price, and further directed that after such deduction, the balance of such deposit made by the plaintiff, if any, shall be paid to the third respondent (defendant 2) who is the assignee of the second respondent (defendant 1) pendente lite.
[71F H] (d) The plaintiff was not bound to suffer a set off in favour of defendant 3, merely because defendant 2 or his assignee withdrew the price deposited by the plaintiff without furnishing any security for its refund or adjustment towards the liability of defendant 3, there being no evidence whatever, on record to show that such withdrawal was the result of any collusion or conspiracy between the plaintiff and defendant 2 and defendant 3.
Even assuming that both defendants 2 and 3 were liable for mesne profits jointly and severally, then also, the plaintiff could at his option.
recover the whole of the amount of mesne profits from either of them; and how such inter se liability of the defendants was to be adjusted or apportioned was a matter between the defendants only.
[72A C] (e) Defendant 3 entered into possession of suit property under a l assignment of sham lease from Neelakanta Iyer on March 5, 1951 during the 61 pendency of the plaintiffs suit, which was instituted on August 25, 1950.
The A plaintiff had deposited Rs. 50,000/ sometimes after the presentation of the plaint.
Under the agreement of the sale, dated May 22, 1950 made by defendant 1 in favour of the plaintiff, the total sale considerations was fixed @ Rs. 90,003/ .
Out of it Rs 5,003/ had been paid to defendant I on the very date of the agreement.
It was further stipulated that out of the balance, Rs. 50,000/ would be paid by the plaintiff purchaser at the time of the registration of the sale deed which was to be executed and registered on or before July 15, 1950.
It was further stipulated that on payment of the further sum of Rs. 50,000/ the plaintiff would be entitled to be put in possession of the suit property.
Thus when defendant 3 entered into possession, first under the garb of an assignee of sham lease from Neelkanta Iyer, and then further purchased the property with his on funds in favour of defendant 2 pendente lite, he was fully conscious that he was purchasing a litigation.
His possession was therefore wrongful qua the plaintiff from its inception [72E H] (f) Disallowance of the claim for deduction for interest on the deposit of Rs. 50,000 which the plaintiff had withdrawn on August 19, 1953 and had redeposited on 9 2 1959 is incorrect.
The defendant is entitled to interest @ 6% per annum for the said period, after deduction the interest for the period during which the property was under the management of the Receiver.
[74D E] (g) The plaintiff`s claim for mesne profits @ the rate of Rs. 25,000/ has correctly been negatived.
Since the plaintiff did not object to the lease granted by the Receiver to defendant 3 on an annual rental of Rs. 15,000/ and since he did not produce any other reliable evidence, the High Court was not wrong in holding that the mesne profits should be on the basis of this rental value of Rs. 15,000/ [76A C] (h) The plaintiff, in view of the long drawn out litigation is entitled to interest @ 6% per annum upto March 29, 1959.
[76E F]
| A Hindu undivided family consisting of the father (Karta) and his three sons carried on business.
Land was acquired in the name of the Karta and the price was paid out of the books of the family, and a building was constructed on the land.
Another building was constructed on another plot of land.
On a partial partition of the above Hindu undivided family its business was taken over by a partnership firm consisting of the Karta and the two elder sons and the firm debited a certain sum of money in the building account of the firm for the assessment year 1955 56 and a similar sum in respect of the other property for the assessment year 1956 57.
The appellants (assessees) who were members of the partnership firm, filed separate returns in their individual status for the assessment years 1955 56 and 1956 57 claiming that the two properties belonged to the four members of the family in their individual capacity.
The Income Tax Officer however regarded the properties as belonging to the partnership firm, and in the assessment proceedings of the firm for the said years, estimated the cost of construction at a higher figure, than the cost disclosed, and made additions accordingly to the returned income of the firm.
Allowing the appeals of the partnership firm the Appellate Assistant Commissioner deleted the additions holding that as the money was advanced by the firm and debited to the account of each co owner, the partnership firm was not the owner of the properties and therefore it could not be said to have earned any concealed income.
The Income Tax Officer then initiated proceedings under section 147(a) of the I.T. Act 1961 against the individual assessees for the assessment years 1955 56 and 1956 57 and the additions on account of concealed income originally made in the assessments of the partnership firm were divided between the assessees and included in their individual assessment, rejecting the plea of the assessees that there was no case for invoking the said section, as they had already disclosed that they had invested in the properties when filing their original individual returns.
On appeal the Appellate Assistant Commissioner though agreeing that there was no default on the part of the assessees to warrant proceedings under section 147(a) and though ordinarily the assessments would be barred by limitation, maintained the assessments on the ground that section 153(3)(ii) of the Act applied.
273 The Income Tax Appellate Tribunal though rejecting the contention that the assessees were not covered by the expression "any person" in section 153(3)(ii), pointed out that the provision could not be availed of by the Income Tax Officer as there was neither any "finding" nor a "direction" on the earlier order of the Appellate Assistant Commissioner in consequence of which, or to give effect to which, the impugned assessment could be said to have been made and that no opportunity had been afforded to the assessees of being heard as was required by Explanation 3 to section 153(3) before that earlier order was made.
It held that the Appellate Assistant Commissioner had no jurisdiction to convert the assessments made by the Income Tax Officer under section 147(a) to "assessments passed under section 153(3)(ii)".
The High Court on Reference by the Tribunal observed that the finding that the properties did not belong to the partnership firm and therefore the excess amount of the cost of construction could not be regarded as the concealed income of the firm, was necessary for the disposal of the appeals filed by the firm and as a corollary it was held that the buildings belonged to the co owners.
This necessitated the "direction" to the Income Tax officer that he was free to assess the excess amount in the hands of the co owners.
It held that the Appellate Assistant Commissioner could convert the provisions of section 147(i) into those of section 153(3)(ii) of the Act and that the provisions of section 153(3)(ii) of the Act applied to the case.
In the assessee 's appeals to this Court on the question whether section 153(3)(ii) can be invoked.
Allowing the appeals, ^ HELD: (1) The provisions of section 153(3)(ii) of the Income Tax Act, 1961 are not applicable to the instant case.
[280 C] (2) The expression "finding" and "direction" are limited in meaning.
A finding given in an appeal, revision or reference arising out of an assessment must be a finding necessary for the disposal of the particular case, that is to say, in respect of the particular assessee and in relation to the particular assessment year.
To be a necessary finding, it must be directly involved in the disposal of the case.
[277G] (3) Where the facts show that the income can belong either to A or B and to no one else, a finding that it belongs to B or does not belong to B would be determinative of the issue whether it can be taxed as A 's income.
A finding respecting B is intimately involved as a step in the process of reaching the ultimate finding respecting A.
If, however, the finding as to A 's liability can be directly arrived at without necessitating a finding in respect of B, then a finding made in respect of B is an incidental finding only.
It is not a finding necessary for the disposal of the case pertaining to A.
The same principles apply when the question is whether the income under enquiry is taxable in the assessment year under consideration or any other assessment year.
[278A B] (4) It is now well settled that the expression "direction" in section 153(3) (ii) of the Act must mean an express direction necessary for the disposal of the case before the authority or court.
It must also be a direction which the authority or court is empowered to give while deciding the case before it.
[278C] 274 5.
(i) Section 153(3) (ii) is not a provision enlarging the jurisdiction of the authority or court.
It is a provision which merely raises the bar of limitation for making an assessment order under section 143 or section 144 or section 147.
[278D] Income Tax Officer, A Ward, Sitapur vs Murlidhar Bhagwan Das, ; N. Kt.
Sivalingam Chettiar vs Commissioner of Income tax, Madras, ; referred to.
In the instant case all that has been recorded is the finding that the partner ship firm is not the owner of the properties.
The finding proceeds on the basis that the cost has been debited in the accounts of the four co owners.
But that does not mean, that the excess over the disclosed cost of construction constitutes the concealed income of the assessees.
The finding that the excess represents their individual income requires a proper enquiry and for that purpose an opportunity of being heard is needed to be given to the assessees.
That is plainly required by Explanation 3 to section 153(3).
The finding contemplated in Explanation 3, is a finding that the amount represents the income of another person.
[278H 279B, D] (ii) It is one thing for the partners of a firm to be required to explain the source of a receipt by the firm, it is quite another for them in their individual status to be asked to explain the source of amounts received by them as separate individuals.
[279C] (iii) The observation of the Appellate Assistant Commissioner cannot be described as such a finding in relation to the assessee.
[279D] (iv) It is also not possible to say that the order of the Appellate Assistant Commissioner contains a direction that the excess should be assessed in the hands of the co owners.
The observation that the Income Tax Officer "is free to take action" cannot be described as a "direction".
A direction by a statutory authority is in the nature of an order requiring positive compliance.
When it is left to the option and direction of the Income Tax Officer whether or not to take action it cannot be described as a direction.
[279E F] (v) The order of the Appellate Assistant Commissioner contains neither a 'finding ' nor a 'direction ' within the meaning of section 153(3)(ii) of the Act in consequence of which or to give effect to which the impugned assessment proceedings can be said to have been taken.
[279G] Commissioner of Income tax, Andhra Pradesh vs Vadde Pullaiah & Co., ; referred to.
| The appellant was the Mahant of the Asthal Estate in Bihar which was in the management of a Receiver appointed by the Civil Court in a suit relating to the estate.
On appeal the question that arose for decision in this Court was whether the appellant Mahant was liable to be assessed under the Bihar Agricultural Income tax Act, 1948, to pay agricultural income tax for the year in which the estate was in the management of the Court Receiver.
Held, that the income though collected by the Receiver was the income of the appellant.
By virtue of the provisions of sections 2, cl.
(m) and 13 of the Bihar Agricultural Income tax Act it was open to the taxing authorities to treat the Receiver as the assessee because he held the property from which income was derived, but on that account the income in the hand of the owner was not exempt from liability to assessment of tax.
Section 3 of the Act provides for charging agricultural income of every person " as defined in section 2, cl.
(m) which includes a receiver and section E3 merely provides a machinery for recovery of tax from "Persons" including receivers and is not by itself a charging section.
| The respondent was a registered dealer under the Assam Sales Tax Act, 1947.
The Sales tax Officer assessed the respondent to Sales tax in respect of the containers of hydrogenated oil and other exempted goods.
Appeals to the Assistant Commissioner of Taxes failed as also second ap peals to the Assam Board of Revenue.
In reference the High Court held that the value of the containers was not assessable to sales tax "unless separate price has been charged for the containers.
" This finding was based on the view that there was no evidence to show that actually separate price was paid for the containers and hence there was no sale and there could not be any tax on the containers.
In appeal to this Court by the Commissioner of Taxes it was urged that the parties may have intended in the circumstances to sell the hydrogenated oil apart from the containers the mere fact that the price of the containers was not separately fixed would make no difference HELD : The question as to whether there is an agreement to sell packing material is a pure question of fact depending upon the circumstances found in each case.
The High Court was in error when it answered the question of law referred to it without addressing itself to the question whether there was an express or implied agreement for the sale of the containers of hydrogenated oil in the present case.
[963 HI Hyderabad Deccan Cirgrette Factory vs State of Andhra Pradesh, 17 S.T.C. 624, relied on.
|
iminal Appeal No. 2 of 1958.
Appeal from the judgment and order dated July 27, 1957, of the Bombay High Court in Criminal Appeal No. 254 of 1957.
WITH Criminal Appeal No. 81 of 1960.
Appeal by special leave, from the judgment and order dated July 27, 1957, of the Bombay High Court, in Criminal Appeals Nos. 255 and 257 of 1957.
M.H. Chhatrapati, Ravindra Narain, O. C. Mathur and J. B. Dadachanji, for the appellant (in Criminal Appeal No. 2 of 1958).
B.K. Khanna and D. Gupta, for the respondent in Criminal Appeal 2 of 1958) and appellant (in Criminal Appeal No. 81 of 1960).
198 Ram Lal Anand and section N. Anand, for respondent No. 1 (in Criminal Appeal No. 81 of 1960).
B.S. Gheba, for respondent No. 2 (in Criminal Appeal No. 81 of 1960).
April 24.
The Judgment of the Court was delivered by SUBBA RAO, J.
These two appeals one filed by accused No. 1 by certificate and the other filed by the State of Maharashtra by special leave against the judgment of the High Court of Bombay confirming the conviction and sentence of accused No. 1 and setting aside the convictions and sentences of accused Nos. 2 and 3.
The prosecution case may be briefly stated.
There was a depot called the Dehu Vehicle Depot in which military stores were kept.
In the year 1944 Col. Rao, the Chief Ordnance Officer, was in charge of the Depot; Col. Sindhi, the Station Commandant, and Brig.
Wilson, the Brigadier, Ordnance, Southern Command, were his superior officers.
Accused No. 1, Major Barsay, was second in command in the Depot and was in charge of stores section; he was subordi nate to Col. Rao.
Major Nag, another subordinate to Col. Rao, was in charge of the administration of the Depot.
One Capt.
Pratap Singh was the Security Officer in the Depot; but, during the period in question, one Lawrence was acting as the Security Officer in place of Capt.
Pratap Singh.
Kochhar, accused No. 2, who was on leave from October 25, 1954, was recalled to duty by accused No. 1 and was put in charge of kit stores in the Depot.
Avatar singh, accused No. 3, who was working in the Unfit Sub Park, was transferred to the Kit Stores by accused No. 1 during the absence on leave of Col. Rao.
Accused No. 4, Saighal, was an Ex Col. and was at one time the Station Commandant of the Depot; after retirement he had been staying in a bungalow at a short distance from mile No. 92/7 on the Poona Bombay Road.
Accused No. 5, Ramchand Gangwani, was a refugee from Sind and he was running a hotel at Lonnavala.
Accused No. 6, Devichand, and one 199 Khemchand, who is absconding, are sons of accused No. 5.
Accused Nos. 4 and 5 were friends and they were also partners along with one Bhagwan Parshuram of Bombay in "The Bombay Lonavala Disposal Syndicate".
There were large consignments of Kits in Shed No. 48 of Kit Stores which were unitemized and unaccounted for in the books of the Depot.
The accused entered into a conspiracy to smuggle out some of the said stores and to make an illegal gain by selling them at Bombay through accused No. 4.
The brain behind the conspiracy was accused No. 1.
The plan chalked out to implement the object of the conspiracy may be briefly stated.
Col. Rao was to proceed on leave sometime in December 1954 and Maj.
Barsay, being the next in command, was naturally to succeed him as Chief Ordnance Officer of the Depot during the absence on leave of Col. Rao.
The smuggling of the goods out of the Depot was there fore arranged to take place during the period when Maj.
Barsay was acting as the Chief Ordnance Officer of the Depot.
Col. Rao went on leave from December 11, 1954.
Kochhar, the second accused, who was in charge of the Fit Park, proceeded on two months ' leave of absence with effect from October 25, 1954, but he was recalled by accused No. 1 and posted as officer in charge of Kit Stores on November 25, 1954.
Accused No. 3, Avatarsingh, was working in the Unfit Sub Park, and he too was shifted from there to the Kit Stores on or about November 22, 1954.
These two, postings were made by accused No. 1 without the consent or knowledge of Col. Rao when he had gone to Delhi on some temporary duty for ten days from November 20, 1954 to November 30, 1954.
On the night of December 1, 1954, there was a theft of various articles in the Unfit Park of the Depot.
Accused No. 1 called in Lawrence, the acting Security Officer, ostensibly to discuss with him certain matters regarding the theft.
During the course of the conversation accused No. 1 suggested to Lawrence that valuable stores in Shed No. 48 might be smuggled out and the large amounts expected to be realized from their sale might be shared between the conspirators, including 200 Lawrence.
Presumably to put him in a suitable frame of mind to accept the suggestion to become a conspirator, he also hinted to Lawrence that Col. Rao suspected that he (Lawrence) had a hand in the theft.
The scheme outlined by accused No. 1 was confirmed by accused No. 2 a few days later.
According to the plan chalked out by Maj.
Barsay, he was to appoint a board of officers for itemization of "Specialist Boxed Kits" in Shed No. 17 and once the board started functioning there would be shuttle of trucks moving from Shed No. 48 to Shed No. 17 and vice versa and during the movements of those trucks two or three trucks loaded with valuable stores were to be moved out through the main gate of the Depot on the pretext of being back loaded to the Return Stores Sub Depot.
He was also to take Col. Rao to Shed No. 48 and explain to him that the boxes contained very few items so that he too, on his return from leave, would not be surprised at the final result of the itemization.
It was also agreed that the scheme should be pushed through tentatively on December 16, 17 and 18, 1954.
But, for one reason or other, it could not be pushed through during those days, as Capt.
Kapoor was frequently visiting the scene of itemization.
On December 18, 1954, a meeting took place at Maj.
Barsay 's bungalow and accused Nos.
1 to 4 and Lawrence attended that meeting.
At that meeting the details of working out the plan to be carried out on December 20, 1954, were finalized.
Kochhar reported to the conspirators that he had briefed Jamadar Kundanlal, and Lawrence told them that, as per Kochhar 's suggestion, he had already detailed Jamadar Kundanlal on day duty at the main gate during the next week.
Barsay agreed to get a driver of his confidence detailed on one of the trucks to be allotted to the Kit Stores and he offered to give orders to Kochhar on the morning of December 20, 1954, in the presence of all, to transfer the itemized kits to Shed No. 26 ostensibly for the purpose of conditioning and preservation.
That would enable accused No. 3, Avatar Singh, to load the stores from Shed No. 17.
The first trip was to be of ordinary stores in which the 201 conspirators were not interested and the second trip was to be of valuable stores which were to be smuggled out of the gate.
Barsay also undertook to call Maj.
Nag to his office on December 20, 1954 and issue orders in the presence of Maj.
Nag to Lawrence to go to Dehu Ordnance Depot (D.O.D.) and get the fire hoses which were sent there for repairs.
Kochhar agreed to prepare a bogus voucher on Monday (December 20, 1954) morning, and Lawrence undertook to provide a bogus gate pass.
Accused No. 4, Saighal, agreed to keep a lorry and some laborers present near his bungalow for transshipping the stores.
On the evening of December 19, 1954, Lawrence went to the house of Saighal and the latter showed him the spot where the stores were to be transshipped.
Thereafter, after taking his dinner, Lawrence went to the Depot at 9 p.m.
The Orderly Officer at the Depot, one Shrinivasan, informed Lawrence that Jamadar Kundanlal, who was to have been on duty at the main gate on December 20, 1954, was sick and had taken 3 days ' leave of absence on medical grounds and that Maj.
Barsay had sent a chit to him asking him to send Lawrence to the bungalow of Maj.
Barsay.
Lawrence went to the bungalow of Maj.
Barsay, but could not meet him; and then Lawrence went to the residence of Jamadar Kundanlal and tried to persuade him to attend to his duty at the main gate on December 20, 1954.
On December 20, 1954, at about 9.15 a.m. Maj.
Barsay called Havaldar Pillay to his office and asked him to allot a new vehicle to the Kit Stores and to detail driver Ramban on that vehicle.
Havaldar Pillay did accordingly.
At about 10 a.m., Maj.
Barsay called Maj.
Nag and Lawrence to his office and, in the presence of Maj.
Nag, he issued orders to Lawrence to go to Dehu Ordnance Depot (D.O.D.) personally and get the fire hoses.
After Maj.
Nag left the place, Lawrence told Maj.
Barsay that Jamadar Kundanlal had reported himself to be sick and had taken leave of absence and that one Godse was at the main gate.
Barsay suggested to Lawrence that 26 202 Jamadar Jogendrasingh may be put at the main gate in place of Godse, and he informed him that he had fixed upon Ramban as the driver of the vehicle in which the stores were to be smuggled out.
At about 11 a.m. Lawrence met Maj.
Barsay and Kochhar near, Shed No. 48 and was told by Maj.
Barsay that the scheme was to proceed according to schedule.
Kochhar and Lawrence then went to Shed No. 17 where Avatarsingh, accused No. 3, was present.
Kochhar told Avatarsingh that he had not prepared any voucher as it was not necessary.
Lawrence had brought an old gate pass with him and he handed over the same to Avatarsingh.
Truck No. D. D. 5963 was, in the first instance, loaded with ordinary stores and was sent to Shed No. 26.
In the meanwhile, Lawrence went to the Depot and asked Godse to take over at the Unfit Sub Park gate and he ordered Jamadar Jogendrasingh to take over from Godse at the main gate.
As Jamadar Jogendrasingh refused to accept the gate pass to be produced by the driver and pass out the vehicle without making an entry regarding the same in the "Vehicles In and Out Register", Lawrence gave him a written order to that effect with instructions not to show or hand over that written order to anybody except himself on his return or to Maj.
At about 1 p.m. Maj.
Barsay told Lawrence that he had become apprehensive of the scheme succeeding, as he had seen the Station Commandant 's car near the Barrack Office and, therefore, he told him not to take out the vehicle till that car had gone out.
Lawrence agreed and went to Shed No. 17 where Avatarsingh was present, and Avatarsingh got the truck loaded and handed over the bogus gate pass and the duty slip of the vehicle to Ramban, and he also asked Lawrence to get into the truck there itself instead of near the main gate as per the plan.
After Lawrence got into the truck, it proceeded towards the main gate at about 1.40 p.m.
At the main gate, Ramban gave the duty slip of the vehicle and also the bogus gate pass to Jamadar Jogendrasingh and the latter told Lawrence that Maj.
Barsay had left a message for him "not to do it on that day".
Lawrence, 203 ignoring the said directions, took the vehicle out of the gate.
At a spot near Talegaon there was a civilian lorry bearing No. BYL 3289 kept ready by accused Nos. 4, 5 and 6 for transhipping the stores, and to that place the truck was driven.
The two lorries were parked back to back, and accused No. 6.
and the absconding accused Khemchand and two others started transhipping the stores from the military lorry to the civilian lorry.
At that stage, the police officers appeared at the scene and prevented further fulfilment of the plan of the accused.
It is a further case of the prosecution that Lawrence ostensibly joined the conspiracy with a view to bring to book the culprits and was informing the superior officers and the police orally and in writing from time to time as and when the important events were taking place.
As some argument was made on the basis of the charges, it would be convenient at this stage to read the charges framed by the Special Judge, Poona.
The charges are: (1) That you accused No. 1 Major E. G. Barsay, when officiating as Chief Ordnance Officer, D. U. V. and you accused No. 2, H. section Kochhar, when posted as Civilian Group Officer, D. U. V., and you accused No. 3, Avatarsingh Seva Singh, then working as Civilian Stores Keeper, D. U. V., and you accused No. 4, W. section Saighal, released Lt. Col., and you, accused No. 5, Ramchand Pahlajrai Gangawani, and you accused No. 6, Deviprasad Ramchand Gangawani and the absconding accused Khemchand between about October 1954 and December 1954 were parties to a criminal conspiracy at Dehu Road area by agreeing to do certain illegal acts to wit: Firstly, dishonestly or fraudulently misappropriate or otherwise convert to your own use the Military Stores lying in the Vehicle Depot, Dehu Road and which was entrusted or was in charge of Major E. G. Barsay, H. section Kochhar, and Avatarsingh Seva Singh and which was also under their control, as public servants; Secondly, to obtain by corrupt or illegal means for yourselves or for any other persons 204 such stores which amounts to abusing their position as public servants i.e., the co conspirators; Thirdly, to commit illegal acts of committing theft or receiving of stolen property and the above said illegal acts were done in pursuance of the said agreement and that you have thereby committed an offence punishable under Section 120 B of the Indian Penal Code and within my cognizance.
(2) That you accused Nos. 1, 2, 3,4, 5, 6 and another (Khemchand Ramchand Gangawani), between about October 1954 and December 1954 in pursuance of the abovesaid conspiracy jointly and in furtherance of the common intention of all of you, you accused No. 1, Major Barsay, Officiating Chief Ord.
nance Officer, and you accused No. 2, H. section Kochbar, Civilian Group Officer, D. U. V., and you accused No. 3, Avatarsingh Seva Singh, Civilian Store Keeper, and you accused No. 4, W. section Saighal, released Lt. Col., and you accused No. 5, Ramchand Pahalajrai Gangawani, and you accused No. 6, Deviprasad Ramchand Gangawani, did on 20th of December 1954, dishonestly or fraudulently his.
appropriate with a common intention or convert for your own use Government property in the form of Military Stores described in detail in Schedule 'A ' appended herewith, entrusted to or under the control of the first three accused, namely, Major E. G. Barsay, H. section Kochhar and Avatarsingh Seva Singh, who were public servants and thereby committed an offence under Section 5(1)(c), punishable under section 5(2), of the Prevention of Corruption Act, read with Section 34 of the Indian Penal Code and within my cognizance.
(3) That you accused Nos. 1, 2,3, 4, 5, 6 and the absconding accused Khemchand Ramchand Gangawani, in pursuance of the abovesaid conspiracy, jointly and in furtherance of the common intention of all of you, did by corrupt or illegal means by abusing their position as public servants, obtained for yourselves or for any other persons, the valuable things in the form of Military Stores detailed out in Schedule 'A ' appended herewith, and this act 205 constitutes an offence under Section 5(1)(d) of the Prevention of Corruption Act, punishable under Section 5(2) of the said Act read with Section 34 of the Indian Penal Code and within my cognizance.
(4) That you accused Nos. 1, 2, 3, 4,5, 6, along with the absconding accused, Khemchand Ramchand Gangawani, did on 20th of December 1954, in pursuance of the abovesaid conspiracy jointly and in furtherance of the common intention of all of you, dishonestly or fraudulently remove the Military stores described in detail in Schedule 'A ' appended herewith from the Dehu Road Depot and this act constitutes an offence punishable either under Section 381 or 411 of the Indian Penal Code, read with Section 34 of the Indian Penal Code and within my cognizance.
" The main defence of the accused was that, in view of the thefts going on in the Depot, the reputation of Lawrence, the Security Officer, was at the lowest ebb, that in order to resurrect his reputation and to ingratiate himself into the good books of his superiors, he concocted the scheme of huge fraud and implicated therein the accused, including the Acting Chief Ordnance Officer of the Depot.
Shortly stated, the defence was that all the accused were innocent and that it was Lawrence that "abducted" the truck with the stores, made false statements to the superior officers from time to time giving concocted versions to fit in with the theory of conspiracy.
The Special Judge, on a consideration of the evidence, held that all the charges were made out against the accused.
He rejected the technical objections raised in regard to the framing of the charges, the validity of the investigation made by the investigating officer and the sanction given by the Central Government for the prosecution of the accused, and came to the conclusion that prima facie there was no good ground to discard the evidence of Lawrence, but he placed the said evidence in the category of interested evidence and required independent corroboration before acceptance.
In the words of the learned Special Judge, "Shri Lawrence 's evidence can, 206 therefore, be accepted and relied upon, only if it is corroborated by other independent evidence and circumstances in the case.
" He found ample evidence and circumstances corroborating the evidence of Lawrence.
After considering the entire evidence, he came to the following conclusion: "The above discussion of the evidence on record and the circumstances in the case makes it abundantly clear that the prosecution has been able to prove beyond a reasonable doubt that every one of these six accused did commit overt acts in furtherance of the criminal conspiracy alleged against them." He held that accused Nos. 1 to 6 were guilty of the principal offence charged against them and convicted all of them under section 120 B of the Indian Penal Code and section 5(2) of the Prevention of Corruption Act, 1947, read with B. 34 of the Indian Penal Code.
He gave varying sentences of imprisonment and fine to the accused.
The accused preferred five appeals to the High Court against their convictions and sentences.
A division bench of the Bombay High Court which heard the appeals set aside the conviction of accused Nos. 2, 3, 5 and 6, but confirmed those of accused ' Nos. 1 and 4.
The High Court also rejected all the technical objections raised at the instance of the appellant accused in regard to some parts of 2nd, 3rd and 4th charges.
In regard to the 2nd and 3rd head sub charges, tile High Court accepted the plea that accused Nos. 4, 5 and 6 could not be charged with having committed an offence under section 5(1)(c) and section 5(1)(d) of the Prevention of Corruption Act, as they were not public servants; but they held that it would be proper to frame a charge against them under section 109 of the Indian Penal Code for having abetted the commission of the offence of criminal misconduct under section 5(1)(c) and (d) of the Prevention of Corruption Act, committed by accused Nos.
1 to 3.
As the High Court held that they were not prejudiced by the irregularity of the charge, it altered the charge to one under section 109 of the Indian Penal Code, read with section 5(1)(c) and (d) of the Prevention of Corruption Act.
As regards the 207 last head of the charge, it held that all the accused could not be charged with having committed an offence under section 381 of the Indian Penal Code and that the charge under section 411 of the Indian Penal Code would also appear to be improper so far as accused Nos. 1 to 3 were concerned; but it held that so far as accused Nos. 4, 5 and 6 were concerned, the charge under section 411, read with section 34, Indian Penal Code, would be quite proper.
Before the High Court, learned counsel appearing on behalf of the accused and the special counsel, Mr. Amin, appearing on behalf of the State, asked the Court to proceed to examine the evidence of Lawrence on the basis that he was a decoy and a trap witness.
The High Court agreed with the learned Special Judge that the evidence of Lawrence would, have to be treated on par with that of a trap witness and that it would be inadvisable to rely upon the said evidence without independent corroboration.
It also pointed out that the corroboration required was not a corroboration of every particular in respect of which the accomplice or the approver gave his evidence, but the corroboration must be such as to make the court believe that the evidence of the accomplice was a truthful one and that it would be safe to act upon that evidence.
Finally the High Court premised its discussion of the evidence in the following words: "In our opinion, all these decisions would clearly establish that it would not be safe to rely on the evidence of Lawrence who is admittedly a decoy or trap witness, without his testimony being corroborated from independent sources.
" Then the learned Judges of the High Court considered the evidence of Lawrence minutely, discarded some parts of the evidence which were discrepant or inconsistent with other proved facts and accepted the broad story of conspiracy given by him as true to the extent it was corroborated by other unimpeachable pieces of evidence and circumstances.
After elaborately considering the evidence of Lawrence, the learned Judges of the High Court came to the following con clusion: 208 "We, therefore, accept Lawrence 's evidence, find that his story is probable and true and we also find that the evidence on the record justified the finding of the trial Court that there was a conspiracy as alleged by the prosecution to smuggle goods out of the Dehu Vehicles Depot." Then the learned Judges considered the question as to which of the accused took part in the conspiracy.
As regards accused No. 1, they came to the conclusion that there was cogent evidence to implicate him in the conspiracy, and in that view, they confirmed the finding of the trial court that he was a party to the conspiracy to smuggle military goods out of the Depot.
As regards accused No. 2, they held that the evidence was not sufficient to establish that he was a member of the alleged conspiracy and that, as he could not be held to be a member of the conspiracy, he could not also be held to be guilty of committing criminal misconduct under section 5(1)(c) and (d) of the Prevention of Corruption Act, 1947.
As regards accused No. 3, they were of the opinion that the case against him was not established beyond reasonable doubt and that he could not be held to be guilty of criminal conspiracy as well as criminal misconduct.
As regards accused No. 4, they accepted the finding of the learned Special Judge, as independent acceptable evidence corroborated the evidence of Lawrence in respect of this accused.
So far as accused Nos. 5 and 6 were concerned, they found the evidence to be very weak and therefore set aside the convictions and sentences passed against them.
In the result, they confirmed the convictions and sentences of accused Nos. 1 and 4, and set aside those of accused Nos. 2, 3, 5 and 6.
It appears that accused No. 4 died after the appeal was disposed of by the High Court.
Accused No. 1 preferred Criminal Appeal No. 2 of 1958 against his conviction and sentence passed by the High Court and the State preferred Criminal Appeal No. 81 of 1960 challenging the correctness of the order of acquittal made in respect of accused Nos. 2 and 3.
We shall first take the appeal filed by accused No. 1.
209 Learned counsel for the appellant raised before us all the technical points which he unsuccessfully raised before the Special Judge as well as before the High Court.
At the outset we shall deal with the said contentions before considering the arguments advanced on the merits of the case.
The first contention of learned counsel for the appellant is that the Special Judge, Poona, had no jurisdiction to take cognizance of the offences with which the accused were charged and that they should have been tried only by a court martial under the Army Act.
The argument of learned counsel for the appellant may be briefly stated thus: The (46 of 1950) created new offences.
Section 52 of the said Act created offences with which accused in the present case were charged, and provided a new machinery, namely, a court martial, to try persons committing the said offences.
Therefore by necessary implication the trial of the said offences was excluded from the jurisdiction of ordinary criminal courts.
This argument was sought to be reinforced by the provisions of section 69 of the whereunder, it was said, by a fiction, offences committed by army personnel which were triable by ordinary courts were to be deemed to be offences committed against the said Act.
That difference between offences against the and the offences deemed to be committed against the , the argument proceeded, was an unfailing clue for the true construction of the pro visions of the in that the offences under the first category were exclusively triable by court martial and the offences; of the latter category were subject to concurrent jurisdiction of two courts.
The logical conclusion from this premises, it was said, was that the provisions designed to resolve conflict of jurisdiction related only to the second category of offences.
Assuming that the said contention was wrong, it was argued, section 126 of the is peremptory in its language, namely, that a criminal court shall not have jurisdiction to try an offence 27 210 defined under the , unless the conditions laid down therein were strictly complied with, that is, unless requisite notice is given to the officer referred to in section 125 of the Act.
To appreciate the said argument it is necessary to scrutinize the provisions of the in some detail.
Section 2 describes the different categories of army personnel who are subject to the .
Section 3(ii) defines "civil offence" to mean "an offence which is triable by a criminal court"; a. 3(vii) defines "court martial" to mean "a court martial held under this Act"; section 3(viii) defines "criminal court" to mean "a court of ordinary criminal justice in any part of India, other than the State of Jammu and Kashmir"; section 3(xvii) defines "offence" to mean "any act or omission punishable under this Act and includes a civil offence"; and section 3(xxv) declares that "all words and expressions used but not defined in this Act and defined in the Indian Penal Code shall be deemed to have the meanings assigned to them in that Code." Chapter VI is comprised of sections 34 to 70.
The heading of the Chapter is "Offences".
As we have already noticed, the word "offence" is defined to mean not only any act or omission punishable under the , but also a civil offence.
Sections 34 to 68 define the offences against the Act triable by court martial and also give the punishments for the said offences.
Section 69 says that any person subject to the Act who at any Place in or beyond India commits any civil offence shall be deemed to be guilty of an offence against the Act and, if charged therewith under this section, shall be liable to be tried by a court martial and, on conviction, be punishable as provided for the offence under any law in force in India or such less punishment as is in the Act mentioned.
Under section 70, " A person subject to this Act who commits an offence of murder against a person not subject to military, naval or air force law, or of culpable homicide not amounting to murder against such a person or of rape in relation to such a person, shall not be deemed to be guilty of an offence against this Act and shall not be tried by a Court martial.
" 211 There are three exceptions to this section with which we are not concerned now.
Shortly stated, under this Chapter there are three categories of offences, namely, (1) offences committed by a person subject to the Act triable by a court martial in respect whereof specific punishments have been assigned; (2) civil offences committed by the said person at any place in or beyond India, but deemed to be offences committed under the Act and, if charged under section 69 of the Act, triable by a court martial; and (3) offences of murder and culpable homicide not amounting to murder or rape committed by a person subject to the Act against a person not subject to the military law.
Subject to a few exceptions, they are not triable by court martial, but are triable only by ordinary criminal courts.
The said categorisation of offences and tribunals necessarily bring about a conflict of jurisdiction.
Where an offence is for the first time created by the , such as those created by sections 34, 35, 36, 37 etc., it would be exclusively triable by a courtmartial; but where a civil offence is also an offence under the Act or deemed to be an offence under the Act, both an ordinary criminal court as well as a court martial would have jurisdiction to try the person committing the offence.
Such a situation is visualized and provided for by as. 125 and 126 of the Act.
Under section 125, "When a criminal court and a court martial have each jurisdiction in respect of an offence, it shall be in the discretion of the officer commanding the army, army corps, division or independent brigade in which the accused person is serving or such other officer as may be prescribed to decide before which court the proceedings shall be instituted, and, if that officer decides that they should be instituted before a court martial, to direct that the accused person shall be detained in military custody." Under a. 126(1) of the Act, "When a criminal court having jurisdiction is of opinion that proceedings shall be instituted before itself in respect of any alleged offence, it may, by written notice, require the officer referred to in 212 section 125 at his option, either to deliver over the offender to the nearest magistrate to be proceeded against according to law, or to postpone proceedings pending a reference to the Central Government.
" Clause (2) of that section says that, "In every such case the said officer shall either deliver over the offender in compliance with the requisition, or shall forthwith refer the question as to the court before which the proceedings are to be instituted for the determination of the Central Government, whose order upon such reference shall be final.
" Section 125 presupposes that in respect of an offence both a criminal court as well as a court martial have each concurrent jurisdiction.
Such a situation can arise in a case of an act or omission punishable both under the .
as well as under any law in force in India.
It may also arise in the case of an offence deemed to be an offence under the Act.
Under the scheme of the said two provisions, in the first instance,, it is left to the discretion of the officer mentioned in section 125 to decide before which court the proceedings shall be instituted, and, if the officer decides that they should be instituted before a court martial, the accused person is to be detained in military custody; but if a criminal court is of opinion that the said offence shall be tried before itself, he may issue the requisite notice under section 126 either to deliver over the offender to the nearest magistrate or to postpone the proceedings pending a reference to the Central Government.
On receipt of the said requisition, the officer may either deliver over the offender to the said court or refer the question of proper court for the determination of the Central Government whose order shall be final.
These two sections provide a satisfactory machinery to resolve the conflict of jurisdiction, having regard to the exigencies of the situation.
What is more, section 127 of the provides for successive trials by court martial and by criminal court in respect of the same offence.
Under sub section
(1) of that section, "A person convicted or acquitted by a 213 court martial may, with the previous sanction of the Central Government, be tried again by a criminal court for the same offence, or on the same facts." But sub section
(2) thereof imposes a limitation in the matters of punishment; for, under that sub section, the criminal court shall, in awarding punishment, have regard to the punishment the offender may already have undergone for the said offence.
The scheme of the Act, therefore, is self evident.
It applies to offences committed by army personnel described in section 2 of the Act; it creates new offences with specified punishments, imposes higher punishments to pre existing offences, and enables civil offences by a fiction to be treated as offences under the Act; it provides a satisfactory machinery for resolving the conflict of jurisdiction.
Further it enables, subject to certain conditions, an accused to be tried successively both by court martial and by a criminal court.
It does not expressly bar the jurisdiction of criminal courts in respect of acts or omissions punishable under the Act, if they are also punishable under any other law in force in India; nor is it possible to infer any prohibition by necessary implication.
Sections 125, 126 and 127 exclude any such inference, for they in express terms provide not only for resolving conflict of jurisdiction between a criminal court and a court martial in respect of a same offence, but also provide for successive trials of an accused in respect of the same offence.
Now let us apply this legal position to the facts of the case.
Under section 52 of the Act, any person subject to the Act who commits theft of any property belonging to Government or to any military, naval or air force mess, band or institution, or to any person subject to military, naval or air force law, or dishonestly misappropriates or converts to his own use any such property, or commits criminal breach of trust in respect of any such property, or does any other thing with intent to defraud, or to cause wrongful gain to one person or wrongful loss to another person shall, on conviction by court martial, be liable to suffer im prisonment for a term which may extend to ten years 214 or such less punishment as is in the act mentioned.
Section 2 (xxv) says that all words and expressions used but not defined in the and defined in the Indian Penal Code shall be deemed to have the meanings assigned to them in that Code.
The section does not create new offences, but prescribes higher punishments if the said offences are tried by a court martial.
The appellant and the other accused were charged in the present case, among others, for having been parties to a criminal conspiracy to dishonestly or fraudulently misappropriate or otherwise convert to their own use the military stores and also for dishonestly or fraudulently misappropriating the same.
The said acts constitute offences under the Indian Penal Code and under the Prevention of Corruption Act.
They are also offences under section 52 of the .
Though the offence of conspiracy does not fall under section 52 of the Act, it, being a civil offence, shall be deemed to be an offence against the Act by the. force of section 69 of the Act.
With the result that the offences are triable both by an ordinary criminal court having jurisdiction to try the said offences and a court martial.
To such a situation sections 125 and 126 are clearly intended to apply.
But the designated officer in section 125 has not chosen to exercise his discretion to decide before which court the proceedings shall be instituted.
As he has not exercised the discretion, there is no occasion for the criminal court to invoke the provisions of section 126 of the Act, for the second part of section 126(1), which enables the criminal court to issue a notice to the officer designated in section 125 of the Act to deliver over the offender to the nearest magistrate or to postpone the proceedings pending a reference to the Central Government, indicates that the said subsection presuppose,% that the designated officer has decided that the proceedings shall be instituted before a court martial and directed that the accused person shall be detained in military custody.
If no such decision was arrived at, the could not obviously be in the way of a criminal court exercising its ordinary jurisdiction in the manner provided by law.
215 The correct approach to the problem may be stated thus: The appellant and the other accused have committed offences under the Indian Penal Code and the Prevention of Corruption Act.
By reason of section 7 of the Criminal Law (Amendment) Act, 1952, the said offences are triable by a special judge appointed under that Act.
The special judge so appointed would have jurisdiction to try the said offences unless the expressly, or by necessary implication, excluded the offences alleged to have been committed by the appellant and others from the jurisdiction of that court.
The aforesaid discussion of the provisions of the indicates that there is not only no such exclusion but also that there is clear and unambiguous indication to the contrary.
An argument advanced by learned counsel for the appellant in this context may conveniently be noticed at this stage.
The second branch of the argument of learned counsel for the appellant under this head is based upon section 549 of the Code of Criminal Procedure.
Under that section, "The Central Government may make rules, consistent with this Code and the . . . as to the cases in which persons subject to military, naval or air force law shall be tried by a court to which this Code applies, or by Court martial . . . .
The Central Government made rules in exercise of the power conferred on it under this section.
No rule was made prescribing that the offences with which we are now concerned shall be tried only by a court martial.
But reliance is made on r. 3 which reads: "Where a person subject to military, naval or air force law is brought before a Magistrate and charged with an offence for which he is liable to be tried by a Court martial, such Magistrate shall not proceed to try such person or to inquire with a view to his commitment for trial by the Court of Sessions or the High Court for any offence triable by such Court, unless, (a) he is of opinion, for reasons to be recorded, that he should so proceed without being moved thereto by competent military, naval or air force authority; or 216 (b) he is moved thereto by such authority.
" This rule obviously cannot apply unless the Special Judge constituted under the Criminal Law (Amendment) Act, 1952, is a magistrate within the meaning of that rule.
A special judge is appointed under section 6(1) of the Criminal Law (Amendment) Act to try the offences specified therein.
Section 6(2), of that Act lays down that "A person shall not be qualified for appointment as a special judge under this Act unless he is, or has been, a sessions Judge or an additional sessions Judge or an assistant sessions Judge under the Code of Criminal Procedure, 1898 (V of 1898).
" Section 8(1) of the said Act says, "A Special Judge may take cognizance of offences without the accused being committed to him for trial, and in trying the accused persons, shall follow the procedure prescribed by the Code of Criminal Procedure, 1898 (Act V of 1898), for the trial of warrant cases by magistrates.
" Under sub section
(3) thereof, "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 not inconsistent with this Act, apply to the proceedings before a Special Judge; and for the purpose 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 conducting a prosecution before a special judge shall be deemed to be a public prosecutor.
" Under section 9 of the said Act, "The High Court may exercise, so far as they may be applicable, all the powers conferred by Chapters XXXI and XXXII of the Code of Crimi nal Procedure, 1898 (Act V of 1898), on a High Court as if the Court of a Special Judge were a Court of session trying cases without a jury within the local limits of the jurisdiction of the High Court." These provisions equate a special judge with a sessions judge, and the provisions of the Code of Criminal Procedure applicable to a sessions judge, in so far as they are not inconsistent with the Act, are made 217 applicable to a special judge.
But it is said that section 8(1) of the Act puts him on par with a magistrate and therefore r. (3) of the rules framed under section 549 which applies to a magistrate equally applies to a special judge.
This argument overlooks the limited purpose for which section 8(1) is enacted.
Section 8 of the Criminal Law (Amendment) Act makes a distinction between the power of a special judge to take cognizance of an offence and the procedure to be followed by him in trying the case.
In trying accused persons, he is enjoined to follow the procedure prescribed by the Code of Criminal Procedure for the trial of warrant cases by magistrates.
The warrant procedure is incorporated in the Act by reference to the Code of Criminal Procedure.
Chapter XXI of the Code of Criminal Procedure provides the procedure for the trial of warrant cases; and section 549 is not one of the sections in that Chapter.
Nor does it empower the Central Government to make rules modifying the warrant procedure.
That apart, can it be said that, by reason of the procedure to be followed by the special judge, he would be a magistrate empowered to try such a person within the meaning of r. (3)? Section 8(1) of the Criminal Law (Amendment) Act maintains a clear distinction between jurisdiction and the procedure.
It is, therefore, not possible to hold that a special judge is a magistrate within the meaning of r. (3).
If so, it follows that r. (3) has no application to the trial of an army personnel by a special judge.
There is a more formidable obstacle in the way of learned counsel 's argument.
Section 7 of the Criminal Law (Amendment) Act, 1952, reads: "Notwithstanding anything contained in the Code of Criminal Procedure, 1898 (Act V of 1898) or in any other law the offences specified in subsection (1) of section 6 shall be triable by special Judges only.
" Doubtless the is comprehended by the words "any other law".
The offences with which we are now concerned are certainly offences specified in sub section
(1) of section 6 of the Criminal Law (Amendment) Act.
The non obstante clause in section 7 clearly confers 218 jurisdiction to try persons committing the said offences on a special judge.
But it is contended that the is a special Act and therefore section 7 found in the general Act cannot take away the jurisdiction conferred on a court martial in respect of the said offences.
That proposition of law may have some bearing when there is conflict of jurisdiction arising out of a general Act and a special Act, without any specific exclusion of the jurisdiction in the general Act of that conferred under the special Act.
But that principle may not have any relevance to a case where the general Act in express terms confers jurisdiction on a particular tribunal in respect of specified offences to the exclusion of anything contained in any other law.
In such a situation, the intention of the Legislature is clear and unambiguous, and no question of applying any rule of interpretation would arise, for the rules of interpretation are evolved only to ascertain the intention of the Legislature.
It is contended that section 7 confers an exclusive jurisdiction on a special judge only in regard to offences specified in sub section
(1) of section 6 and that the said subsection does not comprise offences under section 52 of the .
There is a fallacy underlying this argument.
Certain acts committed or omissions made by a person constitute offences under section 6(1) of the Criminal Law (Amendment) Act, 1952.
Under section 7 of the said Act, the said offences are exclusively triable by a special judge.
In the present case the accused were charged with having committed offences expressly falling under B. 6 of the said Act and, therefore, the special judge had clearly jurisdiction to try the accused in respect of the said offences.
The mere fact that the said acts or omissions might also constitute an offence under section 52 of the would not be of any relevance, as jurisdiction was exclusively conferred on the special judge notwithstanding anything contained in any other law.
If that be so, the special judge had exclusive jurisdiction to try offences covered by section 6 of the Criminal Law (Amendment) Act, 1952.
At this stage, another argument of learned counsel may be adverted to.
He says that some of the offences with which the accused are charged in the present 219 case are not those enumerated in section 6 of the Criminal Law (Amendment) Act, 1952.
This objection is clearly answered by section 7(b) of the said Act which says, "When trying any case, a special judge may also try any offence other than an offence specified in section 6 with which the accused may, under the Code of Criminal Procedure, 1898, be charged at the same trial.
" It is then argued that the prosecution has failed to establish that the Central Government accorded sanction to prosecute the appellant under section 6(1) of the Prevention of Corruption Act.
Under section 6(1)(a) of the Prevention of Corruption Act, "No Court shall take cognizance of an offence punishable under section 161 or section 164 or section 165 of the Indian Penal Code, or under subsection (2) of section 5 of this Act, alleged to have been commuted by a public servant, except with the previous sanction (a) in the case of a person who is employed in connection with the affairs of the Union and is not removable from his office save by or with the sanction of the Central Government, of the Central Government. .
It is common case that the appellant was a public servant within the meaning of the said sub section and, therefore, he cannot be prosecuted without the sanction of the Central.
Government.
The sanction given in this case for the prosecution of the appellant reads thus: " . . . .
NOW, THEREFORE, THE CENTRAL GOVERNMENT doth hereby accord sanction under section 197 of the Criminal Procedure Code (Act V of 1898) and section 6(1)(a) of the Prevention of Corruption Act, 1947 (II of 1947) to the initiation of proceedings to prosecute in a Court of competent jurisdiction the said Major E. G. Barsay and Shri H. section Kochhar in respect of the aforesaid offences and other cognate offences punishable under other provisions of law.
M. Gopala Menon, Deputy Secretary to the Govt.
of India.
" 220 Ex facie the said order giving the requisite sanction purports to have been issued in the name of the Central Government and is signed by the Deputy Secretary to the Government of India in the Ministry of Home Affairs.
P.W. 36, Dharambir, an Assistant in the Minstry of Home Affairs, New Delhi, has given evidence in respect of this document.
He says that the papers relating to the present case were submitted to the Home Ministry by the Inspector General of Police, Special Police Establishment, New Delhi, for obtaining the necessary sanction, that the papers were put up before the Deputy Secretary in that Ministry, that the Deputy Secretary was competent to accord sanction on behalf of the President, and that he gave the said sanction under his signature.
In the cross examination, this witness says that he cannot say whether the Deputy Secretary 's signature was in his own right or by way of authentication of the President 's order.
This uncontradicted evidence clearly established that the Deputy Secretary was competent to accord sanction on behalf of the President and that he gave the sanction in exercise of the power conferred on him, presumably, under the rules framed by the President in this behalf The statement made by this witness in the cross examination is not inconsistent with that made by him in the examination in chief.
The Deputy Secretary may have power to make some orders in his own right and also may have power to authenticate other orders issued in the name of the President.
But in this case, this witness has clearly deposed that the Deputy Secretary had power to accord sanction in his own right and when the order giving the sanction ex facie shows that he did not authenticate it by order of the President, we must hold that he gave the sanction in his own right.
In this context, an argument based upon article 77 of the Constitution may be noticed.
Under el.
(1) of article 77, all executive actions of the Government of India shall be expressed to be taken in the name of the President; and under cl.
(2) thereof, orders and other instruments made and executed in the name of the President shall be authenticated in 221 such manner as may be specified in rules to be made by the President, and the validity of an order or instrument which is so authenticated shall not be called in question on the ground that it is not an order or instrument made or executed by the President.
Under the General Clauses Act, the expression "President" means the Central Government.
It is, therefore, argued that as the order issuing the sanction was not expressed to be made in the name of the President, the sanction was void.
This Article and the corresponding Article viz., article 166, were subject to judicial scrutiny by this Court.
The validity of an order of detention made by the Bombay Government under section 3 of the , was considered in The State of Bombay vs Puru shottam Jog Naik (1).
There, in the body of the order the "satisfaction" was shown to be that of the Government of Bombay; at the bottom of the order the Secretary to the Government of Bombay, Home Department, signed it under the words "By order of the Governor of Bombay".
It was contended that the order was defective as it was not expressed to be in the name of the Governor within the meaning of article 166(1) of the Constitution and accordingly was not protected by cl.
(2) of the said Article.
Adverting to this contention, Bose, J., speaking for the Court, said at p. 678: "In our opinion, the Constitution does not require a magic incantation which can only be expressed in a set formula of words.
What we have to see is whether the substance of the requirements is there.
" This judgment lays down that we must look at the substance of the order.
On a construction of the order that was in question in that case, having regard to the definition of "State Government" in the General Clauses Act and the concluding words "By order of the Governor of Bombay", the Court came to the conclusion that the order was expressed to have been taken in the name of the Governor.
In Dattatreya Moreshwar Pangarkar vs The State of Bombay (2), an (1) ; (2) ; 222 order made under the , was questioned on the ground that it did not comply with the provisions of article 166(1) of the Constitution.
There the order was made in the name of the Government and was signed by one Kharkar for the Secretary to the Government of Bombay, Home Department.
Das, J., as he then was, after referring to the decision of the Federal Court in J. K. Gas Plant Manufacturing Co., (Rampur) Ltd. vs The King Emperor (1) observed at p. 625 thus: "Strict compliance with the requirements of article 166 gives an immunity to the order in that it cannot be challenged on the ground that it is not an order made by the Governor.
If, therefore, the requirements of that article are not complied with, the resulting immunity cannot be claimed by the State.
This, however, does not vitiate the order it self.
" The learned Judge came to the above conclusion on the ground that the provisions of the said article are only directory and not mandatory.
This decision was followed by this Court in P. Joseph John vs The State of Travancore Cochin (2).
There the "show cause notice" issued under article 311 of the Constitution was impugned on the ground that it was contrary to the provisions of article 166 thereof.
The notice was issued on behalf of the Government and was signed by the Chief Secretary to the Government, who had under the rules of business framed by the Rajpramukh the charge of the portfolio of "service and appointments" at the Secretariat level in the State.
This Court held that the said notice was issued in substantial compliance with the directory provisions of article 166 of the Constitution.
The latest decision on the point is that in Ghaio Mall & Sons vs The State of Delhi(1).
There the question was whether the com munication issued by the Under Secretary, Finance, Government of Delhi State, had complied with the provisions of article 166 of the Constitution.
This Court held that it did not comply with the provisions of (1) (2) 223 article 166 of the Constitution and also found that the said order was not, as a matter of fact, made by the Chief Commissioner.
When the decision in Dattatreya Moreshwar Pangarkar 's case (1) was cited this Court observed at p. 1439 thus: "In that case there was ample evidence on the record to prove that a decision had in fact been taken by the appropriate authority and the infirmity in the form of the authentication did not vitiate the order but only meant that the presumption could not be availed of by the State.
" The foregoing decisions authoritatively settled the true interpretation of the provisions of article 166 of the Constitution.
Shortly stated, the legal position is this: article 166(1) is only directory.
Though an impugned order was not issued in strict compliance with the provisions of article 166(1), it can be established by evidence aliunde that the order was made by the appropriate authority.
If an order is issued in the name of the Governor and is duly authenticated in the manner prescribed in r. (2) of the said Article, there is an irrebuttable presumption that the order or instrument is made or executed by the Governor.
Any non compliance with the provisions of the said rule does not invalidate the order, but it precludes the drawing of any such irrebuttable presumption.
This does not prevent any party from proving by other evidence that as a matter of fact the order has been made by the appropriate authority.
Article 77 which relates to conduct of business of the Government of India is couched in terms similar to those in article 166 and the same principles must govern the interpretation of that provision.
If that be the legal position, in the instant case the impugned order does not comply with the provisions of article 77(2) of the Constitution and, therefore, it is open to the appellant to question the validity of the order on the ground that it was not an order made by the President and to prove that it was not made by the Central Government.
But this legal position does (1) ; 224 not help the appellant, for as we have pointed out, the uncontroverted evidence of P. W. 36, an Assistant in the Home Ministry, which was accepted by the High Court and the Special Judge, establishes that the order was made by the Deputy Secretary on behalf of the Central Government in exercise of the power conferred on him under the rules delegating such power to him.
The next contention challenges the legal competence of Jog, an Inspector of Police in the Delhi Special Police Establishment, to make the investigation.
In his evidence Jog stated that the Inspector General of Police, Special Police Establishment, New Delhi, empowered him under section 5A of the Prevention of Corruption Act to investigate the offences mentioned therein without the sanction of any magistrate.
The question is whether he can make an investigation in regard to the offences alleged to have been committed by the accused in the present case.
Section 5A of the Prevention of Corruption Act, 1950, on which reliance is placed reads: "Notwithstanding anything contained in the Code of Criminal Procedure., 1898, no police officer below the rank (a) in the presidency towns of Madras and Calcutta, of an assistant commissioner of police, (b)in the presidency town of Bombay, of a superintendent of police, and (c) elsewhere, of a deputy superintendent of police, shall investigate any offence punishable under section 161, section 165 or section 165A of the Indian Penal Code or under sub section (2) of section 5 of this Act, without the order of a presidency magistrate or a magistrate of the first class, as the case may be, or make any arrest therefor without a warrant: Provided that a police officer of the Delhi Special Police Establishment, not below the rank of an Inspector of police, who is specially authorized by the Inspector General of Police of that Establishment may, if he has reasons to believe that, on account of the delay involved in obtaining the order 225 of a magistrate of the first class, any valuable evidence relating to such offence is likely to be destroyed or concealed, investigate the offence without such order; but in every case where he makes such investigation, the police officer shall, as soon as may be, send a report of the same to a magistrate of the first class, together with the circumstances in which the investigation was made.
" The proviso governs the present case.
Jog, who was specially authorized by the Inspector General of Police under section 5A of the Prevention of Corruption Act to investigate the offences mentioned therein being an Inspector of Police, was certainly empowered to make an investigation within the meaning of that proviso.
But what is contended is that the power to investigate under that proviso is hedged in by two conditions, namely, that the said officer should have reasons to believe that on account of delay involved in obtaining the order of a magistrate of the first class, any valuable evidence relating to such offence is likely to be destroyed or concealed, and subsequently he should have sent a report of the same to a magistrate of the first class together with the circumstances in which the investigation was made.
The High Court on a consideration of the evidence found that the said two conditions have not been complied with by Jog.
On that finding, the question arises whether the trial of the accused by the Special Judge was vitiated by the non compliance with the aforesaid two conditions.
This Court in H. N. Rishbud & Inder Singh vs The State of Delhi (1) held that section 5(4) and proviso to section 3 of the Prevention of Corruption Act, 1947, and the corresponding section 5A of the Prevention of Corruption (Second Amendment) Act, 1952 (LIX of 1952) are mandatory and not directory and that an investigation conducted in violation thereof is illegal.
In the same decision this Court also pointed out that the illegality committed in the course of investigation did not affect the competence and jurisdiction of the court for trial and where cognizance of the case had in fact (1) ; 29 226 been taken and the case had proceeded to termination the validity of the preceding investigation did not vitiate the result unless miscarriage of justice of been caused thereby.
The question is whether in the present case the investigation made by the Inspector duly authorized by the Inspector General of Police to investigate under section 5A of the Prevention of Corruption Act, without complying with the two conditions laid down in the proviso to that section, had caused any prejudice to the accused.
The High Court, after considering the entire evidence, found that the alleged irregularity would not justify the conclusion that the non observance of the conditions prescribed in the proviso to section 5A of the Prevention of Corruption Act had occasioned any failure of justice.
Learned counsel has taken us through different steps in the investigation made by the said officer, and we have no reason to differ from the conclusion arrived at by the High Court.
The validity of the investigation made by Jog was questioned yet on another ground.
It was said that he had not obtained the requisite permission of the State Government under section 6 of the , before he started the investigation.
Section 5 of that Act authorizes the Central Government to extend to any area the powers and jurisdiction of members of the Delhi Special Police Establishment for the investigation of any offences or classes of offences specified in a notification under section 3 thereof.
But section 6 of that Act says that nothing contained in section 5 shall be deemed to enable any member of the Delhi Special Police Establishment to exercise powers and jurisdiction in any area in a State, not being a Union Territory or railways area, without the consent of the Government of that State.
The Government of Bombay, Home Department, addressed a letter to the Government of India, dated August 13,1949 and it was stated therein, ". .I am directed to state that this Government re affirms, with reference to section 6 of the , the consent given for an indefinite period under its letter 227 No. 5042/4 D, dated the 6th November 1946, to the members of the Delhi Special Police Establishment exercising powers and jurisdiction in the area of the not province of Bombay.
" It was contended before the High Court and it was repeated before us that the consent should have been given to every individual member of the Special Police Establishment and that a general consent would not be a good consent.
We do not see any force in this argument.
Under a. 6 of the , no member of the said Establishment can exercise powers and jurisdiction in any area in a State without the consent of the Government of that State.
That section does not lay down that every member of the said Establishment should be specifically authorized to exercise jurisdiction in that area, though the State Government can do so.
When a State Government can authorize a single officer to exercise the said jurisdiction, we do not see any legal objection why it could not authorize the entire force operating in that area belonging to that Establishment to make such investigation.
The authorization filed in this case sufficiently complies with the provisions of section 6 of the , and there are no merits in this contention.
The next contention centres round the framing of charges.
The charges framed in this case have been fully extracted in the earlier part of the judgment.
The first objection is that the Special Judge had no jurisdiction to try the accused on charges involving offences other than those mentioned in section 6(1) of the Criminal Law (Amendment) Act, 1952.
This argument ignores section 7(2)(b) of the Act which says, "When trying any case, a special judge may also try any offence other than an offence specified in section 6 with which the accused may, under the Code of Criminal Procedure, 1898, be charged at the same trial.
" The objection, therefore, has no force.
The next criticism is that there can be no legal charge of a conspiracy between accused Nos.
1 to 3, who are public servants, and accused Nos. 4 to 6, who are not public servants, in respect of offences under 228 the Prevention of Corruption Act for the reason that they can only be committed by public servants.
But this contention ignores the scope of the offence of criminal conspiracy.
Section 120A of the Indian Penal Code defines "criminal conspiracy" and under that definition, "When two or more persons agree to do, or cause to be done, an illegal act, or an act which is not illegal by illegal means, such an agreement is designated a criminal conspiracy.
" The gist of the offence is an agreement to break the law.
The parties to such an agreement will be guilty of criminal con spiracy, though the illegal act agreed to be done has not been done.
So too, it is not an ingredient of the offence that all the parties should agree to do a single illegal act.
It may comprise the commission of a number of acts.
Under section 43 of the Indian Penal Code, an act would be illegal if it is an offence or if it is prohibited by law.
Under the first charge the accused are charged with having conspired to do three categories of illegal acts, and the mere fact that all of them could not be convicted separately in respect of each of the offences has no relevancy in considering the question whether the offence of conspiracy has been committed.
They are all guilty of the offence of conspiracy to do illegal acts, though for individual offences all of them may not be liable.
The second objection is in regard to the second charge.
It is said that accused Nos. 4, 5 and 6 could not be charged with having committed an offence under section 5(1)(c) and 5(1)(d) of the Prevention of Corruption Act, as they are not public servants.
The learned Judges of the High Court accepted the said legal position as correct, but held that they could be convicted under section 109 of the Indian Penal Code, read with cls.
(c) and (d) of section 5(1) of the Prevention of Corruption Act.
But on the merits they convicted accused No. 1 under section 5(2) of the Prevention of Corruption Act, instead of under the said section read with section 34 of the Indian Penal Code, and they convicted accused No. 4 under section 109 of the Indian Penal Code, read with section 5(1)(c) and (d) of the Prevention of Corruption Act, instead of under section 5(2) of the said 229 Act, read with section 34 of the Indian Penal Code.
As accused No. 4 was dead before the appeal was filed in this Court, nothing need be said about the legality of his conviction.
The only outstanding question, therefore, is whether the High Court was justified in convicting accused No. 1 under section 5(2) of the Prevention of Corruption Act instead of under the said section read with section 34 of the Indian Penal Code.
To such a situation, section 537 of the Criminal Procedure Code applies and under that section, no sentence passed by a court of competent jurisdiction shall be reversed or altered on appeal or revision on account of an error, omission or irregularity in the charge, including any misjoinder of charges, unless such error, omission, irregularity or misdirection has in fact occasioned a failure of justice.
This Court in W. Slaney vs State of M. P. (1) held that in adjudging a question of prejudice the concern of the court should be to see whether the accused had a fair trial, whether he knew what he was being tried for, whether the im pugned facts sought to be established against him were explained to him clearly and fairly and whether he was given a full and fair chance to defend himself.
Judged by the said test it is manifest that accused No.
I cannot be said to have been prejudiced by his conviction under section 5(2) of the Prevention of Corruption Act, for accused No.
I had clear knowledge from the inception that the prosecution case against him was that he committed an offence under section 5(2) of the Prevention of Corruption Act and that he had every opportunity, and indeed he made a sustained effort throughout the trial to defend himself against the said accusation.
It is not possible to hold in this case that there was any failure of justice by reason of the High Court convicting him for a substantive offence under section 5(2) of the said Act.
So far as the third head of the charge is concerned, the High Court held that it was bad in regard to accused No. 1.
Accused No. 1, therefore, cannot obviously have any grievance with that finding.
For the foregoing reasons, we hold that there are no merits (1)[1955] 2 S.C.R. 1140.
230 in the contentions raised by learned counsel on the basis of the charges framed in this case.
Now we come to the merits of the case.
So far as the appellant is concerned, both the Special Judge and, on appeal the High Court accepted the evidence of Lawrence, as it was corroborated in material particulars by other acceptable evidence.
They concurrently found that the appellant was a party to the conspiracy.
The finding is one of fact, and the practice of this Court is not to interfere with such finding except under exceptional circumstances.
Learned counsel for the appellant made a serious and sustained attempt to have the said finding reopened by advancing arguments under the following three heads: (1) The High Court has failed to draw correct inferences from the facts found by it and has also drawn wrong conclusion ignoring probabilities arising in a given situation; (2) the High Court has ignored the distinction between an untruthful witness and a truthful witness, whose evidence under the rule of prudence could be accepted only in so far as it is corroborated in material particulars, and the High Court, having disbelieved Lawrence 's evidence in regard to important incidents in his narration, should have rejected his evidence in toto; and if it had done so, the question of corroboration would not arise for consideration; and (3) the independent pieces of evidence accepted by the High Court did not corroborate the evidence of Lawrence in material particulars implicating him in the crime.
The first argument is a direct attack on the correctness of the finding of fact arrived at by the High Court.
As we have said, the practice of this Court in an appeal under article 136 of the Constitution is not to allow such an attack except in exceptional circumstances.
Learned counsel addressed at some length on this aspect of the case, and after hearing him, we were satisfied that there were no such exceptional circumstances present in this case.
Our reluctance to depart from the usual practice is hightened by the fact that in the present case, so far as the appellant is concerned, there are concurrent findings of fact by both the courts.
231 The second argument is a subtle attempt to reopen the findings of fact from a different perspective.
This argument is based upon a decision of this Court in Sarwan Singh vs The State of Punjab (1).
In that case, Gajendragadkar, J., speaking for the Court, observed at p. 959 thus: "But it must never be forgotten that before the Court reaches the stage of considering the question of corroboration and its adequacy or otherwise, the first initial and essential question to consider is whether even as an accomplice the approver is a reliable witness.
If the answer to this question is against the approver then there is an end of the matter, and no question as to whether his evidence is corroborated or not falls to be considered.
In other words, the appreciation of an approver 's evidence has to satisfy a double test." Then the learned Judge proceeded to state, "We have carefully read the judgment delivered by the High Court but we find no indication in the whole of the judgment that the learned Judges considered the character of the approver 's evidence and reached the conclusion that it was the evidence given by a reliable witness." Later on the learned Judge further stated, ". . the evidence of the approver is so thoroughly discrepant that it would be difficult to resist the conclusion that the approver in the present case is a wholly unreliable witness.
" Relying upon these observations, learned counsel contends that in the present case the High Court did not accept the evidence of the approver in regard to important events and therefore the High Court should have rejected his evidence without further attempting to see whether there was any corroboration in material particulars in other evidence.
Before we consider this argument in the context of the facts of the present case, we would like at the outset to make some general observations.
This Court could not have intended to lay down that the evidence (1) ; 232 of an approver and the corroborating pieces of evidence should be treated in two different compartments, that is to say, the Court shall have first to consider the evidence of the approver dehors the corroborated pieces of evidence and reject it if it comes to the conclusion that his evidence is unreliable; but if it comes to the conclusion that it is reliable then it will have to consider whether that evidence is corroborated by any other evidence.
This Court did not lay down any such proposition.
In that case it happened that the evidence of the approver was so thoroughly discrepant that the Court thought that he was a wholly unreliable witness.
But in most of the cases the said two aspects would be so interconnected that it would not be possible to give a separate treatment, for as often as not the reliability of an approver 's evidence, though not exclusively, would mostly depend upon the corroborative support it derives from other unimpeachable pieces of evidence.
We must also make it clear that we are not equating the evidence of Lawrence with that of an approver; nor did the Special Judge or the High Court put him exactly on that footing.
The learned Special Judge in his judgment observed thus: "He (Lawrence) is obviously decoy or spy and agent provocateur and his evidence will have, therefore, to be approached with great caution and much weight cannot be attached to it unless it is corroborated by other independent evidence and circumstances in the case. . . .
Not being tainted evidence, it would not suffer from a disability of being unworthy of acceptance without independent corroboration.
But being interested evidence, caution requires that there should be corroboration from an independent source before its acceptance.
To convict an accused on the tainted evidence of an accomplice is not illegal but it is imprudent; to convict an accused upon the partisan evidence of a person at whose instance a trap is laid by the police is neither illegal nor imprudent but inadvisable therefore, be accepted and relied upon, only if it is corroborated by other independent evidence and circumstances in the case.
" 233 The learned Judges of the High Court practically adopted the same attitude in the manner of their approach to the evidence of Lawrence.
The learned Judges observed: "To convict an accused upon the partisan evidence of a person at whose instance a trap is laid by the police is neither illegal nor imprudent, because it is just possible that in some cases an accomplice may give evidence because he may have a feeling in his own mind that it is a condition of his pardon to give that evidence, but no such consideration obtains in the case of the evidence of a person who is not a guilty associate in crime but who invites the police to lay a trap.
All the same, as the person who lodges information with the police for the purpose of laying a trap for another is a partisan witness interested in seeing that the trap succeeds, it would be necessary and advisable to look for corroboration to his evidence before accepting it.
But the degree of corroboration in the case of a tainted evidence of an accomplice would be higher than that in the case of a partisan witness.
In our opinion, all these decisions would clearly establish that it would not be safe to rely on the evidence of Lawrence who is admittedly a decoy or trap witness, without his testimony being corroborated from independent sources." Even Mr. Amin, learned special counsel on behalf of the State asked the courts to proced to examine the evidence of Lawrence on the basis that he was a decoy or trap witness.
We are definitely of opinion that both the courts had approached the evidence of Lawrence from a correct standpoint.
Though Lawrence was not an approver, he was certainly an interested witness in the sense that he was interested to see that the trap laid by him succeeded.
He could at least be equated with a partisan witness and it would not be admissible to rely upon such evidence without corroboration.
It would be equally clear that his evidence was not a tainted one, but it would only make a difference in the 30 234 degree of corroboration required rather than the necessity for it.
Approaching the case from this perspective in our view that is a correct one the learned Special Judge came to the following conclusion: "There was no compelling necessity for Shri Lawrence to concoct a false story against Major Barsay and the other accused.
It is, therefore, clear that prima facie there is no good ground to discard the evidence of Shri Lawrence." Then the learned Special Judge considered the corroborative pieces of evidence and finally held that Lawrence 's evidence had been corroborated in material particulars in respect of the appellant.
Likewise, the learned Judges of the High Court considered the evidence of Lawrence along with that of other acceptable witnesses.
Though the learned Judges of the High Court rejected the evidence of Lawrence in regard to some events either because that part of the evidence was not consistent with the other parts of his evidence or with the evidence of some disinterested witnesses, they did not see any reason to reject the story given by Lawrence as a myth or a concoction.
After considering the evidence, the learned Judges concluded, "We, therefore, accept Lawrence 's evidence, find that his story is probable and true and we also find that the evidence on the record justifies the finding of the trial Court that there was a conspiracy as alleged by the prosecution to smuggle goods out of the Dehu Vehicles Depot." Having accepted broadly the version given by Lawrence, the High Court took the case of each of the accused and held that in the case of accused Nos.
1 to 4 Lawrence 's evidence had been amply corroborated by other evidence in all material particulars.
In these circumstances, we cannot accept the contention of learned counsel for the appellant that the High Court had rejected the evidence of Lawrence.
As we have said, the High Court did not accept some parts of the evidence of Lawrence, but it had broadly accepted the version given by Lawrence in regard to the conspiracy and the manner in which the articles were smuggled 235 out of the Depot.
If some of the accused were acquitted it was because there were some discrepancies in the evidence of Lawrence in respect of them and particularly because that part of his evidence was not corroborated in material particulars by other evidence.
But in the case of the appellant the High Court accepted the evidence given by Lawrence and convicted the appellant because that version was corroborated in all material particulars by the evidence of other disinterested witnesses.
We, therefore, reject this contention.
This leads us to the consideration of the only remaining question, namely, whether Lawrence 's evidence is corroborated in material particulars implicating the appellant by other acceptable evidence.
The corroboration must be by independent testimony confirming in some material particulars not only that the crime was committed but also that the appellant committed it.
It is not necessary to have corroboration of all the circumstances of the case or every detail of the crime.
It would be sufficient if there was corroboration as to the material circumstances of the crime and of the identity of the accused in relation to the crime.
These principles have been settled in R. vs Baskerville, (1) which has rightly been considered as the locus classicus of the law of approver 's evidence and has been followed by courts in India.
Looking from that aspect, both the courts have found corroboration from disinterested witnesses in material particulars implicating the appellant in the crime.
Lawrence gave a detailed account of the unfurling of the scheme of fraud from the date he met Major Barsay on December 2, 1954, upto December 20, 1954, when the offending truck was obstructed by the police from proceeding further on its onward journey.
Lawrence stated in his evidence that on December 3, 1954, Major Barsay told him, inter alia, that he had chalked out a detailed scheme in consultation with Kochhar to transfer all the valuable parts lying in Shed No. 48 to Shed No. 17 for the purpose of itemization, that he had 'already recalled Kochhar from (1) 236 leave of absence prior to its expiry and posted him in the Kit Stores, and that he had also posted Avatarsingh from Unfit Sub Park to the Kit Stores.
The prosecution has established by clear evidence that Major Barsay was instrumental in posting Kochhar, accused No. 2, to the Kit Stores after asking him to cut short his leave which was for, a period of two months.
It was also established by evidence that Major Barsay brought Avatarsingh to the Kit Stores.
Though these facts might not have implicated Kochhar and Avatarsingh, they certainly corroborate the evidence of Lawrence that Major Barsay told him that these transfers were made to facilitate the implementation of the scheme.
Lawrence stated in his evidence that Major Barsay told him on December 3, 1954, that he had chalked out a detailed scheme in consultation with Kochhar to transfer all the valuable parts lying in Shed No. 48 to Shed No. 17 for the purpose of itemization, and that as soon as the Board of Officers was appointed there would be a shuttle of trucks moving from Shed No. 48 to Shed No. 17 and vice versa and nobody 's suspicion would be roused if one or two trucks were taken away out of the main gate during the course of these movements of the trucks between these two sheds.
There is evidence to show that a Board of Officers was appointed to do the work of itemization and that one Captain Mehendiratta was appointed the President of that Board.
Lawrence said that Major Barsay told him that he would show certain boxes from Shed No. 48 to Col. Rao and tell him that they did not contain many of the articles which they were said to contain, so that Col. Rao also would not be surprised at the final result of the itemization.
It has been established by other evidence that on December 8, 1954, Major Barsay went to Col. Rao and took him to Shed No. 48 and showed him the military stores that were lying there awaiting itemization.
At about midday on December 18, 1954, Lawrence stated, Major Barsay met him at the Depot and told him that he and other conspirators would meet at his 237 residence to discuss about the scheme.
It is in evidence that on the 18th the meeting was held as deposed to by Lawrence.
Evidence of Col. Sindhi and Capt.
Sharma, which was accepted by both the courts, establishes this fact.
The same evidence also establishes that at that meeting Major Barsay, Saighal, Lawrence and two Sikhs were present, and though the two Sikhs were not identified to be accused Nos. 2 and 3, the presence of accused Nos. 1 and 4 and two Sikhs corroborates the evidence of Lawrence.
Lawrence stated that at that meeting Major Barsay undertook to do certain things.
According to Lawrence Major Barsay told the conspirators that he would detail a driver of his confidence in a vehicle for executing the plan, that he would send Kochhar to Shed No. 17, order Kochhar to transfer the itemized goods from Shed No. 17 to Shed No. 26 ostensibly for the purpose of preservation, that he would call Major Nag on Monday (December 20) and in his presence he would order Lawrence to go to the D.O.D. to bring the fire hoses.
The evidence of Havaldar Pillay, Godse, Suryawanshi and G. K. Pillay establishes the fact that Barsay secured one truck and a driver for shifting of the stores from Shed No. 17 to Shed No. 26.
The evidence of Jamadar Lachmansing proves that Major Barsay went to Shed No. 17 and ordered the shifting of stores from there to Shed No. 26 for conditioning and preservation.
The evidence of Major Nag establishes that in his presence Major Barsay sent for Lawrence and asked the latter to go to the D.O.D. and expedite the return of the fire hoses.
These established facts certainly corroborate the evidence of Lawrence as to what took place on the 18th and also his evidence that Major Barsay gave the said instructions to him in the presence of Major Nag.
The evidence of Lawrence that Major Barsay told him and the other conspirators that there should be two loadings of the trucks at Shed No. 17, the first loading to carry innocuous articles and the second the articles intended to be smuggled out of the Depot, was also corroborated by disinterested evidence.
Both the courts accepted that evidence.
238 Then there is evidence of the movements of Major Barsay during the crucial time when the smuggling out of the goods was scheduled to take place.
The evidence of Jogendrasingh, Rambhan and Wagh shows that at about 1 10 p.m. on December 20, 1954, Major Barsay was rather worried and was moving to and fro near the main gate because he was suspecting that somebody was watching their movements.
Jamadar Jogendrasingh deposed that Major Barsay asked him to tell Lawrence, "not to do it as there was something suspicious about it." Major Nag also supported this version.
These nervous movements of Major Barsay certainly corroborate the evidence of Lawrence that he was the moving spirit in the conspiracy.
The evidence of Lawrence that the duty of going along with the truck was allotted to his part in the conspiracy is corroborated by the circumstances establisbed by the evidence that Lawrence got into the truck near Shed No. 17 and went in the truck to its destination.
The evidence of Lawrence regarding how Major Barsay directed the smuggling of the goods out of the Depot was corroborated by other independent evidence.
There is evidence of Jog and Diwate to show that on December 19, in the morning, Saighal showed the spot where the transshipment was to take place to Lawrence.
There is the evidence of Darekar to show that a truck was arranged and that he was asked by Yakubsaheb to take his truck to Talegaon for the transport of iron goods.
There is also the evidence of Darekar and Hatnolkar to establish that accused No. 4 was waiting near the cemetry on the Talegaon Dabhade Road and that Darekar was also instructed by Saighal to park the lorry in a particular way.
Then there is the evidence of the police officers that the goods brought in the military lorry were being transported into the civilian truck when they came on the scene.
All this evidence supports the version of Lawrence when he said that Major Barsay gave the necessary instructions as to the manner of transport of the military goods to the civilian truck.
239 The said facts found by both the courts below implicate accused No. 1 in the matter of the preparation, laying down of the details of implementation and the actual carrying out of the scheme of smuggling the goods out of the Depot through all the stages and thereby establish that the appellant was the main conspirator and the brain behind the conspiracy.
We cannot, therefore, say that the version given by Lawrence implicating accused No. 1 is not corrobo rated by other independent evidence.
It follows that the conviction of the appellant by the High Court is correct.
This leads us to the appeal filed by the State against the judgment of the High Court acquitting accused Nos. 2 and 3 on the ground that the evidence of Lawrence implicating them in the offence was not corroborated in material particulars by independent evidence.
In this appeal also we have not allowed learned counsel for the State to canvass the correctness of the finding arrived at by the High Court on the appreciation of the evidence in the case.
Taking the findings arrived at by the High Court, we find it difficult to take a different view from that taken by the High Court.
In regard to accused No. 2 the High Court arrived at the following findings: (1) There is no evidence or allegation on the record to show that there was any understanding between him and Major Barsay before he left on two months leave.
(2) There is no evidence that Kochhar, accused No. 2, met Lawrence on December 6, 1954.
(3) Accused No. 2 moved Major Barsay by his letter (exhibit 151) to convene the itemization board.
(4) Prior to the appointment of the board and its constitution, accused No. 2 ordered the shifting of the "specialist boxed kits" from Shed No. 48 to Shed No. 17, but this was done under Major Barsay 's instructions.
(5) Accused No. 2 was present when Fernandez was ordered by Major Barsay to complete the identification of the first set before December 13, even by working on Sunday the 12th December, and in that connection a written order was issued by him on December 11.
(6) On December 12 Lawrence persuaded accused No. 2 to go in for two 240 insurance policies.
(7) Though according to Lawrence, Kochhar undertook to prepare a bogus voucher and to be at the Depot at the opening hours on Monday the 20th to prepare that voucher in the office of Lawrence, it is admitted that Kochhar refused to issue the voucher.
(8) Accused No. 2 was present at Shed No. 17 when Major Barsay issued orders to shift the stores to Shed No. 26.
And (9) Accused No. 2 accompanied Major Barsay to Shed No. 19 in the morning and lie was present when the truck was being loaded for the second trip at Shed No. 17.
The High Court found that the said circumstances, though some of them might raise a suspicion, did not implicate accused No. 2 in the offence and they are consistent also with his innocence.
Though some of the facts give rise to a suspicion, we cannot say that the High Court was wrong in holding that the said facts did not corroborate the evidence of Lawrence in implicating the said accused in the offence.
Now coming to accused No. 3, the High Court found the following facts based on the evidence other than that of Lawrence: (1) Avatarsing, accused No. 3, was transferred from Unfit Sub Park to Kit Stores.
(2) Accused No. 3 was a party to the shifting of stores from Shed No. 48 to Shed No. 17 even before the appointment of the board of itemization.
(3) Though Lawrence stated that Avatarsing expressed his inability to push the scheme on account of Capt. Kapoor 's constant vigilance and visits to Shed No. 17, Lawrence had admitted that his first contact with Avatarsing was in the noon of 18th December.
(4) There is no evidence that Avatarsing attended the meeting at Major Barsay 's on the 18th.
(5) Avatarsing loaded the truck for the first trip and also for the second trip, and in loading the second trip he used the usual laborers and two outside workers.
(6) After the truck was loaded, he asked Rambhan to take the truck to D. 0.
D. under instructions from the superior officers.
(7) The words "D. O. D." in exhibit 42, the duty slip, were not entered by Avatarsing.
The High Court held that the said facts found on independent evidence did not implicate the said accused in the offence and 241 they were all consistent with his innocence.
Though some of the findings give rise to suspicion we cannot say that the High Court was wrong in holding that the said facts found did not corroborate the evidence of Lawrence in implicating the accused in the offence.
We, therefore, accept the finding of the High Court in regard to accused Nos. 2 and 3.
In the result both the appeals fail and are dismissed.
Appeals dismissed.
| The appellant and five other persons, three of Them not being public servants, were charged with criminal conspiracy to dishonestly or fraudulently misappropriate or convert to their own use military stores and with dishonestly and fraudulently misappropriating the same.
Sanction for prosecution of the accused was given by a Deputy Secretary on behalf of the Central Government.
The accused were tried by a Special judge.
The main evidence led was that of one L, a security officer.
, who had been asked to join the conspiracy and who had joined it with a view to have the offenders apprehended.
The Special judge convicted all the accused persons.
On appeal the High Court confirmed the conviction of the appellant and one other accused now dead and acquitted the other four accused persons holding that the evidence of L was corroborated in material particulars in respect of the appellant and one other accused only.
The appellant contended: (i) that the appellant who was subject to the Army Act could only be tried by a Court Martial and the Special judge had no jurisdiction to try him, (ii) that the sanction to prosecute was void as it was not expressed to be 196 made in the name of the President, (iii) that the investigation by the Inspector of Police, was illegal, (iv) that there could be no legal charge of conspiracy between accused who were public servants and accused who were not, and (v) that L was a wholly unreliable witness whose testimony ought to have been rejected totally and no question of its corroboration arose.
Held, that the Special judge had jurisdiction to try the appellant for the offences charged.
The Army Act does not bar the jurisdiction of criminal courts in respect of acts or omissions which are punishable under the Army Act as well as under any other law in force.
The offences charged were triable both by the Special judge and by a Court Martial.
In such cases section 125 of the Army Act provides that if the designated officer decides that the proceedings should be before a Court Martial he may direct the accused to be detained in military custody.
But in the present case the designated officer bad not exercised his discretion and the Army Act was not in the way of the Special judge exercising his jurisdiction.
Rule 3 made under section 549, Code of Criminal Procedure for persons subject to military law was applicable only to magistrates and not to a Special judge who is not a magistrate within the meaning of r. 3.
Besides, section 7 of the Criminal Law (Amendment) Act, 952, provides that notwithstanding anything contained in the Code of Criminal Procedure or in "any other law" the offences specified in section 6(1) shall be triable by Special judges only.
The words "any other law" included the Army Act also.
The offences for which the appellant was convicted were offences specified in section 6(1) and were exclusively triable by a Special judge.
Held, further, that the sanction for the prosecution of the appellant was a good and valid sanction.
Article 77 of the Constitution which provides that all orders of the Central Government shall be expressed to be in the name of the President is only directory and not mandatory.
Where an order was not issued in strict compliance with the provisions of article 77 it could be established by extraneous evidence that the order was made by the appropriate authority.
In the present case there was uncontroverted evidence which established that the order of sanction was made by the Deputy Secretary on behalf of the Central Government in exercise of the power conferred on him under the rules delegating such power to him.
The State of Bombay vs Purushottam jog Naik, [1952] S.C.R. 674, Dattareya Moreshwar Pangarkar vs The State of Bombay, ; , J. K. Gas Plant Manufacturing Co., Ltd. vs The King Emperor, , P. Joseph John vs The State of Travancore Cochin; , and Ghaio Mall & Sons vs The State of Delhi, [1959] S.C.R. 1424, applied.
Held, further, that though the conditions of investigation by the Inspector of Police as laid down in section 5A, Prevention of Corruption Act were not complied with the trial.
was not vitiated 197 by the illegality as it did not result in any miscarriage of justice.
The powers and jurisdiction of members of the Delhi Special Police Establishment for investigation of offences in the State of Bombay had been duly extended by a notification of the Government of Bombay dated August 13, 1949, giving a general consent in respect of all the members of the establishment.
It was not necessary that the consent be given to every individual member of the Establishment.
H.N. Rishbud & Inder Singh vs State of Delhi, ; , followed, Held, further, that there was no defect in the charges.
It was not illegal to charge public servants and persons who were not public servants with the criminal conspiracy to do certain acts for which all of them could not be convicted separately.
Though all the accused were not liable for the individual offences, they were all guilty of the offence of conspiracy to do illegal acts.
Held, further, that the evidence of L was reliable and that it was corroborated in material particulars so far as the appellant was concerned.
Though L was not an accomplice, he was an interested witness and required corroboration.
The evidence of an approver and the corroborating pieces of evidence could not be treated in two different compartments; but had to be considered together.
Though some parts of the evidence of L were not accepted, his version was broadly accepted in regard to the conspiracy and the manner in which articles were smuggled out.
Sarwan Singh vs The State of Punjab, ; , explained.
| By an order dated May 25, 1954, the Supreme Court granted the petitioners in the case special leave to appeal against the judgment and order of the High Court at Calcutta.
In accordance with the order, the petitioners furnished the security amounts directed to be deposited within the time specified in the order.
The Registrar of the High Court did not issue any notice of admission of 'appeal to be served by the Appellant 's Solicitor on the Respondents as envisaged in rule 9 of Order XIII, S.C.R. Nor did the Appellant following the practice of the High Court, move that Court for It admission" of the appeal until January 11, 1955.
The Respondents first moved the High Court complaining of default on the part of the appellants in due prosecution of the appeal and latter moved the Supreme Court for action under rule 13 of Order XIII of the Supreme Court Rules.
The application in the High Court was therefore kept pending.
Held: After the grant of special leave under article 136, the Registrar of the Supreme Court transmits, in accordance with the 244 provisions of rule 8 of Order XIII of the Supreme Court Rules, a certified copy of the Supreme Court 's order to the Court or tribunal appealed from, Rule 9 of Order XIII of the Supreme Court Rules enjoins upon the Court or tribunal appealed from to act, in the absence of any special directions in the order, in accordance with the provisions contained in Order XLV of the Civil Procedure Code, so far as they are applicable.
Accordingly the Court or Tribunal to which the order is transmitted receives deposits on account of security for the Respondents ' costs, printing costs, and any other deposits if so ordered by the Supreme Court, and sets about preparing the record of the appeal for transmission to the Supreme Court.
Therefore, action under rule 13 of Order XIII, S.C.R., for rescinding the order granting special leave cannot be initiated unless the Court or tribunal appealed from reports to the Supreme Court that the appellant has not been diligent in taking steps to enable that Court to carry out the directions, if any, contained in the order of the Supreme Court and to act in accordance with the provisions of Order XLV of the Civil Procedure Code so far as applicable to appeals under Article 136 of the Constitution.
In view of rule 9 of Order XIII of the Supreme Court Rules, the application of Order XLV of the Code of Civil Procedure to appeals under Article 136 of the Constitution is restricted.
The Court or tribunal appealed from, no doubt, has to carry out the directions contained in the order granting special leave, and to receive the security for the Respondents ' costs and other necessary deposits, but once the security is furnished and the other deposits are made, the formality of "admission" envisaged by rule 8 of Order XLV of the Civil Procedure Code is unnecessary, because in such cases the order .granting special leave by itself operates as an admission of the appeal as soon as the conditions in the order relating to the furnishing of security or making of deposits are complied with.
Appeals under Article 136 thus stand on a different footing from appeals on grant of certificate by the High Court itself.
In the letter case, the High Court has exclusive jurisdiction over the matter until it admits the appeal under rule 8 of Order XLV of the Civil Procedure Code.
Rule 9 of Chapter 32 of the Original Side Rules of the Calcutta High Court envisages "admission" of appeals to the Supreme Court whether by an order of the Supreme Court or under Order XLV of the Civil Procedure Code.
And when an appeal arising from an order made by the Supreme Court under Article 136 of the Constitution, has been so "admitted", the said rule enjoins upon the Registrar to issue notice of such admission for service by the appellant on the Respondents.
In cases where special leave has been granted by the Supreme Court, it is not necessary for the appellant to move the High Court appealed from for the formal admission of his appeal.
As the order granting special leave itself lays down the conditions to be fulfilled by the appellants, the admission will be regarded as final only when the directions are complied with and as 245 soon as this is done it would be the duty of the Registrar to issue a notice of the admission of the appeal for service upon the respondents.
In default of the issue of such notice, the appellant cannot be held responsible for laches in the prosecution of his appeal with regard to the steps required to be taken after the admission of his appeal.
| The appellant was an Overseer in the Public Works Department of the Central Provinces and Berar Government.
In 1947 he was suspended from service and prosecuted under section 161 I.P.C. Ultimately, on orders from the High Court, the prosecution was dropped.
In a departmental enquiry also the appellant was exonerated, By an order dated December 1960, the Government held that the suspension of the appellant and the ' departmental enquiry against him "were not wholly unjustified".
The order then directed that the appellant should be reinstated in service with effect from the date of the order and retired from the date, he, having already attained superannuation age on September 5, 1952 and that the entire period of absence from duty should be treated as period spent on duty under F.R. 54(5) for purposes of pension only, but that he should not be allowed any pay beyond what he had actually received or what was allowed to him, by way of subsistence allowance during the period of his suspension.
The appellant filed a petition under article 226 of the Constitution contending that F. Rule 54(2) governed his case and not F. Rule 54(5).
The High Court decided against him but granted him certificate to appeal to this Court.
It was contended on behalf of the appellant that before deciding which rule applied to his case the Government should have given him an opportunity to be heard.
The respondent urged that in passing a consequential order a hearing is not necessary.
Held: An order passed under F R. 54 is not always a consequential order nor is such order necessarily a continuation of the departmental proceeding taken against the employee.
[359E F] Consideration under F.R. 54 depending as it does on facts and circumstances in their entirety, passing an order on the basis of factual finding arrived at from such facts and circumstances and such an order resulting in pecuniary loss to the Government servant must be held to be an objective rather than a subjective function.
The very nature of the function implies the duty to act judicially.
In such a case if an opportunity to show cause against the action proposed is not afforded, as admittedly it was not done in the pre sent case, the order is liable to be struck down as invalid on the ground that it was one in breach of the principles of natural justice.
State of Orissa vs Dr. (Miss) Binapani Devi and Ors. ; , relied on.
[359H; 360A B] V. R. Gokhale vs State of Maharashtra, I.L.R. [1963] Bom.
537, approved.
| The appellant was appointed on 20 May, 1965, on two years ' probation.
On 1 July, 1967 there was an order extending the period of probation by one year.
On May 20, 1968, there was an order terminating the services of the petitioner.
On July 20, 1968 there was an order revoking the order of termination and extending the period of probation for six months from 20th May, 1968.
The order of termination was on Jan. 30, 1969.
This order recited that, having considered him unfit for appointment to the State Police Service the services of the appellant are dispensed with on the expiry of his extended period of probation.
Two contentions were raised by the appellant in the High Court.
First, the order of termination was passed on Jan. 30, 1969, when the petitioner.
by reason of expiry of 3 years stood confirmed on 19/20 November, 1968 and Second, the order of termination was one of punishment and the appellant should have been given an opportunity to show cause against the order of termination under Rule 9 of the Punjab Civil Service (Punishment and Appeal) Rules, 1952.
These contentions were rejected by the High Court.
Hence the appeal to this Court by Special Leave.
Dismissing the appeal, HELD: The object of extending the period of probation is to find out whether the appellant was a fit person.
The appellant could not be confirmed, till the period of probation expired.
It cannot, therefore, be held that the appellant stood confirmed on 19/20 November, 1968 before the period of probaition expired in January, 1969.
[776A B] (2) Termination on account of unsatisfactory record will attract rule 9 of the Punishment Rules.
Fitness was a matter to be considered at the time of confirmation.
The order terminating the services is unfitness for appointment and not on the ground of any turpitude to attract Rule 9 of the Punishment Rules, 1952.
To hold that the words "unfit to be appointed" mentioned in the order of termination, are a stigma, would deprive the authorities to judge fitness 'for work or suitability to a post at the time of confirmation.
Termination of services on account of inadequacy for the job or for any tompramental or other defect not involving moral turpitude is not a stigma which can be called discharge by punishment.
Fitness for the job is one.
of the most important reasons for confirmation.
The facts and circumstances do not show that there was any stigma attached to the order of termination and therefore, Rule 9 of the Punjab Civil Service (Punishment & Appeal) Rules, 1952 is not attracted in the present case.
[7760 777B]
| These appeals raised an identical question.
Civil Appeals Nos 4291 and 4292 of 1984 were preferred against the judgment of the Madras High Court in Writ Appeals Nos.
561 and 562 of 1983.
The appellant in these two appeals, an employee in the Bank of India, which is a Nationalised Bank, was dismissed.
Aggrieved, he preferred an appeal under section 41(2) of the Tamil Nadu Shops and Establishments Act, 1947 (the Tamil Nadu Shops Act).
A preliminary objection was raised by the Bank to the effect that the Tamil Nadu Shops Act was not applicable to the Bank in view of the exemption contained in Section 4(1)(c) thereof.
The Appellate Authority held that the preliminary objection might be decided along with the appeal.
The bank thereupon filed two writ petitions in the High Court, one for a direction to the Appellate Authority to dispose of the preliminary objection before disposing of the appeal on merits, and the other, for a direction to the Appellate Authority not to proceed with the appeal.
Both the Writ Petitions were allowed by a Single Judge of the High Court on the ground that the Bank was an establishment under the Central Government and consequently the provisions of the Tamil Nadu Shops Act were not applicable to it in view of the exemption contained in this behalf in section 4(1)(c).
Against that decision, two writ appeals aforementioned were filed, which were dismissed by a Division Bench of the High Court by the Judgment under appeal in these two appeals.
The same judgment of the High Court had disposed of Writ Petition No. 1550 of 1981 also, which had arisen out of an application under section 51 of the Tamil Nadu Shops Act made by the employees of the State Bank of India before the Commissioner of Labour for a direction that all the provisions of that Act would apply to them, being employed in the State Bank.
The State Rank had contended that it was an establishment under the Central 663 Government within the meaning of Section 4(1)(c) of the Tamil Nadu Shops Act and consequently the provisions of that Act were not applicable to it.
The Commissioner of labour had rejected the plea of the State Bank and held that the provisions of the Act were applicable to it.
Civil Appeal No. 4329 of 1984 was preferred against the said Judgment by the State Bank 's Staff Union and Civil Appeal No. 4735 of 1984 was preferred by the employees concerned.
Civil Appeal No. 1120 of 1976 was preferred by Syndicate Bank, a Nationalised Bank, against the judgment of the Andhra Pradesh High Court (Division Bench), dismissing the Writ Appeal No. 268 of 1975 and upholding the order of a Single Judge dismissing the Writ Petition No. 5973 of 1973 filed by the appellant Syndicate Bank.
The services of Respondent No. 3 in the appeal had been terminated by the appellant Syndicate Bank.
An appeal was preferred by the said respondent before the Labour officer under the Andhra Pradesh Shops and Establishment Act, 1966 (the Andhra Pradesh Shops Act).
The Labour officer allowed the appeal which was confirmed in a second appeal by the Labour Court.
Aggrieved by these orders, the Bank filed the Writ Petition above said.
It was urged by the appellant Bank that it being an establishment under the Central Government within the meaning of Section 64(1)(b) of the Andhra Pradesh Shops Act, the provisions of that Act including the provisions of appeal were not applicable to it in view of the exemption contained in this behalf.
Civil Appeal No. 1042 was preferred by the Syndicate Bank against the judgment of the Andhra Pradesh High Court, dismissing the Writ Petition No. 86 of 1979.
Respondent No. 3 in the appeal had been dismissed by the appellant bank.
He preferred an appeal which was allowed.
The Bank preferred a second appeal before the Labour Court, which was dismissed.
The Bank filed the aforesaid writ Petition before the High Court and urged that it being an establishment under the Central Government within the meaning of Section 64(1)(b) of the Andhra Pradesh Shops Act, the provisions of that Act were not applicable to it in view of the exemption contained in this behalf.
The High Court dismissed the Writ Petition.
Civil Appeal No. 837 of 1984 was preferred by the Bank of India a nationalised bank, against the judgment of the Kerala High Court dismissing the Writ Petition No. 1419 of 1978.
Respondent No. 1 in the appeal had preferred an appeal under section 18 of the Kerala Shops and Commercial Establishments Act, 1960 (the Kerala shops Act) against an order passed by the appellant Bank, discharging him from service.
A preliminary objection was raised by the Bank with regard to the maintainability of the appeal on the ground that it being an establish 664 ment under the Central Government within the meaning of section 3(1)(c) of that Act, the provisions thereof including section 18 above said were not applicable to it.
The objection was overruled by the appellate authority.
The Bank filed the original Petition abovementioned in the High Court which dismissed the same.
Dismissing the Civil Appeals Nos . 4291 and 4292 of 1984, 4329 of 1984 and 4735 of 1984, and allowing the Civil Appeal Nos. 1120 of 1976, 1042 of 1979 and 837 of 1984, the Court, ^ HELD: The common question which arose for consideration in all these appeals was as to whether the Nationalised Banks and the State Bank of India were establishments under the Central Government within the meaning of the Acts above said and consequently the provisions of the said Acts were not applicable to these Banks in view of the exemption contained therein in this behalf.
[670E] In view of the definition of the term "establishment" read with that of "commercial establishment" contained in the said Acts, it was not disputed even by counsel for the banks, that a bank is an establishment.
Consequently, unless exempted, the provisions of the said Acts would apply to the State Bank of India and the nationalised banks also.
[670F G] A conspectus of the provisions of the (Act No. 23 of 1955) and the (Act No. 5 of 1970), read with the dictionary meaning of the term "under" leaves no manner of doubt that the State Bank of India and the nationalised banks are clearly establishments under the Central Government.[677D] For the employees of these banks, it was urged that these banks were autonomous corporations having distinct juristic entity with a corporate structure of their own and could not as such be treated to be owned by the Central Government.
According to counsel, the word "under" used in the expression "under the Central Government" con noted complete control in the sense of being owned by the Central Government.
Disagreeing with that submission it was held that the mere fact that the State Bank of India and the nationalised banks are different entities as corporate bodies for certain purposes cannot by itself be a circumstance from which it may be deduced that they cannot be establishments under the Central Government.
[677E F; 678A] 665 If the criteria laid down in Ajay Hasia, etc.
vs Khalid Mujib Sehravardi & Ors. etc.
; , decided by a Constitution Bench of this Court, was applied to the facts of these cases, it is obvious that even though the State Bank of India and the nationalised banks may not be owned as such by the Central Government and their employees may not be the employees of the Central Government, they certainly will fall within the purview of the expression "under the Central Government", in view of the existence of deep and pervasive control of the Central Government over these banks.
As pointed out by this Court in Biharilal Dobray vs Roshan Lal Dobray; , , the true test of determination of the question whether a statutory corporation is independent of the Government depends upon the degree of control.
[679G H;682E F] In view of these considerations, no exception could be taken to the view of the Madras High Court in its judgments which were the subjectmatter of the Civil Appeal Nos. 4291 and 4292 of 1984, 4375 of 1984 and 4329 of 1984.
As regards the judgment of the Kerala High Court and the judgment of the Andhra Pradesh High Court under appeal even if the decisions dealing with Article 12 of the Constitution are not made the foundation for deciding the point in issue, the principles enumerated therein particularly with regard to deep and pervasive control are relevant for deciding the point in issue, and also it was sufficient to point out that for holding that the State Bank of India and the nationalised banks are establishments under the Central Government which have a corporate structure and have freedom in the matter of day to day administration, it is not necessary that these banks should be owned by the Central Government or be under its absolute control in the sense of a department of the Government.
As regards the circumstances that even though the Reserve Bank of India is mentioned specifically in the relevant clause containing exemption, neither the State Bank of India nor the nationalised banks are so mentioned, it is to be pointed out that the Reserve Bank of India was established as shareholders ' Bank under Act 2 of 1934.
The Kerala Shops Act and the Andhra Pradesh shops Act, of the years 1960 and 1966, were modelled almost on the pattern of the Tamil Nadu Shops Act, which is of the year 1947.
When section 4(1)(c) of this Act referred to the Reserve Bank of India in 1947, it obviously referred to it as the Shareholders ' Bank.
The Reserve Bank Transfer to Public ownership Act (Act 82 of 1948) came into force on 1st January, 1949, and it was thereafter that the shares in the capital of the Reserve Bank came to belong to the Central Government.
In this background, no undue emphasis could be placed on the circumstances that the State Bank of India or the nationalised banks did 666 not find mention in the provision containing exemption even though the Reserve Bank of India was specially mentioned therein.
For the response stated above, the aforesaid decisions of the Kerala High Court and the Andhra Pradesh High Court deserved to be set aside.[683C H] On the view the Court had taken that the State Bank of India and the nationalised banks are establishments under the Central Government, the Court did not consider the question as to whether these banks were establishment, which not being factories within the meaning of the , were, in respect of matters deal with in the Tamil Nadu Shops Act, governed by a separate law for the time being in force in the State so as to be entitled to claim exemption under clause (f) of sub section (1) of section 4 of the said Act or of the corresponding provisions in the Kerala Shops Act and the Andhra Pradesh Shops Act.
[684A B] Civil Appeals Nos.
4291 and 4292 of 1984, 4329 of 1984 and 4735 of 1984 were dismissed.
Civil Appeal No. 1120 of 1976 was allowed and the judgment of the High Court in Writ Appeal No. 268 of 1975 as also the Judgment of the Single judgement the Writ Petition No. 5973 of 1973 as well as the orders of the Labour officer in the appeal filed by respondent No. 3 and of the Second Appellate Authority m the second appeal filed by the appellant Bank under the provisions of the Andhra Pradesh Shops Act were set aside.
Civil Appeal No. 1042 of 1979 was allowed and the judgment of the Andhra Pradesh High Court in the Writ Petition No. 86 of 1979 as also the orders passed by the first and second appellate authorities in the appeals preferred by respondent No. 3 and the bank under the Andhra Pradesh Shops Act were set aside.
Civil Appeal No. 837 of 1984 was allowed and the judgment of the Kerala High Court in Writ Petition No. 1419 of 1978 was set aside.
The preliminary objection raised by the bank before the Appellate Authority in the appeal filed by respondent No. I under section 18 of the Kerala Shops Act to the effect that the said appeal was not maintainable was upheld, with the result that if the said appeal was still pending would be disposed of as not maintainable and in case it had been decided, the said decision should be treated as without jurisdiction.[684C F] The various employees whose appeals preferred under the Kerala Shops Act or the Andhra Pradesh Shops Act referred to above had been held to be not maintainable and the orders passed therein had been set aside, would be at liberty to take recourse to such other remedies as might be available to them in law.
[684G] 667 Ajay Hasia, etc.
vs Khalid Mujib Sehravardi & etc.
; , ; Heavy Engineering Mazdoor Union vs The State of Bihar & Ors., ; Hindustan Aeronautics Ltd. vs The Workmen and Ors., ; ; Graham vs Public Works Commissioner, ; Regional Provident Fund Commissioner, Karnataka vs Workmen represented by the General Secretary, Karnataka Provident Fund Employees ' Union and Another, [1984] II L.L.J. 503; Western Coalfields Ltd. vs Special Area Development Authority, Korba and Anr., ; ; Rashriva Mill Mazdoor Sangh, Nagpur vs The Model Mills, Nagpur and Anr., ; ; Union of India & Ors.
vs N. Hargopal and Ors., ; Thote Bhaskara Rao vs The A.P. Public Service Commission and Ors., Judgment Today and Biharilal Dobray vs Roshan Lal Dobray, ; , referred to.
| The appellant was compulsorily retired from service by the Rajpramukh of Pepsu by an order dated August 18, 1950, which was as follows: His Highness the Rajpramukh is pleased to retire from 89 service Sardar Dalip Singh, Inspector General of Police, Pepsu (on leave) for administrative reasons with effect from the 18th August, 1950." No charges Were framed against him and it was on his insist ence that certain charges were communicated to him.
Rule 278 of the Patiala State Regulations, 1931 which was then in force, provided as follows : " 278.
For all classes of pensions of person who desires to obtain the pension is required to submit his application before any pension is granted to him.
The State reserves to itself the right to retire any of its employees on pension on political or on other reasons.
" The question for determination in the appeal was whether the compulsory retirement of the appellant amounted to removal or dismissal from service within the meaning of article 311(2) of the Constitution.
The trial Court held in favour of the appellant and the High Court against him, Held, that the two tests laid down by this Court for deter mining whether an order of compulsory retirement amounted to removal or dismissal from service were (1) whether it was by way of punishment, a charge or imputation against the officer, being made the basis of the exercise of the power, and (2) whether the officer was deprived of any benefit already earned as in a case of dismissal or removal.
Shyamlal vs State of U. P., ; and State of Bombay vs Subhagchand Doshi, ; , referred to.
So judged, the order passed against the appellant could not amount to dismissal or removal from service within the meaning of article 311(2) of the Constitution.
The order was not one purported to have been made on any charge of misconduct or inefficient and the fact that any such considerations might have weighed with the Government in passing the order under Rule 278 did not amount to any imputation or charge against the officer, and there could be no question of losing any benefit earned since the Rule itself provided for retirement on pension and the officer had in fact been allowed full pension.
It would not be correct to say that since the Rule did not fix any age for compulsory retirement, an order of compulsory retirement passed under it must necessarily be regarded as dismissal or removal within the meaning of article 311(2) of the Constitution.
State of Bombay vs Subhagchand Doshi, ; , ex plained.
| A who was a tenant of N sub let the premises to B and C. N filed a suit for ejectment against A, B and C in the Court of Small Causes, Bombay, on the ground of illegal sub letting.
The suit was decreed.
Thereafter, A, B and C filed the present suit in the Bombay City Civil Court for a declaration that A was a tenant of N and was protected from eviction by the provisions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, and that B and C were lawful sub tenants of A and were as such entitled to possession, use and occupation of the premises.
The City Civil Court held that it had jurisdiction to entertain the suit but dismissed it on the ground that there was no lawful subletting.
On appeal, the Bombay High Court held that the City Civil Court had no jurisdiction to entertain the suit and dismissed the appeal without going into the merits : Held, that the High Court was right in holding that section 28 of the Act barred the City Civil Court from entertaining the suit.
Section 28 explicitly confers on courts specified therein jurisdiction to entertain a suit between a landlord and a tenant in respect of a claim which arose out of the Act or any of its provisions, 368 and expressly prohibits any other court exercising jurisdiction with respect thereto.
In the present suit the claim being one which arose out of the Act, and the City Civil Court not being a court specified in section 28, it could not entertain the suit.
Though section 29A of the Act allows questions of title to be regarded in a civil court, it applies only to titles which do not arise out of the Act or any of its provisions; and titles which could riot be established outside the Act but which arose under the provisions of the Act by virtue of a claim made thereunder must be determined by a court specified in section 28.
| The respondent sought special leave to appeal to the High Court under section 417(3) of the Code of Criminal Procedure, 1898 against the acquittal of the petitioner by the trial court.
The application was made beyond the period of limitation but the High Court condoned the delay under section 5 of the .
In their application for special leave to appeal to this Court the petitioners contended that the time limit of 60 days prescribed under section 417(4) was mandatory and as such the High Court had no jurisdiction to extend the time limit by resort to section 5 of the .
Dismissing the special leave petitions, ^ HELD: (1) The order granting special leave was not an order outside the power of the High Court.
In a case where an application for special leave to appeal from an order of acquittal is filed after the coming into force of the , section 5 would be available to the applicant and if he can show that he had sufficient cause for not preferring the application within the time limit of 60 days prescribed in sub section
(4) of section 417, the application would not be barred and despite the expiration of the time limit of sixty days, the High Court would have the power to entertain it.
[265B C] (2) Since under the section 5 is specifically made applicable by section 29(2) it could be availed of for the purpose of extending the period of limitation prescribed by a special or local law if the applicant can show that he had sufficient cause for not presenting the application within the period of limitation.
It is only if the special or local law expressly excludes the applicability of section 5 that it stands displaced.
Section 29(2) (b) of the Limitation Act, 1908 specifically excluded the applicability of section 5 while section 29(2) of the 1963 Act in a clear and unambiguous terms provides for applicability of section 5.
[264F, E] Kaushalya Rani vs Gopal Singh ; , explained.
|
Appeals Nos. 253 and 254 of 1961.
Appeals by special leave from the judgment and order dated May 2,1955, of the Allahabad High Court in Civil Revision Nos. 881 and 882 of 1952.
section F. Andley, Rameshwar Nath and P. L. Vohra, for the appellant in C. A. No. 253 of 1961 and respondent No. 2 in C. A. No. 254 of 1961.
section P. Varma, for the appellant in C.A. No. 254 of 61 and respondent No. 2 in C.A. No. 253 of 1961.
C. B. Aggarwala and C. P. Lal, for the respondent No. 1 in both the appeals.
January 19.
The Judgment of the Court was delivered by SHAH, J.
Vijay Pratap Singh(hereinafter called the plaintiff) a minor by his next friend Pandit Brij Mohan Misir filed a petition in the Court of the Subordinate Judge, Faizabad for leave to sue in forma pauperis for declaration of title to the Ajodhya Raj and accretions thereto and for possession and mesne profits for three years prior to the suit.
The petition was rejected by the Subordinate Judge because, in his view, it disclosed no cause of action.
An application by Ramjiwan Misir father of the plaintiff who was impleaded as the second defendant, to be transposed as a petitioner was also rejected by the Subordinate Judge.
The plaintiff and Ramjiwan Misir applied to the High Court of Judicature at Allahabad in the exercise of its revisional jurisdiction against the orders rejecting 677 their respective petitions but without success.
They have with special leave appealed to this Court against the orders passed by the High Court.
The case set up by the plaintiff in his petition was briefly this.
Maharaja Sir Man Singh holder of the Ajodhya Raj was a Taluqdar in lists I, II and V of the Oudh states set I of 1869.
He died in 1870 and the Raj devolved upon his daughter 's son Maharaja Pratap Narain Singh, who died on November 9, 1906, leaving him surviving two widows Suraj Kumari and Jagdamba Devi and no lineal descendant.
A will alleged to be executed by Maharaja Pratap Narain Singh on July 20, 1891, was set up but it was void and ineffective because, firstly, it was procured by undue influence, coercion and fraud practised upon the testater, and, secondly it created a line of succession contrary to law.
Accordingly on the death of Maharaja Pratap Narain Singh the Raj devolved upon Maharani Suraj Kumari the senior widow and on her death in 1927 upon Maharani Jugdamba Devi, and on the death of the latter on June 18, 1928 upon Ganga Dutt Misir, grand father of the plaintiff Ganga Dutt Misir died in 1942 and the estate devolved upon his son Ramjiwan and his grandson, the plaintiff as co parceners in a Hindu joint family.
Even if the will was valid and effective "the terms thereof alongwith Maharaja Pratap Singh 's other acts and declarations" had the effect of taking the estate out of the purview of Act I of 1869 with the result that Maharani Jagdama Devi enjoyed the property in suit with a life estate therein, and on her death on June 18, 1938, the entire property in suit vested in Ganga Dutt on whose death the plaintiff and defendant No. 2 became owners of the entire property in suit as their joint ancestral property".
Defendant No.1 Dukh Haran Singh Claimed to be adopted as a son by Jagdamba Devi on February 12, 1909 but the claim was "utterly false, fictitious and untrue" for the reasons set out in the partition, and the 678 Raj was in the wrongful possession of the first defendant Dukh Haran Singh.
The plaintiff alleged that his father Ramjiwan Misir was "detained and confined" by the first defendant and was unable to join the plaintiff in the petition.
The first defendant Dukh Haran Singh resisted the petition inter alia contending that it did not disclose a cause of action and that, in any event, the claim made by the plaintiff was barred by law of limitation.
Initially Ram Jiwan Misir supported the will and the plea of adoption set up by the first defendant, but by an application dated April 21, 1951, prayed that he be transposed as a petitioner submitting that his previous statement was procured by coercion and contained averments which were untrue.
Ramjiwan was directed to pay the court fee payable on the plaint within ten days and in default of payment, his application was to stand dismissed.
Ramjiwan did not pay the court fee as directed but on July 23, 1951, he again applied for being transposed as a petitioner in the petition for leave to sue in forma pauperis filed by the plaintiff.
Holding that it did not disclose a cause of action the Subordinate Judge rejected the petition of the plaintiff.
The Subordinate Judge observed that there was nothing in the petition to show how the disputed estate came to be governed by the rule of inheritance under the Hindu Law and, in any event, there was nothing in the petition to support the plea that the estate had lost its impartible character, and that even if in view of the allegations contained in para 12 of the petition it be held that the estate came to be governed by the ordinary Hindu Law, it did not become a partible estate which the plaintiff could inherit, so long at his father Ramjiwan was alive.
The petition filed by Ramjiwan Misir was then taken up for 679 hearing and was also rejected because, in the view of the learned Judge, "no useful purpose would be served" by transposing Ram Jiwan Misir as co plaintiff when the application filed by the plaintiff was held to be defective and liable to be rejected under O. 33, r. 5(d), of the Code of Civil Procedure.
Against the two orders passed by the subordinate Judge the plaintiff preferred Revision Application No. 881 of 1952 and Ram Jiwan preferred Revision Petition 882 of 1952.
The High Court rejected the petition of the plaintiff holding that on the death of Ganga Dutt in 1942 the estate would devolve upon Ram Jiwan Misir alone according to the rule of impartibility which governed the devolution of the estate.
The High Court also observed that there was nothing in the petition to show that Ganga Dutt succeeded to the estate "on the basis of his being the nearest male reversioner under the Ordinary Hindu Law", and that it was unnecessary to consider whether the will by Maharaja Pratap Narain took out the estate from the operation of the Act, "because the plaintiff did not rely upon the will and whatever the plaintiff had stated in the petition in connection with the will was simply by way of answer to what might be contended by the defendant in the suit.
" Dealing with the petition of Ram Jiwan Misir the High Court observed that "By an application to sue in forma pauperis the applicant prays for a relief personal to himself and therefore nobody else can be properly made a co applicant.
There is no direct provision which provides that a court should transpose a party from one side to the other.
Order 1, r. 10, gives the power to the court to strike out or add the names of parties when it appears that he has been improperly joined or that he ought to have been joined or his presence before the court would be necessary in order to enable the court effectively and completely to adjudicate upon and settle all the questions involved in the suit.
The provisions of 680 this rule will not apply to the proceedings on an application for permission to sue as a pauper".
We are unable to agree with the view of the High Court that the petition filed by the plaintiff did not disclose a cause of action, or that O. 1, r. 10 of the Code of Civil Procedure cannot properly be resorted to for transposing a party in a petition for leave to sue in forma pauperis.
The plaintiff had by his plaint set up an alternative case.
In the first instance he pleaded that the will alleged to be executed by Maharaja Pratap Narain on July 20, 1891, was "void and ineffective" and the estate devolved upon Ram Jiwan and the plaintiff as members of a co parcenary: alternatively, he pleaded that even if the will was valid, by the terms thereof and by the other acts and declaration of Maharaja Pratap Narain Singh, the estate was taken out "of the purview of Act I of 1869" and on the death of Maharani Jagdamba Devi the property devolved upon Ganga Dutt, the nearest reversioner under the Hindu law and on his death it devolved upon the plaintiff and upon his father Ram Jiwan Misir.
Order XXXIII of the Code of Civil Procedure prescribes the procedure for institution of suits by paupers.
Rule 2 provides that particulars a petition for permission to sue in forma pauperis shall contain and r.3 sets out the mode of presentation of the petition.
Rule 4 authorises the Court to examine the applicant or his agent regarding the merits of the case and the property of the applicant.
Rule 5 provides: "The Court shall reject an application for permission to sue as a pauper (a) where it is not framed and presented in the manner prescribed by rules 2 and 3, or (b) where the applicant is not a pauper, or 681 (c) where he has, within two months next before the presentation of the application, disposed of any property fraudulently or in order to be able to apply for permission to sue as a pauper, or (d) where his allegations do not show a cause of action, or (e) where he has entered into any agreement with reference to the subject matter of the proposed suit under which any other person has obtained an interest in such subject matter.
" Where the application is not rejected on the grounds set out in r. 5, the Court has under r. 6, to proceed, after giving notice to the opposite party and the Government pleader, to receive evidence as the applicant may adduce in proof of his pauperiam.
By r. 7 the Court is authorised to consider where the applicant is not subject to any of the prohibitions specified in r. 5.
The Court is enjoined to reject a petition where the prohibitions mentioned in cls.
(a) to (e) of r. 5.
exist.
Even if the petition is not so rejected at the hearing of the petition, if the court is satisfied as to the existence of these prohibitions it may be dismissed under r. 7.
It does not appear that any objection was raised as to the existence of prohibitions (c) and (d) set out in r. 5, and the Subordinate Judge disallowed the objection that the petition was not framed and presented as prescribed by r. 2 and 3.
He did not consider the question whether the plaintff was a pauper.
He rejected the application only on the ground that it did not show a cause of action, and the High Court confirmed the order also on that ground.
By the express terms of r. 5 cl.
(d), the court is concerned to ascertain whether the allegations made in the petition show a cause of action.
The court has not to see whether the claim made by the petitioner is likely to 682 succeed: it has merely to satisfy itself that the allegations made in the petition, if accepted as true, would entitle the petitioner to the relief he claims.
If accepting those allegations as true no case is made out for granting relief no cause of action would be shown and the petition must be rejected.
But in ascertaining whether the petition shows a cause of action the court does not enter upon a trial of the issues affecting the merits of the claim made by the petitioner.
It cannot take into consideration the defences which the defendant may raise upon the merits; nor is the court competent to make an elaborate enquiry into doubtful or complicated questions of law or fact.
If the allegations in the petition, prima facie, show a cause of action, the court cannot embark upon an enquiry whether the allegations are true in fact, or whether the petitioner will succeed in the claims made by him.
By the Statute, the jurisdiction of the Court is restricted to ascertaining whether on the allegations a cause of action is shown: the jurisdiction does not extend to trial of issues which must fairly be left for decision at the hearing of the suit We do not propose to express any opinion on the question whether on the death of Jagdamba Devi the estate devolved under section 22(10) of Act I of 1869 upon Ramjiwan Misir and the plaintiff as members of a co parcenary.
Even if that claim is inconsistent with the words of section 22(10) of Act I of 1869 on which the plaintiff himself relies, the plaintiff had an alternative claim that the estate had become non taluqdari by virtue of the will and "the acts and declaration" of Maharaja Pratap Narain.
In support of this claim, section 15 of Act I of 1869, before it was amended by U. P. Act III of 1910, is relied upon.
At the time when Maharaja Pratap Narain died, section 15 of the Act stood as follows: "If any taluqdar or grantee shall hereto before have transferred or bequeathed, or if 683 any taluqdar or grantee or his heir or legatee shall hereafter transfer or bequeath, to any person not being a taluqdar or grantee the whole or any portion of his estate, and such person would not have succeeded according to the provisions of this Act to the estate or to a portion thereof if the transferor or testator had died without having made the transfer and intestate, the transfer of and succession to the property so transferred or bequeathed shall be regulated by the rules which would have governed the transfer of and succession to such property if the transferee or legatee had brought the same from a person not being a taluqdar or grantee.
" It is true that by section 8 of Act III of 1910, the section has been substantially modified and reads as follows: "If any taluqdar or grantee, or his heir or legatee, shall heretofore have transferred or bequeathed, or if any taluqdar or grantee, or his heir or legatee, shall hereafter transfer or bequeath the whole or any portion of his estate to any person who did not at the time when the transfer or bequest took effect belong to any of the classes specified in section 14, the transfer of and succession to the property so transferred or bequeathed shall be regulated by the rules which would have governed the transfer of and succession to such property if the transferee or legatee had bought the same from a person not being a taluqdar or grantee, heir or legatee." By section 21 of the Amending Act III of 1910 a partial retrospective operation was given to the amended section.
The retrospective operation was limited by the proviso which enacted that nothing contained in the amending section shall affect suits pending at the commencement of the amending 684 Act, or shall be deemed to vest in or confer upon any person any right or title to any estate, or any portion thereof, or any interest therein, which is, at the commencement of the Amending Act, vested in any other person who would have been entitled to retain the same if the amending Act had not been passed, and the right or title of such other person shall not be affected by anything contained in the said section.
Mr. Agarwalla, appearing on behalf of the first defendent Dukh Haran Singh, has contended that in view of the retrospective operation given to section 15, as amended, the claim of the plaintiff that the taluqdari character of the state is destroyed has no force and he has invited our attention to two decisions of the Oudh Chief Court in Kaur Nageshar Sahai vs Shiam Bahadur (1) and Mohammad Ali Khan vs Nisar Ali Khan(2).
But we need express no opinion on the correctness or otherwise of these decisions.
An enquiry whether by virtue of certain provisions of the statute on which the first defendant relies, the plaintiff may not be entitled to the estate is, as already observed, not contemplated to be made in considering a petition for leave to sue in forma pauperis.
The true effect of the amended section 15 of the Oudh Estates Act I of 1869 is a complicated question of law which the Court will not proceed to determine in ascertaining whether the petition for leave to sue discloses a cause of action.
The High Court, in our judgment, was in error in observing that there was nothing in the plaint to show that Ganga Dutt succeeded to the estate because he was the nearest male reversioner under the ordinary Hindu law.
The plaintiff has emphatically made that assertion: whether the claim to relief on the basis of that assertion was justified must be adjudicated at the trial of the suit, 685 and not in deciding whether the plaintiff should be permitted to sue in forma pauperis.
We are also of the view that the High Court was in error in holding that by an application to sue in forma pauperis, the applicant prays for relief personal to himself.
An application to sue in forma pauperis, is but a method prescribed by the Code for institution of a suit by a pauper without payment of fee prescribed by the Court Fees Act.
If the claim made by the applicant that he is a pauper is not establish the application may fail.
But there is nothing personal in such an application.
The suit commences from the moment an application for permission to sue in forma pauperis as required by O. 33 of the Code of Civil Procedure is presented, and O. 1, r. 10, of the Code of Civil Procedure would be as much applicable in such a suit as in a suit in which court fee had been duly paid.
It is true that a person who claims to join a petitioner praying for leave to sue in forma pauperis must himself be a pauper.
But his claim to join by transposition as an applicant must be investigated; it is not liable to be rejected on the ground that the claim made by the original applicable is personal to himself.
In our view, the orders passed by the High Court in both the revision applications must be set aside.
Before parting with the case, we must take notice of the unsatisfactory progress this litigation had made since it was instituted nearly twelve years ago.
We regret to observe that the petition filed in July 1950 for leave to sue in forma pauperis was not disposed of by the Subordinate Judge for two years and it took the High Court three years to dispose of the revision petitions against the orders of the Subordinate Judge.
The proceedings were further held up even after special leave was granted by this Court in March, 1957 for nearly five years before the appeal could be heard.
This 686 Court had ordered that the hearing of the appeals be expedited and heard on cyclostyled record but the record was not made ready for a long time.
We also find that a large number of documents were included in the books prepared for use of the court to which no reference was made at the Bar during the course of the hearing.
We trust that the case will be taken up for hearing with the least practicable delay and disposed of according to law.
The appellants in the two appeals will be entitled to their costs both in this Court and the High Court.
The costs of the trial court will be the cost in the cause.
Appeals allowed.
Cases remitted.
| The Estate of Maharaja Man Singh of Ayodhya Raj devolved on his death successively on his two widows and thereafter, according to V the plaintiff a minor on his grandfather G, who died in 1942.
Respondent claimed the estate as adopted son of the junior widow of the Maharaja.
V filed a petition for leave to sue in forma pauperis for declaration of title to the estate making his father R a party.
The plaintiff 's petition was rejected by the Subordinate Judge, on the ground that it disclosed no cause of action.
R 's application to be transposed as petitioner was also rejected.
V and R preferred revision applications to the High Court of Allahabad.
The plaintiff 's application was rejected by the High Court holding inter alia that there was nothing in the petition to show that succeeded to the estate as the nearest male reversioner of the last male holder.
R 's application was rejected by the High Court on the ground that relief in an application to sue in forma pauperis is personal to the applicant and nobody else can be made a co applicant, because 1, R. 10 of the Code of Civil Procedure does not apply to a proceeding for permission to sue as a pauper.
^ Held, that O. XXXIII of the Code of Civil Procedure lays down the procedure for institution of a suit by pauper.
By cl. 5 (d) the court is required to ascertain whether the allegation made in the petition show a cause of action, but it does not enter upon a trial of the issues affecting the merits of the claim made by the petitioner.
By the statute, the jurisdiction of the Court is restricted to ascertaining whether on the allegations a cause of action is shown: the jurisdiction does not extended to trial of issues which must fairly be left for decision at the hearing of the suit.
An application to sue in forma pauperis, is but a method prescribed by the Code for institution of a suit by a pauper without payment of Court fee; and there is nothing personal in such an application.
The suit commences from the 676 moment an application for permission to sue in forma pauperis as required by O. 33 of the Code is presented, and O. 1 r. of the Code would be as much applicable in such a suit as in a suit in which court fee had been duly paid.
A person who claims to join a petitioner praying for leave to sue in forma pauperis must himself be a pauper.
Claim to join by transposition as an applicant must be investigated; it is not liable to be rejected on the ground that the claim made by the original applicant is personal to himself.
| The respondent was appointed as a Sub Inspector of police in a temporary post in 1955.
He was discharged from service on July 13, 1957.
A Writ Petition filed by him in the Allahabad High Court was allowed on August 4, 1959 and consequently he was re instated in service on December 15, 1959.
Thereafter, on January 21, 1960 his services were terminated on the ground that they were no longer required by the State.
A suit for declaration that the said order of termination was null and void was decreed in his favour by the trial court which was affirmed in appeal and also by the High Court in second appeal.
Allowing the State appeal by special leave the Court, ^ HELD: 1.
The considerations which prevailed with the High Court in reaching its findings on the application of Article 311(2) of the Constitution and the bona fides of the superior authority in making the impugned order of termination simpliciter are not warranted in law.
[1130D] 2.
The order terminating the services was order of termination simpliciter passed in accordance with the rules applicable to temporary Government servants.
After the original order of discharge was quashed by the High Court, the respondent was reinstated, allowed increment in pay and one month 's salary in lieu of notice under the 'general rules for termination of services of temporary government servants was also given.
[1128F G] 3.
It was open to the superior authority to terminate the respondent 's services on the ground on which it did so.
And the evidence disclosed no personal motive had influenced the order or that it was passed by way of punishment.
A departmental enquiry is not required under the law.
Instead of instituting disciplinary proceedings against the government servant, the suitability for retention in service could be decided.
[1128H, 1129A, E] State of U.P.v.
Ram Chandra Trivedi; , ; Champaklal Chimanlal Shah vs The Union of India, , Jagdish Mitter vs Union of India, A.I.R. 1964 S.C. 449 and State of Punjab & Anr.
vs Shri Sukh Raj Bahadur, ; ; referred to.
Union of India & Ors.
vs R. section Dhaba, , State of Bihar & Ors.
vs Shiva Bhikshuk Mishra and R. section Sial vs The State of U.P. and Ors., ; applied.
The State of Bihar vs Gopi Kishore Prasad, A.I.R. 1960 SC 689 and Madan Gopal vs The State of Punjab, [1963] 3 SCR 716; distinguished. 1127
| On his retirement as Judge of the Punjab and Haryana High Court the respondent claimed cash equivalent of leave salary in respect of the unutilised earned leave standing to his credit.
His claim was rejected by the Government.
Allowing his petition under Article 226 of the Constitution the High Court directed the Government to pay the leave salary claimed by him.
In its petition for grant of special leave the appellant contended that the being a complete code governing the conditions of service of High Court Judges it would not be permissible to proceed beyond those provisions to discover any further rights in favour of the Judges of the High Court.
Dismissing the petition, ^ HELD : The High Court was right in upholding the respondent 's claim for payment of the cash equivalent of leave salary in respect of the period of unutilised earned leave at the credit of the Judge on the date of his retirement in accordance with the provisions of rule 20B of the All India Services (Leave) Rules 1955 read with rule 2 of the High Court Judges Rules 1956.
[706 B C] Section 24(2)(a) of the 1954 Act enables the Central Government to make rules in respect of, among others, "any other matter which has to be or could be prescribed." [703 B] The second proviso to rule 2 of the High Court Judges ' Rules, 1956 provides that, in the case of a Judge of the High Court of Punjab and Haryana, if no provision had been expressly made in the 1954 Act, as to the conditions of his service, they shall be determined by the rules applicable to a member of the Indian Administrative Service of the rank of Joint Secretary to the Government of India stationed at New Delhi.
Rule 20B of All India Services (Leave) Rules 1955, which is the rule applicable to a member of the Indian Administrative Service of the rank of Joint Secretary to the Government of India stationed at New Delhi, entitles him on retirement from service to the cash equivalent of leave salary in respect of the period of unutilised earned leave subject to a maximum of 180 days.
By virtue of rule 2 of the High Court Judges Rules 1956 this 701 benefit must be read as a condition of service enjoyed by a Judge of the High Court.
[704 B C, 705 A B] The concept of "earned leave" is embedded in the 1954 Act under which the time spent by a Judge on duty constitutes the primary ingredient in the concept of "actual service" which is the reason for crediting leave in the leave account of a Judge.
Although the expression "earned leave" is not employed in the 1954 Act the fundamental premise for grant of leave to a Judge is that he has earned it.
That a Judge earns the leave which is credited to his leave account is borne out by the proviso to section 6 of the 1954 Act.
The concept on which rule 20B proceeds is familiar to and underlies the statutory scheme relating to leave formulated in the Act.
It bears a logical and reasonable relationship to the essential content of that scheme.
On that it must be regarded as a provision absorbed by rule 2 of the High Court Judges ' Rules 1956 into the statutory structure defining the conditions of service of a Judge of the High Court.
[705 C H, 706A]
| The respondent 's application under section 25 of the Guardians and Wards Act for the custody of respondent 's daughter was rejected by the Civil Judge.
When the decision was reversed in appeal by a single Judge of the Rajasthan High Court, the appellants preferred an appeal to the Division Bench under cl. 18 of the Rajasthan High Court Ordinance.
This was dismissed on the ground that the appeal was incompetent having regard to sq. 47 and 48 of the Guardians and Wards Act.
In appeal to this Court, HELD:The appeal before the Division Bench of the Rajasthan High Court under cl.
18(1) of the Ordinance was competent.
[106 H] The competence of an appeal before the Division Bench will have to be judged by the provisions of cl. 18 of the Ordinance itself and section 48 of the Act has no restrictive impact.
Section 48 saves the provisions of section 47 of the Act and section 115 of the Code of Civil Procedure; and considered by themselves the provisions of section 47 do not create any bar against the competence of an appeal under cl.
18(1) of the Ordinance where the appeal permitted by section 47 is heard by a single Judge.
[106 G] Section 48 attaches finality to the order passed by the trial Court subject to the provisions prescribed by section 47 of the Act and section 115 of the Code of Civil Procedure.
[106 E]
| The appellants who were charged with the offence of committing murder were acquitted by the Sessions Judge.
But on appeal by the State, the High Court convicted and sentenced them.
In their appeal under section 2(a) of the , this court, after a detailed analysis of the High Court 's judgment and the evidence led in the case summarily dismissed the appeal under section 384 of the Code of Criminal Procedure, 1973.
After the pronouncement of the judgment but before it was signed, the attention of the court was drawn to the judgment in Sita Ram vs State of U.P. ; which, according to them, held that the Supreme Court had no power to summarily dismiss an appeal under section 384, Cr.
P.C. in an appeal under section 2(a) of the 1970 Act.
Dismissing the appeal.
^ HELD: The decision in Sita Ram vs State of U.P. is no authority regarding the power of the court to summarily dismiss an appeal under section 384 of the Criminal Procedure Code.
In that case neither in the application for adducing additional grounds nor in the order of the Court directing the matter to be placed before the constitution bench was there any reference to the validity of section 384 nor was it pleaded that the section was ultra vires the Constitution.
[356 E] Therefore the observation of the Court that it has "pondered over the issue in depth" would not be a precedent binding on the court.
The decision is an authority for the proposition that rule 15(1)(c) of order XXI of the Supreme Court Rules should be read down as indicated in that decision.
[356F]
| These two appeals were preferred against the decision of the Nagpur High Court in an appeal under 'section 19(1)(f) of the Defence of India Act, 1939, modifying an award of compensation made 1178 under section 19(i)(b) of that Act in respect of certain premises requisitioned by the Government under 75(A) of the Rules framed under the Act.
Both the parties applied for and obtained leave to appeal to the Federal Court under sections 109 and 110 of the Code of Civil Procedure.
A preliminary objection was taken on behalf of the Government that the decision of the High Court was an award and not a judgment, decree or order within the meaning of sections 109 and 110 of the Code and as such no appeal lay therefrom : Held, that the objection must prevail and both the appeals stand dismissed.
There could be no doubt that an appeal to the High Court under section 19(1)(f) Of the Defence of India Act from an award made under section 19(i)(b) of that Act was essentially an arbitration proceeding and as such the decision in such appeal cold not be a judgment, decree or order either under the Code of civil procedure or under Cl. 29 Of the Letters patent of the Nagpur High Court.
Kollegal Silk Filatures Ltd. vs province, of Madyas, I. I,.
R. , approved.
There is a well recognised distinction between a decision given by the Court in a case which it 'hears on merits and one given by it in a proceeding for the filing of an award.
The former is a judgment, decree or order of the Court appellable under the general law while, the latter is an adjudication of a private individual with the sanction of the Court stamped on it and where it does not exceed the terms of the reference, it is final and not appealable.
There can be no difference in law between an arbitaration by agreement of parties and one under a statute.
A referrence to arbitration under a statute to a court may be to it either as a court or as an arbitrator.
If it is to it as a court, the decision is a judgment, decree or order appealable under the ordinary law unless the statute provides otherwise, while in the latter case the Court functions as a persona designata and its decision is air award not appealable under the ordinary law but only under the statute and to the extent provided by it.
An appeal being essentially a continuation of the original proceedings, what *as at its inception an arbitration proceeding must retain its character as an arbitration proceeding even where the statute provides for an appeal, Rangoon Botatung Company vs The Collecter , Rangoon (1912) L.R. 39 I.A. 197 .The special officer sales the building sites Dassabhai Beznoji, Bom 506 the special officer sales the Building sites vs Dassabhai Bozanji Motiwala Manavikram Tirumalpad vs the Collector of the Nilagrie, Mad 943 and secretary of state for India in council vs Hindustan Co operative Insurance society Limited ,(1931) L.R. 58 I. A 259 relied on.
National Telephone Company Limited vs Postmaster General, , explained.
| The appellant was elected as a member of the Bihar Legis lative Assembly in a bye election from the Dhanbad constituency by a majority of votes while the nomination paper of the respondent was rejected by the Returning Officer on the ground that the respondent 's proposer had nominated him for election from the Bihar and not Dhanbad assembly constituency inasmuch as in the nomination paper he wrote the word "Bihar" before the words "assembly constituency" instead of the word "Dhanbad".
This defect arose out of a mistake in the Hindi printed form of the nomination paper which did not exactly conform to the form prescribed by the Rules.
In an election petition by the respondent the Election Tribunal held that his nomination paper was rightly rejected but on appeal the High Court held that it was improperly rejected.
On appeal by special leave, Held, that in view of the mistake that occurred in the 402 printing of the form and in view of the fact that the name of the constituency for which the election was being held was already in the heading, the defect in the filling up of the form which resulted from a mistake of the proposer in putting the word "Bihar" instead of the word "Dhanbad" was not of a substantial character as contemplated under s 33 of the Representation of the People Act, 1951.
Held, further, that the defect arising out of the fact that columns nos.
2 and 5 were not properly filled was not of a substantial character as the Returning Officer bad no difficulty in checking that the proposer and the candidate were voters on the electoral rolls.
Karnail Singh vs Election Tribunal, Hissay, [1954] 10 E.L.R. 189, relied on.
| One 'BC ', governed by the Mitakshra School of Hindu Law, being issueless and apprehending the claim to his property after his death as reversioners by his only brother 'RR ' and his nephew 'K ' who were inimical to him since the partition of their ancestral property in 1899, and possible harassment of his wife and 'G ', the respondent, executed a Will on September 21, 1916, in the Urdu script.
The respondent 'G ' being the son of the testator 's sister married to testator 's wife 's brother was doubly related.
As per the Will, 'G ' was to perform the obsequies and other annual death ceremonies etc.
, being his 'waris ' and the "Malik Kamil ' absolute owner" having all the proprietary powers and the power of making transfers of all sorts", while his wife was to be in possession and enjoyment of the property during her life time.
From the date of death of the testator in 1918 for about 18 years the widow and 'G ' lived in cordiality but got estranged later due to estrangement of feelings resulting in several civil and criminal litigation between them.
The widow died in 1948 executing a gift deed and a Will in respect of certain properties in favour of the appellant 'NL '. 'G ' filed a civil suit claiming his rights under the Will dated 21 September, 1916, and the appellant defendant contested it on pleas that the widow of 'BC ' having an absolute right over the property under the said Will validly made the gift deed and the Will of 1948 in his favour and that the respondent plaintiff had no locus standi to file the suit.
The suit was decreed.
On appeal to the Allahabad High Court, as there was a difference of opinion between the Judges of the Division Bench on the nature of the widow 's estate, one opining as the Will conferring a "limited estate" and the other opining as conferring an "absolute estate" the appeal was set down to a third Judge who agreed with the view that the Will conferred only a "limited estate" upon the widow and dismissed the appeal.
Confirming the decree of the courts below and dismissing the appeal by certificate, the Court, ^ HELD : (1) The following are the established principles for construing the language of the Will.
(a) In construing a document whether in English or in vernacular the fundamental rule is to ascertain the intention from the words used; the surrounding circumstances being considered to find out the intended meaning of such words employed therein.
[927F G] (b) In construing the language of the Will the court is entitled to put itself into the testator 's armchair and is bound to bear in mind also other matters than merely the words used like the surrounding circumstances, the position of the testator, his family relationship, the probability that he would use words in a particular sense all as an aid to arriving at a right construction of the Will, and to ascertain the meaning of its language when used by that particular testator in that document.
[927G H, 928A] (c) The true intention of the testator has to be gathered not by attaching importance to isolated expressions but by reading the Will as a whole with all its provisions and ignoring none of them as redundant or contradictory.
[928B] (d) The court must accept, if possible, such construction as would give to every expression some effect rather than that which would render any of 925 the expression inoperative.
The court will look at the circumstances under which the testator makes his Will, such as the state of his property, of his family and the like.
Where apparently conflicting dispositions can be reconciled by giving full effect to every word used in a document, such a construction should be accepted instead of a construction which would have the effect of cutting down the clear meaning of the words used by the testator.
Further, where one of the two reasonable constructions would lead to intestacy, that should be discarded in favour of a construction which does not create and such hiatus.
[928C E] (e) It is one of the cardinal principles of construction of Wills that to the extent that it is legally possible effect should be given to every disposition contained in the Will unless the law prevents effect being given to it.
Of course, if there are two repugnant provisions conferring successive interests, if the first interest created is valid the subsequent interest cannot take effect but a court of construction will proceed to the farthest extent to avoid repugnancy, so that effect could be given as far as possible to every testamentary intention contained in the Will.
[928E G] Ram Gopal vs Nand Lal and others ; Venkata Narasimha vs Parthasarathy, 42 Indian Appeals 51/72; Gnanambal Ammal vs T. Raju Ayyar and others, ; Raj Bajrang Bahadur Singh vs Thakurain Bakhtraj Kuer, ; Pearey Lal vs Rameshwar Das [1963] Supp.
SCR 834/839/842 and Ramachandra Shenoy and Anr.
vs Mrs. Hilda Brite and others. , applied.
(ii) The term "malik" when used in a Will or other document as descriptive of the position which a devisee or donee is intended to hold, has been held apt to describe an owner possessed of full proprietary rights, including a full right of alienation, unless there is something in the context or in the surrounding circumstances to indicate that such full proprietary rights were not intended to be conferred, but the meaning of every word in an Indian Will must always depend upon the setting in which it is placed, the subject to which it is related and the locality of the testator from which it may receive its true shade of meaning.
The intention of the testator will have to be gathered from all the relevant and material contents in the entire Will made in situation in which the testator was placed in life in the background of his property, his inclinations, wishes, desires and attitudes as can be clearly and unambiguously found either from the recitals from the instrument or from absolutely undoubted contemporaneous legally admissible evidence.
Hence, even the words "malik muakkil" can be qualified by other words and circumstances appearing in the document.
[930 B C & G H] Sasiman Chowdhurain and others vs Shib Narayan Chowdhury and others, 49 Indian Appeals 25/35; Musammat Surajmani and others vs Rabi Nath Ojha and another, 35 Indian Appeals 17; Krishna Biharilal vs Gulabchand and others, (1971) Supp.
SCR 27 and Dhyan Singh and anr.
vs Jugal Kishore and anr.
, [1952] SCR 478, discussed.
(iii) In the instant case, the testator intended a life estate for his wife so long as she lived as is clear from the reading of the present Will as a whole.
This is consistent with his description of Gokul as "my heir (waris)" after his death.
It is further consistent with the recital that "if per chance, Mrs. Jarian dies in my life time, then Gokul, aforesaid will be the absolute owner (malik kamil) of the estate left by me (matruka meri) and he shall have power of making all sorts of transfers (aurusko har qism ke aktiyarat inteqalat hasil honge)".
In obvious contrast even though Smt.
Jarian was made the malik of his entire estate after his death "having all the proprietary rights" nothing is stated about her "power of making all sorts of transfers" which power is expressly mentioned as belonging to him and also exclusively conferred upon Gokul after Smt.
Jarian 's death.
While describing his own "proprietary powers" the testator made reference to his "power of making transfers of all sorts".
This power of making transfers which was prominent in the mind of the testator at the time of execution of the Will is conspicuous by total omission in relation to Smt.
Jarian 's enjoyment of the property.
The testator has made the distinction between mere ownership of property and ownership of the same coupled with a transfer in every way.
[931 A D] 926 Further, from the recitals in the Will about his only reversioners viz., his brother and nephew "might trouble and harass my wife Mst.
Jarian and my sister 's son Gokul", it is clear that the testator never intended that his property should pass to his brother and nephew.
This intention would be achieved by holding that there was a devise of a life estate to his wife and an absolute estate thereafter to Gokul indicating a different line of inheritance in the Will on the other hand, if any absolute estate would have been conferred on the widow, then on her death the property would have passed on by inheritance to her husband 's heirs who were none else than the brother and the nephew of the testator.
There was no other heir of Mst.
Jarian to inherit the property after her death.
[931 G H, 932 A B] A plenitude of absolute estate in favour of the wife will make the absolute bequest to Gokul void in law.
No such repugnant interpretation detrimental to the interest of Gokul can be made in the light of the entire tenor of the instrument.
The testator intended to bequeath in favour of his widow only a life estate and after her death an absolute estate to Gokul.
[932B C]
|
ION: Criminal Appeal No. 237 of 1959.
Appeal from the judgment and order dated February 10 and 11 of 1959, of the Bombay High Court in Criminal Appeal No. 1023/59 with Crinal Appeals Nos. 1048 and 1048 of 1958.
H. R. Khanna and P. D. Menon, for the appellant.
section G. Patwardhan.
J.B. Dadachanji O.C. Mathur and Ravinder Narain, for the respondent No. 1. 1962.
January 23.
The Judgment of the Court was delivered by RAGHUAR DAYAL, J.
This appeal, on a certificate granted by the High Court of Bombay, raises the question whether the contravention of the provisions of sub section
(2) of section 222 of the Code of Criminal Procedure, hereinafter called the Code, in the framing of the charge against an accused, vitiates the trial.
The facts leading to the appeal, in brief, are as follows.
The respondents were charged and tried at the same trial of the offences under section 120B read with section 406, I.P.C., and of an offence under section 406, I.P.C. and committed in pursuance of the criminal conspiracy they had entered into.
They were also tried, but acquitted of other offences charged with.
They appealed against their conviction of the offence under section 120 B read with section 406, I.P.C., and of the offence under section 406, I.P.C. The charge under section 406, I.P.C, was with respect to the commission of trust of trust of a sum of Rs. 2,18,369/ between the period March 6.
1949, and June 30, 1950.
It was contended before the High Court that the charge framed contravened the provisions of sub 713 section (2) of section 222 of the Code which allowed a combined charge with respect to the amount embezzled within a period of a year.
The High Court agreed with this contention and, holding the trial void, set aside the conviction of the respondents and acquitted them of the offences.
The High Court, however, maintained the order of acquittal is respect of the other offences.
The State of Bombay (now Maharashtra) has filed this appeal against the order setting aside the conviction of the respondents.
It is not necessary for us to determine in this appeal the general question whether the contravention of the provisions of sub R. (2) of section 222 of the Code, in the framing of the charge, will always make the trial void, as, in this particular case, the offence under section 406, I.P.C., charged against the respondents was said to have been committed in pursuance of a criminal conspiracy entered into by them.
It will therefore suffice, for the purpose of this case, to consider whether such a defect in the charge vitiates the present trial.
Section 222 of the Code is one of the sections in Chapter XIX, which deals with Form of Charges.
Sections 221, 222 and 223 deal with what should be mentioned in the charge.
The whole object of the charge is inform both the prosecution, and the accused particularly, of the accusation the prosecution has to establish and the accused has to meet.
So long as the accused knows fully what accusation he has to meet any error in the narrative of the charge need not be fatal to the trial.
Sections 225, 232, 535 and 537 save the trial from being vitiated unless of course the accused has been prejudiced and failure of justice has taken place.
Sections 233 to 239 deal with the joinder of charger, and they speak not only of an accused being charged with offences, but of such charges 714 being tried separately or jointly.
Section 233 states that for every distinct offence of which any person is accused, there shall be a separate charge and every such charge shall be tried separately, except in the cases mentioned in sections 234, 235, 236 and 239.
It is clear that the general rule is theat there should be a separate trial for each distinct offence of which a person is accused.
It follows that each item of property of which an accused is alleged to have committed breach of trust, constitutes one distance offence and that, in general, it would be necessary to have as many trials as there be distinct offences of criminal breach of trust committed by the accused.
But section 222(2) provides that when the accused is charged with criminal breach of trust, the charge may be with respect to the gross sum embezzled within a period of one year and that the charged so framed shall be deemed to be a charge of one offence within the meaning of section 234.
The charge framed in the present case was with respect to the gross sum embezzled within a period of more than twelve months, the period being between March 6, 1949 and June 30, 1950.
The charge therefore was in contravention of the provisions of section 222(2).
This defect in the charge, however, did not lead to any prejudice to the accused in the trial and therefore did not vitiate the trial, in view of the provisions of section 537 of the Code.
The charge could have been split up into two charges, one with respect to the offence of criminal breach of trust committed with respect to the amount embezzled between March 6, 1949 and March 5, 1950 and the other with respect to the amount embezzled between March 6, 1950 and June 30, 1950.
The two offences of criminal breach of trust could have been tried together in the present case, as the offences were said to have been committed in pursuance of the criminal conspiracy entered into by the accused, All the offences 715 committed in pursuance of the conspiracy are committed in the course of the same transaction and therefore can be tried together at one trial, in view of sub section (1) of section 235 of the Code which provides that if in one series of acts so connected together as to form the same transaction, more offences than one are committed by the same person, he may be charged with and tried at one trial for every such offence.
It is therefore clear that no prejudice was caused to the accused by the defect in the charge.
A similar view has been taken by this Court in Kadiri Kundahammad vs The State of Madras (1).
We may further point out that the High Court should not have expressed its opinion or passed any order with respect to the acquittal of the respondents for the other offences when the order of acquittal was not before it for consideration and when it had held the entire trial to be void, on account of the contravention of the provisions of sub section
(2) of section 222.
We therefore hold that the trial of the respondents was legal and therefore allow the appeal and set aside the order of the High Court.
Their appeal against their conviction has not been heard on merits and therefore we remand the case to the High Court for further hearing according to law.
| The respondents were charged and tried at the same trial with the offences of Criminal conspiracy and breach of trust committed in pursuance thereof during a period of more than one year.
The question arising for decision was whether, in the framing of the charge, contravention of the provisions of sub s.(2) of s.222 which allowed a combined charge with respect to the amount embezzled within a period of one year, vitiated the trial.
^ Held, that the defect in the charge did not lead to any prejudice to the accused and therefore did not vitiate the trial in view of the provision of section 537 of the Code of Criminal Procedure.
When all the offences committed in pursuance of a conspiracy are committed in course of the same transaction this can be tried together at one trial in view of section 235(1) of the Code of Criminal Procedure which provides that if in one 712 series of acts so connected together as to form the same transaction, more offences than one are committed by the same person, he may be charged with and tried at one trial for every such offence.
Kadiri Kanhahammad vs The State of Madrs, A.I. R. , followed.
| The appellant along with Kanahiya Lal, Ram Niwas and Badri Lal was charged under Section 302 read with Section 34 Indian Penal Code and tried for the offence of murder of one Gyanchand by the Sessions Judge, Bhilwara, Rajasthan.
The learned Judge convicted and sentenced Kanahiya Lal alone to life imprisonment and acquitted the rest.
In appeal, the High Court of Rajasthan, while confirming the conviction of Kanahiya Lal as also the acquittal of two out of the three persons, convicted and sentenced the appellant also to life imprisonment.
Hence the appeal under the Supreme Court Enlargement of Criminal Appellate Jurisdiction Act, 1970.
Dismissing the appeal, the Court, ^ HELD: Since the High Court set aside an order of acquittal and sentenced the appellant to life imprisonment it is necessary for the Supreme Court to consider whether two views of the evidence are reasonably possible and whether, the High Court was justified in setting aside the order of acquittal passed by the trial Court in favour of the appellant.
Approaching the case and assessing the evidence from that point of view, it is clear, that the conviction of the appellant in view of the evidence of Bodu Lal as corroborated by the discovery of the blood stained baniyan and knife is unassailable.
He is an independent and the most important witness in whose cycle rickshaw the appellant and the co accused Kanhiya Lal travelled from the hotel of Shankar Maharaj to the scene of offence.
Bodu Lal identified the appellant in the identification parade and his evidence as to the colour of baniyan worn by the appellant at the time of the incident tallied with that of the one stained with human blood and recovered from the accused.
A knife stained with human blood also recovered from his person confirmed his guilt.
[860E F, 861 B C] 860
| On suo motu enquiry conducted against the appellant with regard to the nature of the properties in question, the Deputy Charity Commissioner held that the properties were of a public trust.
The appellant 's appeal before the Charity CommissiOner was dismissed.
An application filed under section 72 of the Bombay Public Trust Act, 1950 was also dismissed by the City Civil Court.
The First Appeal filed in the High Court was dismissed by a Single Judge.
In the Letters Patent Appeal on behalf of the appellant it was contended: that section 72(1) speaks only of an applica tion to the Court to set aside the decision of the Charity Commissioner, and it does not speak of an appeal; that while section 70 and 71 use the word "appeal" and that the proceedings under section 72 were not in the nature of an appeal and that, therefore.
when the District Court exercised its jurisdic tion it did not exercise an appellate jurisdiction but a special jurisdiction under 'the section.
The High Court dismissed the appeal holding that it was not maintainable since the requisite certificate under clause 15 of Letters Patent Appeal was not obtained by the appellant, that though the well known word "appeal" was not used in section 72, the absence of that word cannot be regarded as determinative of the nature of the proceedings, and that the jurisdiction that the District Court is exercising under section 72 was appellate jurisdiction.
Dismissing the appeal.
1084 HELD:1.1 The power of the District Court in exercising jurisdiction under section 72 of the Bombay Public Trust Act, 1950, is a plenary power.
It is true that the Commissioner is not subordinate to the District Court but the District Court has powers to correct, modify, review or set aside the order passed by the Commissioner.
All the characteristics of an appeal and all the powers of an appellate Court are available to the District Court while deciding an applica tion under section 72.
[1089D E] 1.2 The proceedings before the District Court under section 72(1) are in the nature of an appeal and that District Court exercises appellate jurisdiction while disposing of a matter under section 72(1).
[1089E F ] 1.3 The absence of the word "appeal" in section 72(1) does not make any difference.
[1089C] Hiragar Dayagar vs Ratanlal, ; and [1986] 58 Bombay Law Reporter 894 approved and AIR 1974, Bombay 40, disapproved.
Consequently, the Single judge of tile High Court while deciding the appeal from the order of the District Court deals with a matter made by the District Judge in the exercise of a appellate jurisdiction by a Court subject to the superintendence of the High Court and hence clause 15 of the Letters Patent Appeal is directly attracted.
[1089F G]
| The appellant who lived in a village near Goa was found in possession of contraband gold.
He was prosecuted under section 167(81) of the Sea Customs Act read with section 9 of the Land Customs Act (9 of 1924).
The trial Magistrate convicted him but the Sessions Judge relying on the decision of the Calcutta High Court in Sitaram Agarwala 's case acquitted him.
The High Court of Mysore, in appeal against the acquittal, considered the evidence and relying, inter alia, on the statement made by the appellant to the Deputy Superintendent of Customs and Excise held him guilty.
With certificate the appellant came to this Court.
The questions that felt for consideration were : (i) whether the view taken by the High Court differing from the view taken by the Calcutta High Court in Sitaram Agarwala 's case with respect to the interpretation of section 167(81) was correct, and (ii) whether the statement made by the appellant to the Deputy Superintendent of Customs & Excise was admissible in view of section 25 of the Indian Evidence Act.
HELD : (i) The High Court was right in not following the view of the Calcutta High Court in Sitaram Agarwala 's case, the correct view as to the interpretation of section 167(81) of the Sea Customs being that the section takes in even those persons who may not be concerned with the actual import of the prohibited goods.
[700 G H] Sachidananda Banerjee, Assistant Collector of Customs vs Sitaram Agarwal, , followed.
Sitaram Agarwal vs State, , disapproved.
(ii)The Central Excise and Salt Act, 1944 does not confer all the powers of the police officer on Central Excise Officers.
The powers confered on them by section 21(2) of the Act are only for the purpose of inquiry under section 21(1); they would not entitle the said officers to file a charge sheetunder section 173 of the code of Criminal Procedure.
Therefore even though a central excise officer may have when making enquiries for purposes of the Act, powers an officer in charge of a police station has when investigating a cognizable offence, he does not thereby become a police officer within the meaning of section 25 of the Indian Evidence Act, and the statement of an accused person recorded by him is not hit by that section .
[704 B C, F G] Raja Ram Jaiswal vs State of Bihar, ; and Nanoo Sheikh Ahmed vs Emperor, Bom.
78, distinguished.
State of Punjab vs Barkat Ram,, ; , relied on.
699 Radha Kishun Marwari vs King Emperor, Patna 46, referred to.
| Section 123(1) of the , provided that, where any goods to which this section applies are seized under this Act in the reasonable relief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be on the person from whose possession the goods were seized.
On 21 4 1967 Police officers of the Anti Corruption and Prohibition Bureau.
Greater Bombay, acting on information received, had searched room No. 10 at 56, Sheriff Deoji Street Bombay.
This room was divided by petitions into three parts.
In the central portion the police found the appellant and three other persons.
This portion was again sub divided with a locked connecting door fixed in the passage to the sub divided part.
This was opened by one of the two Godrej lock keys produced by the appellant from a side pocket of his trousers.
Eleven wooden boxes covered with jute cloth and secured by iron strips were found there.
On opening them.
six of them were found to contain cigarette lighters of "Imco Triplex Junior" brand "Made in Austria.".
Each of the six boxes were tightly packed with 1 200 lighters.
The remaining five boxes contained fifty sealed tins of flints for cigarette lighters which bore the Following writing: "Tego Lighter Flints of Superior Quality Made in Germany" inscribed on them.
A panchnama was prepared before Panchas.
A rent receipt in the name of the appellant in respect of room No. 10, in this house, of which a portion was occupied by the appellant, and a bill for the consumption of electricity were also seized from the custody of the appellant together with the Godrej locks and the keys produced by the appellant.
On 30th October.
1968 the Assistant Collector of ' Central Excise, Marine and Prevention Division.
Bombay, filed a complaint alleging that the appellant had committed offences punishable under Section 135(a) and (b) of the .
The appellant had denied being in possession of the offending goods although he had admitted the production of keys from his possession.
The trying Presidency Magistrate convicted him under section 135(b)(ii) of the and sentenced him to six months rigorous imprisonment and a fine of Rs. 2,000/ , and in default, to three months further rigorous imprisonment.
The High Court dismissed his appeal.
This appeal has been preferred on the basis of the special leave granted by this Court.
It was contended for the appellant that: (1) the presumption contained in s.123(1) of the Act would not place the onus of proving innocent possession of the goods in question upon the appellant; and, (ii) the goods in respect of which the appellant was prosecuted were not seized under the Act.
Rejecting the contentions and dismissing the appeal.
the court ^ HELD: (1) Though lighters and flints were notified provided in Section 123(2), in the official Gazette of 26 8 1967 the provisions of Section 123(1) which only lay down a procedural rule, could be applied when the case came up for.
trial before the Presidency Magistrate.
He divided it on 15 7 1969.
The complaint itself ' was filed on 30 10 1968.
It is immaterial that the appellant was round in possession of the goods on 21 4 1967.
[542 B C] (ii) The very appearance of the goods and the manner in which they were packed indicated that they were newly manufactured and brought into this country very recently from another country.
The inscriptions on them and writing on the boxes were Parts of the state in which the goods in unopened boxes were found from which inferences about their origin and recent import 540 could arise.
The appellant 's conduct, including his untruthful denial of their h possession, indicated consciousness of their smuggled character or means rea.
There was some evidence to enable the courts to come to the conclusion that the goods must have been known to the appellant to be smuggled even if he was not party to a fraudulent evasion of duty.
[543 B D] Gian Chand & ors.
vs The State of Punjab, [1962] Suppl.
l S.C.R. 364 Collector of Customs, Madras & ors.
vs D. Bhoormull ; M/s, Kanungo & Co. vs The Collector of Customs, Calcutta & ORS.
A.I. R. 1972 S.C. 2136, Issaradas Daulat Ram & ors vs The Union of India & ors [1962] Suppl.
1 S.C.R. 358, Gopal Sheorey vs The State of Bombay ; and The State of Punjab vs Gian Chand & ors.
Criminal Appeal No. 195 of 1962 decided by this court on 2 4 1968, referred to.
| The respondents who were lorry drivers, cleaners and coolie were carrying fertiliser bags in trucks from Indore (Madhya Pradesh) to Maharashtra.
They were intercepted at a Sales Tax Barrier near the border of Maharashtra State.
The documents seized from the lorry drivers contained the in voices and other records, but did not include permits issued under the Fertilisers (Movement Control) Order, 1973.
Conse quently, they were prosecuted under the Fertiliser (Movement Control) Order, 1973 read with sections 3 and 7 of the for exporting fertilisers from Madhya Pradesh to Maharashtra without a valid permit.
The Trial Court acquitted the respondents holding that: (i) the prosecution had failed to prove mens rea on the part of the respondents, and (ii) the act of transportation of the fertiliser bags in trucks by the respondents constituted merely preparation and not attempted commission of the offence.
Appeals were tided by the State against the acquittal under section 378(3) of the Cr.
P.C. 1973 but the High Court declined to grant leave.
Hence these appeals by the State.
Allowing the appeals, 550 HELD: 1.
The words used in section 7(1) are "if any person contravenes whether knowingly, intentionally or otherwise any Order made under section 3".
The section is comprehensively worded so that it takes within its fold not only contraventions done knowingly or intentionally but even otherwise, i.e., done unintentionally.
The element of mens rea in export of fertiliser bags without a valid permit is therefore not a necessary ingredient for convicting a person for contravention of an order made under section 3 if the factum of export or attempt to export is established by the evidence on record.
[554C D] 1.1.
The crucial words "whether knowingly, intentionally or otherwise" were inserted in section 7 in order to prevent persons committing offences under the Act escaping punish ment on the plea that the offences were not committed delib erately.
The amendment was brought about in 1967 in order to achieve the avowed purpose and object of the legislation.
[557C] 1.2.
Therefore, the Trial Court and the High Court committed an error in taking the view that the respondents in each of the appeals were not liable for conviction for contravention of the Fertiliser (Movement Control) Order, 1973 read with sections 3 and 7 of the because the prosecution had failed to prove mens rea on their part in transporting fertiliser bags from Madhya Pradesh to Maharashtra.
[557E] Swastik Oil Industries vs State, [1978] 19 Guj.
Law Reporter 1117; approved.
Nathu Lal vs State of Madhya Pradesh, A.I.R. 1966 S.C. 43, referred to. 2.
In the commission of an offence there are four stages viz. intention, preparation, attempt and execution.
The first two stages would not attract culpability but the third and fourth stages would certainly attract culpability.
[557G] 2.1.
The respondents in each case were actually caught in the act of exporting fertiliser bags without a permit therefore from Madhya Pradesh to Maharashtra.
If the inter ception had not taken place at the Sales Tax Barrier the export would have become a completed act and the fertiliser bags would have been successfully taken to Maharashtra State in contravention of the Fertiliser (Movement Control) Order, 1973.
It was not therefore a case of mere preparation viz. the resport 551 dents trying to procure fertiliser bags from someone or trying to engage a lorry for taking those bags to Maharash tra.
They were cases where the bags had been procured and were being taken in the lorries under cover of sales in voices for being delivered to the consignees and the lorries would have entered the Maharashtra border but for their interception at the Sales Tax barrier.
Surely, no one can say that the respondents were taking the lorries with ferti liser bags in them for innocuous purposes or for more thrill or amusement and that they would have stopped well ahead of the border and taken back the lorries and the fertiliser bags to the initial place of despatch or to some other place in Madhya Pradesh State itself.
The acts of transportation of the fertiliser hags in the trucks in question by the respondents were therefore clearly cases of attempted unlaw ful export of the fertiliser bags and not cases of mere preparation alone.
[557H, 558A B C D] [Section 7 of the was again amended in 1974 and the words "whether knowingly, intentionally or otherwise" were deleted and a new provision in section 10 of the Act was added.
The effect of this amendment is that a presumption of guilty mind on the part of the accused in respect of offences under the Act, includ ing Sec. 7, would arise and it would be open to the accused to rebut the same.]
| In a writ petition filed under article 226 of the Constitu tion impugning his dismissal from service, the respondent contended that since he had not been given a reasonable opportunity of meeting the allegations against him, his dismissal was void.
writ petition was dismissed.
Thereupon, the respondent flied a suit in a civil court challenging his dismissal on the ground, among others, that since he had been appointed by the Inspector General of Po lice, his dismissal by the Deputy Inspector General of Police was wrong.
The State took the plea that the suit was barred by res judicata.
Dismissing the suit, the trial court held that it was not barred by res judicata.
The first appellate court dismissed the respondent 's appeal.
Purporting to follow a line of decisions of this Court, the High Court held that only that issue between the parties would be res judicata which was raised in the earlier writ petition and was decided by the High Court after contest and since in this case the respondent did not raise in the earlier writ petition the plea of competence of the Deputy Inspector General of Police to dismiss him.
the parties were never at issue on it and that the High Court never consid ered and decided this issue in the writ petition.
On the question of invoking the principle of constructive res judicata by a party to the subsequent suit on the ground that the matter might or ought to have been raised in the earlier proceedings, the High Court held that this question was left open by the Supreme Court in Gulabchand Chhotalal Parikh vs State of Bombay ; , and allowed the respondent 's appeal.
Allowing the States appeal to this Court.
HELD: The High Court was wrong in its view because the law in regard to the applicability of the principle of constructive res judicata having been clearly laid down in Devi Lal Modi vs Sales Tax Officer Ratlam and Others ; it was not necessary to reiterate it in Gulabchand 's case as it did not arise for consideration in that case.
The clarificatory observation in Gulabchand 's case was misunderstood by the High Court in observing that the matter had been left open by this Court.
The doctrine of res judicata is based on two theo ries: (i) the finality and conclusiveness of judicial deci sions for the final termination of disputes in the general interest of the community as a matter of public policy, and (ii) the interest of the individual that he should be pro tected from multiplication of litigation.
[430 D] 2.
(a) In certain cases, the same set of facts may give rise to two or more causes of action.
In such cases res judicata is not confined to the issues which the Court is actually asked to decide but covers issues or facts which are so clearly part of the subject matter of the litigation and so clearly could have been raised that it would be an abuse of the process of the court to allow a new proceeding to be started in respect of them.
This rule has sometimes been referred to as constructive res judicata which is an aspect or amplification of the general principle.
[431 A] (b) Section 11 of the Code of Civil Procedure, with its six explanations, covers almost the whole field, but the section has, in terms, no application to a petition for the issue of a high prerogative writ.
[431 D] (c) Although in the Amalgamated Coalfields Ltd. and others vs Janapada Sabha, ; this Court held that constructive res judicata being a special and artifi cial form of res judicata should not generally be applied to writ petitions, in Devilat Modi 's this Court held that if the doctrine of constructive 429 res judicata was not applied to writ proceedings, it would be open to a party to take one proceeding after another and urge new grounds every time, which was plainly inconsistent with considerations of public policy.
The principle of constructive res judicata was, therefore, held applicable to writ petitions as well.
[433 G & 434 D] 3.
The High Court missed the significance of these deci sions and relied upon L. Jankirama lyer and 'Others vs
P.M. Nilakanta lyer and Others [1962] Supp. 1 S.C.R. 206 which had no bearing on the controversy.
In Gulabchand 's case, this Court observed that it did not consider it necessary to examine whether the principle of constructive res judicata could be invoked by a party to the subsequent suit oft the ground that a matter which might or ought to have been raised in the earlier proceeding but was not so raised therein could be raised again relying on which the High COurt concluded that the question was left open by this Court.
This in turn led the High Court to hold that the principle of resjudicata could not be made applicable to a writ petition.
[435 E F] In the instant case, the respondent did not raise the plea that he could not be dismissed by the Deputy Inspector General of Police.
This was an important plea which was within his knowledge and could well have been taken in the writ petition.
Instead he raised the plea that he was not afforded a reasonable opportunity of meeting the case in the departmental inquiry.
It was therefore not permissible for him to take in the subsequent suit the plea that he had been dismissed by an authority subordinate to that by which he was appointed.
That was clearly barred by the principle of constructive res judicata and the High Court erred in taking a contrary view.
[436 A B]
| Two of the defendants in the two suits out of which the present appeals arose borrowed a sum of Rs. 80,024 4 9 from the respondent Bank in course of their business by pledging their goods.
The Bank discovered that there was shortage in the goods deposited and through its Secretary lodged a com plaint with the police that the said defendants, their father and brother had in collusion with the local agent of the Bank fraudulently removed part of the goods or, in the alternative, had made a grossly inadequate deposit to cheat the Bank.
The Police registered the case and started investigation.
The parties, thereafter settled their differences by a transaction which consisted, among others, of a hypothecation bond for Rs. 30,000/covering immovable property and a Karar for Rs. 35,000/ , which were executed in favour of the Bank by the parent of the said defendants, by the said defendants themselves and their brother and his wife.
On the Secretary of the Bank stating to the Police that the Bank 's claim had been settled and any further action would be unnecessary the criminal proceeding was dropped.
Thereafter the said relatives of ;the two defendants who had executed the hypothecation bond and the Karar brought a suit for the cancellation of the said documents on the ground that they had been executed to stifle the criminal prosecution and were as such unenforceable under section 23 of the Indian Contract Act.
The Bank sued for recovery of the amount due on the Karar which was resisted on the same ground that the document was unenforceable under section 23 of the Contract Act.
The said defendant debtors did not examine themselves.
They did not raise the plea of unenforceability in respect of a hire purchase agreement which formed a part of the transaction in question and on which the Bank brought a suit against them and got a decree.
After the said settlement these defendants applied for further loan from the Bank.
There was evidence to show that an agreement to furnish additional security had been reached between the said defendants and the Bank even before the complaint was filed.
The trial Court held that both ;the documents fell within the mischief of section 23 of the Contract Act and decreed the first suit and dismissed the second.
The High Court on appeal took the contrary view and reversed the decision of the trial Court accordingly.
The plaintiffs in the first suit appealed to this Court.
Held: It was well settled that agreements made with the sole purpose of stifling prosecution were opposed to public policy since the consideration which supported such agreements was itself against public policy and could not, therefore, be 746 enforced.
In India however this doctrine was not applicable either to compoundable offences or to offences which could be compounded with the leave of the Court.
The onus was strictly on the party that impugned the trans action to prove that it was based on an agreement to stifle the prosecution.
It must be able to show that on a certain consideration proceeding from it the complainant in return promised to discontinue the criminal proceeding and then alone the transaction would be one against public policy.
V. Narasimha Raju vs V. Gurumurthy Raju, [1963] 3 S.C.R. 687, Maharaja Srish Chandra Nandy vs Sapravat Chandra A.I.R. , Sudhindra Kumar Ray Chaudhuri vs Ganesh Chandra Ganguli, 1939 I.L. R. I Cal.
241 and Kamini Kumar Basu vs Birendra Nath Basu, A.I.R. 1930 P.C. 100, referred to.
Bhowanipur Banking Corporation Ltd. vs Duresh Nandini.
Dasi, Cal. 1, considered.
But in judging a particular agreement distinction must be made between the motive for the agreement and the considera tion for it and subsequent events should not be allowed to confuse the issue.
It was clear in the present case that the plaintiffs had failed to discharge the onus that lay on them and the decision of the High Court was, therefore, correct.
|
of 1949.
Appeal from a judgment of the High Court of Judicature at Calcutta (Harries C.J. and Chakravarthi J. (dated 30th November, 1948, in Civil Revision Case No. 712 of 1948.
N.C. Sen Gupta (Ajit Kumar Dutta, with him) for the Appellant.
Faiyaz Ali, Advocate General of East Bengal (B. Sen and Noor ud din, with him) for the Respondent.
M. C, Setalvad, Attorney General for India, (section M. Sikri and V.N. Sethi, with him) for the Intervener.
Dec. 4.
The judgment of Kania C.J., Patanjali Sastri j. and Chandrasekhara Aiyar J. was delivered by Patanjali Sastri J. Fazl Ali and Mukherjea JJ.
delivered separate judgments.
PATANJALI SASTRI J.
This is an appeal from a judgment of the High Court of Judicature in West Bengal reversing a finding of the Second Subordinate Judge of 24 Parganas at Alipore that he had jurisdiction to proceed with a suit after substituting the Province of East Bengal (in Pakistan)in the place of the old Province of Bengal against which the suit had originally been brought.
The facts leading to the institution of the suit are not in dispute.
The Bengal Agricultural Income tax Act was passed by the Provincial Legislature of Bengal in 1944.
It applied to the whole of Bengal and purported to bring under charge the agricultural income of, inter alia, "every Ruler of an Indian State." Acting under the provisions of that Act, which came into force on 1st April, 1944, the Income tax Officer, Dacca Range, sent by registered post, a notice to the Manager of the Zemindari Estate called Chakla Roshanabad belonging to the Tripura State but situated in Bengal outside the territories of that State, calling upon him to furnish a return of the total income derived in the 5 previous year from lands in the Estate used for agricultural purposes.
The notice was received by the Manager at Agar talla in Tripura State.
Thereupon, the State, by its then Ruler, Maharaja Sir Bir Bikram Bahadur, instituted the suit in question on 12th June, 1945, against the Province of Bengal and the Agricultural Income tax Officer, Dacca Range, in the Court of the First Subordinate Judge, Dacca, contest ing the validity of the notice and the proposed assessment on the grounds that the "Provincial Legislature of Bengal had no authority to impose tax on any income of an Indian State or its Ruler" and that, in any case, "the Income tax Officer, Dacca Range, had no authority or jurisdiction to issue the said notice to the Manager of the Estate outside British India.
" The cause of action of the suit was alleged to have arisen in the town of Dacca within the jurisdiction of the Court on 28th February, 1945, when the notice was issued.
The reliefs sought were a declaration that the Bengal Agricultural Income tax Act: 1944, in so far as it purported to impose a liability to pay agricultural income tax on the plaintiff as a Ruler of an Indian State was ultra vires and void and that, in any case, the notice served by the Agricultural Income tax Officer, Dacca Range, was void and no assessment could be made on the basis of such notice, and a perpetual injunction to restrain the defendants from taking any steps to assess the plaintiff to agricultural income tax.
Before the defendants filed their written state ments the suit was transferred by the High Court to the Court of the District Judge, 24 Parganas, and was again transferred from that Court to the Court of the Subordinate Judge at Alipore.
The ruler who brought the suit having died, the plaint was amended by the substitution in his place of his son and heir in June 1947, and the suit was pending in that Court when the partition of India took effect on the 15th August, 1947 On 9th December, 1947, the Province of East Bengal filed a petition stating that the Province of Bengal, the original defendant No. 1 in the suit, had ceased to exist with effect from 15th August, 1947, and 6 in lieu thereof two new Provinces, namely, the Province of East Bengal and the Province of West Bengal had come into existence and that, inasmuch as the Province of West Bengal was taking no interest in the suit, it was necessary in the interests of East Bengal that the suit should be contested and that a written statement should be put in on its behalf for such contest.
It was accordingly prayed that the ' delay should be condoned and the written statement which was filed with that petition should be accepted.
In the written statement it was pleaded that inasmuch as the Province of East Bengal was a Province of the; Dominion of Pakistan and that defendant No. 2 was a Revenue officer of that Province, the Court had no jurisdiction to hear the suit or make an order of injunction against the defendants.
It was stated that the Province of East Bengal appeared only to contest the jurisdiction of the Court.
By another written statement filed on the same day defendant No. 2 raised also other pleas in defence but his name was struck off the record at the plaintiff 's instance as not being a necessary party to the suit.
On the 10th December, 1947, the Province of East Bengal was substituted as the defendant in the place of the Province of Bengal which had ceased to exist, and the writ ten statement filed on behalf of the former was accepted.
Thereupon the Subordinate Judge framed a preliminary issue on the question of jurisdiction and, as stated al ready, found it for the plaintiff relying on section 9 of the Indian Independence Act and article 4 of the Indian Inde pendence (Legal Proceedings) Order, 1947.
It may be men tioned in passing that the assessment of the plaintiff was proceeded with by the Agricultural Income tax Officer, Comilla Range (East Bengal), who, by his order dated the 22nd December, 1947, imposed on the plaintiff a tax of Rs. 1,79,848 12 0 for 1944 45 and Rs. 1,34,326 7 0 for 1945 46, but the recovery of the amounts has been deferred under orders of the Court pending the decision on the preliminary issue.
As pointed out by the Federal Court in Midnapore 7 Zemindary Co. Ltd. vs The Province of Bengal and ,Others (1), the orders promulgated on the 14th August, 1947, by the Governor General of India before the partition in exercise of the powers conferred under section 9 of the Indian Independ ence Act, 1947, and containing provisions specially designed to remove the difficulties arising in connection with the transition to the new situation created by the partition are binding on both the Dominion of India and the Dominion of Pakistan.
Among such Orders those relevant to the present controversy are the Indian Independence (Legal Proceedings) Order, 1947, and the Indian Independence (Rights, Property and Liabilities)Order, 1947.
By article 4 of the former Order (1) All proceedings pending immediately before the appointed day in any of the special tribunals specified in col. 1 of the Schedule to this Order shall be continued in that tribunal as if the said Act had not been passed, and that tribunal shall continue to have for the purposes of the said proceedings all the jurisdiction and powers which it had immediately before the appointed day; * * * * (3) Effect shall be given within the territories of either of the two Dominions to any order or sentence of any such Special Tribunal as aforesaid and of any High Court in appeal or revision therefrom as if the order or sentence had been passed by a court of competent jurisdiction in that Dominion; * * * * and by article 12 (2) of the latter Order Where any Province from which property, rights or li abilities are transferred by this Order is, immediately before the transfer a party to legal proceedings with re spect to that property or those rights or liabilities the Province which succeeds to the property, rights or liabili ties in accordance with the provisions of this Order shall be deemed to be substituted for the other Province as a party to those proceedings and the proceedings may continue accordingly.
(1) 8 On the effect of these provisions the learned Judges of the High Court observed: "If this provision [i.e., article 12 (2)] applies to the present case, there can be no doubt that the Province of East Bengal was substituted in the suit for the Province of Bengal by operation of law, and by reason of the Legal Proceedings Order the suit shall continue in the Court of the Second Subordinate Judge, 24 Parganas, as a suit against the substituted defendant.
" With that statement of the position we entirely agree.
The learned Judges, however, proceeded to examine, laying stress on the words "by this Order" in article 12 (2), whether any property, rights or liabilities could be said to have been transferred by the Indian Independence (Rights, Property and Liabilities) Order, 1947, from the Province of Bengal to the Province of East Bengal, and they took the view that neither any property, nor rights, nor liabilities were so transferred under that Order and that, therefore, the con tinuation of the proceedings against the Province of East Bengal, which was now part of an Independent Sovereign State, was governed by the principles of international law and comity of nations, and that, according to those princi ples, East Bengal, being a Province of a sovereign state, could not be sued against its will in the municipal courts of India, with the result that the suit pending in the Court at Alipore must abate.
They also negatived a further con tention raised before them, apparently for the first time, to the effect that by reason of the petition filed on behalf of the Province of East Bengal for acceptance of its written statement condoning the delay involved and also by reason of sundry other proceedings for interim relief sought by the plaintiff which were actively resisted by the Province of East Bengal, that Province must be taken to have submitted to the jurisdiction of the Court.
On behalf of the appel lant, Mr. Sen Gupta challenged the correctness of the deci sion on both points.
Before dealing with these contentions, it will be con venient to dispose of two preliminary points raised by Mr. Faiyaz Ali, Advocate General of East Bengal.
9 In the first place, he submitted that the State of Tripura having since been merged in the Dominion of India and a Chief Commissioner having been appointed to administer its territories, the appeal could no longer be prosecuted by the present Maharaja through his mother as his next friend.
It was, however, represented to us on his behalf that under the agreement of merger the Estate of Chakla Roshanabad was left to the Maharaja as his personal property and it no longer formed part of the territories of the Tripura State.
The Attorney General, appearing on behalf of the Dominion of India, the intervener, confirmed that position.
There is thus no substance in the objection as any formal defect in the proceeding could be set right by suitably amending the cause title.
Mr. Faiyaz Ali next drew our attention to the Pakistan (Indian Independence Legal Proceedings) Order, 1948, promul gated by the Governor General of Pakistan on 13th November, 1948, with retrospective effect from the 15th August, 1947, and pointed out that in view of its provisions any decree that might eventually be passed by the Court at Alipore would receive no effect in Pakistan and that, therefore, it was unnecessary for this Court to decide the question of the jurisdiction of the Alipore Court to proceed with the suit.
We are unable to take that view.
The effect of the Order referred to above on any decree that may eventually be passed in the pending suit may have to be taken note of by the Court trying that suit after hearing arguments on the validity of that Order which is challenged but we are at present concerned only with the question of the jurisdic tion of that Court to try the suit and we cannot at this stage refuse to give our ruling on that question merely because any decree that might be passed in favour of the plaintiff might prove ineffectual.
Turning now to the main question, it is clear that article 12 (2) of the Rights, Property and Liabilities Order applies only to property rights or liabilities which were transferred by the Order from a Province which was a party to legal proceedings 2 10 "with respect to" that property or those rights or liabili ties.
As the suit in question cannot be said to have been instituted with respect to the property transferred, namely, Chakla Roshanabad, the appellant cannot rely upon the trans fer of that property from the Province of Bengal to the Province of East Bengal as part of the territories of Pakistan under the scheme of partition.
Nor was there any transfer of "rights"such as was contemplated under that article, for the only right with respect to which the Prov ince of Bengal could be said to have been a party to the pending proceeding on the facts of this case was the right to tax the agricultural income of the plaintiff under the provisions of the Bengal Agricultural Income tax Act, 1944, and that right was not derived by the Province of East Bengal by transfer under the Rights, Property and Liabili ties Order.
As rightly pointed out by the High Court, the right of taxation under the Bengal Act of 1944 passed to the Province of East Bengal as part of the Sovereign Dominion of Pakistan by virtue of the provisions of section 18(3) of the Indian Independence Act, 1947, which provided that "the law of British India and of the several parts thereof immediate ly before the appointed day shall, so far as applicable and with the necessary adaptations, continue as the law of each of the new Dominions and the several parts thereof, until other provision is made by the laws of the legislature of the Dominion in question or by any other legislature or other authority having power in that behalf.
" The question next arises whether there was a transfer of any "liability" by the Order as contemplated in article 12(2).
Mr. Sen Gupta relied in this connection on article 10 (2) (a) which provides that "where immediately before the appointed day the Province of Bengal is subject to any such liability (i.e., "any liability in respect of an actionable wrong other than breach of contract") referred to in sub section (1)that liability shall, where the cause of action arose wholly within the territories which, as from that day, are the territories of the Province of East Bengal, be a liability of that Province.
" It was contended that the Province 11 of Bengal was, according to the plaintiff 's case, liable to be restrained from proceeding with the illegal and unautho rised assessment on the basis of the notice issued under the Bengal Act of 1944, and that liability, in respect of which the cause of action arose wholly in Dacca (where the as sessment proceeding had been initiated) within the territo ries of the Province of East Bengal, became a liability of that Province.
The High Court rejected this contention on the ground "that article 10(2) is concerned with the liabil ity for an actionable wrong other than breach of contract and it is impossible to say that by serving a notice on the plaintiff under the Bengal Agricultural Income tax Act through one of its officers the Province of Bengal had committed an actionable wrong '.
Assuming that it exceeded its power or acted under an invalid provision of law, the plaintiff may have a declaration to that effect but the Act complained of cannot be said to have been a tortious act.
But even assuming that it was, it is to be remembered that the issue of the notice was an exercise of powers conferred by the Act in relation to the sovereign rights of the Crown and it is elementary that the Crown or the State is not answerable for even negligent or tortious acts of its offi cers done in the course of their official duties imposed by a statute, except where the particular act was specifically directed and the Crown profited by performance . .
No liability for an actionable wrong is thus involved in the suit and Dr. Sen Gupta cannot establish a right to proceed against the Province of East Bengal on the basis that the liability was transferred to that Province under article 10(2) of the Order.
" We are unable to share 'this view.
The learned Judges have placed much too narrow a construction on the phrase "liability in respect of an actionable wrong".
They have assumed that the phrase connotes only a liability for dam ages for a completed, tortious act and that the initiation of what according to the plaintiff was an unauthorised and illegal assessment proceeding by purporting to serve a notice requiring the plaintiff to submit a return of his total agricultural income under section 24 (2) of the Bengal Agricultural 12 Income tax Act, 1944, through an appropriate officer func tioning under that Act, the Province of Bengal had not committed an "actionable wrong".
This, in our opinion, is not a correct view of the matter.
Under section 9(1) (b) of the Indian Independence Act, 1947, the Governor General of British India was directed to make provision by order "for dividing between the new Dominions and between the new Provinces to be constituted under this Act, the powers, rights, property, duties and liabilities of the Governor General in Council or as the case may be of the relevant Provinces which under this Act are to cease to exist", and the Indian Independence (Rights, Property and Liabilities) Order is the only Order by which such provision was made.
The intention being thus to provide for the initial distri bution of rights, property and liabilities as between the two Dominions and their Provinces, a wide and liberal con struction, as far as the language used would admit, should be placed upon the terms of the Order, so as to leave no gap or lacuna in relation to the matters sought to be provided for.
There is no reason, accordingly, why the words "li ability in respect of an actionable wrong" should be under stood in the restricted sense of liability for damages for completed tortious acts.
We consider that the words are apt to cover the liability to be restrained by injunction from completing what on the plaintiff 's case was an illegal or unauthorised act already commenced.
The service of the notice on the plaintiff under section 24(2) of the Bengal Act amounts to much more than a mere threat in the abstract to impose an illegal levy.
It is the actual initiation of an illegal assessment proceeding which, in the normal course, will 'in all probability culminate in an illegal levy of tax.
The failure to make a return as required by the notice would result under section 25(5) of the Act in the Income tax Officer making an ex parte assessment to the best of his judgment and determining the sum payable by the assessee on the basis of such assessment.
Such failure would also expose the plaintiff under section 32(1) of the Act to the impo sition of a penalty which may equal the amount of the tax assessed on him or to a prosecution as for an offence 13 before a Magistrate under section 53 (1), at the option of the Income tax authority.
It is thus plain that the service of a notice requiring a return of income to be furnished for assessment under the Act is a step fraught with serious consequences to the assessee, and if the assessment proposed was illegal and unauthorised by reason of the Act itself being ultra vires in so far as it purported to make the Rulers of Indian States liable to taxation thereunder as contended for by the plaintiff, the service of such notice marked the commencement of a wrongful act against the plain tiff by the Bengal Government under colour of the Act and there can be no doubt that such a wrongful act is actionable in the sense that an action would lie in a civil court for an injunction restraining its completion.
That was the liability to which the Province of Bengal was subject ac cording to the plaintiff 's case at the time when he insti tuted the suit, and that liability, in our opinion, passed to the Province of East Bengal by virtue of article 10 (9.) (a) of the Indian Independence (Rights, Property and Liabil ities) Order, 1947.
There is no question here of the li ability of the Crown for damages for the negligent or tor tious act of its officers.
On the allegations in the plaint, which must, for the purpose of deciding the question of jurisdiction as a preliminary issue, be assumed to be well founded, the Province of Bengal was undoubtedly liable to be sued for an injunction restraining it from proceeding with the assessment and none the less so because the notice was served in purported exercise of powers conferred by the Bengal Act.
The name of the Income tax Officer originally impleaded as the second defendant having been struck off the record, no question in regard to his liability arises.
Reference was made to certain text books where a "tort" is spoken of as an "actionable wrong" and it was suggested that the two expressions are synonymous.
Every tort is undoubtedly an actionable wrong but the converse does not necessarily follow.
Indeed, the words "other than breach of contract" used in article 10 (1) make it plain that the expression "actionable wrong" is used in a wider sense 14 which would have included breach of contract but for those limiting words.
It was said that even assuming that the service of the notice calling for a return of income was a wrongful act, it was not "actionable", as section 65 of the Bengal Act barred suits in civil courts "to set aside or modify any assessment made under this Act".
The short answer to this contention is that the suit in question is not a suit "to set aside or modify an assessment" made under the Act, as no assessment had yet been made when it was instituted, and the subsequent completion of the assessment was made by the Pakistan In come tax authorities on terms agreed to between the parties and sanctioned by the Court.
The decision of the Privy Council in Raleigh Investment Co. Ltd. vs Governor General in Council (1) relied on in support of the contention is distinguishable, as the main relief claimed there was repay ment of the tax alleged to have been wrongfully levied under colour of an ultra vires provision in the Indian Income tax Act.
Their Lordships observed: "In form the relief claimed does not profess to modify or set aside the assessment.
In substance it does, for repayment of part of the sum due by virtue of the notice of demand could not be ordered so long as the assessment stood.
Further, the claim for the declaration cannot be rationally regarded as having any relevance except as leading up to the claim for repayment, and the claim for an injunction is merely verbiage.
The cloud of words fails to obscure the point of the suit.
" The position here is entirely different.
The gist of the wrongful act complained of in the present case is sub jecting the plaintiff to the harassment and trouble by commencing against him an illegal and unauthorised assess ment proceeding which may eventually result in an unlawful imposition and levy of tax.
It was suggested, somewhat faintly, that the cause of action for the suit, though stated in the plaint to have arisen in Dacca, now in the Province of East (1) 15 Bengal, did not arise wholly within the territories of the Province of East Bengal within the meaning of Article 10 (2) (a) inasmuch as the notice calling for a return, though issued from Dacca, was received by the Manager of the Estate at Agartalla in Tripura State.
Assuming that the contention has any substance it is of no assistance to the respondent, for article 10 (2) (c) would then be applicable to the case and the Province of East Bengal would still be liable, though jointly with the Province of West Bengal.
We are therefore of opinion that the Province of East Bengal having succeeded to the liability to which the Province of Bengal was subject immediately before the ap pointed day, the former Province is to be deemed to be substituted for the other Province as a party to the suit and the suit must accordingly continue in the Court of the Subordinate Judge at Alipore, which has jurisdiction to proceed with it under article 4 of the Indian Independence (Legal Proceedings) Order, 1947.
In this view it is unnecessary to consider the question of submission to jurisdiction urged in the alternative by the appellant.
In the result the appeal is allowed, the order of the Court below is set aside and the suit now pending in the Court of the Subordinate Judge at Alipore will be heard and determined by it.
The respondent will pay the appellant 's costs throughout.
FAZL ALI J.
The question to be decided in this appeal is whether the Subordinate Judge 's Court at Alipore in the State of West Bengal, has jurisdiction to try a suit in which the Province of East Bengal was impleaded as a defend ant, after the 15th August,1947 In what circumstances this question has arisen will appear from the facts of the case which may be briefly stated.
In 1944, the Bengal Legislature passed an Act called the Bengal Agricultural Income tax Act, 1944 (Bengal Act IV of 1944), which enabled it to impose a tax on the agricul tural income of various classes 16 of persons including "every Ruler of an Indian State," holding lands within the territory of Bengal.
The appel lant, who is the Ruler of the State of Tripura, holds a zamindary called Chakla Roshanabad Estates, which was situ ated in the Province of Bengal and in the District of Sylhet formerly appertaining to the Province of Assam.
On the 28th February, 1945, the Agricultural Income tax Officer, Dacca Range, issued a notice under section 24 (2) of the Bengal Act to the Manager of the Chakla Roshanabad Estates calling upon him to furnish a return of the appellant 's total agri cultural income for the previous year, derived from lands situated within the Province of Bengal.
On the 12th June, 1945, the appellant instituted a suit in the Court of the Subordinate Judge at Dacca, against the Province of Bengal and the Agricultural Income tax Officer, Dacca Range, claim ing the following reliefs: (1) For a declaration that the Bengal Agricultural Income tax Act, 1944, so far as it imposes a liability to pay agricultural income tax on the plaintiff is ultra vires and void and that the plaintiff ' is not bound by the same.
(2) For a declaration that in any case the notice served by the Agricultural Income tax Officer, Dacca Range, above referred to, is void and of no effect and that no assessment can be made on the basis of that notice.
(3) For a perpetual injunction to restrain the defend ants from taking any steps to assess the plaintiff to agricultural income tax.
On the 15th July, 1945, the suit was transferred to the Court of the Subordinate Judge at Alipore in the District of 24 Parganas, by an Order of the Calcutta High Court.
While the suit was still pending, the new Province of East Bengal, which forms part of the territories of the Dominion of Pakistan, came into existence on the 15th August, 1947, as a result of the Indian Independence Act, 1947, and it appears that the whole of Chakla Roshanabad Estates falls within that Province.
After the creation of the new Province, 17 a petition was filed on the 9th December, 1947, on behalf of the Province of East Bengal, drawing the attention of the Court at Alipore to the fact that the Province of West Bengal, which forms part of the territories of the Dominion of India, was taking no interest in the suit and asking the Court to accept a written statement which was also filed along with the petition, and in which the only plea taken was that the Alipore Court had no jurisdiction to hear the suit or make any order of injunction against the Province of East Bengal or defendant No. 2.
The last paragraph of the written statement was to the following effect: "The Province of East Bengal appears only to contest the jurisdiction of the court and it submits that the suit should be dismissed on that ground.
" Later on, the Province of East Bengal was irapleaded as a defendant in the suit and the name of the Income tax Officer of Dacca was removed from the category of defend ants.
The Subordinate Judge then proceeded to try the question of jurisdiction as a preliminary issue, and decided that by virtue of the provisions of the Indian Independence (Legal Proceedings) Order, 1947, read with section 9 of the Indian Independence Act, 1947, the Court had jurisdiction to try the suit against the new Province.
Thereupon, the respondent (the Province of East Bengal) moved the High Court at Calcutta under section 115 of the Code of Civil Procedure, against the order of the Subordinate Judge, and a Bench of the High Court consisting of Harries C.J. and Chakravarthi J. allowed the application and set aside the order of the Subordinate Judge, giving effect to the objec tion of the respondent that the Court at Alipore was not competent to try the suit against the Province of East Bengal.
One of the points raised on behalf of the appellant before the High Court was that the Province of East Bengal had submitted to the jurisdiction ' of the Subordinate Judge 's Court, but this point was negatived.
The appellant was thereafter granted a certificate under section 205 (1) of the Government of India Act, 1935, and on the basis of it he has preferred this appeal.
18 On a reference to the judgments of the learned Subordi nate Judge and the High Court, it appears that three provi sions were relied upon by the appellant in support of his contention that the Court at Alipore had jurisdiction to try the suit, these being section 9 of the Indian Independ ence Act, 1947, article 4 of the Indian Independence (Legal Proceedings) Order, 1947, [hereinafter referred to as 'the Legal Proceedings Order '], and section 12 of the Indian Independence (Rights, Property and Liabilities) Order, 1947, Therein after referred to as ' the Rights, etc., Order '].
These provisions run as follows : Section 9 of the Indian Independence Act : "The Governor General shall by order make such provi sion as appears to him to be necessary or expedient (a) for bringing the provisions of this Act into effective operation; (b) for dividing between the new Dominions, and be tween the new Provinces, to be constituted under this Act, the powers, rights, property, duties and liabilities of the Governor General in Council or, as the case may be, of the relevant Provinces which, under this Act, are to cease to exist . . " Section 4 of the Legal Proceedings Order : "Notwithstanding the creation of certain new Provinces and the transfer of certain territories from the Province of Assam to the Province of East Bengal by the Indian Independ ence Act, 1947, (1) all proceedings pending immediately before the appointed day in any civil or criminal court (other than a High Court) in the Province of Bengal, the Punjab or Assam shall be continued in that court as if the said Act had not been passed, and that court shall continue to have for the purposes of the said proceedings all the jurisdiction and powers which it had immediately before the appointed day; (2) any appeal or application for revision in respect of any proceedings so pending in any such 19 court shall lie in the court which would have appellate, or as the case may be revisional, jurisdiction over that court if the proceedings were instituted in that court after the appointed day; and (3) effect shall be given within the territories either of the two Dominions to any judgment, decree, order, or sentence of any such court in the said proceedings, as if it had been passed by a court of competent jurisdiction within that Dominion.
" Section 12 of the Rights, etc.
Order : "(1) Where immediately before the appointed day, the Governor General in Council is a party to any legal proceed ings with respect to any property, rights or liabilities transferred by this Order, the Dominion which succeeds to the property, rights or liabilities in accordance with the provisions of this Order shall be deemed to be substituted for the Governor General in Council as a party to the pro ceedings, and the proceedings may continue accordingly.
(2) Where any Province from which property, rights or liabilities are transferred by this Order is, immediately before the transfer, a party to legal proceedings with respect to that property or those rights or liabilities, the Province which succeeds to the property, rights or liabili ties of this Order shall be deemed to be substituted for the other Province as a party to those proceedings, and the proceedings may continue accordingly.
(3) Any proceedings which, immediately before the ap pointed day, are pending by or against the Secretary of State elsewhere than in the United King dom in respect of any liability of the Governor General in Council or a Prov ince shall, * * * * (b) in the case of proceedings in respect, of the Prov ince of Bengal, the Province of the Punjab, or the Province of Assam, be continued by or against the Province which suc ceeds to the liability . . " The learned Subordinate Judge based his judgment entire ly upon section 4 of the Legal Proceedings 20 Order, but the High Court has pointed out that that Order standing by itself can be of no help to the appellant.
According to the High Court, that section might have enabled the appellant to prosecute his suit against the Province of Bengal, but it could not enable 'him to continue the suit against the new Province without invoking section 12 (2) of the Rights, etc.
Order, which provides among other things that the Province which succeeds to the rights or liabilities of the old Province of Bengal by virtue of that Order shall be deemed to be substituted for the latter as a party to the pending proceedings.
In my opinion, this is the correct view.
It Was urged before us that a Court which had juris diction to try a suit against a party would, by reason of what is provided in section 4 of the Legal Proceedings Order, naturally have jurisdiction to substitute the heir or legal representative of that party.
Generally speaking, this must be so, but, in the present case, the Province of East Bengal which forms part of another sovereign State could not be automatically substituted for the Province of Bengal, unless the substitution was permitted by some provision of the Indian Independence Act or any of the Orders issued thereun der.
The whole case thus rests on the proper construction of section 12(2) of the Rights, etc.
Order.
In the High Court, it was strenuously urged on behalf of the appellant that section 12(2) is fully applicable to the present case on account of certain rights having been transferred to the Province of East Bengal from the old Province of Bengal.
This argument was reiterated in this Court also, but it is obviously untenable, for the reasons set out in the judgment of the High Court.
As has been pointed out by the High Court, section 12 (2) is of no help to the appellant, unless the rights in question were transferred by the Rights, etc.
Order itself.
The learned counsel for the appellant however failed to point out any provision of this Order, by which any of the rights referred to by him had been transferred.
He had therefore to fall back upon an alternative argu ment based on section 10(2) of the same Order; and the point to be decided by this Court has thus 21 crystallized into one simple issue, namely, whether section 10(2) of the Order can be of any avail to the appellant.
Section 10 (2) must be read with section 10 (1), and the material part of these two sub sections runs as follows : "10 (1) Where immediately before the appointed day the Governor General in Council is subject to any liability in respect of an actionable wrong other than breach of con tract, that liability shall, (a) where the cause of action arose wholly within the territories which, as from that day, are the territories of the Dominion of India, be a liability of that Dominion;. (2) Where immediately before the appointed day the Province of Bengal is subject to any such liability as aforesaid, that liability shall, (a) where the cause of action arose wholly within the territories which, as from that day, are the territories of the Province of East Bengal, be a liability of that Prov ince; (b) where the cause of action arose wholly within the territories which, as from that day, are the territories of the Province of West Bengal, be a liability of that Prov ince; and (c) in any other case, be a joint liability of the Provinces of East and West Bengal." * * * * It is quite clear that for the application of section 10(2), it is necessary to show inter alia that the Province of Bengal was subject to a liability in respect of an ac tionable wrong other than a breach of contract.
A reference to any book on tort will show that the words used in sub section
(1) are commonly used to define a tort.
A tort has been defined in Stroud 's Judicial Dictionary, Second Edition, page 2072, as a wrong independent of contract, and it is also so described in the Common Law Procedure Act, 1852 (15 & 16 Vict., c. 76); in Halsbury 's Laws of England and in many textbooks.
The difference between "a wrong independent of contract" and "a wrong other than a 22 breach of contract" is merely verbal and has little signifi cance.
A tort is also often referred to as "an actionable wrong" and the two expressions have been synonymously used by eminent writers including Sir Fredrick Pollock and Pro fessor Burdick of America, who has designated his well known book on the law of torts as "a concise treatise on civil liability for actionable wrongs to person and property".
Whether the expression can be taken to be a complete defini tion of a tort may be questioned, because as Addison has pointed out in his book on torts, "to say that a tort is an actionable wrong leaves undefined the term 'actionable wrong '.
" But there can be no doubt that in legal parlance, the two expressions are assumed to be interchangeable.
There is also another matter to be borne in mind in construing section 10 (2) of the Rights, etc.
Order, and that is the well recognized fact that the primary and most common remedy for a tort is an action for damages.
That this is an important feature of a tort is shown by the fact that in many textbooks an action for damages has been made an inte gral part of the definition of a tort.
A few examples will make this clear.
A tort is defined by Salmond as "a civil wrong for which the remedy is a common law action for unliq uidated damages and which is not exclusively the breach of a contract or the breach of a trust or other merely equitable obligation." Professor Winfield, who did not see eye to eye with Salmond on many matters connected with the law of torts, gives the following definition of tortious liability : " Tortious liability arises from the breach of a duty primarily fixed by the law; this duty is towards persons generally and its breach is redressible by an action for unliquidated damages.
" In Underhill 's law of torts, the definition runs as follows : "A tort is an act or omission which is unauthorized by law and independently of contract infringes (i) some absolute right of another, etc., and (ii) gives rise to an action for damages at the suit of the injured party.
" The learned author after attempting to define a tort in this way goes on to state: "A tort is described in the Common 23 Law Procedure Act, 1852, as a wrong independent of contract.
If we use the word 'wrong ' as equivalent to violation of a right recognized and enforced by law by means of an action for damages, the definition is sufficiently accurate, but scarcely very lucid;for it gives no clue to what constitutes a wrong or violation of a right recognized and enforced by law.
It does, however, emphasize the fact that an essential characteristic of a tort is that the appropriate remedy for it is an action for damages.
An act or omission which does not give rise to an action for damages is not a tort.
" It must be recognized that an injunction may also be an appropriate remedy in a limited number of cases, but it is not a remedy of universal application, and no one has yet suggested that it may be treated as an incident of tort.
In the light of the foregoing discussion, it seems to me to be permissible to infer, firstly, that section 10 of the Rights, etc.
Order refers to liability for a tort, and secondly, that what is contemplated there is pecuniary liability such as liability to damages.
The word "liabili ty" has a wider meaning and also a narrower meaning, and the latter would appear to be the appropriate meaning where the word is used in contrast to assets or something which corre sponds to or is in the nature of assets, and where it is used in plural or is preceded by an indefinite article, e.g., when the expression "a liability" is used.
We must remember that the purpose of the Rights, etc.
Order was, among other things, to divide or distribute the rights, property and liabilities of the undivided Province of Bengal between the two new Provinces.
Therefore, the view that the liabilities referred to in section 10 are liabilities capable of being ascertained in terms of money and not liabilities in any abstract or academic sense, is in conso nance with the purpose of the Order as well as the well known fact that for a tort the most common and appropriate remedy is an action for pecuniary damages.
This view is further confirmed by reading section 13 (2) of the Rights, etc.
Order, which runs thus : 24 "Where by virtue of the preceding provisions of this Order either of the Dominions or any Province becomes sub ject to any liability, and it is just and equitable that a contribution towards that liability should be made by the other Dominion, or by another Province, as the case may be, the other Dominion shall make to the Dominion or Province primarily subject to the liability such contribution in respect thereof as, in default of an agreement, may be determined by the Arbitral Tribunal.
" It should be noted that the words "becomes subject to any liability" used in the above provision are practically the words which occur in section 10 of the same Order, and the language of section 13 (2) clearly shows that the word "liabili ty" must have been used in the narrower sense of pecuniary liability, because otherwise no question of contribution towards that liability by the Dominion or Province would arise.
It will be also instructive to refer to Part VII, Chapter III of the Government of India Act, 1935, the head ing of which is "Property, Contracts, Liabilities, and Suits," and upon which the Rights, etc.
Order appears tohave been modeled.
In section 179 of the Government of India Act, 1935, which occurs in this Chapter, the clue to the meaning of the word ' liability. ' is furnished by the provision that "any sum ordered to be paid by way of debt, damages or costs in any such proceedings, and any costs or expenses . . shall be paid out of the revenues of the Federation or the Province, as the case may be . . "I think that it will be quite a fair construction to hold that what is contemplated in section 10 of the Rights, etc.
Order is that the liability referred to therein would be met out of the revenues of the Province concerned.
The construction I have suggested appears to me to represent what the framers of the Order must have intended to convey by the words "liability in respect of an action able wrong", but, lest it should be said that it is too narrow a construction, I shall deal with the matter more fully giving to the words "actionable wrong" and "liability" as wide a meaning as they can 25 bear in a legal context.
Proceeding on this footing, the first question to be asked is: What is a wrong other than a breach of contract ? In answering this question, it is neither possible nor helpful to ignore all that has been said in authoritative textbooks and judgments in dealing with the question of a tort, because the foundation of every tort is a wrong or a wrongful act.
It is true that at one time some of the writers were inclined to think that "there was no English law of tort but there was merely an English law of torts, that is, a list of acts and omissions which under certain conditions were actionable." But, now, the view has considerably broadened, and, generally speaking, it is acknowledged that ' 'torts are infinitely various not limited or confined" (see Chapman vs pickersgill), and that wherever there is an injury by the invasion of a right, a wrong or a tort is committed.
This is often conveyed by the expression injuria sine damnum.
The word "wrong" has been used in sections 17, 18 and 19 of the Code of Civil Proce dure, and the following extract from Mulla 's commentary thereon will show how this word has been construed: "Wrong means a tort or actionable wrong, i.e., an act which is legally wrongful as prejudicially affecting a legal right of the plaintiff.
" Underhill also construes "wrong" in the same sense, because a wrong is, according to him, equivalent to viola tion of a right recognised and enforced by law by means of an action for damages.
I think therefore that in view of all that has been written and said on the subject, it may be safely stated that a wrong must consist of the following elements : (1) There must be an act or omission amounting to an infringement of a legal right of a person or a breach of legal duty towards him; and (2) The act or omission must have caused harm or damage to that person in some way, the damage being either actual or presumed.
These two elements are denoted by two Latin expressions, injuria and damnum.
I have to include (1) [1762] 2 Wils.
146, per Pratt C.J. 4 26 presumed damage under the second head, because in certain cases such as trespass, assault, false imprisonment, etc.
the invasion of a right may be so flagrant that "the law conclusively presumes damage." (See observations of Lord Wright M.R. in Nicholls vs Ely Beet Sugar Factory(1 ).
Such cases are often described as cases of absolute liability or cases where a tort is actionable per se without proof of damage.
Let us then see whether the two elements of an action able wrong are present in this case.
For this purpose, we must examine the best and most plausible statement of the appellant 's case which may be put more or less in the fol lowing way : The issue of a notice, which has been referred to in paragraph S of the plaint calling upon the appellant to furnish a return of his total agricultural income derived from lands situated within the Province of Bengal, was the first step in the initiation of an illegal assessment pro ceeding which was likely to lead to an illegal levy of tax, and the commencement of an illegal proceeding in this manner gave a right of action to the appellant and entitled him to claim an injunction restraining the defendants from complet ing the proceeding.
Such being the position, the case is covered by section 10 of the Order under consideration, the words used there being wide enough to cover liability to be restrained by an injunction from completing an illegal or unauthorized act already commenced.
Consequently, the li ability to be so restrained must be deemed to have been transferred to the Province of East Bengal, by virtue of section 10 of the Rights, etc.
Order.
This may appear to be a plausible way of putting the case, but, when we subject it to a close scrutiny, we find that even on the above statement the true requirements of the material provision are not satisfied.
If we confine ourselves to something which has happened, as opposed to something which may happen in future, that is to say, if we look for an act or omission which must be the foundation of every wrong, we find that all that is said to have happened in this (1) 27 case is the issuing of a notice, which is not some unautho rised or prima facie unlawful act but is an act done trader the authority of a statute and enjoined by it.
It has to be borne in mind that the attack in the plaint is not against the whole Act but all that is contended is that only a par ticular provision of it is ultra vires.
The contention comes to this, that the issuing of a notice against every person other than the Ruler of an Indian State would have been a perfectly legitimate act, but the issuing of a notice against a Ruler is ultra vires.
But that is not enough to constitute a wrong.
What has to be shown is that the issu ing of the notice is a wrongful act, i.e., it amounts to an infringement of some right.
What known right of person or property or any other description it infringes is not at all clear; nor has that been stated in the pleadings.
It is conceded that there has been no assessment and no realiza tion of any tax and it could not also be disputed that it was open to the appellant to show to the assessing authority that he was not assessable at all.
To say that a notice is the first step , in the initiation of an illegal assessment proceeding, does not carry the matter further, but it would seem to be merely a piece of verbiage used to obscure the fundamental weakness of the appellant 's case.
Construing "wrong" as it should be construed, the essential thing to find out is in what way a right has been infringed or there has been a breach of duty.
It is the appellant 's own case that the suit is for a threatened or apprehended wrong, but that very expression shows that the suit has been brought before the alleged wrong was committed.
The other element of a wrong, namely, that the person should have sustained some harm or injury, is also wanting in this case.
It is not the case of the appellant that the notice has in any way caused any actual damage to him.
Nor is it suggested that this is one of those cases in which damage should be presumed.
All that is said is that the notice was likely to entail trouble and harassment to the appellant, but that by itself will not constitute a wrong.
28 The matter may be tested in another way.
As Underhill points out," an act or omission which does not give rise to an action for damages is not a tort.
" To the same effect is the following observation in Salmond 's Law of Torts: " No civil injury is to be classed as a tort unless the appropriate remedy for it is an action for damages.
Such an action is an essential characteristic of every true tort.
" Again, Professor Winfield says that an action for unliqui dated damages is the one sure test of tortious liability and has cited cases where this statement has received judicial approval.
I think these statements will be equally true if we drop the word "tort" and substitute the words" actionable wrong" in its place.
It follows that one of the tests of an actionable wrong is that while other remedies also may be open to the plaintiff, an action for damages is the primary remedy for it.
Can the appellant in this case maintain a suit for damages on the allegations made by him in his plaint? As I have already stated, a reference to the plaint shows that no damages has been either alleged or claimed and it has also not been stated that the appellant is entitled to any damage.
In Rogers vs Rajendro Dutt(1)the Privy Council stated that "it is essential to an action in tort that the act complained of should be legally wrongful as regards the party complaining; that is, it must prejudi cially affect him in some legal right.
" Again, it was ob served in Kali Kischen Tagoor vs Jodoo Lal Mullick(2) that"there may be, where a right is interfered within ju ria sine damno sufficient to found an action; but no action can be maintained if there is neither damnum nor injuria.
" It seems to me therefore that in the absence of the two elements to which I have referred, no case for liability in respect of an actionable wrong has been made out, and it is wholly inappropriate to invoke section 10 of the Rights, etc.
Order in the present case.
It appears that the whole of the appellant 's arguments has been woven round the following two matters : (1) 8 Moore 's I.A. 103 at p. 135.
(2) 6 I.A. 190.
29 (1) Injunction is a recognized form of action; and (2) Injunction has been asked for in the present Case, in connection with something which is said to be likely to culminate in a wrong.
The situation as envisaged is however very different from what is contemplated in section 10 of the Rights, etc.
Order, which is liability for an actionable wrong and not liability for something which may become a wrong in future.
It is to be remembered that there are two words used in the section, viz., actionable and wrong.
The mere fact that a matter is actionable will not bring the case within the four corners of ' section 10 of the Order, unless all the elements of a wrong are established.
I think it will be appropriate at this stage to say a few words about the remedy by way of an injunction in cases where an actionable wrong is said to have been committed.
It cannot be disputed that injunction is one of the remedies in certain cases of torts.
As Addison has pointed out, "the origin of ' the remedy by way of an injunction is to be found in the inadequacy of the legal remedy by way of damages in many of the more serious wrongs, such as continuing tres passes and nuisances, where a wrongful act has been done and there was an intention to continue doing it.
(See Addison 's Law of Torts, 8th Edn. 111).
Injunction will also be granted to prevent a threatened injury or wrong, if it can be shown that the threatened act if carried into execution will lead to violation of a right and such will be the inevitable result.
As was pointed out in an English case, the interfer ence of the court in these cases is rounded on its jurisdic tion to give relief in the shape of preventive justice in order to protect properties and rights from that which, if completed, would give a right of action.
These two cases in which an injunction may be issued stand on two different footings, and the liability to an injunction does.
not necessarily and always amount to "liability in respect of an actionable wrong".
The two liabilities may possibly coin cide where there is a continuing wrong and the injunction is intended to stop its 30 continuance.
But, as I have already stated, where no wrong has been committed, it would require considerable straining of the meaning of familiar legal expressions to say that "liability in respect of an actionable wrong" is identical with "liability to an injunction in respect of an apprehend ed wrong".
"Liability in respect of an actionable wrong" means liability when an actionable wrong has been committed.
It cannot mean liability to be prevented from a wrong which is apprehended.
Nor can the liability which is contemplated in section 10 of the Rights, etc.
Order be created by the mere filing of a suit in which an injunction is claimed.
I should like to refer here to section 176 (1) of the Government of India Act, 1935, which provides as follows : "The Federation may sue or be sued by the name of the Federation of India and a Provincial Government may sue or be sued by the name of the Province, and, without prejudice to the subsequent provisions of this chapter, may, subject to any provisions which may be made by Act of the Federal Legislature or a Provincial Legislature enacted by virtue of powers conferred on the Legislature by this Act, sue or be sued in relation to their respective affairs in like cases as the Secretary of State in Council might have sued or been sued if this Act had not been passed.
" This section is divisible into two parts.
The first part states as to which authority should be named as a plaintiff or as a defendant in a suit brought by or against the Crown or the Government, and the second part deals with cases in which the Federal or the Provincial Government may sue or be sued.
To understand the latter provision, the section is to be read with section 65 of the Government of India Act, 1858, and section 32 of the Government of India Act, 1915.
Section 65 of the Act of 1858 enacted that "the Secretary of State in Council shall and may sue and be sued as well in India as in England by the name of the Secretary of State in Council as a body corporate; and all persons and bodies politic shall and 31 may have and take the same suits, remedies and proceedings, legal and equitable, against the Secretary of State in Council of India as they could have done against the said Company." (East India Co.).
The same provision is substantially made in section 32 of the Act of 1915.
Such being the law, the question has been posed in a number of cases from very early days as to whether, and, if so, in what cases, the Secretary of State would be liable for a wrong or a tort committed by the servants of the Crown, and it has now been definitely held that he may be liable in certain cases.
So far as the present discussion is concerned, the following three points which emerge from a careful perusal of a large number of cases bearing on the subject, seem to be material : (1) The principles of the law of torts have been con sistently applied in all cases dealing with the liability of the Secretary of State for wrongs committed by the serv ants or agents of the crown or the Government.
(2) It is settled law that the Secretary of State cannot be held liable for wrongs committed by the servants of the Crown in the performance of duties imposed by the Legisla ture: [See Shivabhajan vs Secretary of State for India(1).
James Evans vs Secretary of State(2).
Tobin vs Reg(3).
Ross vs Secretary of State(4), in which this principle is fully explained and the reasons upon which it is based, are clear ly set out].
(3) It is also well settled that where a statute spe cially authorizes a certain act to be done by a certain person, which would otherwise be unlawful or actionable, no action will lie for the doing of the act.
On these principles, it would appear that neither the Agricultural Income tax Officer, who has now been dismissed out of action, nor the Province of East Bengal, could be said to be subject to a liability in respect of an action able wrong, assuming that an actionable wrong has been committed.
It must (1) I.L.R. (3) ; (2) A.I.R. 1920 Lah. 364.
(4) I.L.R. 32 however be stated that this conclusion rests on the.
as sumption that my construction of an actionable wrong is correct.
It was contended that in deciding the present appeal, we must assume all the facts stated in the plaint to be correct and therefore assume that the Bengal Act is ultra vires and the notice issued was without authority.
I have already pointed out that the whole Act is not attacked, but only one single provision thereof is said to be ultra vires, and I shall show later, when I deal with section 65 of the Bengal Act, that even the assumption we are asked to make will not bring the case within section 10 of the Rights, etc.
Order.
Mr. Setalvad, the learned Attorney General of India, who intervened on behalf of the Union of India in the ap peal, supported the judgment of the High Court on three main grounds, which may be summed up as follows : (1) that the words used in section 10 of the Rights, etc.
Order do not cover this case, because here no wrong has been actually committed and a threatened wrong is different from an actual wrong; (2) that section 65 of the Bengal Agricultural Income tax Act is a bar to the suit; and (3) that the present suit must in any event end in an infructuous decree and should not be allowed to be pursued.
I have already dealt with the first point, and wish simply to add that the point which is now pressed is not specifically raised in the Memorandum of Appeal presented in this Court, nor is there any trace of it in the Statement of Case filed by the appellant.
The point which is mentioned in the Memorandum of Appeal and the Statement of Case is that section 12 of the Rights, etc.
Order is applicable to the present case, because certain rights have been trans ferred from the old Province of Bengal to the Province of East Bengal.
There is however no mention of section 10 of the Order, nor is it stated that liability to an injunction brings the case within that 33 section.
Thus, a notable feature of the case is that almost every argument which was advanced in the courts below is to be discarded, and we are asked to base our decision on a point, which is not urged in the Statement of the Case, and which, in accordance with the rules of practice of this Court, cannot ordinarily be entertained.
The second point urged by Mr. Setalvad is based on section 65 of the Bengal Act, which runs as follows : "No suit shall be brought in any Civil Court to set aside or modify any assessment made under this Act, and no prosecution, suit or other proceeding shall lie against any officer of the Crown for anything in good faith done or intended to be done under this Act." Strictly speaking, this section does not apply to the present case, as there has yet been no assessment and ex facie the appellant 's suit cannot be regarded as a suit to set aside or modify any assessment.
Mr. Setalvad however contends that this section must be read with the decision of the Privy Council in Raleigh Investment Co. vs Governor General in Council(1).
That was a case under the Indian Incometax Act, 1922, the provisions of which are similar to the provisions of the Bengal Act and which contains a sec tion (section67) which is almost identical in terms with section 65 of the latter Act.
In that case, an assessee paid under protest the tax assessed on him and then brought a suit for the following reliefs : (a) a declaration that certain provisions of the Income tax Act on which the assessment was based were ultra vires and so the assessment was illegal; (b) an injunction restraining the.
Income tax Depart ment from making the assessments in future; (c) repayment of the sum assessed.
It was strongly contended upon the facts of the case that section 67 of the Income tax Act had no application, but it was held by the Privy Council that "though in form the relief claimed did not profess to (1) 5 34 modify or set aside the assessment, in substance it did,because the repayment could not be ordered so long as the assessment stood ' '.
It was further held that an as sessment made under the machinery provided by the Act, if based on a provision subsequently held to be ultra vires was not a nullity but a mistake of law in the course of its exercise.
Lastly, it was held that the Act contained machin ery which enabled an assessee to raise the question whether or not a particular provision of the Act bearing on the assessment made upon him was ultra vires and that jurisdic tion to question the assessment otherwise than by use of the machinery expressly provided by the Act appeared to be inconsistent with the statutory obligation to pay 'arising by virtue of the assessment.
The material part of the judgment on the last point runs as follows : "In construing the section it is pertinent in their Lord ships ' opinion, to ascertain whether the Act contains machinery which enables an assessee effectively to raise in the Courts the question whether the particular provision of the Income tax Act bearing on the assessment made is or is not ultra vires.
The presence of such machinery, though by no means conclusive, marches with a construction of the section which denies an alternative jurisdiction to enquire into the same subject matter.
The absence of such machinery would greatly assist the appellant on the question of con struction and, indeed, it may be added that, if there were no such machinery and if the section affected to preclude the High Court in its ordinary civil jurisdiction from considering a point of ultra vires, there would be a serious question whether the opening part of the section, so far as it debarred the question of ultra vires being debated, fell within the competence of the Legislature.
In their Lordships view it is clear that the In come tax Act, 1922, as it stood at the relevant, date,did give the assessee the right effectively to raise inrelation to an assessment made upon him the question whether or not a provision in the Act was ultra vires.
Under section 30, an assessee whose only ground of complaint was that effect had been given in the assessment 35 to a provision which he contended was ultra vires might appeal against the assessment.
If he were dissatisfied with the decision on appeal the details relating to the procedure are immaterial the assessee could ask for a case to be stated on any question of law for the opinion of the High Court and, if his request were refused, he might apply to the High Court for an order requiring a case to be stated and to be referred to the High Court .
It cannot be doubted that included in the questions of law which might be raised by a case stated is any question as to the validity of any taxing provision in the Income tax Act to which effect has been given in the assessment under review.
Any decision of the High Court upon that question of law can be reviewed on appeal.
Effective and appropriate machinery is therefore provided by the Act itself for the review on grounds of law of any assessment.
It is in that setting that section 67 has to be construed.
In conclusion their Lordships would observe that the scheme of the Act is to set up a particular machinery by the use of which alone total income assessable for income tax is to be ascertained.
The income tax exigible is determined by reference to the total income so ascertained and only by reference to such total income.
Under the Act (section 45) there arises a duty to pay the amount of tax demanded on the basis of that assessment of total income.
Jurisdiction to ques tion the assessment otherwise than by use of the machinery expressly provided by the Act would appear to be inconsist ent with the statutory obligation to pay arising by virtue of the assessment.
The only doubt, indeed, in their Lord ships ' mind, is whether an express provision was necessary in order to exclude jurisdiction in a civil Court to set aside or modify an assessment.
" The authority of this decision was not questioned before us, but it was pointed out firstly that the present suit is not hit by the first part of section 65 of the Bengal Act, which refers only to suits to set aside or modify any as sessment, and secondly, that if the case is not covered by section65, the decision of the Privy Council, which was based on the construction of section 36 67 of the Income tax Act, is not applicable.
Mr. Setalvad, replying to the first contention, has urged that we must not look merely to the letter of the section but to the princi ple underlying it, and he has particularly referred us to the fact that, strictly speaking, the reliefs claimed in the above mentioned case do not fall within the letter of sec tion 67 of the Income tax Act and hence the Privy Council observed in that case: "In form the relief claimed does not profess to modify or set aside, the assessment.
In sub stance it does .
The cloud of words fails to obscure the point of the suit.
" However that may be, it seems to me that the Privy Council in arriving at their decision, were influenced not only by the language of section 67 of the Income tax Act but also by the complete machinery furnished by that Act for dealing with all questions arising in regard to the assessment, including the question of ultra vires as would appear from the fact that while laying down that there was no jurisdiction to question the assessment except by use of the machinery expressly provided by the Act, their Lord ships added: "The only doubt, indeed, in their Lordships ' mind, is whether an express provision was necessary in order to exclude jurisdiction in a civil court to set aside or modify an assessment." think that, for the purpose of understanding the full scope of section 65, we must read not only the first part of the section which bars suits to set aside or modify an assessment, but also its latter part which provides that "no suit or other proceeding shall lie against any officer of the Crown for anything in good faith. intended to be done under this Act." The latter part of the section clearly excludes the jurisdiction of the court to prevent the Income tax Officer from proceeding With an assessment which has already been started.
Reference may here be made to Secretary of State vs Meyyappa Chetti ar(1) where it was held that the expression "intended to be done" signified futurity so as to preclude suits for injunction in respect of proceedings 'intended ' to be taken by the Income tax Officer.
It is true that in terms the provision concerns the Income tax Officer only, but it (1) I1946] , at 352.
37 could hardly have been the intention of the Legislature that though that Officer is not liable to be restrained from proceeding with an assessment, the provision which ensures such a result may be rendered nugatory by permitting an injunction to be claimed against the Provincial Government or the State.
In my opinion, it will be a strange construc tion of the section to hold that although it bars suits to modify or set aside an assessment and though it bars all proceedings to restrain the Officer who is making the as sessment from proceeding with it, yet it leaves it open to a party to stop an assessment by claiming an injunction against the Provincial Government or the State instead of the Officer concerned.
There is no reference to the Provincial Government or the State at all in the first or the second part of the section, but the section as a whole concerns only with excluding the jurisdiction of the civil court in regard to certain acts done or intended to be done in connection with the assessment of agricultural income tax, and, on a fair construction, it must be held to bar all suits in connection with such assessment.
In urging his third point, the learned Attorney General relied on an Ordinance passed by the Governor General of Pakistan on the 13th November, 1948, section 2 whereof runs as follows : "No judgment, decree, order or sentence referred to in paragraph (3) of Article 4 of the Indian Independence (Legal Proceedings) Order, 1947, shall affect the legislative or executive right or authority of the Central or any Provin cial Government of Pakistan and where such right or authori ty has been at issue, the judgment, decree, order or sen tence shall be invalid and inoperative subject to any decision that may be obtained from a competent court, of the Province concerned.
" It was pointed out that by reason of this Ordinance, any decree which may be obtained in the present suit would be wholly infructuous and in this view this was a meaningless litigation which should not be allowed to continue.
There is force in this argument, 38 but the point need not be pursued, as, in my opinion, the first two points raised by the Attorney General are suffi cient to meet the principal contention advanced by the appellant.
The question of submission to jurisdiction appears to me to be unarguable upon the facts stated, and it was not seriously argued before us.
The Province of East Bengal did intervene and apply for permission to file a written state ment, but the only statement made by it was that the Court had no jurisdiction to proceed with the suit.
It cannot therefore be held that it had submitted to the jurisdiction of the Court.
I have tried to deal with the question posed in this appeal in all its material aspects, but it can, I think, be disposed of on the simple ground that the mere issuing of a notice under section 4 of the Bengal Agricultural Income tax Act by the Agricultural Income tax Officer cannot be held to be an actionable wrong, because no right known to law can be said to have been infringed thereby.
One of the recognized tests of an actionable wrong is that, while other remedies may also be open to the person to whom the wrong is done, he can always maintain an action for damages, on the principle that every injury imports damage.
I am however certain that no action for damages can be maintained on the allegations made by the appellant in his plaint.
I think that the entire argument urged on behalf of the appellant has been sufficiently answered by the High Court in the following passage, which appears to me to sum up the legal position accurately and concisely : "Nor was Dr. Sen Gupta right in relying on article 10 (2) for the transfer of liabilities.
That Article is con cerned with liability for an actionable wrong other than breach of contract and it is impossible to say that by serving a notice on the plaintiff under the Bengal Agricul tural Income Tax Act through one of its officers, the Prov ince of Bengal had committed an actionable wrong.
Assuming it exceeded its powers or acted under an invalid provision of law, the plaintiff may have a declaration to that effect, but the 39 act complained of cannot be said to have been a tortious act.
But even assuming it was, it is to be remembered that the issue of the notice was in exercise of powers conferred by the Act in relation to the Sovereign rights of the Crown and it is elementary that the Crown or the State is not answerable for even negligent or tortious acts of its offi cers done in the Course of their official duties imposed by statute, except where the particular act was specifically directed and the Crown profited by its performance.
There is no such allegation in the plaint in the present case.
The plaintiff could not therefore have sued the Province of Bengal for an actionable wrong and the suit actually brought is not a suit of that character.
It is a suit for ,certain declarations and an injunction and does not seek to make the Province liable for any actionable wrong in any way.
No liability for an actionable wrong is thus involved in the suit and Dr. Sen Gupta cannot establish a right to proceed against the Province of East Bengal on the basis that the liability was transferred to that Province under article 10 (2) of the Order.
" In the result, I would dismiss this appeal with costs.
MUKHERJEA J I agree with my learned brother Patanjali Sastri J. that this appeal should be allowed and I would desire to indicate briefly the reasons that have weighed with me in coming to a conclusion different from that ar rived at by the learned Judges of the Calcutta High Court.
All the material facts in relation to this case have been set out with elaborate fullness in the judgment of the High Court and I deem it quite unnecessary to state them over again.
The whole controversy centers round the point as to whether the suit which was instituted by the plaintiff appellant against the Province of Bengal, as it was prior to the 15th of August, 1947, and which is still pending in the Court of the Subordinate Judge at Alipore can be continued against the Province of East Bengal which has come into existence, as a part of the Dominion of Pakistan, upon the 40 partition of Bengal under the Indian Independence Act; and whether the court of the Subordinate Judge of Alipore which is a court in the Dominion of India has any jurisdiction to proceed with and try such suit.
The Subordinate JUdge decided these questions in favour of the plaintiff appellant basing his decision entirely upon article 4 (1) of the Indian Independence (Legal proceedings) Order, 1947, read with section 9 of the Indian Independence Act.
The High Court in revision ' set aside the order of the Subordinate Judge holding inter alia that neither article 4 (1) of the Legal Proceedings Order nor article 12 (2) of the Indian Independence (Rights, Property and Liabilities) Order, 1947, could confer upon the plaintiff any right to continue the suit against the Province of East Bengal.
The Alipore Court, it has been held, has no jurisdiction to proceed with the suit and no jurisdiction has been conferred upon it by reason of the Province of East Bengal appearing in the suit and putting in a written statement only for the purpose of challenging the competency of the court to try the same.
It is the propriety of this decision that has been challenged before us in this appeal.
The first point that requires consideration is whether article 4 (11 of the Legal Proceedings Order has any appli cation to the facts of the present case.
In my opinion, the answer to this question must be in the negative and the view taken by the High Court on this point seems to me to be perfectly sound and unassailable.
The Legal Proceedings Order as well as several other orders dealing with various constitutional matters affecting the two Dominions which were to come into being on and from the 15th of August, 1947, were promulgated by the Governor General of India just on the previous day, that is to say, the 14th of August, 1947, in pursuance of section 9 (1) of the Indian Independence Act which made it a duty on the part of the Governor General to make suitable provisions for removing the difficulties arising in connection with the transition to the new constitutional order.
As the two 41 Dominions came into existence under the Indian Independence Act passed by the British Parliament and these orders were made by the Governor General of India in exercise of the authority conferred upon him by the Independence Act, there cannot be any doubt that the provisions of these orders are fully binding on India as well as the Dominion of Pakistan; and they being provisions made to be applicable only for the transitional period, the question does not really arise as to whether or not they are in strict conformity with the principles of International Law which would ordinarily govern the relations between two sovereign States.
Article 4(1) of the Legal Proceedings Order is worded as follows: "Notwithstanding the creation of certain new Provinces and the transfer of certain territories from the Province of Assam to the Province of East Bengal by the Indian Independ ence Act, 1947, (1) all proceedings pending immediately before the appointed day in any civil or criminal court (other than a High Court) in the Province of Bengal, the Punjab or Assam shall be continued in that court as if the said Act had not been passed, and that court shall continue to have for the purposes of the said proceedings all the jurisdiction and powers which it had immediately before the appointed day.
" The clause of the article is couched in very wide lan guage and under it all proceedings pending in any civil or criminal court in the Province of Bengal, the Punjab or Assam immediately before the 15th of August, 1947, would continue as before and be heard and tried by the courts before which they are pending irrespective of the fact that such proceedings might relate to persons or property situat ed in the other Dominion.
I agree with the High Court in holding that comprehensive though the provision is, by itself it can render no assistance to the plaintiff appel lant.
The suit was commenced here by the plaintiff against the old Province of Bengal as the party defendant and against 42 that defendant the suit may be continued if the plaintiff so chooses under article 4(1) of the Legal Proceedings Order mentioned above.
But this would be of no benefit or advan tage to the plaintiff for what he wants is to proceed against the Province of East Bengal which is a part of the Dominion of Pakistan as a substituted defendant in place of the Province of Bengal.
Dr. Sen Gupta argues that if the court has jurisdiction to continue the suit, this would necessarily carry with it the power to make proper orders for substitution as the court considers necessary.
But such substitution could be made only under the ordinary provi sions of law which regulate the conduct of such suits.
There is no provision of any municipal law which contemplates or authorises the substitution of one sovereign state for another in a pending suit.
If, therefore, the plaintiff wants to proceed against the new Province of East Bengal, he must find warrant for it in some of the provisions made by the Governor General of Indian exercise of the powers vested in him under the Indian Independence Act.
Admittedly there is no such provision in the Legal Proceedings Act and reli ance is, therefore, placed by the plaintiff upon article 12 (2) of the Rights, Property and Liabilities Order, 1947, which is in the following terms : "Where any Province from which property, rights or liabilities are transferred by this Order is, immediately before the transfer, a party to legal proceeding with re spect to that property or those rights or liabilities, the Province which succeeds to the property, rights or liabili ties in accordance with the provisions of this Order shall be deemed to be substituted for the other Province as a party to those proceedings, and the proceedings may con tinue accordingly.
It is not disputed that in order to attract the opera tion of this provision, it is incumbent upon the plaintiff to show that the right or liability to which his suit re lates has been transferred from the Province of Bengal, as it existed prior to the 15th of August, 1947, 43 to the Province of East Bengal in Pakistan in accordance with the provisions of this Order.
To establish this, reli ance was placed on behalf of the plaintiff upon several provisions of the Rights, Property and Liabililies Order, 1947, and none of his contentions in this respect were accepted as sound by the learned Judges of the High Court.
In this court Dr. Sen Gupta took his stand on a two fold ground.
He argued in the first place that for the purpose of invoking the aid of article 12(2) of the Rights, Proper ty ' and Liabilities Order it is not necessary that the transfer of the right and liability to which the proceeding relates should take place under any of the specific articles enumerated in the Order.
It would be enough according to him, if there is a transfer by or under any machinery which the Order sets up or authorises What he says is that as the Province of East Bengal is proceeding to assess and levy agricultural income tax upon the plaintiff in respect of a period anterior to 15th of August, 1947, the right to do so can vest in the Province either under an agreement between the two Dominions or the two Provinces or on the basis of an award by an arbitral tribunal as contemplated by article 3 of the Rights, Property and Liabilities Order.
In either case it would amount to transfer of rights under the provi sions of the Order and would attract the operation of arti cle 12(2).
This argument is manifestly unsound and cannot be ac cepted.
If the right referred to by the learned Counsel means the fight to impose tax on agricultural income earned within its territory, the State of Pakistan did not acquire such right by transfer from the Province of Bengal.
It is a right inherent in sovereignty itself which the Dominion of Pakistan got under the Indian Independence Act.
Again if the right has been created by the Bengal Agricultural In come tax Act, the Province of East Bengal would certainly be entitled to avail itself of the provisions of that Act under section 18(3) of the Independence Act.
Apart from this, Dr. Sen Gupta has not referred us to any agreement between the two Dominions or the two Provinces or to the decision of any arbitral tribunal 44 under which the right in dispute in the present case was transferred to the Province of East Bengal.
This contention must therefore fail.
I have now to consider the other argument on this point advanced by the learned Counsel that the liability of the Province of Bengal in respect to the cause of action upon which the plaintiff 's suit had been rounded became a liabil ity of the Province of East Bengal under the provision of article 10(2) of the Rights, Property and Liabilities Order.
It is not disputed that if this contention succeeds, the plaintiff would be entitled to the benefit of clause (2) of article 12 of the Order.
Clause (2) of article 10 has to be read with clause (1) of that article and taking the two clauses together the provision of article 10(2) would stand thus : "Where immediately before the appointed day the Province of Bengal is subject to any liability in respect of an actionable wrong other than a breach of contract, the li ability shall (a) when the cause of action arose wholly within the territory which as from that day are the territories of the Province of East Bengal be a liability of that Province.
" If the allegations made by the plaintiff in the plaint are assumed to be correct, the Province of Bengal was liable to be restrained from proceeding to levy agricultural income tax upon the plaintiff which was illegal, as being imposed by a statute which so far as it affected the plain tiff was unconstitutional and void.
The question is whether this can be said to be a liability in respect of an action able wrong other than a breach of contract within the meaning of that expression occurring in article 10 set out above.
It may be noted here that the rights and liabilities arising out of contracts have been dealt with in articles 8 and 9 of the Order.
The High Court took the view that the expression "actionable wrong other than a breach contract" is synonymous with 'tort '.
It has held that the act com plained of cannot be a tortious act and 45 even if it is so, no action would lie upon it, it being an established proposition of law that the State is not answer able for any tortious acts of its officers done in the course of official duties imposed by a Statute.
It seems to me that the learned Judges have attached a narrow and some what restricted meaning to the words of the Article men tioned above and that the plain language of the provision read in the light of the context would demand and justify a wider and more liberal interpretation.
In my opinion, there can be an actionable wrong which does not arise out of a breach of contract and at the same time does not answer to the description of a 'tort ' as it is understood in English law; and if the plaintiff 's allegations are correct, it is an actionable wrong precisely of that type which we have in the present case.
The word "wrong" in ordinary legal language means and signifies "privation of right".
An act is wrongful it infringes the legal right of another, and "actionable" means nothing else than that it affords grounds for action in law.
Ordinarily, the word "injury" is used in the same sense of actionable wrong, while "damage in contrast with injury means loss or harm occurring in fact whether actionable as injury or not"(1).
In English law "tort" is a species of civil injury and so is a breach of contract; but it is not quite correct to say that the two together exhaust all forms of actionable wrongs known to English law.
It is true that a tort is often described as wrong independent of contract.
As a legal definition this description, as I shall show presently, is not quite accurate and unless taken with certain limitations is apt to be misleading.
It is well known that in England the principles of modern law of contract and tort emerged solely out of the intricacies of the old "Forms of Action '" under which they lay buried for ages.
The injuries which in modern law are described as torts were remedied in early time by certain writs, known as writs of trespass (1) Vide the observation of Viscount Simon in Crofter etc.
Company Ltd vs Vetch ; , 442. 46 and trespass on the case.
The latter was more elastic than the former and was capable of being adapted to new circum stances and to new types of injuries.
There was no clear line of demarcation in those days between contractual and tortious liability and in fact tile aCtiOn of "assumpsit" which was the method of enforcing simple contracts was a variety of action on the case and was made use of for recov ery of compensation from a party who failed to perform his agreement on the ground that such failure amounted to a wrong in the nature of deceit(1).
When the principles of substantive law gradually extri cated themselves from the entanglements of for realistic procedure, a distinction was drawn between liability for breach of contract and that for tort.
In a breach of con tract the right violated owes its origin to the agreement of the parties while in tort the right infringed is one created by tile general law of the land.
From about the middle of the 19th century the assumption current in England was that all civil causes of action must be rounded either on con tract or on tort and all injuries which were not breaches of contract would come under the category of torts.
This as sumption as Sir Frederick Pollock observes has no historical foundation to rest upon(2).
In 1852 the Common Law Proce dure Act was passed and a tort was described in the Act as "a wrong independent of contract".
It cannot be denied that this mode of expression became very common in legal par lance; but as more than one modern writer on the law of torts have pointed out, the words in such description would have to be interpreted in a particular way and with certain limitations; taken literally it would not be a correct statement of law.
It has been observed by Underhill in his "Law of Torts" that a description like this would be accurate in law if the word "wrong" is taken in the restricted and technical sense as equivalent to "violation of a right (1) Vide Pollock on Contract, 12th Edition, p. 111; Winfield on Tort pp, 3 4 (4th Edition).
(2) Vide Pollock 's Article on Tort, Encyc.
Vol.22, p. 307.
47 recognised and enforced by law by means of an action for damages".
Taken in this form, the definition though it gives no clue as to what constitutes a wrong, certainly does lay stress on the essential characteristic of a tort, viz., that the appropriate remedy f9r it is an action for damages(1).
It is really this characteristic that differen tiates a tort from other forms of civil injury or actionable wrong even though the latter are unconnected with any con tract.
There may be other remedies besides damages avail able to the plaintiff against a tortfeasor in the shape of restitution, injunction etc.
, but no "civil injury" as Salmond observes "can be classed as tort unless the appro priate remedy for it is an action for damages.
Such an action is an essential characteristic of every true tort.
"(2) Other remedies like injunction or restitution can be claimed by the plaintiff but it is solely by virtue of a right to damages that the wrong complained of can be regard ed as a tort.
By way of illustration the author points out that a public nuisance is not to be deemed a tort, because the civil remedy by way of injunction may be obtained at the suit of the Attorney General.
A refusal to perform a statu tory duty is not a tort if the remedy is by way of mandamus.
Nor would any wrong be regarded as a tort if the remedy is not an action for unliquidated damages but for a liquidated sum of money.
A breach of trust is certainly an actionable wrong independent of contract and the beneficiaries can claim compensation if the trustee has misappropriated trust property; but as the claim cannot be for unliquidated damages, it is not regarded as a tort(3).
According to Salmond, the reason for this exclusion is purely historical as a breach of trust or any other equitable obligation was considered to be within the special jurisdiction of equity courts.
It is interesting to observe that although the difference between equitable and common law jurisdiction is not existent at the present day, the old rule is still applied (1) Vide Underbill 's Law of Torts.
16th Edn., p. 4.
(2) Vide Salmond 's Law of Torts, 10th Edn., pp. 7 & 8.
(3) Vide Winfield 's Law of Tort, p. 11 48 to demarcate the boundary of the law of torts in English common law.
Thus tort is a civil injury other than a breach of contract which is capable of sustaining an action for unliq uidated damages in a court of law.
If the appropriate remedy is not a claim for unliquidated damages but for injunction or some other relief, it would not rank as a tort though all the same it would be an actionable wrong.
By way of illustration I may refer to the case of Halsey vs Brotherhood(1) which was decided by Sir George Jessel.
Both the plaintiff and defendant in this case were engineers and held patents for the manufacture of certain types of engines.
The plaintiff brought an action against the de fendant alleging that the latter had threatened to bring legal proceedings against several persons who were actual or intending purchasers of engines from the plaintiff assert ing that the engines manufactured by the plaintiff were infringements of the defendant 's patent.
There was a claim for damages and also for injunction.
It was held by Sir George Jessel that the plaintiff could not claim damages on the basis of slander of title, as he nowhere alleged that the defendant 's statements or representations were not bona fide.
But even though the statements had been made in good faith, the plaintiff would be entitled to an injunction against the defendant if he succeeded in proving that the latter 's allegations of infringement were not true.
As no proper case for injunction on this basis was made in the claim, the action was dismissed; but liberty was given to the plaintiff to bring an action in the proper form claiming an injunction to restrain the defendant from threatening the plaintiff 's customers.
This threat to customers was thus held to be an actionable wrong but as the remedy was injunc tion and not damages, it was not a tort in the legal sense of the term.
In the case before us the act of the Province of Bengal complained of by the plaintiff is not a tort according to the technical rules (1) 49 of English law, but is certainly an actionable wrong as it can be sued upon in a court of law and remedied in an effective manner.
The appropriate remedy for the wrong is not unliquidated damages which is essential in a tort but an injunction restraining the defendant from proceeding with the illegal assessment or from realising the amount assessed if assessment has actually taken place.
If, as the plaintiff alleges, the relevant provision of the Bengal Agricultural Income tax Act, under which the plaintiff is sought to be assessed, is illegal and ultra vires, the issuing of the notice by the Income tax Officer is certainly the first and the essential step in the commis sion of the wrongful act which furnishes a sufficient cause of action for the suit.
As this is not a case of tort, the principle of law, according to which a state is not liable to any damages for tortious acts of its servants, cannot be invoked as a bar to the suit.
A remedy by way of injunction can be claimed against a State or Province unless the act complained of amounts to an 'act of State ' in its strict sense and is not purported to be done in exercise of the powers conferred upon the Government by any municipal law.
As the avowed object of the Rights, Property and Liabilities Order is to distribute and adjust as far as possible the rights, properties and liabilities between the two Dominions which were to come into being under the Indian Independence Act, the language of the Order should be construed as liber ally as possible, and there is no warrant for putting an interpretation upon the words used more restricted than they would bear in English law.
It is argued that article 10(2) (a) does not apply to this case as the cause of action did not wholly arise within the territory of the Province of East Bengal.
The argument does not impress me at all.
The notice was issued by the Income tax Officer of Dacca which is in Pakistan territory though it was received by the plaintiff 's manager at Agarta la which was outside British India at that time.
In any event, the Province 50 of East Bengal cannot escape liability on this ground.
It would be jointly liable with the Province of West Bengal under article 10(2) (c) of the Rights, Property and Liabili ties Order.
In view of my decision on this point, the other question raised by Dr. Sen Gupta as to whether the defendant submit ted to the jurisdiction of the Alipore Court or not does not fall for determination.
The learned Attorney General, who intervened on behalf of the Union of India, put forward certain additional grounds in support of the order made by the learned Judges of the High Court.
One of the points raised by him is that section 65 of the Bengal Agricultural Income tax Act con stitutes a bar to the suit which, therefore, should not be allowed to 'continue.
The other material point is that the suit cannot but result in an infructuous decree, and conse quently there is no justification for allowing it to pro ceed.
It is pointed out that an Ordinance has been passed by the GovernorGeneral of Pakistan on the 13th of November, 1948, under which "no judgment, decree or order referred to in paragraph 3 of Article 4 of the Indian Independence (Legal Proceedings) Order, 1947, shall, in any way, affect the legislative or executive right or authority of the Central or any Provincial Government of Pakistan and where such authority or right has been at issue, the judgment, decree or order shall be invalid and inoperative".
The first point has been dealt with by my learned brother Patan jali Sastri J. in his judgment and I concur with him in holding that section 65 of the Bengal Agricultural Income tax Act has no application to the present case.
The second point, I must say, embarrassed me to some extent and if the effect of the Ordinance is, as has been stated by the learned Attorney General, a doubt may legitimately arise whether it would be worthwhile for the plaintiff to proceed with the suit and whether it would not be more to his advan tage to seek relief in the court of Dacca.
But as this point was not raised before the High Court and the question whether an Ordinance of this character could override the provisions of the 51 Orders passed by the Governor General of India under the Indian Independence Act has still to be decided, I refrain from expressing any opinion on this point.
In the result, the appeal, in my opinion, should be allowed and I concur in the order which has been made by my learned brother Patanjali Sastri, J. Appeal allowed.
Agent for the Appellant: R.R. Biswas.
Agent for the Respondent: P.K. Bose.
Agent for the Inervener: P. A, Mehta.
| The Income tax officer, Dacca, acting under the Bengal Agricultural Income tax Act, 1944, sent by registered post a notice to the Manager of an Estate belonging to the Tripu ra State but situated in Bengal, calling upon the latter to furnish a return of the agricultural income derived from the Estate during the previous year.
The notice was received by the Manager in the Tripura State.
The State, by its then Ruler, instituted a suit in June, 1946, against the Province of Bengal and the Income tax Officer, in the court of the Subordinate Judge of Dacca for a declaration that the said Act in so far as it purported to impose a liability to pay agricultural income tax on the plaintiff was ultra vires and void, and for a perpetual injunction to restrain the defend ants from taking any steps to assess the plaintiff.
The suit was subsequently transferred to the Court of the Subor dinate Judge of Alipore.
The partition of India under the Indian Independence Act took place on the 158h August 1947, and the 2 Province of East Bengal in which the Estate was situated, was substituted as a defendant in the place of the Province of Bengal on an application made by it, and in its written statement it contended that the court of Alipore which was situated in West Bengal had no jurisdiction to proceed with the suit.
The High Court of Calcutta, reversing the order of the Subordinate Judge of Alipore held that the provisions of the Indian Independence (Legal Proceedings) Order, 1947, and the Indian Independence (Rights, Property and Liabili ties)Order, 1947, did not apply to the case and, as the matter was accordingly governed by the rules of internation al law, the court of Alipore had no jurisdiction to proceed with the suit: Held per KANIA C.J., PATANJALI SASTRI, MUKHERJEA and CHANDRASEKHARA AIYAR JJ.
(FAZL ALI J. concurrinG) The suit was not one with respect to any property transferred to East Bengal by the Indian Independence (Rights, Property and Liabilities) Order, 1947, nor was it a suit in respect of any "rights" transferred by the said Order, inasmuch as the Province of East Bengal obtained the right to levy income tax not by means of any transfer under the said Order, but by virtue of sovereign rights which were preserved by section 18 (3) of the Indian Independence Act, 1947, and article 12 (2) of the said Order had no application to the case.
Held per KANIA C.J., PATANJALI SASTRI, MUKHERJEA AND CHANDRASEKHARA AIYAR J.J. (FAZL ALI J, dissenting.) (i) Since the object of the Indian Independence (Rights, Property and Liabilities) Order, 1947, was to provide for the initial distribution of rights, properties and liabili ties as between the two Dominions and their Provinces, a wide and liberal construction, as far as the language used would admit, should be placed upon the Order, so as to leave no gap or lacuna in relation to the matters sought to be provided for.
The words "liability in respect of an action able wrong" should not therefore be understood in the re stricted sense of liability for damages for completed acts, but so as to cover the liability to be restrained by injunc tion from completing what on the allegations in the plaint are illegal or unauthorised acts which have been commenced.
As the Province of Bengal was, on the: allegations in the plaint, liable to be restrained from proceeding with an illegal assessment, that liability was, accordingly, a liability in respect of "an actionable wrong other than breach of contract" with in the meaning of article 10 (2) (a) of the above said Order; and, as the cause of action arose wholly in Dacca within the Province of East Bengal, that liability passed to the province of East Bengal under article 10 (2) (a), the latter must be deemed to be substituted as a party to the suit and the suit must continue in the court of the Subordinate Judge of Alipore, under Art.4 of the Indian Independence (Legal Proceedings) Order, 1947.
(ii) Assuming that the cause of action did not wholly arise 3 in Decca, article 10 (9.) (c) would apply and the Province of East Bengal would still be liable, though jointly with the Province of West Bengal.
(iii) As the suit was not one "to set aside or modify any assessment made under the Act", section 65 of the Bengal Agricultural Income tax Act, 1944, had no application and the suit was therefore one in respect of an "actionable" wrong within the moaning of article 10 (2) (a).
Per FAZL ALI J.
The words "liability in respect of an actionable wrong other than breach of contract" in article 10 of the Indian Independence (Rights, Property and Liabili ties) order 1947, refer to liability capable of being ascer tained in terms of money such as liability for damages for tort and not liability in any abstract or academic sense.
Even if a meaning, as wide ' as they can bear in a legal context, is given to the words "actionable wrong" and "liability" two elements are necessary to constitute an actionable wrong, namely, (i) an act or omission amounting to an infringement of a legal right of a person or breach of duty towards him, and (ii) damage or harm resulting there from.
The mere issuing of a notice under section 4 of the Bengal Agricultural Income tax Act, 1944, by the Income tax Officer is not an actionable wrong because no right known to law is infringed thereby and no action for damages can be main tained in respect of such an act, even assuming that the Income tax Officer had exceeded his powers or acted under an invalid provision of law.
No "liability for an action able wrong" was thus involved in the suit and no liability in respect of such a wrong could therefore be said to have been transferred to the Province of East Bengal within the meaning of article 10 (2.) of the said Order so as to entitle the plaintiff to continue the suit against the Province of East Bengal under article 10 (2).
For the purpose of understanding the full scope of section 65 of the Bengal Agricultural Income tax Act, 1944 it is necessary also to read the latter part which provides that no suit or other proceeding shall lie against any officer of the Crown for anything in good faith done or intended to be done under the Act.
" The latter part of the section clearly excludes the jurisdiction of the courts to prevent the Income tax Officer from proceeding with an assessment which has been started and the section must on a fair construction be held to bar all suits in connection with such assessment whether against the State or an Income tax Officer of the State.
If, therefore, no suit or action lies, there cab be no liability for an actionable wrong.
[The nature of actionable wrongs and torts discussed.] Judgment of the Calcutta High Court reversed.
| The question for decision in this appeal was whether a single transaction of sale of land measuring about three quarters of an acre was an adventure in the nature of trade so as to make it liable to income tax.
The assessee appellant, an Engineer by profession, was engaged in various business activities including that of an engineering firm but, admittedly, had no dealing, except the one in question, in respect of land.
In 1946 be entered into an agreement with the Hindusthan Co operative Insurance Society Ltd. for the purchase of the land in question and paid a sum of Rs. 32,748 in two instalments, being 25% of the estimated total price of the land.
As his construction activities declined and the Government, who had requisitioned the land, were not immediately releasing it, the appellant sold his rights under the agreement to a third party in 1947 and thereby received a sum of Rs. 74,000 odd in excess of the amount paid by him to the Society.
The land, however, was not released by the Government until 1949.
The Income tax Officer held that the transaction was an adventure in the nature of trade and the said sum was a profit therefrom, taxable under section 10 of the Incometax Act, and included it in the assessable income.
The Appellate Assistant Commissioner, in appeal, held that the assessee, a man of means, had intended to purchase the land for his own use, and that the motive of profit was entirely absent when the purchase was made and that as it was a case of appreciation of capital, he was liable to pay Capital Gains tax.
The Appellate Tribunal on appeal by the Department, reversed the findings and the decision of the Appellate Assistant Commissioner and affirmed that of the Income tax Officer.
After the assessee had obtained from this Court special leave to appeal, he made an application to the High Court under section 66(2) of the Income tax Act, which that Court dismissed as being barred by limitation.
Held, (per Bhagwati and Sinha, JJ., Kapur, J., dissenting) that admittedly the transaction in question being a single instance of its kind, and not in the line of the business of the assessee, it was for the Department to prove that the dominant intention of the appellant, when he entered into the agreement with the Society, was to embark on a venture in the nature of 847 trade as distinguished from a capital investment, and they having failed to do so, the appeal must succeed.
Commissioners of Inland Revenue vs Reinhold, , applied.
There could be no doubt, as held by the Court, that the question for decision involved in such cases was one of law or a mixed question of fact and law.
G. Venkataswami Naidu and Co. vs The Commissioner of I come tax; , , referred to and distinguished.
The line of demarcation, however, between an isolated trans action and a venture in the nature of trade was very thin and each case had to be decided on the total impression all its facts and circumstances made on the mind of the judge.
Case law reviewed.
KAPUR, J. Even though the powers of this Court under article I36 of the Constitution were very wide, they had to be exercised within the limits imposed by its own decisions and one such limitation was that this Court would not ordinarily interfere on questions of fact.
Since the question involved in the instant case was a mixed question of law and fact, the facts should properly be found by the body whose exclusive function under the Income tax Act was to do so.
G. Venkataswami Naidu & Co. vs The Commissioner of Income tax; , and Dhakeswari Cotton Mills vs The Commissioner of Income tax, [1955] i S.C.R. 94I, referred to.
Nor could an assessee be allowed to by pass the procedure prescribed by sections 66(1), 66(2) of the Income tax Act to have question of law determined.
Since, however, the Appellate Tribunal had, in the instant case, failed to consider certain essential facts, the case should be remitted to it for a proper decision in the light of the observations made by this Court.
| The appellant filed a suit against the respondent for a decree for Rs. 8339/ on the ground that the said amount had been illegally recovered from it under the Madras General Sales Tax Act, 1939, for the years 1952 54.
The respondent 753 resisted the claim on the ground that the suit was incompetent under section I 8 A of the Act.
On the merits, it was contended that the transactions in regard to groundnuts on which sales tax was levied and recovered from the appellant were transactions of purchase and not of sale, and it was urged that the appellant having voluntarily made the return and paid the taxes, it was not open to it to contend that the transactions were not taxable under the Act.
Besides it was argued that the appellant had not preferred an appeal either to the Deputy Commissioner of Commercial Taxes or to the Sales Tax Appellate Tribunal against the assessments and bence the suit was not maintainable.
The suit was decreed by the trial court but the High Court reversed that decision and dismissed the suit on the ground that in view of the provisions of section 18 A of the Act, the suit was incompetent.
Alternatively.
it was found on merits that the claim made by the appellant was not justified.
The appellant came to this Court by special leave.
Held, that section 18 A excludes the jurisdiction of Civil Courts to set aside or modify any assessment made under the Act.
There is no express provision in the Act under which the suit can be said to have been filed and it falls under the prohibition contained in this section.
The prohibition is express and unambiguous and no suit can be entertained by a Civil Court, if by instituting the suit.
the plaintiff wants to set aside or modify any assessment made under the Act.
Where an order of assessment has been made by an appropriate authority under the provisions of the Act, any challenge to its correctness and any attempt either to have it set aside or modified must be made before the appellate or revisional forum prescribed by the relevant provisions of the Act.
A suit instituted for that purpose is barred under section 18 A. When the appellant made its voluntary returns and paid the tax in advance to be adjusted at the end of the year from time to time, it treated the groundnut transactions as taxable.
The appellant having conceded the taxable character of the transactions in question, no occasion arose for the taxing authorities to consider whether the said transactions could be taxed or not.
Even after the impugned orders of assessment were made, the appellant did not choose to file an appeal and urge before the appellate authority that.
the transactions were sale transactions and as such were outside the purview of section 5A (2).
If an order made by a taxing authority under the relevant provisions of the Act in a case where the taxable character of a transaction is disputed, is final and cannot be challenged in a civil court by a separate suit, the position is just 754 the same where the taxable character of the transactions is not even disputed by the dealer who accepts the order for the purposes of the Act and then institutes a suit to set aside or modify it.
The expression "any assessment made under this Act" is wide enough to cover all assessments made by the appropriate authorities under this Act whether the said assessments arc correct or not.
It is the activity of the assessing officer acting as such officer which is intended to be projected and as soon as it is shown that exercising his jurisdiction and authority under this Act, an assessing officer has made an order of assessment, that clearly falls within the scope of section 18 A.
The fact that the order passed by the assessing authority may in fact be incorrect or wrong does not affect the position that in law the said order has been passed by an appropriate authority and the assessment made by it must be treated as made under this Act.
Whether or not an assessment has been made under this Act will not depend on the correctness or accuracy of the order passed by the assessing authority.
There is a general presumption that there must be a remedy in the ordinary civil courts to a citizen claiming that an amount has been recovered from him illegally and such a remedy could be held to be barred only on very clear and unmistakable indications to the contrary.
The exclusion of jurisdiction of civil courts to entertain civil causes will not be assumed unless the relevant statute contains an express provision to the effect or leads to a necessary and inevitable implication of that nature.
The mere fact that a special statute provides for certain remedies may not by itself necessarily exclude the jurisdiction of the civil courts to deal with a case brought before it in respect of some of the matters covered by the said statute.
There is no justification for the assumption that if a decision has been made by a taxing authority under the provisions of a taxing statute, its validity can be challenged by a suit on the ground that it is incorrect on merits and as such it can be claimed that the provisions of the said statute have not been complied with.
Non compliance with the provisions of the statute must be non compliance with such fundamental provisions of the statute as would make the entire proceedings before the appropriate authority illegal and without jurisdiction.
If an appropriate authority has acted in violation of the fundamental principles of judicial procedure, that may also tend to make the proceedings illegal and void and that infirmily may affect the validity of the order passed by the authority in question.
It is cases of this character where the 755 defect or infirmity in the order goes to the root of the order and makes it in law invalid and void that these observations may perhaps be invoked in support of the plea that the civil court can exercise its jurisdiction notwithstanding a provision to the contrary contained in the relevant statute.
Secretary of State vs Mask & Co., (1940) 67 I.A. 222 and Reliegh Investment Co. Ltd. vs Governor General in 'Council, (1947) 74 I.A. 50, relied on.
State of Andhra Pradesh vs Sri Krishna Coconut Co. (1960) 1 Andhra W.R. 279, overruled.
| On August 5, 1947, the appellant booked two consigments by the N. W. Railway from Gujranwala, now in Pakistan, to jagadhari.
The consignments were not delivered and, on January 22, 1948, the appellant gave a notice to the railway under section 80 of the Code of Civil Procedure claiming the value of the goods by way of compensation.
It was stated in the notice that the cause of action had arisen on August 21 and 30, 1947, when delivery was refused.
On December 1, 1948, the railway informed the appellant that the consignments were still lying at Gujranwala and could be despatched on the appellant obtaining the necessary permits from the Pakistan authorities.
On December 13, 1949, the appellant bro ught a suit for compensation for non delivery of the goods.
The respondent contended that the suit was beyond time as it was not filed within one year from the time "when the goods ought to be delivered" as prescribed by article 31 of the Limitation Act.
Held, that the suit was barred by time.
The words "when the goods ought to be delivered" in article 31 had to be given their strict grammatical meaning and equitable consi derations were out of place.
Under article 31 limitation started on the expiry of the time fixed between the parties for delivery of the goods and in the absence of any such agreement the limitation started after reasonable time had elapsed on the expiry of which the delivery ought to have been made.
The reasonable time was to be determined according to the circumstances of each case.
The view taken by some High Courts that time began to run from the date when the railway finally refused to deliver was not correct ; where the legislature intended that time should run from ' the date of refusal it had used appropriate words in that connection.
The starting point of limitation could not generally be affected by the conduct of the parties or by the correspondence between them, unless it contained an acknowledgment of liability by the carrier or showed something affecting the reasonable time In the present case delivery ought to have been made within five or six months, as is also indicated by the s, 80 notice given 71 by the appellant and the suit was filed more than a year after that expiry of that time.
Dominion of India vs Firm Aminchand Bholanath (F. B.) decided by Punjab High Court on May 2, 1956, approved.
Jugal Kishore vs The Great Indian Peninsular Rat (1923) I. L. R. 45 All.
43 ; Bengal and North Western Railway Company vs Maharajadhiraj Kameshwar Singh Bahadur, (1933) I. L. R. 12 Pat. 67, 77 ; Jai Narain vs The Governor General of India, A. I. R. ; and Governor General in Council vs section G. Ahmed, A. 1.
R. , disapproved.
Nagendranath vs Suresh, A. 1.
R. and General Accident Fire and Life Insurance Corporation Limited vs Janmahomed Abdul Rahim, A. I. R. , referred to.
| N owned agricultural lands in Bahawalpur State now forming part of Pakistan and also owned some property in Punjab in India.
He died in June 1947 while on a visit to India in the normal course of business, leaving behind three sons, the respondents in the appeal.
On the partition of India, the land in Pakistan originally owned by N and after his death by his sons, had to be abandoned.
After migrating to India, the three respondents filed separate claims as displaced persons and were allotted an area of land in Punjab.
Thereafter a complaint was filed before the Managing Officer that these respondents had received double allotments.
The Managing Officer, held this allegation was not substantiated but came to the conclusion that N, although he had died before the partition, must be treated as a displaced land holder for the purpose of allotment of land as his name continued to be shown in the Jamabandi as the owner of the abandoned land in Pakistan.
In consequence of this finding a large portion of the land allotted to the three respondents was cancelled by an order of the Managing Officer dated September 18, 1961.
Appeals made by the respondents to the Assistant Settlement Commissioner as well as revision petitions before the Chief Settlement Commissioner Punjab, were dismissed.
In dismissing the revision petitions, the Chief Settlement Commissioner relied on para.
17 of "Tarlok Singh 's Land Resettlement Manual" 1952 edition Page 180, to the effect that "Even where a displaced land holder in whose name the land stands in the records received from West Punjab has died, the allotment is made in the name of the deceased".
He therefore upheld the view 4 at the land could only be allotted in the name of N.
The respondents then filed a writ petition against the orders of the Chief Settlement Commissioner which was allowed.
On appeal to this Court, HELD:Dismissing the appeal, The definition of a "displaced person" in para 2(e) of the Notification of July 8, 1949, issued by the Custodian in accordance with provisions of the East Punjab Evacuees (Administration of Property) Act 1947, and the Rules made thereunder, or of a "Refugee" in Section 2(d) of the East Punjab Refugees (Registration of Land Claims) Act 12 of 656 1948, show that these expressions have been used in the relevant enactments with reference to a person who has migrated to India as a result of disturbances or fear of disturbances or the partition of the country.
Therefore if a person had died before the disturbances took place or he had never migrated to India as a result of the disturbances and he died before such migration, he could not come within the meaning of the expression "displaced person" or the word "refugee" under the relevant statutory enactments.
N died in June, 1947, long before the partition of the country and he did not abandon or was not made to abandon his land in Bahawalpur on account of the civil disturbances or the fear of such disturbances or the partition of the country.
[660 A D] There was no force in the contention that even though N never became a refugee or a displaced land holder, the allotment had to be made in his name because he was shown in the revenue records received from West Punjab as the owner of the land and there had been no mutation of the names of the respondents in the revenue records.
The rule in para 17 of "Tarlok Singh 's Manual" consistently with the statutory enactments, would be applicable only to such persons who were land holders 'it the time of their becoming displaced persons or refugees and who died afterwards before allotment could be made in their favour.
It does not apply to a person like N who was not a displaced land holder at the time of his death.
[661 D F]
| The respondent firm was assessed to income tax for the assessment years 1947 48, 1948 49 and 1949 50 under section 23(3).
The Income tax Officer renewed the registration of the firm under section 26A of the Income tax Act and passed an order under section 23(6) allocating the shares of the various partners.
The respondent preferred appeals against the orders of assessment to the Appellate Assistant Commissioner.
Oil November 4, 1950, the Appellate Assistant Commissioner partly accepted the appeals in respect of the assessment years 1947 48 and 1948 49 but the appeal in respect of the assessment year 1949 50 was still pending.
Meanwhile after issuing notice to the parties and hearing them the Commissioner, acting under section 33B(1), passed an order on June 5, 1952, cancelling the registration granted under section 26A on the ground that one of the partners of the firm was a minor, and directed the Income tax Officer to make fresh assessments for the three years.
The respondent preferred appeals to the Appellate Tribunal which were allowed.
On the application of the appellant the Tribunal referred, under section 66(1) of the Act, three questions to the High Court of Bombay.
In regard to the assessment years 1947 48 and 1948 49 the High Court held that the orders of the Income tax Officer granting registration had merged in the appellate orders of the Assistant Appellate Commissioner and the revisional power of the Commissioner under section 33B(1) could not be exercised in respect of them.
With regard to the renewal of registration for the year 1949 50 the High Court held that the Commissioner could not exercise his revisional power as the propriety of this order was open to consideration by the Appellate Assistant Commissioner in the respondent 's appeal pending before him.
The appellant obtained special leave and appealed: Held, that the Commissioner had the authority under section 33B(1) to set aside the orders of registration made by the Income tax Officer.
An order of the Income tax Officer granting registration was not appealable before the Appellate Assistant Commissioner.
Such an order could be cancelled by the Commissioner in exercise of his revisional powers under section 33B(1) ; but it could not be cancelled by the Appellate Assistant Commissioner even in the exercise of his appellate jurisdiction when dealing with an appeal by an assessee.
The theory that the order of a tribunal merges in the order of the appellate authority did not apply to the order of registration passed by the Incometax Officer.
Commissioner of Income tax, Bombay North vs Tejaji Farasram Kharawala, , referred to.
Durgabati and Narmadabala Gupta vs Commissioner of Income tax, , disapproved.
But the Commissioner has no power while exercising his revisional jurisdiction under section 33B(1) of the Act to set aside the assessment orders.
The Commissioner, in the present case, did 715 not really intend to set aside the assessment orders but merely to direct the Income tax Officer to make suitable consequential amendments in regard to the machinery or procedure.
to be adopted to recover the tax payable by the respondent.
The registration or non registration of a firm does not at all affect the computation of taxable income; it merely governs the procedure to be adopted in recovering the tax found due.
Shapurji Pallonji vs Commissioner of Income tax, Bombay, , referred to.
| There was divergence between the appellant 's date of birth as given at the time of his appointment as Judge of the Calcutta High Court and as found in the records of the public examinations at which he had appeared.
The Union Home Minister after correspondence with the parties concerned including the Chief Justice of India and the appellant determined the appellants date of birth to be December 27, 1901 as found in the records of the appellant 's Matriculation Examination.
The President, by order passed on May 15, 1961, approved the decision and the consequent order that the appellant be asked to emit his office on December 26, 1961 when be would reach the age of superannuation.
The Punjab High Court dismissed the appellant 's writ petition challenging the order and the Supreme Court dismissed in limine the petition for special leave to appeal.
Pursuant to the orders of the Union Government the Chief Justiceof the Calcutta High Court asked the appellant to demit his office on December 26, 1961, and after that date did not allot him any work.
The appellant thereupon filed a writ petition before the Calcutta High Court under article 226 of the Constitution which was dismissed.
The Supreme Court granted him special leave to appeal.
The appellant in his appeal contended that the age of a Judge given by him at the time of appointment once accepted by Government, could not again be called in question and in any case could not be determined again by the Government by Executive order.
The complexion of the controversy the passing of the Constitution by adding cl.
(3) to article 217 provided that any dispute as to the ago of a Judge of a High Court would be decided exclusively and finally by the president of India in consultation with the chief justice of India.
The Amendment Act also provided that the provision shall be deemed always to have been in the Constitution.
The parties agreed that after the retrospective amendment the main question for consideration was whether the order of the Union Government determining the appellant 's age and date of superannuation was an order which could be deemed to have been passed under article 217(3).
HELD : (i) If a dispute is raised about the age of a sitting Judge then it is desirable that the matter should be decided by the President.
Whether the dispute is genuine or not is to be considered by the President in consultation with the Chief Justice of India.
But it is certainly in the interests of the Judge himself, as much as in the interests of the purity and 54 reputation of the administration of justice that the dispute should be settled.
it could not be held that the age of a Judge given by him at the time of ,,appointment could never again be called in question.
(65 E F] (ii)The Chief Justice of the Calcutta High Court was justified in not allotting any work to the appellant after December 26, 1961, as any judgments delivered by him after the date would have been open to question as to their validity.
[66 B C] (iii)The judgment of the Punjab High Court dismissing appellant 's ,writ petition did not operate as res judicata as it was not on merits.
[71 A] (iv)Article 217(3) gave to the President exclusive power to determine ,the age of a sitting Judge and divested the courts of jurisdiction in this regard.
The procedure to be adopted was in the discretion of the President ,but the provision to formally consult the Chief Justice of India was man Also implicit in the Article, was the requirement that the Judge concerned should have a reasonable opportunity to give his version and 'Produce his evidence.
[64 B D] (v)The provision having been expressly made retrospective the appeal had to be decided on the basis that the order passed by the President in the appellant 's case could be treated as a decision under article 217(3), if, on merits, such a conclusion was justified.
[65 A] (vi)The order of the Union Government passed on May 15, 1961 did not satisfy the requirements of article 217 (3) and could not be held to be ,an order passed under the provisions of that Article.
The decision had been taken by the Home Minister and that plainly was not a decision of the President.
The offer to allow the matter to be decided by arbitration, and reopening of the matter after the decision had been taken, cannot be ,easily assimilated to the requirements of the Article.
The informality of the consultation with the Chief Justice of India also did not squarely fit, in ,with the formal consultation which is mandatory.
[67 B C, G H; 68 A] Srinivas Mail Bairoltva vs King Emperor, I.L.R. 26 Pat. 460 and Alexander Brogden and others vs The Directors of the Metropolitan Rail.way Company , referred to.
(vii)The order was also not a proper order under article 217(3) because the requirements of natural justice had not been satisfied inasmuch as the President did not have before him when he made the decision the evidence of the appellant.
It is true that the appellant had refused to produce the evidence on the ground that the Executive had no jurisdiction to call into question and determine his age.
This contention of the appellant when raised was fully justified as such a dispute in the legal situation which them existed had normally to be determined by judicial proceeding before the High Courts of competent jurisdiction, and therefore his failure or refusal to produce his evidence could not be fairly pressed into.
service against 'him.
[69 D F; 70 B] The Court held that the appellant was entitled to a decision by the President of India as to his age under article 217(3) and passed orders in terms agreed to by both parties.
[71 B F]
| The appellant was a chartered accountant and a partner of a firm of auditors.
This firm acted as auditors of two companies, among others, registered under the Indian , the entirety of the shares of one of which are owned by the Union Government and the entirety of the shares of the other by the West Bengal Government.
The appellant was declared elected to the Lok Sabha.
His election was challenged by two voters of the constituency by means of an election petition.
The main ground raised was that the appellant was at the relevant period the holder of an office of profit under the Government of India as well as the State Government and hence he was disqualified from standing for election under article 102(1)(a) of the Constitution.
The Election Tribunal accepted this contention and declared the election of the appellant void.
The appellant filed an appeal before the High Court in which he did not succeed.
The present appeal was by virtue of a certificate granted by the High Court under article 133(1)(c) of the Constitution.
It was contended before this Court that on a true construction of the expression "under the Government of India or the Government of any State" occurring in cl.
(a) of article 102 (I.) of the Constitution the appellant could not be said to hold an office of profit under the Government of India or the Government of West Bengal.
It was argued that the various tests, namely, who has the power to appoint, who has the right to remove, who pays the remuneration, what are the functions and who exercises the control should all co exist and each must show subordination to the Government.
The fulfillment of some of the tests alone, would not be sufficient to determine that a person holds an office of profit under the Government.
It was contented on behalf of the respondent that the tests were not cumulative and that the court should look to the substance rather than to the form.
Held : (i)For holding an office of profit, under the Government a person need not be in the service of the Government and there need not be any relationship of master and servant between them.
312 (ii)The examination of the various provisions of the Com panies Act, 1956 (sections 224, 227, 618 and 619) showed that so far as the two companies in question were concerned the appellant was appointed as an auditor by the Central Government, was removable by the Central Government, that the Comptroller and the Auditor General of India exercised full control over him and that his remuneration was fixed by the Central Government under sub section
(8) of section 224 of the though it was paid by the companies concerned.
(iii)Where the several elements, the power to appoint, the power to dismiss, the power to control and give directions as to the manner in which the duties of the office are to be performed and the power to determine the question of remuneration are all present in a given case then the officer in question holds the office under the authority so empowered.
It is not necessary that all these must co exist nor is the fact that the source from which the remuneration is paid is not from public revenue decisive.
(iv)The appellant held an office of profit under the Government of India within the meaning of article 102(1)(a) of the Constitution of India and as such he was disqualified for being chosen as a member of Parliament.
Maulana Abdul Shakur vs Rikhab Chand, [1958] S.C.R. 387, distinguished.
Ramappa vs Sangappa, ; , referred to.
|
Civil Appeal No. 59 of 1952.
Appeal from the Judgment and Order dated 3rd January, 1952, of the High Court of Judicature at Patna (Ramaswami and Sarjoo Prosad JJ).
in an application under article 226 of the Constitution registered as Miscellaneous Judicial Case No. 204 of 1950.
Original Petition No. 20 of 1952 under article 32 of the Constitution was also heard along with this appea.
P. R. Das (B. Sen, with him) for the appellants.
M. C. Setalvad, Attorney General for India, and Mahabir Prasad, Advocate General of Bihar (G. N. Joshi, with them) for the respondents.
February 20.
The court delivered judgment as follows : PATANJALI SASTRI C. J. I concur in the judgment which my learned brother Mukherjea is about to deliver, but I wish to add a few words in view of the important constitutional issue involved.
The facts are simple.
The appellants obtained a settlement of about 200 bikhas of land in a village known as Sathi Farm in Bettiah Estate, in Bihar, 1131 then and ever since in the management of the Court of Wards on behalf of the disqualified proprietress who is the second respondent in this appeal.
The lands were settled at the prevailing rate of rent but the salami or premium payable was fixed at half the usual rate as a concession to the appellants who are said to be distant relations of the proprietress.
The appellants paid the salami and entered into possession of the lands on the 2nd November, 1946, and ' have since been paying the rents regularly.
On the 13th June, 1950, the Bihar Legislature passed an Act called the Sathi Lands (Restoration) Act, 1950.
The genesis of this legislation is thus explained in the counter affidavit filed on behalf of the State of Bihar, the first respondent herein.
Report against the settlement of these lands with the petitioners as well as some other lands to Sri Prajapati Mishra and the unlawful manner in which these settlements were brought about, was carried to the Working Committee of the Indian National Congress, which body, after making such enquiry as it thought fit, came to the conclusion that the settlement of these lands with the petitioners was contrary to the provisions of law and public policy and recommended that steps should be to taken by the State of Bihar to have these lands restored to the Bettiah Estate.
In pursuance thereof a request was made to the petitioners and to the said Prajapati Mishra to return the lands to Bettiah Estate.
While Sri Prajapati Mishra returned the land settled with him, the petitioners refused to do so.
The Statement of Objects and Reasons of the Sathi Lands (Restoration) Bill runs thus: "As it has been held that the settlement of Sathi lands in the District of Champaran under the Court of Wards with Sri Ram Prasad Narayan Sahi and Shri Ram Rekha Prasad Narayan Sahi is contrary to the provisions of the law and as Sri Ram Prasad Narayan Sahi and Sri Ram Rekha Narayan Sahi have refused to return the lands to the Bettiah Estate, Government 1132 have decided to enact a law to restore these lands to the Bettiah Estate." The impugned Act consists of three sections.
Section 2(1) declares that "notwithstanding anything contained in any law for the time being in force" ', the settlement obtained by the appellants is "null and void", and that "no party to the settlement or his successor in interest shall be deemed to have acquired any right or incurred any liability thereunder".
Sub section (2) provides that the appellants and their successors in interest "shall quit possession of the said land from the date of commencement of this Act and if they fail to do so, the Collector of Champaran shall eject them and restore the lands to the possession of the Bettiah Wards Estate".
Subsection (3) provides for the refund of the amount of salami money and the cost of improvement, if any, to the lessees by the estate on restoration to it of the lands in question.
In the "case" lodged in this court for the State of Bihar, the legislation is sought to be justified and its validity maintained on the following grounds: " It is well settled that a Legislature with plenary powers so long as it enacts law, within the ambit of its powers, is competent to enact a law which may be applicable generally to society or to an individual or a class of individuals only .
It is submitted that grants of the lands belonging to the Bettiah Estate made by the Court of Wards were of doubtful validity; hence they have been dealt with by the impugned Act .
No evidence has been adduced by the appellants, except a bare allegation, which has not been substantiated, that about 2000 acres of land were settled to show that persons in similar circumstances with whom similar settlements were made, were treated differently.
It is submitted that in the context the impugned Act, has a reasonable basis of classification.
" The decision of the majority of this Court in Chiran vs The Union of India(1) is relied on in suport of these contentions, In that case, however, the (1) ; , 1133 majority felt justified in upholding the legislation, though it adversely affected the rights and interest of the shareholders of a particular joint stock company, because the mismanagement of the company 's affairs prejudicially affected the production of an essential commodity and caused serious unemployment amongst a section of the community.
Mr. Justice Das and I took the 'view that legislation directed against a particular named person or corporation was obviously discriminatory and could not constitutionally be justified even if such legislation resulted in some benefit to the public.
In a system of government by political parties, I was apprehensive of the danger inherent in special enactments which deprive particular named persons of their liberty or property because the Legislature thinks them guilty of misconduct, and I said in my dissenting opinion: "Legislation based upon mismanagement or other misconduct as the differentia and made applicable to a specified individual or corporate body is not far removed from the notorious parliamentary procedure formerly employed in Britain of punishing individual delinquents by passing bills of attainder, and should not, I think receive judicial encouragement.
" My apprehensions have come true.
Recently we had before us a case from Hyderabad (Civil Appeal ,No. 63 of 1952Ameerunnissa Begum vs Mahboob Begum) ' where the duly constituted legislative authority of that State intervened in a succession dispute between two sets of rival claimants to the estate of a deceased person and " dismissed " the claim of the one and adjudged the Property to the other by making a special " law " to that effect.
And now comes this case from Bihar of an essentially similar type.
The appellants assert title to certain lands in Bettiah Estate under a settlement which they claim to have lawfully obtained from the Court of Wards, while it is now alleged on behalf of the Estate that the settlement was not for the benefit of the Estate and was contrary to law, as the Court of Wards did not then " apply its (1) Since reported as ; 147 1134 mind " to that question.
This is purely a dispute between private parties and a matter for determination by duly constituted courts to which is entrusted, in every free and civilised society, the important function of adjudicating on disputed legal rights, after observing the well established procedural safeguards which include the right to be heard, the right to produce witnesses and so forth.
This is the protection which the law guarantees equally to all persons, and our Constitution prohibits by article 14 every State from denying such protection to anyone.
The appellants before us have been denied this protection.
A political Organization of the party in power decides after making such enquiry as it thought fit, that the settlement in question was " contrary to the provisions of law and public policy " and the State Legislature, basing itself on such decision, purports to declare the settlement " null and void " and directs the eviction of the appellants and the restoration of the lands to the Estate.
The reasons given for this extraordinary procedure are indeed remarkable for their disturbing implications.
It is said that "there was agitation amongst the tenants of the locality and opposition on the part of persons living in the locality against the appellants ' possession of the lands which led to breach of the peace and institution of criminal cases ".
Whenever, then, a section of the people in a locality, in 'assertion of an adverse claim, disturb a person in the quiet enjoyment of his property, the Bihar Government would seem to think that it is not necessary for the police to step in to protect him in his enjoyment until he is evicted in due course of law, but the Legislature could intervene by making a " law " to oust the person from his possession.
Legislation such as we have now before us is calculated to drain the vitality from the rule of law which our Constitution so unmistakably proclaims, and it is to be hoped that the democratic process in this country will not function along these lines.
MUKHERJEA J.
This appeal, which has come before us on a certificate granted by the High Court of 1135 Patna under article 132 (1) of the Constitution, is directed against a judgment of a Division Bench of that court, dated 3rd January, 1952, by which the learned Judges dismissed a petition of the appellants under article 226 of the Constitution.
The prayer in the petition was for a writ in the nature of mandamus, directing the opposite party, not to take any action, under an Act passed by the Bihar Legislative Assembly in 1950 and known as The Sathi Lands (Restoration) Act which was challenged as void and unconstitutional.
To appreciate the points in controversy between the parties to the proceeding, it may be necessary to narrate the material facts briefly.
Maharani Janki Koer, the respondent No. 2 in the appeal, is the present proprietress of an extensive Estate in Bihar known by the name of Bettiah Raj, which is held and managed on her behalf by the Court of Wards, Bihar, constituted under Bengal Act IX of 1879.
On 19th July, 1946, the appellants, who are two brothers and are distantly related to the Maharani, made a representation to the Government of Bihar through the Manager of the Estate, praying for settlement in raiyati right, of 200 bighas of land preferably in Sathi farm or Materia farm along with a certain quantity of waste lands.
On 20th July, 1946, the then Manager of the Wards Estate wrote a letter to the Collector of Champaran recommending that the applicants might be given settlement of the lands as prayed for, without payment of any selami.
The Collector, however, did not.
agree to this proposal, nor did the Commissioner of the Tirhut Division, and the matter then came up for consideration before the Board of Revenue which recommended that settlement might be made with the applicants provided they were agreeable to pay selami at half the usual rates.
On 14th October, 1946, the recommendation of the Revenue Board was accepted by the Provincial Government and six days later the Court of Wards accepted a cheque for Rs. 5,000 from one of the lessees, towards payment of the selami money and rent for the year 1354 F.S.
On the 2nd November, 1946, possession 1136 of the lands was given to the appellants and on the 18th of November following, the Manager of the Court of Wards recorded a formal order fixing the selami of the land at Rs. 3,988 annas odd and rent at Rs. 797 annas odd per year.
On the same day, a Hisab Bandobasti form, which is the usual form employed in the Estate for raiyati settlements, was signed by the Circle Officer on behalf of the Court of Wards and by one of the lessees for himself as well as the constituted attorney of the other lessees.
It is not disputed that the lessees continued to possess the lands since then on payment of the stipulated rent.
On the 3rd June, 1950, the Bihar Legislative Assembly passed an Act known as The Sathi Lands (Restoration) Act which received the assent of the Governor on the 13th June, 1950.
The object of the Act, as stated in the preamble, is to provide for restoration of certain lands belonging to the Bettiah Wards Estate which were settled contrary to the provisions of law in favour of certain individuals.
Section 2, which is the only material section in the Act, enacts in the first sub section that the settlement of Sathi lands (described in the schedule to the Act) on behalf of the Bettiah Court of Wards Estate with the appellants, as per order of the Manager of the Estate dated the 18th November, 1946, is declared null and void and no party to the settlement ,or his successor in interest shall be deemed to have acquired any right or incur any liability under the same.
The second sub section embodies a direction to the effect that the said lessees and their successor in interest shall quit possession of the lands from the date of the commencement of the Act and if they fail to do so, the Collector of Champaran shall eject them and restore the lands to the possession of the Bettiah Estate.
The third and the last sub section provides that the Bettiah Wards Estate shall on restoration to it of the lands pay to the lessees the selami money paid by them and also such amount as might have been spent by them in making improvements on the lands prior to the commencement of the Act.
1137 In substance, therefore, the Act declared the lease granted by the Bettiah Wards Estate to the appellants on the 18th November, 1946, to be illegal and inoperative and prescribed the mode in which this declaration was to be given effect to and the lessees evicted from the lands.
On the 28th August, 1950, the appellants filed the petition, out of which this appeal arises, under article 226 of the Constitution in the High Court of Patna, challenging the validity of The Sathi Lands Act and praying for a writ upon the respondents restraining them from taking any steps under the said Act, or from interfering with the possession of the appellants in respect of the lands comprised in the lease.
It was asserted by the petitioners that in passing the impugned legislation the Bihar Legislature actually usurped the power of the judiciary and the enactment was not a law at all in the proper sense of the expression.
The other material contentions raised were that the legislation was void as it conflicted with the fundamental rights of the petitioners guaranteed under articles 14, 19(1) (f) and 31 of the Constitution.
The respondents opposite parties in resisting the petitioners ' prayer stated inter alia in their counter affidavit that the settlement of the lands in question with the appellants by the Court of Wards, was not for the benefit of the estate or advantage of the ward and that the transaction was entered into by the Wards Estate without properly applying their mind to it.
It was stated further that after the settlement was made, there was a good deal of agitation among the tenants in the locality which led to the institution of certain criminal proceedings.
In these circumstances, the matter was brought to the notice of the Working Committee of the Indian National Congress and the Working Committee was of opinion that the settlement of these lands was against public interest.
The lessees, therefore, were asked to vacate the lands and on their refusal the legislation in question was passed.
The petition was heard by a Division Bench consisting of Ramaswami and Sarjoo Pershad JJ.
Ramaswami J. 1138 decided all the points raised by the petitioners against them and held that the Act was neither ultra vires the Bihar Legislature nor was void under article 13(1) of the Constitution.
The learned Judge was further of opinion that it was not a fit case for interference by the High Court under article 226 of the Constitution.
The other learned Judge expressed considerable doubts as to whether a legislation of this type, which in form and substance was a decree of a court of law, was within the competence of the legislature and warranted by the Constitution.
He agreed, however, with his learned colleague that the case was not such as to justify an interference of the High Court in exercise of its discretionary powers under article 226 of the Constitution.
The remedy of the petitioners might lie, according to him, in a regularly constituted suit.
The result, therefore, was that the appellants ' petition was dismissed and it is the propriety of this judgment that has been assailed before us in this appeal.
Mr. P. R. Das, who appeared in support of the appeal, put forward at the forefront of his arguments, the contention raised on behalf of his client in the court below that the impugned legislation was void by reason of its violating the fundamental rights of the appellants under article 14 of the Constitution.
The point appeared to us to be of substance and after hearing the learned Attorney General on this point we were satisfied that the contention of Mr. Das was well founded and entitled to prevail, irrespective of any other ground that might be raised in this appeal.
There have been a number of decisions by this court where the question regarding the nature and scope of the guarantee implied in the equal protection clause of the Constitution came up for consideration and the general principles can be taken to be fairly well settled.
What this clause aims at is to strike down hostile discrimination or oppression or inequality.
As the guarantee applies to all persons similarly situated, it is certainly open to the legislature to classify persons and things to achieve particular legislative objects; 1139 but such selection or differentiation must not be arbitrary and should rest upon a rational basis, having regard to the object which the legislature has in view.
It cannot be disputed that the legislation in the present case has singled out two individuals and one solitary transaction entered into between them and another private party, namely, the Bettiah Wards Estate and has declared the transaction to be a nullity on the ground that it is contrary to the provisions of law, although there has been no adjudication on this point by any judicial tribunal.
It is not necessary for our present purpose to embark upon a discussion as to how far the doctrine of 'separation of powers has been recognised in our Constitution and whether the legislature can arrogate to itself the powers of the judiciary and proceed to decide disputes between private parties by making a declaration of the rights of one against the other.
It is also unnecessary to attempt to specify the limits within which any legislation, dealing with private rights, is possible within the purview of our Constitution.
On one point our Constitution is clear and explicit, namely, that no law is valid which takes away or abridges the fundamental rights guaranteed under Part III of the Constitution.
There can be no question, therefore, that if the legislation in the present case comes within the mischief of article 14 of the Constitution, it has got to be declared invalid.
This leads us to the question as to whether the impugned enactment is, in fact, discriminatory and if So, whether the discrimination made by it can be justified on any principle of reasonable classification ? The appellants, it is not disputed, are only two amongst numerous leaseholders who hold lands in raiyati right under the Bettiah Wards Estate.
It cannot also be disputed that the lands were settled with them on the recommendation of the Board of Revenue after due consideration of the respective views put forward by the Manager of the Estate on the one hand and the Collector and the Divisional Commissioner on the other.
The appellants are admittedly paying rents which are normally assessed on lands of similar 1140 description in the locality.
The learned AttorneyGeneral referred in this connection to the provisions of section 18 of the Court of Wards Act and argued that the lease in dispute was granted in contravention of that section.
Section 18 of the Court of Wards Act provides as follows: "The Court may sanction the giving of leases or farms of any property under its charge . and may direct the doing of all such other acts as it may judge to be most for the benefit of the property and the advantage of the Ward".
Apparently it makes the Court of Wards the sole judge of the benefit to the estate or advantage of the ward.
But it is said that the Court of Wards did not apply its mind properly to this matter when it granted lease to the appellants at half the usual rate of selami.
The Wards Estate thus suffered loss to the extent of nearly Rs. 4,000 which could legitimately have been recovered from any other lessee.
This contention does not impress us much; the utmost that can be said is that this could have been put forward, for what it is worth and with what result, nobody can say, as a ground for setting aside the lease in a court of law.
But that is not the question which is relevant for our present purpose at all; we were not called upon to decide whether or not the lease was a proper one or beneficial to the estate.
The question for our decision is, whether the statute contains discriminatory provisions so far as the appellants are concerned and if so, whether these discriminations could be reasonably justified ? It is clearly stated in paragraph 9 of the affidavit made by the appellants in support of their petition that there are numerous other persons to whom leases on similar terms were granted by the Bettiah Wards Estate.
Clauses (b), (c) and (d) of paragraph 9 of the affidavit stand thus: "(b) In this long course of management by tile Court of Wards, leases or settlement of lands used to be made without any selami on proper rent.
This state of affairs continued down to recent times during 1141 which period thousands of bighas were so settled with numerous persons; (c) in 1945 the authorities decided to make settlements on large scale with war returned soldiers on a selami equal to 5 times the average rent prevailing in the locality for similar lands; (d) in 1946, 1947, 1948 and 1949 a good number of settlements covering about 2000 acres of lands were settled on the basis of IO years ' rental obtaining in the locality and in some cases for good reasons, at five years ' rental." In paragraph 12 of the counter affidavit put in on behalf of the respondents, these statements are not denied.
In fact, they are admitted and the only thing said is, that these leases were granted in due course of management.
Ramaswami J. has dismissed this part of the case by simply remarking that no details of these settlements were furnished by the appellants; but no details were at all necessary when the correctness of the statements was not challenged by the respondents.
It will be interesting to note that the respondents themselves in paragraph 10 of their counter affidavit mentioned the name of Shri Prajapati Mishra as one of the persons with whom similar settlement of lands was made by the Bettiah Estate.
It is stated in that paragraph that the cases of the appellants as well as of Prajapati Mishra were brought to the notice of the Working Committee of the Indian National Congress and the Committee came to the conclusion that both the settlements were contrary to the provisions of law.
Thereupon a request was made to both these sets of lessees to restore their lands to the Estate, but whereas Prajapati Mishra returned his lands to the Bettiah Estate, the appellants refused to do so.
In reply to this statement, the appellants stated in their rejoinder that the said Prajapati Mishra did not vacate the land,% but created a trust in respect of the same, he being the chairman of the board Of trustees and the lands were still in possession of the board of trustees.
Strangely, as it seems, the State of Bihar raked up this matter again in a 148 1142 further affidavit where it was admitted that the said Prajapati Mishra did execute a trust and that the trustees took possession of the property.
It was stated, however, that Prajapati Mishra, who was one of the trustees, did actually surrender the lands in two installments but the other trustees did not, and hence legal advice was being taken to find out ways and means of recovering the property from them.
The whole thing smacks of disingenuousness and the State of Bihar, it seems, was not well advised in rely ing upon facts like these in their attempt to repel the appellants ' attack on the legislation on the ground of discrimination.
Be that as it may, there is no doubt that the appellants were not the only lessees under the Bettiah Estate who got settlement of lands at a selami of five years ' rental.
On the sworn statements of the appellants, which are not challenged by the other side, it appears that there are numerous persons occupying the same position as the appellants, who however were not subjected to this expropriatory legislation.
But the vice in this legislation goes much deeper than this.
It is not merely a question of treating the appellants differently from the other lessees under the Wards Estate, with whom settlements of land have been made on similar or identical terms.
If a lease has been given by a Court of Wards, which is not for the benefit of the estate or advantage of the ward, it is for a court of ,law to decide whether it is warranted by the terms of the Court of Wards Act.
If the lessor proceeds to cancel the lease, the lessee has a legal right to defend his claim and satisfy the court that the lease is not in contravention of law.
If, on the other hand, the lessee is actually dispossessed, he has a right to sue in court for recovery of possession of the property on establishing that he has been illegally turned out.
The dispute here, is a legal dispute pure and simple between two private parties.
What the Legislature has done is to single out these two individuals and deny them the right which every Indian citizen possesses to have his rights adju dicated upon by a judicial tribunal in accordance with 1143 the law which applies to his case.
The meanest of citizens has a right of access to a court of law for the redress of his just grievances and it is of this right that the appellants have been deprived by this Act.
It is impossible to conceive of a worse form of discrimination than the one which differentiates a particular individual from all his fellow subjects and visits him with a disability which is not imposed upon anybody else and against which even the right of complaint is taken away.
The learned Attorney General, who placed his case with his usual fairness and ability, could not put forward any convincing or satisfactory reason upon which this legislation could be justified.
It is true that the presumption is in favour of the constitutionality of a legislative enactment and it has to be presumed that a Legislature understands and correctly appreciates the needs of its own people.
But when on the face of a statute there is no classification at all, and no attempt has been made to select any individual or group with reference to any differentiating attribute peculiar to that individual or group and not possessed by others, this presumption is of little or no assistance.
to the State.
We may repeat with profit what was said by Mr. Justice Brewer in Gulf Colorado etc.
Co. vs Ellis(1) that "to carry the presumption to the extent of holding that there must be some undisclosed and unknown reason for subjecting certain" individuals or corporations to hostile and discriminatory legislation is to make the protection clauses of the Fourteenth Amendment a mere rope of sand".
In our opinion, the present case comes directly within the principle enunciated by this court in Ameerunnissa, Begum vs Mahboob Begum(2 ).
The result is that we allow the appeal and set aside the judgment of the High Court.
A writ in the nature of mandamus shall issue directing the respondents not to take any steps in pursuance of The Sathi Lands (Restoration) Act of 1950 or to interfere with the possession of the appellants in respect to the lands (1) 165 U section 150.
(2) [1953] S.C.R 404.
1144 comprised in the lease referred to in that Act.
The appellants will have their costs in both courts.
VIVIAN BOSE J. I am in entire agreement with my Lord the Chief Justice and with my learned brother Mukherjea.
GHULAM HASAN J.
I agree with my Lord the Chief Justice and with my brother Mukherjea.
BHAGWATI J. I entirely agree with the judgment just delivered by my Lord the Chief Justice and my brother Mukherjea and there is nothing which I can usefully add.
Appeal allowed.
| The Court of Wards granted to the appellants a large area of land belonging to the Bettiah Raj which was then under the management of the Court of Wards, on the recommendation of the Board of Revenue, at half the usual rates.
A few years later, the Working Committee of the Indian National Congress expressed the opinion that the settlement of the lands was against public interest, and in 1950, the Bihar Legislature passed an Act called the Sathi Lands (Restoration) Act, 1950, which declared that, notwithstanding anything contained in any law for the time being in force the settlement granted to the appellants shall be null and void and that no party to the settlement or his successors in interest shall be deemed to have acquired any right or incurred any liability thereunder, and empowered the Collector to eject the appellants if they refused to restore the lands.
The appellants, alleging that the Act was unconstitutional, applied under article 226 of the Constitution for a writ of mandamus against the State of Bihar restraining it from taking any action under the Act.
It was found that there were several other settlements of lands belonging to the Bettiah Raj on similar terms against which the Government had taken no action: Held, that the dispute between the appellants and the State was really a private dispute and a matter to be determined by a judicial tribunal in accordance with the law applicable to the case, and, as the Legislature had, in passing the impugned enactment singled out the appellants and deprived them of their right to 1130 have this dispute adjudicated upon by a duly constituted Court, the enactment contravened the provisions of article 14 of the Constitution which guarantees to every citizen the equal protection of the laws, and was void.
Legislation which singles out a particular individual from his fellow subjects and visits him with a disability which is not imposed upon the others and against which even the right of complaint is taken away is highly discriminatory.
Though the presumption is in favour of the constitutionality of a legislative enactment and it has to be presumed that a Legislature understands and correctly appreciates the needs of its own people, yet when on the face of a statute there is no classification at all, and no attempt has been made to select any individual or group with reference to any differentiating attribute peculiar to that individual or group and not possessed by others, this presumption is of little or no assistance to the State.
Ameerunnissa Begum vs Mahboob Begum ; and Gulf of Colorado etc.
Co. vs Ellis ; referred to.
| The appellant wife and her husband were estranged and living apart.
The husband, by a letter dated July 28, 1956, entrusted.to the appellant the land in dispute alongwith another piece of land and a house and agreed to pay a sum of Rs.100 per mouth for her maintenance.
After a few years, the husband conceived the idea of selling the land in dispute.
The appellant protested by her letter dated June 15, 1966 and implored him not to sell the land.
Despite this, the husband sold the said land to the plaintiff respondents.
The purchaser instituted a suit for an injunction re straining the appellants from interfering with possession, which was contested initially on the ground that the land had been gifted to the appellant orally by the husband, and that title had been acquired by adverse possession.
Later, the written statement was amended and a further plea was taken that the said land had been given in lieu of mainte nance and that she had become the absolute owner of the land under Section 14 of the Hindu Succession Act.
All courts found that there was no oral gift.
A Single Judge of the High Court held that the land was given to the appellant by her husband in lieu of maintenance and that by Section 14 of the Hindu Succession Act, she had become full owner of the property.
On appeal under the Letters Patent, a Division Bench of the High Court held that "The reading of the letter left no meaning of doubt that there was never any intention on the part of the husband to give away the land to the lady and that instead of sending the total amount in cash he allowed her to utilise the amount of ckakota for meeting her day to day expenses", that she did not at all acquire any such right or interest in the property as could be termed 'limit ed ownership ' so as to permit 577 her to take the benefit of the provisions of Section 14(1) of the Hindu Succession Act, that "if the husband had given over the land in dispute completely to the lady, then the question of sending more money could not have arisen" and reversed the Judgment of the Single Judge.
The appellant appealed to this Court.
On behalf of the respondents, it was contended that even if the land was given to the appellant in lieu of maintenance, it must be established that what was given to her was a limited estate in the sense of ownership without the right of alienation and that under Section 14 of the Hindu Succession Act only such a limited estate would blossom into an absolute estate.
Allowing the appeal, this Court, HELD: 1.1 Section 14 is aimed at removing restrictions or limitations on the right of a female Hindu to enjoy, as a full owner, property possessed by her so long as her posses sion is traceable to a lawful origin, that is to say, if she has a vestige of a title.
It makes no difference whether the property is acquired by inheritance or devise or at a parti tion or in lieu of maintenance or arrears of maintenance or by gift or by her own skill or exertion or by purchase or by prescription or in any other manner whatsoever.
The Explana tion to the Section expressly refers to property acquired in lieu of maintenance and the widow is not required to estab lish her further title before she could claim full owner ship, under Section 14(1) in respect of property given to her and possessed by her in lieu of maintenance.
[582F H] 1.2 The very right to receive maintenance is sufficient title to enable the ripening of possession into full owner ship if she is in possession of the property in lieu of maintenance.
Sub section (2) of Section 14 is in the nature of an exception to Section 14(1) and provides for a situa tion where property is acquired by a female Hindu under a written instrument or a decree of court and not where such acquisition is traceable to any antecedent right.
[582H; 583A] 2.
If a female Hindu is put in possession of property pursuant to or in recognition of a right to maintenance, it cannot be denied that she has acquired a limited right or interest in the property and once that position is accepted, it follows that the right gets enlarged to full ownership under Section 14(1) of the Act.
That is clear from the language of Section 14(1) of the Act.
[586B C] 3.1 In the instant case, the question was not whether the husband 578 intended to give away the land in dispute absolutely but whether the land was given to her in lieu of maintenance.
A perusal of the letters exchanged between the husband and the appellant wife clearly establishes that the land in dispute was given by the husband in lieu of maintenance.
The Divi sion Bench of the High Court was wrong in making distinction between day to day expenses and maintenance.
[581F G] 3.2 It is rather late in the day to contend that the land which was given to the appellant in lieu of maintenance did not vest in her absolutely.
[586F] [The Judgment of the Division Bench of the High Court set aside and that of the Single Judge restored. ] Eramma vs Verrupanna & Ors., , distin guished.
Badri Pershad vs Smt.
Kanso Devi, ; ; Naraini Devi vs Smt.
Rano Devi and Ors., ; ; V. Tulasamma & Ors.
vs V. Sesha Reddi (Dead) by L.Rs.; , ; Bai Vajia (Dead) by L.Rs.
vs Thakorbhai Chelabhai and Ors., ; ; Santhanam vs Subramanya AIR 1977 SC 2024 and Jagannathan Pillai vs Kunjithapadam Pillai, ; , referred to.
| The respondents were convicted and sentenced for committing murder and other offences.
The deceased and the respondents, who respectively belonged to the Rajput and the Harijan factions of the village, had a dispute over a piece of land which had been decided in favour of the Rajputs by a final order of the High Court in second appeal.
When the respondents ' appeal against conviction in the criminal case came up for hearing, the High Court took the view that 'the matter could be settled by a compromise ' and invited the Harijans and Rajput panchayats of the village to appear before it and, ultimately, called for the papers of the second appeal decided earlier and passed an order to the effect that, as agreed between the parties, the claim of the Harijans for four kanals of land was allowed.
Finding that some of the affected parties were not served, the High Court directed that if any unserved party had a grievance, it could apply for review of the judgment.
After re disposing of the second appeal relating to the dispute over land in the manner stated above, the High Court took up the criminal appeal for hearing and, without considering the evidence before it, delivered a short judgment acquitting the respondents.
Remanding the appeal, ^ HELD: It is impossible to appreciate how the High Court could dispose of the criminal appeal in this extraordinary fashion.
It is obvious that the High Court had made up its mind to acquit the accused without considering the evidence before it.
Finding that the offence of murder cannot be compounded, the High Court took the facile course of acquitting the accused who, by a considered judgment, were convicted by the trial Court.
[814 C D] The judgment of the High Court shows how important it is for the judges to observe the norms laid down by law for dispensing justice. 'Justice under the tree ' or 'panchayat justice ' have advantages of their own, but they cannot be confused with justice according to the Chancellor 's foot.
[812 F]
| The father of the first respondent sold his lands to the second respondent but continued to be in possession.
The second respondent sold them to the appellants who were put in possession in 1934.
In August 1945, the first respondent filed a petition against the second respondent, before the Debt Adjustment Board, under Ss. 17, 18 and 45 of the Bombay Agricultural Debtors Relief Act, 1939, within the time prescribed by section 17, alleging that the transaction with the second respondent was a mortgage and that the debt was liable to be adjusted under the Act.
The first appellant was impleaded as a party to the petition in December 1945, beyond the time specified in section 17.
No appeal was filed against that order, and in 1947, the Board disposed of the petition for adjustment of debt by directing the second respondent to render accounts.
He appealed and, pending the appeal, the 1939 Art was repealed by the Bombay Agricultural Debtors Relief Act of 1947.
In 1949, the appellate Court set aside the Board 's order and remanded the case to the Civil Judge, for deciding the nature of the transaction, because, under the 1947 Act, the Board was dissolved and its jurisdiction was vested in the Civil Judge.
In 1950, the first respondent 's application to the Civil Judge for impleading the second respondent also as a party to the petition for adjustment of the debt, was allowed, and thereafter, the matter was disposed of on merits.
On the questions: (i) Whether the orders impleading the appellants were without jurisdiction.
and (ii) whether the appellants had acquired title to the lands by adverse possession, HELD: (i) The orders were not without jurisdiction.
Under the repealed Act, if a party was added beyond the period prescribed under section 17 of the Act, if he was added as a necessary party to a petition filed in time, the said order might be improper but not without jurisdiction.
[151 C D] Under section 56 of the 1947 Act, original and appellate proceedings initiated under the repealed Act but pending at the time the 1947 Act came into force will have to be disposed of in accordance with the substantive and procedural sections of the 1947 Act.
Under section 46 of the 1947 Act, the court is empowered.
in a suitable case, to add Parties under 0.1, r. 10, Civil Procedure Code, and they may be added irrespective of the time limit prescribed under the repealed Act, or the time specified in Ss. 4 and 24 of the 1947 Act.
[152 A C] Case law referred to.
(ii) The appellants had not acquired any title by adverse Possession, as the petition for adjustment of debt was filed within 12 years from the date of their occupation of the suit lands.
| These appeals were preferred by tenants against the judgment of the High Court in civil revisions.
Respondent Mahabir Prasad had executed a registered deed dated 8th December, 1966 with regard to premises in question, giving the benefits arising out of the said properties to his grandsons and their mother Smt.
Sulochana Devi.
He informed the tenants to make payment of rent to Smt.
Sulochana Devi in terms of the said deed.
Later, Mahabir Prasad executed a registered deed of cancellation dated 3rd November, 1970, cancelling the aforesaid deed dated 8th December, 1966 and debarring the grandsons and their mother from the right to realise rent and informed the tenants about the said deed of cancellation.
Subsequently, Mahabir Prasad instituted suits in the Court of the Judge, Small Causes against the appellant tenants for recovery of arrears of rent and their eviction on the ground that in spite of their being informed of the deed of cancellation, they had not paid rent to him.
The appellants contended that the deed dated 8th December, 1966, could not be unilaterally cancelled by Mahabir Prasad, and the rent claimed by him had already been paid by them to Smt.
Sulochana Devi.
The title of Mahabir Prasad to realise rent was disputed by the appellants who had contended that the suit involving a question of title was not cognizable by a Court of Small Causes.
The Judge, Small Causes, decreed the suits.
The appellants filed revisions before the District Judge who dismissed the same.
Further revisions filed by the appellants in the High Court were also dismissed.
The appellants moved this Court for relief by special leave against the Judgments of the High Court.
PG NO 238 PG NO 239 Allowing the appeals, the Court, HELD: The provisions of section 23 of the Provincial Small Cause Courts Act (the Act) were clearly attracted in these cases and the plaints in the cases ought to have been returned for presentation to a Court having jurisdiction to determine the title.
It is true that Section 23 does not make it obligatory on the Court of Small Causes to invariably return the plaint once a question of title is raised by the tenant, and that in a suit instituted by the landlord against his tenant on the basis of contract of tenancy, a question of title could also incidentally be gone into and that any finding recorded by a Judge, Small Causes, in this behalf could not be res judicata in a suit based on title, but it cannot be gainsaid that in enacting section 23 the Legislature must have had in contemplation some cases in which the discretion to return the plaint ought to be exercised in order to do complete justice between the parties.
On facts, these are cases in which~ in order to do ' complete justice between the parties the plaints ought to have been returned for presentation to a court having jurisdiction to determine the title so that none of the parties was prejudiced.
[242E, H, 243A C, F] Judgments and decrees of the courts below were set aside and the Judge, Small Causes was directed to return the plaints of the cases for presentation to the appropriate Court as contemplated by section 23 of the Act.
[243F G]
| The tenant of the appellant a Jagirdar, died without leaving any male issues.
His distant relations the respondents, took possession of his properties.
Thereupon the appellant brought a suit claiming possession.
of the properties as he was the owner.
The trial court dismissed the suit holding that the civil court has no jurisdiction to entertain the suit, and that in view of the Jagir Abolition Act, 1951 which was enacted during the pendency of the sit and with the vesting of the suit properties in the State, the appellant was not entitled to claim.
The first appellate court reversed these findings and held that though the suit properties had vested in the State, it was for the State to get itself impleaded, and as the State had not got itself impleaded, it was open to the appellant to press the suit.
In view of these conclusions, the appellate court demanded the suit to decide the other undecided issues.
After the remand, the trial court negatived the respondents defendants contention and decreed the suit.
In appeal that decree was affirmed.
In second appeal, the High Court agreed with the courts below on all issues except that relating to the effect of abolition of Jagirs.
It held that under the Jagir Abolition Act, the appellant lost his title to the suit properties.
In its view that issue was not concluded by the decision of the appellate court made before remand as the same had not been appealed against, since the court had inherent power to consider the correctness of that order.
In appeal, this Court: HELD : The case must be remanded for determination of the right of all the parties after impleading the State as a party.
The correctness of the remand order was not open to review by the High Court.
The order in question was made under rule 23, Order 41, Civil Procedure Code.
That order was appealable under Order 43 of that Code.
As the same was not appealed against, its correctness was no more open to examination in view of section 105 (2) of the Code which lays down that where any party aggrieved by an order of remand from which an appeal lies does not appeal therefrom he shall thereafter be precluded from disputing its correctness.
The High Court has misconceived the scope of its inherent powers.
Under the inherent power of courts recognised by section 151, Civil Procedure Code, a court has no power to do that which is prohibited by the Code.
Inherent jurisdiction of court must be exercised subject to the rule that if the Code does contain specific provisions which would meet the necessities of the case, such provisions should be followed and inherent jurisdiction should not be involved.
In other words the court cannot make use of the special provisions of section 151 of the Code where a party bad his remedy provided elsewhere in the Code and be neglected 208 to avail himself of the same.
Further the power under section 151 of the Code cannot be exercised as an appellate power.
The appellant Jagirdar had not lost all rights in the suit properties.
The suit properties vested in the State in view of the Jagir Abolition Act.
But it was conceded at the bar that if the appellant was proved to have been the owner of the suit properties on the day the Jagir Abolition Act came into force, he was entitled to the compensation provided in that Act.
Therefore the appellant was interested in establishing that on the date Jagir Abolition Act came into force, he was the full owner of the suit properties.
[210 C] Himatrao vs Jaikishandas and Ors. ; followed.
| In the election to the Bihar Legislative Assembly held in 1985, the appellant was declared elected from the 286 Chandan Kyari (S.C.) Constituency.
The respondent, a sitting M.L.A., who secured 430 votes less than the appellant, filed an election petition in the Patna High Court (Ranchi Bench) calling in question the election of the appellant.
The respondent 's main grievance was that the Returning Officer re allocated his 'bow and arrow ' symbol to another candidate Murura Dasi, and instead allotted the symbol of 'ladder ' to him, and this sudden change of symbol left him with less than 20 days time for campaign which resulted in confusion amongst his supporters as a result of which his election was materially affected.
On this premise the respondent contend ed that the election was liable to be declared void on the ground of (i) violation of section 30(d) of the Representa tion of People Act, 1951, which according to him prescribed atleast 20 days time for election campaign, which he did not have after change of the symbol; and (ii) violation of Rule 10(5) of the Conduct of Election Rules, 1961 under which, according to him, the election symbol could not be changed without permission of the Election Commission.
The respond ent election petitioner examined himself.
Evidence of no other witness appears on record.
The High Court allowed the petition and declared the appellant 's election to be void holding that the result of the election in so Tar as it concerned the returned candi date was materially affected by violation of Rule 10(5) of the Conduct of Election Rules, 1961.
Before this Court, it was contended on behalf of the appel lant that 922 (i) the appellant did not receive any notice of the election petition against her and the trial had proceeded ex parte; (ii) there was no breach of section 30(d) of the Representa tion of the People Act Inasmuch as the minimum 20 days time was available after the date of withdrawal of nomination paper to the date of poll; (iii) there was no violation of Rule 10(5) of the Conduct of Election Rules; and (iv) even assuming that there was violation of this rule, the election petitioner dismally failed to prove by evidence that the result of the election was materially affected thereby, inasmuch as no sufficient evidence was adduced in proof of his claim, and he himself could not have proved his aver ments.
Allowing the appeal, this Court, HELD: (1) Under s.30 of the Representation of the People Act, 1951, as soon as the notification calling upon a con stituency to elect the member or members is issued, the Election Commission shall, by notification in the Official Gazette appoint, amongst others, under clause (d), the date or dates on which a poll shall, if necessary, be taken, which or the first of which shall be a date not earlier than the twentieth day after the last date for the withdrawal of candidature.
[928F] (2) In the instant case, the last date for the withdraw al of nomination was 9.2.1985 and the date of poll was 5.3.1985.
There was, therefore, clear compliance with the requirement of section 30(d).
The respondent himself stated that on 14.2.1985 he received notice of intention of the Return ing Officer to change his election symbol and the symbol was actually changed on 15.2.1985.
This Court agrees with the High Court that only the spirit of section 30(d) was not complied with.
In terms, this provision was clearly complied with.
[928G 929A] (3) The violation of sub rule (5) of Rule 10 per se will not invalidate the election.
The election petitioner has also to prove that the result of the election, in so far as it concerns the returned candidate, was materially affected.
[934A B] (4) The party who wishes to get an election declared void has to establish by satisfactory evidence that the result of the poll had in fact been materially affected by the violation of Rule 10(5) of the Rules.
For doing this, it has to be demonstrated that the votes would have been di verted in such a way that the returned candidate would have been unsuccessfull.
[931B] 923 Vashist Narain Sharma vs Dev Chandra & Ors., ; ; lnayatullah Khan vs Diwanchand Mahajan & Ors., ; S.N. Balakrishna vs Fernandes, ; , ; Shiv Charan Singh vs Chandra Bhan Singh, ; and Chhedi Ram vs Jhilmit Ram & Ors., , referred to.
(5) A decision in an election petition can be given only on positive and affirmative evidence and not on mere specu lation and suspicion, however, strong they are.
In the instant case, there is no such positive and affirmative evidence.
Mere assertions by the election petitioner were not enough.
[932D] (6) There could be no proposition or contention that a candidate with a particular symbol would always be success ful at the hustings or that a particular voter or a number of voters would always vote for a symbol irrespective of the candidate to whom it is allotted.
[932E] (7) There is no dispute about the importance of the symbol in a backward constituency.
This will however, not absolve the election petitioner of his burden of proving that the result of the election has been materially affect ed.
[933B] All Party Hill Leaders ' Conference, Shillong vs Captain W.A. Sangama, ; and Roop Lal Sathi vs Nach hattar Singh Gill; , , referred to.
(8) The election petitioner has not stated and proved that more than 430 voters would have voted for him, had the symbol of 'bow and arrow ' not been changed, and that they voted for Murura Dasi only for her having the symbol of 'bow and arrow '.
How could that be proved would.
of course, depends on the facts and circumstances of the case.
[929F] (9) In the instant case, the election petitioner dismal ly failed to discharge the burden of proving that the result of the election, in so far as it concerned the appellant, who has been the returned candidate, was materially affect ed.
The High Court was in error in holding, without suffi cient evidence, that it was materially affected.
[934C]
| The respondents in Civil Appeal No. 708/78 Mamanchand Ratilal Agarwal and others, who are the landlords of premises bearing door No. 16 in Nawa Bazar Area Kirkee Cantonment, filed a civil suit No. 17,0 of 1964 against the Appellant tenant for recovery of possession and arrears of rent under the provisions of Bombay Rents, Hotel and Lodging House Rates Control Act, 1947.
The suit was decreed.
There was an appeal by the tenant.
It resulted in a com promise decree dated July 12, 1967 by which some time was given to the tenant to vacate the premises.
On April 29, 1969, in the case of Indu Bhushan Bose vs Rama Sundari Devi and Anr.
; , this Court held that Parliament alone had and the State Legislature did not have the necessary competence to make a law in regard to the "regulation of house accommodation in Cantonment Areas.
" The expression "regulation of house accommodation" was interpreted as not to be confined to allotment only but as extending to other incidents, such as termination of existing tenancies and eviction of persons in possession of house accommodation etc.
To get over the situation created by the said decision, on December 29, 1969, the Central Government issued a notification under section 3 of the Cantonment (Extension of Rent Control Laws) Act, 1957 extending the pro visions of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, to the Kirkee and other cantonment areas.
In June 2, 1972, the Parliament also enacted Act 22 of 1972 amending the Cantonment (Extension of Rent Control laws) Act 1957, purporting to enable the Central Government to make the Rent Control Laws in the several States applicable to Cantonment areas from dates anterior to the dates of notification and further purporting to validate certain pre existing decrees.
In the meanwhile, taking advantage of the decision in the case of Indu Bhushan Bose vs Rama Sundari Devi and Anr., the appellant tenant filed Miscellaneous Application No. 597/70 for a declaration that the decree obtained against him was a nullity and incapable of being executed.
This application was allowed by the Court on November, 19, 1971.
But, after the enactment of Act 22 of 1972, on January 11, 1973 the landlords filed Darkhast No. 104 of 1973 to execute the decree in their favour.
The appellant tenant raised three objections, namely, (i) subsequent to the compromise decree there was a 225 fresh agreement of lease between the landlords and himself; (ii) the provisions of the amending Act 22 of 1972 were not extensive enough to save the decree dated July 12, 1967; ,(iii) in any case, the decision in Miscellaneous Application No. 597/70 holding the decree to be a nullity operated as res judicata between the parties.
The first objection was left open by all the Courts for future adjudication, as the landlord denied the existence of any fresh agreement.
The second and third objections alone were considered.
In the judgment under appeal, the High Court overruled them and hence this appeal by special leave and two other similar appeals.
Dismissing the appeals the Court, ^ HELD: 1.
In Indu Bhushan Bose vs Rama Sundari and Anr., [1970 ] 1 S.C.R. 443, the Supreme Court agreed with the view of the Calcutta and Rajasthan High Courts and held that the power of the State Legislature to legislate in respect of landlord and tenant of buildings was to be found not in Entry 18 of the List II, but in Entries 6, 7 and 13 of List III of the Seventh Schedule to the Constitution and that such power was circumscribed by the exclusive power of Parliament to legislate on the same subject under Entry 3 of List I.
But even before this decision Parliament took the view of the Calcutta Rajasthan High, Courts as the correct view and proceeded to enact the Cantonment (Extension of Rent control Laws) Act, 1957, by section 3 of which the Central Government was enabled, by notification in the official Gazette to extend to any cantonment with such restrictions and modifications as it thought fit, any enactment relating to the control of rent and regulation of house accommodation which was in force on the date of the notification in the State in which the Cantonment was situated.
Though this Act came into force on December 18, 1957, no notification was issued extending the provisions of the Bombay Rents Hotel and Lodging House Rates Control Act, 1947, to Kirkee and other Cantonment areas within the State of Bombay until 1969.
Apparently such a notification was thought unnecessary in view of the fact that the Bombay Act was supposed to operate within the said Cantonment areas because of the consistent view taken by the Bombay High Court regarding the applicability of the Bombay Act to such areas.
In view of the Supreme Court decision in Indu Bhushan 's case, it became necessary that a notification under section 3 of the Cantonment (Extension of Rent Control Laws) Act, 1957, should be issued.
It was accordingly done on December 29, 1969.
But it was realised that the entire problem was not thereby solved since all such notifications as the one issued on December 29, 1969 could only be prospective and could not save decrees which had already been passed.
Therefore, Amending Act 22 of 1972 was enacted for the express purpose of saving decree which had already been passed.
By section 2 of the Amending Act of 1972 the Principal Act of 1957 was itself deemed to have come into force on January 26, 1950.
Original Section 3 was renumbered as subsection 1 and the words "on the date of the notification" were omitted and "were deemed always to have been omitted." [229 B G & 230 C D] 2.
Under section 3 of the unamended Act, 1957, a notification could be issued extending a State Legislation to a Cantonment area with effect from the date of notification.
As a result of the introduction of sub section 2 of section 3 the notification can be given effect from an anterior date or a future late but it cannot be made effective from a date earlier than the commencement 226 of the State Legislation or the establishment of the Cantonment or the commencement of the Cantonment (Extension of Rent Control Laws) Act, 1957.
Sub section 3 is merely consequential to sub section 2, in that it provides that a State Legislation when extended to a Cantonment area with effect from the date of the notification from an anterior date, such legislation is to stand extended with all the amendments to such State Legislation made after such anterior date but before the commencement of the 1972 Amending Act, the amendments being applicable as and when they come into force.
Sub section
4 makes provision for the saving of decrees or orders for the regulation of or for eviction from any house accommodation in a Cantonment made before the extension of the State Legislation to the Cantonment provided certain conditions are fulfilled.
One condition is that the decree or order must have been made by any Court, Tribunal or other authority in accordance with a law for the control of rent and regulation of house accommodation for the time being in force in the State in which such Cantonment is situated.
In other words the decree or order must have been made by the wrong application of the State Legislation to the Cantonment area.
If a decree or order has been made by such wrong application of the State Legislation to the Cantonment area it shall be deemed, with enact from the date of the notification to have been properly made under the relevant provisions of the State Legislation.
1231 A H, 232 A BI 3.
The applicability of sub section 4 cannot be confined to cases where notifications are issued with retrospective effect under sub section 2.
Sub section 4 is not so confined.
It applies to all cases of decrees or orders made before the extension of a State Legislation to a Cantonment area irrespective of the question whether such extension is retrospective or not.
The essential condition to be fulfilled is that the decree or order must have been made as if the State Legislation was already in force, although.
strictly speaking, it was not so in force.
Subsection 4 is wide enough to save all decrees and orders made by the wrong application of State rent control and house accommodation legislation to a Cantonment area, though such State Legislation could not in law have been applied to cantonment areas at the time of the passing of the decrees or order.
The decree obtained by the respondent is saved by the pro visions of section 3, sub section 4 of the Cantonment (Extension of Rent Control Laws) Act 22 of 1957, as amended by Act 22 of 1972.
[232 E F] 4.
If the decision in the previous proceeding was to be regarded as res judicata it would assume the status of a special rule of law applicable to the parties relating to the jurisdiction of the Court in derogation of the rule declared by the legislature.
[234 A] In the present case, the executing Court had refused to exercise jurisdiction and to execute the decree on the ground that the decree was a nullity as the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947, had no application to buildings in Cantonment areas.
That defect having been re moved and all decrees obtained on the basis that the Bombay rent law applied to the Kirkee Cantonment area having been validated by Act 22 of 1972, it cannot be said that the earlier decision holding that the decree was a nullity operated as res judicata.
[234 B D] Mathura Prasad Bajoo Jaiswal and ors.
vs Dessibai N. B. Jeejeebhoy, (@) 836: followed.
|
No. 224 of 1959.
Appeal from the judgment and decree dated August 28, 1956, of the Madhya Pradesh High Court in F.A. No. 90 of 1949.
A. V. Viswanatha Sastri, section N. Andley, Rameshwar Nath and P.L. Vohra, for the appellant.
section T. Desai, R. Ganapathy Iyer and K. L. Hathi, for the respondent.
January 15 The Judgment of the Court was delivered by section K. DAS, J.
This is an appeal on a certificate granted by the High Court of Madhya Pradesh under article 133 (1) (a) of the Constitution, The appellant is Mithoolal Nayak, who took an assignment on october 18, 1945 of a life insurance policy on the life of one Mahajan Deolal for a sum of Rs. 25,000/ in circumstances which we shall presently state.
Mahajan Deolal died on November 12, 1946 573 Thereafter, the appellant made a demand against the respondent company for a sum of Rs. 26,000/ and odd on the basis of the life insurance policy which had been assigned to him.
This claim or demand of the appellant was repudiated by the respondent company by a letter dated October 10, 1947, which in substance stated that the insured Mahajan Deolal had been guilty of deliberate mis statements and fraudulent suppression of material information in answers to questions in the proposal form and the personal statement, which formed the basis of the contract between the insurer and the insured.
On the repudiation of his claim the appellant brought the suit out of which this appeal has arisen.
The suit was originally instituted against the oriental Government Security Life Assurance co. Ltd., Bombay, which issued the policy in favour of Mahajan Deolal on March 13, 1945.
Latter, on the passing of the life Insurance corporation Act, 1956, there was a statutory transfer of the assets and liabilities of the controlled (life) business of all insurance companies and insurers operating in India to a Corporation known as the Life Insurance Corporation of India.
By an order of this Court made on February 16, 1960, the said Corporation was substituted in place of the original respondent.
For brevity as convenience we shall ignore the distinction between the original respondent and the said Corporation and refer to the respondent in this judgment as the respondent company.
The Suit was decreed by the learned Additional District Judgment of Jabalpur by his judgment dated May 7, 1949.
The respondent company then preferred an appeal to the High Court of Madhya Pradesh.
This appeal was heard by a Division Bench of the said High Court and by a judgment dated August 28, 1956, the appeal was allowed and the suit was dismissed with costs.
It is from 574 that appellate judgment and decree that the present appeal has been brought to this Court.
We now proceed to state some of the relevant facts relating to the appeal and the contentions urged on behalf of the appellant.
Mahajan Deolal was a resident of.
village Singhpur, Tehsil Narsinghpur.
It appears that he was a small landholder and possessed several acres of land.
Sometime in December, 1942, Mahajan Deolal submitted a proposal through one Rahatullah Khan, an agent of the respondent company at Narsingpur, for the insurance of his life with the respondent company for a sum of Rs. 10,000/ only.
Mahajan Deolal 's age at that time was about 45 as stated by him.
In the proposal form which was submitted to the respondent company, Mahajan Deolal mentioned the name of one Motilal Nayak, by profession a doctor, as a personal friend who best knew the state of the health and habits etc.
of the insured.
This Motilal Nayak, be it noted, is a brother of the appellant, the evidence in the record showing that the two brothers lived together in the same house.
When the proposal for insurance of his life was made by Mahajan Deolal in December 1942, he was examined by a doctor named Dr. D. D. Desai.
This doctor submitted two reports about Mahajan Deolal; one report, it appears, was admitted with the proposal form through the agent of the respondent company; another report was sent in a confidential cover along with a letter from the doctor.
In this letter (exhibit D 22) the doctor explained why he was submitting two medical reports.
In substance he said that the report submitted with the proposal form at the instance of the agent, Rahatullah Khan, was not a correct report and the correct report was the one which he enclosed in the confidential cover.
In that report Dr. Desai said that Mahajan Deolal 575 was anaemic, looked about 55 years old, had a dilated heart and his right lung showed indications of an old attack of pneumonia or pleurisy.
The doctor further said that the general health of Mahajan Deolal was very much run down and he was a total physical wreck.
The doctor opined that Mahajan Deolal ' life was an uninsurable life.
It appears that nothing came out of the proposal made by Mahajan Deolal for the insurance of his life in December, 1942.
The evidence of the Inspector of the respondent company shows that on receipt of Dr. Desai 's reports, the respondent company directed that Mahajan Deolal should be further examined by the Civil Surgeon, Hoshangabad and District Medical officer, Railways at Jabalpur.
Mahajan Deolal could not, however, be examined by the two doctors aforesaid and according to the rules of the respondent company the proposal lapsed on the expiry of six months for want of completion of the medical examination as required by the respondent company.
Then, on July 16, 1944, a second proposal was made through the same agent of the respondent company for the insurance of the life of Mahajan Deolal, this time for a sum of Rs. 25,000/ .
The Inspector of the respondent company said in his evidence that this second proposal was made at the instance of the same agent, Rahatullah Khan inasmuch as the proposal of 1942 had not been rejected but had only lapsed.
It appears that at the time of the first proposal in 1942 Mahajan Deolal had paid a sum of Rs. 571/ and odd towards the first premium due in case the proposal was accepted.
In the personal statement, accompanying the second proposal of July 16, 1944, it was stated that an earlier proposal for insuring the life of Mahajan Deolal was pending with the respondent company.
Now, in the proposal form (exhibit D 11) there was a question (question No. 13) to the following effect: 576 "Have you within the past five years consulted any medical man for any ailment, not necessarily confining you to your house? If so, give details and state names and addresses of medical man consulted.
" The answer given to the question was "No".
This answer, according to the case of the respondent, was false and deliberately false.
because, according to the evidence of one Dr. P.N Lakshmanan, Consulting Physician at Jabalpur, Mahajan Deolal was examined and treated by the said doctor between the dates September 7, 1943, and October 6, 1943, when the doctor found that Mahajan Deolal was suffering from anaemia, oedema of the feet, diarrhoea and panting on exertion.
We shall advert in greater detail to the evidence of Dr. Lakshmanan at a later stage.
In his personal statement accompanying the second proposal Mahajan Deolal answered in the negative question 12(b), the question being as to when he was last under medical treatment and for what ailment and how long.
In the same personal statement with regard to questions, for example, question nos.
5(a); 5(b) etc., as to whether he suffered from shortness of breath, anaemia, asthma etc, Mahajan Deolal gave negative answers.
The contention on behalf of the respondent company was that these answers in the personal statement were also deliberately false and constituted a fraudulent suppression of material particulars relating to the health of the insured.
With regard to the second proposal and the personal statement accompanying it, Dr. Motilal Nayak, brother of the appellant, gave a friend 's report, in which he said that Mahajan Deolal health was good and that he had never heard that Mohajan Deolal suffered from any illness.
It is worthy of note here that Dr. Motilal Nayak himself took Mahajan Deolal to Dr. Lakshmanan for treatment at Jabalpur in September October., 1943.
On receipt 577 of the second proposal in July, 1944, Mahajan Deolal was examined by Dr. Kapadia, who was the District Medical officer of the Railways at Jabalpur.
Dr. Kapadia reported that Mahajan Deolal was a healthy man and looked about 52 to 54 years old.
He recommended that Mahajan Deolal might be given a policy of fourteen years.
In his report Dr. Kapadia noted that Mahajan Deolal had stated that he had suffered from pneurnonia four or five years ago, and that he had also cholera some years ago.
No mention, however, was made of anaemia, asthma, shortness of breath etc.
On December 29, 1944, Mahajan Deolal made a further declaration of his good health and so also on February 12, 1945.
On March 13, 1945, the policy was issued by the respondent company.
It contained the usual terms of such life insurance policies, one of which was that in case it would appear that any untrue or incorrect averment had been made in the proposal form or personal statement, the policy would be void.
The first premium due on the policy was taken from the amount which was already in deposit with the respondent company in connection with the proposal made in 1942.
Then, on May 22, 1945, Mahajan Deolal wrote a letter to the respondent company in which he said that his financial condition had become suddenly worse and that he would not be able to pay the premium for the policy.
He requested that the policy be cancelled.
In the meantime the premium for 1945 not having been paid, the policy lapsed.
Then, on October 28, 1945, Mahajan Deolal made a request for revival of the policy, but a few days before that, namely on October 18, 1945, the policy was assigned in favour of the appellant, by an endorsement made on the policy itself.
This assignment was duly registered by the respondent company by means of its letter dated November 1, 1945 in which the respondent company said that it accepted the assignment without expressing any opinion as to its validity or 578 effect.
The respondent company also made an enquiry from the appellant as to whether the latter had any insurable interest in the life of the insured and what consideration had passed from him to the insured.
To this the appellant replied that he had no insurable interest in the life of Mahajan Deolal except that the latter was a friend and he (the appellant) had purchased the policy for a sum of Rs. 427.12 nP. being the premium paid by him so far, because Mahajan Deolal did not with to continue the policy.
On his request for a revival of the policy Mahajan Deolal was again medically examined, this time by one Dr. Belapurkar.
Later on February 25, 1946, he was examined by Dr. Clarke.
The policy was then revived on payment of all arrears of premium, these arrears having been paid by the present appellant.
On receipt of the revival fee, the policy appears to have been revived some time in July, 1946.
We have already stated that Mahajan Deolal died in November, 1946.
The certificate of Dr. Clarke, who was the medical attendant at the time when Mahajan Deolal died, showed that the primary, cause of death of Mahajan Deolal was malaria followed by severe type of diarrhoea; the secondary cause was anaemia, chronic bronchitis and enlargement of liver.
In the certificate which Dr. Clarke gave there was mention of certain other medical practitioners who had attended Mahajan Deolal at the time of his death.
One of such medical practitioners mentioned in the certificate was Dr. Lakshmanan.
On receipt of this certificate the respondent company got into touch with Dr. Lakshmanan and discovered from him that Mahajan Deolal had been treated in September October, 1943, by Dr. Lakshmanan for ailments which, according to the doctor, were of a serious nature.
Several issues were tried between the parties in the trial court.
But the four questions which 579 were argued in the High Court and on which the fate of the appeal depends were these: (1) Whether the policy was vitiated by fraudulent suppression of material facts by Mahajan Deolal ? (2) Whether the present appellant had no insurable interest in the life of the insured, and if so, can he sue on the policy ? (3) Whether the respondent company had issued the policy with full knowledge of the facts relating to the health of the insured and if so, is it estopped from contesting the validity of the policy ? and (4) Whether in any event the appellant is entitled to refund of the money he had paid to the respondent company ? These are the four questions which have been agitated before us and we shall deal with such of them as are necessary for deciding this appeal.
So far as the first question is concerned, the learned trial Judge found that though Mahajan.
Deolal had given a negative answer to question no, 13 in the proposal form and to questions nos.
5(a), 5(b), 5 (f) and 12(b) in the personal statement, these answers though not strictly accurate, furnished no grounds for repudiating the claim of the appellant by the respondent company, in as much as s.45 of the (4 of 1938) applied and the answers did not amount to a fraudulent suppression of material facts by the policy holder within the meaning of that section.
The learned trial Judge found that the ailments for which Dr. Lakshmanan treated Mahajan Deolal in September October, 1943, were of a causal or trivial nature and the failure of the policy holder to disclose those ailments did not attract the second part of 580 section 45 of the .
The High Court came to a contrary conclusion and held that even applying section 45 of the , the policy holder was guilty of a fraudulent suppression of material facts relating to his health within the meaning of that section and the respondent company was entitled to avoid the contract on that ground.
On behalf of the appellant it has been argued before us that the finding of the learned trial Judge on this question was the correct finding and that the High Court was wrong in arriving at a contrary finding on this question in view of the evidence given in the case.
The judgment of the High Court is a judgment in reversal and the appellant has a right of appeal under article 133(1)(a) of the Constitution in as much as the value of the subject matter of the dispute in the court of first instance and still in dispute is more than Rs. 20,000/ .
We have, therefore, allowed learned counsel for the parties to take us through the evidence in the case.
On a consideration of that evidence we have come to the conclusion that the finding of the High Court is the correct finding.
We shall presently consider the evidence, but it may be advantageous to read first section 45 of the , as it stood at the relevant time.
The section, so far as it is relevant for our purpose, is in these terms: "No policy of life insurance effected before the commencement of this Act shall after the expiry of two years from the date of commencement of this Act and no policy of life insurance effected after the coming into force of this Act shall, after the expiry of two years from the date on which it was effected, be called in question by an insurer on the ground that a statement made in the proposal for insurance or in any report of a medical officer, or referee, or friend of the insured, or in any other document leading to 581 the issue of the policy, was inaccurate or false, unless the insurer shows that such statement was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policy holder and that the policy holder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose.
x x x x x x" It would be noticed that the operating part of section 45 states in effect (so far as is relevant for our purpose) that no policy of life insurance effected after the coming into force of the Act shall, after the expiry of two years from the date on which it was effected, be called in question by an insurer on the ground that a statement made in the proposal for insurance or in any report of a medical officer, or referee, or friend of the insured, or in any other document leading to the issue of the policy, was inaccurate or false; the second part of the section is in the nature of a proviso which creates an exception.
It says in effect that if the insurer shows that such statement was on a material matter or suppressed facts which it was material to disclose and that it was fraudulently made by the policyholder and that the policy holder knew at the time of making it that the statement was false or that it suppressed facts which it was material to disclose, then the insurer can call in question the policy effected as a result of such inaccurate or false statement.
In the case before us the policy was issued on March 13, 1945, and it was to come into effect from January 15, 1945.
The amount insured was payable after January 15, 1968, or at the death of the insured, if earlier.
The respondent company repudiated the claim by its letter dated October 10, 1947.
Obviously, therefore, two years had expired from the date on which the policy was effected.
We are clearly of the opinion that section 45 of the applies in the present case in 582 view of the clear terms in which the section is worded, though learned counsel for the respondent company sought, at one stage, to argue that the revival of the policy some time in July, 1946, constituted in law a new contract between the parties and if two years were to be counted from July, 1946, then the period of two years had not expired from the date of the revival.
Whether the revival of a lapsed policy constitutes a new contract or not for other purposes, it is clear from the wording of the operative part of section 45 that the period of two years for the purpose of the section has to be calculated from the date on which the policy was originally effected; in the present case this can only mean the date on which the policy (exhibit P 2) was effected.
From that date a period of two years had clearly expired when the respondent company repudiated the claim.
As we think that section 45 of the applies in the present case, we are relieved of the task of examining the legal position that would follow as a result of inaccurate statements made by the insured in the proposal form or the personal statement etc.
in a case where section 45 does not apply and where the averments made in the proposal form and in the personal statement are made the basis of the contract.
The three conditions for the application of the second part of section 45 are (a) the statement must be on a material matter or must suppress facts which it was material to disclose; (b) the suppression must be fraudulently made by the policy holder; and (c) the policy holder must have known at the time of making the statement that it was false or that it suppressed facts which it was material to disclose.
The crucial question before us is whether these three conditions were fulfilled in the present 583 case.
We think that they were.
We are unable to agree with the learned trial Judge that the ailments for which Mahajan Deohal was treated by Dr. Lakshmanan in September October, 1943, were trivial or casual ailments.
Nor do we think that Mahajan Deolal was likely to forget in July, 1944, that he had been treated by Dr. Lakshmanan for certain serious ailments only a few months before that date.
This brings us to a consideration of the evidence of Dr. Lakshmanan.
That evidence is clear and unequivocal.
Dr. Lakshmanan says that Dr. Motilal Nayak brought the patient to him at Jabalpur.
We have already referred to the fact that Dr. Motilal Nayak had himself made a false statement in his friend 's report dated July 17, 1944, when he said that he had never heard that the insured had suffered from any illness.
It is impossible to believe that Dr. Motilal Nayak would not remember that he had himself taken the insured to Jabalpur for treatment by Dr. Lakshmanan who was an experienced consulting physician.
Dr. Lakshmanan said that when he first examined Mahajan Deolal on September 7, 1943, he found that his condition was serious as a result of the impoverished condition of his blood, and that Mahajan Deolal was suffering from anaemia, oedema of the feet, diarrhoea and panting on exertion.
The doctor asked for an examination of the blood.
The pathological report supported the diagnosis that Mahajan Deolal was suffering from secondary anaemia meaning thereby that anaemia was due to lack of iron and malnutrition.
Dr. Lakshmanan further found that from the symptoms disclosed the disease was a major one.
Mahajan Deolal had also cardiac asthma which was a symptom of anaemia and due to dilatation of heart.
Dr. Lakshmanan saw the patient again on September 9, 1943, and then again on September 16, 1943.
On October 6, 1943 Mahajan Deolal himself went to Dr. Lakshmana.
On that date Dr. Lakshmanan found that 584 anaemia had very greatly disappeared.
In cross examination Dr. Lakshmanan admitted that the anaemia, dilatation of heart and cardiac asthma from which Mahajan Deolal was suffering continued a passing phase which might disappear by treatment.
He further admitted that he did not mention cardiac asthma in his letter addressed to the respondent company.
We have given our very earnest consideration to the evidence of Dr. Lakshmanan and we are unable to hold that the ailments from which Mahajan Deolal was then suffering were either trivial or casual in nature.
The ailments were serious though amenable to treatment.
Mahajan Deolal 's son gave evidence in the case and he said in his evidence that though Dr. Lakshmanan prescribed some medicine, his father did not take it.
He further said that his father was a strict vegetarian.
This evidence was given by the son with regard to what the doctor had said that he prescribed fresh liver juice made at home according to his directions three times a day.
He also prescribed iron sulphate in tablet from with plenty of water.
The son further said that during his stay at Jabalpur his father felt weakness, though he used to move about freely and was never confined to bed.
The son tried to make it appear in his evidence that his father was suffering from nothing serious.
Dr. Lakshmanan said in his evidence that his fees for visiting a patient at Jabalpur were Rs. 16/ per visit.
We agree with the High Court that if Mahajan Deolal was not suffering from any serious ailment, he would not have been taken by his physician, Dr. Motilal Nayak from his village to Jabalpur nor would he have consulted Dr. Lakshmanan, a consulting physician of repute, for so many days on payment of Rs. 16/ per visit.
No doubt, Mahajan Deolal 's son now tries to make light of the illness of his father but Dr. Lakshmanan 's evidence shows elearly enough that in September October, 1943.
Mahajan 585 Deolal was suffering from a serious type of anaemia for which he was treated by Dr. Lakshmanan.
Mahajan Deolal could not have forgotten in July, 1944, that he was so treated only a few months earlier and furthermore, Mahajan Deolal must have known that it was material to disclose this fact to the respondent company.
In his answer to the questions put to him he not only failed to disclose what it was material for him to disclose, but he made a false statement to the effect that he had not been treated by any doctor for any such serious ailment as anaemia or shortness of breath or asthma.
In other words, there was a deliberate suppression fraudulently made by Mahajan Deolal.
Fraud, according to section 17 of the (IX of 1872), means and includes Inter alia any of the following acts committed by a party to a contract with intent to deceive another party or to induce him to enter into a contract (1) the suggestion, as to a fact, of that which is not true by one who does not believe it to be true; and (2) the active concealment of a fact by one having knowledge or belief of the fact.
Judged by the standard laid down in section 17, Mahajan Deolal was clearly guilty of a fraudulent suppression of material facts when he made his statements on July 16, 1944, statements which he must have known were deliberately false.
Therefore, we are in agreement with the High Court in answering the first question against the appellant.
We may here dispose of the third question.
Learned counsel for the appellant has argued before us that Mahajan Deolal was examined under the direction of the respondent company by as many as four doctors, namely, Dr. Desai, Dr. Kapadia, Dr. Belapurkar and Dr. Clarke.
It is further pointed out that Mahajan Deolal had correctly 586 disclosed that he had suffered previously from malaria, pneumonia and cholera.
Dr. Kapadia, it is pointed out, was specifically asked to examine Mahajan Deolal in view of the conflicting reports which Dr. Desai had earlier submitted.
On these facts, the argument has been that the respondent company had full knowledge of all facts relevant to the state of health of Mahajan Deolal and having knowledge of the full facts, it was not open to the respondent company to call the policy in question on the basis of the answers given by Mahajan Deolal in the proposal form and the personal statement, even though those answers were inaccurate.
Learned counsel for the appellant has referred us to the Explanation to section 19 of the in support of his argument.
We are unable to accept this argument as correct.
It is indeed true that Mahajan Deolal was examined by as many as four doctors.
It is also true that the respondent company had before it the conflicting reports of Dr. Desai and it specially asked Dr. Kapadia to examine Mahajan Deolal in view of the reports submitted by Dr. Desai.
Yet, it must be pointed out that the respondent company had no means of knowing that Mahajan Deolal had been treated for the serious ailment of secondary anaemia followed by dilatation of heart etc.
in September October, 1943 by Dr. Lakshmanan.
Nor can it be said that if the respondent company had knowledge of those facts, they would not have made any difference.
The principle underlying the Explanation to section 19 of the Contract Act is that a false representation, whether fraudulent or innocent is irrelevant if it has not induced the party to whom it is made to act upon it by entering into a contract.
We do not think that principle applies in the present case.
The terms of the policy make it clear that the averments made as to the state of health of the insured in the proposal form and the personal statement were the basis of the contract between the 587 parties, and the circumstance that Mahajan Deolal had taken paint to falsify or conceal that he had been treated for a serious ailment by Dr. Lakshmanan only a few months before the policy was taken shows that the falsification or concealment had an important bearing in obtaining the other party 's consent.
A man who has so acted cannot after wards turn round and say; "It could have made no difference if you had known the truth.
" In our opinion, no question of waiver arises in the circumstances of this case, nor can the appellant take advantage of the Explanation to section 19 of the .
Our finding on the first question makes it unnecessary for us to decide the second question, namely, whether the present appellant merely gambled on the life of Mahajan Deolal when he took the assignment on October 18, 1945.
The contention of the respondent company was that appellant had no insurable interest in the life of Mahajan Deolal and when he took the assignment of the policy on October 18, 1945 he was merely indulging in a gamble on Mahajan Deolal 's life; the contract was therefore, void by reason of section 30 of the .
On behalf of the appellant, however, the contention was that section 38 of the insurance Act provided a complete code for assignment and transfer of insurance policies and the assignment made in favour of the appellant by Mahajan Deolal was a valid assignment in accordance with the provisions of section 38 aforesaid.
The High Court, it appears, proceeded on the footing that from the very inception the policy was taken for the benefit of the appellant on the basis of a gamble on the life of Mahajan Deolal; it said that the appellant and his brother, Dr. Motilal Nayak, knew very well that Mahajan Deolal was not likely to live very long and when the policy was taken out in 1944, it was really for the benefit of the present appellant, who soon after took an assignment 588 on payment of the premium already paid by Mahajan Deolal and such arrears of premium as were then outstanding.
It is unnecessary for us to give our decision on these contentions; because if Mahajan Deolal was himself guilty of a fraudulent suppression of material facts on which the respondent company was discharged from performing its part of the contract, the appellant who holds an assignment of the policy cannot stand on a better footing than Mahajan Deolal himself.
It was argued before us that is the policy was valid in its inception, that is to say, if it was in fact effected for the use and benefit of Mahajan Deolal, who undoubtedly had an insurable interest in his own life, it could not afterwards be invalidated by assignment to a person who had no interest but who merely took it as a speculation.
Our attention was drawn to several decisions on this question, American and English, noticed in para 502 of MacGillivray on Insurance law (fourth Edition).
We consider it unnecessary to examine those decisions or to go into the question posed therein.
That question must be left to be determined in a case where it properly arises.
As we have stated earlier, on our conclusion on the first question, the appellant is clearly out of Court and can not claim the benefit of a contract which had been entered into as a result of a fraudulent suppression of material facts by Mahajan Deolal.
This brings us to the last question, namely, whether the appellant is entitled to a refund of the money he had paid to the respondent company.
Here again one of the terms of the policy was that all moneys that had been paid in consequence of the policy would belong to the company if the policy was vitiated by reason of a fraudulent suppression of material facts by the insured.
We agree with the High Court that where the contract is bad on the ground of fraud, the party who has been guilty of fraud or a person who claims under him can not 589 ask for a refund of the money paid.
It is a well established principal that courts will not entertain an action for money had and received, where, in order to succeed, the plaintiff has to prove his own fraud.
We are further in agreement with the High Court that in cases in which there is stipulation that by reason of a breach of warranty by one of the parties to the contract, the other party shall be discharged from the performance of his part of the contract, neither section 65 nor section 64 of the has any application.
For the reasons given above we have come to the conclusion that there in no merit in the appeal.
The appeal is accordingly dismissed with costs.
Appeal dismissed.
| In 1942, one M sent a proposal for the insurance of his life.
He was examined by Dr. D who submitted two reports, one with the proposal form and one confidential.
The confidential report showed that M was anaemic, had a dilated heart and his right lung showed indications of an old attack of pneumonia or pleurisy and that he was a total physical wreck.
Nothing came out of this proposal and it lapsed.
In 1943, M consulted and was treated by one Dr. L for anaemia oedema of the feet, diarrhoea and panting on exertion.
In 1944, M made a second proposal for insurance of his life.
Against the question in the proposal form whether he had consulted any medical man for any ailment within the last five years, he gave the answer, "Nor '.
He also did not disclose any of his ailments.
After medical examination by one Dr. K the proposal was accepted and a policy for Rs. 25,000/ was issued on March 13, 1945.
The policy lapsed for non payment of premium but was revived in July, 1946.
In November, 1946, M died.
His assignee, the appellant, made a demand for Rs. 26,000/ but the Company on October 10, 1947, repudiated it on the ground that the policy had been obtained by deliberate mis statement and fraudulent suppression of material facts.
Thereupon, the appellant filed a suit to recover the amount of the policy contending that section 45 Insurance Act, barred the company from calling in question the policy after two years on the ground that any statement made in the proposal was inaccurate or false. ^ Held, that the policy holder was guilty of fraudulent suppression of material facts relating to his health and the Company was entitled to avoid the contract.
Section 45 Insurance Act applied to the case as two years had lapsed since the policy was effected; in view of the language of s.45 the two years could not be counted from the date of the revival of the policy.
The second part of section 45 entitled the company to repudiate the contract even after the expiry 572 of two years if three conditions were fulfilled viz. (a) the statement was on a material matter or there was suppression of facts which it was material to disclose; (b) the suppression was fraudulently made by the policy holder, and (c) the policy holder must have known at the time of the making of the statement that it was false or that it suppressed facts which it was material to disclose.
When M was treated in 1943 by Dr. L he was suffering from serious ailments.
He must have known that it was material to disclose this but made a false statement that he had not been treated by any doctor for any serious ailment.
There was deliberate suppression fraudulently made by M. Even though the Company had got M examined by four doctors before issuing the policy, it was not estopped from questioning the policy.
It had no means of knowing that M had been treated by Dr. L for serious ailments.
Held, further, that the appellant was not entitled even to a refund of the money paid as premium as one of the terms of the policy was that all monies paid belonged to the company if the policy was vitiated by fraudulent suppression of material facts.
To such a contract neither section 65 nor section 64 of the Indian Contract had any application.
| The appellant land owner held lands in excess of 30 standard acres as on 6.4.1960.
He filed a return as required by the Tamil Nadu Land Reforms (Fixation of Ceiling on Land) Act, 1961 and an enquiry was initiated by the Authorised Officer concerned under Section 9(2)(b) of the Act.
Several objections raised by the appellant were rejected and the Authorised Officer came to the conclusion that the family of the appellant could be reckoned to be of five members be tween 6.4.1960 and 2.10.1962 and thus the appellant was entitled to 30 standard acres; his wife and daughter however could hold 10 and 7.71 standard acres respectively as strid hana.
The appellant was asked to elect which lands he wished to be included in his holding and state which lands should be treated as surplus.
Feeling aggrieved by the said deter mination, the appellant preferred an appeal under Section 78(1) to the Land Tribunal.
The appellant contended (i) that the Authorised Officer had wrongly included the lands of his minor sons, unmarried daughter and wife gifted to them long before 1960; (ii) that subsequent to the filing of the appeal, the Act was amended as a consequence whereof his rights and liabilities with regard to the fixation of ceil ing area were required to be worked out on the basis of the revised date of commencement of the Act i.e. 15.2.1970; notified date being 2.10.1970.
It was also urged by the appellant that the lands of his eldest son Laxminarayanan could not be included in his holding.
On those grounds amongst others relating to the effect of subsequent transac tions the appellant prayed that the matter ought to be remanded to the Authorised Tribunal for a de novo considera tion.
The appellant authority rejected all the contentions and dismissed the appeal, whereupon the appellant preferred a revision application before the High Court.
Before the High Court his plea regarding subsequent transactions was confined to the documents executed between 15th February 1970, the date of commencement of the 359 Act, and 2nd October 1970, the notified date; contentions regarding other transactions were not pressed.
The High Court accepted this contention and took the view that even in respect of proceedings which commenced prior to the coming into force of the Amending Act, an affected person can take advantage of the provisions contained In Section 2 IA.
The High Court held that while Section 2 of the Amending Act reduced the ceiling area to half, benefit was conferred by Section 21A and hence both the provisions had to be read together.
On that reasoning the High Court opined that the three documents relating to subsequent transactions executed between the said date, could not be ignored in fixing the ceiling area unless it was found that the documents were executed to defeat the provisions of the Act, in which case the transactions may be declared void under Section 22 of the Act.
The High Court accordingly directed the Authorised Officer to make further inquiries regarding the three trans actions in question and pass appropriate orders.
The High Court rejected the other contentions.
The appellant being aggrieved with the rejection of other points raised before the High Court has preferred this appeal by special leave.
Dismissing the appeal, this Court, HELD: The proceedings in this case had started and concluded before the Authorised Officer long before the Amending Act saw the light of the day.
Under Section 3(1) of the Amending Act, any action taken (including any order made, decision or direction given, proceeding taken, etc.) under the provisions of Act before the date of publication of the Amending Act, can be continued and enforced after the said date in accordance with the provisions of the Act as if the Amending Act had not been passed.
This is however, subject to subsection (2) which carves out an exception to sub section (1) insofar as the reduction of the ceiling area from 30 standard acres to 15 standard acres is concerned.
[367E G] B.K.V. Radhamani Ammal vs Authorised Officer, Land Reforms, Coimbatore, , referred to.
| In respect of its business as a middleman relating mainly to sales of coal and coke in the course of inter State trade, the appellant firm was assessed to Central sales tax under section 8(2) of the , by the Commercial Tax officer.
The appellant without availing itself of the remedies under the Act, applied for and obtained special leave to appeal under article 136 of the Constitution of India directly against the order of assessment When the appeal was taken up for hearing, the question was raised as to whether it should be entertained, when even the facts had not been finally determined by the final fact finding authority under the Act, nor had the jurisdiction of the High Court been invoked to exercise its powers under the Act.
Held, that an assessee is not entitled ordinarily to come up to the Supreme Court directly against the judgment of the Assessing Authority and invoke the Court 's jurisdiction under article 136 of the Constitution without first exhausting the remedies provided by the taxing statutes.
Mahadayal Premchandras vs Commercial Tax Officer Calcutta, and The State of Bombay vs M/s. Ratilal Vedilal, [1961] 2 section C. R. 367, explained.
Chandi Prasad Chokhani vs The State of Bihar, [1962] 2 section G. R. 276 and Kanhaiyalal Lohia v, Commissioner of Income Tax Bengal, [1962] 2 section C. R. 839, followed.
^ Held, further, that in the present case, in which there, were no special circumstances and in which the facts had not yet been finally determined, the appeal must be considered to be incompetent.
| The respondent imported 2,000 drums of mineral oil and the appellant confiscated 50 drums and imposed a personal penalty.
The appeal of the respondent was dismissed by the Central Board of Revenue.
The respondent filed a petition under article 226 of the Constitution in the Calcutta High Court.
A Full Bench of the High Court held that the High Court had no jurisdiction to issue a writ against the Central Board of Revenue in view of the decision in the case of Saka Venkata Subbha Rao.
However, as the Central Board of Revenue had merely dismissed the appeal against the 564 order of the appellant, the High Court further held that it had jurisdiction to pass an order against the appellant.
The appellant came to this Court after obtaining a certificate.
Held that the appellant had merged into that of the Central Board of Revenue and hence no order could be issued against the appellant.
It is only the order of the appellate authority which is operative after the appeal is disposed of.
It is immaterial whether the appellate order reverses the original order, modifies it or confirms it.
The appellate order of confirmation is as efficacious as an operative order as an appellate order of reversal or modification.
As the appellate authority in this case was beyond the territorial jurisdiction of the High Court, it was not open to the High Court to issue a writ to the original authority which was within its jurisdiction.
Election Commission, India vs Saka Vankata Subba Rao, , A. Thangal Kunju Mudatiar vs M. Venkitachalam Poiti, ; , Commissioner of Income tax vs M/s. Amritlal Bhogilal & Co. [1959] section C. R. 713 and Madan Gopal Rungta vs Secretary to the Government of Orissa, (1962) (Supp.) 3 S.C.R. followed.
Barkatali vs Custodian General of Evacuee Property, A. 1.
R. , overruled.
Joginder Singh Waryam Singh vs Director, Rural Rehabilitation, Pepsu, Patiala, A. 1.
R. 1955 Pepsu 91, Burhanpur National Textile Workers Union vs Labour Appellate Tribunal of India at Bombay, A. I. R. , and Azmat Ullah vs Custodian, Evacuee Property, A.I.R. 1955 All 435, approved.
State of U. P. vs Mohammed Nooh, ; , distinguished.
| The respondents instituted a civil suit challenging the election of the office bearers ' of the appellant Society and asked for rendition of accounts.
The appellant Society contested the suit on the ground that in view of Sections 23 and 25 of the the suit was barred.
The courts below having held that the suit was not barred, the defendant Society filed appeal in this Court.
Dismissing the appeal, this Court, HELD: 1.
A litigant having a grievance of a civil nature has, independently of any statute, a right to institute a suit in the civil court unless its cognizance is either expressly or impliedly barred.
The exclusion of jurisdiction of the civil court is not to be readily inferred and such exclusion must be either express or implied.
[973A B] K.S. Venkataraman & Company vs State of Madras, ; ; Ganga Bai vs Vijay Kumar and Ors., ; ; Dhula Bhai and Ors.
vs The State of Madhya Pradesh and Ors., ; ; referred.
Raleigh Investment Company Limited vs The Governor General in Council, [1947] L.R. 74 I.A. 50; cited.
The provisions of Section 23 of the Societies Regis tration Act, 1860 are confined to audit and have nothing to do with the relief of rendition of accounts.
[976B] 972 3.
Section 25 deals with disputes regarding challenge to the eviction of office bearers.
The maintainability of dispute within the purview of that Section is hedged with conditions and unless such requirement is fulfilled, a statutory dispute would not be maintainable.
[976B] 3.1 In the instant case the action in the Civil Court is by some of the members who perhaps would not satisfy the requirement laid down in Section 25.
It cannot be said that Section 25 having provided the pre conditions on the satis faction of which a dispute within the purview of that Sec tion would be maintainable before the Registrar takes away the right of Members of the Society to claim relief other wise outside the purview of Section 25 on the basis of their right to seek remedy for their grievance.
It is not the appellant 's contention that the relief claimed is not one which would come within the ambit of Section 9 of the Code of Civil Procedure.
Therefore, the bar of Section 25 is not applicable to the facts of the case, and the conclusion reached in the Courts below is correct and the suit is maintainable.
[976C E]
| In the years prior to 1950 the respondent company with headquarters in the erstwhile state of Indore was assessed to tax under the Indore Industrial Rules, 1927 and also under the Indian Income tax Act, 1922 in so far as its income fell within sections 4(1) (a) and 4(1)(c) read with section 42 of the Act.
Depreciation had been allowed to it under the Indore Industrial Rules as well as the Indian Act.
The written down value of its assets for the purpose of 1950 51 and subsequent assessments had to be determined under the Taxation Laws (Part B States) (Removal of Difficulties) Order, 1950 which laid down in the proviso to paragraph 2 that .where in respect of any asset, depreciation has been allowed for any year, both in the assessment made in the Part B State and in the taxable territories, the greater of the two sums allowed shall only be taken into account.
" The Income tax Officer found that up to and including the year 1944 the sum allowed as depreciation under the Indian Income tax Act was larger and therefore in computing written down value as on 1 1 49 he took the sum allowed as depreciation under the Indian Act up to the end of 1944 and under the Indore Industrial Rules after that date.
In the assessments made for the period up to the end of 1944 the respondent company had been treated as a non resident and its taxable income under the Indian Income tax Act had been worked out under Rule 33 of the Indian Income tax Act, 1922 as a fraction of its total world income.
In determining the total world income the depreciation claimable under the Indian Act had been allowed, and it was the full amount of this depreciation allowed against the total world income that the Income tax Officer took into account in determining the written down value of the respondent company 's assets for the purpose of the 1950 51 assessment.
The respondent company claimed that as only a fraction of the total world income had been treated as taxable income, therefore only a fraction of the depreciation allowed against the world income should be taken as having been 'actually allowed ' in the terms of paragraph 2 of the Removal of Difficulties Order.
The Income tax Officer, the Appellate Assistant Commissioner and the Appellate Tribunal having rejected this plea the matter went in reference to the High Court.
That Court took the view contended for by the respondent viz. that only the proportionate amount of depreciation which was attributable to the taxable income could be taken into account.
The Revenue appealed to this Court It was urged on behalf of the appellant that depreciation was allowed in respect of the use of the assets in the business, that the allowance did not depend on the assessable income, and that the High Court, therefore went wrong in striking a proportion on the basis of a part of the income 926 actually assessed under the Indian Income tax Act.
The different expressions used in various parts of paragraph 2 of the Removal of Difficulties Order came for consideration.
HELD : Per Subba Rao and Sikri, JJ. (i) The word "assessment" used in the proviso to paragraph 2 has been given a very wide meaning in decided cases.
It means sometimes 'the computation of income ', sometimes the determination of the amount of tax payable; and some,times the procedure laid down in the Act for imposing liability upon the tax payer.
The proviso used the word 'assessment ' both with reference to Part B States and also with reference to the taxable territories.
But in the present case the different shades of meaning of the said word were not relevant.
For the purpose of computing the written down value, the amount of depreciation allowed for the purpose of the assessment only was relevant.
[931 G H; 932 A] (ii)The key to the understanding of paragraph 2 is the expression "allowed '.
The expression 'actually allowed ' in the main paragraph, 'allowed ' in the proviso, and 'taken into account ' in the Explanation mean the same thing.
What the Income tax Officer has to take into consideration in computing the written down value is the depreciation actually allowed under the Income tax Act or the laws obtaining in Part B States and adopt the greater of the two sums so allowed under that head.
The determination of the depreciation actually allowed under the Income tax Act for the years up to and including 1944 must depend on the provisions of that Act.
[932 B] (iii)Under the Income tax Act depreciation allowance is in respect of such assets as are used in the business and shall be calculated on the written down value, which means, in the case of assets acquired in the previous year, the actual cost to the assessee, and in the case of assets acquired before the previous year, the actual cost to the assessee less all depreciation actually allowed to him under the Act.
The allowance towards depreciation is conditioned an the user of the assets, wholly or in part., during the accounting year and thus contributing to the earning of the income.
Though it is not unrelated to the profits it does not depend upon the increase or decrease in the earning capacity of the assets, but is only linked up with physical depreciation in their value.
Even so only amount of depreciation actually allowed can be deducted from the original cost of the assets to ascertain the written down value.
De hors such an allowance.
, it has no significance in income tax law.
[932 F H;933 A B] (iv) During the years up to and including 1944 the assessee was taxed as a nonresident on the income which fell under section 4(1)(a) or unders.
4(1)(c), read with section 42 of the Indian Income tax Act.
The assessee was only assessed during the said years in respect of that part of its profits which could be said to be attributable to the sale proceeds or goods received in British India or in regard to which contract , were signed in British India.
Such income was brought to tax in terms of r. 33 of the Indian Income tax Rules, 1922.
The method adopted was that the amount of income for the purpose of Indian Income tax was calculated on an amount which bore the same proportion to the total profits of the business as the receipts accruing or arising in India bore to the total receipts, of the business.
By applying the formula in r. 33 the Income tax Officer had actually allowed only a fraction of the amount towards depreciation allowable in assessing the world income of the assessee.
The mere fact that in the matter of calculation the total amount of depreciation was first deducted from the world income and thereafter the proportion was struck in terms of r. 33 does not amount to an actual allowance of the entire depreciation in ascertaining the tax 927 able income accrued in India.
The Income tax Officer could have adopted a different method by first ascertaining the gross income accrued in India and then deducting from it the allowance under the Act proportionate to the said income.
Whatever method was adopted only a fraction of the total depreciation was actually allowed in ascertaining the taxable income in India.
The view taken by the High Court was therefore correct.
[933 B H] Hakumchand Mills Ltd. vs Commissioner of Income (Central) Bombay, , endorsed.
Per Shah, J. (dissenting) Under section 10 of the Income tax Act taxable profits or gains earned by an assessee under the head 'business ' after making appropriate allowances under Subs.
(2) have to be computed.
One of such allowances is depreciation in respect of the assets used for the purpose of business.
But depreciation determined according to the rules merely enters into the computation of taxable profits, whether the assessee is a resident or a non resident.
In the assessment of a company the same rates of tax apply under the Income tax Act, whether the company is resident or non resident.
If the company is resident under section 4A(c) its entire world income would be chargeable, subject of course to special exemptions like those provided in section 14(2)(c) : if it is nonresident only a slice of the income would be chargeable.
Under the scheme of the Indian Income tax Act depreciation like any other allowance has to be allowed in computing the total profit; after the total profit is determined depreciation does not survive as a separate head of allowance.
A part only of the total profit of a company determined in the manner prescribed by section 10, may be taxable.
But total profit being determined after depreciation is allowed, between the taxable profits which may be a fraction of total profits and depreciation there is no definable relation.
Therefore it is wrong to presume that the depreciation allowed in the taxable territories which is to be taken into account under the proviso to paragraph 2 of the Removal of Difficulties Order is a fraction of the depreciation considered for computing total profits.
[940 E H; 941 A D] The fact that income was computed under r. 33 made no difference.
In the ascertainment of total profits either for the purposes of assessment in the ordinary manner when the income of the assessee is determined or when a fraction is to be adopted for the purpose of the second method contemplated by section 33, there is no scope for assuming that only a fraction of the depreciation is actually allowed.
Depreciation is deducted only once and for all, and it is deducted in determining the total profits of the business.
[942B D] There is therefore no warrant either in section 10(2)(vi) or in paragraph 2 of the Removal of Difficulties Order or in r. 33 framed under the Indian Income tax Act for the view that the depreciation allowed is a fraction of the total depreciation of the business.
[942 H]
| Somasundram Viswanath, Respondent No. 1 herein was working as an officer in the Defence Accounts Service.
Promotions to Level I & Level II of the Senior Administrative Grade of the said Service were governed by the Indian Defence Accounts Service (Recruitment) Rules, l95X (as amended from time to time) promulgated by the President of India under the proviso to article 309 of the Constitution of India.
Under the Rules, recruitments by promotion to the senior administrative posts were to be made by Selection on merit on the recommendations of a duly constituted Departmental Promotion Committee.
In accordance with the said Rules, when the case of the Respondent came within the Zone of consideration for promotion to the cadre of controller of Defence Accounts, the same was placed before the Departmental Promotion Committee, and the said Committee in order to make appropriate recommendations convened its meeting on 7.8.1986.
At the said meeting one of its members i.e. the Secretary to the Ministry of Defence could not be present even though he was duly notified about the date and time of the meeting.
In his absence the remaining members met and made the recommendation.
The 1st Respondent was graded good ' and was not put in the Select panel.
Aggrieved by the said decision Respondent filed a Petition before the Central Administrative Tribunal, Jabalpur Bench, challenging the validity of the recommendations made by the Department Promotion Committee and prayed for an order directing the appellant union of PG NO 146 PG NO 147 India not to promote his juniors to the higher grade.
The principal contention raised by the Respondent before the Tribunal was that the Departmental Promotion Committee was not properly constituted, as one of its members, was absent with the result the proceedings of its meeting held on 7.8.1986 stood vitiated and recommendation made by it should not be acted upon.
On the other hand the Deptt.
contended that the proceedings of the Committee were protected by the administrative instructions issued by the Government of India with regard to the procedure to be followed by the D.P.C.
In reply thereto the 1st Respondent pleaded that the administrative instructions issued by the Government of India could not override the rules made under the proviso to article 309 of the Constitution and the same has to be ignored.
On consideration of the rival contentions the Central Administrative Tribunal came to the conclusion that the D.P.C. had not been properly constituted at the meeting held on 7.8.1986 because of the absence of the Secretary to the Govt.
of India, Ministry of Defence and therefore the proceedings of the said Committee were not valid.
The Tribunal accordingly set aside the recommendations made by the Committee and directed that a fresh D.P.C. may be convened for reconsidering the agenda which was before the Departmental Committee on 7.8.86.
The Union of India being dissatisfied with the aforesaid order of the Tribunal appealed by special leave, to this Court.
Disposing of the appeal.
the Court, HELD: It is well settled that the norms regarding recruitment and promotion of officers belonging to the Civil appropriate Legislature or by rules made under the proviso to Article 309 of the Constitution of India or by means of executive instructions issued under Article 73 of the Constitution of India in the case of Civil Services under the Union of India and under article 162 of the Constitution of India in the case of Civil Services under the State Governments.
[152B] If there is a conflict between the executive instructions and the rules made under the proviso to Article 309, the rules made under the proviso lo Article 309 prevail, and if there is a conflict between the rules made under the proviso to Article 309 and the law made by the appropriate Legislature the law made by the appropriate Legislature prevails.
[152C] PG NO 148 The Office Memorandum dated 30.12.1976 1s in the nature of complete code with regard to the topics dealt with by it.
Unless there is anything in the Rules made under the proviso to Article 309 which is repugnant to the instructions contained in the Office Memorandum the Office Memorandum which is apparently issued under Article 73 or the Constitution is entitled to be treated as valid and binding on all concerned.
[153B C] This Court does not agree with the decision of the Central Administrative Tribunal that in the instant case the proceedings of the Departmental Promotion Committee on 7.8.1986 have been vitiated solely on account of the reason that the Secretary Ministry of Defence, one of its members was not present at the meeting of the Committee.
The proceedings of the Departmental Promotion Committee at its meeting held.
on 7.8.1986 are not invalid on this account.
[153E] The decision of the Tribunal set aside and the case remitted to the Tribunal to dispose it of afresh.
[153G]
| In the State of Madhya Pradesh vs V. P. Sharma, ; this Court held that once a declaration under section 6 of the Land Acquisition Act 1894 was made the notification under section 4(1) of the Act was exhausted and there could be no successive notifications under section 6 with respect to land in a locality specified in one notification under section 4(1).
Relying on the above judgment the present writ petitions were filed in order to challenge successive notifications under section 6 following a single notification under section 4(1) in respect of land belonging to them.
Meanwhile in order to meet the situation created by the judgment in V. P. Sharma 's case the President of India promulgated the Land Acquisition (Amendment and Validation) Ordinance (1 of 1967).
The Ordinance was later followed by the Land Acquisition (Amendment and Validation) Act 1967.
Section 2 of this Act purported to amend section 5 A of the principal Act by allowing the making of more than one report in respect of land which had been notified under section 4(1).
Section 3 purported to amend section 6 of the principal Act by empowering different declarations to be made from time to time in respect of different parcels of land covered by the same notification under section 4(1) irrespective of whether one report or different reports had been made under section 5 A sub section
Section 4 of the Act purported to validate all acquisitions of land made or purporting to have been made under the principal Act before the commencement of the ordinance namely January 10, 1967, notwithstanding that more than one declaration under section 6 had been made in pursuance of the same notification under section 4(1), and notwithstanding any judgment, decree or order of any court to the contrary.
The Amending Act also laid down time limits for declarations under section 6 of the principal Act after the notification under s 4(1), had been issued in respect of notifications made after January 20.
1967 the time limit was three years; in respect of notification made before that date the time limit was to be two years after that date.
Provision was also made for payment of interest on compensation due to persons in respect of whose land declarations under section 6 had been delayed beyond a specified period; no interest was however, to be paid to those to whom compensation had already been paid.
The petitioners by leave of Court amended their petitions to attack the validity of the.
aforesaid Validating Act on the following main grounds : (1) By seeking to validate past transactions of a kind which had been declared invalid by this Court without retrospectively changing the substantive law under which the past transactions had been effected the legislature was encroaching over the domain of the judicial power vested by the Constitution in the judiciary exclusively; (ii) The Validating Act did not L4Sup.
C.I.1684 42 revive the notification under section 4 which had become exhausted after the first declaration under section 6 and no acquisition following thereafter could be made without a fresh notification under section 4; (iii) The Validating Act violated article 31(2) of the Constitution inasmuch as it purported to authorise acquisitions without fresh notifications under section 4 thereby allowing compensation to be paid on the basis of the said .
notification under section 4 without allowing for increase in the value of land thereafter; (iv) The Validating Act violated article 14 of the Constitution in various ways.
HELD: Per Wanchoo C.J., Bachawat & Mitter, JJ. (i) The American doctrine of well defined separation of legislative and judicial powers has no application to India and it cannot be said that an Indian Statute which seeks to validate invalid actions ' is bad if the invalidity has already been pronounced upon by a court of law.
A.K. Gopalan vs State, ; , referred to.
(ii) The absence of a provision in the amending Act to give retrospective operation to section 3 of the Act does not affect the validity of section 4.
It was open to Parliament to adopt either course e.g. (a) to provide expressly for the retrospective operation of section 3, or, (b) to lay down that no acquisition purporting to have been made and no action taken before the Land Acquisition (Amendment and Validation) Ordinance, 1967 shall be deemed to be invalid or even to have become invalid because, inter alia, of the making of more than one declaration under section 6 of the Land Acquisition Act, notwithstanding any judgment decree or order to the contrary.
Parliament was competent to validate such actions and transactions, its power in that behalf being only circumscribed by appropriate entries in the Lists of the Seventh Schedule and the fundamental rights set forth in Part III of the Constitution.
Section 4 of the Amending Act being within the legislative competence of Parliament, the provisions thereof are binding on all courts of law notwithstanding judgments, orders or decrees to the contrary rendered or made in the past.
[67 C F] Case law referred to.
(iii) The impugned Act does not violate article 31(2).
The Act does not in express terms enact any law which directly affects compensation payable in respect of property acquired nor does it lay down any principles different from those which were already in the Land Acquisition Act of 1894.
After the amendment of the Constitution in 1955 the question of compensation is not justiciable and it is enough if the law provides that a person expropriated must be given compensation for his property or lays down the principles therefor.
[67 G H] The Legislature might well have provided in the Act of 1894 that it would be open to the appropriate Government after issuing a notification under section 4 to consider objections raised under section 5 with regard to the different localities from time to time enabling different reports to fie made under section 5 A with consequent adjustments in section 6 providing for declarations to be made as and when each report under section 5A was considered.
By the validation of action taken under section 6 more than once in respect of a single notification under section 4, the original scheme of acquisition is not altered.
The public purpose behind the notification remains the same.
It is not as if a different public purpose and acquisition of land for such purpose were being interploated by means of the Validating Act.
Only the shortcoming in the Act as to want to provision to enable more than one decla ration under section 6 are being removed.
[68 D F] 43 The date of valuation under the Validation Act is that of the issue of notification under section 4(1), a principle which has held the field since 1923 Legislative competence to acquire land under the provisions of the Land Acquisition Act cannot be challenged because of constant appreciation of land values all over the country due to the prevalent abnormal inflation.
There must be some time lag between the commencement and conclusion of land acquisition proceedings and in principle there is nothing wrong in accepting the said commencement as the date of valuation.
Sections 4 and 23 of the Land Acquisition Act are protected by article 31(5) (a) of the Constitution.
Only sections 5 A and 6 of the Act have been amended.
The amendment does not alter the principle of compensation fixed by the Act nor contravene article 31 of the Constitution in any way.
[69 G 70 B] It cannot be said of the Validating Act that it was fixing an arbitrary date for the valuation of the property which bore no relation to the acquisition proceedings.
The population in Indian cities especially in the capital is ever increasing.
The State has to plan the development of cities and it is not possible to take up all schemes in all directions at the same time.
The resources of the State may not be sufficient to acquire all the area required by a scheme at the same time.
Of necessity the area under the proposed acquisition would have to be carved into blocks and the development of one or more blocks at a time could only be taken up in consonance with the resources available.
Even contiguous blocks could be developed gradually and systematically.
In view of such factors it cannot be said that the principle of fixing compensation on the basis of the price prevailing on the date of the notification under section 4(1) of the Land Acquisition Act was not a relevant principle which satisfied the requirements of article 31(2).[70 C 71 H] The State of West Bengal vs Mrs. Bela Banerjee, ; , State of Madras vs D. Namasivaya Mudaliar, ; and, P.V. Mudaliar vs Deputy Collector, ; , considered.
(iv) The validating Act was not violative of article 14.
Whenever an Amending Act is passed there is bound to be some difference in treatment between transactions which have already taken place and those which are to take place in the future.
That by itself will not attract the operation of article 14.
Again, even with respect to transactions which may be completed in the future, a reasonable classification will not be struck down.
[72 C] Jalan Trading Co. vs Mazdoor Union, ; , relied on.
It is not possible to say that because the Legislature thought of improving upon the Act of 1894 by prescribing certain limits of time as from 20th January 1967 the difference in treatment in cases covered by the notification before the said date and after the said date denies equal protection of laws because the transactions are not similarly circumstanced.
Some of the notifications issued under section 4 must have been made even more than 3 years before 20th January, 1967 and such cases obviously could not be treated in the same manner 'as notifications issued after that date.
article 14 does not strike at differentiation caused by the enactment of a law between transactions governed thereby and those which are not so governed.
[73 H 74 B] Hatisingh Manufacturing Co., Ltd. vs Union of India, ; No grievance can be made because interest is denied to persons who have already taken the compensation.
Even here the classification is not unreasonable and cannot be said to be unrelated to the object of the Act.
[74 E F] 44 Per Shelat and Vaidialingam, JJ.
(dissenting) By validating the acquisition orders and declarations made on the basis of an exhausted notification under section 4 the impugned Act saves government from having to issue a fresh notification and having to pay compensation calculated on the market value as on the date of such fresh notification and depriving the expropriated owner of the benefit of the appreciated value in the meantime.
The real object of section 4 of the impugned Act is thus to save the State from having to compensate for such appreciation under the device of validating all that is done under an exhausted section 4 notification and thus in reality fixing an anterior date i.e. the date of such a dead section 4 notification for fixing the compensation.
The impugned Act thus suffers from a two fold vice : (i) that it purports to validate acquisitions orders and notifications without resuscicating the notification under section 4 by any legislative provision on the basis of which alone the validated acquisitions, orders and declarations can properly be sustained and (ii) that its provisions are in derogation of article 31(2) as interpreted by this Court by fixing compensation on the basis of value on the date of notifications under section 4 which had become exhausted and for keeping them alive no legislative provision is to be found in the impugned Act.
It is therefore not possible to agree with the view that the purpose of section 4 is to fill the lacuna pointed out in Sharma 's case nor with the view that it raises a question of adequacy of compensation.
The section under the guise of validating the acquisitions, orders and notifications camouflages the real object of enabling acquisitions by paying compensation on the basis of values frozen by notifications under s 4 which by part acquisitions thereunder had lost their efficacy and therefore required the rest of the land to be notified afresh and paying compensation on the date of such fresh notifications.
The fact that neither section 4 nor section 23 of the principal Act are altered does not make any difference.
[89 D H, 85 H] Section 4 of the Amending Act must therefore be struck down as invalid.
[90 A]
|
on Nos. 120 of 58 etc.
Petition under article 32 of the Constitution of India for enforcement of Fundamental Rights.
G. section Pathak, J.B. Dadachanji, S.N. Andley, Rameshwar Nath and P.L. Vohra, for the petitioners (in Petns.
120 and 147 of 1958).
section B. Dadachanji, S.N. Andley, Rameshwar Nath and P.L. Vohra, for the petitioner (in Petn.
No. 149/58).
J.B. Dadachanji, S.N. Andley, Rameshwar Nath and P.L. Vohra, for the petitioners (in Petns.
Nos. 148 and 150/58).
415 C.K. Daphtary, Solicitor General of India, N.P. Nathwani, R. H. Dhebar and T. M. Sen, for the respondents.
N.P. Nathwani and I. N. Shroff for respondents Nos. 5 and 6 (in Petns.
120, 148 and 156 of 1958).
December 22.
The Judgment of Sinha, C. J., and Das, J., was delivered by Das, J., the judgment of Sarkar and Mudholkar JJ., was delivered by Mudholkar, J., and Ayyangar, J., delivered a separate judgment.
section K. Das, J.
In these 13 writ petitions arises a common question of law, namely, the constitutional validity of some of the provisions of the Bombay Land Tenure Abolition Laws (Amendment) Act, 1958 (Bombay Act LVII of 1958) and in particular, of the provisions contained in sections 3 and 4 read with section 6 thereof.
We shall hereinafter refer to this Act as the impugned Act, 1958.
Put very briefly, the case of the petitioners is that as a result of the provisions of the impugned Act, 1958, certain non permanent tenants were deemed to be permanent tenants as from the commencement of the Bombay Taluqdari Tenure Abolition Act, 1949 (Bombay Act LXII of 1949), hereinafter referred to as the Taluqdari Abolition Act, 1949 and thereby became entitled to acquire on payment of six times the assessment or six times the rent instead of at least the minimum of twenty times the assessment, the rights of an "occupant" within the meaning of section 5A of the Taluqdari Abolition Act, 1949.
This result, it is contended, has substantially deprived the petitioners of the rights which they acquired on tillers ' day (April 1, 1957) by reason of the provisions contained in section 32 and other relevant sections of the Bombay Tenancy and Agricultural Lands Act, 1948 (Bombay Act LXVII of 1948) as amended from time to time.
It is 416 stated that this deprivation has resulted in the violation of certain fundamental rights of the petitioners, such as those guaranteed under articles 14, 19 and 31 of the Constitution.
On behalf of the petitioners it has also been contended that apart from the question of violation of their fundamental rights, the impugned Act, 1958 is a piece of colourable legislation in the sense that under the guise of changing a rule of evidence, it has in effect taken away the petitioners ' property without payment of compensation and given it to another; it is, therefore, a piece of legislation which does not come within any entry of the two legislative lists under which the State Legislature was competent to make laws.
To appreciate the points urged in support of the petitions which have all been heard together, it will be necessary to consider the effect and inter ; action of some of the provisions of four principal Acts, namely, (1) the Bombay Land Revenue code 1879 (Bombay Act V of 1879), hereinafter referred to as the Revenue Code; (2) the Bombay Tenancy and Agricultural Lands Act, 1948, as amended from time to time, hereinafter called the Tenancy Act, 1948; (3) the Taluqdari Abolition Act 1979; and (4) the impugned Act, 1958.
We shall presently read the relevant provisions of these Acts.
But before we do so, it is necessary to state some facts.
The facts are similar, though not the same, in all the petitions.
It will be sufficient to state the facts of one of the petitions (Petition No. 120 of 1958) in detail in order to focus attention on the main question of law which is the same in all these petitions and which we have indicated briefly in the preceding paragraph.
The petitioners are all ex Taluqdars.
In Petition No. 120 of 1958 the petitioner was a Taluqdar of two estates known as Sanand and Koth in the Ahmedabad district of the then State of 417 Bombay and now of the State of Gujarat.
These two estates comprised 24 Taluqdari villages.
The petitioner was the absolute proprietor of all the lands comprised in the two estates, subject to payment of land revenue to the State (Government under the petitioner there were tenants it is stated, some permanent and some non permanent.
In the year 1949, the Bombay Provincial Legislature enacted the Taluqdari Abolition Act, 1949 which came into force on August 15, 1950.
As a result of the provisions of that Act, the Taluqdari tenure as such was abolished and certain properties, such as, wells, tanks, waste lands, uncultivated lands, etc., were acquired by the State; and the Taluqdar was converted into mere "occupant" as defined in the Revenue Code and was to pay land revenue in accordance with the provisions of that Code.
Section 3 (16) of the Revenue code defined an "occupant" as meaning "a holder in actual possession of unalienated land, other than a tenant; provided that where the holder in actual possession is a tenant, the landlord or superior landlord, as the case may be, shall be deemed to be the occupant." In 1955 the Taluqdari Abolition Act, 1949 was amended and section 5A was inserted.
This section, in effect, gave a permanent tenant in possession of Taluqdari land the right to become an occupant if he paid six times the assessment for acquiring the right of occupancy.
In other words, if a permanent tenant of an ex Taluqdar paid the required amount as stated in section 5A, he became an occupant.
himself in place of the ex Taluqdar and came into direct relation with the State in the matter of payment of land revenue, and acquired all the rights of an occupant under the Revenue Code.
The right which was conferred by section 5A was available at first for a limited period only, but it was extended till 1962 as stated at the Bar.
It is necessary to state now what is meant by "permanent tenant".
Section 16 of the Taluqdari Abolition made the provisions of the Revenue Code applicable thereto and an attempt was made to harmonize the provisions of the Taluqdari Abolition Act, 1949 with the provisions of the Revenue Code; therefore, for understanding what is a "permanent tenant" we have to go to the Revenue Code, section 83 whereof, so far as it is relevant, reads as follows: "83 x x x x x And where by reason of the antiquity of a tenancy, no satisfactory evidence of its commencement is forthcoming, and there is not any such evidence of the period of its intended duration, if any, agreed upon between the landlord and tenant, or those under whom they respectively claim title, or any usage of the locality as to duration of such tenants, it shall, as against the immediate landlord of the tenant, be presumed to be co extensive with the duration of the tenure of such landlord and of those who derive title under him.
And where there is no satisfactory evidence of the capacity in which a person in possession of land in respect of which he renders service or pays rent to the landlord received, holds or retains possession of the same it shall be presumed that he is in possession as tenant.
x x x x It will be noticed that the expression "permanent tenant" does not occur in the section.
What is stated therein is that in certain circumstances the duration of the tenancy of a tenant as against his immediate landlord shall be presumed to be co extensive with the duration of the tenure of such landlord.
The two circumstances mentioned are, (1) where by reason of the antiquity of the tenancy no satisfactory evidence of its commencement is forthcoming, and (2) where there is no such evidence 419 of the period of its intended duration, if any, agreed upon between the landlord and tenant, or any usage of the locality as to duration of the tenancy.
Some time later, by Bombay Act, XIII of 1956, the definition of a "permanent tenant" was inserted in section 2(10A) of the Tenancy Act, 1948.
That definition was in these terms: "`permanent tenant ' means a person (a) who immediately before the commencement of the Bombay Tenancy and Agricultural Lands (Amendment) Act, 1955 (hereinafter called `the Amending Act, 1955 ') (i) holds land as mulgenidar or mirasdar; or (ii) by custom, agreement, or the decree or order of a Court holds the land on lease permanently; or (b) the commencement or duration of whose tenancy cannot satisfactorily be proved by reason of antiquity; and includes a tenant whose name or the name of whose predecessor in title has been entered in the record of rights or in any public record or in any other revenue record as a permanent tenant immediately before the commencement of the Amending Act, 1955.
" Section 87A of the Tenancy Act, shall, which was also inserted by Bombay Act XII of 1956 by section 47 thereof, said: "Nothing in this Act, shall affect the provisions of any of the Land Tenures Abolition Acts, specified in Schedule III to this Act, in so far as such provisions relate to the conferment of right of An occupant in favour of any inferior holder or tenant in respect of any land held by him." 420 In Schedule III to the Tenancy Act, 1948, was given a list of Land Tenures Abolition Act, including the Taluqdari Abolition Act, 1949.
Therefore, the effect of section 87A aforesaid was that nothing in the Tenancy Act, 1948, affected the provisions of the Taluqdari Abolition Act, 1949, in so far as the provisions in section 5A of the Taluqdari Abolition Act 1949, conferred the right of an occupant in favour of a permanent tenant in possession of any taluqdari land on payment of the sums mentioned therein.
The arguments before us have proceeded on the footing that before the coming into force of the impugned Act, 1958, the status of a permanent tenant in possession of any taluqdari land was to be determined by the provisions in section 83 of the Revenue Code; in other words by the two circumstances mentioned in that section.
What was the position with regard to tenants who were not permanent ? No right was conferred on them by section 5A of the Taluqrlari Abolition Act, 1949, which section was inserted in that Act in 1955 by Bombay Act I of 1955.
The rights of these non permanent tenants were governed by the Tenancy Act, 1948, which underwent some fundamental changes in 1956 (see Bombay Act XIII of 1956).
The changes relevant for our purpose were contained in section 32 and some of the succeeding sections.
The effect of these sections was considered by this court in Sri Ram Ram Narain Medhi vs The State of Bombay (1).
After summarising the provisions contained in sections 32 to 32R, this Court said: "The title of the landlord to the land passes immediately to the tenant on the tillers ' day and there is a completed purchase or sale thereof as between the landlord and the tenant.
The tenant is no doubt given a locus penitentiae and an option of declaring whether 421 he is or is not willing to purchase the land held by him as a tenant.
If he fails to appear or makes a statement that he is not willing to purchase the land, the Tribunal shall by an order in writing declare that such tenant is not willing to purchase the land and that the purchase is ineffective.
It is only by such a declaration by the Tribunal that the purchase becomes ineffective.
If no such declaration is made by the Tribunal the purchase would stand as statutorily effected on the tillers ' day and will continue to be operative, the only obligation on the tenant then being the payment of price in the mode determined by the Tribunal.
If the tenant commits default in the payment of such price either in lump or by instalments as determined by the Tribunal, section 32M declares the purchase to be ineffective but in that event the land shall then be at the disposal of the Collector to be disposed of by him in the manner provided therein.
Here also the purchase continues to be effective as from the tillers ' day until such default is committed and, there is no question of a conditional purchase or sale taking place between the landlord and tenant.
The title to the land which was vested originally in the landlord passes to the tenant on the tillers ' day or the alternative period prescribed in that behalf.
This title is defeasible only in the event of the tenant failing to appear or making a statement that he is not willing to purchase the land or committing default in payment of the price thereof as determined by the Tribunal.
The tenant gets a vested interest in the land defeasible only in either of those cases and it cannot therefore be said that the title of landlord to the land is suspended for any period definite or indefinite.
" 422 The tillers ' day referred to above was the first day of April, 1957.
The argument on behalf of the petitioners is that according to the decision of this Court, the title of the petitioners to lands held by tenants who were entitled to the benefit of sections 32 to 32R passed immediately to the tenants on the tillers ' day and there was a completed purchase or sale thereof as between the petitioners and the tenants.
So far as permanent tenants in possession of taluqdari lands were concerned, they were governed by section 5A of the Taluqdari Abolition Act, 1949, and nothing in the Tenancy Act, 1948, affected their right under that section.
But non permanent tenants in possession of taluqdari lands became purchasers of their lands on the tillers ' day with an obligation to pay the purchase price mentioned in section 32H of the Tenancy Act, 1948.
Section 32H, in so far as it bears upon non permanent tenants, says: "32H. (1) Subject to the additions and deductions as provided in sub sections (1A) and (1B), the purchase price shall be reckoned as follows, namely: (i) in the case of a permanent tenant X X X (ii) in the case of other tenants, the purchase price shall be the aggregate of the following amounts, that is to say, (a) such amounts as the Tribunal may determine not being less than 20 times the assessment and not more than 200 times the assessment; (b) the value of any structures, wells, and embankment constructed and other permanent fixtures made and trees planted by the landlord on the land; (c) the amount of the arrears of rent, if any lawfully due on the tillers ' day or the postponed date; 423 (d) the amounts, if any, paid by or recovered from the landlord as land revenue and other cesses referred to in clauses (a), (b), (c) and (d) of sub section (1) of section 10A, in the event of the failure on the part of the tenant to pay the same.
Explanation 1. * * * Explanation 2. * * * (1A) Where a tenant to whom subsections (1) and (2) of section 10A do not apply, has, after the commencement of the Bombay Tenancy and agricultural Lands (Amendment) Act, 1955, paid in respect of the land held by him as tenant land revenue and other cesses referred to in sub section (1) of that section, on account of the failure of the landlord to pay the same, a sum equal to the total amount so paid by the tenant until the date of the determination of the purchase price shall be deducted from the aggregate of the amounts determined under sub section (1).
(1B) (a) On the amount arrived at in accordance with the provisions of sub sections (1) and (lA) there shall be calculated interest at 4 1/2, per cent, per annum for the period between the date on which the tenant is deemed to have purchased the land under section 32 and the date of the determination of the purchase price.
(b) (i) The amount of interest so calculated shall be added to, and (ii) the amount of rent, if any, paid by the tenant to the landlord and the value of any products of trees planted by the landlord if such products are removed by the landlord during the said period shall be deducted from, the amount so arrived at.
424 (2) The State Government may by general or special order, fix different minima and maxima for the purpose of sub clause (a) of clause (ii) of sub section (1) in respect of any kind of land held by tenants in any backward area.
In fixing such minima and maxima, the State Government shall have regard to the rent payable for the land and the factors specified in sub section (3) of section 63A." The difference in the purchase price mentioned in section 5A of the Taluqdari Abolition Act, 1949, and the purchase price mentioned in section 32H of the Tenancy Act, 1948, is noticeable.
Under section 5A of the Taluqdari Abolition Act, 1949, the purchase price for the right of occupancy is approximately six times the assessment fixed for the land.
Under section 32H, however, the minimum is 20 times the assessment and the maximum 200 times the assessment.
These minima and maxima are liable to reduction in the case of land held by tenants in any backward area.
Now, the main grievance of the petitioners is this.
So far as non permanent tenants were concerned, the title of the petitioners to their lands passed on April 1, 1957, to the tenants and the petitioners ceased to be landlords.
All that they became entitled to on that day was the purchase price mentioned in section 32H.
By one stroke of the pen as it were, the impugned Act, 1958, made almost all non permanent tenants into permanent tenants and thereby deprived the petitioners of the higher purchase price which they were entitled to get under section 32H and the succeeding sections of the Tenancy Act, 1948.
In petition No. 120 of 1958 the petitioners has stated that he would lose about Rs. 14 lacs as a result of the provisions of the impugned Act, 1958.
We may now read some of the provisions of the impugned Act, 1958.
The Act is entitled "an Act 425 further to define permanent tenants, inferior holders and permanent holders for the purposes of certain Land Tenure Abolition laws and to provide for certain other matters.
" In view of the argument advanced before us on behalf of the respondents that the impugned Act, 1958 merely changes a rule of evidence, it is worthly of note that the long title itself states that the Act is an Act further to define permanent tenants.
Section 2 of the Act is the interpretation section and the expression 'Land Tenure Abolition law ' means in relation to a permanent tenant, Acts specified in Part I of the Schedule.
The Taluqdari Abolition Act, 1949 is one of the Acts mentioned in Part I of the Schedule.
The expression 'tenure holder ' means inter alia a taluqdar and 'tenure land ' means inter alia taluqdari land.
Sections 3, 4 are 6 and important for our purpose and should be read in full.
A person shall, within the meaning of the relevant Land Tenure Abolition law, be deemed to be an inferior holder, a permanent holder or, as the case may be, a permanent tenant, on the date of the abolition of the relevant land tenure, if his name has been recorded in the record of rights or other public or revenue record as an inferior holder, permanent holder or permanent tenant in respect of any tenure land (a) on the date of the abolition of the relevant land tenure, or (b) in pursuance of orders issued during the course of any proceedings under the relevant Land Tenure Abolition law or, as the case may be, the Bombay Land Revenue Code, 1879 (i) before the commencement of this Act, or 426 (ii) after the commence of this Act in cases in which inquiries were pending at the commencement of this Act, or (c) in pursuance of an order issued by the Mamlatdar in respect of an entry under section 6 of this Act.
For the purposes of the relevant Act specified in Part I of the Schedule, a person (a) who on the date of the commencement of that Act was holding any tenure land and (b) who and whose predecessors in title, if any, were, immediately before that date for such continuous period of twelve years or more, holding the same tenure land, or any other tenure land, as a tenant or inferior holder under the tenure holder for the time being on payment of an amount exceeding the assessment of the land, shall unless it is proved by the tenure holder that he would not have been a permanent tenant on the basis of continued possession of the land under clause (b), be deemed to be a permanent tenant of the land under clause (a) and all the provisions of that Act shall apply to him as they apply to a permanent tenant.
Explanation.
The assessment for the purpose of this section shall be reckoned as provided in clauses (a) and (b) of section 5.
(1) The rights of an inferior holder, permanent holder or permanent tenant under sections 4 and 5 shall be entered in the record of rights unless the tenure holder applies in writing to the Mamlatdar within six months from the date of the commencement of this Act for a declaration that any holder, or tenant under him is not an inferior holder, a 427 permanent holder or, as the case may be, a permanent tenant.
(2) Any such application shall be disposed of as if it were an application in respect of a disputed case under section 135D of the Bombay Land Revenue Code, 1879.
" The constitutional validity of the aforesaid provisions has been challenged before us on behalf of the petitioners on the following grounds.
(1) The Bombay State legislature was not competent to enact the impugned Act, which is a piece of colourable legislation inasmuch as under the guise of defining a permanent tenant, or changing a rule of evidence, it has really confiscated a large part of the purchase price which the petitioners were entitled to under section 32H of the Tenancy Act, 1948 from some of their tenants; (2) The impugned Act contravenes the rights of the petitioners guaranteed by the Constitution under articles 14, 19 (1) (f) and 31 there of; and (3) Article 31A does not save it.
On behalf of the respondents the main argument is that the impugned Act, 1958, merely changes a rule of evidence for determining who are permanent tenants in possession of taluqdari lands; it does nothing more than that and is not, therefore, bad on any of the grounds urged on behalf of the petitioners.
It is clear that if the impugned Act merely changes a rule of evidence for determining who are permanent tenants in possession of taluqdari lands, then the points urged as to the violation of the petitioners ' fundamental rights under articles 14, 19 (l) (f) and 31 would not at all arise.
If, on the contrary, it is found that the impugned Act is not a piece of legislation which changes a rule of evidence but is a device by which the petitioners have been deprived of their property 428 without payment of compensation, then it would be a piece of colourable legislation not within the competence of the State Legislature.
The legislation would then fall on the main ground that it is a piece of colourable legislation, the subject matter of which is not covered by any entry in List II or List III.
Therefore, the crux of the matter is what is the true scope and effect of the provisions of the impugned Act, 1958.
To this question we now address ourselves.
It may be stated at the very outset that the constitutional validity of the relevant provisions of the Taluqdari Abolition Act, 1949 and the Tenancy Act, 1948 as amended by Bombay Act, XIII of 1956 has not been challenged before us.
In Dhirubha Devisingh Gohil vs The state of Bombay and Sri Ram Ram Narain Medhi vs The State of Bombay, it was held by this Court that the relevant provisions of those two Acts were Constitutionally valid.
What has been challenged before us is the constitutional validity of the relevant provisions of the impugned Act 1958, particularly the provisions in sections 3,4 and 6 which we have quoted earlier.
What is the scope and effect of those provisions? Section 3 in effect states that a person shall, within the meaning of the relevant Land Tenure Abolition law, be deemed to be a permanent tenant on the date of the abolition of the relevant land tenure, if his name has been recorded in the record of rights or other public or revenue record as a permanent tenant in respect of any tenure land in any of the three following circumstances (a) on the date of the abolition of the relevant land tenure; or (b) in pursuance of orders issued during the course of any proceeding under the relevant land tenure abolition law or the Revenue Code 429 either before or after the commencement of the impugned Act, 1958; or (c) in pursuance of an order issued by the Mamlatdar in respect of an entry under section 6 of the impugned Act, 1958.
It is worthy of note that section 3 does not create a mere presumption, as is referred to in section 135J of the Revenue Code.
Section 135J of the Revenue Code states inter alia that an entry in the record of rights shall be presumed to be true until the contrary is proved.
Section 3 of the impugned Act, 1958 states, however, that a person shall be deemed to be a permanent tenant on the date of the abolition of the relevant land tenure if his name has been recorded in the record of rights in respect of any tenure land in any of the three circumstances mentioned as (a), (b) and (c) therein.
In other words, if any one of the three circumstances mentioned in the section exists, then by a fiction of law a person who fulfils that circumstance must be deemed to be a permanent tenant.
Section 4 says in effect that a tenant(a) who on the date of the commencement of the Taluqdari Abolition Act, 1949 was holding any tenure land, and (b) who and whose predecessors in title, if any, were immediately before that date for such continuous periods as aggregate to a total continuous period of 12 years or more, holding the same tenure land, or any other tenure land shall unless it is proved by the tenure holder that he would not have been a permanent tenant on the basis of continued possession of the land under (b) above, be deemed to be a permanent tenant of the land under (a), and all the provisions of the Taluqdari Abolition Act, 1949 shall apply to him as they apply to a permanent tenant.
There is a third condition mentioned in section 4, namely, the amount which the tenant pays must exceed the assessment of the land.
This condition does not, however have any importance in the discussion which follows and no further reference to it is necessary.
430 There is no difficulty in understanding cl.
(a) of section 4 but cl.
(b) is not so clear.
The expression "continuous periods as aggregate to a total continuous period of twelve years or more" is neither very elegant nor very clear.
Perhaps, the expression means that one particular continuous period may be of less than twelve years but there may be more than one such continuous period and in such a case the totality of such continuous periods must aggregate twelve years or more; if however, one continuous period extends over twelve years or more, there is no difficulty, and the question of the aggregate totalling twelve years does not arise.
The question of the aggregate totalling twelve years will arise when there are more continuous periods than one, of less than twelve years duration each.
The possessions for such continuous periods may be of the same tenure land or of different tenure lands.
If however, the aggregate of continuous periods of possession of the same tenure land or of any other tenure land comes to twelve years or more, then cl.
(b) of section 4 is fulfilled.
It further appears that conditions mentioned in (a) and (b) are cumulative.
In other words, for the application of s.4, a tenant must be in possession of tenure land on the date of the commencement of the Taluqdari Abolition Act, 1949 (August 15, 1950) and further more must have been in possession of the same tenure land or of any other tenure land for continuous periods aggregating more than twelve years immediately before the said date.
A person who fulfils the aforesaid two conditions shall be deemed to be a permanent tenant of the land unless it is proved by the tenure holder that he would not have been a permanent tenants of the basis of possession referred to in cl.(b).
The expression "unless it is proved by the tenure holder that he would not have been a permanent tenant on the basis of continued possession of the land under clause (b)" has again given rise to some difficulty.
Two views have been can 431 vassed before us.
One view is that the expression means that the tenure holder can only contest the correctness of the claim of twelve years ' possession and show that the tenant was not in possession of the land or lands concerned or that the continuous period or periods of possession did not aggregate twelve years.
The other view is that the tenure holder can show that the tenancy commenced on a particular date or that there is satisfactory evidence of the duration of the tenancy, and therefore, under section 83 of the Revenue Code the tenant would not be a permanent tenant merely by reason of twelve years ' possession.
Section 4 as worded is somewhat obscure and if one were to go merely by the words used, one would be inclined to accept the first view.
On that view, the Section undoubtedly would go much further than merely introducing a rule of evidence; it would create a new class of permanent tenants not contemplated by section 83 of the Revenue Code.
The latter section talks of two circumstances which determine the status of a tenant: one relates to commencement of the tenancy and the other to its intended duration.
Under section 83 the onus will be on the person who claim a permanent status as a tenant to prove that either the commencement of the tenancy is not known or that its intended duration was not agreed upon between the landlord and tenant or was not governed by any usage of the locality.
Section 4 of the impugned Act, 1958 gives a go by to these circumstances.
It brings in different considerations altogether.
In effect it says that if a person was in possession of any tenure land on August 15, 1950 (the date of commencement of the Taluqdari Abolition Act, 1949) and was further more in possession of the same tenure land or any other tenure land for a continuous aggregate period of twelve years, he would be deemed to be a permanent tenant, unless the tenure holder proved that he was not in possession for a continuous aggregate period of twelve years 432 as laid down in cl.
(b) of the section.
This means that instead of the two circumstances relating to commencement and duration a new consideration is brought in, namely, whether the tenant has been in possession for a continuous, aggregate period of twelve years.
If he has been, then he is a permanent tenant.
If he has not been in such possession, then he is not a permanent tenants.
In other words, section 4 of the impugned Act, 1958, completely changes the definition of a permanent tenant and creates a new class of permanent tenants who were not permanent tenants on April 1, 1957.
If this view is correct, and we think that there is a good deal to be said in favour of this view, then section 4 of the impugned Act, 1958 in spite of giving the tenure holder an opportunity of proving that the tenant was not in possession for an aggregate continuous period of twelve years under section 4 read with section 6, undoubtedly changes the very definition of permanent tenant and by that change wipes out a large part of the purchase price which the petitioners were entitled to get on April 1, 1957 from some of their tenants.
It is not disputed that on this view of section 4, the impugned legislation would be unconstitutional inasmuch as it would bring within the category of permanent tenants persons who were non permanent tenants under the previous law and there by deprive the tenure holders of part of the purchase money which they were to get from them.
It has been contended that the second view with regard to the expression "unless it is proved by the tenure holder that he would not have been a permanent tenant on the basis of continued possession of the land under clause (b)" is preferable on the ground that cl.
(b) is one of the conditions which the tenant must fulfil before he can get the benefit of section 4 and there would not be much sense in allowing the tenure holder to disprove a condition which the tenant must fulfil before he can get 433 the benefit of section 4.
We find it difficult to accept this view.
On a pure question of construction of the words used in section 4, we see nothing wrong in allowing the tenure holder to prove that the tenant was not in possession for continuous periods aggregating twelve years.
Let us, however, assume that the second view as to the interpretation of section 4 of the impugned Act, 1958, is preferable to the first view.
What then is the position? The position then is that a tenant who fulfils the two conditions mentioned in cls.
(a) and (b) must be deemed to be a permanent tenant unless the tenure holder proves the commencement and/or duration of the tenancy.
From this point of view it may be argued that section 4 merely changes a rule of evidence and throws the onus on the tenure holder to prove that in spite of twelve years ' continuous possession mentioned in cl.
(b), the tenant is not a permanent tenant by reason of the circumstance that the commencement of the tenancy or its intended duration is known.
Under section 6 the rights of a permanent tenant under section 4 shall be entered in the record of rights unless the tenure holder applies in writing to the Mamlatdar within six months from the date of the commencement of the impugned Act, 1958, for the declaration that the tenant under him is not a permanent tenant.
If any such application is filed by the tenure holder, it shall be disposed of as if it were an application in respect of a disputed case under section 135D of the Revenue Code.
What is the effect of section 6 ? It was conceded by the learned counsel appearing for the respondent State and also the respondent tenants that the tenure holder has only one opportunity of saying that a tenant under him is not a permanent tenant and the tenure holder must avail himself of that opportunity within six months from June 10, 1958, the date on which the impugned Act, 1858, came into force.
The combined effect of sections 3, 4 and 6 appears to us to be this.
If the tenure holder has made no application 434 within six months from June 10, 1958, for a declaration that a tenant under him is not a permanent tenant, every tenant under him who fulfils the conditions mentioned in cls.
(a) and (b) of section 4 at once gets recorded in the record of rights as a permanent tenant.
As soon as he is so recorded, he must be deemed under section 3 to be a permanent tenant by a fiction of law and under section 4 all the provisions of the Taluqdari Abolition Act, 1949, will apply to him as they apply to a permanent tenant.
This combined effect of sections 3, 4 and 6 of the impugned Act, 1958 does in our opinion deprive the tenure holder of any real opportunity of contesting the claims of his tenants and makes them permanent tenants once they are recorded in the record of rights, thereby depriving the tenure holder of the purchase price which he was entitled to get from them under section 32H of the Tenancy Act, 1948.
On behalf of the respondents it was stated at the Bar that the petitioners had made applications for a declaration under section 6 of the impugned Act, 1958, and that those applications are still pending.
We have no materials in support of this statement.
No affidavit has been made on behalf of the respondents to this effect; nor do we know if those applications related to all the non permanent tenants of the petitioners.
What we know is that in a stay application made by the petitioner in petition No. 120 of 1958 it was averred that the petitioner had filed several declaratory suits before the Mamlatdar under section 70(b) of the Tenancy Act, 1948, for a declaration that the tenants concerned were not permanent tenants.
Those suits were however, filed prior to the coming into force of the impugned Act, 1958.
The petitioner asked for a stay of those suits on two grounds: firstly, that after the coming into force of the impugned Act, 1958, the suits would become infructuous, and secondly, that the Mamlatdar concerned would have no jurisdiction to adjudicate upon the constitutional 435 validity of the provisions of the impugned Act, 1958, and in view of those provisions would be bound to hold that the tenants had become permanent tenants.
This Court passed no order on the application for stay.
But the petitioner, it appears, moved the Mamlatdar to stay the hearing of the suits pending the disposal of the writ petition in this Court and the suits were stayed.
In a second petition filed on behalf of the petitioner it was stated that after the coming into force of the impugned Act, 1958, the petitioner received a notice to show cause why the non permanent tenants under him should not be declared to be permanent tenants and the record of rights amended accordingly.
The petitioner applied to the Revenue Officer concerned to stay the proceedings in view of the writ petition pending in this Court.
This request was, however, turned down.
The petitioner then came to this Court and it appears that an order was made to the effect that any investigation which might be necessary for the proceedings pending before the Revenue Officer might be continued, but no final order or entry should be made till the disposal of the writ petition.
Such an order appears to have been made in respect of a number of villages and the petitioner stated that he had thousands of tenants in 24 villages, some of whom were permanent, some protected, and some ordinary.
Nothing was stated in those petitions or in the replies thereto as to whether the tenure holder had made an application for a declaration within the meaning of section 6 of the impugned Act, 1958.
All that has been stated in the application is that in response to a notice received from the Revenue Officer, the petitioner, as a tenure holder, had moved this Court for a stay of the proceedings.
If the petitioner had filed no application for a declaration within the meaning of section 6 of the impugned Act, 1958, and within the time allowed by that section, then it is obvious 436 that the Revenue Officer dealing with the suits under section 70(b) of the Tenancy Act, 1948, pending before him, or the Revenue Officer dealing with other proceedings before him, must give effect to the provisions of sections 3, 4 and 6 of the impugned Act, 1958.
It is, therefore difficult to see how the pendency of the suits or other proceedings before the Revenue Officers concerned can be of any assistance to the petitioners.
The question, therefore, boils down to this.
Section 6 of the impugned Act, 1958 does give one opportunity to the petitioners to make an application for a declaration that any tenant under him is not a permanent tenant, but that opportunity was to be availed of within six months from June 10, 1958.
Once that opportunity is lost, the tenure holder cannot claim that a tenant who fulfils cls.
(a) and (b) of section 4 is not a permanent tenant.
Our attention was drawn to sub sections
(3), (4) and (5) of section 5A of the Taluqdari Abolition Act, 1949.
Those sub sections say in effect that if any question arises whether any person is a permanent tenant, the State Government or an officer authorised by the State Government in that behalf shall decide the question; where such officer decides such question any person aggrieved by the decision may file an appeal to the State Government within 60 days from the date of the decision; and the decision of the State Government shall be final.
It was not suggested before us that the aforesaid sub sections would give the tenure holder a second opportunity of contesting the claim of the tenant, and it seems to us quite clear that the tenure holder who had failed to make an application within the time mentioned in section 6 of the impugned Act, 1958, would not be in a position to take advantage of sub sections
(3), (4) and (5) of section 5A of the Taluqdari Abolition Act, 1949.
If sections 3, 4 and 6 of the impugned Act, 1958, are good and valid in law, then whichever be the authority that has to decide the claim of the tenant, it must decide it in accordance with those provisions.
437 In these circumstances, can it be said that the opportunity given by section 6 is a real opportunity and does it amount to merely changing a rule of evidence ? We think that this question must be answered in the negative.
It is to be noted that on April 1, 1957 the petitioners ceased to be tenure holders of the lands held by non permanent tenants and as held by this Court, sections 32 to 32R of the Tenancy Act, 1948, clearly contemplated the vesting of the title in the tenants on the tillers ' day, defeasible only on certain specified contingencies.
This Court held that those sections were designed to bring about an extinguishment, or in any event a modification of the landlord 's rights in the estate within the meaning of article 31A (1) (a) of the Constitution.
If that was the true effect of sections 32 to 32R of the Tenancy Act, 1948, then on April 1, 1957 the petitioners were left only with the right to get the purchase price under section 32H.
That right of the petitioners was undoubtedly a right to property.
In Bombay Dying and Manufacturing Co. Ltd. vs The State of Bombay (1) this Court observed, with regard to unpaid wages of an employee, that when an employee had done his work, the amount of wages earned by him become a debt due to him from the employer and this was property which could be assigned under the law.
The provisions of the Bombay Labour Welfare Fund Act (Bombay Act XL of 1953) were under consideration in that case.
Section 3 of the Act transferred inter alia all unpaid accumulation of wages to a fund known as the Bombay Labour Welfare Fund.
This Court held that section 3 (1) of the Act in so far as it related to unpaid accumulation in section 3(2) (b) was unconstitutional and void by reason of the right guaranteed under article 19(1) (f) of the Constitution and was not saved by cl.(5) thereof.
We think that the same principle must apply in the 438 present case.
The right of the petitioners to the purchase price under section 32H of the Tenancy Act, 1948, from those of their tenants who were non permanent on April 1, 1957, was a right of property in respect of which the petitioners have a guarantee under article 19 (1)(f).
The provisions in sections 3,4 and 6 of the impugned Act, 1958, in so far as they laid down that in certain circumstances a tenant shall be deemed to be a permanent tenant from the date of the Taluqdari abolition Act, 1949, adversely affected the right of the petitioners with retrospective effect; it practically wiped off a large part of the purchase price which the petitioners were entitled to get.
If section 6 of the impugned Act, 1958, is to be tested on the touchstone of reasonable restrictions in the interests of the general public as laid down in cl.
(5) of article 19 of the Constitution, it must be held that it does not impose a reasonable restriction.
We have found it very difficult to understand why and how it is reasonable that the tenure holder must make an application within six months from the commencement of the impugned Act, 1958, for a declaration that his tenants are not permanent tenants.
The petitioners have three kinds of tenants permanent tenants, protected tenants, and ordinary tenants.
On April 1, 1957 the petitioners ceased to be tenure holders in respect of all tenants other than permanent tenants and became entitled only to the purchase price under section 32H. If any tenant claimed on that date that he was a permanent tenant, he had to establish his claim in accordance with section 83 of the Revenue Code.
Such a claim could be contested by the tenure holder whenever made by the tenant.
But by the impugned Act, 1958, all this was changed, and unless the tenure holder made an application within six months of the commencement of the impugned Act, 1958, he was not in a position to say that a particular tenant who was in possession of tenure land for continuous period aggregating twelve years on and before August 15, 439 1950, was not a permanent tenant.
We are unable to hold that the six months ' limit imposed by section 6 of the impugned Act, 1958, is in the circumstances, a reasonable restriction within the meaning of article 19(5) of the Constitution.
It is a little difficult to understand how the tenure holder could know which of his non permanent tenants would claim to be permanent on the coming into force of the impugned Act, 1958.
Obviously, the tenure holder had to anticipate that all his non permanent tenants might claim to be permanent, and therefore it was incumbent on him to make an application for a determination that none of his non permanent tenants were permanent, and unless he did so he would lose his right to get the purchase price under section 32H of the Tenancy Act, 1948.
We are clearly of the view that the time limit imposed by section 16 of the impugned Act, 1958, is, in these circumstances, and unreasonable restriction and cannot be justified under article 19(5) of the Constitution.
In view of this finding it is unnecessary to consider the effect of article 31 of the Constitution.
On behalf of the respondent State reliance was sought to be placed on article 31A of the Constitution.
That Article, in our opinion, has no application to the present cases, inasmuch as there was no acquisition by the State of any estate or any rights therein or the extinguishment or modification of any such rights.
On April 1, 1957, the tenure holders had ceased to be tenure holders in respect of lands held by non permanent tenants.
The relation between the tenure holders and the tenants had changed from that of landlord and tenant to that of creditor and debtor.
When, therefore, the impugned Act, 1958, affected the right of the petitioners as creditors to get a certain sum of money from the debtors, it did not provide for the acquisition by the State of any estate or of any rights therein; nor did it provide for the extinguishment or modification of any such 440 rights.
Therefore, article 31A has no application and cannot save the impugned Act, 1958.
It has been contended before us that while implementing the provisions of section 5A of the Taluqdari Abolition Act, 1949, it was found that because of the failure or inability of the ex Taluqdar to produce old records concerning the tenants it was difficult for the tenants to take the benefit of that provision; therefore, it became necessary for the Legislature to define permanent tenant in such a way that the tenure holder might not defeat the provisions of section 5A. That it was stated, was the reason for enacting sections 3, 4 and 6 of the impugned Act, 1958.
We are unable to accept this argument as correct.
If the reason was as stated above, then the tenure holder should have been given a chance to contest the claim of the tenant whenever he made a claim of being a permanent tenant.
It appears to us that the true scope and effect of the provisions in sections 3, 4 and 6 of the impugned Act, 1958 is to considerably reduce the purchase price payable to the petitioners and this has been secured by the device of defining permanent tenant in such a way that the tenure holder has no real opportunity of contesting the claim of the tenants.
In that view of the matter, the impugned Act, 1958, does not fall within any entry of List II or List III of the Seventh Schedule to the Constitution and is a piece of colourable legislation.
What is colourable legislation was explained by this Court in K. C. Gajapati Narayan Deo vs The State of Orissa (1).
This Court said that the idea conveyed by the expression "colourable legislation" is that although apparently a legislature in passing a statute purported to within the limits of its powers, yet in substance and in reality it transgressed those powers, the transgression being veiled by what appears, on proper examination, to be a mere pretence or disguise.
We are of the view that, that is what has happened in the present case.
Under the guise of defining a 441 permanent tenant or changing a rule of evidence what has been done is to reduce the purchase price which became payable to the tenure holders on April 1, 1957.
For these reasons we must hold that sections 3, 4 and 6 of the impugned Act, 1958 in so far as they deem some tenants as permanent tenants in possession of taluqdari land are unconstitutional and void.
Under the guise of changing the definition of a permanent tenant, they really take away a large part of the right of the petitioners to get the purchase price under section 32H of the Tenancy Act, 1948, from some of their tenants.
The petitions must accordingly be allowed with costs.
As the petitions have been heard together there will be only one hearing fee.
MUDHOLKAR, J, Writ petition No. 120 of 1958 was heard along with writ petitions Nos. 147 to 158 of 1958.
But a common argument was advanced before us on behalf of the petitioner in each case by Mr. G.S. Pathak and by the Solicitor General on behalf of the State of Gujarat and by Mr. Nathwani on behalf of the tenants.
The petitioners in these cases were Talukdars of certain villages in that part of the former state of Bombay which is now the State of Gujarat.
The rights of Talukdars in different parts of Gujrat to Taluqdari villages were regulated by the Ahmedabad Taluqdars Act, 1862 (Bom. 6 of 1862) and the Broach and Kaira Incumbered Estates Act, 1881 (XXI of 1881) and the Gujarat Taluqdars Act, 1888.
The Bombay Taluqdari Tenure Abolition Act, 1949 (herein referred to as the Abolition Act) repealed the aforementioned Taluqdari Acts and section 3 thereof abolished the Taluqdari tenure wherever it prevailed.
That section further abolished all incidents of the said tenure attaching to any land comprised in a Taluqdari Estate.
Section 5 of that Act made all the taluqdars "occupants" of the lands in their 442 possession, within the meaning of the expression "occupant" occurring in the Bombay Land Revenue Code (hereafter referred to as the Code).
Like "Occupants" in other areas of the Bombay State these persons became liable to pay land revenue to the Government subject to the provisions of cl.(b) of sub s.2 of s.5.
Nothing, however, turns on these provisions.
Section 16 of the aforesaid Act makes the provisions of the Code applicable to taluqdari villages subject to certain modifications with which we are not concerned.
The validity of the Abolition Act was challenged before this Court but that challenge failed vide Dhisubha Devisingh Gohil vs The State of Bombay(1).
Vast areas of lands in these villages were in the occupation of inferior holders, permanent tenants, protected tenants, ordinary tenants etc.
It is not disputed that the provisions of Ch.
VII of the Code which deals with "superior holders and inferior holders" govern the relationship between the tenure holders and permanent tenants.
In addition to these provisions there are those in the Bombay Tenancy and Agricultural Lands Act, 1948 (hereafter referred to as the 'Tenancy Act ') which deal with the relationship between landlord and tenant and till April 1, 1957, it is these provisions which exclusively governed the relationship between the tenure holder and tenants other than permanent tenants and inferior holders.
It would be necessary to refer to some of the provisions of this Act while dealing with the arguments advanced before us.
By Bombay Taluqdari Abolition (Amendment) Act 1 of 1955 which came into force on March 1, 1955, the Abolition Act was amended and a new provision was added therein, viz: section 5A the relevant portion of which reads thus: "(1) Notwithstanding anything contained in section 5 a permanent tenant in possession 443 of any taluqdari land, and also an inferior holder holding such land on payment of annual assessment only, shall be deemed to be occupants within the meaning of Code, in respect of such land in their possession and shall be primarily liable to the State Government for the payment of land revenue due in respect of such land, and shall be entitled to all the rights and shall be liable to all the obligations in respect of such land as occupants under the Code or any other law for time being in force: Provided that (a) such permanent tenant shall be entitled to the rights of an occupant in respect of such land on payment to the taluqdar or the cadet as the case may be : (i) of the occupancy price equivalent to four multiples of the assessment fixed for such land, and (ii) for the extinguishment or modification of any rights of the taluqdar or cadet, as the case may be, including the right of reversion in the lands, of a further sum equivalent to two multiples of such assessment; x x x (2) The right conferred under sub section (1) shall not be exercisable after a period of (five) years from the date on which the Bombay Taluqdari Tenures Abolition (Amendment), Act 1954 comes into force.
x x x This section for the first time conferred upon a permanent tenant the right to acquire the status of an occupant in respect of the land held by him as a permanent tenant of the tenure holder upon payment of a certain sum of money as the price of occupancy to the tenure holder within five years of the commencement of the Amending Act of 1955.
444 It was accepted before us that the period fixed by section 5A has been extended upto the year 1962.
Section 5A of the Act has never been challenged, and the argument before us proceeded upon the footing that it is a perfectly valid piece of law.
Though the Abolition Act by section 5A thus conferred upon the permanent tenants in the taluqdari villages the right become occupants, it did not define what a permanent tenant was.
By an amendment made by Bombay Act XVIII of 1958, it was provided that certain persons would be permanent tenants but that does not really define what a permanent tenant is.
This absence of definition of a permanent tenant did not, however, create any difficulty because in Bombay that term has been understood to mean the tenant described in paragraph 2 of section 83 of the Code.
Indeed, in the petitions themselves it is stated that s.83 of the Code defines a permanent tenant.
The second paragraph of that section is in these terms: "And where by reason of the antiquity of a tenancy no satisfactory evidence of its commencement is forthcoming, and there is not any such evidence of the period of its intended duration, if any, agreed upon between the landlord and tenant, or those under whom they respectively ' claim title or any usage of the locality as to duration of such tenancy, it shall, as against the immediate landlord of the tenant, be presumed to be co extensive with the duration of the tenure of such landlord and of those who derive title under him." Under this section, therefore, a permanent tenant is one whose tenure is co extensive with that of his landlord and a tenant is to be presumed to be such a tenant when by reason of antiquity, the commencement of the tenancy cannot be proved and there is no satisfactory evidence of the agreed duration of the tenancy or of any usage of the locality as 445 to such duration.
The Bombay Tenancy and Agricultural Lands Act, 1956 (13 of 1956) which among other provisions, has amended section 2 of the Tenancy Act has given a definition of the expression in the new sub s.10A thereof but it is not necessary to reproduce it as no argument based on it is advanced before us as indeed none could be advanced.
That Act made extensive and far reaching amendments in the Bombay Tenancy Act.
Several sections thereof were recast including s.32.
Amongst the Provisions added are sections 32A to 32 R which appear in the second part of Chapter 3 of that Act, dealing with "Purchase of land by tenants" to which we will refer hereafter.
By virtue of s.32, sub.
section 1, on April 1, 1957, called the "tillers ' day" every tenant, including permanent tenant was, subject to the other provisions of that section and of the succeeding sections deemed to have purchased the tenancy land in his possession from the landlord free of all encumbrances subsisting thereon.
Section 87A, which also was added to the Tenancy Act by the Amending Act of 1956, provided that nothing in the Tenancy Act was to affect the provisions of any of the Land Tenure Abolition Acts specified in Schedule II (which includes the Abolition Act in question) in so far as such provisions relate to the confinement of the right of an occupant upon a permanent tenant in respect of land held by him.
In consequence of this the provisions of section 32 H of the Tenancy Act which deal with the purchase price payable by permanent tenants will not apply to such permanent tenant.
He would, therefore, have only that right which is conferred upon a permanent tenant by section 5 A of the Abolition Act.
The result of this is that he would not be bound to pay the purchase price at once under section 32 H of the Tenancy Act and can make his election to acquire or not to acquire the right of an occupant within the period allowed by section 5 A (as extended from time to time).
446 The records relating to tenancies in taluqdari villages used to be maintained by the tenure holders.
It is from these records that information could be obtained as to the nature of the tenancies of the tenants in those villages.
While implementing the provisions of section 5 A of the Abolition Act it was found that because of the refusal, failure or inability of the taluqdar to produce old records concerning the tenants it was difficult for the tenants to take the benefit of that provision.
Therefore, the legislature passed Bombay Act No. 57 of 1958 called the Bombay Land Tenure Abolition Laws (Amendment) Act, 1958.
The long title of the Act runs thus: "An Act further to define permanent tenants, inferior holders and permanent holders for the purposes of certain Land Tenure Abolition laws and to provide for certain other matters.
" Section 4 of this Act states who are to be deemed to be permanent tenants for the purpose of the Land Tenure Abolition laws specified in Part II of the Schedule to the Act.
The validity of this Act (hereafter referred to as the impugned Act) and in particular of the provisions of section 4 is challenged before us.
We will reproduce hereafter this section and certain other provisions of the Act which have a bearing upon the arguments addressed before us.
According to Mr. Pathak section 4 of the Act in effect expands the category of permanent tenants by bringing within its fold persons who were merely ordinary tenants prior to the enactment of this provision.
So far as an ordinary tenant is concerned it is Mr. Pathak 's contention that on the tillers ' day he became an occupant of the land or at any rate the landlord (or tenure holder) lost his interest therein and that thereafter the latter became entitled to receive from the tenant the purchase price by the combined operation of section 32(1) and section 32 H(1) (i) of the Tenancy Act.
Section 32(1) so far as material runs thus: 447 "On the Ist day of April, 1957, (hereinafter referred to as 'the tillers ' day ') every tenant shall, subject to the provisions of the next succeeding sections, be deemed to have purchased from his landlord, free of all encumbrances subsisting thereon on the said day, the land held by him as tenant, if (a) such tenant is a permanent tenant thereof and cultivates the land leased personally; (b) such tenant is not a permanent tenant but cultivates the land leased personally; and (i) the landlord has not given notice of termination of this tenancy under section 31: or (ii) notice has been given under section 31, but the landlord has not applied to the Mamlatdar on or before the 31st day of March, 1957 under section 29 for obtaining possession of the land; (or) (iii) the landlord has not terminated this tenancy on any of the grounds specified in section 15, or has so terminated the tenancy but has not applied to the Mamlatdar on or before the 31st day of March, 1957 under section 29, for obtaining possession of the lands; . . . " Section 32 H, so far as material, runs thus: "(1) Subject to the additions and deductions as provided in sub sections 1A and 1B, the purchase price shall be reckoned as follows, namely: (i) In the case of a permanent tenant who is cultivating the land personally 448 the purchase price shall be the aggregate of the following amounts, that is to say, . . . " (ii) In the case of other tenants the purchase price shall be the aggregate of the following amounts, that is to say, (a) such amount as the Tribunal may determine not being less than 20 times the assessment and not more than 200 times the assessment; . . . " According to the petitioner in W. P. 120 of 1958 the total area of land held by him in his villages is 62,588 acres out of which only 703 acres are in his personal cultivation and the rest is held by tenants who are non permanent tenants.
He contends that by the operation of section 4 of the impugned Act most of these persons are likely to be placed in the category of permanent tenants with the result that the petitioners would be compelled to accept purchase price at a much lower rate, that is, they would get only six times the assessment instead of between 20 and 200 times the assessment, as may be determined by the tribunal.
According to him his estimated loss would be over Rs. 14,00,000.
On behalf of the State it is denied that the petitioner would be put to any such loss.
The substance of the argument of Mr. Pathak is that the right to claim compensation under s.32H(1)(ii) from the ordinary tenants having vested in the petitioner it cannot be taken away by the Bombay legislature by extending the definition of "permanent tenant" so as to include within it those who were merely ordinary tenants on the "Tillers ' Day".
He formulated his grounds of attack on the legislation as follows: (1) The Bombay legislature was not competent to enact the impugned Act as the subject 449 matter thereof is not covered by any entry in List II.
(2) The impugned Act is colourable legislation as it amounts to a device adopted for the purpose of confiscating money, the right to claim which had vested in the landlord as purchaser on April 1, 1957, and that the State legislature had no power to make a law with respect to this matter.
(3) The impugned Act being outside the legislative competence of the Bombay legislature, taking away of the petitioner 's money was a contravention of article 31(1) of the Constitution.
(4) The acquisition of money is not for a public purpose as taking money from one and giving to another is not a public purpose.
(5) Even assuming that the acquisition was for a public purpose no compensation has been provided by the Act or could indeed be provided by the Act and, therefore, article 31(2) is contravened.
(6) The impugned Act contravenes article 19(1)(f) of the Constitution inasmuch as it authorises the confiscation of money.
(7) The Act infringes article 14 of the Constitution as there are other classes of tenure holders similarly situate to whom the impugned Act does not apply.
All these grounds of attack, except the last, rest upon one assumption and that assumption is that section 4 of the impugned Act extends the definition of permanent tenants and brings within its fold persons who were till April 1, 1957, that is, the "tillers ' day", ordinary tenants.
If this assumption is invalid then the whole edifice which Mr. Pathak has built upon it must tumble down.
Let us 450 consider what exactly section 4 of the impugned Act does.
In order to appreciate Mr. Pathak 's argument properly it would be desirable to reproduce that section as well as sections 3 and 6.
These sections run thus: Section 3 : "A person shall, within the meaning of the relevant Land Tenure Abolition law, be deemed to be an inferior holder, a permanent holder or, as the case may be, a permanent tenant, on the date of the abolition of the relevant land tenure, if his name has been recorded in the record of rights or other public or revenue records as an inferior holder, permanent holder or permanent tenant in respect of any tenure land (a) on the date of the abolition of the relevant land tenure, or (b) in pursuance of orders issued during the course of any proceedings under the relevant Land Tenure Abolition law or, as the case may be, the Bombay Land Revenue Code, 1879 (i) before the commencement of this Act, or (ii) after the commencement of this Act in cases in which inquiries were pending at the commencement of this Act, or (c) in pursuance of an order issued by the Mamlatdar in respect of an entry under section 6 of this Act.
" The relevant Land Tenure Abolition law for our purposes is the Bombay Tenancy Abolition Act and tenure land means taluqdari land.
Section 4 runs thus: "For the purposes of the relevant Act specified in part I of the Schedule, a person 451 (a) who on the date of the commencement of that Act was holding any tenure land, and (b) who and whose predecessors in title, if any were, immediately before that date for such continuous periods as aggregate to a total continuous period of twelve years or more, holding the same tenure land or any other tenure land, as a tenant or inferior holder under the tenure holder for the time being on payment of an amount exceeding the assessment of the land, shall unless it is proved by the tenure holder that he would not have been a permanent tenant on the basis of continued possession of the land under clause (b), be deemed to be a permanent tenant of the land under clause (a) and all the provisions of that Act shall apply to him as they apply to a permanent tenant.
" Section 6 runs thus: "(1) The rights of an inferior holder, permanent holder or permanent tenant under sections 4 and 5 shall be entered in the record of rights unless the tenure holder applies in writing to the Mamlatdar within six months from the date of the commencement of this Act for a declaration that any holder or tenant under him is not an inferior holder, a permanent holder or, as the case may be, a permanent tenant.
(2) Any such application shall be disposed of as if it were an application in respect of a disputed case under section 135D of the Bombay Land Revenue Code, 1879." Thus according to section 3 a person whose name is recorded in the record of rights or other public revenue records as a permanent tenant in respect of tenure land he will be deemed to be a permanent 452 tenant within the meaning of the expression occurring in the Abolition Act.
As already stated, for ascertaining the meaning of the expression one has to go to para.
2 of section 83 of the Code.
No doubt, it merely raises a presumption as to permanent tenancy but from that para.
we can deduce the essential feature of a permanent tenancy.
The argument is that section 3 being a deeming provision in so far as the Abolition Act is concerned, gives new definition of a permanent tenant.
What the section says is that certain persons will be deemed to be permanent tenants for the purpose of the Abolition Act.
Who are these persons ? Are they chosen arbitrarily and put in that class though they could not possibly have been so put under the previous law ? A bare perusal of clauses (a) to (c) of section 3 shows that only tenants who have been found on enquiry to be permanent tenants, at least presumptively, are to be regarded as permanent tenant, for the purpose of the Abolition Acts and their status as permanent tenants can no longer be questioned.
In regard to persons whose cases fall under clauses (a) and (b) all that the section has done is to take away the right of the tenure holder to challenge in a collateral proceeding their status as permanent tenants.
As regards tenants falling under cl.
(c) what the provision has done is to require the tenure holder to object to the recording of such person as permanent tenant within a certain time before the mamlatdar.
If he fails to avail himself of the opportunity the door is shut to his saying thereafter that the person is not a permanent tenant.
It is to be noted that tenants who are to be regarded as permanent tenants for the purposes of the Abolition Act have been so found in enquiries held by revenue courts and not persons arbitrarily selected or persons who could not reasonably be regarded as permanent tenants.
453 The inclusion of persons as permanent tenants in the register of rights may be prior to the commencement of the Abolition Act or after its commencement.
The proceedings for the inclusion may have been instituted prior to the commencement of the Abolition Act or may be instituted under the impugned Act.
If they hold in favour of the tenant he will be deemed to be a permanent tenant.
The landlord cannot then be permitted to say that he is not a permanent tenant.
It is difficult to see how this disability imposed upon a landlord to dispute the fact that a person is a permanent tenant be regarded as enlarging the definition of a permanent tenant.
It is true that section 135.J of the Code granted the landlord a right to challenge the correctness of an entry in the record of rights in collateral proceedings without reference to time and that right is abrogated by the impugned Act but even so doing that cannot be regarded as taking away a vested right.
Within what time, in what circumstances and in which manner a particular fact is open to challenge is only a matter of procedure and it cannot be disputed that there is no vested right in procedure.
The effect of the provision thus is that in proceedings under the Abolition Act for conferral of a right of an occupant the claimant 's status as a permanent tenant cannot, if he satisfies the requirement of any of the three clauses of section 3 of the impugned Act be open to question by the tenure holder.
Would the position have been any different if the impugned Act had not been passed ? Let us consider section 5A of the Abolition Act by itself.
Suppose a person recorded as a permanent tenant in the record of rights claimed to enforce the right conferred by this section to obtain the right of an occupant in proceedings thereunder.
These proceedings would be taken before a revenue officer and he would be bound to act on the entry in the record 454 of rights until and unless it was lawfully substituted by another.
No suit lies for correcting an entry in the record of rights.
Only in a collateral proceeding could it have been challenged and the jurisdiction of a civil court be invoked.
Where no such suit or proceeding is pending when the proceedings under section 5A are going on the tenure holder cannot be permitted to go behind the entry.
However, as an additional safeguard the Abolition Act has provided in section 5A itself a remedy and that is to approach the State Government or an authority empowered by it in this behalf for deciding to question.
Clause (b) of section 3 of the impugned Act, as also cl.
(c), expressly contemplate cases where there is a dispute as to the status of a person and if it has been decided in favour of the person claiming to be a permanent tenant he is to be deemed to be a permanent tenant for the purposes of the Abolition Act.
True that thereafter the tenure holder cannot challenge the fact even in a collateral proceeding but that would be by reason of the provisions of section 5A itself which have not been challenged.
No doubt after the commencement of the impugned Act no new proceedings under section 5A of the Abolition Act are permissible but that is because an alternative remedy is available under section 6 of the impugned Act.
We must now examine section 4 in detail.
It provides that a person who, on the date of the commencement of the Abolition Act was holding any tenure land and who, and whose predecessors in title, if any, were immediately before that date "for such continuous periods as aggregate to a total continuous period of 12 years or more" holding the same tenure land or any other land as a tenant be deemed to be a permanent tenant "unless it is proved by the tenure holder that he would not have been a permanent tenant on the basis of continued possession of the land under clause (b)".
It is difficult to appreciate how it expands the definition of permanent tenant.
True, it says that such a 455 tenant will be deemed to be a permanent tenant but it does not stop there.
It goes on to say that he will be so deemed unless the tenure holder can show that he cannot be so deemed ! What does s.4 mean when it says that a tenant shall be deemed to be a permanent tenant ? Clearly, the legislature had in mind the provisions of section 83 of the Code which by virtue of section 16 of the Abolition Act apply to all ex taluqdari villages.
To repeat, the impugned Act does not define "permanent tenant" anywhere and that it is from para 2 of section 83 of the Code that we must infer that a person whose tenancy is co extensive with that of the landlord is a permanent tenant.
A tenure holder can get rid of the presumption raised by this provision if he can show the precise date of the commencement of the tenancy or if he can show that the tenancy is terminable in particular circumstances or on a particular date.
We find nothing in section 4 which directly or indirectly modifies the requirements of the definition of "permanent tenant".
No doubt, para 2 of section 83 of the Code sets out certain conditions for raising a presumption of permanent tenancy and section 4 of the impugned Act modifies them.
But by doing so, it is difficult to see how it alters the basic requirements of a permanent tenancy as deducible from para 2 of section 83 of the Code.
All that section 4 does is to alter the conditions for raising the presumption but that cannot amount to altering the definition of "permanent tenant.
" According to Mr. Pathak, however, the section permits the landlord to prove only that the tenant and his predecessors in title were not in possession for a continuous period of twelve years or more, on the date of the commencement of the Abolition Act and that if they fail to prove this, the presumption raised by the section would be irrebuttable.
Thus according to him section 4 makes a person who is in possession as a tenant for over twelve years, a permanent tenant even if the date of the commence 456 ment of his tenancy was known or the duration thereof was for a definite period.
In our opinion, reading the section that way would lead to an absurdity.
It is admitted on both hands that section 4 is intended to be availed of only in proceedings under s.6 to which a landlord would be a party.
Clause (b) of that section which enacts the second condition which has to be fulfilled by a person before he can avail himself of the presumption under that section prescribes the minimum "duration" of a tenancy and does not deal with the question of its commencement or terms.
Either the tenant fulfils that condition or he does not.
If he does not fulfil it no further question arises and he must be deemed to be an ordinary tenant and nothing more.
Therefore, if the tenant satisfies the condition, it would be meaningless to give to the tenure holder an opportunity of disproving the very thing which had been proved in his presence and upon proof of which the tenant has been able to enlist the presumption created by the section in his aid.
Such a construction would render the provision absurd or at best useless.
If the section was capable of being read in the way Mr. Pathak wants, it would read thus: "A person who has been in possession of tenure land at the commencement of the Abolition Act and was holding the same or any other land under the same tenure holder for a continuous period of 12 years he shall unless the tenure holder proves that he was not holding the land or lands for the continuous period of 12 years, be deemed to be a permanent tenant".
Surely this would be making nonsense of the section.
We are wholly unable to accept such a reading.
We think, therefore, that the tenure holder can prove under the section that on the basis of twelve years continued possession the tenant would not have been a permanent tenant for other reasons.
These other reasons must be the reasons which in spite of the 457 length of possession would show that he is not a permanent tenant because the tenancy commenced at a certain time or because a term had been agreed upon for the tenancy or fixed by usage.
It may be, as the learned Solicitor General says, that the language used by the legislature is not felicitous.
Even so, we think that it would not at all be far fetched to construe it as meaning that the tenure holder has the right to establish for getting over the presumption, that the tenancy originated at a definite point of time or was of a finite duration.
The language used by the legislature is in our view capable of only such construction.
Then it is said that even if section 4 is construed as giving an opportunity to the tenure holder to prove otherwise than by disproving that the tenant had been in continuous possession of land under him for twelve years that he is not a permanent tenant, that opportunity is illusory and really nonexistent and, therefore, section 4 in effect extends the definition of a permanent tenant.
This contention is based on section 6 of the Act which, it may be stated gives the tenure holder a period of six months from the commencement of the impugned Act to move the Mamlatdar in writing for a declaration that the tenant is not a permanent tenant within section 4.
It may be stated that the respondents concede that section 6 has that effect.
We are, however, unable to agree that section 6 makes the opportunity to rebut the presumption raised under section 4 by continuous possession for twelve years illusory or non existent.
We have first to point out that we do not find this point taken in the petitions.
Secondly, we fail to appreciate why the six months ' time prescribed should be considered as if no time had really been given to the tenure holder which would be the effect of accepting the petitioners ' contention.
458 Since six months is not a short period, within that time it is easily possible for the tenure holder to move the required application.
Then it is said that it is illusory because there may be a very large number of tenants and the tenure holder could be required to make numerous applications.
Even so, we do not see why it should not have been reasonably possible to lodge these applications within the period allowed.
All that the tenure holder has to do is to name the tenant concerned and state that he wants a declaration that the tenant is not a permanent tenant.
It is also said that the tenure holder has to make the application in anticipation of the tenant making a claim to be a permanent tenant.
But we are unable to appreciate how this by itself can make the opportunity to rebut non existent.
We find no practical difficulty in the tenure holder making the application in anticipation.
Furthermore, the question has to be considered according to the realities of the case.
It is admitted in the petitioners ' affidavit in opposition that the preparation of the record of rights in respect of the tenants in the taluqdari villages commenced soon after the Abolition Act came into force, that is, soon after August 15, 1950.
Many of the tenants have already been recorded as permanent tenants and since this could only have been done with reference to the provision of section 83 of the Code the petitioners can have no grievance against such entries.
Further, section 3(b)(ii) of the impugned Act takes into account the fact that the proceedings in respect of the preparation of the record of rights were pending at the commencement of this Act.
In these proceedings the tenure holder must already have objected of course where he thought fit to the tenant being recorded as a permanent tenant.
These again would cover quite a number of cases.
It is only in regard to the remaining cases that 459 applications under section 6 would be required.
We think it right also to point out that the rights under section 4 of the impugned Act can be claimed by a tenant who pays for his holding an amount exceeding the assessment of the land.
This we suppose would further reduce the number of tenants to whom section 6 would apply.
We have no materials on which to show that these would form a very large number.
As we have already stated the petitioners not having raised the present point out of section 6, they have not given any materials to show the cases of how many tenants are outstanding.
Therefore, on the facts on this case, the petitioners cannot legitimately urge any practical difficulty in making applications under section 6.
We may also state here that many claims by tenants to be permanent tenants must have long ago been raised because under section 5A of the Abolition Act, as originally framed, a tenant had five years from its commencement, that is, from August 15, 1950, within which to exercise his right.
At the date of the impugned Act this period had been extended upto February 28, 1960.
The impugned Act came into force on June 10, 1958.
Therefore, at the date of the impugned Act the tenant had about one year and nine months within which to exercise the right given to him by section 5 A of the Abolition Act.
It is apparently for this reason that section 6 of the impugned Act fixed the period of six months.
It is true that later the period under s.5 A was extended but that was by Act XVIII of 1960 which came into force on April 8, 1960 and had, therefore, no bearing on the legislature fixing the time under section 6 of the impugned Act.
According to one of our brethren the definition of "permanent tenant" is enlarged because even though the point of time when the tenancies of persons over certain lands commenced were known these persons are also included in the definition of "permanent tenant" under the impugned Act and cl.
(b) of section 4 is said to do this.
We may point out 460 that this was not one of the arguments advanced at the Bar and the respondents had no opportunity of meeting it.
That apart, it is clear that this clause has to be read with Expl.
II to section 5 A of the Abolition Act.
As already stated section 5 A was not attacked as unconstitutional.
Explanation II thereto provides as follows: "For the purpose of this section, a permanent tenant includes a tenant who holds a taluqdari land in exchange of another taluqdari land of which he was, and but for the exchange would have been a permanent tenant and who has been in continuous possession thereof since the date of exchange.
" We may assume that the Explanation extends the definition of "permanent tenant" but its validity has not been challenged by the plaintiffs.
Clause (b) of section 4 of the impugned Act merely takes note of the practice in tenure villages of changing the holdings of tenants from time to time and it is apparently for this reason that there was no challenge to section 4 of the impugned Act on this ground.
It is only the persons who or whose predecessors in title were tenants in tenure villages from time immemorial who will get the benefit of the impugned Act and no others.
No new persons will thus be brought in by section 4(b) and so it is idle to say that it enlarges the definition of permanent tenant.
It is said that section 4 widens the definition of permanent tenant by including tenants the commencement of whose tenancies is definitely known.
But does it do that ? The tenant in a tenure village is a person holding tenure land.
It is not necessary that he and his predecessors in title should have been holding the same parcel of land since the commencement of their tenancy.
The practice of exchanging parcels of lands prevailed in tenure villages and Expl.
II to section 5 A has been founded upon it.
Section 83 of the Code refers to the per 461 manency of the relationship of landlord and tenant and not to the existence of permanent tenancy with respect to a specific parcel of land.
These provisions have to be read along with section 4 of the impugned Act because this Act cannot stand or was not intended to stand by itself.
It adds certain provisions to the Abolition Act and the Code and these provisions must necessarily be assimilated to those of the main Act.
Looked at this way it is clear that what section 4 contemplates is a person the commencement of the tenancy of whose predecessors in title is unknown but who has been in possession of the same or different parcels of tenure land for a period of not less than twelve years prior to the commencement of the Abolition Act.
It may be possible to say when he came into possession of a parcel of land `X ' where it was taken by him within or more than twelve years of the commencement of the Abolition Act but that is not the same thing as saying that the relation between him and tenure holder came into existence on that date for the first time.
If in fact it came into existence more than twelve years before the Abolition Act came into force, may be with respect to different parcels of land from time to time, he is entitled to be regarded as a permanent tenant, unless of course it can be shown by the landlord that he or his predecessor in title was first inducted as a tenant in the tenure village at a definite period of time or that the tenancy was of a finite duration.
Thus, in our judgment, section 4 of the impugned Act does not expand the definition of a permanent tenant.
Therefore, it cannot be said that it has the effect of taking away from the landlord any property which had vested in him on the tillers ' day.
It may be that a tenant who, prior to the enactment of section 4, was merely recorded as an ordinary tenant because he could not show that the origin of his tenancy was lost in the mists of anti 462 quity and that now availing himself of this provision, he can get himself recorded as a permanent tenant by showing his continuous possession for twelve years.
But section 4 does not, as we read it, say that he becomes a permanent tenant in these circumstances in every case.
He would not become one if the landlord shows that his tenancy commenced on a particular date beyond those twelve years or is of a finite duration.
Section 32H(1) does not confer upon the landlord the right to claim the price of occupancy at the rates prescribed in sub section
(1)(ii) from a person because he is recorded as an ordinary tenant but only from one who is in fact other than a permanent tenant.
If, in fact, he was a permanent tenant, or can be presumed to be a permanent tenant though till the coming into force of the impugned Act he was not recorded as such no right to claim the price of occupancy on the footing that he is not a permanent tenant of tenure land vested in the tenure holder by virtue of that provision.
Section 87 A of the Tenancy Act renders section 32H(1)(i) inappropriate to such a tenant.
No question of infringement of the right under article 19(1) (f) therefore arises in such cases.
It was also said that section 6 of the impugned Act is void because it puts an unreasonable restriction upon the tenure holder 's right to hold property and, therefore, offends article 19(1)(f) of the Constitution.
This point does not appear to have been taken in the petitions.
In any case, if our construction of section 4 is right, then the impugned Act would be saved by article 31 A of the Constitution and its validity would not be open to attack on the ground that it violated article 19(1)(f) of the Constitution.
Furthermore, it is difficult to appreciate how the tenure holder 's right to hold property is affected by section 6.
His right of property with which we are 463 concerned, is as occupant of certain land having some permanent or other tenants under him.
Section 5 A of the Abolition Act gives the permanent tenants the right to convert themselves into occupants and thereby cease to be tenants of the tenure holder.
The validity of this provision is not at all challenged.
A tenant may claim the benefit under this section only if he establishes that he is a permanent tenant.
It is plainly conceivable that in many cases the tenure holder may dispute that the tenant is a permanent tenant.
On such dispute being raised, the tenant has to prove that he is a permanent tenant.
All that section 6 does is to fix a time limit within which the tenure holder shall have the right to dispute that certain permanent tenants are not permanent tenants.
That does make those who were not permanent tenants, such tenants.
Therefore, section 6 can in no way be said to affect the tenure holder 's right to property.
Further, it would appear that in most cases the tenure holders themselves including the petitioners, have actually applied to the mamlatdars for a declaration in their favour under this provision and those applications are pending.
The learned Solicitor General informed us that as a matter of fact upon the basis of the records made available by the tenure holders tentative entries were made in the record of rights immediately after the coming into force of the impugned Act and that thereupon the tenure holders have applied to the mamlatdar well within six months for a declaration under that provision.
Thus, according to him the section affords and has afforded a real opportunity to the tenure holders to rebut the presumption created by section 4.
We agree with him.
To summarise, the position is that section 4 of the impugned Act by merely enacting the presumption does not take away any property of the tenure holder.
His property such as it is, is left in tact.
That section 464 does not confer any new property upon a tenant.
It only comes to the rescue of a permanent tenant who is faced with the task of proving the nature of his tenancy, by raising a presumption of permanency in his favour.
If in fact his tenancy is not permanent and has been extinguished by law but he is tentatively recorded or is sought to be recorded as permanent, the landlord can, in a proceeding under s.6(1) rebut the presumption by producing the documents in his possession or otherwise that the tenancy is not in fact permanent and, therefore, has been extinguished by the operation of s.32(1) of the Tenancy Act.
If he proves this he will be entitled to claim compensation or purchase money at the rates permissible under section 32H(1)(ii) of that Act.
That right of his is not affected in any way by the impugned Act.
If he does not succeed in establishing that, then he will be only entitled to get purchase price at the rate provided in s.5A of the Abolition Act.
That, however, would be by virtue of the operation of s.5A of the Abolition Act a provision which, as we have already said has not been challenged and not because any provision of the impugned Act deprives him of a right to claim a higher purchase price.
The impugned Act is plainly applicable only to matters arising out of a relationship between landlord and tenant.
Its provisions are not intended to apply where such relationship does not subsist.
Therefore, the law must be held to be within the competence of the legislature by virtue of entry 18 of List II of the Constitution which is to the following effect : "Land, that is to say, rights in or over land, land tenures including the relation of landlord and tenant, and the collection of rents; transfer and alienation of agricultural land; land improvement and agricultural loans; colonization.
" 465 There can be no question of regarding the impugned Act as colourable because it directly falls under Entry 18 and deals with matters which have a bearing upon the relationship of landlord and tenant.
The law being thus within the competence of the Bombay legislature, Art.31(1) of the Constitution cannot be said to have been infringed.
The first three points urged by Mr. Pathak accordingly fall to the ground.
The fourth, fifth and sixth points are also based on the assumption that the impugned Act confers upon the persons whose tenancy rights were extinguished on April 1, 1957, rights of permanent tenancy.
Upon the construction which alone can properly be placed on section 4 it cannot be said to confer any new rights on such persons.
To repeat, the section applies to permanent tenants and permanent tenants alone.
Therefore, the three contentions raised by Mr. Pathak do not fall for consideration.
The seventh point urged by Mr. Pathak is that sections 4 and 5 of the impugned Act do not apply to other occupants under the Bombay Land Revenue Code, who are similarly situate and that the result of this would be that they will be entitled to higher purchase price than that permissible under section 5A of the Abolition Act.
This, according to him, is a classification without any reasonable connection with the objects sought to be achieved by the statute.
If our construction of section 4 is correct, article 31 A of the Constitution would protect the law and the petitioners would be precluded from challenging it on the ground that it infringes Art 14.
Apart from that we may point out that though the impugned Act applies only to tenure villages and not to non tenure villages, there is, in fact a ground of distinction between villages of the two types.
That ground is the availability or otherwise of the records.
In the former all the relevant records were with the tenure holders themselves, but as stated in the statement of 466 "objects and reasons" were not produced by them and this created difficulties in completing the record of rights.
In the latter the records having been maintained by the Government were available and therefore, no difficulty was experienced in completing the record of rights.
The classification is thus based on the extent of the availability of the material for raising an inference or a presumption and, therefore, has a reasonable nexus with the object sought to be achieved by the impugned Act.
Upon this view it is not necessary to consider the other points urged by Mr. Pathak on the authority of various decisions because the very basis of those arguments is, in our opinion, unsound.
The petitions are, therefore, dismissed with costs.
As there was only one common argument we direct that there will be only one set of costs.
AYYANGAR, J. I entirely agree with the order proposed to be passed by my Lord the Chief Justice and my learned Brother S.K.
Das J.
The only reason for my separate judgment is because of the views I entertain regarding the import of the Bombay Land Tenure Abolition Laws (Amendment), Act 1958 (Bombay Act LVII of 1958) hereinafter referred to as the impugned Act, and in particular of section 4 thereof.
The facts of the case and the relevant statutory provisions bearing upon it are set out in extenso in the judgments of my learned brethren and they do not need to be repeated Before entering on a consideration of the proper construction of the impugned Act it is necessary to state that I did not understand the learned Solicitor General to contest the position that if the impugned Act extended the definition of the term permanent tenant beyond that which obtained under s.83 of the Land Revenue Code, and brought into that category tenants who before then were comprehended within the class of "other tenants".
467 under s.32H(1)(ii) of Bombay Act 13 of 1956, its constitutional validity could be sustained, having regard to the decision of this Court in Sri Ram Ram Narain Medhi vs State of Bombay(1) holding that the effect of the 1956 legislation was to replace the relationship of landlord and tenant by that of vendor and purchaser as between the tenure holder and his tenants.
His submission was accordingly directed to establishing that the impugned Act while not modifying in any manner the basic requirements needed to constitute a person a "permanent tenant" under section 83 of the Code, merely shifted the onus of proof on to the tenure holder on certain stated facts being found.
It is this view which has found favour with my learned brother Mudholkar J. On the Construction of the relevant provisions of the impugned Act, he has held that the status or character of a permanent tenant or the definition of that term has not been altered in any manner, and that whereas before the impugned enactment the onus was upon the tenant to prove all the necessary elements to establish his claim to be a permanent tenant, the change effected by the Act of 1958 was to throw on the landlord the burden of proving the origin of the tenancy and its terminable character in the event of its being proved that the tenant had been in possession of his holding for twelve Dears before August 15, 1950.
If this construction of the effect of the impugned Act were accepted I agree it would go a considerable way towards establishing the constitutional validity of the impugned provision.
I feel myself however unable to accept the construction of s.4 of the impugned Act which was put forward before us by the learned Solicitor General for the State and Mr. Nathwani on behalf of the contesting tenants.
To start with, the long 468 title of the Act itself states that the Act is one for further to "define" permanent tenants.
No doubt, where the operative words of the provision are clear that only a shifting of the onus of proof is effected, the long title of the Act cannot be called in aid to vary their proper interpretation, but that is not the position here.
On the other hand as I shall show presently, the operative provisions of the enactment appears to me designed to clearly carryout the purpose set out in the long title, viz., to "define" or to redefine the class of persons who shall be considered to be "permanent tenants" for the purposes of obtaining the benefits conferred upon "permanent tenants" under the law that existed before that date.
The operative provisions of the impugned Act relevant to the present enquiry are sections 3, 4 and 6 and they read : "3.
A person shall, within the meaning of the relevant Land Tenure Abolition Law (in the context the Taluqdari Abolition Act, 1949), be deemed to be . . a permanent tenant on the date of the abolition of the relevant land tenure, if his name has been recorded in the record of rights or other public or revenue record as. . permanent tenant in respect of any tenure land (a) on the date of the abolition of the relevant land tenure, or (b) in pursuance of orders issued during the course of any proceedings under the relevant Land Tenure Abolition law or, as the case may be, the Land Revenue Code, 1879 (i) before the commencement of this Act, (ii) after the commencement of this Act in cases in which inquiries were pending at the commencement of this Act, or 469 (iii) in pursuance of an order issued by the Mamlatdar in respect of an entry under section 6 of this Act." "4.
For the purposes of the relevant Act specified in Part I of the Schedule, a person (a) who on the date of the commencement of that Act was holding any tenure land, and (b) who and whose predecessors in title, if any were, immediately before that date for such continuous periods as aggregate to a total continuous period of twelve years or more, holding the same tenure land or any other tenure land, as a tenant. under the tenure holder for the time being on payment of an amount exceeding the assessment of the land shall unless it is proved by the tenure holder that he would not have been a permanent tenant on the basis of continued possession of the land under clause (b), be deemed to be a permanent tenant of the land under clause (a) and all the provisions of that Act shall apply to him as they apply to a permanent tenant.
Explanation.
The assessment for the purpose of this section shall be reckoned as provided in clauses (a) and (b) of section 5." "6.
(1) The rights of . . .(a) permanent tenant under sections 4 and 5 shall be entered in the record of rights unless the tenure holder applies in writing to the Mamlatdar within six months from the date of the commencement of this Act for a declaration that any holder or tenant under his is not. . a permanent tenant.
(2) Any such application shall be disposed of as if it were an application in respect of a 470 disputed case under section 135D of the Bombay Land Revenue Code, 1879." to extract only the portion pertinent to the controversy before us.
It will be seen that by force of section 3 persons are deemed to be permanent tenants under the Taluqdari Abolition Act, 1949, if the name of such tenant is recorded in the record of rights or other public records as "a permanent tenant" in any one of the three events specified in cls.
(a), (b) and (c) of the section.
In so far as reference is made to persons already recorded in the record of rights before the passing of the Act, the characteristics for determining who a permanent tenant was would obviously have been based on the pre existing law and they would have been permanent tenants under the law apart from the "deeming" provision.
The position of those recorded under cl.
(b) might be similar, and it is unnecessary to enter into a discussion as to whether in cases where an enquiry commenced before the commencement of the Act but is completed thereafter, the tests brought in by section 4 of the Act could be availed of to determine the status of the tenant.
If one proceeded on the assumption that the provisions of the impugned Act are not to be brought in into an enquiry already started there would be no difference between cls.
(a) and (b) of section 3 and in both cases they would be actual and not statutorily deemed "permanent tenants".
Sub cl.
(c) however stands on a different footing.
It brings in, if my construction of section 4(b) is correct, a new class of "permanent tenants" persons who were before the date of the impugned enactment non permanent tenants in whom by virtue of the provisions of Bombay Act 13 of 1956 the interest of the landlord stood transferred and by whom the purchase price specified in s.32H(1)(ii) was payable, into the category of "permanent tenants." 471 Section 3(c) refers to an entry made by a Mamlatdar under section 6, but when one looks at section 6 he is referred to section 4 as containing or defining the class of tenants whom the Mamlatdar is enjoined to enter in the revenue records as a "permanent tenant.
" Turning now to section 4, it would be seen that persons are deemed to be "permanent tenants" if they satisfied three cumulative conditions : (a) they must be holding tenure land on the date of the commencement of that Act, viz., The Taluqdari Abolition Act, i.e., on August 15, 1950, (b) they or those from whom they claim should immediately before August 15, 1950, have been continuously in possession of that or any other tenure land for twelve years, (c) the amount of rent payable by them should exceed the assessment leviable on the land calculated according to section 5.
The effect of condition (a) would be to exclude from the category of permanent tenants those who came into occupation or were inducted on the land of which they could claim to be permanent tenants, after August 15, 1950.
But every tenant who was in possession of tenure land on that date could apparently qualify for obtaining the status of a permanent tenant, being deemed to be such, if he satisfied the other two conditions.
As regards condition (b), there is obscurity and contradiction attending the expression "continuous periods aggregating to a total continuous period of twelve years".
Aggregation would obviously mean an addition of integers, and when units of time are the integers as is apparent from the context, in plain words it would mean the addition of broken periods.
To posit continuity in such a case, might possibly suggest that it refers to cases where a tenant is in possession of different parcels of tenure land throughout the twelve year period, though he is not in possession of any particular parcel continuously for a period of 12 years, and that the terms of the section would be satisfied and he would be deemed to have been in "continuous 472 possession" of the land of which he was in possession at the commencement of the Taluqdari Abolition Act for the purpose of qualifying for permanent tenancy of that parcel.
An analysis of the circumstances attendant on this condition would reveal the following : (1) Let us take it that during the period twelve years before August 15, 1950 a tenant had been in possession of three distinct parcels of tenure land `A ', `B ' and `C ' at different periods but continuous, i.e., there being no point of time at which he was not in possession of one or the other of these three parcels and that on the date of the commencement of the Act he is in possession of parcel `C '.
It is possible that such a situation might arise from exchange of holdings with the consent of the tenure holder by a person who was a permanent tenant under the existing law.
But the provision on its terms is not confined to exchanges by such tenants, but is of wider application.
If the proper construction of this unclear provision of section 4 be as above, any tenant who satisfied the other conditions of the section, would be deemed to be a permanent tenant in respect of parcel `C '.
It will at once be seen that the origin of his tenancy of holding `C ' is ex concessis known.
Surely, such a tenant would not be a permanent tenant within section 83 of the Bombay Land Revenue Code.
It has only to be added that he would not fall within the definition of a permanent tenant even under section 2(10A) of the Tenancy Act inserted by Bombay Act 13 of 1956.
The argument, therefore that section 4 was merely intended to and provided a rule of evidence for determining who a permanent tenant was under section 83 of the Bombay Land Revenue Code, 1879 and did not extend such category of persons by an artificial definition, would appear to be negatived even by the first paragraph of section 4(b).
This conclusion is strengthened by the provision made at the end of section 4(b) of the impugned Act as regards the grounds upon which the landlord or 473 the tenure holder could disprove the right of a tenant to the status of a permanent tenant.
That provision reads: "Unless it is proved by the tenure holder that he would not have been a permanent tenant on the basis of continued possession of land under clause (b). " The learned Solicitor General submitted that to read this portion of section 4 (b) as meaning that the landlord has to disprove what the tenant has already proved would be to give it no meaning at all and that consequently it should be held that in order to give some rational meaning to the words quoted they refer to tenure holder having to prove that the tenant was not a permanent tenant under section 83 of the Bombay Land Revenue Code.
To put it differently, the construction suggested was that on the conditions laid down in section 4(b) being fulfilled, viz., continuous possession of tenure land by a tenant for twelve years computed as described, the onus was shifted to the tenure holder to prove that the tenant did not fall within the category of persons described in section 83 of the Code.
I find myself unable to accept this interpretation of the section.
Even if one started with the presumption that what the impugned Act sought to achieve was not to "define" a permanent tenant but merely to shift the onus of proving the status the conditions of section 83 of the Code being assumed to be still the determinant, I do not find words in section 4 to support the interpretation which the learned Solicitor General desires the Court to accept.
There is no reference to section 83 in the impugned Act and the class of persons who are termed "permanent tenants" are expressly stated to be those who are deemed to be such.
That itself would be some indication that the class is an artificial creation brought into existence by the Act.
That apart, I have already pointed out that the opening words of the 474 first paragraph of section 4(b) contemplate cases where the origin of the tenancy of the parcel in respect of which permanent tenancy is claimed is known.
Lastly, the words in which the content of the right of the tenure holder to dispute the "deemed" permanent tenancy are couched are wholly incompatible with his having a right to establish that the tenant does not satisfy the requirements of section 83 of the Code.
The words used are "that the tenant would not have been a permanent tenant on the basis of continued possession of land under clause (b)".
The conditions on the fulfilment of which a person is deemed to be a permanent tenant are, as already pointed out, three and of these two are set out in sub cl.
(b), viz., the "continuous" possession of tenure land and the rent of the land being higher than the revenue assessment.
In my opinion the argument about the irrationality of the literal construction of the quoted words or section 4(b) stems from the assumption that section 4 contemplates an enquiry or proceeding initiated by the tenants who by evidence establish the matters set out in section 4 and it is on that basis that the submission is made that the legislature could not have made a provision for the same matters being disproved by the tenure holder.
Even if the basis be assumed to be correct, I do not see any absurdity in the provision.
But that apart, in my judgment section 4(b) does not contemplate or provide for any application by the tenant and therefore there is no question of the tenant having established that the conditions of section 4(b) have been satisfied.
Section 4(b) enacts a positive rule of law by which a person in possession of a holding of tenure land on August 15, 1950 is "deemed" to be a permanent tenant on the fulfilment of three conditions, the tenure holder being entitled to establish that the conditions of that section have not been satisfied when proceedings for that purpose are initiated by him.
The 475 provision for proceedings being initiated by the tenure holder to take advantage of the right granted to him by section 4(b) is to be found in section 6.
What has just been stated is amply borne out by the terms of section 6, for it enacts that the rights of a permanent tenant under section 4 "shall be entered in the record of rights unless the tenure holder applies in writing to the Mamlatdar within six months from the commencement of the Act of a declaration that the tenant under him is not a permanent tenant" (to quote only the material words).
It will therefore be seen that the concept of permanent tenant as envisaged under section 4 is incorporated into the texture of section 6.
Every person who satisfies the definition of a permanent tenant under section 4 is therefore automatically entitled without application by him, to be entered in the revenue records as a permanent tenant by the Mamlatdar unless the tenure holder applies in writing objecting to the entry.
Obviously the objections which he could raise and which would be the subject of adjudication under section 6 are those set out as being open to him under section 4.
In this connection it has to be noticed that section 6 does not specify the grounds upon which the tenure holder might object to a tenant being treated as a permanent tenant and it is on the absence of those provisions that the learned Solicitor General bases his argument suggesting that the objections of the tenure holder would extend to disproving that the tenant was a permanent tenant under section 83 of the Code.
It is not possible to accede to this submission.
It is common ground that no enquiry is contemplated under section 4(b) and that the right of the tenure holder to object to the entry of the tenant as a permanent tenant is by taking advantage of the provision in section 6.
It would therefore follow that section 4(b) and section 6 are integrated provisions, the one laying down the grounds of objection open to the tenure holder, and section 6 making provision for the forum in which and 476 the procedure by which such objections could be urged.
To put the matter slightly differently section 4(b) specifies the grounds of objection open to a tenure holder but does not indicate where and in which proceeding the objections could be raised while section 6 indicates that the authority to decide is the Mamlatdar and that the proceeding would be initiated by an objection petition filed by the tenure holder.
Both section 4(b) and section 6 would be truncated unless they were read as forming an integrated whole.
It is in this manner that a reconciliation is possible between the terms of sections 4 and 6 which so to speak form together provision for determining, after investigation.
the class of persons who shall be entitled to claim rights as permanent tenants.
Section 4 having defined a permanent tenant in positive terms, section 6 steps in and sets up a procedure and creates a forum in which that positive provision might be tested and if not displaced would be given effect to.
In the view I have expressed the reference to the enquiry being under section 135D of the Code would not make any difference, because the officials and Tribunals or Courts vested with authority under section 135D of the Code and the related provisions would have still to consider whether the tenant had or had not qualified to be a permanent tenant by the application of the criteria enacted by section 6.
I am therefore clearly of the opinion that the entire object and purpose of the impugned enactment which is given effect to by its operative provisions enacts not a rule of evidence for determining who permanent tenants are under the pre existing law, but to define, create and as it were, add a new class of "permanent tenants", i.e., those who satisfy the requirements of section 4.
If this were the proper construction of the impugned enactment it was not seriously contested that the enactment would be void and unconstitutional and liable to be struck down.
I agree therefore that these petitions should be allowed.
477 BY COURT : In accordance with the opinion of the majority, these petitions are allowed with costs.
As the petitions have been heard together there will be only one hearing fee.
| The petitioners, who were tenure holders, challenged the constitutional validity of the Bombay Land Tenure Abolition Laws (Amendment) Act, 1958 and in particular sections 3 and 4 read with section 6 of that Act, as infringing their fundamental rights guaranteed by articles 14, 19 and 31 of the Constitution.
Their case in brief was that those provisions by making certain non permanent tenants permanent as from the commencement of the Bombay Taluqdari Tenure Abolition Act, 1949, enabled them to acquire occupancy right by payment of six times the assessment or the rent under section 5A of that Act instead of 20 times to 200 times the assessment under section 32H of the Bombay Tenancy and Agricultural Lands Act, 1948, 412 as amended in 1956, and thereby substantially deprived the petitioners of the rights acquired by them on the 'tillers ' day, April 1, 1957, when they ceased to be tenure holders.
It was urged that the impugned Act was a piece of colourable legislation in that it had confiscated, under the guise of defining a permanent tenant or changing a rule of evidence, a large part of the purchase price the petitioners were entitled to from their tenants, and that the State Legislature had not the competence to enact it as it was not saved by article 31A of the Constitution.
^ Held, (Sarkar and Mudholkar, JJ., dissenting), that ss.3, 4 and 6 of the Bombay Land Tenure Abolition Laws (Amendment) Act, 1958, in so far as they deemed some tenants as permanent tenants in possession of Taluqudari land, were unconstitutional and void.
Under the guise of changing the definition of a permanent tenant and changing a rule of evidence, they really reduced the purchase price that the petitioners were entitled to receive under section 32H of the Bombay Tenancy and Agricultural Lands Act, 1948, as amended in 1956, from some of their tenants on the "tillers ' day.
" Per Sinha, C.J., and Das, J. There can be no doubt that section 4 of the impugned Act, properly construed, created a new class of permanent tenants not contemplated by section 83 of the Bombay Land Revenue Code, 1879, and not in existence on the 'tillers ' day", and the combined effect of sections 3, 4 and 6 of the impugned Act was that if the tenure holder did not make an application under section 6 within six months from the commencement of the impugned Act for a declaration that a tenant under him was not a permanent tenant, the name of the tenant would be recorded as a permanent tenant if he fulfilled the conditions laid down by section 4 and thereafter he would be deemed under section 3 to be a permanent tenant and under section 4 all the provisions of the Taluqdari Abolition Act 1949, would apply to him.
The result of this combined effect would be to deprive the tenure holder of any real opportunity of contesting the claims of the tenant and deprive him of the purchase price prescribed by section 32H of the Bombay Tenancy and Agricultural Lands Act, 1948.
The right of the petitioners to the said purchase price from those of their tenants who were non permanent on April 1, 1957, was a right of property guaranteed by article 19 (1) (f) and the impugned sections adversely affected that right with retrospective effect Section 6, tested in the light of article 19(5), could not be said to impose a reasonable restriction in the interest of the general public.
413 Bombay Dyeing and Manufacturing Co. Ltd. vs State of Bombay; , , applied.
Sri Ram Ram Narain Medhi vs The State of Bombay.
[1959] Supp. 1 S.C.R. 489, referred to.
Article 31A of the Constitution had no application.
The relation between the tenure holders and the tenants had changed from that of landlord and tenant to that of creditor and debtor on April 1, 1957, and the impugned Act which affected such rights, did not come within the protection of that Article.
In view of the true scope and effect of sections 3, 4 and 6, the impugned Act could not fall within any entry of List II or List III of the Seventh Schedule to the Constitution and was a piece of colourable legislation.
K.C. Gajapati Narayan Deo vs State of Orissa ; , referred to.
Per Sarkar and Mudholkar, JJ.
Section 4 of the impugned Act did not expand the definition of a permanent tenant and did not take away any property that was vested in the landlord on the "tillers day".
Nor did it confer any new property on the tenant.
It only applied to and rescued a permanent tenant faced with the task of proving the nature of his tenancy, by raising a presumption of permanency in his favour.
If in fact his tenancy was not permanent and had been extinguished by law but he was tentatively recorded as permanent, the landlord could rebut the presumption in a proceeding under section 6 (1) by producing the documents in his possession or otherwise by showing that the tenancy was not in fact permanent and, therefore, had been extinguished by section 32(1) of the Bombay Tenancy and Agricultural Lands Act, 1948, and claim compensation or the purchase money under section 32H(1)(II) of the Act, that right of his not having been affected in any way by the impugned Act.
If he failed, he would get the purchase price according to section 5A of the Bombay Taluqdari Tenure Abolition Act, 1949, which would not be and was not challenged.
Dhirubha Devisingh Gohil vs State of Bombay, ; , referred to.
The impugned Act dealt with matters arising out of the relationship between landlord and tenant.
Its provisions were not intended to apply where such relationship did not subsist.
The Act was, therefore, within the competence of the Legislature under entry 18 of List II of the Seventh Schedule to the Constitution and was thus not a piece of colourable legislation.
414 There was, therefore, no infringement of article 31(1) and the Act was within the protection of article 31A of the Constitution and its Constitutional Validity could not be challenged under article 14 and 19(1)(f) of the Constitution.
Held, further, that the distinction made between tenure villages and non tenure ones was a classification based on the extent of availability of the material for raising the inference or the presumption and such classification had a reasonable nexus with the object sought to be achieved by the Act.
Per Ayyangar, J. There was no basis for the argument that section 4 of the impugned Act merely intended to provide a rule of evidence for determining who was a permanent tenant under section 83 of the Bombay Land Revenue Code, 1879, and did not extend the category of such tenants.
It enacts a positive rule of law by which a person in possession of holding of a tenure land must be "deemed" to be a permanent tenant on fulfilment of the three specified conditions.
This is evident from the provisions of section 6(1) under which every person who satisfied the definition of a permanent tenant under section 4 was entitled automatically and without applying for to be entered as a permanent tenant in the record of rights by the Mamlatdar unless the tenure holder filed an objection in writing.
Obviously such objection could only be on grounds open to him under section 4.
Section 4(b) and s.6(1) of the impugned Act had to be read together as forming an integrated whole.
The entire object and purpose of the impugned enactment was not, therefore, to enact a rule of evidence for determining who were permanent tenants under the pre existing law but to define and create a new class of permanent tenants who satisfied section 4 of the Act.
| Respondent No. 1 who was the landlord and had let out the petition premises to respondent No. 2, served a notice (dated July 28, 1962) terminating her tenancy and filed an ejectment suit.
A decree for ejectment was passed (in 1966) and the appeal of respondent No. 2 was dismissed (in 1972).
The landlord took out execution of the decree.
Obstructionist notice served on the petitioners who were sub tenants of respondent No. 2 was made absolute in favour of the landlord.
The pensioners ' appeal was dismissed.
Dismissing the petitioners ' suits against the landlord for a declaration that they were lawful sub tenants /licensee entitled to the protection of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 and for an injunction restraining the landlord from executing the decree for ejectment the trial Court held that they were not entitled to the benefit of the Act as lawful sub tenants or as deemed tenants or as protected licensees.
The petitioners appeals were dismissed on the ground that having been inducted into the premises after 1960 they were not entitled to be regarded as lawful sub tenants.
In the Special Leave Petitions to this Court it was contended that the petitioners: (1) must be regarded as licensees entitled to the benefit of section 14(2) read with section 15 A(1) of the Act: and (2) having been in occupation since 1943 and having in 1960 merely restricted their occupation to the portions occupied by them, they were lawful sub tenants since 1943, and, therefore, by virtue of section 14(1) they must be regarded as tenants on the determination of respondent No. 2 's tenancy.
Dismissing the Special Leave Petitions: ^ HELD: 1.
An agreement for licence can subsist and continue only so long as the licensor continues to enjoy a right, title or interest in the premises.
On the termination of his right, title or interest in the premises, the agreement for licence comes to an end.
If the licensor is a tenant, the agreement for licence terminates with the tenancy.
No tenant is ordinarily competent to grant a licence beyond his tenancy.
On the termination of the licensor 's tenancy the licensee cases to be a licensee.
This loss of status is the point 713 from which sub section (2) of section 14 of the Act begins to operate and in consequence of its operation, the erstwhile licensee becomes a tenant of the landlord on the terms and conditions of the agreement.
[715 F H] In the instant case respondent No. 2 ceased to be a tenant of any description long before February 1, 1973.
The contractual tenancy came to an end when the notice to quit took effect and the statutory tenancy terminated when the decree for ejectment was passed thereafter.
When she had ceased to be tenant, the agreement for licence stood automatically terminated by reason of which the petitioners cannot claim to be licensees on February 1, 1973.
[715 H 716 B] 2.
The benefit of section 14(1) can be claimed by a sub tenant to whom the premises had been lawfully sub let before the commencement of the Bombay Rents, Hotel and Lodging House Rates Control (Amendment) Ordinance, 1959.
[716 E] In the instant case the sub tenancy has been found to commence from 1962 and not earlier.
The benefit of sub section (1) of section 14 cannot be available, and there can be no right to continue in possession.
[716 F] Madhusudan A Mahale vs P.M. Gidh and others, held inapplicable.
| Both the appeals raise a common question as to whether a tenant in order to resist passing of a decree of eviction under the provisions contained in section 12(3)(a) of the Bombay Rent Act 1947 must dispute the standard rent within one month from the date of receipt of the notice from the landlord terminating the tenancy on the ground of arrears of rent or whether a tenant can raise such a dispute in the written statement.
The Gujarat High Court took a view that the dispute as to standard rent has to be raised within one month from the service of the notice on the tenant.
The Bombay High Court has taken a contrary view and held that the tenant can raise a dispute as to standard rent in his written statement in answer to the suit and in such a case the provisions of section 12(3)(a) of the Act will apply.
In the Gujarat case, the High Court found that the tenant did not raise the dispute within one month of the service of the notice terminating the tenancy inter alia, on the ground of arrears of rent for more than 6 months.
In the Bombay appeal the dispute was not raised within one month from the date of the receipt of the notice.
It was, however, raised in the written statement.
Under section 11 of the Act, the court has power to determine standard rent when there is a dispute between the landlord and tenant regarding the amount of standard rent.
^ HELD: (1) Under section 12 of the Act the landlord is not entitled to recover possession of the premises so long as the tenant pays or is ready and willing to pay the amount of standard rent and permitted increases.
Section 12(2) provides that no suit for recovery of possession shall be instituted by a landlord against a tenant on the ground of non payment of the standard rent until the expiration of one month next after notice in writing of the payment of the standard rent.
Section 12(3)(a) provides for passing a decree for eviction of the tenant is in arrears for a period of 6 months and neglects to make the payment after the expiration of the notice period provided there is no dispute regarding the amount of standard rent.
Clause 12(3)(a) provides that in any other case no decree for eviction should be passed if the tenant pays or tenders in the court the standard rent and permitted increases which is due and thereafter continues to pay or tender in court regularly such rent till the suit is finally decided.
Explanation I to section 12 provides that where there is a dispute as to the amount of standard rent or permitted increases recoverable under this Act the tenant shall be deemed to be ready and willing to pay such amount if before the expiry of the period of one month from the receipt of the notice he makes an application under section 11 for the fixation of the standard rent and thereafter pays the rent fixed by the Court.
[632 B, G] (2) The Bombay High Court view overlooks the limitation of time within which a dispute is to be raised as to standard rent.
The view of the Bombay High Court that dispute within one month of the service of the notice terminating the tenancy is one mode of raising a dispute and there is another mode of raising the dispute at any stage of the suit, nullifies the provisions contained in section 12 and explanation thereto and confers a right on the tenant where the legislation does not contemplate such right.
The provisions in section 11(3) of the Act deal with orders which may be passed by the court during the pendency of the application disputing the rent.
Provisions of section 11(4) of the Act deal with orders which may be passed consequent upon dispute as to rent.
It is 629 only when an application disputing the rent is made within the time contemplated by Explanation I to section 12 of the Act that the provisions on sub sections (3) and (4) of section 11 are attracted.
[635F H, 636A]
| The appellants are the tenants and the respondents are the landholders in respect of the tenanted agricultural lands of the hitherto inam estates.
After the coming into force of the Andhra Pradesh (Andhra Area) Estates (Abolition and Conversion into Ryotwari) Act, 1948.
the inam estates were abolished, the land stood vested in the Government free of all encumbrances, and the pre existing rights, title and interest of erstwhile landholders ceased except to claim ryotwari patta.
The respondents landholders claimed that the lands, in question, were either under their personal cultivation or they intended to resume those for private cultivation, and as such those were their private lands and they were enti tled to ryotwari pattas.
The appellants tenants on the contrary claimed that those lands were neither under the personal cultivation of the landholders nor the landlords intended to resume those for personal cultivation, but were in possession of the tenants who were entitled to ryotwari pattas after the abolition of the estates.
The Settlement Officer, after making inquiry under section 15 of the Estates Abolition Act, held that the landholders failed to establish that they were personally cultivating the lands or that they intended to resume the lands for personal cultivation, and as such rejected their claims.
The landholders ' appeals to the Estates Abolition Tribu nal were allowed.
The Tribunal held that the landholders were entitled to the grant of ryotwari pattas as the lands were private lands within the meaning of section 3 (10)(b)(i) of the Andhra Pradesh (Andhra Area) Estates Land Act, 1908 and that the tenants were not entitled to ryotwari pattas in respect of the same.
394 The appellants tenants moved writ petitions before the High Court.
The learned Single Judge observed that it was common ground before the Subordinate Tribunal, as well as before him, that the nature of the lands at the inception, whether ryoti or private, was not known; that the burden of establishing that the lands were private lands was on the landholders; and that it was also common ground before him that apart from the fact that there were occasional changes of tenants, and the lands were sometimes leased under short term leases, there were no other circumstances indi cating that the landholders intended to resume cultivation of the lands.
The learned Single Judge held that after the pronouncement of this Court in Chidambaram Chettiar vs Santhanaramaswamy Odayar, the decision of the Full Bench of the Madras High Court in Periannan vs Amman Kovil, AIR 1952 Mad. 323 (F.B.) could no longer be considered good law, and further that the decision in Jag deesam Pillai vs Kuppammal, ILR and in Perish Priest of Narayar vs Thingaraja Swami Devasthanam, App.
176 178 and 493 of 1946, once more held the field.
It was also observed that since in all the cases the only mode of proof attempted by the landholders was the grant of short term leases and change of tenants and rent, it must be held that the lands were not established to be private lands and that no attempt was made to prove personal cultivation or any intention to resume personal cultivation.
The Division Bench, in writ appeals filed by the land holders, held that, in the first place, the observations of this Court in Chidambaram 's case were in accord with the rule in Periannan 's case, and secondly, even if some of the dicta in the judgment of this Court in Chidambaram suggested a contrary principle, the effect of the entire observations did not support the contention that Periannan 's case had been impliedly overruled by this Court.
Before this Court, it was inter alia contended on behalf of the appellants tenants (i) that the learned Single Judge having found as fact that the landholders had failed to establish that the lands were their private lands as these were neither under their personal cultivation nor they were intended to be resumed for personal cultivation, and applying the rule in Chidambaram 's case, the learned Single Judge having held that the lands were not private lands, the Division Bench erred in holding to the contrary; (ii) that the learned Single Judge correctly held that Perriannan 's case was no longer good law as in Chidambaram Chettiar vs Santhanaramaswamy Odayar, it was held that the definition of private land in section 3(10) of the Estate Land Act of 1908 read as a whole indicated clearly that the ordinary test for private land was the 395 test of retention by the landholder for his own personal use and cultivation by him or under his personal supervision, though they might be let on short leases; (iii) that it was not the intention or the scheme of the Act to treat as private those lands with reference to which the only pecul iarity was the fact that the landholder owned both the varams in the land and had been letting them out on short leases; and (iv) that the Division Bench erred in holding that Periannan 's tests were still applicable.
On the other hand, it was contended that the correct tests for determining what was private land had been laid down in Periannan 's case, which were not different from those of Chidambaram 's case, and the Division Bench correct ly applied those tests to find that the lands were private lands of the landholders.
Allowing the appeals, setting aside the judgment of the Division Bench, and restoring that of the learned Single Judge, this Court, HELD: (1) To find out whether a village was designated as inam village or not, prima facie the revenue accounts of the Government which were there at the time of the Inam Abolition Act came into force had to be looked into.
If it was so shown, no further proof was necessary.
Only when the entries in the revenue accounts were ambiguous, and it was not possible to come to a definite conclusion, it might be necessary to consider other relevant evidence which was admissible under the Evidence Act.
[406H; 407A B] (2) An interpretation of the words "private land" and "ryoti land" had to be made in consonance with the legisla tive purpose, provisions and scheme of the enactment.
Inter pretare at Concordare leges legibus, est optimus interpre tundi modus.
To interpret and in such a way as to harmonize laws with laws in the best mode of interpretation.
[410E] (3) The Estate Abolition Act accepted the definitions of occupancy right and ryoti as in the Estates Land Act, 1908.
The above provisions conferred permanent, heritable and transferable right of occupancy on the Tenant.
This right stemmed from the will of the legislature and involved an element of social engineering through law star pro rationa voluntas populi: the will of the people stands in place of reason.
The right of the landholder to keep his private land to himself has therefore to be interpreted in its proper perspective.
Statuta pro publico late interpretaur.
Statute made for the public good ought to be liberally construed.
[425E F] 396 (4) The concept of past or present intention of the landholder to resume personal cultivation of land let out to a tenant and still in possession of the tenant has to be strictly construed against the landlord and liberally in favour of the tenant.
[425E] The learned Single Judge in the instant case rightly observed that the legislature did not use the word domain or home farm land without attaching to them a meaning, and it was reasonable to suppose that they would attach to those words the meaning which would be given to them in ordinary English, namely, to connote land appurtenant to the mansion of the lord of the manor kept by the lord for his personal use and cultivated under his personal supervision is dis tinct from land let to tenant to be farmed without any control from the lord of the manor other than such control as incident to the lease.
To that extent, the propositions of the learned Judges in Periannan 's case can no longer be held to be good law in view of this Court 's decisions in Chidambaram 's case and Venkataswami 's case, and the decision in Zamindar of Challapali vs Rajalapati/Jagadesan Pillai vs Kuppamal, and in Parish Priest of Karayar Perish vs Thiapa rajaswami Devasthanam mast be held to have been correctly decided.
[421C E] Zamindar of Chellapalli vs Rajalapato Somayya, 39 Mad. 341; Jagadeesam Pillai vs Kuppamal, ILR ; Parish Priest of Karayar Parish vs Thiagarajaswami Devastha nam, App.
176 178 & 493 of 1946; Chidambaram Chettiar vs Santhanaramaswamy Odayar, ; ; Yerlagadda Malikarjuna Prasad Nayudu vs Somayya, ILR PC; P. Venkataswami
D.S. Ramireddy, ; Suryanara yana vs Patanna, , referred to.
Periannan vs Amman Kovil, AIR 1952 Mad.
323 F.B. partly overruled.
(6) In the instant case the pattas and the muchilkas are not claimed to have shown anything to establish the lands to be private lands.
Only the facts of occasional change of tenants and rents have been shown.
[431B]
| Under Section 56(1)(c) of the Andhra Pradesh (Andhra Area) Estates (Abolition and conversion into Ryotwari) Act, 1948, "where, after an estate is notified, a dispute arises as to (a) whether any rent due from a ryot for any fasli year is in arrear or (b) what amount of rent is in arrear or (c) who the lawful ryot in respect of any holding is, the dispute shall be decided by the Settlement Officer".
Section 56(2) of the Act provides for an appeal to the Estates Abolition Tribunal against the decision of the Settlement Officer whose decision was final and not to be questioned in any court of law.
The petition filed before the Tahsildar, Pathapatnam under section 13 of the Andhra Tenancy Act by the appellant, for the eviction of the respondents on the ground of default in payment of rent was dismissed on the ground, among others that the respondents had occupancy rights in the land.
The appeal before the Revenue Divisional Officer Tekkali was dismissed on the ground that the petition for eviction was not maintainable since the question as to who was the lawful ryot in respect of any holding in an estate had to be decided by the Settlement Officer under Section 56(1)(c) of the Andhra Pradesh (Andhra Area) Estates (Abolition and Conversion into Ryotwari) Act and that the decision of such question was within the exclusive competence of the Settlement Officer.
In the revision petition filed before it under article 227 of the Constitution, the High Court of Andhra Pradesh agreed with the appellate order.
Dismissing the appeal by special leave the Court, ^ HELD: 1.
Interpretation of a statute contextual or otherwise must further and not frustrate the object of the statute.
[207 D] The object of the Andhra Pradesh (Andhra Area) Estates (Abolition and Conversion into Ryotwari) Act, 1948 is to protect ryots and not to leave them in wilderness.
When the Act provides a machinery in Section 56(1)(c) to discover who the lawful ryot of a holding was, it is not for the Court to denude the Act of all meaning by confining the provisions to the bounds of Section 55 and 56(1) (a) and (b) on the ground of "contextual interpretation".
[207 C D] 202 2.
The scope of section 56(1)(c) cannot be restricted to mean that it was controlled by Section 55 and 56(1)(a) and (b) and that an enquiry into the question as to who was the lawful ryot of a holding under that section was permissible only for the purpose of identifying the person liable to pay the arrear of rent which had accrued in respect of the holding before the taking over of the estate.[204 E G] It would indeed be anomalous and ludicrous and reduce the Act to an oddity, if the Act avowedly aimed at reform by the conferment of ryotwary pattas on ryots and the abolition of intermediaries is to be held not to contain any provision for the determination of the vital question as to who was the lawful ryot of a holding.
Section 56(1)(c) is indeed such a provision.
A contextual interpretation may not be quite appropriate in view of the fact that Sections 55 and 56(1)(a) and (b) occur under the heading 'Miscellaneous '.
Any other interpretation would lead to conflict of jurisdiction and the implementation of the Act would be thrown into disarray.
A, B C] Munuswami Naidu (died) & Ors., vs R. Venkata Reddy and Ors., A.I.R. 1978 A.P. 200 (F.B.); approved.
The Andhra Pradesh Estates Abolition Act is a self contained Code in which a provision is also made for the adjudication of various types of disputes arising after an estate is notified by specially constituted Tribunals.
On general principles, the special Tribunals constituted by the Act must necessarily be held to have exclusive jurisdiction to decide disputes entrusted by the statute to them for their adjudication.
[204 D E] Appanna vs Sriramamurthy, ; approved.
| The appellants were Taluqdars owning taluqdari villages in District Ahmedabad, State of Bombay.
In 1922 23 there was a revision settlement of land revenue and the aggregate sum of land revenue payable by each taluqdari estate was fixed.
In 1925 26, in exercise of the powers conferred by section 22 of the Gujrat Taluqdars Act, 1888 (Bom.
VI of 1888), the Government of Bombay ascertained and declared the jama payable by each taluq which was much less than the amount of land revenue and the said declaration was to remain in force for thirty years.
With the passing in 1949 of the Bombay Taluqdari Abolition Act, 1949, the taluqdari estates of the appellants were abolished and they became occupants of the lands and, after the expiry of the thirty years, were called upon to pay the full land revenue assessment in respect of the lands.
It was contended on behalf of the appellants that by reason of section II7R of the Bombay Land Revenue Code, i879, the declaration made by the Governor in council fixing the amount of jama for a period of thirty years would continue to be in force even after the expiry of that period till a revision settlement was made and the Government was precluded from demanding the higher amount of revenue till then.
Held, that the contention must fail.
The jama payable by the Taluqdars under section 22 Of the Gujrat Taluqdars Act, 1888, was distinct from the revenue assessment of land comprised in the taluqdari estate and they could not be equated.
The declaration under section 22 or the fixation of the jama under section 23(1) of the Act was in the nature of a settlement entered into between the Government on the one hand and the Taluqdar on the other but that was no settlement of land revenue within the meaning of section II7R of the Bombay Land Revenue Code, 1879.
As section 5(2) (b) of the Bombay Taluqdari Tenure Abolition Act, 1949, expressly saved the settlement made under section 23 and the 912 declaration under section 22 of the Gujrat Taluqdars Act, the appellants were liable to pay the entire land revenue after the expiry Of 30 years, i.e., from the year 1955 56.
| The petitioners challenged the constitutional validity of the U.P. Consolidation of Holdings Act (U .
P. V of 954), as amended by the amending Acts, which was intended to encourage the development of agriculture by the allotment of compact areas to tenure holders in lieu of scattered plots so that large scale cultivation might be possible with all its attendant advantages.
A notification was issued under section 4 Of the impugned Act declaring the decision of the State Government to formulate a scheme of ' consolidation in respect of the area where the petitioners held their lands.
This was followed up by a statement of proposals under section 19.
The petitioners objected to these proposals and thereafter appealed to the Settlement Officer (Consolidation) but to no effect.
It was contended, inter alia, on their behalf that (1) the provisions of sections 8, 9 and 10 read with those Of s 49 Of the impugned Act were discriminatory in that they laid down a procedure for correction and revision of revenue records for 929 villages under consolidation that was vitally different from that applicable to other villages under the U.P. Land Revenue Act, 1901; (2) that sections 14 to 17 as also sections 19 to 22 read with section 49 conferred arbitrary powers on the consolidation authorities in respect of the lands of the tenure holder and his rights therein and deprived him of the protection of courts available to other tenure: holders and that (3) section 29B which provided for compensation, by giving inadequate compensation, offended article 31(2) Of the Con stitution.
Held, that the contentions must fail.
Although the procedure laid down by the impugned Act was to some extent different from that under the U.P. Revenue Act, 1901, it was by no means arbitrary or devoid of natural justice.
Regard being had to the advantages that consolidation conferred on the tenure holder such difference was supportable as a permissible classification on an intelligible differentia reasonably connected with the object of the Act.
The expeditious procedure for effectuating consolidation laid down by ch.
II of the Act read with the Rules, therefore, could not be said to violate article 14 Of the Constitution.
Nor could for similar reasons the provisions of ch.
III of the Act be said to violate article 14 Of the Constitution.
The provision Of section 22(2) Of the Act which made the decision of the arbitrator final by ousting the jurisdiction of ordinary courts even where a party had obtained a decree which might be under appeal, was necessary in the interest of expedition.
Having regard to the peculiar conditions in cases of this kind and the advantages a scheme of consolidation offered to the entire body of tenure holders, it could not be said that the cash compensation for tenure holders provided by section 29B of the impugned Act was inadequate, even assuming that article 31(2) applied to the case.
| The respondent landlord filed a petition under section 10 of the Andhra Pradesh Building (Lease, Rent and Eviction) Control Act, 1960, for the eviction of the appellant tenant.
There was a compromise.
Since the tenant defaulted in payment of the rent thereafter, a registered notice terminating the tenancy issued by the landlord, came back with an endorsement that the appellant had refused to accept it.
Later.
the tenant was ordered to be evicted. 'The tenant 's appeal to the appellate court and then his revision application to the High Court were rejected.
Relying upon an earlier Division Bench decision of that Court, the High Court held that the Act provided a self contained procedure for eviction of tenants, and therefore, compliance with the provisions of section 106, Transfer of Property Act was unnecessary.
Dismissing the tenant 's appeal, ^ HELD: The High Court has correctly applied the principle laid down by a Division Bench of that court in Mohan & ors.
vs section Mohan Rao & Ors.
[1969] An.
P.R. Law Journal 351.
[553 E] Raval & Co. vs K. C. Ramacharndran & ors.
[19741 2 SCR 629 @ 634 and Shri Hern Chand vs Shrimali Sham Devi.
ILR 1955 Puni.
36, referred to.
In Mangilal vs Sugan Chand Rathi [AIR 1955 SC 101] this Court was considering an entirely different kind of provision of another Act in another State, and this case is distinguishable.
In the context of the remedy of ejectment by an ordinary civil suit it was held in that case that the usual notice of termination _ of tenancy under section 106.
Transfer of Property Act was necesary.
[553F & D] boiler [In cases where a party denies receipt of registered notice it is not always necessary to produce the postman who tried to effect service.
Denial of service by a party may be found to be incorrect from its own admissions or conduct.
The decision of the Bombay High Court in M. K. Patel vs Kundan Mal Chamanlal and that of the Calcutta High Court in Nirmal Bala Devi.
vs Provar Kumar Basu are reconcilable.
The Calcutta High Court applied a rebuttable presumption under section 114, Evidence Act, that the letter was received by the addressee in the ordinary course of blazons was refused by him because the presumption from the endorsement made upon it had not been repelled by any , evidence.
In the Bombay case, the presumption had been held to have been `J rebutted by the evidence of the defendant on oath so that it meant that the plaintiff could not succeed without further evidence.] [554C E]
|
Civil Appeal No. 766 of 1957.
Appeal by special leave from the judgment and order dated January 31, 1966, of the, Punjab High Court in Civil Writ Petition No. 30 of 1956.
R. section Narula, for the appellants.
B. K. Khanna and P. D. Menon, for the respondents.
section L. Pandhi, for the interveners.
January 24.
The Judgment of the Court was delivered by WANCHOO, J.
This is an appeal by special leave against the order of the Punjab High Court 735 summarily rejecting a petition filed by the appellants.
under article 226 of the Constitution.
The brief facts necessary for present purposes are there.
The appellants migrated in 1947 from what is now West Pakistan and settled in two villages, viz., Sheikhapind and Kotla.
They were given temporary allotment of agricultural land in the two villages under the East Punjab Evacuees ' (Administration of Property) Act, (No.XIV of 1947) then in force.
Thereafter a scheme was formulated in 1948 for quasi permanent allotment of agricultural land to owners of land in West Pakistan after the East Punjab Refugees (Registration of Claims) Act, (No.VIII of 1948) was enacted.
In July 1949, a notification was issued stating the condition under which allotment of agricultural land would be made to displaced person from West Pakistan.
This allotment was quasi permanent in the sense that it was to remain in force so long as the land was to remain vested in the Custodian of Evacuee Property.
In pursuance of this notification, land was allotted in the two villages to the appellants on quasi permanent basis in 1949 and the appellants have remained in possession thereof eversince.
Originally land was classified into two kinds, namely, (i) urban and (ii) agricultural land.
Later in 1949, however, a third Classification, namely sub urban was also introduced in practice with respect to agricultural land in the neighborhood of certain towns and a notification seems to have been issued with respect to that specifying the villages land in which was considered to be a sub urban (vide Chap.
V of Land Settlement Manual by Tarlok Singh).
But the two villages in which land was allotted to the appellants were not included in the notification with respect to sub urban land.
In August 1950 after the quasi permanent allotment in favour of the appellants had been 736 made, the Revenue Assistant (Rehabilitation) Jullundur proposed that these two villages should also be classified as sub urban, the consequence of which would have been to reduce the area of land given to the allottees therein.
The appellants objected before the Director General of Rehabilitation to the villages being graded as sub urban The Director General called for a report from the Revenue Assistant (Rehabilitation) and eventually passed an order on January 12, 1951 that it was not desirable at that stage to cause any disturbance to the allotments made in these two villages by declaring them sub urban and that the status quo should continue.
This however did not end the matter and in February, 1952 the Director of Rehabilitation passed an order in effect declaring these villages as sub urban with the result that the allotment made to the appellants would have to be reduced.
It also appears that some order was passed in April, 1952 on paper allotting the extra land which would be released from the allotment of the appellants to other persons who have appeared as interveners in this appeals.
But this order remained merely on paper and has not been carried out so far.
When the appellants came to know of the order of February 29, 1952, they filed a revision before the Custodian General for setting aside that order.
The revision came up before the Deputy Custodian General for hearing in January 1956.
By then however certain changes in the law and the Rules had been made.
Firstly, there was an amendment in r. 14 (8) of the Administration of Evacuee property (Central) Rules framed under the Administration of Evacuee property Act, (Central Act XXXI of 1950).
Further, the Displaced persons (Compensation and Rehabilitation) Act, Central Act XLIV of 1954, (hereinafter referred to as the Act) had been passed.
Under the amendment to r. 14 power was given for cancellation or variation of any 737 allotment of rural evacuee property on a quasi permanent basis, where the allotment was to be cancelled or varied in accordance with the general or special order of the Central Government.
It appears that in the meantime correspondence passed between the Punjab Government and the Central Government and an order under the amended r. 14 (6) (iii) (d) was obtained on October 11,1955.
Therefore, when the revision came up before the Deputy Custodian General he held that in view of r. 14 (6) (iii) (d) of the Rules it was open to the Central Government by special order to direct cancellation or variation of the allotment made in this case in favour of the appellants and that the Central Government had on the representation of the Punjab Government agreed to declare these two villages as sub urban by its order dated October 11, 1955; therefore he held that whatever was being done after October 11, 1955 was in pursuance of the order of the Central Government.
He therefore held that the impugned order of February 29, 1952, even if it was revisable, no longer held the field and action was to be taken in future under the order of the Central Government passed on October 11, 1955.
Therefore, the revisions had become infructuous and he dismissed them.
Then followed the writ petition by the appellants in the Punjab High Court, which was dismissed summarily.
As leave was refused by the High Court, the appellants applied for special leave to this Court, which was granted; and that is how the matter has come up before us.
The main contention on behalf of the appellants before us is that after the coming into force of the Act and the notification made there under on March 24, 1955 under section 12, the land allotted to the appellants in the two villages ceased to because property and became part of the compensation pool created thereunder and therefore the Central 738 Government had no power left to act under the Central Act XXXI of 1950 and the Rules framed thereunder.
In consequence the order passed, by the Central Government on October 11, 1955 on the basis of which the Deputy Custodian General rejected the revision petitions filed on behalf of the appellants was not within the competence of the Central Government and no action could be taken by virtue of that order declaring the two villages as sub urban.
Therefore it was not open to the authorities under the Central Act XXXI of 1950 to take any action under that order with the object of varying the allotment made in favour of the appellants by reducing the area allotted to them.
It is further urged that whether further action has to be taken after the notification dated March 24, 1955 can only be taken under the Act and that no such action has in fact been taken, We are of opinion that there is force in this contention of the appellants and it must prevail.
Section 12(1) of the Act provides that "if the Central Government is of opinion that it is necessary to acquire any evacuee property for a public purpose, being a purpose connected with the relief and rehabilitation of displaced persons, including payment of compensation to such persons, the Central Government may at any time acquire such evacuee property by publishing in the Official Gazette a notification to the effect that the Central Government has decided to a acquire such evacuee property in pursuance of this section".
Sub section (2) then provides that "on the publication of a notification under sub section (1), the right, title and interest of any evacuee in the evacuee property specified in the notification shall. . be extinguished and the evacuee property shall vest absolutely in the Central government free from all encumbrances".
Sub section (4) provides that all evacuee property acquired under this section shall form part of the 739 compensation pool.
Section 14 provides for the constitution of a compensation pool.
Section 16 gives powers to the Central Government for the management of the compensation pool, including the appointment of such officers as it may deem fit (referred to as managing officers) or constitution of such authority or corporation, as it may deem fit (referred to as managing corporations).
Section 17 provides for functions of managing officers and managing corporations.
Section 19, which is important, provides that "notwithstanding anything contained in any contract or any other law for the time being in force but subject to any rules that may be made under this Act, the managing officer or managing corporation may cancel any allotment or terminate any leases or amend the terms of any lease or allotment under which any evacuee property acquired under this Act is held of occupied by a person, whether such allotment or leases was granted before or after the commencement of this Act".
Rules have been framed under the Act specifying the circumstances under which a managing officer or a managing corporation may cancel an allotment or terminate a lease or vary the terms of any such lease or allotment (see r. 102).
It is not in dispute that the evacuee property in these two villages was notified under s.12 of the Act on March 24, 1955.
The consequence of that notification is that all rights.
title and interest of the evacuee in the property ceased with the result that the property no longer remained evacuee property.
Once therefore the property ceased to be evacuee property it can not be dealt with under the Central Act No. XXXI of 1950 or the Rules framed thereunder.
The property in these two villages became part of the compensation pool after the notification of March 24, 1955 and could be deal with under the provisions of the Act and any variation or cancellation of any lease or allotment thereafter could only be made under s.19 740 of the Act.
This is the position which emerges on a consideration section 12, 14, 16 and 19 of the Act after the notification under section 12(1) was made with respect to the evacuee property in these two villages on March 24, 1955.
This view has been taken by the Punjab High Court in Balmukand vs The Punjab State.
The same view has also been expressed by this Court in Major Gopal Singh vs Custodian, Evacuee Property, where it was held that from the date of the notification under section 12, the Custodian by reasons of the divesting of the property becomes functus officio with respect to it and cannot rectify any error made by him in the past in the matter of cancellation of allotment.
It follows therefore that when the notification of March 24, 1955 was made and the evacuee property in these two villages ceased to be evacuee property and became part of the compensation pool it could only be deal with under the Act and if any variation or cancellation of allotment was to be made it could only be done under the provisions of section 19 of the Act and there was no power left in the Central Government to act under r. 14(6)(iii)(d) of the Rules framed under the Central Act XXXI of 1950 with respect to this land after the notification of March 24, 1955.
The order of the Deputy Custodian General of January 1956 shows that further proceedings with respect to this land are contemplated under the order of October 11, 1955 passed by the Central Government under r. 14(6)(iii)(d).
As however that order was passed after March 24, 1955, when the power of the Central Government to act under the Central Act XXXI of 1950 had ceased on the evacuee property in these two villages becoming part of the compensation pool, that order must be set aside and no further proceedings can be taken under that order.
We order accordingly.
The appellants will get their costs.
741 We should however like to make it clear that we express no opinion on the controversy between the appellants and the interveners who are left to such remedies as may be available to them under the law.
| The appellants migrated to India in 1947 from West Pakistan.
To begin with, they were given temporary allotment of land in two villages.
In 1949, land was allotted to them on quasi permanent basis, and they have remained in possession of the same eversince.
Originally, land was classified into two kinds: urban and agricultural land.
Later on, a third classification was introduced, known as sub urban land.
The two villages in which land was allotted to the appellants were not included in the notification with respect to sub urban land.
In February, 1952, the Director of Rehabilitation passed and order declaring those villages as 734 sub urban land.
The result of the order was that the allotment made to the appellants was to be reduced.
The appellants went in revision to the Custodian General, and their revision petitions were dismissed on the ground that the view of Rule 14(6)(iii)(d) of the Rule it was open to the Central Government by a special order to direct cancellation or variation of the allotment made in favour of the appellants, and the Central Government has on the representation of the Punjab Government agreed to declare the two villages in question as sub urban by its order dated October 11, 1955.
The appellants filed a writ petition in the High Court but that was dismissed summarily.
The have come in appeal to this Court by special leave.
^ Held, that when the notification of March 24, 1955, was made under section 12 of the placed Persons (Compensation and Rehabilitation) Act, 1954, the evacuee property in those villages ceased to be evacuee property and became a part of the compensation pool.
That property could only be dealt with under the Act of 1954.
If any variation or cancellation of allotment was to he made that could be done only under the provisions of section 19 of Act of 1954.
There was no power left in the Central Government to act under Rule 14(6)(iii)(d) of the Rules framed under the with respect to that land after the notification of March 24, 1955.
Balmukand vs The State of Punjab, I.L.R. 1957 Punjab 712 and Major Gopal Singh vs Custodian of Evacuee Property, ; , followed.
| The respondents filed a suit against the petitioner in 1954 for the possession of certain property and for mesne profits and obtained decree in their favour.
The petitioner 's appeal to the High Court was dismissed in April 1959 and a petition for special leave to appeal to this Court was granted in June, 1959.
Thereafter, the 7th respondent died in November 1959.
The petitioner filed the present applications in October 1964 for bringing on record the legal representatives of the 7th respondent and for condonation of delay on various grounds.
It was also contended on behalf of the petitioner that in view of the fact that after the preliminary decree for mesne profits had been passed, the respondents/plaintiffs brought the heirs and legal representatives of the deceased 7th respondent on record in the final decree proceedings within the time prescribed, and as the legal representatives were brought on record at one stage of the suit on the basis of the rule laid down by the Privy Council in Brij Inder Singh vs Kanshi Ram, 44 I.A. 218, no question of abatement would arise in respect of the appeal; that the final decree proceedings are a stage in the suit and the appeal is another stage in the suit and, therefore, the bringing on record of the legal representatives in one stage of the suit will enure for all stages of the suit.
HELD: (i) On the facts of the case there were no sufficient grounds for condoning the delay in bringing the legal representatives of the 7th respondent on the record.
(ii) The order bringing the legal representatives of the respondent on record in the final decree proceedings cannot enure for the benefit of the appeal filed against the preliminary decree.
The appeal therefore abated so far as the 7th respondent was concerned.
[217D] An order bringing the legal representatives of a deceased party on the record passed at the stage of an interlocutory application in a suit, or passed while an appeal is pending where the suit is subsequently remanded to the trial court or if passed while an appeal is pending against an interlocutory order in passed while an appeal the subsequent stages of the suit ' in all that suit, would enure for made at one stage of the suit be it the suit these.
cases the order is final appeal against the interlocutory order or final order in the suit, for here the appeal is only a continuation of the suit.
But the same legal position cannot be invoked where an order is made in a suit subsequent to the filing of an appeal at an earlier stage.
Such an order cannot be Projected,backwards into the appeal that has already been filed so as to become an order in that appeal [216F 217D] Brij Inder Singh vs Kanshi Ram, 44 I.A. 218 distinguished.
Shankarnaraina Saralaya vs Laxmi Hengsu, A.I.R. 1931 referred to.
N)3S.C.I. 1 212
| C was the lessee of a plot which consisted of agricultural land as well as a homestead.
The homestead was later leased to the appellants.
The respondents purchased the rights of C and brought a suit against the appellants for possession of the homestead.
The contention of the appellants in defence was that the suit had not been brought according to the provisions of the Bihar Tenancy Act and hence was not maintainable.
The contention of the respondents was that the lease of the homestead was not an agricultural lease within the meaning of section 117 of the Transfer of Property Act and was invalid under the provisions of the latter Act.
The trial court decreed the suit.
The first appellate court however dismissed it.
In doing so it relied on earlier rulings of the Patna and Calcutta High Courts which had held the field for over 55 years, to the effect that if the main lease is a lease for agricultural purposes all sub leases of portions of that leasehold should also be considered as agricultural leases despite the fact that a particular lease may he that of a homestead only.
The High Court in further appeal departed from the view taken in the earlier cases and decided against the appellants, who came to this Court.
The main question for consideration was whether the High Court was justified in departing from the settled view.
HELD: The rule laid down in the earlier decisions was never departed from in the past.
The Tenancy Act was amended a number of times but yet the legislature did not think it necessary to alter or modify the said rule.
In law finality is of the utmost importance.
Unless so required in public interest questions of law firmly 'settled by a long course of decisions should not ordinarily be disturbed and it is all the more so in the ease of an interpretation affecting property rights.
[471 C E] The rule that where the terms of a statute or ordinance are clear then even a long and uniform course of judicial interpretation of it may be overruled, if it is ' contrary to the clear meaning of the enactment is inapplicable to decisions on the basis of which titles and transactions must have been rounded [477 D] Case law referred to.
| The appellant instituted two suits in the Court of Assistant Collector (a Revenue, Court) against the respondent under sections 60, 61 and 180 of the U.P. Tenancy Act, 1939.
The suits were decreed, and the appellant took symbolical possession of the lands.
The Assistant Commissioner.
affirmed the decrees, and during the pendency of the respondent 's second appeals in the High Court, the Uttar Pradesh Zamindari Abolition & Land Reforms Rules, 1952 came into force.
The Board of Revenue held that in view of the Rules.
the pending appeals as also the suits had a ate.
The respondent filed applications for 'restitution of the lands under section 114 C.P.C. in the Court of Assistant Collector.
The Assistant Collector referred the issue whether the appellant had acquired Bhumidari rights to the civil court.
He refused to recall the 'reference in spite of the respondent 's Plea that he had no power to pass the order as no question of pro prietary title bad arisen.
The civil court answered the issue in the negative, and the Asstt.
Collector allowed the applications for restitution.
As the appellant was not certain about the proper forum of appeals against these orders of the Assistant Collector, he filed anneals in the revenue court as also in the civil court.
The Assistant Commissioner held that the revenue court had no Jurisdiction to entertain appeals and the appeals lay to the civil court under sections 286(4) and 265(3) off the U.P. Tenancy Act.
The appellant filed revision petitions against the orders before the Board of Revenue.
In the meantime the appeals filed before the civil court came up for hearing:.
The respondent submitted to the jurisdiction of the civil court, and did not contend that the civil court had no Jurisdiction to entertain the appeals.
The Civil Judge allowed the anneals and dismissed the application for restitution.
Because of this decision.
the appellant did not proceed with the pending revision petitions 'before the Board of Revenue and there the petitions were dismissed.
The respondent filed second appeals in the High Court against the appellate orders of the civil court, without taking the plea that the civil court 'had no Jurisdiction to entertain the anneals.
but later on he took the plea by adding a new ground.
The High Court held that the appeals lay to the revenue court and the respondent was not estopped from raising the contention.
In appeals to this Court the appellant contended that the anneals lay to the civil court and not for the revenue court and in the circumstances of this case, and in view of section 289(2) of the U.P. Tenancy Act.
the respondent was precluded from raising the objection that the appeals did not lie to the civil court.
Allowing the appeals this Court.
HELD : In this case the doctrine of approbate and reprobate could not be pressed into service to preclude the respondent from raising the objection that the appeals did not lie to the civil court as the court in which the proceeding were originally filed suo motu raised the objection.
232 But the effect of upholding his objection would be that the, appellant would be deprived of his right of appeal altogether, and section 289(2) of the U.P, Tenancy Act is intended to prevent such grave miscarriage of justice.
[237 F] Section 289(2) applies whenever any suit, application or appeal having been rejected either by the civil court or revenue court on account of want of jurisdiction is subsequently filed in the court of the other description and the latter court disagrees with the finding of the former.
In such a case,, a reference to the High Court is compulsory and the conflict of opinion is resolved by a decision of the High Court which is binding on all courts.
A court subordinate to the Collector cannot make the reference without the previous sanction of the Collector under section 289(3).
It is implicit in section 289(3) that if the Collector refuses to give the sanction, the case will proceed as if there is no disagreement with the finding of the former court.
[237 H] In a case falling within section 289(2), only the court in which the proceeding is subsequently instituted can disagree with the finding of the former court on the question of jurisdiction.
If it so disagrees, it must refer the matter to the High Court; and only the High Court on such a reference can override the finding.
No other court can disagree with the finding and make the reference.
If no such reference is made, the finding of the former court on the question of jurisdiction becomes final and conclusive; and the objection that it is erroneous cannot be entertained by the appellate or revisional court or any other court.
[238 D] Having regard to the circumstances of this case, it was not open to the respondent to raise the objection in the High Court that the civil court was not competent to hear the appeals.
In view of the fact that no reference under section 289(2) was made, the finding of the revenue court that the civil court was competent to entertain the appeals could not be challenged in the High Court.
The case must be decided on the footing that the Civil Judge was competent to entertain the appeals.
[238 F] On the merits the respondent had no case.
The Civil Judge found that the appellant was in possession of the lands on the dates of the institution of the suits.
The High Court agreed with this finding.
No ground has been made for setting aside this concurrent finding of fact.
The appel lant did not obtain possession of the lands by executing the decrees passed in the two suits.
Even assuming that the suits had abated and the decrees passed therein had been set aside or reversed, no case for restitution of the lands under section 144 of the Code of Civil Procedure was made out.
The applications under section 144 C.P.C., were rightly rejected.
Nathan vs Harbans Singh, A.I.R. 1930 All. 264, Mohammad Mehdi Khan vs Mussammat Sharatunnissa, 3 Oudh Cases 32, 35 37, Mahadeo Singh vs Pudal Singh, A.I.R. 1931 Oudh 123 and Saira Bibi vs Chandrapal Singh, I.L.R. 4 Luck.
150, 166, referred to.
| One Kalu Ram was the owner of 90 Kanals of land.
He sold this land in favour of three brothers, Kewal Ram, Chet Ram and Kuldip Ram for a consideration of Rs.65,000 by a regis tered sale deed dated 1.8.1966.
Kewal Ram is residing in Village Badala in Jullunder District.
Chet Ram and Kuldip Ram were residing at 71, Windsor Road, Forest Gate, London.
Ram Lubhai, minor daughter of Kalu Ram filed a suit for possession of the land on the ground that she being the daughter of the vendor had superior right of pre emption as against the vendees who were strangers.
Kewal Ram alone was served in the suit.
The other two were not served.
Substi tuted service was, therefore, taken for service on them by publication in a vernacular paper.
The suit was decreed on 31.7.1969 against all the three defendants, ex parte against Chet Ram and Kuldeep Ram.
Kewal Ram filed an appeal against this decree and judgment.
He made his brothers Chet Ram and Kuldip Ram as proforma respondents giving their village address for service.
In the appeal also they were served by substituted service.
The appeal was heard on 5.1.1971 and was dismissed.
On 24.3.1971, Kuldip Ram and Chet Ram filed an applica tion under Order 9, Rule 13 of C.P.C. in the Trial Court for setting aside the ex parte decree against them on the ground that they were neither served in the Trial Court nor in the Appellate Court.
The Trial Court 786 accepted the application and set aside the decree passed.
Against this order dated 10.1.1972, the plaintiff filed a revision petition in the High Court of Punjab and Haryana as C.R.P. No. 147 of 1972.
The High Court felt that there was no error of jurisdiction in the order sought to be revised, but held that since Kewal Ram had contested the suit, there was no ground to set aside the decree against him.
On this around, the petition was partly allowed.
The decree against Kewal Ram was allowed to stand but was set aside against the other two.
The review petition filed by Smt.
Ram Lubhai was dismissed by the High Court.
Hence the appeals by special leave.
Dismissing the appeals, the Court, HELD: It is well settled that when a decree of the Trial Court is either confirmed, modified or reversed but the Appellate decree, except when the decree is passed without notice to the parties, the Trial Court decree gets merged in the appellate decree.
But when the decree is passed without notice to a party, that decree will not, in law, be a decree to which he is a party.
Equally so in the case of an appel late decree.
In this case these two persons were not served in the suit.
A decree was passed ex parte against them without giving them notice of the suit.
In law, therefore, there is no decree against them.
In the appeal also they were not served.
If they had been served in the appeal, things would have been different.
They could have put for ward their case in appeal and got appropriate orders passed.
But that is not the case here.
That being so, there is no bar for an application by them before the Trial Court under Order IX, Rule 13, to set aside the ex parte decree against them.
[689G H; 690A B] There is no error of law in allowing a joint decree to stand against the person who contested throughout while setting aside the ex parte decree passed against others without serving them personally on admitting the application under Order IX Rule 13 C .P.C. [690C]
| The petitioner 's husband transferred certain property to the petitioner.
A notice under section 7, , was issued to the petitioner and to her husband and the husband was declared an evacuee and the property was declared as evacuee property by the Assistant Custodian.
An appeal to the Deputy Custodian and thereafter a revision petition to the Custodian General by the petitioner were dismissed.
The petitioner applied to the Supreme Court under article 32 of the Constitution contending that her fundamental rights under 64 506 articles 19(1)(f) and 31 were infringed by the order of the Assistant Custodian and prayed for the restoration of the property.
Held, that the petition under article 32 was incompetent as no question of violation of any fundamental right arose in the case.
The decision of an authority of competent jurisdiction had negatived the existence of the right alleged by the petitioner and unless that decision was held to be a nullity or could be otherwise got rid of, the petitioner could not complain of any infringement of a fundamental right.
The alleged fundamental right of the petitioner was dependent on whether her husband was an evacuee and whether his property was evacuee property.
The decision on that question had become final and no question of lack of jurisdiction was involved.
Sahibzada Saiyed Muhammed Amirabbas Abbasi vs The State of Madhya Bharat, ; , applied.
| The appellant company filed a suit against the respondents in the court of the Senior Subordinate Judge, Gurgaon, for the specific performance of an agreement for the purchase of ' certain land by the company from the respondents.
Part of the land in question became the subject of proceedings under the Land Acquisition Act, 1894, and dispute relating to compensation was referred to the Court of the District Judge.
The court fixed the compensation at over Rs. 2 Iakhs.
A dispute as to apportionment of the compensation was also.
referred under section ' 30 of the Land Acquisition Act to the court but the proceedings were stayed by the Additional District Judge, pending decision of the suit for specific performance by the Senior Subordinate Judge.
The suit was dismissed and thereupon the respondents applied to the Additional District Judge for continuation of proceedings under section 30 and for payment of compensation to them.
The appellant company resisted the application on the ground that it had filed an appeal in the High Court against the decree of the Senior Subordinate Judge.
The Additional District Judge after hearing both parties stayed the proceedings under section 30 pending disposal of the company 's appeal by the High Court.
On a revision application under section 115 C.P.C. filed by the respondents, the High Court ordered on March 18, 1969 that a sum of not more than Rs. 1,78,000 out of the compensation for the acquired land be paid to the respondents who must undertake not to sell the rest of the land during the pendency of the appeal.
The Additional District Judge after hearing the parties judicially interpreted the order to.
mean that Rs. 1,78.000 were to be paid to the respondents after the conclusion of the proceedings under ' section 30.
The respondents again moved the High Court with an application under section 151/141 C.P.C. for a clarification of its earlier order whereupon by order dated May 8, 1969 the High Court ordered immediate payment.
The company challenged the High Court 's orders dated March 18, 1969 and May 8, 1969 in an appeal before this Court.
It was contended on its behalf that in making its first order the High Court exceeded its jurisdiction u/s 115 C.P.C. and in making the clarificatory order ex parte it violated the rules of natural justice.
HELD: (i) The position is firmly established that while exercising its jurisdiction under section 115, it is not competent to the High Court to correct errors of fact however gross or even errors of law unless the errors have relation to the jurisdiction of the Court to try the dispute itself.
Clauses (a) and (b) o.f this section on their plain reading quite clearly did not cover the present case because it had not been shown that the learned Additional Sessions Judge had either exercised a jurisdiction not vested in him by law or had failed to exercise a jurisdiction so vested in him in recording the order that the proceedings under reference be stayed till the decision of the appeal by the High Court in the proceedings for specific performance of the agreement in question.
Clause (c) of the section also did not apply 369 to the present case.
The words "illegally" and "with material irregularity" as used in this clause do not cover either errors of fact or of law; they do not refer to the decision arrived at but merely to the manner in which it is reached.
The errors contemplated by this clause may relate either to breach of some provision of law of to material defects of procedure.
affecting the ultimate decision, and not to errors of either fact or of law, after the prescribed procedure has been complied with.
[375 D G] The High Court had not adverted to the limitation imposed on its power under section 115 of the Code and had treated the revision as if it was an appeal.
Merely because the High Court would have felt inclined, had it dealt with the matter initially, to come to a different conclusion on the question of continuing stay of the reference proceedings pending decision of the appeal could hardly justify interference on revision under section 115 of the Code when there was no illegality or material irregularity committed by the Additional Sessions Judge in his manner of dealing with the question.
The order of the High Court dated March 18, 1964 had therefore to be set aside.
[375 F H] Rajah Amir Hassan Khan vs Sheo Baksh Singh, I I Indian Appeals 237: Balakrishna Udayar vs Vasudeva Aiyar, 44 Indian Appeals 261; Keshav Deo vs Radha Kissan. ; applied.
(ii) The ex parte order dated May 8 1969 was equally difficult to sustain.
The High Court had proceeded to make an order virtually and in effect reversing the judicial order made by the learned Additional Judge in favour of the appellant.
This could, more appropriately be done only on appeal or revision after notice to the party affected and not on an application under sections 151/141 C.P.C. Such an application in the.
circumstances was misconceifed.
[376 C, F]
| The appellants and respondents Nos. 3 to 37 herein, were allottees of houses in Chandigarh constructed by the State Government for low paid industrial workers under the Industrial Housing Scheme subsidised by the Central Govern ment.
The Labour Inspector, Union Territory, Chandigarh gave them notices in terms of the proviso to, rule 4(3) of the Punjab Industrial Housing Rules, 1956, as amended vide Notification dated November 7, 1972, to.
show cause why their allotments should not be cancelled.
The income of each of them exceeded Rs. 350/ per mensem, which disenti tled them to retain their allotments.
The appellants and the said respondents filed a joint petition in the High Court for a writ to quash the amendment to rule 4, and to restrain the Government from cancelling their allotments and evicting them.
The writ petition was dismissed.
The appel lants contended firstly, that rule 4(3) was ultra vires the Punjab Industrial Housing Act, 1956 as it took out industri al workers with income exceeding Rs. 350/ p.m. from the scope of section 2(e) of the Act which defines industrial workers; and secondly, that the authority competent to make rules u/s 24 of the Act cannot frame rules having retrospec tive effect, and as the amended rule 4(3) operates retro spectively it is invalid Dismissing the appeal by special leave, the Court, HELD: (1) The allotment of accommodation to an industrial worker is not unconditional but is subject to conditions which can be changed unilaterally by the Government from time to time by altering the rules in exercise of the powers conferred on it under section 24 of the Act.
Section 24 specifically empowers the State Government to make rules to provide inter alia for the manner of allotment of accom modation and conditions relating to its occupation.
The impugned amendment which squarely falls within the purview of the aforesaid provisions of section 24, was validly made, and was not ultra vires.
[331 G H, 331 (a) C] (2) Section 7 of the Act embodies a deeming provision and gives a mandate to treat a person as an unauthorised occupant not only if he ceases to be an industrial worker under the Act, but also if being an allottee, he ceases to fulfil any of the prescribed conditions then in force, including the one relating to the limit of his income, and thereby becomes amenable to action under section 9(2) of the Act.
[331(a) A B] (3) The proviso to rule 4(3) clearly shows that the allotment of an industrial worker whose income exceeds Rs. 350/ per mensem is to stand cancelled not from the date when his income started exceeding Rs. 350/ per mensem but on the expiry of one month 's notice in writing of the can cellation.
The rule is not intended to operate retrospec tively on industrial workers who had been allotted and were in occupation of industrial houses immediately before, 328 the amendment of the Punjab Industrial Housing (Chandigarh First Amendment) Rules, 1972.
[331(a) E F] The Court observed The scheme being meant for the benefit of the low paid industrial workers and the number of the houses constructed thereunder being very limited, the Government could legiti mately evolve the method which it did, to disentitle indus trial workers whose monthly income was relatively large, to retain the houses.
[331 (a) C D]
|
Civil Appeal No. 559 of 1960.
Appeal by special leave from the judgment and order dated May 1/14, 1957, of the Income Tax Appellate Tribunal of India (Delhi Bench) in I.T.A. No. 2070 of 1956 57.
K.N. Rajagopal Sastri and D. Gupta, for the appellant.
Radhey Lal Agarwal and P.C. Agarwal for the respondents.
867 1962.
January 29.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
This is an appeal against the order of the Income tax Appellate Tribunal, Delhi Bench, dated May 1/14, 1957, by which the tribunal, reversing the order of the Appellate Assistant Commissioner, held that a loss arising from the sale of certain shares by the respondent Company was a capital loss.
Subsequent to the order of the Tribunal impugned here, the Commissioner of Income tax, New Delhi, who is the appellant before us, had moved the Tribunal for a reference to the High Court on certain questions of law said to arise out of the order of the Appellate Tribunal.
That application was found to be barred by one day, and since, under the law, the Tribunal had no jurisdiction to extend the time, the application was dismissed.
Against the decision of the Tribunal, an application was filed in the High Court under section 66(3) of the Income tax Act; but the High Court dismissed the application, agreeing with the Tribunal that the application to the Tribunal for a reference was barred by time.
The Commissioner of Income tax then applied for special leave against the order passed by the Tribunal in the appeal before it, and the present appeal, with special leave, has been filed.
Before we examine the merits of the case, we shall deal with a preliminary objection raised on behalf of the respondent that the appeal is incomepetent, in view of the decision of this Court in Chandi Prasad Chokhani vs State of Bihar (1) where it was held that this Court would not entertain an appeal directly from an order of the Tribunal by passing the decision of the High Court, except in very exceptional circumstances.
The appellant relies upon the decision of this Court in Baldev Singh vs Commissioner of Income tax (2), and contends 868 that the exceptional circumstances existing in the latter case and adverted to in the former, govern the present case.
The facts relating to the filing of the application for reference together with the relevant dates are these: The Tribunal 's order was passed by two learned Members, who signed their respective orders on different dates.
The Accountant Member signed his order on May 1, 1957, and the Judicial Member, on May 14, 1957.
The notice of the order was sent to the Commissioner of Income tax, New Delhi, and reached his office by registered post on July 15, 1957.
It was received by one Motilal Pathak, a clerk in the office of the Commissioner.
Motilal 's affidavit shows that, he suddenly fell ill, and had to take casual leave for the day.
He returned to the office the next day, and dealt with the notice received from the Tribunal.
By a mischance, which is easy to appreciate, the date stamp of the receipt of the papers was affixed on the 16th, and bore that date instead of the real date, viz., the 15th, on which the papers had actually been received.
Relying upon the date stamp, everybody took it for granted that limitation would expire on the 60th day, counting time from July 16, 1957.
The application was filed on the last day of limitation on that supposition.
Actually, the application was barred by a day.
The Income tax Tribunal, therefore, dismissed the application on December 4, 1957.
The decision of the Tribunal was unsuccessfully challenged before the High Court.
It is evident that the decision of the Tribunal was quite correct, and the Tribunal had no option but to dismiss the application, since the law gives no jurisdiction to the Tribunal to extend limitation, as is done under section 5 of the Indian Limitation Act.
This Court then granted special leave against the order of the Tribunal passed in the appeal 869 before it, and the question is whether the appeal should be heard or the leave revoked, in view of the decision in Chokhani 's case (1).
In Chokhani 's case (1), the attempt was to bypass the decision of the High Court on a question referred to the High Court for decision and also another decision of the High Court that no other point of law arose from the order of the Tribunal.
It was held that this Court would not allow the High Court to be by passed, and that an appeal from the decision of the Tribunal in the circumstances was incompetent.
A similar view was again expressed in two other cases, viz., Indian Aluminium Co. Ltd. vs Commissioner of Income tax (2) and Kanhaiyalal Lohia vs The Commissioner of Income tax (3).
In all the three cases, reliance was placed by the appellants therein upon the decisions of this Court in Dhakeswari Cotton Mills, Ltd. vs Commissioner of Income tax (4) and Baldev Singh vs Commissioner of Income tax (5) It was pointed out in the judgments of this Court that the two cases relied upon were decided on the special circumstances existing there.
In the first, there was a question of breach of the principles of natural justice, which could not be raised otherwise than by an appeal with the special leave of this Court.
In the second case, it was pointed out that limitation was lost by the party through no fault of his, inasmuch as a letter was unduly delayed in post.
In our opinion, in the present case also, special circumstances which justified the grant of special leave in Baldev Singh 's case (5), exist.
There was a combination of circumstances which led to the filing of the application a day late, but in circumstances showing that the default was not due to any negligence on the part of the Commissioner of Income tax.
The receipt of the notice on July 15 is admitted; but the affixing of the date stamp on the 16th was due to the failure of the 870 clerk to deal with the notice on the 15th because he fell ill and had to leave the office.
It is common knowledge that date stamps are altered every day in the office, and this is done mostly by a very junior employee.
The affixing of the date stamp on the 16th and the notice consequently bearing that date went unnoticed, and relying upon the date stamp, the appeal was filed, though on the last day of limitation but within time.
In these circumstances, it is difficult to say that the Commissioner of Income tax was negligent and the negligence, if any, on the part of the clerk in affixing a wrong date stamp is excusable, if one considers his illness and his absence from the office on the 15th.
In our opinion, this case comes within the rule of Baldev Singh 's case (1) and an appeal direct to this Court from the Tribunal 's order is justified by the special circumstances.
By this appeal, no decision of the High Court can be said to be bypassed, because the decision of the High Court related to the correctness of the decision of the Tribunal on the question of limitation, which is not a question which is sought to be raised in an indirect way by the present appeal.
We, therefore, overrule the preliminary objection.
The assessee Company is the National Finance Ltd., New Delhi.
It is a public limited Company which was incorporated in 1943.
It deals in shares and securities and also as financiers.
The present case arises from a deal in 3,000 shares of the Madhusudan Mills Ltd., Bombay, by the assessee Company.
In the year of account, May 1, 1949, to April 30, 1950, corresponding to the assessment year, 1951 52, the assessee Company sold these shares suffering a loss of Rs. 5,48,712 8 0, which it claimed as one on the sale of its stock in trade.
The Income tax Officer and the Appellate Assistant Commissioner held it to be a capital loss.
The 871 Appellate Tribunal, Delhi Bench, reversed the decision, and held in favour of the assessee Company.
The only question in this appeal is whether the decision of the Tribunal is right.
The assessee Company belongs to a group of Companies controlled by one Lala Yodh Raj Bhalla and certain persons associated with him.
It is convenient to describe these persons as the 'Yodh Raj Bhalla group '.
These Companies are (1) Jaswant Sugar Mills Ltd., (2) Jaswant Straw Boards Ltd., (3) National Finance Ltd., (4) National Construction and Development Corporation Ltd., (5) Ganesh Finance Corporation Ltd., and (6) Raghunath Investment Trust Ltd. The interrelation of these.
Companies is very intimate, and they are practically owned by the 'Yodh Raj Bhalla group '.
To understand this, the following analysis of the shareholdings of these Companies must be sufficient: (1) Jaswant Sugar Mills Ltd. 2,00,000 shares (i) Jaswant Straw Board Ltd. 44,845 (ii) National Finance Ltd. 67,390 (iii)National Construction and Development Corporation Ltd. 47,800 _______ 1,60, 035 (i.e. over 80 per cent) (2) Jaswant Straw Board Ltd. 6,176 shares.
(i) National Finance Ltd. 4,783 (ii) National Construction and Development Corporation Ltd. 500 _____ __ 5,200 odd (or nearly 84 per cent) 872 (3) National Finance Ltd. (assessee Company) 50,000 shares.
Ganesh Finance Corporation Ltd. 48,000 (or over 96 per cent) (4) National Construction and Develop ment Corporation Ltd. 1,30,504 shares.
Ganesh Finance Corporation Ltd. 1,30,500 (almost all) (5) Ganesh Finance Corporation Ltd. 50,000 shares.
Raghunath Investment Trust Ltd. 49,795 (99.6 per cent of the capital) (6) Raghunath Investment Trust Ltd. 10,000 shares.
(i) Mr. Yodh Raj Bhalla 1,500 (ii) Mrs. Bhalla 1,000 (iii) Mr. N. C. Malhotra (brother in law) 1,000 (iv) Mr. Ram Prasad (father in law) 1,000 (v) Mr. Dina Nath (Secretary) 1,000 (vi) National Finance Ltd. 3,499 (vii) Mr. Piyare Lal Saha 1 9,000 (90 per cent).
The resulting position may be stated thus: Ganesh Fiance Corporation Ltd. practically owns the assessee Company and National Construction and Development Corporation Ltd., Raghunath Investment Trust Ltd. practically owns the Ganesh Finance Corporation Ltd., and 'Yodh Raj Bhalla group ' practically owns Raghunath Investment Trust Ltd. 873 Jaswant Sugar Mills Ltd. is practically owned by Jaswant Straw Board Ltd., National Finance Ltd., and National Construction and Development Corporation Ltd., and Jaswant Straw Board Ltd., is practically owned by National Finance Ltd., and National Construction and Development Corporation Ltd. Thus, the entire group is owned by a consortium, and there is no doubt about it.
The shares of Madhusudan Mills Ltd. were acquired in the following circumstances: In July 1948, Mr. Yodh Raj Bhalla, who was in a position by reason of his holdings in these six Companies to influence decisions of the Board of Directors, arranged to purchase 26,547 shares of the Mills from Messrs. Bhadani Brothers, Ltd., who were the managing agents of the Mills.
This block of shares represented about 80 per cent of the total issued capital of the Mills, The purchase was made at Rs. 400 per share, when the price in the market, was about Rs. 250 per share.
Out of the remaining shares which were on the market 200 shares were purchased at Rs. 252 8 0 per share, which was then the quoted price.
Now, these shares were purchased by Jaswant Sugar Mills Ltd., but the money for the purchase of the shares was obtained by borrowing it from some of the other concerns.
These Companies, as has been shown above, were completely under the control of 'Yodh Raj Bhalla group '.
The arrangement for the money was as follows: Rs. 14,75,000 borrowed from the assesee Company.
Rs. 5,00,000 from National Construction and Development Corporation Ltd. Rs. 55,00,000 from the assessee Company but advanced by Ganesh Finance Corporation Ltd. 874 The shares were registered as follows: 10,500 shares registered in the name of the assessee Company.
5,400 shares in the name of the National Construction and Development Corporation Ltd., and the balance in the names of the nominees of Jaswant Sugar Mills Ltd., which meant, largely, persons belonging to the 'Yodh Raj Bhalla group '.
On October 9, 1949, the assessee Company purchased 15,547 shares at Rs. 400 per share from Jaswant Sugar Mills Ltd., and the amount paid by the assessee Company was adjusted towards the purchase price and the balance was paid.
On the same day, the remaining 11,000 shares were sold by Jaswant Sugar Mills Ltd. to National Construction and Development Corporation Ltd., at Rs. 400 per share.
Thus, on that date Jaswant Sugar Mills Ltd. ceased to have any connection with the present matter.
It may be pointed out that on the date on which the two transactions took place, the priceruling in the market was about Rs. 217 8 0.
Before Jaswant Sugar Mills Ltd. parted with the shares, they.
had appointed a new Board of Directors of the Madhusudan Mills Ltd., and these new Directors also belonged to the same group.
The managing agency of Messrs. Bhadani Brothers Ltd. was terminated, and on the same day on which the shares were purchased from these managing agents, the assessee Company was appointed as the purchasing and selling agent of the Mills.
The assessee Company made enormous profit from the acquisition of these shares by way of dividend and commission as the purchasing and selling agent.
In October and November, 1948 they, however, sold 6,525 shares to Dalmia Cement and Marketing Company Ltd. at Rs. 400 per share.
These shares subsequently came back to the same group; but 875 that is not a matter with which we are immediately concerned.
On April 7, 1949, 4,500 shares were sold by the assessee Company to the National Investment Trust Ltd. at Rs. 181 per share resulting in a loss of Rs. 8,80,000, and on June 1, 1949, another block of 3,000 shares was sold to the National Investment Trust Ltd., at Rs. 180 per share, resulting in a loss of Rs. 5,86,312.
We are not concerned with the loss arising from the first sale which was considered in the assessment year, 1950 51, and in respect of which a reference is pending in the High Court of Punjab.
We are concerned with the loss in the second year relating to the assessment year, 1951 52.
In that year, the loss on the sale of the shares was sought to be set off against the profits made, and the loss practically cancelled the profits.
The shares which were sold by the assessee Company on the two occasioning were sold to one Amrit Bhushan (a relative of Mr. Yodh Raj Bhalla) who sold then the same day to Messrs. National Investment Trust Ltd., at the slender profits of 8 annas per share, which was brokerage.
Thus, at the beginning and at the end, though numerous transactions had taken place, the shares continued to be the property of the 'Yodh Raj Bhalla group '.
The question is whether the loss on the sale of the shares be set off against the profits in the year in which the sales and profits were respectively made.
The assessee Company was assessed for the assessment year, 1950 51, by the Income tax Officer, Meerut.
In that year, the loss of Rs. 8,78,062 8 0 arising from the sale of Rs. 4,520 shares of Madhusudan Mills Ltd. was set off against the profits of the assessee Company.
The case of the assessee Company for the assessment year, 1951 52, was considered by the Income tax Officer, Central Circle V, New Delhi, to whom the cases of the other Companies above named were also transferred.
By looking into the 876 affairs of these Companies, he came to learn, that the shares of the Madhusudan Mills Ltd. were purchased at a price, which was almost double the current market price, by the 'Yodh Raj Bhalla group, and were transferred at the same price to the assessee Company.
He found that this was done with a view to removing Messrs. Bhadani Brothers, Ltd. from their managing agency and to securing for the assessee Company the purchasing and selling agency of the Mills.
On the date of the purchase from Messrs. Bhadani Brothers, Ltd., Jaswant Sugar Mills Ltd. achieved this purpose in view of their controlling interest.
Bhadani Brothers, Ltd. ceased to be the managing agents from that date, and the purchasing and selling agency of the Madhusudan Mills, Ltd. was given to the assessee Company, though it had, on that day, done no more than give a loan to Jaswant Sugar Mills Ltd. In the assessment year, 1951 52, the loss of Rs. 5,86,312 8 0 on the sale of 3,000 shares was, therefore, disallowed holding it to be a capital loss.
The order of the Income tax Officer, Central Circle V, New Delhi was confirmed on appeal by the Appellate Assistant Commissioner.
On further appeal by the assessee Company, the Income tax Appellate Tribunal, Delhi, reversed the order of the Appellate Assistant Commissioner, and held that the loss was a trading loss.
Whether a particular loss is a trading loss or a loss on the capital side undoubtedly depends upon the facts of each case.
But it has been held, over and over again, that the question is not one of pure fact, and that a mixed question of fact and law is always involved.
The cases to which we shall make a reference presently, have laid down this proposition, and those cases have also indicated how the matter is to be viewed in the context of facts.
In Commissioner of Income tax vs Ramnarain Sons Ltd. (1), the Company was a dealer in shares 877 and also carried on the business of acquiring managing agencies of other Companies.
The Company the acquired the managing agency of a Textile Mill from Messrs. Sassoon J. David and Co. Ltd., and also agreed as part of the same transaction to buy 2,507 shares of the Mills.
1,507 shares were purchased at Rs. 2,321 8 0 per share, and the remaining 4,000 shares were purchased at Rs. 1,500 per share.
These shares were quoted on the market at Rs. 1,610.
Later,4,000 shares were sold at a loss of Rs. 1,78,000 This was shown in the books of the Company as a busines loss but was disallowed, as the shares were not held to be the stock in trade of the business of the Company as share dealers.
On a reference to the High Court of Bombay, a Divisional Bench upheld the view of the Tribunal.
Chagla,C. J., in delivering the judgment of the Court, observed that a managing agency being an asset of an enduring nature, the way to look at the matter was to enquire what was, the primary intention in acquiring the shares.
The learned Chief Justice then referred to a judgment of this Court reported in Kishan Prasad & Co. Ltd. vs Commissioner of Income tax (1), where it was observed: "It seems that the object of the assessee Company in buying shares was purely to obtain the managing agency of the third mill which no doubt would have been an asset of an enduring nature and would have brought them profits but there was from the inception no intention whatever on the part of the assessee Company to re sell the shares either at a profit or otherwise deal in them." The learned Chief Justice then considered the argument that a block of shares might have to be bought, if at all, at a higher price, and observed as follows: "A dealer in shares may succeed in getting a large number of shares at a price less than 878 the market price if the seller is in difficulties and wants to get rid of his shares and to get liquid assets.
But we have not heard of a dealer in shares purchasing a large number of shares at a higher value than the market value.
The other circumstance which is equally strong in this case is that the shares were purchased for the acquisition of the managing agency.
Therefore the real object of the assessee company was not to do business in these shares, not to make profit out of these shares, but to acquire a capital asset out of which it would earn managing agency commission and make profit." Messrs. Ramnarain and Sons.
Ltd. then appealed to this Court, and the decision of the Bombay High Court was upheld.
The Judgment of this Court is reported in Ramnarain Sons (Pr.) Ltd. vs Commissioner of Income tax (1).
It was laid down by this Court that in considering whether a transaction was or was not an adventure in the nature of trade, the problem must be approached in the light of the intention of the assessee, having regard to the "legal requirements which are associated with the concept of trade or business".
Dealing with the price above the market price which was paid in that case, it was observed: "Even assuming that the appellants acquired the entire block of 2,507 shares from M/s. Sassoon J. David & Co. Ltd. the shares transferred to the names of the directors being held by them merely as nominees of the appellants the price per share was considerably in excess of the prevailing market rate.
The only reason for entering into the transaction, which could not otherwise be regarded as a prudent business transaction, was the acquisition of the 879 managing agency.
If the purpose of the acquisition of a large block of shares at a price which exceeded the current market price by a million rupees was the acquisition of the managing agency, the inference is inevitable that the intention in purchasing the shares was not to acquire them as part of the trade of the appellants in shares.
" The above two decisions are merely the application of a principle of long standing, which has been stated over and over again in the past.
In Oriental Investment Co. Ltd. vs Commissioner of Income tax (1), that principle was reiterated, and it was that the object for which a company was formed did not invest the deal with the characteristics of a trade in shares, but that other circumstances along with that fact must be considered to find out the real object of a particular venture.
Before we deal with the present case, one other case of this Court may be noticed.
In Rajputana Textiles vs Commissioner of Income tax (2), the converse conclusion was reached.
There, on the facts and circumstances of the case, it was held that a particular deal in shares was a commercial venture and had all the attributes of an adventure in the nature of trade.
In that case, the transaction was not a single or an undivided one with a slump payment, because for the managing agency, Rs. 12,50,000 were paid separately and for the shares, a sum of Rs. 83,98,000 was paid.
The two acquisitions being different, the profit on the sale of some of the shares was considered to be a gain on the revenue side.
There is no doubt, whatever, that the shares of the Madhusudan Mills Ltd. were acquired at a price considerably higher than the market price.
In fact, that the price paid was almost double.
Such a deal, from the business point of view, was not prudent, unless the purchaser stood to gain in some 880 other way.
It was contended before us that this was a speculative deal in the hope that the price of the shares would firm up when the textile industries would revive.
If this was the intention, then it might possibly be argued that the purchasers miscarried in their calculations, and suffered a loss in a business transaction.
But, was this the intention of the Directors of Jaswant Sugar Mills Ltd. ? Those who sold the shares were not only in possession of the shares but also of the managing agency of the Madhusudan Mills Ltd., and the intention of the Directors of Jaswant Sugar Mills Ltd. was to remove the sellers from their position as managing agents and to get the entire benefit of such or other agencies for themselves.
The assessee Company has urged that might have been the intention of they Jaswant Sugar Mills Ltd. but not of the assessee Company which had, on that day, merely given a loan to Jaswant Sugar Mills Ltd. Curiously enough, however, the immediate benefit of the deal was the acquisition of the selling and purchasing agency of the Mills, and that was obtained not in favour of Jaswant Sugar Mills Ltd. but of the assessee Company, even though on July 15, 1948 (the date of purchase) the assessee Company had obtained registration of 10,5000 shares by way of security in its own name.
Why the assessee Company was favoured in this way is not far to seek.
It mattered not whether Jaswant Sugar Mills Ltd. acquired that agency or the assessee Company; the benefit thereof went to the same group of persons.
The transaction of sale of the shares was also made within three months of their purchase, and the assessee Company not only bought the 10,500 shares which stood in its name but 15,547 shares, which gave the assessee Company a controlling voice in the affairs of the Mills.
The assessee Company continued to retain the selling and purchasing agency, which was very profitable.
Indeed, on its investment in the first year of Rs. 14 lakhs odd, it 881 made a profit of about Rs. 7 lakhs.
The question, therefore, would be whether the assessee company in purchasing the shares merely wished to deal in shares as stock in trade, or was acquiring a capital asset of an enduring nature.
This question is not one of fact, pure and simple, hut one of an inference in law from the proved circumstances of the case.
The Income tax Officer, in deciding this question against the assessee Company, pointed out numerous circumstances, which showed clearly that this was not a mere purchase of shares as shares by a speculator, who, buying a big block, sometimes pays slightly more than the market rate.
Bhadani Brothers Ltd., owned not only the shares but also the managing agency, and it is obvious that they would not part with the shares without charging for the managing agency.
The price of Rs. 400 per share was so out of proportion to the market price that it indicated, by itself, the acquisition of something more than the mere shares.
According to the Income tax officer, the real intention was to acquire lucrative agencies of the Mills, and this intention, whether it was held by Jaswant Sugar Mills Ltd. Or the assessed Company or both, was of the same body of persons.
The Appellate Assistant Commissioner endorsed the view of the Income tax officer; but the Tribunal made a distinction between one Company and another, and that distinction has been pressed upon us by the assessee Company.
Relying upon the well known case of Salomon vs Salomon & Co. Ltd.(1), it was argued before us that each company must be viewed as a separate entity, and that the intention of one company could not be attributed to another company, even though the proprietorship of the companies might be same.
As a proposition affecting companies, it cannot be gainsaid; but we are not concerned with a theoretical question as to the assesee Company being a separate legal entity, but with the 882 question whether a particular loss made by the assessee Company is a capital or a revenue loss.
The two Companies, i. e., jaswant Sugar Mills Ltd. and the assessee Company, were directed by the same set of persons, and the facts show that even though Jaswant Sugar Mills Ltd. temporarily acquire the shares, they conferred all the benefits of the acquisition upon the assessee Company from the very first day.
The assessee Company also ultimately came into possession of all the shares along with another Company, which was also directed by the same persons, and Jaswant Sugar Mills Ltd. went out of the picture within three months.
In these circumstances, it is easy to see that the interposition of Jaswant Sugar Mills Ltd. was merely a device to secure the benefit of the English case, to which we have referred.
It was never intended that Jaswant Sugar Mills Ltd. would hold the shares or the benefits arising from the acquisition of a block of shares, giving to the holder a decisive voice in the affairs of Madhusudan Mills Ltd. That controlling interest was acquired by the `Yodh Raj Bhalla group ' for the benefit of the assessee Company, and it was an acquisition of an interest of an enduring nature.
Reference was made, in this connection, to the transactions with the Dalmia Cement and Marketing Co. Ltd. in which the latter paid the same price namely, Rs. 400 per share.
Perhaps, the Dalmia Company was after the controlling interest in its own way, and it is significant to note that within a short time, those shares again found their way in the hands of the same group.
Similarly, the shares changed hands even within this group through the agency of Amrit Bhushan, no doubt a broker but also a relative of Mr. Yodh Raj Bhalla, who profited only to the extent of 8 annas per share, and bought and sold the shares from one Company to mother on the same day.
All this show that the affairs of there Companies were centrally arranged, and the 883 intention was to benefit the assessee Company by the acquisition of a large block of shares at a very much later prices than obtaining in the market, to acquire certain agencies of a profitable character.
In our opinion, this transaction must be regarded as one on the capital side.
Shares were never treated as part of the stock in trade.
They were not sold in the market, but were sold at a loss to another Company belonging to the same group, with the obvious intention of setting off the losses against the profits, thus cancelling the profits, and saving them from taxation.
In the result, the appeal is allowed, with costs on the respondent.
Appeal allowed.
| The respondent was a company dealing in shares and securities and belonged to a group of companies all controlled by the same persons.
In the year of account, corresponding to the assessment year 1951 52, the respondent sold the shares relating to Madhusudan Mills Ltd., which it had acquired sometime earlier, suffering a loss for which it claimed a set off against the profits in that year.
The Income tax Officer found that the shares in question had been purchased by J, a company belonging to the group, at a price which was almost double the current market price, that it was so done with a view to removing the sellers from their managing agency and to securing for the respondent the purchasing and selling agency of the Mills, and that after the purchase J achieved the purpose in view of its controlling interest and the purchasing and selling agency of the Mills was given to the respondent, though the latter had done no more than give a loan to J.
It was also found that soon after the purchase the shares in question came into the possession of the respondent and that when the shares were sold it was not in the market but at a loss to another company belonging to the same group.
The Income tax Officer came to the conclusion that in getting the shares the respondent did not deal with them as stock in trade but was acquiring a capital asset of an enduring nature.
Accordingly, he disallowed the claim holding the loss to be a a capital loss.
The Appellate Tribunal, however, held in favour of the respondent on the view that a distinction must be made between the respondent company and J. The Commissioner of Income tax moved the Tribunal for a reference to the High Court, but it was dismissed on the ground that though it was barred only by one day and there was no negligence on the part of the Commissioner, the Tribunal had no power to extend time.
An application to the High Court was also dismissed.
The Commissioner of Income tax then applied for and got special leave to appeal against 866 the order passed by the Tribunal.
When the appeal came on for hearing in due course the respondent raised an objection that the appeal was not maintainable because no appeal was filed against the order of the High Court, and relied on the decision in Chandi Prasad Chokani vs State of Bihar, ; ^ Held, that the appeal was maintainable because there was no question of by passing the order of the High Court which only related to the correctness of the decision of the Tribunal on the question of limitation which was not the subject of the present appeal.
Held, further, that there were special circumstances which justified the grant of special leave.
Baldev Singh vs Commissioner of Income tax , applied.
Chandi Prasad Chokhani vs State of Bihar ; , distinghuished.
Held, also, that, on the facts, the object was to purchase a large block of shares at a much larger price than the market value to acquire certain agencies of a profitable character, that the purchase of the shares by J was merely a device but the controlling interest was acquired by the respondent, and that the transaction must be regarded as one on the capital side.
Ramanarain Sons (P.) Ltd. vs Commissioner of Income tax, ; and Oriental Investment Co. Ltd. vs Commissioner of Income tax, ; , applied.
Salomon vs Salomon & Co. Ltd. ; , distinguished.
| In response to a show cause notice dated March 15, 1957, under section 28(1)(c) of the Income Tax Act, before imposing a penalty for deliberate concealment of its income, the appellant, through its authorised representative, voluntarily agreed to a slum of Rs. 15,000/ being treated as income of Hindu Undivided Family.
The Income Tax officer, by his order dated March 20,1958, added a sum of Rs. 68,550/ to the income of the appellant and imposed on it a penalty of Rs. 26,000/ which on appeal was reduced to Rs. 15,000/ .
Meanwhile, on March 19, 1957, the appellant filed an application under section 25A of the Act for an order recording partition of joint family property in definite portions from June 22, 1956, claiming that date to be the date of partition.
The Income Tax officer, after due enquiries, accepted the disruption of the Hindu Undivided Family as claimed by his order dated March 26, 1962.
This led the appellant to contend that, in view of ' the orders dated March 26, 1962, of the Income Tax officer, the imposition of the penalty by him on March 20, 1958 was bad in law and could not be sustained.
The Tribunal uphold the contentions of the appellant resulting in a reference under section 66(1) of the Act to the High Court of Allahabad (Lucknow Bench), which reversed the decision or the Tribunal.
However, the High Court granted a certificate of fitness for appeal to this Court.
Dismissing the appeals the Court, ^ HELD: Sub section (3) of section 25A of the Income Tax Act embodies a legal fiction according to which a Hindu family which has been previously assessed as "undivided" is to be continued to be treated as "undivided" till the passing of the order under sub section
(1) of section 25A.
So long as no order under section 25(A)(1) 1 of the Act is recorded, the jurisdiction of the Income Tax officer to continue to assess as undivided despite a partition under personal law, a Hindu family which has hitherto been assessed in that status, remain unaffected.
[508G H] Additional Income Tax Officer, Quddapah vs A. Thimmayya vs Commissioner of Income Tax, Gujrat , applied.
Commissioner of Income Tax vs Sanchar Sah Bhim Sah section A. Raju Chattiar & Ors.
vs Collector of Madras & Anr. ; Mahankali Subba Rao Mahankali Nageswara Rao & Anr.
v, Commissioner of income Tax.
Hyderabad and Commissioner of Income Tax, Punjab vs Mothu Ram Prem Chand , not applicable
| The appellant who had agricultural income from his Zamindari was assessed to income tax for the four assessment years, 1944 45, to 1947 48.
The income tax authorities did not include in his assessable income, interest received by him on arrears of rent, in view of a decision of the Patna High Court, but subsequently this view of law was reversed by the Privy Council.
On August 8, 1948, the Income tax Officer issued notices under section 34of the Indian Income tax Act, 1922, for assessing the escaped income.
Before the notices were issued the Income tax Officer had not put the matter before the Commissioner for his approval as the section then did not require it and the assessments were completed on those notices.
In the meantime, certain amendments were made to the Indian Income tax Act by Act 48 of 1948, which received the assent of the Governor General on September 8, 1948.
The Amending Act substituted a new section in place of section 34, which among other changes, added a proviso to the effect that "the Income tax Officer shall not issue a notice. unless he has recorded his reasons for doing so and the Commissioner is satisfied on such reasons that it is a fit case for the issue of such notice", and also made it retrospective by providing that the new section "shall be deemed to have come into force on the 30th day of March, 1948".
The question was whether the notices issued by the Income tax Officer on August 8, 1948, without the approval of the Commissioner, were rendered void by reason of the operation of the amended section 34.
The Commissioner claimed that section 6 of the , saved the assessments as well as the notices.
Held, that section 6 of the , was in applicable as the Amending Act of 1948 indicated a different intention within the meaning of that section, inasmuch as the amended section 34 of the Indian Income tax Act, 1922, provided that it shall be deemed to have come into force on March 30, 1948.
Lemm vs Mitchell, ; , distinguished, 761 Held, further, that the notices issued by the Income tax Officer on August 8, 1948, and the assessments based on them were invalid.
Venkatachalam vs Bombay Dyeing & Mfg. Co., Ltd., ; , applied.
| The respondent was a firm carrying on business in different lines.
It was assessed to income tax under section 23(4) of the Income tax Act, 1922 for the assessment year 1949 50 on the ground that notices issued under section 22(2) and (4) had not been complied with.
Later on, that assessment 412 was cancelled.
However, before the cancellation, it was found that an interest income of Rs. 88,737 in the shape of U.P. Encumbered Estates Act Bonds received by the respondent from third parties had escaped assessment as the assessee failed to disclose the same.
The Income tax Officer issued a notice for the assessment year 1949 50 on the ground that a sum of Rs. 88,737 had escaped assessment in the said assessment year.
After the cancellation of the assessment made under section 23(4), the Income tax officer, ignoring the notice issued by him under section 34(1)(a), included that amount in the fresh assessment made by him for the year 1949 50.The respondent appealed to the Appellate Assistant Commissioner who ordered the deletion of the sum of Rs. 88,737 from the assessment for the year 1949 50 and directed the same to be included in the assesment for the year ending 1948 49.
Pursuant to the direction given, the Income tax Officer served a notice on the respondent under section 34(1).
Against that notice the assessee filed a writ petition in the High Court for quashing the above mentioned proceeding on the ground that these were initiated beyond the time prescribed by a. 34.
The High Court accepted the petition and quashed the notice on the ground that it was issued by the appellant beyond the ordinary period of limitation It also overruled the contention of the appellant that no period of limitation governed the notice in as much as the second proviso to section 34(3) was attracted to the facts of the case.
The only direction which the Appellate Assistant Commissioner could give was one which was covered by section 31 of the Act and as the appeal before him was confined to a particular assessment year, the direction must necessarily be limited to a matter falling within that year.
if the direction be treated as based on a finding recorded by Appellate Assistant Commissioner, that finding would have to be disregarded when applying the proviso.
The appellant came to this Court by special leave.
Held: (per B. P. Sinha, C.J., K. Subba Rao and N. Rajagopala Ayyangar JJ.).
The proviso to sub section
(3) of section 34 of the Indian Incometax Act, 1922 does not save the time limit prescribed under sub section
(1) of section 34 in respect of an escaped assessment of a year other than that which is the subject matter of appeal or revision as the case may be and hence the notice under section 34(1)(a) issued in the present case was clearly barred by time.
The jurisdiction of the High Court or the Supreme Court under section 66 or section 66(b) is a limited one and is confined only to the questions referred to them.
Moreover, the questions referred by Tribunal cannot exceed its jurisdiction.
Therefore the assessment or reassessment made under the said sections or Pursuant to the orders or directions made thereunder must necessarily relate to the assessment of the year under review, revision or appeal as the case may be. 'Me proviso to sub section
(3) of section 34 does not confer any fresh power upon the Income tax Officer to make assessment in respect of the escaped incomes without any time limit.
It only lifts the ban of limitation in respect of certain assessments made under certain provisions of the Act and the lifting of the ban cannot be so construed as to increase the jurisdiction of the tribunal Under the 413 relevant sections.
The lifting of the ban was only to give effect to the orders that may be made by the appellate, revisional or reviewing Tribunal within the scope of its jurisdiction.
If the intention was to remove the period of limitation in respect of any assessment against any person, the proviso would not have been added as proviso to sub section
(3) which deals with completion of an assessment but would have been added to sub section
(1) of section 34.
The word 'finding ' covers only the material questions which arise in a particular case for decision by the authority hearing the. case or the appeal which, being necessary for passing the final order or giving the final decision in the appeal, has been the subject of controversy between the interested parties or on which the parties concerned have been given a hearing.
The expression 'direction ' refers to a direction which the appellate or revisional authority is empowered to give under the law.
The expression "any person" must be confined to a person intimately connected with the assessment of the year under appeal or revision.
Held: per Raghubar Dayal and J. R. Mudholkar JJ.
(dissenting): That the notice was not in contravention of the provisions of section 34 and hence could not be quashed on that ground.
When an appeal is before an appellate authority, the whole matter is at large before it and there fore when a specific case is put before it by an assessee, it has both the power as well as the duty to give its finding thereon.
The ground given by an assessee for claiming a reduction or annulment of assessment may be that the income upon which he had been assessed was not earned in the accounting period of the year to which the assessment pertained but in respect of a specified earlier or later year.
The appellate authority is entitled to go into the whole question and come to a finding one way or the other.
The finding of a tribunal is its conclusion on a point agitated before it and for a conclusion to amount to a finding, it is not necessary that it should be the final and ultimate conclusion.
The contention of respondent that the second proviso to a. 34(3) enabling a notice to issue only to assessee in respect of escaped income without limit of time on the ground that the appellate authority has made a finding or direction in the proceeding before it makes a discrimination against such assessee because it does not lift the bar of limitation with regard to other assessees similarly situated but with regard to whom no finding has been made or direction given by appellate authority, was rejected.
It was held that prima facie, there was a reasonable basis for the classification.
The ground on which classification was made had a rational relationship with the object which was intended to be achieved by law, ie., to detect and bring to assessment the escaped income.
Commissioner of Income tax vs section M. Chitnavis, (1932) L.R. 59 I.A. 290, Sir Kikabhai Premchand vs Commissioner of Income tax (Central), Bombay, pt.
Hazart Lal vs Income tax Officer, Kanpur.
Lakshman Prakash vs Commissioner of Income 414 tax, U.P., , A. section Khader Ismail vs Income tax Officer, Salem, (1963)48 I.T.R. 16, Simrathmul vs Additional Income tax Officer, Ootachamund, (1959)36 I.T.R. 41, Brindaban Chandra Basak vs Incometax Officer, , K. C. Thomas, First Income tax Officer.
Bombay vs Vasant Hira Lal Shah , Prashar & Anr.
V. Sasantsen Dwarkadas 49 I.T.R. (S.C.) 1, Kamlapat Hotilal vs Income tax Officer, , Hiralal Amrit Lal Shah vs K. C. Thomas, Income tax Officer, Bombay, , General Construction and Supply Co. vs Income tax Officer (8th) C Ward, Bombay, , Suraj Mal Mohata & Co. vs A. V. Visvanatha Sastri ; , A. Thangal Kunju Mudaliar vs M. Venkatachalam Potti & Anr. ; and Palaji vs Income tax Officer, Special Investigation Circle ; , referred to.
| The Karta of a Hindu undivided family was assessed to Incometax from year to year until the assessment year 1953 54 either as an individual or as the Karta.
But later, the Income Tax Officer issued notices to him under section 34(1) of the Income tax Act, 1922, for the assessment years 1951 52 to 1953 54 and under section 22(2) for the years 1954 55 to 1956 57 for assessment of the income as having been received by an association of persons consisting of the Karta and his minor son in 1951 52, and the Karta, his minor son and a firm in the years 1952 53 to 1956 57, and assessed the income received as income and associations of persons.
The Appellate Assistant Commissioner and the Tribunal, in appeals filed before them, substantially confirmed the order of the Income tax Officer.
The High Court, upon a reference.
held that the income for the assessment year 1951 52 did E not accrue to an association of persons, but confirmed the view taken by the Income tax Officer in respect of the income for the year 1952 53 to 1956 57.
The Karta then moved the High Court under article 226 of the Constitution and contended that section 3 of the Income tax Act, 1922, invested the Income tax Officer with arbitrary and unguided power to assess the income of an association of persons in the hands either of the association or of the persons constituting that association and it therefore offended article 14 of the Constitution.
The High Court rejected the petitions.
In appeals to this Court against the decisions of the High Court in the writ petition and the reference under section 66 of the Income tax Act.
HELD:(i) section 3 of the Income tax Act, 1922, was not violative of article 14 of the Constitution.
The duty of the Income tax Officer is to administer the provisions of the Act in the interests of public revenue, and to prevent evasion or escapement of tax legitimately ,due to the State.
Though an executive Officer engaged in the administration of the Act.
the function of the Income tax Officer is fundamentally quasi judicial.
His decision to bring to tax either the income of the association collectively or the shares of the members of the association separately is not final: it is subject to appeal to the Appellate Assistant Commissioner and to the Tribunal.
The nature of the authority exercised by the Income tax Officer in a proceeding to assess to tax income, and his duty to prevent evasion or escapement of liability to pay tax legitimately due to the State, con stitute adequate enuciation of Principles and policy for the guidance of the Income tax Officer.
[72B H] 66 Suraj Mall Mohta & Co. vs A. V. Visvanatha Sastri and Anr. , distinguished.
Shri Ram Krishna Dalmia vs Shri Justice S.R. Tendolkar and Ors.
; , Jyoti Pershad vs The Administrator for the Union Territory of Delhi. ; and Commissioner of Income tax U.P. vs Kanpur Coal Syndicate, referred to, There is no force in the contention that section 23A of the Income tax Act, as it was incorporated by Act 21 of 1930 laid down certain principles for the guidance of the Income Tax Officer in exercising his option, but since the repeal of that section by Act 7 of 1939, the discretion vested in the Income tax Officer to select either the income of the association or the individual member is unfettered.
By the repeal of section 23A(1) the essential nature of the power of the Incometax Officer was not altered.
He remained as before under a duty to administer the Act, for the benefit of public revenue, but his powers were to be exercised judicially and so as to avoid double taxation of the same income.
[73A B; 74F G] (ii) There was abundant material on the record to prove that the Karta, his minor son and the firm formed an association in the years 1952 53 to 1956 57.
Under section 2(9) of the Income tax Act, 1922, read with el.
(42) of 3 of the General Clauses Act, a firm is a person within the meaning of the Income tax Act and a firm and an individual or group of individuals may form an association of persons within the meaning of section 3 of the Income tax Act.
[75F, G] There is nothing in the Act to indicate that a minor cannot become a member of an association of persons for the purposes of the Act.
In any event the High Court had rightly held that the mother and guardian of the minor son must, on the facts, be deemed to have given her implied consent to the participation of the minor in the association of persons.
[75H] Commissioner of Income tax, Bombay vs Laxmidas & Anr.
and Commissioner of Income tax, Bombay North, Kutch Saurashtra vs Indira Balkrishna, , referred to.
(iii)The doctrine of res judicata does not apply so as to make a decision on a question of fact or law in a proceeding for assessment in one year binding in another year.
The assessment and the facts found are conclusive only in the year of assessment: the finding on questions of fact may be good and cogent evidence in subsequent years, when the same question falls to be determined in another year but they are not binding and conclusive.
The finding recorded by the High Court that in the year 1951 52 there was no association of persons constituted by the Karta and his minor son did not in 'the present case have any effect on the finding of the Tribunal that in year 1952 53 and the subsequent years such an association existed.
Furthermore, the association of persons which traded in 1952 53 and the subsequent years was different from the association in 1951 52 because in 1952 an association was formed of the Karta, his son and a firm.
[75B C] (iv)If the person described as a principal officer of an.
association is duly served with a notice under section 23(2) in the manner prescribed by section 23(2), an adjudication of his status as the principal officer, before assessment proceedings may take place, is not obligatory.
The order assessing the association containing a finding that the per.
son served is the principal officer is sufficient compliance with the 67 requirements of the statute.
It is open to the association to challenge the finding of the Income tax Officer in appeal before the Appellate Assistant Commissioner and in further appeal to the Appellate Tribunal.
But the order declaring him as the principal officer of an association of persons will not be deemed to be void merely because the proceeding for assessment was not preceded by a declaration of his status as the principal officer.
[80G 81B] Commissioner of Income tax, Punjab & N.W.F.P. vs Nawal Kishore Kharaiti Lal, (1938) 6 I.T.R. 61, referred to.
| This appeal was against the order of the Deputy Registrar directing the present case to be registered as nine appeals and requiring the appellant to pay nine sets of court fees.
The case originated out of one petition under article 226 of the Constition challenging the validity of various assessment orders.
The High Court passed one order on the petition and one appeal was filed in this Court.
886 Held that the appellant should pay only one set of court fee and other charges as in a single appeal.
It could not be said that there were as many proceedings as there were assessment orders as the appellant had by a single petition challenged them all together.
Lajwanti Sial 's case, Petition for special leave No. 673 of 1959 and Kishinchand Chellaram 's case, C.A. Nos.
462 to 465 of 1960, referred to.
| The assessee, a public limited company, in the assess ment year 1964 65 was in the second year of its new project going into production.
The Income tax Officer computed the assessment under section 143(3) of the Income tax Act, 1961 after determining the rebate admissible under sections 84 and 101 at Rs.2,72,372.
He re opened the assessment under section 147(b) and re computed the rebate at Rs.2,51,222.
The appeal by the assessee to the Appellate Assistant Commissioner was dis missed.
The Appellate Tribunal accepted the plea of the assessee that to the figure of capital as worked out under Rule 19(1) is to be added the average profit as worked out under sub rule (5) of Rule 19 and held that the average capital has to be taken at Rs.45,39,557 and not at Rs.41,87,034.
In the Reference, the High Court agreed with the conclusion reached by the Appellate Tribunal.
Dismissing the Appeal of the Revenue, HELD: 1.
Admissibility of exemption under section 84 of the Incometax Act, 1961 which has been repealed with effect from 1.4.1968 has never been in dispute.
What has been deputed is the manner of its computation.
Rule 19 of the Income tax Rules, 1962 prescribes the method of computation and on a proper interpretation of sub rule (1), (3) and (5) of this Rule would depend the ultimate conclusion to be reached.
[590F G] 2.
The High Court is right in saying that the dispute has to be resolved by referring to sub rules (1), (3), (5) and (6) of Rule 19.
The High Court found that the value of assets entitled to depreciation under Rule 19(1)(a) worked out to Rs.40,10,947.
To this figure was added a sum of Rs.1,39,764 on account of depreciation as on 1.1.63 as also on account of the average value of additions.
The other assets were valued under Rule 19(1)(b) at Rs.44,38,126 as on 1.1.63.
All put together the 589 aggregate valuation came to Rs.85,38,837.
From this aggre gate, deduction of sum of Rs.44,01,803 representing loans, other liabilities including provision for tax as authorised by Rule 19 was made leaving the valuation of the capital at Rs.41,87,034.
To this figure the sum of Rs.3,52,503 being half of the profit from the New Project was added to compute the value at Rs.45,39,537.
Following the provision of section 84, entitlement to exemption was determined at Rs.2,72,372 representing 6% of the capital employed in the new industri al undertaking.
[592C E] 3.
Re assessment was made by deleting the addition of Rs.3,52,503 ' which represented half the profit of the year.
According to the Revenue, profits earned during the year had already been taken into account in the process of computa tion and there was no warrent for its addition over again to the extent of a moiety.
In fact, that is the only dispute that fell to be resolved.
The High Court took note of the fact that profits had necessarily been reflected in the average valuation of the assets but in its view the deeming provision of Rule 19(5) was the special procedure laid down for computation for the purpose of calculation and could not be over looked for the reasons advanced by the Revenue.
There is sufficient force in the reasoning of the High Court and the conclusion reached by it is accepted.
[592E G]
| The respondent bank had income from banking business and interest on securities.
For the assessment year 1949 50 its loss from banking business was set off against the income from interest on securities but for the succeeding three years the income tax officer set off the said loss which had been carried forward, only against the income.
from banking business and disallowed it against the income under the head 'interest on securities '.
The view of the Income Tax Officer was upheld by the Appellate Assistant Commissioner and on further appeal by the Appellate Tribunal.
The Tribunal however referred to the High Court, at the instance of the assessee, the question whether the assessee was entitled to set off business loss brought forward from the preceding assessment year against the entire income including interest on securities.
The High Court remitted the case to the Tribunal for a finding whether the securities in Question formed part of the trading assets held by the assessee.
The Tribunal held that the receipt of interest from securities was as much the assessee 's business as its other banking activities.
On receipt of the supplementary statement of case the High Court answered the reference in favour of the assessee.
The Revenue appealed to this Court.
It was urged for the Revenue that the income from business and securities fell under different heads, namely section 10 and section 8 of the Act respectively, that they were mutually exclusive and, therefore, the losses under the head "business" could not be carried forward from the preceeding year to the succeeding year and set off under section 24(2) of the Act against the income from securities held by the assessee.
HELD: (i) While subs.
(1) of section 24 provides for setting off of the loss in a particular year under one of the heads in section 6 against the profit under a different head in the same year, subs.
(2) provides for the carrying forward of the loss of one year and setting off the same against the profit or gains of the assessee from the same business in subsequent years.
This cl.
(2) of section 24 in contradistinction to cl.
(1) thereof is concerned only with the business and not with its heads under section 6 of the Act.
This designed distinction brings out the intention of the legislature to give further relief to an assessee carrying.
on business and incurring loss in the business though the income therefrom falls under different heads under section 6 of the Act.
[622E; 623E F] (ii) The scheme of the Act is that income tax is one tax.
Section 6 only classifies the income under different heads for the purpose of computation of the net income of the assessee.
Though for the purpose of computation of the income, interest on securities is separately classified, income by way of interest on securities does not cease to be part of the income from business if the securities are part of the 620 trading assets.
Whether a particular income is part of the income from a business falls to be decided not on the basis of the provisions of s.6 but on commercial principles.
[622G H] (iii) In the present case the Tribunal and the High Court found that the securities were the assessee 's trading assets and the income therefrom was, therefore, the income of the business.
If it was income of the business, section 24(2) of the Act was immediately attracted.
If the income from the securities was the income from its business, the loss could, in terms of that section, be set off against that income.
[622H 623A] The Punjab Co operative Bank Ltd. vs Commissioner of Incometax, Punjab, (1940)8 I.T.R. 635 and Commissioner of Income tax Bombay City I vs Chugandas & Co. (1965) 55 I.T.R. 17, relied on.
United Commercial Bank Ltd. vs Commissioner of Income tax West Bengal; , , East India Housing and Land Development Trust Ltd. vs Commissioner of Income tax, West Bengal , and Commissioner of Income tax, Madras vs Express Newspapers Ltd. , distinguished.
|
ION: Criminal Appeal No. 223 of 1959.
Appeal by special leave from the judgment and ordered dated April 14, 1959, of the former Bombay High Court (Rajkot Branch) at Rajkot in Criminal Appeal No. 84 of 1958.
Nur ud din Ahmed and K. L. Hathi for appellant.
H. R. Khanna and R. H. Dhebar, for respondent.
January 24.
The Judgment of the Court was delivered by KAPUR, J.
The appellant and two others were convicted by the Additional Sessions Judge, Gohilwad, under sections 302 and 201 of the Indian Penal Code for the murder of Kanji and they were sentenced to imprisonment for life under the former section and to seven years ' rigorous imprisonment under the latter.
The sentence were concurrent.
On appeal the High Court set aside the conviction 728 of Nanji Ravji but upheld the convictions and sentences of the appellant and Karamshi Bhawan.
The appellant has Come in appeal to this Court by Special leave.
The deceased Kanji was rather an unsavoury character in village Chiroda and it is alleged that he had a illicit connection with Shrimati Shantu the sister of Karamshi and also used to follow about Smt.
Baghu the sister of the appellant for a similar object.
It is stated that five days before the occurrence the appellant Karsan, Karamshi, Nanji and Gumansinh approver met and decided to murder the appellant.
With that object in view Gumansinh approver was to decoy the deceased to the Vadi of the appellant and there the murder was to be committed.
At about sunset on March 19, 1958, the deceased was decoyed to the place as previously arranged and there he was murdered by the appellant who gave him a few blows.
with a sharp cutting instrument called Dharia.
According to the statement of the approver the dead body was wrapped in the scarf of the deceased and was carried by the appellant from the place of the murder to the dry bed of the river and there it was burried in a pit.
Nothing was heard of the murder or of the deceased till on March 26, 1958, a brother of the deceased made a report to the police about his disappearance and that he suspected the three uncles of the appellant, subsequently the appellant and the other accused persons were taken into custody by the police.
One of them while in the custody of the police, was allowed to go to the village and he asked the help of Shamji and Manilal P.Ws.
He also made a confession to them and they reported the matter to the police.
On March 31, 1958, Gumansinh and Karamshi made confessions 729 which were recorded by a Magistrate.
Between March 26 and March 31, recoveries of various articles were made.
At the instance of the appellant, it is stated, the dead body and then the head of the deceased was recovered from a distant well.
At the instance of Nanji on March 28, 1958 a scarf was, discovered in the pit in which the dead body was according to the approver, buried.
On the scarf, there were some hairs which on analysis by the Chemical Examiner were found to be similar to the hairs of the appellant and of the deceased.
A day previous, i. e. March 27, 1958, at the instance of the appellant silver buttons which were stained with human blood were discovered from the field of the appellant at small stick like a button belonging to the deceased was also found at his instance.
The High Court rejected the confession of Karamshi on the ground that it was not voluntary.
It acquitted Nanji on the ground that there were no corroboration in regard to him of the approver 's statement, the place where the dead body was buried was not discovered at his instance, his production of stick and shirt and trousers from his house was of no consequence, and the oral evidence was contrary to the medical evidence and Karamshi 's confessional statement could not be used against Nanji.
In regard to the appellant the High Court accepted the testimony of the approver as being a reliable piece of evidence.
It attached no importance to the recovery of the cutting instrument, Dharia, nor to the discovery of the stick (Dhoka) at his instance.
But the High Court did rely upon the discovery of the dead body of the deceased, i.e. the trunk and the head, at the instance of the appellant and of the blood stained buttons also at his instance and attached importance to scarf recovered from the pit where the dead body was alleged to have been first buried and which had hairs both of the appellant as well as of the deceased.
730 It was argued for the appellant that the evidence of the approver, even though it had been accepted as true, was not corroborated in material particulars connecting the appellant with the offence.
On the other hand it was contradicted.
The approver had stated that the dead body was buried in a pit in the dry bed of the river but when that pit was dug up the dead body was not found there and only a piece of ulna bone and a heel of a human foot were found and all there recoveries had been made earlier and so could not be called corroborative in material particulars.
It was further submitted that there was no evidence to show as to when and how the body of the deceased was removed from the pit, dismembered and thrown into the well.
The recovery of the scarf, it was pointed out, was an innocuous circumstance because on the evidence produced it had not been shown to belong to the appellant but to his father and the evidence of the Chemical Examiner was not sufficient to prove that the hairs on the scarf were of the appellant or of the deceased because the Chemical Examiner was certainly no expert on this matter and his evidence was, not admissible under section 45 of the Evidence Act, and at the most, according to the Chemical Examiner 's report the hairs resembled those of the appellant.
And secondly according to the approver the dead body of the deceased was wrapped in his own pania (scarf).
It was further submitted that the statement in regard to the recovery of the trunk and the head will only show that the appellant knew where the trunk and the head were, which at the most would lead to an inference of an offence under 8. 201 and not of 8. 302.
What the law requires in the case of an accomplice 's evidence is that there should be such corroboration of the material Parts of the story connecting the accused with the crime as will satisfy reasonable minds that the approver can be regarded 731 as a truthful witness.
The corroboration need not be direct evidence of the commission of the offence by the accused.
If it is merely circumstantial evidence of his connection with the crime it will be sufficient and the nature of the corroboration will depend on and vary with the circumstances of each case.
Vemireddy Satyanarayan Reddy vs The State of Hyderabad.
The confessional statement made by the approver on March 31, 1958 gave the following facts connecting the appellant with the murder.
(1) The appellant gave dharia blow to the deceased.
The dharia had already been discovered and it has been disregarded from the evidence by the High Court as being of no importance.
The next thing stated by the approver was that the deceased 's body was tied in a pania (scarf).
He did not state that the scarf in which it was bound belonged to the appellant.
The next fact stated by him was that the appellant carried the body of the deceased and then it was buried in a pit and lastly he stated that the appellant had told him that the head of the deceased had been thrown into a well.
None of these recoveries in the circumstances of this case are corroborative of the statement of the approver to the extent of connecting the appellant with the offence committed.
On the other hand, they are somewhat contradictory of the statement because the pania (scarf) which was found in the pit has now been stated to belong to the appellant.
The dead body was not found in the pit, the head had already been discovered and the trunk had also been taken out of the well.
In these circumstances it was submitted that the approver 's statement cannot be said to have been corroborated in material particulars.
But there are other circumstances which have to be considered even if the evidence of the approver is held not to be very helpful to the prosecution.
Firstly, there is the pointing out of 732 the dead body by the appellant from the well; secondly, the discovery of the blood stained (stained with human blood) buttons at the instance of the appellant i thirdly the scarf which has been held to belong to the appellant and which was found from the pit pointed out by the co accused Nanji and fourthly by the presence of the hairs of the appellant and of the deceased on that scarf.
The mere fact that the dead body was pointed out by the appellant or was discovered as a result of a statement made by him would not necessarily lead to the conclusion of the offence of murder.
But there are other circumstances which have to be considered.
The discovery of the buttons with bloodstains at the instance of the appellant is a circumstance which may raise the presumption of the participation of the appellant in the murder, In Wasin Khan vs The State of Uttar Pradesh (1), it was held that the recent and unexplained possession of stolen property would be presumptive evidence against a prisoner on a charge of robbery as also of a charge of murder.
But it must depend upon the circumstance of each case.
The third piece of evidence to be considered is the recovery of the pania i.e. scarf.
No doubt there is no statement by the approver that the scarf in which the dead body was taken was that of the appellant.
But a scarf has been found which the High Court has held as belonging to the appellant and hairs were found on that scarf.
It was argued that the finding of the hairs was of no consequence and at least the Chemical Examiner was not he proper expert who could depose as to the similarity or other wise of the hairs.
The writers on medical jurisprudence, however, have stated that from the microscopic examination of the hairs it is possible to say whether they are of the same or of different colours or sizes and from the examination it may help in deciding where the hairs come from.
In 733 Taylor 's Medical Jurisprudence (1956 Edn.) Vol. 1, at page 122, sine cases are given showing that hairs were identified as belonging to particular persons.
Thus, we have besides the evidence of the approver three important facts which connect the appellant with the commission of the offence.
His pointing out the dead body, his pointing out the silver buttons of the deceased which were stained with human blood and the presence of his hairs on a pania (scarf) on which there were the hairs of the deceases also.
In our opinion this would be sufficient evidence in the circumstances of the present case to connect the appellant with the commission of the offence.
We, therefore, dismiss the appeal.
Appeal dismissed.
| The appellant and two others were convicted for murder under sections 302 and 201 of the Indian Penal Code.
The High Court accepted the testimony of the approver as being a reliable piece of evidence.
It relied upon the discovery of the dead body of the deceased at the instance of the appellant and of blood stained buttons also at his instance and attached importance to the scarf recovered from the pit where the dead body was alleged to have been first buried and which had hairs both of the appellant as well as the deceased.
The appellant contended that the evidence of the approver, even though it had been accepted as true, was not corroborated in material particulars connecting the appellant with the offence.
None of the recoveries are corroborative of the statement of the approver to the extent of connecting the appellant with the offence committed; on the other hand they are somewhat contradictory of the statement.
The evidence of the Chemical Examiner was not sufficient to prove that hairs on the scraf were of the appellant or of the deceased because the Chemical Examiner was no expert on this matter and his evidence was not admissible under section 45 of the Evidence Act and, at the most, according to the Chemical Examiner the hairs resembled those of the appellant.
^ Held, that where the evidence of the approver is held not to be very helpful to the prosecution other circumstances 727 besides the evidence of the approver has to be considered.
The mere fact that the dead body was pointed out by the appellant or was discovered as a result of a statement made by him would not necessarily lead to the conclusion of the offence of murder.
In the present case beside the evidence of the approver, the appellant 's pointing out of the dead body, his pointing out the silver buttons of the deceased which were stained with human blood and the presence of his hairs on a pania (scraf) on which there were the hairs of the deceased also, are important facts which are sufficient evidence to connect the appellant with the commission of the offence.
Held, further, that writers of medical jurisprudence have stated that from microscopic examination of the hairs it is possible to say whether they are of the same or of different colours or sizes and from the examination it may help in deciding where the hairs come from.
Vemireddy Satyanarayan Reddy vs State of Hyderabad, ; and Wasim Khan vs State of Uttar Pradesh, [1956] S.C.R. 191, relied on.
| Dismissing the appeal and maintaining the conviction and sentences of the appellants, the Court ^ HELD:(1) It is well settled that where the inference of guilt of an accused person is to be drawn from circumstantial evidence only, those circumstances must, in the first place, be cogently established.
Further, those circumstances should be of a definite tendency pointing towards the guilt of the accused, and in their totality, must unerringly lead to the conclusion that within all human probability, the offence was committed by the accused and none else.
In the instant case, the following circumstances had been correctly found to have been established by the prosecution: (i) Rama Nand accused had a strong motive to murder his wife, Sumitra.
(ii) Sumitra was last seen alive with Rama Nand, appellant in the family house at Jherwin on the night between 13th and 14th May, 1972.
(iii) (a) Rama Nand and the other co accused falsely gave out that she had committed suicide by jumping into the river.
They 'planted ' a Salwar and a pair of shoes on the bank of the Sutlaj and gave out that they belonged to the deceased, and Shish Ram lodged a false report with the police to the effect that she had committed suicide by jumping into the river.
The Salwar and the shoes, which had been 'planted ' there to manufacture false clues by the accused, did not belong to Sumitra, and the accused falsely asserted that whose articles belong to the deceased.
(b) The story given out by the accused persons that upto 11 a.m. on May 14, 1972, Sumitra was planting chillies along with Sheela and other members of the family of the accused, was false.
(iv) The gold chain (exhibit P 1) and the watch (exhibit P 2) which Sumitra used to wear on her person all the 24 hours, and the clothes (exhibit P 5 to P 10) which she had on her person and the basket (exhibit P 11) and umbrella (exhibit P 12) which she was carrying when on the evening of May 13, 1972 she came to house of the accused at Jherwin, were recovered from the house of the accused.
(v) Some days after the occurrence, one Paranda was found from the jungle near this village.
There was a bunch of hair in the plated tail of this Paranda.
The tail appeared to have been cut.
These hair sticking in the paranda and those found entangled in the Dupatta of the deceased were according to the Forensic Expert of one and the same person.
(vi) A legless decomposed corpse was recovered from the Sutlej near village Randol in a mutilated condition.
But its identity [451G H, 452A E, 453A B] (2) Even on the assumption that the dead body of the victim was not found, circumstances (i) to (v) mentioned above in their cumulative effect includably and rationally compel the conclusion that Sumitra had died and it was Rama 445 Nand accused who had intentionally caused her death.
Ordinarily, the recovery of the dead body of the victim or a vital part of it, bearing marks of violence is sufficient proof of homicidal death of the victim.
Even so, discovery of the dead body of the victim bearing physical evidence of violence, has never been considered as the only mode of proving the corpus delicti in murder.
Indeed very many cases are of such a nature where the discovery of the dead body is impossible.
A blind adherence to this old doctrine of Sir Mathew Hale that "for a conviction of murder atleast the body was found dead" would open the door wide open for many a heinous murderer to escape with impunity simply because they were a cunning and clever enough to destroy the body of their victim.
In the context of our law, Hale 's enunciation has to be interpreted no more than emphasising that where the dead body of the victim in a murder case is not found, other cogent and satisfactory proof of homicidal death of the victim must be adduced by the prosecution.
Such proof may be the direct ocular account of an eye witness, or by circumstantial evidence, or by both.
But where the fact of corpus delicti, i.e. 'homicidal death ' is sought to be established by circumstantial evidence alone, the circumstances must be of a clinching and definitive character unerringly leading to the inference that the victim concerned has met a homicidal death.
Even so, this principle of caution cannot be pushed too far as requiring absolute proof.
Perfect proof is seldom to be had in this imperfect world, and absolute certainty is a myth.
That is why under Section 3, Evidence Act, a fact is said to be "proved", if the Court considering the matters before it, considers its existence so probable that a prudent man ought.
under the circumstances of the particular case, to act upon the supposition that it exists.
The corpus delicti or the fact of homicidal death, therefore, can be proved by telling and inculpating circumstances which definitely lead to the conclusion that within all human probability, the victim has been murdered by the accused concerned.
[457 D H, 458A D]
| The appellant and four others were charged with offences under sections 302/149 I.P.C., the appellant with having shot at the deceased and the other accused with giving blows to the deceased with a sharp edged weapon.
The trial court acquitted the four accused but convicted the appellant under section 302 read with section 34, I.P.C. The High Court dismissed the appeal of the State against acquittal as also the appellant 's appeal against conviction.
In appeal to this Court, it was contended for the appellant that it was not permissible to take the view that a criminal act was done by the appellant in furtherance of the common intention of the other accused when those accused who had been named had all been acquitted and that all that was permissible for the High Court was to convict the appellant of an offence which he might have committed in his individual capacity.
Allowing the appeal in part, ^ HELD: It was not permissible for the High Court to invoke section 149 or section 34, I.P.C. [659D E] (1) In a given case even if the charge disclosed only the named persons as co accused and the prosecution witnesses confined their testimony to them, it would be permissible to conclude that others, named or unnamed, acted conjointly with one of the charged accused if there was other evidence to lead to that conclusion, but not otherwise.
[657D] The charge in the present case related to the commission of the offence of unlawful assembly by the appellant along with four named co accused, and with no other person.
The trial in fact went on that basis throughout.
There was also no direct or circumstantial evidence to show that the offence was committed by the appellant along with any other unnamed person.
So when the other four co accused had been given the benefit of doubt and acquitted, it would not be permissible to take the view that there must have been some other person along with the appellant in causing injuries to the deceased.
The appellant would accordingly be responsible for the offence, if any, which could be shown to have been committed by him without regard to the participation of others.
[659C E] Dharam Pal vs The State of U.P., ; explained and followed.
The King vs Plummer, ; Topandas vs The State of Bombay, ; Mohan Singh vs State of Punjab, [1962] Supp.
3 S.C.R. 848; Krishna Govind Patil vs State of Maharashtra, ; ; Ram Bilas Singh vs State of Bihar, and Yeswant vs State of Maharashtra; , referred to.
(2) The appellant was guilty of voluntarily causing grievous hurt to the deceased by means of an instrument for shooting and was, therefore, guilty of an offence under section 326 I.P.C. From the medical evidence, it is not possible to say that the death of the deceased was caused by gun shot or by blunt weapon injuries.
It however proved that the appellant inflicted gun shot in juries on the deceased, one of the injuries being grievous.
[659H] 652
| During the pendency of a civil writ petition in the Allahabad High Court, one N moved an application under section 476, Code of criminal Procedure, for making a complaint under section 93, Indian Penal Code, against T. A single judge who was seized of the case rejected the application.
Thereupon N presented an appeal against the order of rejection of his application before the Supreme Court under section 476 B, Code of Criminal Procedure.
Held, that the appeal did not lie to the Supreme Court but that it lay to the Appellate Bench of the High Court.
The decrees of a single judge of the High Court exercising civil jurisdiction were ordinarily appealable to the High Court under cl.
1o of the Letters Patent of the Allahabad High Court read with cl. 13 of the U. P. High Courts (Amalgamation) Order, 1948, and as such the Court constituted by the single judge was a court subordinate to the Appellate Bench of the High Court within the meaning of section 195(3) of the Code.
M. section Sheriff vs The State of Madras, [1954] S.C.R. 1144, distinguished.
| The appellant was a constable in the police force ' of Haryana State.
At the relevant time he was posted to do duty at the police lines, Karnal.
It was reported by the Lines Officer that he was not present at the roll call on the evening of November 25, 1963.
The Judicial Magistrate gave him a notice in January 1966 asking him to explain why he should not he held guilty under section 29 of the police 'Act 1891 being absent on the aforesaid date.
The appellant explained that he was mentally upset on account of the death of two near relatives and was himself ill.
The, Magistrate held that the appellant was technically guilty, even though his case required sympathetic consideration.
In this view he sentenced the appellant to pay a fine of Rs. 51 and in default to undergo simple imprisonment for seven days.
Appeals before the Sessions Judge and the High Court failed.
In appeal to this Court by special leave it was contended on behalf of the appellant, that since more than three months, had intervened between the commission of the alleged offence and the commencement of the prosecution, the trial was time barred by limitation under section 42 of the .
This point was raised in this Court for the first time but had been stated in the statement of propositions of law to be advanced before the Court, and a copy of the same had been supplied to the counsel for the State.
Allowing the appeal, HELD : (i) The question of limitation being purely one of law requiring no fresh investigation into facts the appellant could be permitted to raise it for the first time in this Court.
[973 H] (ii)The appellant 's prosecution was initiated against him for something done under the provisions of the Act, namely non compliance with the requirement to be on duty as required under the .
Therefore under section 42 of the Act the prosecution should have been commenced against the appellant within three months of the commission of the act complained of.
The act complained of was alleged to have been committed on November 25, 1963.
Even treating the notice issued by the judicial magistrate as amounting to commencement of prosecution, it took place only on January 10, 1966, long after the expiry of three months from the date of the commission of the offence.
Therefore the prosecution commenced against the appellant was barred by limitation under section 42 of the Act.
[974 D E] Maulud Ahmad vs State of Uttar Pradesh, [1961] Supp. 2 S.C.R. 38, distinguished.
| The appellant was convicted under section 302/34, Indian Penal Code and sentenced.
Statements of two witnesses recorded in the committing court were transferred to the record during trial under section 288 Cr.
P.C. and the trial court treated the evidence of these witnesses as substantive evidence.
The High Court accepted the testimony of the witnesses before the committing Court.
In appeal it was contended that the statements of wit nesses in the committing court transferred under section 288 were inadmissible in evidence and should not be acted upon, since no specific portion of their contradictory statements had been put to them in cross examination.
Dismissing the appeal, HELD: There is no legal infirmity about the transfer of deposition of the witnesses to the record of the Sessions Court under section 288 Cr.
It was a legitimate use of discretion by the Sessions Judge.
Evidence recorded in the committing court is substantive evidence in this case and is admissible.
[147 E F] Section 288 Cr.
P.C. which provides for transfer of evidence recorded in the committing court under certain circumstances is subject inter alia to the provisions of section 145 of the Evidence Act.
Provisions of the latter section have been substantially complied with in this case.
[147 E] In the instant case after drawing the attention of the witnesses to their contradictory statements recorded by the police, the statements recorded by the committing Magistrate were read out to the witnesses who did not deny have made them but only explained that they had deposed in that manner under threat and pressure from the police.
[147 D]
| Twelve named persons, including the two appellants, were charged with having formed an unlawful assembly with the common object of committing the murder of three persons.
The Sessions Judge acquitted seven of the accused but convicted five under section 302 read with 149 and section 302 read with 34 of the Penal Code.
He sentenced the appellants to death and the other three to imprisonment for life.
On appeal, the High Court acquitted one of the other three convicted persons but maintained the conviction and sentences of the appellants and the two others.
The High Court held that there were ten to thirteen persons in the unlawful assembly though the identity of all the persons except four had not been established, that all these persons had the common object and the common intention of killing the victims and that the killing was done in prosecution of the common object of the unlawful assembly and in further ance of the common intention of all.
The appellants contended that they having been charged with sharing the common object and common intention with certain named persons, it was not 173 open to the High Court to hold that they shared the common object or the common intention with certain other unspecified persons or with some of the persons who had been acquitted, and that in the absence of any finding that the appellants gave the fatal blows they could not be held constructively liable for the murders either under section 149 or section 34, Penal:Code, for blows given by some unknown persons.
Held, that the appellants had been rightly convicted.
Even though the number of convicted persons was less than five the High Court could still apply s 149 in convicting the four persons.
There was nothing in law which prevented the High Court from finding that the unlawful assembly consisted of the four convicted persons and some unidentified persons, who together numbered more than five.
In doing so the High Court did Dot make out a new unlawful assembly different from that charged ; the assembly was the same assembly but what had happened was that the identity of all the members had not been clearly established.
Kapildeo Singh vs The King, , Dalip Singh vs State of Punjab, ; and Nay Singh vs State of Uttar Pradesh; , , applied.
There was no difficulty in the application of s 34, Penal Code as the number of convicted persons was four and there was a clear finding that they shared the common intention with some others whose identity was not established.
Even if it was not known which particular person or persons gave the fatal blows, once it was found that the murders were committed in furtherance of the common intention of all, each one of such persons was liable for the murders as though they had been committed by him alone.
The section was intended to meet a case where members of a party acted in furtherance of the common intention of all but it was difficult to prove exactly the part played by each of them.
Wasim Khan vs The State of Uttar Pradesh, [1956] S.C.R. 191, referred to.
Prabhu Babaji Navle vs The State of Bombay, A.I.R. 1956 S.C. 51, distinguished.
| The appellant was tried for an offence under section 302 Indian Penal Code for the murder of his wife.
The evidence consisted mainly of the uncorroborated dying declaration of the wife.
The Sessions judge accepted the evidence but convicted the appellant under section 304 Part 1 Indian Penal Code.
On appeal by the State the High Court convicted the appellant of an offence under section 302 Indian Penal Code and sentenced him to death.
The appellant contended that he had a right of appeal to the Supreme Court under article 134 (1) (a) of the Constitution and that his conviction was bad.
Held, that the appellant had a right of appeal to the Supreme Court under article 134 (1) (a) of the Constitution.
The conviction of the appellant under section 304 Part 1 of the Indian Penal Code by the Sessions judge amounted to an acquittal of the offence under section 302 and the High Court had reversed this order of acquittal and sentenced the appellant to death.
The word "acquittal" in article 134 (1) (a) did not mean that the trial must have ended in a complete acquittal of the charge, but acquittal of the offence charged and conviction for a minor offence was included in the word "acquittal".
Kishan Singh vs The King Emperor, (1928) L. R. 55, I.A. 390 relied on.
Per Kapur, Subba Rao and Shah, JJ.
The appellant was rightly convicted and sentenced by the High Court.
it was legal to found a conviction on the uncorroborated dying declaration.
The dying declarations had been accepted both by the Sessions judge and by the High Court and there was nothing in the evidence on the record which detracted from the findings of those courts in regard to the correctness or the propriety of this dying declaration.
776 Khushal Rao vs The State of Bombay, ; , referred to.
Per Hidayatullah and Dayal, JJ.
In an appeal under article 134 (1) (a) of ' the Constitution the Supreme Court assessed afresh the evidence on record and did not follow the practice in appeals by special Leave under article 136 that concurrent findings of the Courts below could be interfered with.
only when special circumstances existed.
In the circumstances of the present case it was not safe to rely on the dying declaration and the appellant was entitled to be acquitted.
|
ION: Criminal Appeal No. 126 of 1960.
Appeal by special leave from the Judgment and order dated November 23, 1959, of the Punjab High Court in Criminal Revision No. 1445 of 1959.
V. D, Mahajan, for the appellant.
B. K. Khanna, D. Gupta and P. D. Menon, for the respondent.
January 25.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
This is an appeal by one Dault Ram who was prosecuted under section 182 of the Indian Penal Code and sentenced to imprisonment for three months.
His revision application in the High Court of Punjab at Chandigarh was dismissed in limini; but he obtained special leave from this court and has filed this appeal.
The appellant was working as a Patwari and on August 19, 1958, he wrote a letter to the Tehsildar of Pathankot that on the previous day he had been set upon by two persons Hans Raj and Kans Raj who beat him severely and robbed him of certain of his official papers and some money, which was with him, partly belonging to 814 him and partly to the Government.
At the end of the letter which he wrote to the Tehsildar, he stated that the letter was written for his information.
The Tehsildar, however, forwarded the letter to the Sub Divisional Officer who in his turn sent it on to the police.
The police enquired into the facts and reported that the allegations in letter were false.
Meanwhile, it appears that the appellant entered into some sort of compromise with Hans Raj and Kans Raj and wrote another letter saying that as they were his relatives and he had found the papers and money, the proceedings if any be dropped and the papers be consigned to the record room.
The matter however was pursued further and when the report of the police came that the allegations in the original letter were false, the Tehsildar asked the police that a "calendar" be drawn up.
The police however launched a prosecution against the appellant under section 182 of the Indian Penal Code, and after due trial, the appellant was found guilty of that offence and was sentenced to three months ' rigorous imprisonment.
His appeal and revision failed and we have been informed that the appellant has served out his entire sentence.
The only question in this case is whether a complaint in writing as required by section 195 had been presented by the public servant concerned.
The public servant who was moved by the appellant was undoubtedly the Tehsildar.
Whether the appellant wanted the Tehsildar to take action or not, the fact remains that he moved the Tehsildar on what is stated to be a false averment of facts.
He had charged Hans Raj and Kans Raj with offences under the Penal Code and he had moved his superior officer for action even though he might have stated in the letter that it was only for his information.
We are prepared to assume that he expected that 815 some action would be taken.
In fact his second letter that he had compromised the matter and the proceedings might be dropped clearly shows that he anticipated some action on the part of his superior officer.
The question is therefore whether under the provisions of section 195, it was not incumbent on the Tehsildar to present a complaint in writing against the appellant and not leave the court to be moved by the police by putting in a charge sheet.
The words of section 195 of the Criminal Procedure Code are explicit.
The section reads as follows: "(1) No Court shall take cognizance (a) of any offence punishable under sections 172 to 188 of the Indian Penal Code, except on the complaint in writing of the public servant concerned, or of some other public servant to whom he is subordinate; The words of the section, namely, that the complaint has to be in writing by the public servant concerned and that no court shall take cognizance except on such a complaint clearly show that in every instance the court must be moved by the appropriate public servant.
We have to decide therefore whether the Tehsildar can be said to be the public servant concerned and if he had not filed the complaint in writing, whether the police officers in filing the charge sheet had satisfied the requirements of section 195.
The words "no court shall take cognizance" have been interpreted on more than one occasion and they show that there is an absolute bar against the court taking seisin of the case except in the manner provided by the section.
Now the offence under section 182 of the Penal Code, if any, was undoubtedly complete when the appellant had moved the Tehsildar for action.
Section 182 does not require that action must always be 816 taken if the person who moves the public servant knows or believes that action would be taken.
In making his report to the Tehsildar therefore, if the appellant believed that some action would be taken (and he had no reason to doubt that it would not) the offence under that section was complete.
It was therefore incumbent, if the prosecution was to be launched, that the complaint in writing should be made by the Tehsildar as the public servant concerned in this case.
On the other hand what we find is that a complaint by the Tehsildar was not filed at all, but a charge sheet was put in by the Station House Officer.
The learned counsel for the State Government tries to support the action by submitting that section 195 had been complied with inasmuch as when the allegations had been disproved, the letter of the Superintendent of Police was forwarded to the Tehsildar and he asked for "a calendar".
This paper was flied along with the charge sheet and it is stated that this satisfies the requirements of section 195.
In our opinion, this is not a due compliance with the provisions of that section.
What the section comtemplates is that the complaint must be in writing by the public servant concerned and there is no such compliance in the present case.
The cognizance of the case was therefore wrongly assumed by the court without the complaint in writing of the public servant namely the Tehsildar in this case.
The trial was thus without jurisdiction ab inito and the conviction cannot be maintained.
The appeal is therefore allowed and the conviction of the appellant and the sentence passed on him are set aside.
Appeal allowed.
| The appellant a Patwari wrote a letter to the Tehsildar under whom he was working that he had been robbed of certain official papers and money.
The police reported that on investigation, the allegations were found to be false.
The Tehsildar asked the police that a "calendar" be drawn up.
The police launched a prosecution under section 182 of the Indian Penal Code.
No complaint in writing as required by section 195 of the Code of Criminal Procedure was made by the Tehsildar 813 as the public servant concerned in the case, but a charge sheet was put in by the police attaching the letter of the Tehsildar asking them to draw up a "calendar" against the appellant.
^ Held, that in a prosecution to be launched under section 195 of the Code of Criminal Procedure, it is incumbent that a complaint in writing should be made by the public servant concerned for only on such complaint can the court take cognizance of the offence otherwise the trial is without jurisdiction ab initio.
Held, further, that section 182 does not require that an action must always be taken on the report made to the public servant, the offence is complete as soon as the report is made and the person who made the report believed that some action would be taken.
| The appellant was convicted under section 302/34, Indian Penal Code and sentenced.
Statements of two witnesses recorded in the committing court were transferred to the record during trial under section 288 Cr.
P.C. and the trial court treated the evidence of these witnesses as substantive evidence.
The High Court accepted the testimony of the witnesses before the committing Court.
In appeal it was contended that the statements of wit nesses in the committing court transferred under section 288 were inadmissible in evidence and should not be acted upon, since no specific portion of their contradictory statements had been put to them in cross examination.
Dismissing the appeal, HELD: There is no legal infirmity about the transfer of deposition of the witnesses to the record of the Sessions Court under section 288 Cr.
It was a legitimate use of discretion by the Sessions Judge.
Evidence recorded in the committing court is substantive evidence in this case and is admissible.
[147 E F] Section 288 Cr.
P.C. which provides for transfer of evidence recorded in the committing court under certain circumstances is subject inter alia to the provisions of section 145 of the Evidence Act.
Provisions of the latter section have been substantially complied with in this case.
[147 E] In the instant case after drawing the attention of the witnesses to their contradictory statements recorded by the police, the statements recorded by the committing Magistrate were read out to the witnesses who did not deny have made them but only explained that they had deposed in that manner under threat and pressure from the police.
[147 D]
| Vinay Kumar, the husband of the deceased Asha and his mother Chhano Devi were charged, convicted for the offence of burning alive the deceased and sentenced to life imprisonment on a complaint by Hanumant Dass the father of the deceased and the appellant in Criminal Appeal 45 of 1982 by the Sessions Judge Gurdaspur, Punjab.
The offence is alleged to have been committed within the territorial limits of the State of Himachal Pradesh, but on an application of the complainant the case was transferred by an order of the Supreme Court inasmuch as the accused were the brother in law and mother in law of a Judge of the High Court of Himachal Pradesh.
In appeal by tho accused the High Court of Punjab issued, on 22 6 1981, notice for 6 7 1981 to the Advocate General of Punjab only and on that date heard the appeal and acquitted both the accused.
Hence the appeal by the complainant and the special leave by the State of Himachal Pradesh.
Dismissing the appeal and the Special Leave Petition, the Court, ^ HELD: 1.
The charge levelled against the High Court that it was in a hot haste to decide the appeal at the earliest possible is incorrect in view of the order dated 22 6 1981 passed by the High Court of Punjab.
[600 B] 2:1.
Section 385 of the Code of Criminal Procedure is a mandatory provision and the requirement of the section must be satisfied.
In the appeal before tho High Court State of Punjab was made a party and notice of the appeal was also given to the Advocate General of Punjab.
From sections 2(4), 24, 225, 378 and 432 it is evident that there shall be a Public Prosecutor for conducting any prosecution appeal or other proceeding on behalf of the Central 596 Government or State Government in the High Court.
If notice has been given to the Public Prosecutor, namely, the Advocate General of Punjab the requirement of law has been fulfilled.
[601 B C, 603 C D] 2:2.
Section 432 of the Criminal Procedure Code defines "appropriate Government" as meaning (a) in cases where the sentence is for an offence against, or the order referred to in sub section (6) is passed under any law relating to a matter to which the executive power of the Union extends, the Central Government; (b) in other cases, the Government of the State within which the offender is sentenced or the said order is passed.
According to this section the appropriate Government is the Government of the State of conviction and not the Government of the State where the offence was committed.
[603 C D] State of Madhya Pradesh vs Ratan Sing & Ors., [1976] Supp.
S.C.R. 552, applied.
To contend that the High Court disposed of the appeal even without summoning the record is incorrect.
No specific allegation has been made in the Special Leave Petition that the record was not summoned.
The tenor of the judgment of the High Court indicates that the record must have been there before the High Court.
There is copious reference to the materials on the record which could be possible only when the record was there before the court.
Besides, the counsel for the appellant made a statement before the court that on the finding of fact recorded by the High Court he was entitled to an acquittal and in this view of the matter even if the record had not been summoned that would not be fatal.
Further proviso to sub section (2) of section 385 itself provides ". the court may dispose of the appeal without sending for the record," in a certain situation.
The rigour of sub section (2) of section 385, which provides that "the Appellate Court shall then send for the record of the case. " has been taken away by the proviso in a certain situation.
If the appellant himself says that the appeal can be allowed on the findings recorded by the Sessions Judge, the non summoning of the record, if it was at all so, would not be fatal.
The complainant was present with his counsel, the State Advocate General was also present.
If there had been any grievance about the record, they would have raised an objection.
Their non objection on this point is also an indicator that the record was there or in any case, the summoning of the record was not thought to be necessary by the parties.
[604 E H, 605 A B] 4.
On merits also there is no case for the appellants since each and every aspect of the matter has been thoroughly discussed by the High Court which has referred to the error committed by the Sessions Judge in the approach of the case and also in making unwarranted assumptions.
There is no eye witness.
The fate of the case hinges upon the circumstantial evidence.
The High Court has dealt with the two dying declarations, one recorded by the Doctor and the other by the Assistant Sub Inspector.
The High Court also took into consideration the oral dying declaration on which the prosecution strongly relied.
But even that declaration does not implicate the accused.
[605 G H, 606 A B]
| The petitioner, an officer of the Madras Government, was employed in Central Provinces and Berar for the purchase of grains on behalf of the Madras Government.
He along with many others, was under prosecution before a Special Magistrate, Nagpur (Mad by a Pradesh), on charges for offences under section 420 of the Indian Penal Code etc.
for causing loss to the Madras Government.
The Special Magistrate trying the case was appointed by the Madhya Pradesh Government under section 14 of the Code of Criminal Procedure and as the petitioner was a servant of the Government of Madras, the prosecution against him was initiated with the sanction given by the Government of Madras under section 197 of the Code of Criminal Procedure.
Held, (i) that section 14 of the Criminal Procedure Code in so far as it authorises the Provincial Government to confer upon any person all or any of the powers conferred or conferrable by or under the Code on Magistrates of the first, second or third class in 169 respect of particular oases and thereby to constitute a Special Magistrate for the trial of an individual case, does not violate the guarantee under article 14 of the Constitution as the Special Magistrate in the present case had to try the case entirely under the normal procedure and no discrimination of the kind contemplated by the decision in Anwar Ali Sarkar 's Case ([1952] S.C.R. 284) arose in the present case.
A law vesting discretion in an authority under such circumstances cannot be discriminatory and is, therefore, not hit by article 14 of the Constitution.
(ii) It is not for the very Government which accords sanction under section 197(1) to specify also the Court before which the trial is to be held under section 197(2) and therefore in a case to which section 197(1) applies, the exercise of any power under section 14 is not excluded.
The word "Court" in sub section (2) of section 197 is not the same thing as a "person" in sub section (1) of section 14.
The practice of direct approach to the Supreme Court under article 32 (except for good reasons) in matters which have been taken to the High Court and found against, without obtaining leave to appeal therefrom, is not be encouraged.
Gokulchand Dwarkadas Morarka vs The King (A.I.R. 1948 P. C. 82) referred to; and Anwar Ali Sarkar 's case ([1952] S.C.R. 284) distinguished.
| In the election to Parliament from a constituency in Punjab the respondent was declared elected.
The appellant filed an election petition alleging, inter alia, (i) that at least 15,000 invalid and void votes had been included and counted in favour of the respondent, and (ii) that the Chief Minister of Punjab, who was the brother of the respondent, directed, (a) the distribution to Harijans of large sums of money for construction of Dharamshalas, and (b) the issue of a large number of gun licences, as gratification for inducing voters to vote for the respondent and that thereby, the corrupt practice of bribery under section 123(1), Representation of the People Act, 1951, was committed.
The High Court dismissed the election petition Dismissing the appeal to this Court, ^ HELD: (1) On the evidence, the High Court was right in holding that the appellant had not succeeded in establishing the allegation regarding the 15,000 votes.
[889F] (a) Rule 56 of the Conduct of Elections Rules as amended in 1971, provides that only a ballot paper which did not contain both the mark and the signature of the polling officer would be invalid.
Even then it does not automatically become invalid.
If the Returning Officer was satisifed that the failure to affix the stamp or signature was due to the fault of the polling officer but the ballot paper was itself genuine he could include it among the valid ballot papers, because, under pressure of work, the polling officer might have failed either to affix the stamp or his signature.
[887F H] (b) The evidence adduced on behalf of the appellant is not consistent as to the ground of invalidity of the ballot papers; as to how the number of 15,000 was arrived at; and as to whether they were counted in favour of the respondent or both the appellant and the respondent.
[889E F] (c) There cannot be any hard and fast rule as to the circumstances when an order of recount would be permissible and it always depends upon the circumstances of the case.
On the facts of the present case, there is not the slightest justification for ordering a recount.
[889G H] (2) In the case of both the allegations regarding Dharamshalas and gun licences, there was no gratification offered and there was no bargaining for votes, and hence there was no corrupt practice.
[896B] (a) The word 'gratification ' in section 123(1) should be deemed to refer only to cases where a gift is made of something which gives a material advantage to the recipient.
There is a distinction between licences which give a material advantage and those which do not.
For example, a licence in a prohibition area to deal in liqueur confers a material advantage on the licensee, whereas a licence enabling a person to imbibe liqueur in such an area gives him no material advantage.
It is only the grant of the former that might amount to gratification.
Arms licence is a licence for regulatory purposes.
Its possession give no material advantage to its possessor.
[893C G] (b) To constitute the corrupt practice of bribery under section 123(1) there must be a bargain for votes.
But a bargain for the purposes of the section does not mean that the candidate or his agent makes an offer and the voter accepts it in the sense that he promises to vote.
It is not necessary that the 885 voter should say that he would vote and that thereafter only the candidate or his agent should pay the money.
It is enough if the candidate or his agent makes the gift or promise on that condition.
[889G 890A] (c) In the present case, the State Government had set apart a sum of Rs. 50 lacs for the purpose of construction of Dharamshalas for Harijans.
A sum of Rs. 3 lacs was spent towards the end of the financial year, in the district in which this particular parliamentary constituency was situate.
Punjab has 11 districts and it cannot, therefore, be said that, the amount is disproportionately large.
[889H 890A] (d) The anxiety to spend the money towards the end of financial year is also natural.
[890A B] (e) It may not be setting up a high standard and it may be very desirable that whatever is done for the people should be done by persons in authority throughout the period of their office and not when election time is approaching.
But where a large section of the people get an amentiy which they ought, in any case to get, and which they got probably a little more easily because it was election time, it cannot be said that the person in authority making a promise and holding out that he would carry out many remedial measures to benefit the people was resorting to bribery or bargaining for votes.
[890B D] (f) The issue of the unusually large number of gun licences may be an improper use of power.
But, there is no evidence regarding bargaining for votes by the promise of gun licences.
[890D G, 893G] (g) Maganlal Bagdi vs Hari Vishnu Kamath, Khadar Sheriff vs Munnuswami Gounder & Ors.
A.I.R. 1955 S.C. 775, Ghasi Ram vs Dal Singh ; , Radha Krsihna Shukla vs Tara Chand Maheshwar , amirchand vs Surendra Lal Dha E.L.R. 57, Om Prabha Jain vs Abnash Chand & Anr. ; ,Bhanu Kumar vs Mohan Lal ; , referred to.
| The appellant, who was employed in the Punjab Police, was found while working as a Police Censor to have detained certain letters illegally and later to have made use of copies and photographs of the them for blackmail.
He was consequently reverted to his substantive post of head constable on January 14, 1944.
Thereafter an enquiry was started against him by the Superintendent of Police and eventually he was dismissed from service on January 25, 1944.
His representations to higher authorities having failed he instituted a suit challenging the legality of the order of dismissal on the grounds, inter alia, (1) that section 240(3) of the Government of India Act, 1935, had not been complied with, and (2) that as the appellant was alleged to have committed a criminal offence the Superintendent of Police could not hold a departmental enquiry in respect of such allegations in view of SS. 29 and 35 of the .
Held : (1) that section 243 of the Government of India Act, 1935, 65 which was a special provision with regard to the subordinate ranks of police forces in India, excluded the operation of section 24G(3) of the Act to the appellant, who was, therefore, governed by the conditions of service as provided under the Police Regulations, and that the substance of section 240(3) which was brought into the Police Regulations in September 1946 long after the appellant had been dismissed was not applicable to him.
Accordingly, he was not entitled to the second notice, under section 240(3), giving him a reasonable opportunity of showing cause against the action proposed to be taken in regard to him.
North West Frontier Province vs Suraj Narain Anand and High Commissioner for India and High Commis sioner for Pakistan vs I. M. Lal, , referred to.
(2) that the provisions of the , relating to offences committed by a police officer above the rank of a constable do not bar a departmental enquiry in respect of a matter where it is also possible to prosecute such an officer under that Act.
| The appellant was convicted of offences under Sections 302 (,on two counts), 307 and 460 I.P.C., and sentenced to death by the trial court, for illegally entering a residential house and causing two murders by shooting.
He was noticed by the deceased Natrajan 's wife and neighbour, who identified him in a test parade.
The High Court confirmed the death sentence.
The appellant, inter alia, challenged the propriety of his identification by the witnesses, and also the identification of the fire arm used for the murders.
Dismissing the appeal, the Court.
HELD : 1.
Identification parades have been in common use for a very long time, for the object of placing a suspect in a line up with other persons for identification is to find out whether he is the perpetrator of the crime.
This is all the more necessary where the name of the offender is not mentioned by those who claim to be eye witnesses of the incident but they claim that although they did not know him earlier, they could recall his features in sufficient details and would be able to identify him if and when they happened to see him.
The holding of a test identification in such cases is as much in the interest of the investigating agency or the prosecution as in the interest of the suspect or the accused.
For while it enables the investigating officer to ascertain the correctness or otherwise of the claim of those witnesses who claim to have seen the perpetrator of the crime, and their capacity to identify him, and thereby fill the Zap in the investigation regarding the identity of the culprit, it saves the suspect or the accused from the sudden risk of being identified in the dock by the self same witnesses during the course of the trial.
The line up of the suspect in a test identification parade is, therefore, a workable way of testing the memory and veracity of witnesses in such cases and has worked well in actual practice.
[703 A D] (2)The argument that the evidence regarding the holding of a test identification parade would be of no consequence and would suffer from a fatal defect if the prosecution has not led any evidence to prove that the appellant was kept "ba parda", is not correct.
After referring to the decision in Dhokal Singh and Anr.
vs The State, I.L.R. (1953) 3 Raj. 762, their Lordships approved of the view taken in State of Rajasthan vs Ranjitha, A.I.R. 1962, Raj 78 (FB) in which the earlier decision in Dhokal Singh 's case was adequately reexamined.
[701 H, 702, 703A] (3)A comparison microscope is the most important and most widely used scientific instrument in comparing the crime cartridge with the test cartridge, but there has been considerable difference of opinion amongst investigators regarding these photographs in a court for the purpose of illustrating the matching of the markings, and while it may be that microscopic photographs, when taken with the due care and in the best of conditions, may enable the evidence to be placed on the record in a visible form, a court would not be justified in rejecting the opinion of an expert who has examined the markings under the comparison microscope simply for the reason that he has not thought it necessary to take the photographs.
[705 F 706 A B] 695 The State of Gujarat vs Adam Fateh Mohmed Umative & Ors., , differentiated.
| ^ HELD: (Per Sarkaria, J.) The records of this case be submitted to the Hon 'ble Chief Justice for C constituting a larger Bench which would resolve the doubts, difficulties and inconsistencies pointed out by Kailasam J. in his order, particularly in its last paragraph.
(Per Kailasam, J.) 1.
Before the amendment of Section 367(5) of the Code of Criminal Procedure by the Criminal Procedure Code (Amendment) Act 1955 (Act 26 of 1955) was introduced, the normal sentence for an offence of murder was death and the lesser sentence was the exception.
After the introduction of the amendment it was not obligatory for the court to state the reasons as to why the sentence of death was not passed.
By the amendment the discretion of the court in deciding whether to impose a sentence of death or imprisonment for life became wider.
The court was bound to exercise its judicial discretion in awarding one or the other of the sentences.
By the introduction of Section 354(3) of the Code of Criminal Procedure 1973, the normal sentence is the lesser sentence of imprisonment for life and if the sentence of death is to be awarded, special reasons will have to be recorded.
In other words, the court, before imposing a sentence of death, should be satisfied that the offence is of such a nature that the extreme penalty is called for.
[1203A C] 2.
In a number of decisions, this court has reiterated the position that under section 354(3) of the 1973 Code, the court is required to state the reasons for the sentence awarded and in the case of sentence of death special reasons are required to be stated.
[1203D] Balwant Singh vs State of Punjab [1976] 2 S.C.R. 684; Ambaram vs The State of Madhya Pradesh ; and Sarveshwar Prasad Sharma vs Slate of Madhya Pradesh [1978] I S.C.R. 560 referred to.
In Jagmohan Singh vs State of U.P. ; in which the constitutional validity of imposition of death sentence was challenged, this Court held that the deprivation of life is constitutionally permissible if that is done according to the procedure established by law and that it cannot be held that capital sentence is per se unreasonable and not in the public interest.
It was also held that the Judges are invested with very wide discretion in the matter of fixing the degree of punishment and that discretion in the matter of sentence is liable 20 409SCI/79 1194 to be corrected by superior courts, that exercise of judicial discretion on well recognised principles is, in the final analysis, the safest possible safeguard for the accused.
[1204C D] 4.
Section 367(5) of the Criminal Procedure Code which came into force on April 1, 1974, after the judgment in Jagmohan Singh 's case, provides that the judgment shall state the special reasons where a sentence of death is award ed for an offence punishable with death or in the alternative with imprisonments life or imprisonment for a term of years.
The requirement that courts should state the special reasons for awarding the death sentence would indicate that the normal sentence for an offence punishable either with death or with imprisonment for life is imprisonment for life and that if the court considered that sentence of death is appropriate on the particular facts of the case it should give special reasons.
[1204 G H] 5.
But in Rajendra Prasad vs State of U.P. ; , the majority of a Division Bench of this Court held that "special reasons" necessary for imposing the death penalty must relate not to the crime as such but to the criminal.
The death sentence can be awarded only in certain restricted categories where a crime holds out a durable And continuing threat to social security in the setting of a developing country and poses a grave peril to society 's survival and when an economic offender intentionally mixes poison in drugs and knowingly and intentionally causes death for the sake of private profit and so on.
The decision is in many respects contrary to the law laid down by the Constitution Bench of this Court in Jagmohan Singh 's case.
The court in this case has proceeded to make law as regards the conditions that are necessary for imposition of a sentence of death under section 302 I.P.C. and to canalisation of sentencing discretion and has embarked on evolving working rules on punishment bearing in mind the enlightened flexibility of social sensibility.
In doing so the Court has exceeded its power conferred on it by law.
Courts have no power to legislate and to frame rules to guide the infliction of death penalty.
[1205C F] 6.
So far as the enacted law is concerned, the duty of the court is to interpret and construe the provisions of the enactment.
Courts must take it absolutely for granted that the Legislature has said what it meant and meant what it has said.
Judges are not at liberty to add or to take from or modify the letter of the law simply because they have reason to believe the true sentence legis is not completely or correctly expressed by it.
Though the courts are free to interpret, they are not free to overlook or disregard the constitution and the laws. [1207B D] 7.
It is for the court to administer the law as it stands.
In awarding sentence or death, the court has to take into consideration the various aspects regarding a crime and the reason for committing the crime and pass the appropriate sentence, and if it is death sentence, to give reasons as required by the Code of Criminal Procedure.
If in deciding a case on particular facts a principle is stated, it would be binding as a precedent.
If courts resort to rule making, it will not be binding as a precedent.
If the courts are to embark on rule making the question arises whether the responsibility can be undertaken by a bench of three Judges with majority of 2: 1.
There is no machinery by which the court could ascertain the views of the various cross sections of the society, which is a pre requisite before any law making is resorted to.
1195 Rajendra Prasad 's ease the court embarked on framing rules prescribing conditions for the imposition of death sentence.
The view of the majority that in awarding a sentence the criminal is more important than the crime is not warranted by the law as it stands today.
The general principles laid down in Rajendra Prasad 's case are not the ratio decidendi of the case.
The enunciation of the reasons or the principle on which a question before a court has been decided is alone binding as a precedent.
The concrete decision alone is binding between the parties to it but it is the abstract ratio decidendi ascertained on a consideration of the judgment in relation to the subject matter of the decision which alone bas the force of law and which, when it is clear what It was, is binding.
Statements which are not necessary to the decision, which go beyond the occasion and lay down a rule that is unnecessary for the purpose in hand have no binding authority on another court, though they may have merely persuasive efficacy.
Decisions upon matters of facts are not binding on any other court [1207G H; 1202D F] Tribhuvandas vs Ratilal ; = 70 Bom.
L. R. 73; Amritsar Municipality vs Hazara Singh A.I.R. ; and Quinn vs Leatham 1901 A.C. 495 at p. 506; referred to.
In Rajendra Prasad 's case the conclusion of the majority was that as nothing on record suggested that the accused was beyond redemption and since the record did not hint that such an attempt was made inside the prison there was no special reason to award death sentence.
The utmost to which this case can be considered as an authority is that if in similar circumstances when a person stabs two persons several times it would not furnish special reasons for inflicting the death penalty.
In the second case (Kunjukunju) the majority was of the view that the test should be whether the accused was a social security risk altogether beyond salvage by therapeutic life sentence was neither in accordance with the requirements of the Code of Criminal Procedure nor law laid down by the Constitution Bench.
Therefore, it cannot be followed as a precedent.
Similarly, in the third case (Dubey 's case) also the majority view that it would be illegal to award capital punishment without considering the correctional possibilities inside the prison and that the accused being young and of malleable age and other circumstances bearing on the offender called for the lesser sentence is not in conformity with the decisions of this Court or the requirements of the law.
[1213H; 1214A H] 9.
In the instant case the appellant was released after undergoing a term of imprisonment for the murder of his wife.
After release he lived with his cousin.
When his cousin 's son and wife objected to his stay with the family he inflicted a fatal injury on the son and two daughters of his cousin when they were asleep and caused grievous injury on another daughter The courts below came to the conclusion that the appellant acted in a very cruel manner.
They have rightly characterised the offence as heinous and held that the only appropriate sentence was the extreme penalty of death.
The trial court and the High Court were right in their conclusions.
[1215 C E] [Rajendra Prasad 's case cannot be treated as a binding precedent yet as it is a decision of a division bench of this Court.
The papers were directed to be placed before the Hon 'ble the Chief Justice for constituting a larger bench to decide the case.]
|
N: Cr. A. No. 189 of 1961.
Appeal by special leave from the judgment and order dated July 10 and 11, 1961, of the Bombay High Court (Nagpur Bench) in Criminal Application No. 19 of 1961.
A. section Bobde, B. A. Masodkar, M. L. Vaidya, M. M. Kinkhede and Ganpat Rai, for the appellant.
M. C. Setalvad, Attorney General for India, B. Sen and R. H. Dhebar, for the respondents.
January 31.
The Judgment of the Court was delivered by 919 SINHA, C J.
This appeal is directed against the Judgment and order dated July 11, 1961 of a Division Bench of the Bombay High Court (Nagpur Bench), dismissing the appellant 's application, under article 226 of the Constitution, read with section 491 of the Code of Criminal Procedure, wherein he had prayed for a writ of Habeas Corpus against the State of Maharashtra and the District Magistrate of Nagpur, directing them to produce the petition in Court and to set him at liberty.
This application was heard by us on January 8 and 9, 1962, and after hearing Shri A. section Bobde for the appellant and the learned Attorney General for the State of Maharashtra, we directed that the appellant be released forthwith, and that the reasons for our judgment will follow later.
We now proceed to set out our reasons for the order passed on that day.
It appears that an Order of Detention, under section 3(1) (a)(ii) of the Preventive Detention Act (IV of 1950) hereinafter referred to as the Act) was made by the District Magistrate of Nagpur on April 10, 1961.
The order of Detention is in these terms: "No.
CC/X (2) of 1961 office of the District Magistrate, Nagpur, Dt.
10th April, 1961.
ORDER OF DETENTION UNDER SEC.
3(1)(a) (ii) OF THE .
Whereas I am satisfied that it is necessary to prevent Shri Harikisan Kishorilal Agarwal of Nagpur from acting in a manner prejudicial to the maintenance of public order and that therefore, it is necessary to detain him.
Now, therefore, in exercise of the powers conferred on me by Section 3(1)(a)(ii) of the 920 , I Dinkarrao Hanjantrao Deshmukh, I.A.S., District Magistrate, Nagpur hereby direct that the said Shri Harikisan Kishorilal Agarwal be so detained.
Given this 10th day of April 1961 under my signature and seal.
Seal of the Sd/D.H. Deshmukh D.M. Nagpur District Magistrate, Nagpur" He also directed that the appellant should be detained in the District Prison, Thana, and that for the purpose of the Bombay Condition of Detention order, 1951, be treated as a Class II Prisoner.
The grounds of detention were served on the same day.
The substance of the grounds is that since his release from previous detention in October, 1960, he had been instigating persons at Nagpur to defy and disobey reasonable directions and lawful orders issued by competent authorities, from time to time, prohibiting and regulating processions and assemblies at Nagpur; that by use of highly provocative words, expressions and slogans in meetings and processions in Nagpur, in which he took a prominent part, he had instigated persons on several occasions at Nagpur to indulge in acts of violence and mischief and to create disturbance in the city of Nagpur; and that he had been acting since October 1960, in a manner prejudicial to the maintenance of public order, in that city.
And then follow 'notable particular ' of his activities, running into five closely typed pages and contained in many paragraphs.
In his petition to the High Court, the petitioner raised a number of grounds of attack against the legality of the order of his detention, and most of those grounds have been reiterated in this Court.
We do not think it necessary to go into all the points raised, on behalf of the appellant, by the learned counsel.
In our opinion, it is enough to say that we are satisfied 921 that, in the circumstances of this case, the provisions of article 22(5) of the Constitution have not been fully complied with, and that, therefore, the appellant had not the full opportunity provided or contemplated by that Article of making his representation against the Order of Detention.
In this connection, it is necessary to state the following facts.
The appellant wrote a letter to the District Magistrate of Nagpur on April 19, 1961, to the effect that he had been served with an Order of Detention dated April 10, 1961, and that the Order and the grounds of detention being in English, he was unable to understand them, and therefore, asked for a Hindi version of the same so that he may be able to follow and understand the charges levelled against him and take necessary steps for his release from jail.
He raised some other questions also in that letter, but it is not necessary to refer to them here.
To that letter the District Magistrate replied by his letter dated April 23, 1961, the second paragraph of which, in the following terms, sets out his views of the matter: "The order of detention and the grounds of detention already communicated to you are given in English which is the official language in this district.
It is not possible to supply any translation of the same for is (sic) it legally necessary under the .
The order and the grounds of detention served on you were fully explained to you by the Police Officer in the presence of the D.S.P. Nagpur City." The High Court, dealing with this contention on behalf of the detenue, came to the conclusion that under the Constitution English still continued to be the official language of the State of Maharashtra, and that service of the Order in English upon the detenue was sufficient compliance with 922 the requirements of cl.
(5) of article 22 of the Constitution.
It also held that the failure of the District Magistrate to supply the grounds in Hindi did not have the effect of preventing him from making his representation to the authorities.
Furthermore, the High Court pointed out that the District Magistrate had stated in his letter that the grounds were explained to the appellant in Hindi by the Police Officer at the time the Order and the grounds were served upon him.
In the view of the High Court, therefore, the explanation or translation of the grounds by the Police Officer at the time he served those on the appellant should be deemed to be enough to enable him to make an effective representation against his detention.
Mr. Bobde, for the appellant, has vehemently argued that the requirements of the Constitution had not been complied with inasmuch as cl.
(5) of article 22 of the Constitution required that the grounds on which the Order of Detention had been based had to be communicated to the detained person.
His argument further was that "communication" of the grounds was not equivalent to serving the grounds in English upon a person who was not conversant with the English language, and that oral translation by the police officer, said to have been made to the detenue, was not sufficient compliance with the requirements of the constitutional provisions, which must be fully satisfied in order that the detenue may be in a position to make an effective representation against the Order of Detention.
He also contended that we do not know in what terms the police officer translated the lengthy document or whether his translation was correct.
On behalf of the State of Maharashtra, the learned Attorney General first attempted to show that the appellant knew English.
In this connection he has referred to the affidavit of the District Magistrate, the exact words of which are as follows: 923 "He (the detenue) had also asked me to supply the grounds in Hindi to enable him to understand the same.
I admit that I had replied to this letter and had declined to communicate the grounds in Hindi.
I deny that this has been done with a view to keep the petitioner in dark as to the grounds of his detention.
The petitioner as per my information, is an educated man and can understand English.
The question that the petitioner did not understand the grounds, therefore, does not arise.
I deny that the petitioner is entitled to receive the grounds in Hindi.
The grounds were supplied to the petitioner in the court language and also they were explained to him by the Police Inspector Shri W.B. Bobde who had served them on the petitioner. . " That statement of the District Magistrate is apparently based on the following statement, in the affidavit of Shri W.B. Bobde, the Police Inspector: "The Order of Detention as well as the grounds of detention were translated by me orally in Hindi and explained to Shri Harikisan Kishorilal Agrawal, in the presence of the District Superintendent of Police, Nagpur City.
" It has not been found by the High Court that the appellant knew enough English to understand the grounds of his detention.
The High Court has only stated that "he has studied upto 7th Hindi Standard, which is equivalent to 3rd English Standard".
The High Court negatived the contention raised on behalf of the appellant not on the ground that the appellant knew enough English, to understand the case against him, but on the ground, as already indicated, that the service upon him of the Order and grounds of detention in English was enough communication to him to enable him to 924 make his representation.
We must, therefore, proceed on the assumption that the appellant did not know enough English to understand the grounds, contained in many paragraphs, as indicated above, in order to be able effectively to make his representation against the Order of Detention.
The learned Attorney General has tried to answer this contention in several ways.
He has first contended that when the Constitution speaks of communicating the grounds of detention to the detenue, it means communication in the official language, which continues to be English; secondly the communication need not be in writing and the translation and explanation in Hindi offered by the Inspector of Police, while serving the Order of Detention and the grounds, would be enough compliance with the requirements, of the law and the Constitution; and thirdly, that it was not necessary in the circumstances of the case to supply the grounds in Hindi, in our opinion, this was not sufficient compliance in this case with the requirements of the Constitution, as laid down in cl.
(5) of article 22.
To a person, who is not conversant with the English language, service of the Order and the grounds of detention in English, with their oral translation or explanation by the police officer serving them does not fulfil the requirements of the law.
As has been explained by this Court in the case of The State of Bombay vs Atma Ram Sridhar Vidya, (1) cl.
(5) of article 22 requires that the grounds of his detention should be made available to the detenue as soon as may be, and that the earliest opportunity of making a representation against the Order should also be afforded to him.
In order that the detenue should have that opportunity, it is not sufficient that he has been physically delivered the means of knowledge with which to make his representation.
In order that the detenue should be in a position effectively to make his representation against the Order, he should have knowledge of the grounds of 925 detention, which are in the nature of the charge against him setting out the kinds of prejudicial acts which the authorities attribute to him.
Communication, in this context, must, therefore, mean imparting to the detenue sufficient knowledge of all the grounds on which the Order of Detention is based.
In this case the grounds are several, and are based on numerous speeches said to have been made by the appellant himself on different occasions and different dates.
Naturally, therefore, any oral translation or explanation given by the police officer serving those on the detenue would not amount to communication, in this context, must mean bringing home to the detenue effective knowledge of the facts and circumstances on which the Order of Detention is based.
We do not agree with the High Court in its conclusion that in every case communication of the grounds of detention in English, so long as it continues to be the official language of the State, is enough compliance with the requirements of the Constitution.
If the detained person is conversant with the English language, he will naturally be in a position to understand the gravamen of the charge against him and the facts and circumstances on which the order of detention is based.
But to a person who is not so conversant with the English language, in order to satisfy the requirements of the Constitution, the detenue must be given the grounds in a language which he can understand.
and in a script which he can read, if he is a literate person.
The Constitution has guaranteed freedom of movement throughout the territory of India and has laid down detailed rules as to arrest and detention.
It has also, by way of limitations upon the freedom of personal liberty, recognised the right of the State to legislate for preventive detention, subject to certain safeguards in favour of the detained 926 person, as laid down in cls.
(4) & (5) of article 22.
One of those safeguards is that the detained person has the right to be communicated the grounds on which the order of detention has been made against him, in order that he may be able to make his representation against the order of dentention.
In our opinion, in the circumstances of this case, it has not been shown that the appellant had the opportunity, which the law contemplates in his favour, making an effective representation against his detention.
On this ground alone we declare his detention illegal, and set aside the Order of the High Court and the Order of Detention passed against him.
Appeal allowed.
| The detenue was served with the order of detention and the grounds in English.
He did not know English and asked for a translation of these in Hindi.
This request was refused on the grounds that the order and the grounds had been orally translated to him at the time they were served upon him and that English still being the official language communication of the order and grounds in English was in accordance with the law and the Constitution.
^ Held, that the provisions of article 22(5) of the Constitution were not complied with and the detention was illegal.
Article 22(5) required that the grounds should be communicated to the detenue as soon as may be and that he should be afforded the earliest opportunity of making a representation against the order.
Communication in this context meant bringing home to the detenue effective knowledge of the facts and grounds on which the order was based.
To a person who was not conversant with the English language, in order to satisfy the requirement of the Constitution, the detenue must be given the grounds in a language which he can understand and in a script which he can read, if he is a literate person.
Mere oral translation at the time of service was not enough.
| The facts are that the respondent made a representation dated June 18, 1983 against an order of detention passed by the District Magistrate, Moradabad dated November 6, 1982 for his detention under sub section
(3) of section 3 of the , and the same was duly forwarded by the District Magistrate to the Advisory Board on June 21.
The State Government had in the mean while on June 13, 1983 made a reference tn the Advisory Board under section 10 of the Act i.e. within three weeks from the dale of detention together with the order of detention and the grounds therefor for its opinion.
On June 23, 1983 the representation was examined by the Joint Secretary, Home Department who marked the file to the Home Secretary on June 27, 1983 who on his turn placed the file before the Chief Minister for his comments on June 27, 1983.
The Chief Minister took to days to study the file and ultimately passed an order rejecting the representation.
On July 2, 1983 the State Government forwarded the representation made together with the comments to the Government of India and the Central Government rejected the same on July 19, 1983.
It appears that on July S, 1983 the respondent through his counsel simultaneously addressed two representations for revocation of his detention under section 14 of the Act, one addressed to the Prime Minister of India and the other to the State Government.
The representation made to the Central Government addressed in the name of the Prime Minister was received in the Prime Minister 's Secretariat on July 7, 1983 and the grievance of the respondent before the High Court was that the Central Government had not dealt with his application for the revocation of the order of detention under section 14 of the Act.
The High Court observed that the right of the detenu to make a representation to the Central Government for revocation of the order of detention under section 14 of Act was intended to be an additional check or safeguard against the improper exercise of its power of detention by the detaining authority or the State Government and therefore the failure on the part of the Central Government to consider the same was tantamount to a denial of the constitutional safeguard as contemplated by article 22(5) 790 of the Constitution.
It accordingly held the continued detention of the respondent to be illegal.
Aggrieved by the order, the State preferred an Special Leave.
Allowing the appeal, the Court, ^ HELD: (1) The constitutional imperatives of article 22(5) enjoin that where a detenu simultaneously makes representation to the detaining authority as well as an application under section 14 of the Act, they must not be dealt with by the appropriate Government at the same time and there was no question of any conflict of jurisdiction.
If the Central Government were to revoke the order of detention under section 14 of the Act, there would be no representation for the State Government to consider, or refer to the Advisory Board under section 8(b) of the Act nor will there arise any question of Advisory Board making a report to it, or on receipt of such a report, confirming the order of detention under section 8(f).
The other type of cases can be where notwithstanding that the order of detention has been confirmed under section 8(f) the appropriate Government may, at any time, revoke the same under section 14.
The power of revocation conferred on the appropriate Government under section 14 is independent of the power of confirming or setting aside an order or detention under section 8(f) [795H; 796A D] 2.
The power of revocation conferred on the Central Government under section 14 of the Act is a statutory power which may be exercised on information received by tile Central Government from its own sources including that supplied by tile State Government under sub section
(5) of section 3, or from the detenu in the form of a petition or representation.
It is for the Central Government to decide whether or Dot it should revoke the order of detention in a particular case.
[796G H] Any lapse on the part of State Government in forwarding the representation made by the detenu to the Central Government for revocation of the order of detention under section 14 of the Act or non consideration of the same by the Central Government makes the continued detention of the detenu bad.
[793B C] In the present case, however, the detenu was not deprived of the right of making a representation to the detaining authority under article 22(5) of the Constitution read with section 8(1) of the Act.
Although the detenu had no right to simultaneously make a representation against the order of detention to the Central Government under article 22(5) and there was no duty cast on the State Government to forward the same to the Central Government, nevertheless the State Government forwarded the same forthwith.
The Central Government duly considered that representation which in effect was nothing but a representation for revocation of the order of detention under section 14 of the Act.
That being so.
it was not obligatory on the parr of the Central Government to consider a second representation for revocation under section 14 of the Act.
[797A D] 791
| The predecessor in interest of the present appellant applied to the land officer of the respondents for the settlement of the subject,matter of dispute, situated in,Jamshedpur.
The land was let out to him as tenant from month to month at a rent of Re. 1 / per month.
There was no document creating the lease.
The application for settlement contained averments to the effect that the applicant wanted it 1 for garden purposes" that he agreed to hold the land "on monthly tenancy" and that would abide by the "house building rules".
Following a notice to quit the respondents who are the owners of the plot filed a suit for eviction of the appellant and for arrears of rent.
The defence raised was that there was no monthly tenancy and the lease was for agricultural and horticultural purposes and the appellant was an agricultural tenant within the meaning of sections 4 and 6 of the Chotanagpur Tenancy Act who has fixity of tenure.
_The trial court upheld the contention and on appeal it was confirmed by the Subordinate Judge.
On second appeal the High Court of Patna held that the lease was not for agri cultural purposes and ordered eviction.
The present appeal is by way of special leave granted by this Court.
The main contention before this Court was that since the application for Jew made it clear that the land was for "garden 2 purpose" the appellant was raiyat within the meaning of section 6 of the Act.
Held, that the statement of the purpose had to considered alongwith the other facts mentioned in the document, viz. that the application was for a monthly tenancy, and that the applicant agreed to abide by the house building rules.
On such consideration, it was clear that the lease was not for horticultural or agricultural purposes.
| M filed a suit at Asansol against H for recovery of money.
Later, H filed a counter suit at Indore against M for recovery of money.
In the Asansol suit one of the defences raised by H was that the Asansol court had no jurisdiction to entertain the suit.
H applied to the Asansol court to stay the suit but the court refused the prayer.
An appeal to the Calcutta High Court against the refusal to stay was dismissed with the direction that the preliminary issue of jurisdiction should be disposed of by the trial court immediately.
Thereupon, H applied to the Indore court for an injunction to restrain M from proceeding with the Asansol suit pending the disposal of the Indore suit and the court purporting to act under O. 39 Code of Civil Procedure granted the injunction.
M appealed to the Madhya Bharat High Court which dismissed the appeal holding that though O. 39 was not applicable to the case the order of injunction could be made under the inherent powers of the court under section 151 Code of Civil Procedure. ^ Held, that the order of injunction was wrongly granted and should be vacated.
Per, Wanchoo, Das Gupta, and Dayal,JJ.
The Civil courts had inherent power to issue temporary injunctions in cases which were not covered by the provisions of O. 39 Civil Procedure Code.
The provisions of the Code were not 451 exhaustive.
There was no prohibition in section 94 against the grant of a temporay injunction in circumstances not covered by O. 39.
But inherent powers were not to be exercised when their exercise was in conflict with the express provisions of the Code or was against the intention of the legislature.
Such powers were to be exercised in very exceptional circumstances.
A plaintiff of a suit in another jurisdiction could only be restrained from proceeding with his suit if the suit was vexatious and useless.
It was not so in the present case.
It was proper that the issue as to jurisdiction should be decided by the Asansol court as directed by the Calcutta High Court.
The Indore court could not decide this issue.
Beside, it was open to the Asansol court to ignore the order of the Indore court and to proceed with the suit.
This would place M in an impossible position.
An order of a court should not lead to such a result.
Varadacharlu vs Narsimha Charlu, A.I.R. 1926 Mad.258; Govindarajalu vs Imperial Bank of India, A.I.R. 1932 Mad. 180 ; Karuppayya vs Ponnuswami, A.I.R. 1933 Mad.
500(2); Murugesa Mudali vs Angamuthu Madali, A.I.R. 1938 Mad. 190 and Subramanian vs Seetarama, A.I.R. 1940 Mad. 104, not approved.
Dhaneshwar Nath vs Ghanshyam Dhar, A.I.R. 1940 All.185, Firm Richchha Ram vs Firm Baldeo Sahai, A.I.R. 1940 All.241, Bhagat Singh vs Jagbir Sawhney, A.I.R. 1941 Cal.
670 and Chinese Tannery Owners ' Association vs Makhan Lal, A.I.R. 1952 Cal.
550, approved.
Padam Sen vs State of U.P. [1961] 1 section C. R. 884, Cohen vs Rothfield, L. R. and Hyman vs Helm, L. R.(1883) , relied on.
Per, Shah, J. Civil courts have no inherent power to issue injunctions in case not covered by O. 39, rr. 1 and 2 Code of Civil Procedure.
The power of civil courts, other than Chartered High Courts, to issue injunctions must be found within the terms of section 94 and O. 39, rr. 1 and 2.
Where an express provision is made to meet a particular situation the Code must be observed and departure therefrom is not permissible.
Where the Code deals expressly with a particular matter the provision should normally be regarded as exhaustive.
Padam Sen vs State of U. P. [1961] 1 section C. R. 884, relied upon.
| The respondent was appointed as a Sub Inspector of police in a temporary post in 1955.
He was discharged from service on July 13, 1957.
A Writ Petition filed by him in the Allahabad High Court was allowed on August 4, 1959 and consequently he was re instated in service on December 15, 1959.
Thereafter, on January 21, 1960 his services were terminated on the ground that they were no longer required by the State.
A suit for declaration that the said order of termination was null and void was decreed in his favour by the trial court which was affirmed in appeal and also by the High Court in second appeal.
Allowing the State appeal by special leave the Court, ^ HELD: 1.
The considerations which prevailed with the High Court in reaching its findings on the application of Article 311(2) of the Constitution and the bona fides of the superior authority in making the impugned order of termination simpliciter are not warranted in law.
[1130D] 2.
The order terminating the services was order of termination simpliciter passed in accordance with the rules applicable to temporary Government servants.
After the original order of discharge was quashed by the High Court, the respondent was reinstated, allowed increment in pay and one month 's salary in lieu of notice under the 'general rules for termination of services of temporary government servants was also given.
[1128F G] 3.
It was open to the superior authority to terminate the respondent 's services on the ground on which it did so.
And the evidence disclosed no personal motive had influenced the order or that it was passed by way of punishment.
A departmental enquiry is not required under the law.
Instead of instituting disciplinary proceedings against the government servant, the suitability for retention in service could be decided.
[1128H, 1129A, E] State of U.P.v.
Ram Chandra Trivedi; , ; Champaklal Chimanlal Shah vs The Union of India, , Jagdish Mitter vs Union of India, A.I.R. 1964 S.C. 449 and State of Punjab & Anr.
vs Shri Sukh Raj Bahadur, ; ; referred to.
Union of India & Ors.
vs R. section Dhaba, , State of Bihar & Ors.
vs Shiva Bhikshuk Mishra and R. section Sial vs The State of U.P. and Ors., ; applied.
The State of Bihar vs Gopi Kishore Prasad, A.I.R. 1960 SC 689 and Madan Gopal vs The State of Punjab, [1963] 3 SCR 716; distinguished. 1127
| Allowing the petitions, the Court ^ HELD: The supply to the detenus of the grounds of detention in the English language with which they were not conversant could not be considered to be effective communication to them so as to afford to them a real opportunity of making a representation against the order of detention.
Their detention is repugnant to the provisions of Article 22 (5) of the Constitution.
The complicated nature or the length of the document, is not a sine qua non for the fulfilment of the requirement that the grounds must be supplied to the detenu in a language which he understood before the service on him of such grounds could be considered a communication thereof to him.
[206C D, 208E G] Harikisan vs The State of Maharashtra & Ors.
[1962] Suppl.
2 SCR 918; Habibandhu Das vs District Magistrate, Cuttack and Anr, ; ; Nainmal Pratap Mal Shah vs Union of India and Ors. , followed.
| The appellant and another were prosecuted ' for offences under section 5(2) of the Prevention of Corruption Act, 1947.
The trial commenced before the special judge who heard the evidence but before he could deliver judgment was transferred and was succeeded by another special judge.
The latter did not recall the witnesses and did not hear the evidence over again, but proceeded with the trial without any objection from either side from the stage at which his predecessor had left.
He convicted both the accused.
On appeal, the Punjab High Court held that section 350 Criminal procedure Code applied to the trial before a special judge in view of section 8(1) of the Criminal Law Amendment Act, 1952, and the succeeding special judge was entitled to proceed on the evidence recorded by his predecessor.
The controversy is whether section 330 of the Code of Criminal Procedure is applicable to a special judge under sub s.(1) ,of section 8 of the Criminal Law Amendment Act, 1952, though it is not applicable under sub section
(3) of the Act.
Therefore the question is what is meant by the words "The procedure prescribed by the court. for the trial of warrant cases by magistrate" in sub s.(1) of section 8 of the Act, and whether section 350 of the Code prescribe one of the rules of such procedure.
The Act was since amended and therein it is expressly provided that s.350 of the Code applies to the proceedings before a special judge.
The amendment does not govern the present proceeding as the impugned part of the proceedings was concluded before the amendment.
Held, that the Criminal Law Amendment Act, 1952, did not intend that section 350 of the Criminal Procedure Code would be available as a rule of procedure prescribed for the trials of warrant cases, to a special judge as the special Judge was not a magistrate for the purpose of the Act not did the Act require before the amendment that he was to be deemed to be such.
329 The Act in using the words "procedure prescribed by the Code. for the trial of warrant cases by magistrate" meant only the sections 251 to 259 of the Criminal Procedure Code as expressly referred in the code as containing the procedure St specified for the trials of warrant cases by magistrate and did not contemplate section 350 of the Code as a procedure so prescribed.
Held, further, that where in a case there is want of competency and not a mere irregularity, section 537 of the Code of Criminal Procedure has no application.
It cannot be called in aid to make what was incompetent, competent.
Held, also, that it is the right of an accused person that his case should be decided by a judge who has heard the whole of it and that very clear words would be necessary to take away such an important and well established right.
In the present case the succeeding special judge had no authority under the law to proceed with the trial of the case from the stage at which hi , predecessor in office left it, and the conviction of the appellant cannot be supported as he had not heard the evidence in the case himself.
The proceeding before the succeeding special judge were clearly incompetent.
There has been no proper trial of the case and there should be one.
In re Vaidyanatha Iyer, (1954) 1 M. I,.
cable.
Pulukuri Kotayya vs King Emperor, (1947) L. R. 74 I A. 65 and Kimbray vs Dapper, , referred to In re Fernandez.
(1958) 11 M. L. J. 294, approved,.
| Under section 363(1) of the Criminal Procedure Code, 1973 "when the accused is sentenced to imprisonment, a copy or the judgment shall immediately after the pronouncement of the judgment, be given to him free of cost".
Under section 363(2), "on the application of the accused, a certified copy of the judgment or when he so desires z. translation in his own language if practicable or in the language of the Court, shall be given to him without delay and such copy shall in, every case where the judgment is appealable by the accused be given free of cost: Provided that where the sentence of death is passed or confirmed by the High Court, a certified copy of the judgment shall be immediately given to the accused free of cost whether or not he applies for the same".
section 387 of the Code, these provisions contained in Chapter XXVII are applicable so far as may be practicable to the judgment in appeal by a Court of Sessions or Chief Judicial Magistrate.
section 388, however, requires that the order of the High Court on appeal should be certified to lower court and the court to which the High Court certifies its judgment shall make such orders as are comfortable to the judgment of the High Court.
The petitioner was tried for the various offences under s.417 read with s.511 I.P.C`., section 467 I.P.C. section 468 I.P.C. and 471 read with section 467 I.P.C. by the Sessions Court and found guilty of the said offences but sentenced to a soft sentence of simple imprisonment till the rising of the Court and some fine.
Two appeals were filed one by the petitioner and the other by the State.
The High Court dismissed the petitioner 's appeal and accepting the State 's appeal enhanced the sentence to three years on 22 11 73.
On 26 11 73, in conformity with the Judgement of the High Court, the Sessions Court passed necessary orders to the Central Prison Authority Bombay to take him into custody.
He was later on transferred to Yeravada Jail, Pune.
The petitioner under went the full period of im 193 prisonment and filed the special leave petition with a petition for condonation , of delay contending that on 10 12 73 he had applied under section 363(2) read with section 387 of the Code for a certified copy of the judgment dated 22 11 73 through the jail authorities and that though the copy was received by the jail authorities in March 1 1974 from the High Court it was never delivered to him, with the result he not only lost his right to appeal by special leave but was forced to come up with a condonation petition after obtaining another certified copy from the High Court.
Condoning the delay and dismissing the petition the Court ^ HELD: l. Freedom is what freedom does.
In article 21 of the Constitution the guarantee of the personal liberty is phrased with superb amplitude with the words, "No person shall be deprived of his life or personal liberty except according to procedure established by law".
"Procedure established by law" are words of deep meaning for all lovers of liberty and judicial sentinels.
Amplified activist fashion, 'procedure ' means 'fair and reasonable procedure ' which comports with civilised norms like natural justice rooted firm in community consciousness not primitive processual barbarity nor legislated normative mockery.
[201C E] 2.
One component of 'fair procedure ' is natural justice.
Generally speaking and subject to just exceptions, at least a single right of appeal on facts, where criminal conviction is fraught with long loss of liberty, is basic to civilized jurisprudence.
It is integral to fair procedure, natural justice and normative universality save in special cases like the original tribunal being a high bench sitting on a collegiate basis.
In short, a first appeal from the Sessions Court to the High Court, as provided in the Criminal Procedure Code, manifests this value upheld in article 21.
Every step that makes the right of appeal fruitful is obligatory and every action or inaction which stultifies it is unfair and, ergo, unconstitutional (In a sense, even article 19 may join hands with article 21, as the Maneka Gandhi reasoning discloses).
Maneka Gandhi 's case has laid down that personal liberty cannot be cut out or down without fair legal procedure.
[197F, 203D E. F 208E] Pertinent to the point in the case are two requirements: (i) service of a copy of the judgment to the prisoner in time to file an appeal an(l (ii) provision of free legal services to a prisoner who is indigent or otherwise disabled from securing legal assistance where the ends of justice call for such service.
Both these are.
State responsibilities under article 21 and apply where procedural law provides.
for further appeals as well.
[203F G] Maneka Gandhi vs Union of India , referred to.
Judicial Justice with procedural intricacies, legal submissions and critical examination of evidence, leans upon professional expertise; and a failure of equal justice under the law is on the cards where such supportive skill is absent for one side.
Our Judicature and Judicial Process, engineered by kindred legal technology, compel the colloboration of lawyer power for steering the wheels of equal justice under the law.
[204C D] If a prisoner who is sentenced to imprisonment is virtually unable to exercise his constitutional and statutory right of appeal, inclusive of special leave to appear for want of legal assistance, there is implicit in the Court under article 142 194 read with Articles 21 and 39A of the Constitution power to assign counsel for such imprisoned individual "for doing complete justice".
This is a necessary incident of the right of appeal conferred by the Code and allowed by article 136 of the Constitution.
The accused has a right to counsel not in the permissive sense of article 22(1) and its wider amplitude but in the peremptory sense of article 21 confined to prison situations.
[28F G, 209C] 4.
Where the prisoner seeks to file an appeal or revision every facility for exercise of that right shall be made available by the jail administration.
[209E] (a)Courts shall forthwith furnish free transcript copy OF the judgment when sentencing a person to prison term.
In the event of any such copy being sent to the jail authorities for delivery to the prisoner by the appellate, unrevisional or other Court, the official concerned shall with quick despatch.
get it delivered to the sentence and obtain written acknowledgement thereof from him.
Any jailor who by indifference or vendetta, withholds the copy thwarts the Court process and violates article 21 and may pavc the way for holding the further imprisonment illegal.
These obligations are necessary implied in the right of appeal conferred by the Code read with the commitment to procedural fairness in article 21.
section 363 of the Cr.
P.C. is an activist expression of this import of article 21 and is inviolable.
[204A B & 209DE] John Richard Argersinger vs Raymond Hamlin, ; 530 at 535 36 and 554, quoted with approval.
article 8 of the Universal Declaration on Human Rights and article 14(3) of the International Covenant on Civil and Political Rights referred to.
(b) The State which prosecuted the prisoner and set in motion the process which deprived him of his liberty shall pay to the assigned counsel such sum as the Court may equitably fix.
the Court may judge the situation and consider from all angles whether it is necessary in the ends of justice to make available legal aid in the particular.
That discretion resides in the Court.
[209A B, & G] (c) These benign prescriptions operate by force of article 21 "strengthened by article 19(1)(d) read with sub article (5) from the lowest to the highest Court where deprivation of life and personal liberty is in substantial peril.
[209H] 5.
Since the Supreme Court is the last in Indian pyramid of justice every party in person elicits from the Court extra solicitude so that he may not suffer from a sense of handicap due to the absence of professional legal service.
The present petition, the party though proffessional legal aid by the Court preferred to argue himself [1971H. 198A, 209B] 6.
(a) The Supreme Court has laid down certain fundamental principles its governing its jurisdiction when special leave is sought under article 136 of the Constitution.
The Court cannot depart from this criteria lest the endless chase for justice by every defeated litigant, civil and criminal should flood it into dysfunction.[198A B] 195 Ujjagar Singh & Anr.
vs State (Delhi Admn), order in S.L.P. (Crl.) No. A 1319 etc.
Of 1977 dt. 31 7 78 (unreported case).
(b) The soft justice syndrome vis a vis white collar offenders scandalizes the Court.
It stultifies social justice and camouflages needed severity with naive leniency.
[196G] (c) Social defence is the criminological foundation of punishment.
In the instant case, the trial judge has confused between correctional approach to prison treatment and nominal punishment verging on decriminalisation of serious social offences.
The first is basic and the second pathetic.
That Court which ignores the grave injury to society implicit in economic crimes by the upperberth 'mafia ' ill serves social justice.
Soft sentencing justice is gross injustice where many innocents are the potential victims.
It is altogether a different thing to insist on therapeutic treatment, hospital setting and correctional goals inside the prison "even punctuated by parole, opportunities for welfare work meditational normalisation and healthy self expression so that the convict may be humanised and on release rehabilitated as a safe citizen.
Coddling is not correctional any more than torture is deterrent.
While iatrogenic prison terms are bad because they dehumanize, it is functional failure and judicial pathology to hold out a benignly self defeating non sentence to deviants who endanger the morals and morale, the health and wealth of society.
[199E H, 200A] Mohammad Giasuddin vs State of Andhra Pradesh [1978] I SCR 153.
applied.
|
Civil Appeal No. 323 of 196.
Appeal from the judgment and order dated September 25, 1958, of the Bombay High Court in I.T.R. No. 3 of 1958.
K. N. Rajagopal Sastri and D. Gupta, for the appellant.
R. J. Kolah, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the respondent.
January 31.
The Judgment of the Court was delivered by 904 section K. DAS, J.
The Commissioner of Income tax, Bombay City I, has preferred this appeal to this Court on a certificate of fitness granted by the High Court of Bombay under section 66A (2) of the Indian Income tax Act, 1922.
The assessee, who is the respondent before us, was assessed to income tax as an individual in respect of his income for the assessment year 1954 55.
The taxing authorities included in the assessee 's total income for the year to sums, namely, a sum of Rs. 410/ and a sum of Rs. 14,170/ .
It was stated that these two sums accrued in the relevant account year in the following circumstances.
On January 12, 1953 the assessee created a trust in respect of a sum of Rs, 25,000/ , the trustees whereof were the Central Bank Executor & Trustee Co., the assessee himself his wife and brother.
The scheme of the trust deed was that the said sum of Rs. 25,000/ was set apart by the assessee and it was provided that the interest on that amount should be accumulated and added to the corpus and a minor daughter of the assessee, named Chandrika, was to receive the income from the corpus increased by the addition of interest, when she attained the age of 18 on February 1, 1959.
She was to receive the income during her life time and after her death the corpus was to go to persons with whom we are not concerned.
The income derived from the said trust fund amounted to Rs. 410/ in the relevant account year and the taxing authorities included this amount in the total income of the assessee, purporting to act under section 16(3)(b) and/or section 16(3)(a)(iv) of the Income tax Act.
As regards the second sum of Rs. 14,170/ it appears that on December 1, 1941, the assessee 's father had created a trust in respect of some shares and a cash sum of Rs. 30,000/ for the benefit of his four sons including the assessee.
The trustees were the Central Bank Executor and Trustee Co. Ltd., the assessee himself and one other person.
The said trustees were to hold the trust funds upon trust to 905 pay the net interest and income thereof to the assessee "for the maintenance of himself and his wife and for the maintenance, education and benefit of all his children till his death".
The sum of Rs. 14,170/ .
it was stated, accrued as income in the hands of the assessee in the relevant account year from the said trust funds.
The view of the taxing authorities and the Income tax Appellate Tribunal was that under the aforesaid provision of the trust deed the assessee was the sole beneficiary and that the amount was received by him for his own benefit and he was not accountable to any one in respect of the amount and, therefore, this amount was liable to be included in his total income.
On behalf of the assessee the contention was that the sum of Rs. 410/ aforesaid was not liable to be included in the total income of the assessee inasmuch as Chandrika, the minor daughter of the assessee, had no right to the income nor any beneficial interest therein in the relevant year of account under the provisions of the trust deed and, therefore, neither section 16(2)(a)(iv) nor section 16(3)(b) applied to the case.
As to the sum of Rs. 14,170/ the case of the assessee was that it should not be included in his total income as the sole beneficiary, because the beneficiaries under the trust settlement were not only the assessee but his wife and children as well.
It was contended that the assessee received the amount in trust for himself and his wife and children and it was open to the Department to proceed under the first proviso to section 41 (1) of the Income tax Act and recover tax on a separate assessment made on the assessee as a trustee in respect of the said sum at the maximum rate, because the individual shares of the beneficiaries on whose behalf the money was receivable were indeterminate and not known.
The Income tax Appellate Tribunal, on an appeal by the assessee, did not accept these contentions.
The Tribunal was then moved to state a 906 case to the High Court on two questions of law those questions were: "1.
Whether the sum of Rs. 410/ is properly includible in the assessee 's total income either in accordance with the provisions of section 16(3)(b) and/or section 16(3)(a)(iv) of the Indian Income tax Act, 1922? 2.
Whether the sum of Rs. 14,170/ is properly includible in the total income of the assessee as the sole beneficiary thereof under the trust settlement made on 1 12 1941 by Dhanji Devsi?" On being satisfied that these questions of law arose out of the order of the Tribunal dated April 24, 1957, the Tribunal stated a case under section 66(1) of the Income tax Act.
The High Court answered both the questions in favour of the assessee by its judgment and order dated September 25, 1958.
There after the High Court granted a certificate of fitness under section 66A(2) of the Income tax Act and, as we have already stated, the present appeal has been brought to this Court on the strength of that certificate.
We proceed now to deal with the first question which relates to the sum of Rs. 410/ .
The question is whether this sum was properly includible in the assessee 's total income under the provisions of section 16(3)(b) of the Income tax Act, because Mr. Rajagopal Sastri appearing for the appellant has not pressed the claim which was made before the Tribunal on behalf of the Department under the provisions of section 16(3)(a)(iv).
Before we go to the provisions of section 16(3)(b) it is advisable to set out the material portions of cls.
3 and 4 of the trust deed of January 12, 1953.
Those clauses were in these terms: "3.
The Trustees shall hold and stand possessed of the trust fund and the investments for the time being representing the 907 same and receive the income, divided, interest and rents thereof and invest the same and the resulting income, dividend, interest and rents thereof so as to accumulate at compound interest to the intent that such accumulations shall be added to the principal trust fund until the settler 's daughter Chandrika shall attain the age of eighteen years which age she will attain on the 1st February 1959 and after the expiration of the above named period the Trustees shall deal with and dispose of the trust fund as hereinafter stated.
The Trustees shall hold and stand possessed of the trust fund and the accumulations thereof upon trust to pay the net interest and income thereof after deducting all out goings and charges for collection to the said Chandrika for her life for her maintenance. " It is clear from these clauses that during the minority of Chandrika, the income from the trust funds was to be accumulated and added to the trust funds and after the attained majority on February 1, 1959, she was to get only the income from the enlarged trust funds.
Now, in the relevant year of account Chandrika was still a minor and under the terms of the trust deed she had no right to the trust income nor any beneficial interest therein; she could neither receive nor enjoy the income.
She did not derive any benefit whatsoever from the trust funds during her minority and even after she attained majority, she did not have any right to the trust income which arose during her minority and her only right was to enjoy the income arising from the enlarged trust funds, i. e., the original trust funds and the accumulations of trust income during her minority.
Therefore, the sum of Rs. 410/ was not the income of Chandrika, but was the income of the trustees and the income was impressed with a trust, namely, that it should be added to 908 the trust corpus.
The question is, does section 16(3)(b) apply to such a case ? We shall presently read section 16(3), but before we do so it is necessary to refer to the scheme of section 16 of the Income tax Act.
The section deals with the computation of total income as defined in section 2(15) of the Act, and provides that what sums are to be included or excluded in determining the total income.
The definition of total income in section 2(15) involves two elements (a) the income must comprise the total amount of income, profits and gains referred to in section 4(1), and (b) it must be computed in the manner laid down in the Act.
The exemption granted under the Act is of two kinds; certain classes of income are exempted from tax and also excluded from the computation of total income, while certain other classes of income exempted from tax are to be included in the assessee 's total income.
Now cl.
(a) of sub section
(i) of section 16 provides the sums exempted from tax under certain provisions of the Act should be included in the assessee 's total income.
Clause (b) lays down the mode of computing a partner 's share in the profit or loss of the firm.
Under cl.
(c) income which arises to any person by virtue of any settlement or disposition from assets remaining the property of the settler or disponer etc.
is taxed as his income.
The object of the legislation is clearly designed to overtake and circumvent a tendency on the part of the tax payers to endeavour to avoid or reduce tax liability by means of settlements.
Sub section (2) deals with grossing up of dividend etc.
Then we come to sub section (3).
This sub section aims at foiling an individual 's attempt to avoid or reduce the incidence of tax by transferring his assets to his wife or minor child or admitting his wife as a partner or admitting his minor child to the benefits of a partnership in a firm in which such individual is a partner.
The sub section creates an artificial 909 liability to tax and must be strictly construed.
Now, let us read the sub section.
(3) In computing the total income of any individual for the purpose of assessment there shall be included: (a) so much of the income of a wife or minor child of such individual as arises directly or indirectly: (i) from the membership of the wife in a firm of which her husband is a partner; (ii) from the admission of the minor to the benefits of partnership in a firm of which such individual is a partner; (iii)from assets transferred directly or indirectly to the wife by the husband otherwise than for adequate consideration or in connection with an agreement to live apart; or (iv) from assets transferred directly or indirectly to the minor child, not being a married daughter by such individual otherwise than for adequate consideration; and (b) so much of the income of any person or association of persons as arises from assets transferred otherwise than for adequate consideration to the person or association by such individual for the benefit of his wife or a minor child or both.
" The argument on behalf of the appellant is that the conditions laid down in cl.
(b) of sub section
(3) of section 16 are fulfilled in the present case and therefore the Department was intitled to include in the 910 total income of the assessee so much of the income in the hands of the trustees as arose from the assets transferred by the assessee for the benefit of his minor child.
It is pointed out that the conditions laid down in cl.(b)are (1) that there must be income in the hands of any person or association of persons (trustees in the present cases;) (2) the income must arise from assets transferred otherwise than for adequate consideration to the trustees; and (3) the transfer must be for the benefit of the minor child.
It is argued that when the conditions are fulfilled and the only exceptional case, namely, where the transfer is for adequate consideration is out of the way, cl.
(b) must apply and the Department is entitled to include the income in the hands of the trustees in computing the total income of the individual assessee who made the transfer.
At first sight the argument appears to be attractive and supported by the words used in the clause.
On a closer scrutiny, however; it seems to us that cl.
(b) must be read in the context of the scheme of 16 and the two clauses (a) and (b) of sub section
(3) thereof must be read together.
So read the only reasonable interpretation appears to be the one which the High Court accepted, namely, that the scheme of the section requires that an assessee can only be taxed on the income from a trust fund for the benefit of his minor child, provided that in the year of account the minor child derives some benefit under the trust deed either he receives the income, or the income accrues to him, or he has a beneficial interest in the income in the relevant year of account.
But if no income accrues, or no benefit derived and there is no income at all (so far as the minor child is concerned), then it is not consistent with the scheme of section 16 that the income or benefit which is non existent so far as the minor child is concerned, will be included in the income of his father.
Take, for example, a case where the assets 911 were transferred otherwise than for adequate consideration for the benefit of a minor child, but the child has attained majority before the relevant year of account.
After the child attains majority the sub section would cease to apply and the income from assets transferred for the benefit of the child would no longer be taxable in the parent 's hands.
The reason must be that in the relevant year of account there is no benefit to the minor child by the transfer, even though the transfer was originally made for the benefit of the child.
The same principle may be illustrated by another example which has been dealt with by the High Court.
Take a case where there are intermediate beneficiaries before the minor gets the benefit under the trust deed.
In such a case the learned Advocate for the Department conceded in the High Court that cl.
(b) of sub section
(3) of section 16 would not be attracted till the minor derived benefit under the trust deed.
Mr. Rajagopal Sastri did not make any such concession before us; but seems to us that principle underlying the illustration is incontestable.
If the minor derives no benefit in the relevant year of account, it can hardly be said that for that year the transfer was for the benefit of the minor child.
Section 4, the charging section, of the Income taxs Act makes it clear that what is taxed is the total income of the relevant account year, and total income, according to section 2 (15), is the income, profits and gains referred to in sub section
(1) of section 4 and computed in the manner laid down in the Act.
In other words, the tax is levied on a yearly basis.
It is true that in the present case there was income in the hands of the trustees and the trustees were liable to pay tax thereon.
That, however, is not the question before us.
The question before us is whether such income in the hands of the trustees could be included in the total income of the assessee under cl.
(b) of sub s.(3) of section 16.
In our opinion, when 912 cl.
(b) of sub section
(3) of section 16 talks of benefit of the minor child it refers to benefit which arises or accrues to the minor in the year of account.
If there be no such benefit, the income cannot be included in the total income of the individual who made the transfer.
There is a third type of case which also illustrate the same principle.
If only a portion of the income of the trust is reserved for the minor child, cl, (b) would apply and that portion of the income which is set apart for the benefit for the child would be taxable in the hands of the settler.
All these illustrations only establish the principle that the minor child must derive some benefit in the relevant year of account before cl.
(b) would apply.
Furthermore, we are also of the view that cls.
(a) and (b) of the sub section must be read together, Clause (a) begins with the expression "so much of the income of a wife or minor child of such individual as arises directly or indirectly", and this is followed by the four circumstances numbered (i), (ii), (iii) and (iv).
There is no doubt that so far as cl.
(a) is concerned, there must be income of the wife or minor child.
Mr. Rajagopal Sastri has not disputed this.
The obvious intention of the Legislature in enacting cl.
(b) was to see that the provisions of cl.
(a) were not defeated by the assessee creating a trust and in order to deal with that mischief it enacted cl.
Instead of the expression "so much of the income of a wife or minor child" the expression used in cl.
(b) is "so much of the income of any person or association of persons etc.".
Obviously, when a trust is created the income is income in the hands of the trustees.
But the underlying principle in the two cls.
(a) and (b) appears to be the same, namely, there must be income of the wife or minor child under cl.(a) and there must be some benefit derived by the wife or minor child in the year of account under cl.(b).
This is consistent with the scheme of section 16 913 and particularly sub section
(3) thereof.
which is intended to foil an individual 's attempt to avoid or reduce the incidence of tax by transferring his assets to his wife or minor child etc.
When, however, the minor child derives no benefit under the trust deed in the year of account, it is not consistent with the scheme of section 16 to say that even though there is no accrual of and income or benefit in the year of account in favour of the minor child, yet the income must be included in the total income of the individual concerned.
Our attention has been drawn to section 64 of the Income tax Act, 1961 (43 of 1961).
That section corresponds to section 16 of the Income tax Act, 1922 and cl.
(v) of section 64 has made the position clear by using the expression 'immediate or deferred benefit" so that even a benefit which is postponed and does not arise in the year of account will not entitle the Department to include the income in the hands of the trustees in the total income of the settler.
We do not, however, think that the Act of 1961 can be taken as declaratory of the law which excited previously; nor can s 64 (v) be taken as determinative of the true scope and effect of cl.
(b) of sub section
(3) of section 16.
The Legislature may have thought fit in its wisdom to widen the scope of the law that existed previous to it so as to take in deferred benefits as well.
We think that we must interpret cl.
(b) of sub section
(3) of the context of the section as it occurs in the Income tax Act of 1922.
We have been referred to two English decisions Dale vs Mitcalfe (1) and Mauray vs Commissioners of Inland Revenue (2).
One of the decision Dale vs Mitcalfe (1) related to section 25 of the English Income Tax Act, 1918 (8 & 9 Geo.
V. C. 40) and the other related to section 20(1)(c) of the English Finance Act 1922 (12 and 13 Geo V. C. 17).
Those provisions were differently worded and appear in a different 914 context and decisions of the English Courts given on provisions differently worded and appearing in a different context are not, in our opinion, helpful in determining the true scope and effect of cl.
(b) sub section
(3) of section 16 of the Income tax Act, 1922.
We have therefore, come to the conclusion that on a true construction of cl.
(b) of sub section
(3) of section (3), the view expressed by the High Court was correct and the sum of Rs. 410/ did not form part of the total income of the assessee.
The High Court correctly answered the first question referred to it.
We now turn to the second question.
The relevant clause of the trust deed of December 1, 1941 is cl. 7 which reads as follows: "The trustees shall hold and stand possessed of the Trust Fund mentioned in the second Schedule hereto and the accumulations thereof referred to in clause 3 thereof upon Trust to pay the net interest and income thereof to the Settler 's son MANILAL for the maintenance of himself, his wife and for the maintenance, education and benefit of all his children till his death.
" The question before us is whether under this clause the income received by the assessee is impressed with a trust in favour of himself, his wife and children to whom he is accountable as a trustee for the amount received.
In other words, the question is whether the trust deed of December 1, 1941, created two trusts, the one requiring the trustees to pay the income from the trusts funds to the assessee and the second requiring the assessee to spend the income for the maintenance of himself and his wife and for the maintenance, education and benefit of his children.
In cases where property is given to a parent or other person standing or regarded as in loco parentis, with a direction 915 touching the maintenance of the children, the question often arises whether the settler intended to impose a trust by the direction or whether the direction was only the motive of the gift.
The line between the two classes of cases has not been drawn always very firmly.
It is, however, clear that in construing provisions of this kind the Court will not enforce or treat as obligatory a mere wish or desire or hope on the part of the settler that the donee of the fund should or would ought to or is expected to apply it for the benefit of other persons; on the other hand, the Court does regard as binding and obligatory and does enforce a direction or trust in favour of third parties if such a binding obligation can be clearly ascertained from the document.
Instances of cases where no trust is created and of cases where trust is created and detailed at pages 85 and 86 of Lewin on Trusts (15th Edition).
We are unable to hold that in the case before us cl.
7 of the trust deed merely expressed a wish or desire or hope on the part of the settler.
We are in agreement with the High Court that the direction contained in cl. 7 created a trust in favour of the assessee, his wife and children.
The expression "for the maintenance of himself and his wife and for the maintenance, education and benefit of all his children" is not indicative of a mere desire or hope.
It imposes a binding and obligatory trust.
In re.
Booth, Booth vs Booth (1) a testator gave the residue of his estate to his executors, on trust, to pay to his wife or permit her to receive the annual income thereof during her life, "for her use and benefit and for the maintenance and education of my children".
It was held that the wife took the income subject to a trust for the maintenance and education of the 916 children.
A similar view was expressed in Raikes vs Ward (1) and Woods vs Woods (2) On behalf of the appellant our attention was drawn to section 8 of the (II of 1882) which states that the subject matter of a trust must be property transferable to the beneficiary and it must not be merely beneficial interest under a subsisting trust.
It is contended that the assessee held a beneficial interest in the income from the trust funds under the trust deed of December 1, 1941, and in respect of beneficial interest another trust could not be created in favour of himself, his wife and children.
We think that this argument proceeds on a misconception.
The assessee did not create a second trust in respect of the beneficial interest which he held under the trust deed of December 1, 1914.
The assessee father created two trusts by that trust deed, one requiring the trustees to pay the trust income to the assessee and the other requiring the assessee, who was himself a trustee, to spend the income for the maintenance, education and benefit of his children.
It is not disputed that by a single document more than one trust may be created.
It is not, therefore, true to say that the subject matter of the trust in the present case was merely a beneficial interest under a subsisting trust.
Under section 41 of the Income tax Act it was open to the Department either to tax; the trustees of the trust deed or to tax those on whose behalf the trustees had received the amount.
The true position of the assessee in this case was that he was a trustee and not the sole beneficiary under the trust deed.
He held the income on trust for himself, his wife and his children.
The shares of the beneficiaries were indeterminate and therefore under the first proviso to section 41(1) of the 917 Income tax Act, it was open to the Department to levy and recover the tax at the maximum rate from the assessee; but that did not entitle the Department to include the sum of Rs. 14,170/ in the total income of the assessee as though he was the sole beneficiary under the trust deed, Mr. Rajagopal Sastri made it clear that the intention of the Department was to include the sum in the total income of the assessee in order to levy and charge super tax on him.
This, we do not think, the Department was entitled to do.
In respect of the sum of Rs. 14,170/ the assessee was a trustee, within the meaning of section 41 of the Income tax Act, appointed under a trust declared by a duly executed instrument in writing and as such trustee he had the right to contend that his assessment in respect of the money received by him not as a beneficiary but as a trustee could only be made under the first proviso to section 41 (1).
We have, therefore, come to the conclusion that on the second question also the answer given by the High Court was correct.
The result, therefore, is that the appeal fails and is dismissed with costs.
Appeal dismissed.
| In 1953 the assessee created a trust in respect of a sum of money and provided that the interest on that amount was to be accumulated and added to the corpus and that his minor daughter C was to receive the income from the corpus increased by the addition of interest when she attained the age of 18 years.
In the relevant account year, when C was still a minor, the income derived from the trust fund was Rs. 410 Earlier in 1941, the assessee 's father had created a trust in respect of certain shares and money directing the trustees to pay the net interest and income thereof to the assessee "for the maintenance of himself and his wife and for the maintenance, education and benefit of all his children till his death".
In the relevant account year a sum of Rs. 14,170 accrued as income in the hands of the assessee from the said trust funds, 903 The taxing authorities included both these incomes in the total income of the assessee. ^ Held, that neither of these two incomes could be included in the total income of the assessee.
Under section 16(3)(b) of the Indian Income tax Act, upon which the authorities relied, the assessee could only be taxed on the income from the trust funds for the benefit of his minor child if in the year of account the minor child either received the income or it accrued to her or she had a beneficial interest in the income in the relevant year of account.
In the present case though there was income in the hands of the trustees and they were liable to pay tax thereon, there was no benefit to the minor child in that year.
As such the sum of Rs. 410 did not form part of the total income of the assessee.
The trust deed of 1941 created two trusts, the one requiring the trustees to pay the income from the trust funds to the assessee and the second requiring the assessee to spend the income for the maintenance of himself and his wife and for the maintenance, education and benefit of his children.
It was not a case where the settler merely expressed a wish or desire or hope but he gave as direction which created a trust in respect of the income in the hands of the assessee in favour of himself, his wife and children.
The assessee did not create the second trust in respect of the beneficial interest which he held under the trust of 1941 and section 8 of the Indian Trusts Act which forbade the creating of such a trust was inapplicable.
The assessee was a trustee and not the sole beneficiary; and since the shares of the beneficiaries were Indeterminate it was open to the Department to levy and recover tax at the maximum rate from the assessee as trustee under the first proviso to s.41(1) but the Department was not entitled to include the sum of Rs. 14,170 in the total income of the assesse as though he was the sole beneficiary under the trust deed.
| In January, 1956 the assessee company whose assets had been valued at Rs. 155 lacs as on December 31, 1955 decided to terminate the services of 22 of its employees with effect from 31st March, 1956 and to pay them retrenchment compensation and compensation for termination of employment.
Thereafter Davids, who held the shares of the company entered into an agreement with Tatas to sell to them all the shares for Rs. 155 lacs.
The agreement provided that compensation and gratuity payable to the Directors and employees whose services had been terminated and the annuity payable to the managing director should be deducted from the purchase consideration.
The assessee claimed deduction under section 10(2)(xv) of the Indian Income Tax Act, 1922 of a sum of Rs. 1.64 lakhs paid by way of retrenchment compensation and compensation for termination of service during the assessment year 1957 58 and a sum of Rs. 16,885 which was the amount of annuity paid to the managing director in each of the three succeeding assessment years.
The Income Tax officer disallowed the amounts on the ground that the services of the directors and employees had been terminated not as business expediency but because the purchasers of the shares made it a condition under the agreement.
On appeal the Appellate Assistant Commissioner, affirming the view of the Income Tax Officer, held that the decision to pay compensation could not be said to have been taken solely with a view to the business requirement of the company.
Dismissing the assessee 's appeal the Appellate Tribunal held that the expenses had not been incurred for the purpose of the company but purely as a result of the bargain between Davids and Tatas and assuming that the payments were beneficial to the assessees by reason of the reduction in its establishment expenses, no deduction could be allowed under section 10(2) (xv) since the payment was made to the benefit of a third party.
Relying principally upon the decision of this Court in Gordon Woodroffee Leather Manufacturing Co. vs The Commr.
of Income tax, [1962] Supp. 2 SCR 211, the High Court held that the amount involved in the case did not satisfy the test applicable to the expenditure allowable under section 10(2)(xv) of the Act and, therefore, disallowed the expenditure of Rs. 1.27 lakhs out of a sum of Rs. 1.64 lakhs on the ground that it had not been incurred for commercial expediency.
The High Court also disallowed the annuity paid to the managing director in the succeeding three assessment years.
879 Allowing the assessee 's appeals ^ HELD: 1(a) The three tests laid down by this Court in Gordon Woodroffee 's case viz., (1) that the payment should have been made as a matter of practice which affected the quantum of salary, (ii) that there was an expectation by the employee of getting a gratuity and (iii) that the sum of money was expended on the ground of commercial expediency and in order indirectly to facilitate the carrying on of the business of the assessee have to be read disjunctively.
So read the present case which satisfied the third test fell under section 10(2) (xv) of the Act.
The High Court was in error in holding that the amount in question did not satisfy any of the tests applicable to the expenditure allowable under the section.
[893H] (b) In order to claim deduction under the section an assessee has to show that the expenditure in question (1) was not an allowance of the nature described in any of the clauses (i) to (xiv) of the section, (ii) was not in the nature of a capital expenditure or personal expenses of the assessee and (iii) had been laid out or expended wholly and exclusively for the purposes of his business, profession or vocation.
[891G] (c) Even assuming that the motive behind the payment of retrenchment compensation was that the terms of the agreement of the sale of shares should be satisfied, as long as the amount had been laid out or expended wholly and exclusively for the purpose of the business of the assessee there could be no good reason for denying the benefit of this section if there was no other impediment to do so.
[891H] In the instant case the assessee company was neither dissolved nor was its business undertaking sold.
It continued to exist as a juristic entity and continued to function even after the transfer of its shares to Tatas.
The expenditure was laid out for the purpose of the assessee company 's own trade and not for the trade of Tatas who were only shareholders of the company.
As a result of the expenditure the company was benefited and it was possible for it to earn more profits as a consequence of the reduction in the wage bill.
It cannot be said that Tatas were in any way benefited financially by reason of reduction in the consideration payable by them for the shares.
[893B C] Gordon Woodroffae Leather Manufacturing Co. vs The Commissioner of Income tax, Madras, [1962] Supp.
2 SCR 211, applied.
(i) Commissioner of Inland Revenue vs Patrick Thomson, Ltd. (in Liquidation), (ii) Commissioners of Inland Revenue vs J. & R. Allan, Ltd. (In liquidation), (iii) Commissioners of Inland Revenue vs Pattigrew & Stephens, Ltd., , referred to.
Commissioner of Income tax, Gujarat vs Laxmi Cement Distributors (P) Ltd., , Commissioner of Income tax, Bombay City I vs Fairdeal Corporation (P) Ltd., ; Commissioner of Income tax, Bombay City I vs Patel Cotton Co. Pvt. Ltd., ; approved.
880 (d) Moreover it is too late in the day whatever might have been the position about two decades ago, to treat the expenditure incurred by the management in paying reasonable sums by way of gratuity and retrenchment compensation or compensation for termination of services as not business expenditure.
Such expenditure would ordinarily fall within the scope of section 10(2)(xv) of the Act.
[889C] 2.
The argument that since there was no necessity to retrench the services of all the employees, the expenditure could not be treated as one laid out wholly and exclusively for the purpose of business has no force.
The expression "wholly and exclusively" does not mean "necessarily".
Ordinarily it is for the assessee to decide whether any expenditure should be incurred in the course of his or its business.
Such expenditure may be incurred voluntarily and without any necessity and if it is incurred for promoting the business and to earn profits the assessee can claim deduction under the section even though there was no compelling necessity to incur such expenditure.
The fact that somebody other than the assessee was also benefited by the expenditure should not come in the way of an expenditure being allowed by way of deduction under the section, if it satisfies otherwise the test laid down by law.
[894D G] In the instant case the company thought that its business could be carried on with a smaller number of employees and the only way to reduce the number was to terminate the services of all employees by paying compensation and to re employ only some of them.
Thereby the company reduced its expenditure on wages payable to its employees.
It could not therefore be said that compensation was paid with an oblique motive and without regard to commercial considerations or expediency.
[895F]
| The appellant firm was assessed to sales tax under the pro visions of the Bihar Sales Tax, 1944, for three periods commencing from October 1, 1947, and ending on March 31, 1050.
Its claim for certain deductions was disallowed, and its applications in revision under section 24 Of the Act to the Board of Revenue, Bihar, were dismissed by three orders dated August 20, 1953, September 3, 1953 and April 30, 1954.
Under section 25(1) of the Act the appellant applied to the Board to state a case to the High Court of Patna on certain questions of law, but the applications were dismissed by order dated August 30, 1954, on the ground that no questions of law arose.
The appellant then moved the High Court for requiring the Board to state a case on the said questions of law.
The High Court dismissed the applications in respect of the first two periods of assessment, but by order dated November 17, 1934, directed the Board to state a 277 case in regard to the third period on one of the questions of law which only, in its opinion, arose.
By its judgment dated January 21, 1957, the High Court answered the question against the appellant.
On February 17, 1955, the appellant made applications to the Supreme Court for special leave to appeal against the orders of the Board of Revenue dated August 20, 953, and September 3, 1953, in respect of the first two periods; and on April 12, 1955, it similarly applied for special leave in respect of the third period.
Leave was granted in respect of all the three applications by order dated December 23, 1955, the leave granted in regard to the third period being confined to the order of the Board dated August 30, 1954.
When the appeals came up for hearing the question was raised as to whether the appeals were maintainable in view of the fact that no applications for leave to appeal were filed against the orders of the Board of Revenue and the High Court subsequent to the orders of the Board in respect of which only special leave had been granted.
Held, that though the words of article 136 of the Constitution of India are wide, the Supreme Court has uniformly held as a rule of practice that there must be exceptional and special circumstances to justify the exercise of the discretion under that Article.
Pritam Singh vs The State, ; , V. Govinda rajulu Mudaliar vs The Commissioner of Income tax, Hyderabad, A.I.R. 1959 S.C. 248 and Messrs Chimmonlall Rameshwarlal vs Commissioner of Income tax (Centyal), Calcutta, , relied on.
Dhakeswari Cotton Mills Ltd. vs Commissioner of Income tax, West Bengal, ; and Baldev Singh vs Commis sioner of Income tax, Delhi and Ajmer, , explained.
Held, further, that in the circumstances of the present case the appellant was not entitled to a grant of special leave against the orders of the Board of Revenue where the result would be to by pass the High Court by ignoring its orders.
Held, also, that though special leave might have been granted on an application made under article 136, the Court is not precluded from coming to a conclusion at the time of the hearing of the appeal that such leave ought not to have been granted.
Baldota Brothers vs Libra Mining Works, A.I.R. 1961 S.C.C. 100, followed.
| The appellant a Public Limited Company filed its Income Tax Return relating to the assessment years 1957 58 and 1959 60 under the Income Tax Act, 1922.
The Income Tax Officer passed assessment orders on 16 4 1959 and on 30 3 1961 respectively in respect of the two years.
Certain depreciation was allowed by the Income Tax Officer for both the years.
On 5 10 1965.
the Income Tax Officer addressed a letter to the appellant stating that there had been a mistake in the calculation of the depreciation allowance.
The appellant was asked by that letter if it had any objec tion to.
the rectification of the mistake in the calculation of the depreciation amounts.
for the above mentioned two years.
On 2nd February, 1966, the Income Tax Officer ad dressed a letter under section 147(a) of the Income Tax Act, 1961 alleging that the income of the appellant had escaped assessment for failure of the appellant to disclose all materials facts.
The appellant in his reply stated that the depreciation was calculated by the Income Tax authorities and there was no failure on the part of the appellant in disclosing all the facts.
Thereafter, the Income Tax Offi cer issued the notices on 4 3 1966 stating that he had reasons to believe that the income of the appellant charge able to tax for the assessment years in question had escaped assessment within the to meaning of section 147 of the 1961 Act.
The appellant was called upon to furnish fresh return.
The appellant challenged the said notices by filing a Writ Petition in the High Court.
According to the appellant there was no omission or failure on its part to disclose fully and truly all material facts necessary for the assess ment; that all material facts were placed before the assess ing authority; and that the fact that initial depreciation on the new assets had been allowed was also on the record of the department.
It was further contended that if there was any oversight on the part of the Income Tax Officer the appellant could not be held responsible.
The respondent filed an affidavit in the High Court contending that the appellant did not disclose in the return that initially depreciation in respect of certain items of capital assets had been allowed in the past and that the same should be taken into account while calculating the depreciation allow able for the assessment years in question.
The High Court dismissed the Writ Petition on the ground that there was an omission or failure on the part of the appellant to disclose truly and fully the fact that the initial depreciation had been allowed in respect of items of capital assets in ques tion during the previous years.
Under section 10 of the 1922 Act an assessee is liable to pay tax under the head "Profits and Gains of Business, Profession or Vocation, carried on by him".
Such profits or gains shall be computed after making a number of allowances.
Those allowances included the allowances provided by section 10(2)(vi) which deals with depreciation under section 147(a) of the Income Tax Act, 1961.
if the Income Tax Officer has reason to believe that the reason of the omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment, income charge able to tax has escaped assessment for that year he may subject to the provisions of sections 148 to 151 assess or reassess such income or recompute the loss or the deprecia tion allow 93 ance as the case may be.
According to section 148 of 1961 Act before making the assessment, reassessment, or recompu tation under section 147, the income Tax Officer shall serve on the assessee a notice containing all or any of the re quirements which may be included in a notice under section 149(1).
The Income Tax Officer has also before issuing such notice to record his reasons for doing so.
Section 149 prescribes a time limit for the notice.
The time limit in respect of section 147(a) is 8 years.
Allowing the appeal, HELD: 1.
Two conditions have to be satisfied before an Income Tax Officer acquires jurisdiction to issue notice under section 148 beyond the period of 4 years but within the period of 8 years: (i) The Income Tax Officer must have reason to believe that income chargeable to tax has escaped assessment; (ii) He must have reason to believe that such income has escaped assessment by reason of the omission or failure on the part of the assessee to disclose fully and truly material facts necessary for his assessment for that year.
The duty which is cast upon the assessee is to make a true and full disclosure of the primary facts at the time of the original assessment.
The duty of the assessee in any ease does not extend beyond making a true and full disclosure of primary facts.
Once he has done that his duty ends.
It is for the Income Tax Officer to draw the correct inference from the primary facts.
It is no responsibility of the assessee to advise the Income Tax Officer with regard to the inference which he should draw from the primary facts.
If an Income Tax Officer draws an inference which appears subsequently to be erroneous mere change of opinion with regard to that inference would not justify initiation of action for reopening assessment.
[98 E G, H, 99 A B] Income Tax Officer vs Lakhmani Mewal Dass, followed.
What facts are material and necessary for assessment will differ from case to case.
Calcutta Discount Co. vs Income Tax Officer, , followed.
The Income Tax return has to be filled in form, No. C under rule 19 of the Income Tax Rules, 1922.
Part V of that form deals with depreciation.
The said part requires a number of columns to be filled in by the assessee.
It has not been suggested that any of the information furnished or any of the particulars given in those columns by the appellant Company were factually incorrect.
When Income Tax Officer relies upon his own records for determining the amount of depreciation 'and makes.
a mistake in doing so, the respon sibility for the mistake cannot be ascribed to an omission or failure on the part of the assessee.
[99 D 100 B D, E F] Commission of Income Tax vs Bhanji Lavli, fol lowed.
(Taxes are the price that is paid for civilisation.
It is essential that those who are entrusted with the task of calculating and realising that price should familiarise themselves with the relevant provisions and become well versed with the law on the subject.
Any remissness on their part can only be at the cost of the national exchequer and must necessarily result in loss of revenue.
At the same time, it has to be borne in mind that the policy of law is that there must be a point of finality in all legal proceed ings).
| The appellant made a provision for a sum of Rs.49,19,520/ in his books of account for the discharge of its tax liabil ities.
The appellant claimed deduction of the said amount for computation of his net wealth on the ground that it was a debt owed by the assessee within the meaning of section 2(m) of the Wealth Tax Act.
The claim was disallowed by the Wealth Tax Officer, the Appellate Asstt.
Commissioner of Wealth Tax and the Tribunal.
The High Court of Calcutta answered the reference in favour of the revenue and against the assessee relying on its earlier decision in the ease of Assam Oil Co. Ltd. Allowing the appeal by certificate, HELD: This Court has reversed the decision of Calcutta High Court in the case of Assam Oil Co. Ltd. In that case this Court held by majority that the amount set apart by an assessee in his balance sheet on the valuation date as an estimated provision for meeting its tax liability less the last instalment of the payment of the advance tax was a debt owed by the assessee within the meaning of section 2(m) of the Wealth Tax Act, 1957 and was deductible in computing its net wealth as on that date.
The Court followed the said deci sion.
[296C G] Assam Oil Co. vs Commissioner of Wealth Tax, Central Calcut ta, followed.
| The Income tax Officer found that in the assessment year 1953 54 the respondent assessee company had declared excess dividends amounting to Rs. 1,87,691 and he levied additional income tax on it at 5 annas in the rupee after deducting incometax borne by the profits of the previous year at 4 annas per rupee, a surcharge of 5 per cent.
less rebate of one anna in the rupee as allowed by the Finance Act, 1953.
The Income tax Tribunal held that the excess dividends were deemed to be paid out of undistributed profits of the earlier year ending June 30, 1951 on which a rebate of one anna in the rupee was given in the assessment year 1952 53.
It further observed that additional income tax was also a tax on income, and that the Finance Act could say that the tax would be payable on the income of any year preceding the previous year.
The Tribunal, however, referred three questions to the High Court which the High Court compressed into one as below : " Whether additional income tax has been legally charged under Clause (ii) of the proviso to paragraph B of Part 1 of the First Schedule :to the Indian Finance Act, 1951, as applied to the assessment year 1953 54 by the Indian Finance Act, 1953, read with section 3 of the Indian Income tax Act? " The High Court held that section 3 of the Indian Income tax Act put the liability to tax on the total income of the previous year or what can be deemed to be income.
The Finance Act provided the rate applicable to the income so found and a method of computing the total income.
The Finance Act in providing that additional income tax should be paid upon the accumulated profits of the previous years went beyond the purpose for which the Finance Act was passed every year, and the Finance Act could not stand by itself without the support Of section 3 of the Indian Income tax Act.
On appeal by the Commissioner of Income tax on certificate of the High Court: Held, that the High Court was right in answering the ques tion framed by it, in the negative.
The Finance Act provided that the tax should be levied on the " total income " as defined in and determined under the Indian Income tax Act.
The Additional income tax was not properly laid upon the total income because what was actually taxed was never a part of the total income of the previous year, nor deemed to be so. 874
| The appellant company which carried on business in tea garden tools and requisites and also acted as agents for selling tea, derived the bulk of its income from selling commission on tea.
The assessment year in question is 1950 60.
In the relevant previous year which ended on June 30, 1958 the assessee for the first time in its history entered into certain transactions in jute.
On April 17, 1958 the assessee had contracted to purchase 1100 bales of B Twill and 2500 bales of corn sacks.
the contract for B Twill was with two parties, M/s. Raghunath Sons (P) Ltd. for 500 bales and M/s. Mahadeo Ramkumar for 600 bales.
The corn sacks were all purchased from Tulsider Jewaraj under three contracts for 800 bales, 1000 bales and 700 bales respectively.
On June 18, 1958 the assessee entered into a contract with M/s. Lachhminarain Kanoria & Co. to sell the aforesaid quantities of B Twill and corn sacks.
The assessee had no godown for keeping the goods and had not handled them.
The goods were in the godown of the mills and only the delivery orders addressed to the mills changed hands.
The amount realised on sale to M/s. Lachhminarain Kanoria & Co. came to Rs. 10,49,865/=.
The assessee had however purchased the corn sacks and D Twill for Rs. 11,48,399/ .
The transactions thus resulted in a loss of Rs, 98,534/=/ to the assessee and the assessee claimed adjustment of this loss in the computation of its income for the assessment year 1959 60.
The Income tax officer held that the transactions involving mere transfer of delivery notes and not actual delivery of the goods were of a speculative character as contemplated in explanation 2 to sec.
24(1) and the loss could be set off only against speculation profits, and as there were no speculation profits is that year, he held that the loss would be carried forward and set off against speculation profits in the future.
The appellate Commissioner on appeal by the assessee held that the transaction were not speculative and the loss should be treated as business loss.
In appeal by the Department, the Tribunal held that this case came within the scope of Sec.
24(1 ) read with explanation 2 and restored the order of the Income tax officer.
In reference, the High Court answered the question formulated by the Tribunal in the affirmative and against the assessee.
Section 24(1) of the Indian Income tax Act, 1922, provides 'that where an assessee sustains a loss under any of the heads of income chargeable to income tax as enumerated in 9. 6 of the Act in any year, he shall be entitled to have the loss set off against his income, profits or gains under any other head in that year.
This general provision is qualified by the first proviso which permits the set off of a loss in speculative business against the assessee 's profit and gains, if any, in a similar business only.
Explanation 1 says that where the speculative transactions are of such a nature as to constitute a business, the business shall be deemed to be distinct and separate from any other business.
Explanation 2 defines a speculative transaction as a transaction in which a contract for purchase and sale of any commodity is periodically or ultimately settled otherwise than by the actual delivery or transfer of the commodity.
This appeal has been preferred by the assessee company after obtaining special leave from this Court, Dismissing the appeal, 181 ^ HELD: The words actual delivery in explanation 2 means real as opposed to notional delivery.
For the income tax purposes speculative transaction means what the definition of that expression in explanation 2 says.
Whether a transaction is speculative in the general sense or under the Contract Act is not relevant for the purpose of this explanation.
The definition of "delivery" in section 2(2) of the which has been held to include both actual and constructive or symbolical delivery has no bearing on the definition of speculative transaction in the explanation.
A transaction which is otherwise speculative would not be a speculative transaction within the meaning of explanation 2 if actual delivery of the commodity or the scrips has taken place; on the other hand, a transaction which is not otherwise speculative in nature may yet 'be speculative according to explanation 2 if there is no actual delivery of the commodity or the scrips.
The explanation does not invalidate speculative transactions which are otherwise legal but gives a special meaning to that expression for purpose of income tax only.
The question referred to the High Court in the present case has been correctly answered.
[186E G; 187D] D. M. Wadhwana vs Commissioner of Income tax West Bengal , approved.
Raghunath Prasad Poddar vs Commissioner of Income fax, Calcutta , over ruled.
Duni Chand Rataria vs Bhuwalka Brothers Ltd. ; Bayana Bhimayya and Sukhdevi Rathi vs The Government of Andhra Pradesh ; and The State of Andhra Pradesh vs Kolla Sreeramamurthy, ; , held inapplicable.
Manalal M. Varma & Co. (P) Ltd. vs Commissioner of Income tax, and Butterworty vs Kingsway, , referred
| The income derived by the Bar Council of Maharashtra from securities (interest) and other income by way of enrollment fees during the accounting periods relevant to the assessment years 1962 63,1963 64,1964 65 was subjected to tax by the Income Tax Officer.
Since the Central Government had accorded approval to the assessee for the purpose of section 10(23A) during the pendency of the appeal before the Tribunal by a notification dated August 5, 1966 with effect from December 28,1961, the Tribunal held that the assessee Council was entitled to exemption under section 10(23A) in respect of its income by way of enrollment fees.
The Tribunal remanded the case back to the Appellate Assistant Commissioner and directed him to dispose of the case by examining the question as to the purpose for which the securities were held by the assessee Council.
It observed that if the said securities were held for educational purpose or for any other charitable purpose then the exemption under section 11 would be admissible to the extent available under the law.
The High Court, on a reference made at the instance of the assessee Council, answered the question: "Whether on the facts and in the circumstances of the case, the assessee Council could be taken to be a body intended to advance any object of general public utility falling within section 2(15) for purposes of section 11 of the Act ?" in favour of the assessee and hence the appeals by Revenue after obtaining special leave from the Court.
Dismissing the appeals, the Court ^ HELD: 1.
Having regard to the Preamble of the and the nature of the various obligatory functions including the one under clause (d) enjoined upon every State Bar Council under section 6(1) of the , it is clear that the primary or dominant purpose of an institution like the assessee Council is the advancement of the object of general public utility within the meaning of section 2(15) of the Income Tax Act, 1961 and as such the income from securities held by the assessee Council would be exempt from any tax liability under section 11 of the Income Tax Act, 1961.
[551 E G] 543 2.
If the primary or dominant purpose of a trust or institution was charitable any other object which by itself might not be charitable but which was merely ancillary or incidental to the primary or dominant purpose would not prevent the trust or institution from being a valid charity.
The restrictive words "not involving the carrying on any activity for profit" in section 2(15) of the Income Tax Act, 1961, qualify "object" and not the advancement or accomplishment thereof.
In other words, the true meaning of the restrictive words is that when the purpose of a trust or institution was the advancement of an object of general public utility it was that object of general public utility and not its accomplishment or carrying out which must not involve the carrying on of any activity for profit.
Here, admittedly, the State Bar Councils are not indulging in any activity for profit and hence the question of applying the restrictive words in s.2(15) does not arise.
[547 C F, 548 G H] Commissioner of Income Tax, Madras vs Andhra Chamber of Commerce, ; Additional Commissioner of Income Tax, Gujarat vs Surat Art Silk Cloth Manufacturers Association, , reiterated.
|
C.A No. 10 of 1961.
Appeal from the judgment and decree dated March 5, 1956 of the Madras High Court in A.S. No. 256 of 1951, R. Ramamurthi Aiyar and R. Gopalakrishanan, for the appellants.
R. Ganapathy Iyer and D. Gupta, for the Respondent.
February 1.
The Judgment of the Court was delivered by 957 SHAH, J.
Messrs.
Ramalingam & Co. hereinafter called the assessees are a firm doing business principally as exporters of vegetable fibres to foreign countries.
They have their place of business at Tuticorin in the district of Tirunelveli in the State of Madras.
The contracts of sale are made by correspondence on approval of samples sent by the assessees to the foreign buyers.
The contracts are C.I.F. or C.F. and the price is payable by draft upon bank credit to be opened by the buyer.
The course of dealing between the assessees and the foreign buyers was as follows: After the contract for a quantity of goods was finalised by correspondence and the price ascertained the foreign buyer opened with his own bankers an irrevokable Letter of Credit in favour of the assessees for 95% of the net invoice value.
Intimation of the opening of the Letter of Credit was then given to the assessees through a bank operating in the Province of Madras.
The assessees then shipped the goods, obtained Bills of Lading in their own names and lodged the shipping documents endorsed in blank with their own bankers together with the invoice and Bill of Exchange for 95% of the invoice value.
The assessees then discounted the Bills through their own bankers.
The shipping documents were forwarded to the foreign banker who on presentation paid 95% of the invoice amount.
The Bill of Lading was then delivered by the foreign banker to the buyer and the goods were unloaded.
For the year 1945 46 the Commercial Tax Officer, Tirunelveli determined for the purpose of computing tax liability under the Madras General Sales Tax Act, 1939, the turnover of the assessees at Rs. 15,61,200/ .
The Commercial Tax Officer rejected the claim of the assessees that the amount of Rs. 15,22,000/ in respect of overseas transactions 958 was exempt from liability to tax.
He held that the export transactions in respect of which the exemption was claimed were sales within the province of Madras and subject to sales tax under the Madras General Sales Tax Act, 1939.
The order of the Sales tax Officer was confirmed by the Board of Revenue, Madras, except as to the amount of freight.
The Board of Revenue held that the property in the goods passed to the buyers in a large majority of the export transactions when the goods were shipped.
On remand, the commercial Tax Officer recomputed the turnover at Rs. 11,23,603/8/8 inclusive of the local sales of the value of Rs. 75,082/14/0.
After paying the tax the assessees sued the Province of Madras in the Court of the Subordinate Judge, Tuticorin for a decree for Rs. 10,485/ being the amount of tax paid by them on export sales pursuant to the order of assessment and interest thereon at 6% until realisation.
The assessees contended that the export sales were at the material time "totally outside the provisions of the Madras General Sales Tax Act, and the order of assessment was ultra vires and beyond the powers of the authorities".
The Subordinate Judge decreed the claim for Rs. 10,323/ with interest at 6% till realization.
In appeal, the High Court of Madras reversed the decree and dismissed the suit filed by the assessees.
With certificate granted by the High Court this appeal is preferred by the assessees.
It is common ground that in the year 1945 46, under the Madras General Sales Tax Act; 1939, the taxing authorities had no power to levy sales tax on sales which took place outside the Province.
The decision of the appeal, therefore, depends upon the determination of the question whether the export sales took place within the Province.
If they took place within the Province, the sales were properly taxed.
We may observe that the plea that a suit for a decree for refund of tax paid in pursuance of 959 an order of assessment passed by the taxing authorities on the basis that the sales took place within the Province did not lie in the civil court, was not raised in the Court of First Instance, nor in the High Court.
Counsel for the State of Madras has also stated before us that he does not desire to contend in this case that the suit was, in view of the adjudication by the taxing authorities, not maintainable.
We therefore proceed to deal with the only question which was debated before us at the Bar: whether the export sales which are the subject matter of dispute in this appeal were completed within the Province of Madras.
The dispute relates to turnover in respect of seventeen export transactions with merchants in different destinations overseas.
As typical of the transactions the files relating to the shipments to Messrs Begbie Philips and Haylay, London and Messrs Hindley and Company, London were tendered in evidence and the case proceeded to trial on the footing that those transactions were typical of all other transactions.
On April 16, 1945, the Mercantile Bank of India wrote a letter in connection with the shipment to Messrs Begbie Philips and Hayley, London about a contract of sale of five tons palmyra fibre.
The letter is in the following terms: "Dear Sirs, Without any responsibility on the part of this bank we beg to advice receipt of a telegram from our London office reading: "We open irrevocable credit favour Ramalingam Company, Tuticorin, $400 (four hundred pounds) drafts on Mercantile Bank of India Limited, 60 d/st. invoices, full set shipped bills of lading order bank endorsed certificate of origin insurance covered in London about 5 tons palmyra fibre at $80 (eighty pounds) not per ton C and F. Shipment soonest India to 960 United Kingdom by approved ship.
Part shipments allowed expiry 6th October, 1945 a/c Bagbie Phillips Hayley, Limited, licence No. 198281.
" When submitting documents under this credit we would emphasise the fact that the goods must be described both in the bill of lading and invoice identically as advised above and the relative bill marked "Drawn under telegraphic credit No. 88 A/36 of 12th April 1945".
We shall furnish you with further particulars on receipt of written confirmation.
Owing to frequent mutiliations in coded telegrams the above message is subject to any necessary corrections on receipt of confirmation by mail.
Kindly note that the negotiation of bills under this credit is entirely optional on our part and this advice does not release you from the liability attaching to the drawer of a Bill of Exchange.
This letter must be produced with all bills drawn under this credit.
Yours faithfully (signed).
Manager".
On May 28, 1945, the National Bank of India, Tuticorin wrote a letter to the assessees in regard to a sale of a quantity of fibre, which is as follows: "Dear Sirs, We beg to inform you that we are in receipt of advice by cable of 24th instant 961 from our London office that they have received from Messrs Hindley and Company, Limited, No. 35, Crutched Friars, London, E. C. 3 an undertaking to honour your bills on Messrs. Hindley and Company, Limited No. 35 Crutched Friars, London E. C. to the extent of $370 (three hundred and seventy pounds) sterling being 95 per cent of invoice value on the following conditions: Bill to be drawn payable 90 days after sight and to be accompanied by Invoices.
Full sets of on board bills of lading made out to order and blank endorsed representing shipments of: Five tons Tuticorin medium cut and dyed bassine 7 inches and 7 1/2 inches equally at $78 per ton in 1 Cwt.
(ballots) C and F United Kingdom post Shipment June/July from Cochin freight paid of deducted and credit reduced accordingly Freight basis 22nd May, 1945.
Insurance including was risk with unlimited transshipment covered in London.
Such shipping documents are to be delivered on payment of the bills which should bear the clause "Drawn under N.S.I. credit number 83 cabled 24th May 1945".
Bills fulfilling the above mentioned conditions must be negotiated on or before Extended till 30th April 1946.
Please note that the bank accepts no liability for the above undertaking and this advice does not release you from the liability attaching to the drawer of a Bill of Exchange.
The above message is continued by us on behalf of the opening bank for your information but without any responsibility on our 962 part except for the correctness of this copy of the telegram as received by us.
When negotiating bills please produce this letter to have the amounts recorded on the back hereof.
I am, Dear Sirs, Yours faithfully (Signed). Manager.
" On receipt of intimation the assessees shipped the goods and handed over the Bill of Lading and the invoice to their own bankers, accompanied by a Bill of exchange for the amount for which the Letter of Credit was opened by the foreign banker.
The assessees then discounted the bills for the amount for which credit was opened.
The taxing authorities taxed these transactions, because, in their view, the sales were effected in the Province of Madras and not outside.
The assessees in the plaint in paragraph IV cl.
(e) stated that one of the salient features of the business was that "The bills of lading are handed over to the Plaintiffs bankers with the clear and definite instructions to pass on the shipping documents to the buyers only on payment.
They are what is styled in commercial parlance as D/P bills, i.e., documents to be handed over on payment".
This averment in the plaint was not traversed in their written statement by the defendants.
The only witness examined at the trial was A.V. Samuel, one of the partners of the assessees ' firm.
He deposed to the practice which was followed by the assessees.
He stated. "After shipment we obtain Bill of lading made out in our name as shipper.
We draw a bill of Exchange and along with bill of lading and invoice.
These documents are deposited with National Bank.
We endorse in Bank on the Bill of Lading.
It is only after payment of 963 the Bill of exchange by the foreign Bank on behalf of the purchaser, the Bill of Lading is handed over.
Till the bill is paid for no title in the goods pass and the goods are at our disposal.
If the bill is not honoured the Bank will ask us for directions as regards the disposal of goods.
Under instruction from the buyers foreign banks give instruction to any local Bank to give credit up to a certain limit.
Inspite of letter of credit as drawers we are responsible under the bill of exchange.
We can discount in any bank and not merely in the credit opening bank.
" In cross examination he stated that the "credit opening bank opens credit on behalf of the purchasers.
Those banks are not known to us before.
" It is clear from the terms of the two letters dated April 16, 1945, and May 28, 1945, that the foreign buyers had opened letters of credit for the benefit of the assessees, for the amounts set out therein.
These, it appears, were general credits and intimation thereof was given by the local bankers in India who were agents of the foreign bankers.
The local bankers, however, did not undertake any liability by intimating the opening of the letter of credit and the assessees were expressly informed that they (the assessees) would not be released from their liability under the Bills of Exchange drawn by them.
The assessees negotiated the Bills through their bankers after receiving an intimation of the opening of credit.
Counsel for the State of Madras submits that the property in the goods which were the subject matter of sale passed in Tuticorin when the assesees received an amount which represented the price the goods against delivery of the Bills of Lading endorsed in blank with authority to complete the endorsement.
In substance, the plea is that the oreign bank opening the letter of credit is an agent 964 of the buyer, and that bank authorizes its own branch to pay the price to the shippers and by the arrangements made by opening the letter of credit, price is paid to the vendor in his own country against the bill of Lading endorsed in blank.
It is necessary to appreciate the true nature of the commercial letter of credit extensively used in foreign trade.
During the last few decades, expansion of international trade involving overseas transactions has raised problems of peculiar difficulty.
The parties to a contract to supply goods are generally unknown to each other and the contract is the result of correspondence between the parties.
Often neither the seller nor the buyer is prepared to trust the other.
Again, between the delivery of the goods in such trade on board the ship and its ultimate delivery at the destination, the seller is reluctant to tie up his funds.
The seller himself in generally a purchaser of goods from the local market and has invested funds in purchasing the goods.
The buyer is also unwilling to make payment in advance.
To tide over the problem created by this reluctance of the seller and the buyer, bankers of international repute and credit interpose.
They for a small commission undertake by opinion letters of credit to honour the Bill of Exchange drawn by the seller accompanied by the insurance policy and the invoice relating to the goods forming the subject matter of the contract.
At the instance of the buyer the banker issues a letter of credit which is addressed to the world at large or more frequently to specified person or persons: thereby the banker undertakes to honour the Bills of Exchange drawn on the faith of that letter.
Invariably, the Bills are payable in future but the exporters as the beneficiaries under the contract, have the guarantee of the banker that payment will be forthcoming and are also entitled to discount the bills with any party cognisant of the undertaking of the original 965 banker.
There are generally four parties to such a transaction the buyer, the seller, the banker who issues the letter of credit, called the issuing banker and the intermediary or the negotiating banker who allows credit to the seller on the bills lodged with him.
Between the buyer and the issuing banker, the contract is that he will pay bills drawn by the seller of the goods against delivery of the Bill of Lading, insurance certificate and invoice.
The buyer undertakes to put the banker in funds to enable him to make payment if the documents are presented.
The relation between the buyer and the banker is not of pricipal and agent.
The contract between the issuing banker and the negotiating banker may be of a dual character.
Where the issuing banker 's instructions are merely to advise the credit, and the credit calls for bills to be drawn either on the issuing banker or on the buyer, the intermediary banker may negotiate the beneficiary 's bills.
In such a case he stands qua the issuing banker as principal to principal, for either he succeeds to the rights of the beneficiary under the credit or, if he negotiates relying on the credit alone, as acceptor of the offer it contains.
If the instructions call upon the intermediary banker to pay or to negotiate the beneficiary 's bills, the intermediary banker is the issuing banker 's agent.
Under the terms of the contract between the assessees and the foreign buyer the price was to be paid "by draft after 90 days under bank credit to be opened by the buyer for 95% of the net invoice amount.
" By the letter of credit the foreign banker guaranteed to pay the amount in London.
The issuing bank intimated the opening of the letter of credit, but there is no evidence of any express directions to its agent in India to pay or negotiate the draft.
The letter of credit was general; and it was open to any bank on the faith 966 thereof to negotiate the bill issued by the assessees.
The payment made by the intermediary bank was not and could not therefore be on behalf of the issuing bank much less on behalf of the buyer.
By negotiating the bill, the banker of the assessees became the acceptor of the offer contained in the letter of credit of the issuing bank, and as such acceptor obtained the Bill of Lading, the invoice and the Bill of Exchange and presented them for payment.
This arrangement was not an arrangement for payment of price on behalf of the buyer.
It appears clear from the two letters dated April 4, 1945, and May 28, 1945, that the banks accepted no liability by intimating the opening of the letter of credit and the liability attaching to the assessees by drawing Bills of Exchange was not discharged.
If the liability of the assessees, as drawers of the Bills of Exchange continued, the arrangement made by the buyer could not be regarded as one to pay the price through his banker in India.
As stated hereinbefore, the relation between the buyer and his issuing banker was not of principal and agent, nor was the relation between the issuing bankar and the intermediary banker that of principal and agent.
The two bankers were interposed for the protection of the seller as well as the buyer.
The issuing banker did not purport to act as agent of the buyer and the intermediary banker accepted the general offer of the issuing banker by negotiating the draft.
By so accepting the offer and by taking over the Bill of Lading, the insurance certificate and the invoice which represented title to the goods the intermediary banker did not act as an agent of the seller.
The price in respect of the goods was not received in the Province of Madras, and the property in the goods also did not pass to the buyer 967 within the Province.
Tax in respect of the sale of fibre by the assessees under the disputed transactions was therefore not exigible under the Madras General Sales Tax Act.
The appeal is therefore allowed: the decree of the High Court is set aside, and the decree of the trial Court is restored with costs in this Court and the High Court.
Appeal allowed.
| The assessees were doing business principally as exporters of vegetable fibres to foreign countries.
The contracts of sale were C.I.F. or C.F. and were made by correspondence on approval of samples sent by the assessees to the foreign buyers.
The price was payable by draft upon bank credit to be opened by the buyer; who opened with his own bankers 955 an irrevocable letter of credit in favour of the assessees for 95% of the net invoice value.
Intimation of the opening of the letter of credit was then given to the assessees by the local bankers in India who were the agents of the foreign bankers.
The local bankers, however, did not by intimating the opening of the letter of credit undertake any liability, and the assessees were expressly informed that they would not be released from their liability under the Bill of Exchange drawn by them.
On receipt of the information about opening of the letter of credit the assessees shipped the goods, obtained bills of leading in their own names and lodged the shipping documents endorsed in blank with their own bankers together with the invoice and Bill of Exchange for 95% of the invoice value.
Bills of lading were handed over to the assessees bankers with the definite instructions to pass on the shipping documents to the buyers only on payment.
The assessees then discounted the Bills through their own bankers.
The shipping documents were forwarded to the foreign bankers who on presentation paid 95% of the invoice amount.
The Bill of lading was then delivered by the foreign banker to the buyer and goods were unloaded.
For the year 1945 46 the Commercial Tax officer taxed the assessees under the Madras General Sales Tax Act, 1930.
The Commercial Tax officer rejected the claim of the assessees that the amounts in respect of overseas transactions was exempt from liability to tax, because in his view the export transactions were sales within the province of Madras.
The Board of Revenue confirmed the order and held that the property in the goods passed to the buyers in a large majority of the export transaction when the goods were shipped.
The assessees contended that the export sales were at the material time totally outside the provisions of the Madras General Sales Tax Act and the order of the assessment was ultra vires and beyond the powers of the Authority.
The plea of the State of Madras was that the foreign bank opening the letter of credit is an agent of the buyer, and that the bank authorises its own branch to pay the price to the shippers and by the arrangements made by opening the letter of credit, price is paid to the vendor in his own country against the Bill of lading endorsed in blank.
^ Held, that the price in respect of the goods was not received in the Province of Madras and the property in the goods also did not pass to the buyer within the province.
Therefore tax in respect of the sale transactions was not exigible under the Madras General Sales Tax Act 1939.
The expansion of international trade involving overseas transactions has raised problems of peculiar difficulty.
The 956 parties to a contract (which is as a result of correspondence) are generally unknown to each other; often neither the seller nor the buyer is prepared to trust the other and the seller is reluctant to tie up his funds and the buyer is also unwilling to make payment in advance.
To tide over the problem created by this reluctance of the seller and the buyer, bankers of international repute and credit interpose.
They for small commission undertake by opening letters of credit to honour the bill of exchange drawn by the seller accompanied by the insurance policy and the invoice relating to goods forming the subject matter of the contract.
At the instance of the buyers the bank issues a letter of credit which is addressed to the world at large or more frequently to specified person or persons thereby the bank undertakes to honour the Bills of Exchange drawn on the faith of that letter.
Invariably the bills are payable in future but the exporters as the benefit ciaries under the contract, have the guarantee of the banker that payment will be forthcoming and are also entitled to discount the Bills with any party cognisant of the undertaking of the original banker.
The relation between the buyer and his issuing banker was not of principal and agent, nor was the relation between the issuing banker and the intermediary banker that of principal and agent.
The two bankers were interposed for the protection of the seller as well as the buyer.
The issuing banker did not purport to act as agent of the buyer and the intermediary bankers accepted the general offer of the issuing banker negotiating the draft.
By so accepting the offer and by taking over the Bill of Lading, the insurance certificate and the invoice which represented title to the goods the intermediary banker did not act as an agent of the seller.
| The appellant was a private limited company carrying on business mainly as building contractors in the State of Orissa.
It was assessed to sales tax under the provisions of the Orissa Sales Tax Act, 1947 and made payments towards the tax assessed.
Subsequently on the basis of the decision of this Court in State of Madras vs Gannon Dunkerley & Co. 119591 S.C.R. 379, the appellant filed a writ petition in the High Court challenging the said assessments.
The High Court quashed the assessments and directed refund of that portion of the tax which was not barred by limitation on the date of filing the application The appellant thereupon filed an application before the Sales Tax Officer for refund of the amount payable to him in view of the said decision.
The Sales Tax Officer rejected the, application on the ground that it was made by only one of the directors.
The Commissioner of Sales Tax in A revision filed against the said order set aside the order of the Sales Tax Officer and held that the appellant was entitled to the refund applied for and directed the said officer to issue refund payment orders as early as possible.
Subsequently the Commissioner issued a notice to the appellant under r. 83 of the Orissa Sales Tax Rules, 1947 calling upon it to show cause why the order earlier passed by him should not be reviewed.
The Commissioner then reviewed his.
previous orders and held that the appellant would be entitled to refund of the taxes paid subject to the disallowances made in his order.
The appellant appealed to this Court by special leave.
The question for consideration was whether the Commissioner 's Order in review was a proper order under r. 83.
HELD: Rule 83 provides a summary remedy within a narrow compass.
The jurisdiction of the Commissioner under this rule is a limited one and is confined only to the correction of arithmetical or clerical mistakes or 'errors apparent on the face of the 'record arising or occurring from accidental slip or.
omission in an order passed by him.
However widely the said expressions are construed they cannot countenance a reargument on merits on questions of fact or law, or permit a party to raise new arguments which he has not advanced in the first instance.
B] In the present case the Commissioner reversed his previous order which was passed on merits mainly on two grounds : (i) that the application for refund in respect of certain amounts was barred by limitation , and (ii) the assessee was not entitled to a refund of the amounts paid before the assessment orders were made on the grounds that the said amounts were not the subject matter of the appeals wherein the assessments were set aside.
Both the question of limitation as well as the question of construction of the appellate orders and the impact of those orders on the amounts paid towards tax before the assessments were arguable questions of fact and law.
The Department should have raised the said questions before the Commissioner at the time he first made the 100 order directing refund of the ammounts claimed by the assessee.
The wrong conclusion if any arrived at by the Commissioner in his earlier order, because of the fact that the said two arguments were not advanced before him, cannot be said to be error on the face of the record arising or accruing from an accidental slip or omission.
The errors if any arose because the Department did not raise those points before the Commissioner.
They were also errors not apparent on the face of the record for the decision depended upon consideration of arguable questions of limitation and construction of documents.
Indeed the Commissioner reheard the argument and came to a conclusion different from that which he arrived at on the earlier occasion.
That is not permissible under 83 of the Rules.
[104 E 105 A]
| The appellant company which carried on business in tea garden tools and requisites and also acted as agents for selling tea, derived the bulk of its income from selling commission on tea.
The assessment year in question is 1950 60.
In the relevant previous year which ended on June 30, 1958 the assessee for the first time in its history entered into certain transactions in jute.
On April 17, 1958 the assessee had contracted to purchase 1100 bales of B Twill and 2500 bales of corn sacks.
the contract for B Twill was with two parties, M/s. Raghunath Sons (P) Ltd. for 500 bales and M/s. Mahadeo Ramkumar for 600 bales.
The corn sacks were all purchased from Tulsider Jewaraj under three contracts for 800 bales, 1000 bales and 700 bales respectively.
On June 18, 1958 the assessee entered into a contract with M/s. Lachhminarain Kanoria & Co. to sell the aforesaid quantities of B Twill and corn sacks.
The assessee had no godown for keeping the goods and had not handled them.
The goods were in the godown of the mills and only the delivery orders addressed to the mills changed hands.
The amount realised on sale to M/s. Lachhminarain Kanoria & Co. came to Rs. 10,49,865/=.
The assessee had however purchased the corn sacks and D Twill for Rs. 11,48,399/ .
The transactions thus resulted in a loss of Rs, 98,534/=/ to the assessee and the assessee claimed adjustment of this loss in the computation of its income for the assessment year 1959 60.
The Income tax officer held that the transactions involving mere transfer of delivery notes and not actual delivery of the goods were of a speculative character as contemplated in explanation 2 to sec.
24(1) and the loss could be set off only against speculation profits, and as there were no speculation profits is that year, he held that the loss would be carried forward and set off against speculation profits in the future.
The appellate Commissioner on appeal by the assessee held that the transaction were not speculative and the loss should be treated as business loss.
In appeal by the Department, the Tribunal held that this case came within the scope of Sec.
24(1 ) read with explanation 2 and restored the order of the Income tax officer.
In reference, the High Court answered the question formulated by the Tribunal in the affirmative and against the assessee.
Section 24(1) of the Indian Income tax Act, 1922, provides 'that where an assessee sustains a loss under any of the heads of income chargeable to income tax as enumerated in 9. 6 of the Act in any year, he shall be entitled to have the loss set off against his income, profits or gains under any other head in that year.
This general provision is qualified by the first proviso which permits the set off of a loss in speculative business against the assessee 's profit and gains, if any, in a similar business only.
Explanation 1 says that where the speculative transactions are of such a nature as to constitute a business, the business shall be deemed to be distinct and separate from any other business.
Explanation 2 defines a speculative transaction as a transaction in which a contract for purchase and sale of any commodity is periodically or ultimately settled otherwise than by the actual delivery or transfer of the commodity.
This appeal has been preferred by the assessee company after obtaining special leave from this Court, Dismissing the appeal, 181 ^ HELD: The words actual delivery in explanation 2 means real as opposed to notional delivery.
For the income tax purposes speculative transaction means what the definition of that expression in explanation 2 says.
Whether a transaction is speculative in the general sense or under the Contract Act is not relevant for the purpose of this explanation.
The definition of "delivery" in section 2(2) of the which has been held to include both actual and constructive or symbolical delivery has no bearing on the definition of speculative transaction in the explanation.
A transaction which is otherwise speculative would not be a speculative transaction within the meaning of explanation 2 if actual delivery of the commodity or the scrips has taken place; on the other hand, a transaction which is not otherwise speculative in nature may yet 'be speculative according to explanation 2 if there is no actual delivery of the commodity or the scrips.
The explanation does not invalidate speculative transactions which are otherwise legal but gives a special meaning to that expression for purpose of income tax only.
The question referred to the High Court in the present case has been correctly answered.
[186E G; 187D] D. M. Wadhwana vs Commissioner of Income tax West Bengal , approved.
Raghunath Prasad Poddar vs Commissioner of Income fax, Calcutta , over ruled.
Duni Chand Rataria vs Bhuwalka Brothers Ltd. ; Bayana Bhimayya and Sukhdevi Rathi vs The Government of Andhra Pradesh ; and The State of Andhra Pradesh vs Kolla Sreeramamurthy, ; , held inapplicable.
Manalal M. Varma & Co. (P) Ltd. vs Commissioner of Income tax, and Butterworty vs Kingsway, , referred
| The assessee entered into a contract for working certain collieries.
As he did not have the requisite funds, he entered into an agreement with M whereunder M was to advance a sum upto Rs. 11/2 lacs, but could withdraw the money at any time and stop further advances and was not liable for any losses; the assessee was to pay interest on the advances at 6% per annum in addition to a sum equivalent to 11/16th of the net profits of the business.
In pursuance of the agreement M made advances to the assessee and the assessee paid interest and 11/16th of his net profits to M.
The assessee claimed these amounts paid to M as allowable deductions under section 10(2)(iii) or under section 10(2)(xv) of the Income tax Act.
The amount paid as interest was allowed but the other sums paid were not allowed on the ground that these sums were not wholly and exclusively laid out for the purpose of the business.
Held, that the assessee was entitled to the deductions claimed.
The case had to be decided according to the tenor of the agreement and the circumstances of the case.
In order to justify the deduction of the sum given up had to be for reasons of commercial expediency; it may be voluntary but so long as it was incurred for the assessee 's benefit, e.g., the carrying on of his business, the deduction was claimable.
In the present case there was nothing to show that the assessee could have made any better arrangements or would not have lost the contract had he not entered into the agreement with M. Therefore in a commercial sense the payments were an expenditure wholly and exclusively laid out for the purpose of the business.
Commissioner of Income tax vs Chandulal Keshavlal, , followed.
Commissioner of Income tax, Bombay vs M/s. jaggannath Kissonlal; , , M/s. Haji Aziz & Abdul Shakoor Bros. vs The Commissioner of Income tax, ; , and Strong vs Woodifield, ; , relied on.
Pondicherry Railway Company vs Commissioner of Income tax, Madras, (1931) L.R. 58 I.A. 239, distinguished.
Union Cold Storage Co. Ltd. vs Adamson, , 360 Tata Hydro Electric Agencies Ltd., Bombay vs The Commissioner of Income tax, Bombay Presidency.
(1937) L.R. 64 I.A. 215, Robert Addie & Sons ' Colleries, Ltd, vs Commissioners of Inland Revenue, , Commissioner of Income tax, Bombay Presidency vs Tata Sons Ltd. , The Indian Radio and Cable Communications Company Ltd. vs The Commissioner of Income tax, Bombay, , British Sugar Manufacturers Ltd. vs Harris, , referred to.
| Respondent No. 1 acquired tenancy rights in five plots in the villages of Biknaur and Samahuta situated in the area known as Lower Murli Hill in District Shahabad, Bihar.
In 1949 he filed a plaint in the Court of the Subordinate Judge Sasaram, against the State of Bihar and others, claiming inter alia that as a tenant he had a customary right to quarry limestone for trade purposes from the Lower Murli Hill.
The claim was based mainly on certain entries in the Custom sheets prepared at the time of the Cadastral Survey in 1913 under section 102 of the Bihar Tenancy Act, 1885.
The trial court rejected the claim but the High Court held the custom to be established by the evidence of the Customs sheets.
The defendants appealed.
Held The High Court was in error in holding that the plain tiff had established the custom pleaded by him or that it was reasonable.
(i) There was nothing to show that the practices and privileges recorded in the Custom Sheets were exercised as a matter of right.
The record has presumptive value.
But the revenue authorities were concerned to ascertain the existing state of affairs and not to determine whether the practices and privileges were ancient, certain, reasonable and continuous.
As evidence of local custom, the custom sheets had therefore not much value.
On the other hand there were indications that the exercise of the privileges recorded therein was permissive.
Even on the most liberal interpretation they did not provide evidence of the exercise of the privilege of commercial exploitation of limestone from the area in question.
[317D; 319G] (ii) Even granting that the Custom sheets recorded a local custom that the tenants in the villages of Baknaur and Samahuta excavated stones from the hills near the villages for purposes of trade, a claim of right founded on that custom must be held unreasonable and incapable of enforcement by the sanction of a court 's verdict, [320B] A claim in the nature of a profit a prendre operating in favour of an indeterminate class of persons and arising out of a local custom may be held enforceable only if it satisfies the tests of a valid custom.
A custom is a usage by virtue of which a class of persons belonging to a defined section in a locality are entitled to exercise specific rights against certain other persons or property in the same locality.
To the extent to which it is inconsistent with the general law undoubtedly the custom prevails.
But to be valid a custom must be ancient, certain and reasonable, and being in derogation of the general rules of law must be construed strictly.
A right in the nature of a profit a prendre in the exercise of which the residents of a locality are entitled to excavate stone for trade purposes would ex facie 313 314 be unreasonable, because the exercise of such a right ordinarily tends to the complete destruction of the subject matter of the profit.
The custom, if exercised in its amplitude as claimed, may also lead to breaches of the peace, for it would be open to all tenants to work any quarry simultaneously for trade purposes.
[321B D; 324D] Lord Rivers vs Adams, L.R.3 exhibit Div. 361, Harris & Anr.
vs Earl of Chesterfield and Anr.
, , Alfred F. Beckett Ltd. vs Lyons , referred to Lutchhmeeput Singh vs Sadaulla Nushyo & Ors., I.L.R. 9 Cal.
698 and Arjun Kaibarta vs Manoranjan De Bhoumick, I.L.R. , approved.
Henry Goodman vs The Mayor and Free Burgesses of the Borough of Saltash.
7 A.C. 633 and Mercer vs Denne, , 557 distinguished.
| One Ittiyavira, the deceased father of the appellant purchased properties and paid part of the consideration for the transaction in cash and for the balance executed two hypothecation bonds in favour of his vendors, Ramalinga Iyer and Raman Vela Yudhan.
Ramalinga Iyer assigned his hypothe cation bond in favour of one Sankara Rama Iyer.
He had executed a promissory note in favour of one Anantha Iyer who, after his death, instituted a suit against his son Sankara Subha Iyer for recovery of the amount thereunder and obtained a decree.
Treating the deed of assignment executed by Ramalinga 496 Iyer in favour of Sankara Rama Iyer as a sham document, Anantha Iyer attached the mortgagee rights of Ramalinga Iyer in the hypothecation bond and eventually purchased them.
In a partition in Anantha Iyer 's family, the rights under the hypothecation bond purchased by him were allotted to his share and to that of his brother.
These two persons instituted a suit against Ittiyavira being O. section No. 59 of 1093 and obtained a decree for realisation of the amount against him and transferred their decree to one Venkiteswara Iyer who.
at the court auction held in execution of that decree, purchased the hypothecated properties which are properties in the suit and eventually obtained possession of the properties on 12. 7: 1099.
Before the institution of O. section 59 of 1093 by Anantha Iyer and his brother, Ittiyavira had executed a sale deed of these properties on 8. 10.
1093 in favour of his son, the appellant.
The appellant was not.
male a party to O. section No. 59 of 1093.
Ituyavira died in the 1107 and on 2. 2.
1108, Venkiteswara Iyer sold all the suit properties to the plaintiffsrespondents.
Thereafter the respondents instituted proceedings under section 145 of the Code of Criminal Procedure in the Court of Magistrate claiming their possession over the suit properties which was disputed by the appellant.
The properties were attached and placed in the possession of the Receiver appointed by the court.
Eventually, the court held that the appellant 's possession over the properties be maintained until otherwise ordered by the competent civil court.
The High Court of Travancore affirmed the order of the Magistrate and the appellant was handed over the possession of the properties by the Receiver.
Consequently, the respondents instituted a suit out of which this appeal arises.
The trial court dismissed the suit and that decision was reversed by the High Court.
It was contended before this Court that the decree obtained by Anantha Iyer in O. section 59/1093 was a nullity because the suit was barred by time.
It was further urged that the appeal before tile High Court should have been heard not by a Division Bench of merely two judge but by a Bench of three judges as provided in section II (1) of the Travancore High Court Act, 1099.
Held, that if the suit was barred by time and yet, the court decreed it, the court would be committing an illegality and the aggrieved party would be entitled to have the decree set aside by preferring an appeal against it.
As has often been said, courts have Jurisdiction to decide right or to decide wrong and even though they decide wrong the decree rendered by them cannot be treated as nullities, 497 Maqbul Ahmad vs Onkar Pratap Narain Singh, A. 1.
R. , held inapplicable.
Where the question of limitation was not raised in the High Court, it cannot be allowed to be raised in this Court when the question was one of mixed fact of law.
In the instant case the possession of the Receiver during the proceedings under section 145 of the Code of Criminal Procedure would necessarily unure for the benefit of the successful party and if this period is taken into account, the respondent 's suit would be well within time.
Held, further that no party has a vested right to have his appeal heard by a specified number of judges and no right of the party has been infringed merely because it was heard by two judges and not by three judges.
A litigant has no right to contend that a tribunal before whom he.
should have taken an appeal when he instituted the suit, should not be abolished and unless it can be shown that the repeal of the Travancore High Court Act was unconstitutional, whatever right of appeal may have vested in the party stood abrogated by the competent legislature.
| The appellant assessee was a cooperative society engaged in the business of banking The previous year relevant to the assessment year 1963 64 was the year ending June 30, 1962.
The business income of the assessee was exempt under the provisions of Section 80(1) as it then stood.
During the aforesaid accounting yew, the assessee received a sum of Rs. 19 being the interest on the deposit made by it with an Electricity Distribution Company.
This deposit had to be made by the assessee as it was required by the conditions notified by the electricity company for supply of energy, and it carried interest.
It was on account of the said deposit that the sum of Rs. 19 was received by the assessee, by way of interest.
The Income tax Officer treated the amount of Rs. 19 as income from other sources, and on that basis, he levied additional surcharge, in a sum of Rs. 81,920.
The assessee appealed to the Appellate Assistant Commissioner who upheld the assessee 's contention that the said sum of Rs. 19 constituted its business income and, was therefore, exempt.
He held that the levy of surcharge was unsustainable.
The Revenue appealed to the Appellate Tribunal which held that it was 'income from business ', and accordingly dismissed the Revenue 's 997 998 appeal.
At the instance of the Revenue, the Tribunal referred the question to the High Court.
The High Court held, that the assumption made by the Appellate Assistant Commissioner and the Tribunal that the liability of surcharge was not attracted in case the said sum of Rs. 19 represented business income may not be warranted and that in such a situation the High Court does possess the power to correct the error so long as the point arose out of the Tribunal 's order.
It returned the reference unanswered and directed the Tribunal to consider the case on all points that require consideration of the question whether additional surcharge was attracted.
In the assessee 's appeal to this Court, it was submitted that the High Court exceeded its jurisdiction in making the aforesaid direction, that the High Court widened the scope of enquiry which it was not empowered to do in a reference under Section 256 and that the matter should be sent back to the High Court for answering the question of law as stated by the Tribunal.
Dismissing the appeal, this Court, HELD : All that the High Court has asked the Tribunal to do is to consider whether the liability of surcharge is not attracted even if the said sum of Rs. 19 is treated as income from business.
The fact that the revenue was also a party to the said erroneous assumption before the Tribunal cannot stand in the way of the Revenue resiling from an er roneous assumption of law.
[1004 D F] In the instant case, the question was whether additional surcharge was leviable for the assessment year 1963 64 under the relevant Finance Act.
The assessee 's contention was that it had no income which was liable to be assessed to income tax inasmuch as its entire income was exempt under Section 81 (1) (a), and it was submitted that the sum of Rs. 19 was also a business income and, therefore, the liability of additional surcharge did not attach to the assessee.
The I.T.O. took the view that the said sum of Rs. 19 represented income from other sources and, therefore, liability of additional surcharge was attracted.
The Appellate Assistant Commissioner upheld this contention.
The High Court, however, thought that having regard to the language of the provisions of the relevant Finance Act, the Tribunal ought to examine whether the liability to additional 999 surcharge was attracted even if the said sum of Rs. 19 was treated as income from business.
The High Court was of the opinion that this legal submission, though raised for the first time, did call for serious consideration.
This was done to arrive at a correct decision in law relating to the liability to additional surcharge.
If really, additional surcharge was chargeable according to the Finance Act even In case the said sum of Rs. 19 represented business income, the High Court cannot be called upon to act on the assumption that it is not so chargeable and answer the question stated.
Such a course would neither be in the interest of law or justice.
That the Revenue was also a party to the erroneous assumption of law makes little difference to the principle.
[1004 B F] C.I.T. Bombay vs Scindia Steam Navigation Ltd., 42 I.T.R. 589, relied on.[1004 H] V.R.Y.K.N. Kallappa Chettiar vs Commissioner of Income Tax, ; C.L T. vs Ogale Glass Works Ltd., 25 I.T.R. 529; Keshav Mills Co. Ltd. vs Commissioner of Income Tax, Bombay North, Ahmedabad, ; Commissioner of Income Tax, Bihar and Orissa vs Kirkend Coal Co., 74 I.T.R. 67 and Kusumben D. Mahadevia vs Commissioner of Income Tax, Bombay City , not applicable.
[1004 H]
| The respondent company was a dealer in matchwood called sawar " and his place of business was situate in Chanda in the erstwhile Central Provinces.
Pursuant to an agreement between the respondent and a match factory, the former loaded diverse quantities of " sawar " logs on railway wagons and despatched the same by rail from Chanda and other railway stations in the Central Provinces to Ambernath, a town in the erstwhile Province of Bombay.
Under cl. 4 Of the agreement the goods to be supplied under the contract shall be despatched by the contractor from certain railway stations within the Central Provinces, while cl. 2 reserved the right of the consignee to examine the goods on arrival at.
Ambernath and to reject the same if they, were found, in the opinion of the factory manager, not to conform with the specifications.
Clause 6 provided that the goods shall be measured under the supervision of the factory 's repre sentative, the decision of the factory manager at Ambernath being binding on the contractor, and by cl. 7 the prices of the goods shall be " F. O.R. Ambernath ".
The course of dealings between the parties was that on arrival of the logs at Ambernath the logs were inspected and measured by the factory manager and the prices, calculated at the agreed rates, were paid to the respondent 's agent at Bombay.
The question was as to when and where the property in the logs passed from the respondent to the consignee and whether the respondent was liable to pay sales tax under the provisions of the Central Provinces and Berar Sales Tax Act, 1947.
At the date when the agreement was entered into, the logs were unascertained goods.
There was also no evidence that at that date the particular logs delivered thereunder were in the Central Provinces in the shape of logs at all.
The sales tax department levied the tax on the respondent on the grounds, inter alia, that (1) the property in the logs passed from the respondent to the factory consignee under section 23 Of the Indian , when the logs were loaded in the wagons at railway stations within the Central Provinces and the railway 703 receipts taken in the name of the factory were forwarded to the latter, and that (2) in any case, as the logs were in the Central Provinces at the date when the contract for sale was made, the transfer in them must be deemed to have taken place there under Explanation II to section 2(g) Of the Central Provinces and Berar Sales Tax Act, 1947.
Held : (1) that on a proper construction of the contract as a whole the intention of the parties was that the respondent would send the logs by rail from the different stations in the Central Provinces to Ambernath where the factory manager would inspect, measure and accept the same if in his opinion they were of the description and quality agreed upon.
Conse quently, as the respondent sent the logs and left it to the factory to appropriate to the contract such of them as they accepted as of contract quality and description, the property in the logs did not pass to the buyer by the mere delivery to the railway for carriage but passed only at Ambernath when the logs were appropriated by the factory with the assent of the seller within the meaning of section 23 of the Indian .
(2) that Explanation II to section 2(g) of the Central Provinces because under the Explanation the goods, in respect of which the contract of sale is made, must, at the date of the contract be in existence in the Central Provinces, that is to say, that the goods must at the date of the contract be there in the form in which they are agreed to be sold and there was no evidence, in the present case, for this.
|
minal Appeal No. 103 of 1952.
Appeal under article 134(l) (c) of the Constitution of India from the Judgment and Order dated the 27th October, 1952, of the High Court of Judicature for the State of Rajasthan at Jodhpur (Wanchoo C.J. and Bapna J.) in D.B. Criminal Murder Reference No. 2 of 1952, arising out of the Judgment and Order dated the 1st July, 1952, of the Court of the Sessions Judge, Pali, in Criminal Original Case No. 2 of 1951.
H. J. Umrigar for the appellants.
Porus A. Mehta for the respondent.
February 16.
The Judgment of the Court was delivered by MAHAJAN J.
This is an appeal under article 134(l) (c) of the Constitution of India, by Magga and Bhagga,who have been convicted under section 302, Indian Penal Code, for the triple murders of Ganesh, Gheesa and Hardas.
The case relates to an incident which took place on the night between the 3rd and 4th April, 1951 Gheesa and Ganesh, deceased, Ratna, Govind, another Ganesh who is a witness in the case, and Hardas had gone to " Imaratia " a well in village Gadwara on that night to keep watch over the crops there.
Gheesa slept in one shed near the well, while Hardas slept in another shed some distance away, and Ratna slept in a third shed near the entrance gate.
Ganesh, deceased, Ganesh (P. W.), and Govind slept on the threshing floor further away from the well.
Some time after midnight Ratna woke up on hearing the cries of Gheesa.
It is alleged that he then saw the two accused beating Gheesa, accused Magga having in his hand a farsi and accused Bhagga having a katari and an axe.
Hardas, who woke up on hearing the cries, rushed to the aid of Gheesa and thereupon the two accused, Magga and Bhagga, fell upon him and attacked him with farsi and axe.
Ratna 975 ran away and hid himself near the well.
On an alarm being raised, one Krishna who was working on a nearby well came and witnessed the attack on Hardas.
The accused, after finishing Gheesa and Hardas went to the threshing floor where Ganesh, deceased, was sleeping.
There Magga asked Bhagga to hit Ganesh with the axe and Bhagga immediately hit Ganesh with the axe and he fell down.
Thereafter Magga hit Ganesh two or three times with the farsi on the legs and Bhagga cut the neck of Ganesh with the katari.
Govind (P.W.) entreated on behalf of Ganesh but he was threatened and was told, that if he did not keep quiet he would also be killed.
Without injuring Govind and Ganesh (P.Ws.) the accused then left the place.
Information of the incident was carried to the village by Ratna and a report of it was made to the police at 11 30 a.m. on 4th April, 1951.
In the report it was stated that " Bhagga and Magga are standing at their house with swords and are saying that they would kill more persons.
Village people are surrounding them outside the house ".
The sub inspector of police, when he arrived at the village, found the house of the accused surrounded by the village people.
The door of the house was closed from inside and the accused were standing on the chabutra inside.
Magga had a farsi in his hand and Bhagga had an unsheathed sword.
The sub inspector got the door opened, arrested the accused, and took possession of the farsi and the sword.
He also recovered the axe and a katari which were bloodstained.
The clothes of the accused were also taken possession of after the arrest and they appeared to have bloodstains on them.
The accused pleaded not guilty.
They admitted their partnership in cultivation at " Imaratia " well with the deceased but denied that any quarrel took place between them and the other partners about the cutting of the crop.
They also denied that they had gone to the well armed with various weapons and had committed the murder of Gheesa, Hardas and Ganesh.
The sessions judge on the evidence led by the prosecution felt satisfied that the prosecution case was 976 proved beyond all reasonable doubt.
It was held that the murder was brutal and advantage had been taken of the persons who were sleeping to kill them.
In the result the appellants were convicted under section 302, Indian Penal Code, and sentenced to death.
The sentence of death passed on them by the sessions judge was confirmed by the High Court after examining the evidence afresh.
In the High Court a contention was raised that the whole trial was vitiated inasmuch as it had not been conducted in accordance with procedure prescribed by law.
This contention was negatived on the ground that the irregularities committed in the course of the trial were such as were cured by the pro visions of section 537, Criminal Procedure Code.
As the objection raised concerned the validity of the trial the case was certified as a fit one for appeal to this Court.
The facts which concern the validity of the trial, shortly stated, are these: The trial began on 22nd March, 1952.
Three assessors had been summoned for that date.
Of these two were present while the third did not come.
Thereupon one person who was present in the court premises and whose name was in the list of assessors but who had not been summoned in the manner prescribed by the Code of Criminal Procedure was chosen as an assessor.
The trial then began with the three assessors so chosen, viz., Jethmal, Balkrishna and Asharam.
On the 6th June, 1952, Jethmal, one of the assessors absented himself and for some reason, which is not clear from the record, one Chimniram was asked to sit in place of Jethmal as an assessor with the result that on the 6th June, 1952, there were three assessors, viz., Balkrishna and Asharam, who had been sitting from the beginning of the trial, and Chimniram who was introduced for the first time that day.
On the 23rd June also Chimniram, Balkrishna and Asharam sat as assessors.
On 27th June, however, Jethmal reappeared and was allowed to sit and since that date four assessors sat throughout, viz., Jethmal, Chimniram, Balkrishna and Asharam.
Eventually all these four assessors gave their opinion on the first 977 July, 1952, when the trial came to an end.
It was con tended that the trial was bad as it took place in defiance of the provisions of sections 284 and 285 of the Code of Criminal Procedure and that such an illegality could not be cured by the provisions of section 537 of the Code.
In order to judge of the validity of this objection it is necessary to set out the provisions of the Code relevant to this matter.
Section 284 provides that, "When the trial is to be held with the aid of assessors, not less than three and, if possible, four shall be chosen from the persons summoned to act as such" .
The section as it originally stood required that " two or more shall be chosen as the Judge thinks fit ", so that there had to be a minimum of two assessors.
In the year 1923, that provision was amended so as to make a minimum of three assessors an essential requisite for a trial to be held with the aid of assessors.
A trial commenced with less than three assessors is not authorised by the provisions of this section as it now stands.
Therefore, unless a case comes within the provisions of the next following section 285, a trial held in defiance of the provisions of section 284 would not be legal.
Section 285, however, has no application to cases where a trial is commenced with less than three assessors.
[Vide Balak Singh vs Emperor (1); Sipattar Singh vs King Emperor (2)].
Section 285 provides : "(1) If in the course of a trial with the aid of assessors, at any time before the finding, any assessor is from any sufficient cause, prevented from attending throughout the trial, or absents himself, and it is not practicable to enforce his attendance, the trial shall proceed with the aid of the other assessor or assessors.
(2)If all the assessors are prevented from attending or absent themselves, the proceedings shall be stayed and a new trial shall be held with the aid of fresh assessors.
" In cases contemplated by this section a trial commenced with the aid of three assessors can be (1) A.I.R. 1918 Pat.
(2) A.I.R. 1942 All, 140.
978 continued and finished with the aid of less than three assessors.
This section, however, does neither authorize the substitution of an assessor for an absent assessor, nor does it authorise an addition of an assessor to the number of assessors during the course of the trial.
The effect of the provisions of sections 284 and 285 is that a trial cannot be validly commenced with less than three assessors chosen in the manner prescribed by the Code, but once validly commenced it can be continued in certain cases to a finish if some, though not all, of the persons originally appointed, attend throughout the trial.
If all of them do not attend, then a fresh trial has to be held.
An addition in the number of the assessors or a change or substitution in their personnel during the course of the trial is not warranted by the Code; on the other hand, it is implicitly prohibited.
The procedure prescribed by section 285(l) is not of a permissive nature.
It has to be followed if the conditions prescribed are fulfilled, and like section 285(2) it is of a mandatory character.
No scope is left in these provisions for the exercise of the discretion of the judge for supplementing these provisions and for holding a trial in a manner different from the one prescribed and for conducting it with the aid of some assessors originally appointed, and also with the aid of some others recruited during the trial.
Section 309 provides that when a trial is concluded, the court may sum up the evidence for the prosecution and defence and shall then require each of the assessors to state his opinion orally and shall record such opinions.
Sub clause (2) of this section enacts that the judge shall then give judgment, but in doing so shall not be bound to conform to the opinions of the assessors.
Sections 326 and 327 enact the method and manner of summoning assessors and jurors.
Section 537 provides as follows: "Subject to the provisions hereinbefore contained, no finding, sentence or order passed by a Court of competent jurisdiction shall be reversed or altered under Chapter XXVII or on appeal or revision on account 979 (a)of any error, omission or irregularity in the complaint, summons, warrant, charge, proclamation, order, judgment or other proceedings before or during trial or in any inquiry or other proceedings under this Code, or. (c)of the omission to revise any list of jurors or assessors in accordance with section 324, or (d)of any misdirection in any charge to a jury, unless such error, omission, irregularity or misdirection has in fact occasioned a failure of justice.
" The first objection that was taken in the High Court to the validity of the trial was that Asharam who had not been summoned as an assessor could not be appointed as such and hence it should be held that the trial commenced with a minimum of two assessors in defiance of the provisions of section 284.
What happened was this: On the date fixed for the trial there was a deficiency in the number of persons who had been summoned and who appeared to act as assessors, the court then sent for Asharam whose name was in the list of assessors and ordered him to sit as an assessor.
The High Court took the view, and we think rightly, that the circumstance that the formality of issuing a summons was not gone through was a mere irregularity which was curable under section 537 of the Code, as there was no failure of justice caused on account of that irregularity and that the trial on that account could not be held to be bad.
This view is in accord with the decision of the Calcutta High Court in King Emperor vs Ramsidh Rai(1) with which we agree.
We are constrained, however, to observe that the High Court did not fully appreciate the decision of the Patna High Court in Balak Singh vs Emperor(2), when it said that that decision held a trial bad where a person was chosen as an assessor who had not been summoned.
In that case during the examination of the first witness only one qualified assessor was present in court and capable of acting as such, the judge ordered another person who happened to be present in court but was not in the official list of assessors to act as an (1) 30 Crl.
L. J .
(2) A.I.R. 1918 Pat.
420. 980 assessor, and it was held that as the trial commenced with only one assessor and not with two duly qualified assessors the trial was abortive and contrary to law.
No exception could therefore be taken to the rule stated in this decision.
The second objection against the validity of the trial taken before the High Court was founded on section 285.
It was contended that when one of the assessors appointed absented himself the court was bound, under section 285, to ascertain before proceeding further with the trial whether the absence of the assessor was due to sufficient cause and whether it was practicable to enforce his attendance and that the judge in this case failed to observe this condition which alone entitled him to continue the trial with the remaining assessors and that the defect was fatal to the validity of the trial.
The High Court held that though there was non compliance with the provisions of section 285 in the case, this irregularity was cured by section 537 as it had not in fact caused failure of justice.
We agree with the High Court in this conclusion.
It is no doubt true that the section enjoins on the judge a duty to find whether there is a sufficient cause for the non attendance of an assessor and whether it is not practicable to enforce his attendance, and ordinarily the proceedings must represent on their face whether this duty has been performed, but we think that such an omission on his part does not necessarily vitiate the trial.
We are further of the opinion that when a judge proceeds with a trial in the absence of one or two of the assessors with the aid of the remaining assessor or assessors, it may be presumed that he has done so because he was satisfied that it was not practicable to enforce the attendance of the absent assessor or assessors and that there was sufficient cause for his or their non attendance.
If, however, there is evidence to a contrary effect, the matter maybe different.
Failure to record an order indicating the reasons for proceeding with the trial with the aid of the remaining assessors can at best be an irregularity or an omission which must be held to 981 be such as to come within the reach of section 537 unless it has in fact occasioned a failure of justice.
It could not be seriously argued that such an omission can lead to such a result.
Finally the learned counsel contended, also relying on section 285, that the sessions judge had no jurisdiction or power to substitute an assessor or to reinstate the absent assessor, or to add to the number of assessors.
When the point was raised before the High Court, it fully realized that there was no provision in law which permitted such substitution of an absent assessor by another assessor or the subsequent reinstatement of an absent assessor as bad been done in this case.
It, however, felt that the irregularity was of the same nature as noncompliance with the provisions of section 285, and as such was cured by section 537 of the Code.
In regard to the addition of an assessor during the trial it said: " We have not been able to find any reported case where an assessor had been added in the middle of the trial as has been done by the learned judge.
That is perhaps due to the fact that no judge ever did such an obviously silly thing, but considering that the trial, in any case, continued with the aid of two assessors who were there throughout, there was, in our opinion, substantial compliance with the mode of trial provided in the Code and the irregularity committed by the addition of Chimniram in June, 1952, is curable under section 537 as it did not occasion any failure of justice.
The sessions judge was still the court of competent jurisdiction to try the case and all that he did was to add unnecessarily one more assessor to advise him when he had no business to do so.
We can ignore his presence altogether and as the irregularity has not caused failure of justice, the trial will not be vitiated".
In our judgment, the High Court was in error in this view.
The sessions judge during the progress of the trial not only made a change in the personnel of the assessors originally appointed and also added to their number, but he.
actually took the opinions 127 982 of all the four assessors as required by the provisions of section 309 of the Code, and acted in accordance with those opinions in convicting the two appellants.
It is plain that a unanimous verdict of four assessors is bound to weigh much more with a judge than the opinion of two persons.
We have not been able to understand how the High Court could ignore the presence of assessors altogether who had given their opinions and which opinions had been accepted by the judge.
The opinion of an assessor is exercised in the judicial function imposed upon him by law, and the judge is bound to take it into consideration and he cannot dispense with it.
The judge considered this trial as if lie had commenced it with the aid of four assessors, and taking into consideration their opinion, he convicted the appellants.
It is difficult to assess the value which the judge gave to the opinions of the assessors at the time of arriving at his finding and the High Court was in error in thinking that it did no harm and caused no prejudice.
We cannot subscribe to the view of the High Court that the trial should be taken as having been conducted with the aid of the two assessors as sanctioned by section 285, Criminal Procedure Code.
That is not what actually happened.
It is difficult to convert a trial held partly with the aid of three assessors and partly with the aid of four assessors into one held with the aid of two assessors only.
At no stage was the trial held with the aid of two assessors only.
The third substituted assessor attended a part of the trial and the added fourth assessor also attended a part of it.
None of these two were present throughout.
Thus the trial when it concluded was a different trial from the one which was commenced under the provisions of section 284, Criminal Procedure Code.
To a situation like this we think section 537 cannot be called in aid.
Such a trial is not known to the Code and it seems implicitly prohibited by the provisions of sections 284 and 285.
What happened in this case cannot be described as a mere error, omission or irregularity in the course of the trial.
It is much more serious, It 983 amounts to holding a trial in violation of the provisions of the Code and goes to the root of the matter and the illegality is of a character that it vitiates the whole proceedings.
As observed by their Lordships of the Privy Council in Subramania lyer vs King Emperor( '), disobedience to an express provision as to a mode of trial cannot be regarded as a mere irregularity.
In Abdul Rahman vs King Emperor (2), the distinction between cases which fall within the rule of section 537 and those which are outside it was pointed out by Lord Phillimore.
There it was said that the distinction between Suubramania Iyer 's case (1) and that case in which there was an irregularity in complying with the provisions of section 360 of the Code was fairly obvious.
In Subramania Iyer 's case(1) the procedure adopted was one which the Code positively prohibits and it was possible that it might have worked actual injustice, to the accused but that the error in not reading the statements of witnesses to them was of a different character, and such an omission was not fatal.
In Pulukurti Kotayya vs King Emperor(3) their Lordships again examined this question.
That was a case where there had been a breach of the provisions of section 162, Criminal Procedure Code, and it was held that in the peculiar circumstances of that case it had not prejudiced the accused and the case therefore fell under section 537 and that the trial was valid notwith standing the breach of section 162.
Sir John Beaumont in delivering the decision of the Board made the following observations which bring out the distinction between the two sets of cases: There are, no doubt, authorities in India which lend some support to Mr. Pritt 's contention, and reference may be made to Tirkha vs Nanak (4), in which the court expressed the view that section 537, Criminal Procedure Code, applied only to errors of procedure arising out of mere inadvertence, and not to cases of disregard of, or disobedience to, mandatory provisions of the Code, and to In re Madura Muthu (1) (1901) 28 l.A. 257.
(3) (1947) 74 I.A. 65.
(2) (1927) 54 I.A. 96.
(4) All 475. 984 Vannian(1), in which the view was expressed that any failure to examine the accused under section 342, Criminal Procedure Code, was fatal to the validity of the trial, and could not be cured under section 537.
In their Lordships ' opinion, this argument is based on too narrow a view of the operation of section 537.
When a trial is conducted in a manner different from that prescribed by the Code [as in Subramania lyer 's case(2)], the trial is bad, and no question of curing an irregularity arises: but if the trial is conducted sub stantially in the manner prescribed by the Code, but some irregularity occurs in the course of such conduct, the irregularity can be cured under section 537, and none the less so because the irregularity involves, as must nearly always be the case, a breach of one or more of the very comprehensive provisions of the Code.
The distinction drawn in many of the cases in India between an illegality and an irregularity is one of degree rather than of kind.
This view finds support in the decision of their Lordships ' Board in Abdul Rahman vs King Emperor( '), where failure to comply with section 360, Criminal Procedure Code, was held to be cured by sections 535 and 537.
The present case falls under section 537, and their Lordships hold the trial valid notwithstanding the breach of section 162.
" In our judgment, the trial conducted in the present case was conducted in a manner different from that prescribed by the Code and is bad and no question here arises of curing any irregularity.
The Code does not authorize a trial commenced with the aid of three named assessors to be conducted and completed with the aid of four assessors.
The substitution of one assessor by another and an addition to the number of assessors appointed at the commencement of the trial is not sanctioned by section 285, Criminal Procedure Code, nor is it authorized by section 284.
On the other hand, the language of section 285(l) read with the provisions of section 285(2) implicitly bans the holding of such a trial.
It is not possible to say with any degree (1) Mad. 82o.
(2) (1901) 28 I.A. 257.
(3) (1927) 54 I.A. 96.
985 of certainty to what extent the opinion of the outgoing and the incoming assessors who did not attend the whole of the trial influenced the decision in the case ; but as such a trial is unknown to law, it has to be presumed that it was illegal.
Mr. Mehta for the State Government contended that under section 309(2) the opinion of assessors is not binding on the sessions judge and their presence or absence does not affect the constitution of the court and that as at this trial at least two of the assessors originally appointed sat throughout the trial it should be held that the trial was substantially a trial conducted in accordance with the provisions of the Code.
The learned counsel did not go to the length of urging that a trial without the aid of any assessors whatever was a good trial under the Code.
Such a contention, if raised, would have to be negatived in view of the clear provisions of section 284 and of sub section (2) of section 285.
The appointment of at least three assessors is essential for the validity of a trial of this character at its commencement, and once validly commenced,in certain events, it can be validly concluded if at least one of them remains present throughout, while others drop out; but a trial conducted in the manner in which it was done in this case is wholly outside the contemplation of the Code and it is not possible to hold that it was concluded according to the provisions of the Code.
The provision in the Code that the opinion of the assessor is not binding on the sessions judge cannot lend support to the contention that the sessions judge is entitled to ignore their very existence.
As already pointed out, though he may not be bound to accept their opinions, be is certainly bound to take them into consideration.
The weight to be attached to such opinions may well vary with the number of assessors.
Mr. Mehta to support his contention placed reliance on the majority decision of the Madras High Court in King Emperor vs Tirumal Reddi (1).
In that case the trial continued for about seven weeks.
During that (1) Mad.
986 period one of the assessors was permitted to absent himself during two whole days, and five half days respectively, at first, so that he might visit his mother on her death bed, and subsequently, to perform the daily obsequies rendered necessary by her decease.
He then resumed his seat as an assessor and continued so to act until the termination of the trial, all the depositions recorded in his absence having been read by him on his return.
At the conclusion of the trial the sessions judge invited the opinion of each assessor, and recorded it.
The opinion of each was that all the accused were guilty and the judge concurring in that opinion, convicted.
the accused.
On appeal it was contended that the judge had acted contrary to law in allowing the assessor who had been absent to resume his seat as an assessor and in inviting and taking into consideration his opinion in deciding the case.
It was held by the majority of the court that the finding and the sentence appealed against had been passed by a court of competent jurisdiction within the meaning of section 537 of the Code and that the defect in the trial did not affect its validity and was cured by that section as the irregularity had not in fact occasioned a failure of justice.
Mr. Justice Davies took a different view.
This decision was clearly given on the peculiar facts and circumstances of that case and is no authority in support of the view contended for by Mr. Mehta.
For the reasons given above we are constrained to hold that the trial of the appellants conducted in the manner above stated was bad and the appellants have to be retried in accordance with the procedure prescribed by the Code.
In the result we allow this appeal, quash tile conviction and sentence passed on the appellants, and direct their retrial by the sessions judge in accordance with the procedure prescribed by the Code.
Appeal allowed Retrial ordered.
| Section 285 of the Criminal Procedure Code permits a trial commenced with the aid of three assessors to be continued and completed with the aid of less than three if during the course of the trial any assessor is prevented by sufficient cause from attending.
It does not, however, authorise the substitution of an assessor for an absent one nor an addition to the number of assessors during the course of the trial.
A, B and C were summoned to sit as assessors for a murder trial and as C did not appear, D who was in the list of assessors and who was present in court though not summoned, was asked to sit as an assessor, and the trial commenced with three assessors A:, B and D. A absented himself during the course of, the trial and the judge asked E to sit in place of A and proceeded with the trial for some days with B, D and E.
Later on A appeared and the trial continued till the end with the four assessors A, B, D and E: Held, (i) that the mere fact that D who had not been sum moned was allowed to sit as an assessor when the trial commenced did not vitiate the trial as it, was a mere irregularity and did not cause any failure of justice; King Emperor vs Ramsidh Rai approved.
Balak Singh vs Emperor (A.I.R. 1918 Pat.
420) explained.
(ii)though sub section (1) of section 285 imposes a duty on the judge to find out whether there was sufficient cause for the absence of an assessor and to consider whether it is not possible to enforce his attendance, it should be presumed that he has done so when he proceeds with the trial in his absence and a mere omission to record reasons for proceeding with the trial without the absent assessor would not by itself vitiate the trial ; (iii) a sessions judge, however, has no jurisdiction to substitute another person for any assessor who absents himself during the trial or to reinstate the absent assessor when be reappears and continue the trial with four assessors when the trial commenced with three assessors, and the trial in question was there fore illegal.
126 974 King Emperor vs Tirumal Reddi (I.L.R. distin guished.
| The appellant alongwith Radhey Shyam and Munni Lal were charged with the murder of Gokaran Prasad on 24.11.1975 at about 5 PM.
The Trial Court on consideration of the evidence concluded that the prosecution has failed to prove the case beyond reasonable doubts and acquitted the accused persons.
On appeal, the High Court appreciating the facts and circumstances of the case convicted Munni Lal along with the appellant for an offence under Section 302 read with 34 I.P.C. and sentenced each of them to undergo rigorous imprisonment for life.
During the pendency of the appeal the main accused Radhey Shyam died.
This appeal is against the High Court 's Judgment under Section 379 of the code of Criminal Procedure.
Allowing the Appeal in part, HELD : 1.
The High Court has rightly pointed out that PW 6 was not connected with the prosecution party in any manner and there was no reason for him to depose falsely, claiming to be an eye witness of the occurrence.
As such, his evidence can be taken into consideration.
to corroborate the evidence of the informant PW 1.
(587 C) 2.
The occurrence took place at about 5 P.M. and the first information report was lodged at 6.45 P.M. within two hours, the Police Station being at the distance of four miles from the place of occurrence.
In the first information report the same version of the occurrence was disclosed, which has been stated in Court.
Apart from naming himself, PW 1 also named PW 5 and PW 582 6 as eye witness of the occurrence.
The Investigating Officer reached the place of the occurrence at 9.
P.M. the same evening.
In such a situation there does not appear to be any scope for concoction of a false case to implicate the accused persons leaving out the real culprits.
PW 1 being the brother of the deceased, his going to the Court of Tehsildar at Sitapur and returning to village with the deceased is most natural.
His evidence cannot he rejected merely on the ground that he happened to be the brother of the victim.
It has been repeatedly pointed out by this Court that near relations will be the last persons to leave out the real culprits and to implicate those who have not participated in the crime.
Taking all facts and circumstances into consideration, the prosecution has been able to prove the case as disclosed in FIR against the accused persons.
(587 E G) 3.The appellant was a school student and there was no reason on his part to share the common intention of committing the murder of the victim.
By merely pressing down the victim before the other two accused persons, assaulted him, it cannot be held that appellant had shared the common intention of causing the death of the victim.
In the facts and circumstances of the case it has to he held that he shared only the common intention of culpable homicide not amounting to murder.
He can be attributed with the intention that the injuries, which were being caused by the other two accused persons, were likely to cause the death of the victim.
(588 E F) 4.
The conviction of the appellant under Section 302 read with 34 I.P.C. as well as his sentence to imprisonment for life is set aside.
He is convicted under Section 304, Part 1, read with Section 34 of the Penal Code sentenced to undergo rigorous imprisonment for ten years.
(588 G)
| The respondent sued the State of Bihar for a declaration that the Bihar Land Reforms Act, 1950, was ultra vires, void and unconstitutional and for a permanent injunction restraining the State and its officers or agents from issuing any notification thereunder in respect of her estate or taking possession thereof and on a petition filed along with the plaint obtained an order of temporary injunction against the State in terms of her prayer, pending the hearing of the suit.
More than a year thereafter, the State made an application under 0. 39, r. 4 of the Code for a discharge of the order of temporary injunction on the ground that the impugned Act had in another case been declarer valid by the Supreme Court.
Before that application could, however, be heard, the State of Bihar, on May 19, 1952 issued a notification under section 3(1) of the Act, authenticated by the Additional Secretary to the Government, declaring that, amongst others, the respondent 's estate had vested in the State of Bihar under the provisions of the Act.
Thereupon the respondent moved the trial Court for taking action against the State under 0. 39, r. 2(3) of the Code.
The contention on behalf of the State was that in view of article 31 B of the Constitution the issue of the notification was lawful and could not constitute contempt of Court.
The Subordinate judge held that this was no defence to the application by the respondent and directed attachment of the appellant 's property to the value of Rs. 5,000 and the High Court on appeal affirmed that decision.
Held, that the courts below took the correct view of the matter and that the appeal must be dismissed.
The procedure laid down by 0. 39, r. 2(3) of the Code of Civil Procedure is remedial and essentially one for the enforcement or execution of an order of temporary injunction passed under 0. 39, r. 2(1) and is available against the State although the provision for detention may not apply to it.
It is wrong to say that it is either contrary to article 300 of the Constitution or hit by the rule that no action lies against the State in tort or for a wrong doing entailing punishment or compensation.
District Board of Bhagalpur vs Province of Bihar, A.I.R. 1954 729 Pat.
529 and Tarafatullah vs section N. Maitra, A.I.R. 1952 Cal.
gig, distinguished.
There is also no basis for the contention that the State is not expressly or by necessary implication mentioned in 0. 39, r. 2(3).
The word 'person ' used by it, properly construed, includes the defendant against whom the order of injunction is primarily issued as also the defendant 's agents, servants and workmen.
Since the court 's power to issue an order of temporary injunction against the State under 0. 39, r. 2(1) cannot be in doubt, disobedience of such an order when issued necessarily attracts 0. 39, r. 2(3) of the Code.
Director of Rationing & Distribution vs Corporation of Calcutta, ; , held inapplicable.
Held, further, that when once an order is passed which the Court has jurisdiction to pass, it is the duty of the State no less than any private party to obey it so long as it stands, and the conduct of the State Government in the instant case in issuing the notification at a time when its application for vacating the injunction was still pending and the attitude taken up by it after the application under 0. 39, r. 2(3) was made and persisted in till the end must be disapproved.
| HELD: The order of detention was passed by the respondent No. 2.
District Magistrate, on the basis of two Criminal Cases in respect of two incidents which had occurred on October 2 and 3, 1986.
So far as the case being G.D. No. 38 was concerned, the report of this incident was made by the picket employed at police station, Kydganj.
It appeared from this report that there were no particulars about the shopkeepers who had been terrorised and threatened for payment of money, as alleged in the grounds of detention, nor were mentioned at all the names of any of the witnesses in whose presence the threat or terror was used and money was demanded.
The report was absolutely vague and it was not possible for the detenu to give an effective representation 127 against the ground, which is one of the Constitutional requirements enjoined in Article 22(5) of the Constitution of India.
The second ground, which led to crime case No. 248/86 under section 307, I.P.C., and crime case No. 249/86 under section 4/5 of the Explosives Act and which occurred on October 3, 1986, registered on the complaint of Sub/Inspector Yatendra Singh through special court, Allahabad, also did not disclose any particulars as to the shop keepers in whose presence the bombs alleged were thrown by the appellant, and who were terrified and panic stricken, etc., nor were mentioned the names of any witnesses in respect of the said incident.
[133F, 134A D] The question whether a man has only committed a breach of law and order or has acted in a manner likely to cause a disturbance of the public order, is a question of degree and the extent of the reach of the act upon the Society, as held by this Court in Kanu Biswos vs State of West Bengal, ; , while determining the meaning of 'public order '.
Public order is what the French Call "order Publique" and is something more than ordinary maintenance of law and order.
From the observations of this Court made in many cases, it is evident that whether an act amounts to a breach of law and order or a breach of public order, solely depends upon its extent and reach to the society.
If the act is restricted to particular individuals or a group of individuals, it breaches the law and order problem, but if the effect and reach and potentiality of the act are so deep as to affect the community at large and/or the even tempo of the community, then, it becomes a breach of the public order.
An act, which may not at all be objected to in certain situations is capable of totally disturbing the public tranquillity.
When communal tension is high, an indiscreet act of no significance is likely to disturb or dislocate the even tempo of the life of the community.
An order of detention made in such a situation has to take note of the potentiality of the act objected to.
Thus, whether an act relates to law and order or the public order depends upon the impact of the act on the life of the community, or, in other words, the reach and effect and potentiality of the act, if so put as to disturb or dislocate the even tempo of the life of the community, it will be an act which will affect the public order .
[134D E,137A B. 138B D] In this case, so far as the first incident which occurred on 2.10.1986 was concerned, the ground was vague inasmuch as the names of the witnesses in whose presence the threat was given and the incident occurred, had not been mentioned.
As regards the second incident which occurred on 3.
10.1986, the Crime Case No. 248/86 under section 307, I.P.C. and the Crime Case No. 249/86 under section 4/5 of the Explosive Act, were pending trial.
[138E F] 128 A case crime No. 200 of 1985 under sections 323/504/506/426, l.
P.C., read with section 2/3 of the U.P. Gangsters and Anti Social Activities Act No. 4 of 1986 was registered against the appellant by the police.
That case was challenged by an application under section 482 Cr.
P.C. in the High Court.
The said application was admitted on 2.6.1986 and had been pending.
The High Court had, while admitting the case, granted stay of arrest of the appellant.
The appellant had been taken into custody and was in jail as an undertrial prisoner on October 10, 1986, when the impugned order of detention was clamped upon him.
The appellant stated in this Appeal that till date he had not applied for bail in case crime No. 248/86 and case crime No. 249/86 as well as the case registered in report No. 38 dated October 2, 1986 at the police station Kydganj.
The question was whether there was a possibility of the detaining authority to be satisfied that the appellant was likely to indulge in activities prejudicial to the maintenance of public order as there was no likelihood of his being released from the jail custody immediately.
There was nothing in the case to show that in consideration of his previous conduct and acts, there was a likelihood of the appellant 's indulging in activities prejudicial to the maintenance of public order if he was set free and/or released from custody.
[138F H, 139A B, 140B C] The detaining authority District Magistrate respondent No. 2, had not filed an affidavit stating whether he had taken into consideration the fact that the appellant had already been in the judicial custody and on considering his past activities he had been subjectively satisfied that if set free or released from jail custody on bail, there was a likelihood of his indulging in criminal activities endangering public order.
On the other hand, the Station officer of Kydganj police station, had filed a counter stating that the District Magistrate had passed the impugned detention order when the appellant was already in jail, on the p apprehension that the appellant was likely to be released on bail in the near future and if he was bailed out, the public order would become worse.
This clearly showed that the police officer had arrogated to himself the knowledge about the subjective satisfaction of the District Magistrate on whom the power is conferred by the Act.
The affidavit filed by the station officer of police implied that he had access to the file of the District Magistrate or he influenced the decision of the District Magistrate for making the detention order.
There was nothing to show that there was awareness in the mind of the District Magistrate, the detaining authority, of the fact that the appellant was in jail at the time of the clamping of the order of detention, and the detaining authority was satisfied, in considering his antecedents, that there was a likelihood of his indulging in criminal activities, jeopardising public order if he 129 was released on bail and that there was every likelihood of his being A enlarged on bail within a short time.
On this ground alone, the detention order was invalid.
It might be said in this connection that the respondents could very well oppose the bail application when it came up for hearing, and if at all the appellant was released on bail, the respondents were not without a remedy.
They could file an application for cancellation of the bail.
In the circumstances, it could not but be held that the passing of the order of detention of the appellant who was already in custody was fully bad and invalid in law.
The respondents could very well proceed with the criminal case under section 307, I.P.C., and get the appellant punished if the case was proved beyond doubt against him.
The police officers, who witnessed the hurling of the bombs and the Sub Inspector of police who recorded the F.I.R., could come forward to give evidence.
In the circumstances, the open statement in the affidavit of the Sub Inspector that the witnesses were afraid of disclosing their names and giving evidence, was wholly incredulous and could not be accepted.
[141G H, 142A G, 143G 144A] The clamping of the order of detention was not in accordance with the provisions of the Act.
The history sheet did not at all link to the proximity of the two incidents on the basis of which the detention order had been passed.
[144C D] The impugned order of detention was illegal and invalid.
[144G] E Kanu Biswas vs State of West Bengal, [1972] 3 S.C.C. 831; Haradhan Saha vs The State of West Bengal and Anr. ; ; Kanchanlal Maneklal Chokshi vs State of Gujarat & ors.
; , ; Dr. Ram Manohar Lohia vs State of Bihar & ors.; , ; Arun Ghosh vs State of West Bengal, ; Nagendra Nath Mondal vs State of West Bengal, 11972] 1 S.C.C. 498; Nand Lal Roy alias Nonda Dulal Roy vs State of West Bengal, ; S.K. Kedar vs State of West Bengal, ; Ashok Kumar vs Delhi Administration, ; State of U.P. vs Hari Shankar Tewari, ; ; Masood Alam vs Union of India, A.I.R. 1973 S.C. 897; Rameshwar Shaw vs District Magistrate Burdwan State of Andhra Pradesh & ors.
; , ; Ramesh Yadav vs District Magistrate, Etah and others, A.I.R. 1986 S.C. 315; Abdul Gaffer vs State of West Bengal, A.I.R. 1975 S.C. 1496 and Sudhir Kumar Saha vs Commissioner of Police, Calcutta, ;
| Held (Per MEHR CHAND MAHAJAN C. J., MUKHERJEA, VIVIAN BOSE and GHULAM HASAN JJ., section R. DAS J. dissenting) that the effect of the declaration in the case of The State of Bombay and Another vs F. N. Balsara(1) that clause (b) of section 13 of the Bombay Prohibition Act (XXV of 1949) is void under article 13(1) of the Constitution in so far as it affects the consumption or use of liquid medicinal or toilet preparations containing alcohol, is to render part of section 13(b) of the Bombay Prohibition Act inoperative, ineffective and ineffectual and thus unenforceable.
In view of the constitutional invalidity of a part of section 13(b) of the Bombay Prohibition Act having been declared void by the Supreme Court, that part of the section ceased to have legal effect in judging cases of citizens and must be regarded as null and void in determining whether a citizen was guilty of an offence.
The clear enactment of article 141 of the Constitution leaves no scope in India for the application of the American doctrine that "the declaration by a court of unconstitutionality of a statute which is in conflict with the Constitution affects the parties only and there is no judgment against the statute and it does not strike the statute from the statute book.
" In India, on the other hand, once a law has been struck down as unconstitutional by the Supreme Court, no notice can be taken of it by any Court because after it is declared as unconstitutional it is no longer law and is null and void.
The bare circumstance that a citizen accused of an offence under section 66(b) of the Bombay Prohibition Act is smelling of alcohol is compatible both with his innocence as well as his guilt.
The smell of alcohol may be due to the fact that the accused had contravened the enforceable part of section 13(b) of the Bombay Prohibition Act or it may well be due to the fact that he had taken alcohol which fell under the unenforceable and inoperative part of the section.
Therefore the onus was laid on the prosecution to prove that the (I) ; 79 614 alcohol of which he was smelling came under the category of prohibited alcohol within the meaning of the enforceable part of section 13(b).
Per section R. DAS J. : The declaration in the case of The State of Bombay and Another vs F. N. Balsara gives a citizen who has consumed or used liquid medicinal or toilet preparations a defence to a charge under section 66(b) read with section 13(b) of the Bombay Prohibition Act and it is for the accused person to prove the facts on which that declaration of law is based.
The State of Bombay and Another vs F. N. Balsara ([1951] S.C.R. 682) explained.
Kesava Madhava Menon vs The State of Bombay ([1951] S.C.R. 228) followed.
rangarao Bala Maize vs The State ([19511 54 Bom.
L. R. 325), In re Kanakasabai Pillai (A.I.R. 1940 Mad. 1) and Norton vs Shelby County ; referred to.
| The State of Uttar Pradesh issued two notifications in 1953, by one of which the Uttar Pradesh Zamindari Abolition and Land Reforms Act, 1950, was extended to certain areas, in which, Pargana Agori which was owned by the respondent was situate, and by the other, it was directed that all " estates" in the area including the Pargana should vest in the State.
The respondent challenged the notifications by a writ petition on the ground that the Pargana was not an estate within section 3 (8) of the Act.
While the matter was pending in the High Court, the definition in section 3 (8) was amended by U.P. Act 14 of 1958, and while appeals were pending in this Court, by U.P. Act 1 of 1964, by which, the Pargana was deemed to be an "estate".
The amendments had retrospective effect from 1st July 1952.
The appellant State contended that Act 1 of 1964 could not be impugned because, the Pargana was an "estate ' either within article 3 1A(2) (a) or (iii).
HELD : The forest land or waste land in the Pargana could not be deemed to be an estate within article 3 1A(2) (a) (iii) unless it was held or let for purposes ancillary to agriculture.
But the entire Pargana is la grant in the nature of a jagir or inam, having been held by the respondent 's ancestor under sanads granting the land and the land revenue to him for services rendered to the British, and consequently, is an "estate, within article 31A(2) (a) (i) of the Constitution.
[368 D, 370 G H; 371 F H] Thakur Amar Singhji vs State of Rajasthan [1955] 2 S.C.R. 303, followed.
The acquisition of the Pargana was a necessary step in the implementation of agrarian reforms contemplated by article 31A.
Therefore, U.P. Act 1 of 1964 can claim the protection of article 31A, and the two notifications must be upheld.
[372 A C}
| In the present case.
the trial court held the respondent guilty of the offences under sections 333, 323 and 440 all read with section 149, Indian Penal Code.
It was alleged by the prosecution that 'the respondent Bira Singh was a member of the unlawful assembly which was formed between 3 and 5 p.m. on 25th April 1960, in contravention of the promulgation of the order under section 144 of the Code of Criminal Procedure.
As a member of the mob he was alleged to have pelted Stones at police officers.
The respondent pleaded, in his defence that the present trial was barred by section 403, Criminal Procedure Code by reason of the acquittal of the accused under section 188, Indian Penal Code on July 30, 1960.
The Trial court did not accept his defence and convicted him.
On appeal, the Judicial Commissioner accepted the defence of the respondent and acquitted him on the bases of the decision of this court in Pritam Singh vs State of Punjab.
Before the trial of the present case, a complaint was filed against the respondent on May 12, 1960 under section 188 I.P.C.
In that complaint the District Magistrate alleged that the respondent had disobeyed the order passed under section 144 by forming himself alongwith other persons into an unlawful assembly between the hours of 3 and 5 p.m. on April 25, 1960.
In that case the trial court convicted him of the offence charged and sentenced him to rigorous imprisonment for 6 months.
On appeal the Sessions Judge by his judgment dated July 30, 1960 acquitted the respondent, on the ground that the prosecution had failed to establish that the respondent was present at the place and at the time where the occurrence took place.
This acquittal was confirmed by the Judicial Commissioner.
Held Sub sections
(1) to (3) of section 403 of the Code of Criminal Procedure deal with the trial of an accused for an offence and his conviction therefor.
The question raised for decision in Pritam Singh 's case however was different and was whether where an issue of fact has been tried by a competent court on a former occasion and a finding has been reached in favour of an accused, such a finding would constitute an estoppel or res judicata against the prosecution not as a bar to the trial and conviction of the accused for a different or distinct offence but as precluding the reception of evidence to disturb that finding of fact when the accused is tried subsequently even for a different offence which might be permitted by the terms of section 403 (2).
It would not be correct to say that the principle underlying in Sambasivan 's case was dissented from in R. vs Connelly.
Besides, it should be pointed out that the principle 124 underlying the decision in Pritam Singh 's case did come up for consideration before this Court on several occasions, but it was never dissented from though in some of them it was distinguished on facts.
Pritam Singh vs State of Punjab, A.I.R. 1956, S.C. 415, R. vs Connelly, and Sambasivam vs Public Prosecutor, Federation of Malaya, , relied on.
Gurcharan Singh vs State of Punjab, A.I.R., , referred to.
State of Bombay vs section L. Apte, ; , Banwari Godara vs The State of Rajasthan, Cr. A. No. 141 of 1960 dated February 7, 1961, Mohinder Singh vs State of Punjab, A.I.R. 1965 S.C. 79, Kharkan vs The State of Uttar Pradesh, A.I.R. 1965 S.C. 83, Yusofalli mulla vs The King.
76 I.A. 158, referred to.
(ii) The rule of issue estoppel does not prevent the trial of an offence as does author fois acquit but only precludes evidence being led to prove a fact in issue as regards which evidence had already been led and a specific finding recorded at an earlier criminal trial before a court of competent jurisdiction.
The rule of issue estoppel is not the same as the plea of double jeopardy or autre fois acquit is also clear from the statement of the law by Lord Mac Dermott in Sambasivam 's case.
(iii) It is clear that section 403 of the Criminal Procedure Code does not preclude the applicability of this rule of issue estoppel.
The rule being one which is in accord with sound principle and supported by high authority and there being a decision of this court in Pritam Singh 's case which has accepted it as a proper one to be adopted, there is no reason for discarding it.
The Queen vs Ollis, The King vs Wilkes, ; , Marz vs The Queen, ; and Manick chand Agarwall vs The State, A.I.R. 1952 Cal.
730 relied on.
| % Respondent No. 1, Shri P.K. Mukerjee, filed an application under the U.P. Act No. 3 of 1947 (Temporary Control of Rent and Eviction Act) (OLD Act), seeking permission to file a suit for eviction of his tenant, Harbans Lal Soni, the father of the appellant, D.K. Soni, on the grounds of his bona fide requirement for his personal need.
The Rent Control and Eviction officer rejected the application, holding that the respondent 's requirement was not bona fide.
A revision was filed by the respondent No. 1 before the Commissioner who allowed the same.
The U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 (new Act) came into effect on July 15, 1972.
On August 2, 1972, the State Government rejected the representation of the tenant (father of the appellant) filed under section 7 of the old Act against the order of the Commissioner aforementioned.
The tenant then moved a writ petition in the High Court.
A Single Judge of the High Court allowed the petition and set aside the abovesaid orders of the Commissioner and the State Government.
Upon an appeal being filed by the respondent (No. 1) against the order of the Single Judge, a Division Bench of the High Court allowed the same, setting aside the order of the Single Judge and upholding the above said orders of the commissioner and the State Government, allowing the eviction of the tenant.
In September, 1978, the respondent No. 1 moved an application under section 21, read with section 43(2)(rr) of the new Act.
Thereafter, the respondent executed an agreement as vendor to sell the permises in dispute in favour of the vendee, the wife of the appellant, Smt.
Madhu Soni daughter in law of the tenant, Harbans Lal.
The agreement was dated November 7, 1978, and it mentioned therein that the landlord, respondent No. 1 had filed an application against the tenant above 617 named.
The father in law of the vendee for permission to file a suit for eviction of the tenant from the premises in dispute on account of the respondent 's personal need, and that the permission had been granted.
The agreement recited that a vacant portion of the land of the disputed premises, would be in the exclusive possession of the vendor and the rest of the property the disputed premises would be sold to the vendee, Smt.
Madhu Soni.
The agreement stipulated that the vendee or the other members of the family had no right over the portion of the land to be kept with the vendor, and that the appellant had given up his tenancy rights in respect of the same, and also that premises would be built on the said vacant land with the money to be obtained by selling the disputed house to Smt.
Madhu Soni.
The price of the house was settled at Rs.1,00,000 out of which a sum of Rs.5000 was paid as earnest money, and it was stipulated that the rest of the amount would be paid at the time of registration.
It was agreed that the parties would move the authorities for permission to transfer as early as possible and the saledeed would be executed within one month of the grant of permission and notice to the vendee.
It was stated that if the vendee failed to get the sale deed executed within the time stipulated, the earnest money of Rs.5000 would be forfeited and the property would stand released in favour of the vendor.
It was also stipulated that the need of the vendor for the premises subsisted and the agreement had been entered into to enable the vendor to get money out of the sale to construct a house for himself on the vacant piece of land.
On December 12, 1978, the father of the appellant, who was the tenant, died, leaving behind a widow, two sons, including the appellant, and a daughter.
On December 22, 1978, the appellant informed the Prescribed Authority before whom the application under section 21(1)(a) of the New Act, read with section 43(2)(rr), was pending, about the death of the tenant, Shri Harbans Lal Soni.
On March 23, 1979, the respondent No. 1 filed an application (in Case No. 53 of 1978) for substitution of the legal heirs of the deceased tenant, along with an application under section 5 of the Limitation Act.
The Prescribed Authority rejected the application for substitution on grounds of delay.
On December 11, 1979, the respondent No. 1 moved a second application under section 21(1)(a), read with section 43(2)(rr) of the new Act (on the ground as in his earlier application), which was registered as Case No. 68 of 1979.
On March 12, 1981, the respondent No. 1 executed two separate agreements for sale of the property in dispute, in favour of R.P. Kanodia and P.K. Kanodia, respectively.
618 The Prescribed Authority decided the Case No. 68 of 1979 abovementioned on July 7, 1981, directing the tenant to be evicted from the premises in dispute.
The Additional District Judge dismissed the appeal against the order of eviction passed by the Prescribed Authority.
On March 11, 1983, the appellant 's wife, Smt.
Madhu Soni filed a suit for injunction, restraining the respondent No. 1 from dispossessing her from the premises in dispute on the strength of the registered agreement, asserting that she resided in the premises in part performance of the agreement under section 53A of the Transfer of Property Act.
The trial Court dismissed the suit.
The High Court was then moved for relief by a writ petition against the orders of the Prescribed Authority for eviction and the order of the Additional District Judge.
The writ petition was dismissed, followed by the dismissal of a Review Petition too.
Aggrieved thereby the appellant has appealed to this Court by special leave.
Dismissing the appeal, the Court, ^ HELD: The questions involved in the appeal are: Firstly, in view of the provisions of section 43(2)(rr), was the High Court right in its decision, in the facts and circumstances of the case, specially the factum of the death of the (original) tenant being alleged, and in view of the fact that the execution of the order for eviction had become final before the new Act came into operation? Secondly, how far do the subsequent events, namely, the agreements by the respondent No. 1 with the wife of one of the sons of the tenant and with the Kanodias to sell the property in dispute, demolish or destroy the case of a bona fide need of the landlord? [622G H; 623A] In substance, the need was there of the landlord for his occupation of his premises as he wanted to reside in his house after his retirement from Government service, and for this purpose he had sought eviction and obtained the order of eviction prior to the coming into operation of the new Act.
The object of the landlord was not defeated by the provisions of the New Act.
[626G H] Considering the subsequent events, namely, the refusal of permission by the Urban Ceiling Authorities, the escalation of building cost (upto 1987), failure on the part of the vendee to register and execute the document, it is not possible to hold that the subsequent events have so materially altered the position as to defeat the original order for possession passed in favour of the landlord.
The subsequent events do not in 619 any way affect the existence of the need of the landlord for possession of premises in question.
[627C E] There was no failure on the part of the landlord to take steps for the substitution.
Nothing was proved before the Court that the agreements with R.P. Kanodia and P.K. Kanodia were valid today or given effect to in view of the provision of the Land ceiling Act.
It was not proved to the satisfaction of the authorities below that any agreement to sell the premises to Kanodias had been given effect to and acted upon and in that view of the matter, the need of the landlord indubitably succeeds, and any allegations made do not merit any revision of the order which had become final.
Finality of the judicial decisions is one of the essential ingredients upon which the administration of justice must rest.
In that view of the matter, even if the contentions advanced on behalf of the respondents are taken into consideration and a new look is taken because of the subsequent events, which cannot be done in view of the specific provisions in clause (rr) of section 43(2) of the new Act, the appellant has no case.
The High Court was right in not interfering with the order of the Prescribed Authority.
Finality of the decisions of the authorities under the Act has to be given due reverence and place in the judicial administration.
[629A C] The appeal fails.
As the appellant had been staying in the premises for quite some time, time till April 30, 1988 granted to him to deliver vacant possession of the house to the landlord, subject to his filing usual undertaking within four weeks.
[629E F] Pasupuleti Venkateswarlu vs The motor and general Traders; , ; Pattersion vs State of Alabama, ; at 607; Ramji Dayawala and Sons(P) Ltd. vs Invest Import; , ; Hasmat Rai and Anr.
vs Raghunath Prasad; , ; Syed Asadullah Kazmi vs The Addl.
District Judge, Allahabad and Ors.
, ; ; Sher Singh and Ors.
vs The State of Punjab, ; ; Bansilal Sahu vs The Prescribed Authority and Anr, [1980] All L.J. 331; Smt.
Sarju Devi vs Prescribed Authority, Kanpur, [1977] All L.J. 251 and Tara Chand Khandelwal vs Prescribed Authority, Agra, [1976] All L.J. 708, referred to.
|
Civil Appeal No. 96 of 1961.
Appeal by special leave from the award dated December 7, 1959, of the central Government Industrial Tribunal Dhanbad in reference No. 42 of 1959.
S.C. Banerjee and P. K. Chatterjee, for the appellant.
Janardan Sharma, for the respondent.
January 30.
The Judgment of the Court was delivered by SARKAR, J.
The appellants, the Bhowra Kankanee Coal Co. Ltd., own the Bhowra and other collieries.
On the Bhowra Colliery there are a number of residential bungalows belonging to the appellants occupied by their officers employed in the colliery.
The appellants employ certain malis for working as such in these bungalows and their duty is to look after and maintain the gardens there.
A dispute along between the appellants and their workmen as to whether these malis, who were fourteen in number, were entitled to bonus.
By an order made on June 23, 1959, under the , the Government of India referred this dispute along with another with which we are not concerned in this case, for adjudication to the Industrial Tribunal, Dhanbad.
The Points referred concerning the dispute above mentioned were in these terms: (1) Whether the withdrawal of the benefit of bonus provided in the Coal Mines Bonus 885 Scheme by the management of the Bhowra Colliery from the following garden mazdoor/malis is justified.
If not, to what relief are they entitled and from what date? (2) Whether the garden mazdoors/malis referred to above are employed on domestic and personal work within the meaning of paragraph 3 (b) of the Coal Mines bonus Scheme, 1948 and if not, to what relief are they entitled and from what dates The points so referred were decided by the Tribunal against the appellants by an award made on December 7, 1959, and the present appeal is against that award.
Till January 1, 1955, the Bhowra and certain other collieries managed as a group, were owned by the Eastern Coal Company Ltd., and on that date these collieries were sold to the appellants.
At the time when this sale was being arranged, the workmen in these collieries raised a dispute that their services should be treated as continuous inspite of the transfer of the collieries from one owner to another by the sale and that the conditions of their service and the facilities which they were enjoying under the previous owners should be guaranteed and continued by the succeeding owners, that is the appellants, after the latter took over the collieries.
At the instance of the conciliation officer appointed under the Act this dispute was settled by an agreement made on January 14, 1955, to which the Conciliation officer the workmen the previous owners and the appellants were parties.
Paragraph 3 of this agreement provided as follows: "Agreed that the existing service conditions and the facilities will be continued, excepting pension." Now in 1948 an Act called the Coal Mines Provident Fund and Bonus Schemes Act had been passed by section 5 of which the Central Government was 886 empowered to frame a bonus scheme for the payment of bonus to the employees of coal mines, The Central Government had framed a Bonus Scheme under this provision in 1948 and since then the previous owners had been paying the malis employed for the bungalow gardens belonging to the Bhowra Colliery, bonus in terms of it.
In 1951 they once stopped the bonus but that caused an industrial dispute and they thereupon restored the bonus.
Upto the acquisition of the Bhowra Colliery by the appellants they position thus was that these malis had been receiving bonus since 1948 excepting for a short period during which it had been stopped as earlier mentioned.
After they became the owners of the Bhowra Colliery, the appellants however stopped the payment of bonus to these malis.
This raised the industrial dispute which had led to this appeal.
Paragraph 3 of the Bonus Scheme framed under the Act, so far as relevant for this case, is in these terms: Paragraph 3.
Except as hereinafter provided every employee in a coal mine to which this Scheme applies shall be eligible to qualify for a bonus, Exceptions: An employee in a coal mine shall not be entitled to a bonus under the Scheme for the period during which (a) . . . . . . . . (b) he is employed as a mali, sweeper or demestic servant on demestic and personal work; (c) . . . . . . . .
One of the questions raised in this appeal is whether the bungalow malis were entitled to bonus under this paragraph.
The appellants contended before the Tribunal that malis as a class were excepted from the benefit of the Bonus Scheme by the provision 887 in exception (b) in this paragraph.
They further contended in the alternative that these malis were excepted in any event because they were In malis employed on domestic and personal work within the meaning of the exception.
The Tribunal rejected these contentions of the appellants and held (a) that these malis were entitled to bonus under paragraph 3 of the agreement of January 14, 1955 and (b) that they were not employed on domestic and personal work and were therefore not within the exception.
For these reasons the Tribunal held that the withdrawal of the bonus by the appellants was not justified.
It is not clear on what ground the Tribunal held that the malis were entitled to bonus under paragraph 3.
of the agreement of January 14, 1955.
It may be that the Tribunal thought that the Bonus Scheme framed by the Central Government formed a condition of service of the malis or a facility to which they were entitled and which the appellants undertook by the agreement of January 14, 1955, to continue.
If this was the point of view, then of course the further question still remains whether the malis were on domestic and personal work for if they were, then they would not be entitled to the bonus as a facility or a condition of their service under the Scheme.
It was however contended on behalf of the respondent workmen in this Court that the right to bonus was a condition of the service of the malis and a facility to which they were entitled independently of the Bonus Scheme and that this is what the Tribunal had held.
The record however is not very clear on this question.
The appellants dispute the contention of the workmen and further say that in any event the Tribunal had no jurisdiction to decide that question for the question referred to it was the right of the malis to bonus under the Bonus Scheme.
888 We think that the appellants ' contention is well founded.
What had been referred was the question "whether the withdrawal of the benefit of bonus Provided in the Coal Mines Bonus Scheme . is justified".
On the language of the order of reference it seems to us that the dispute referred was as to the right as provided in the Bonus Scheme and not as to any other right.
This also was the workmen 's case before the Tribunal as appears from its written statement filed there.
In the statement of case filed in this appeal also, the respondent took the same position.
We therefore think that if the Tribunal had held that the malis were entitled to the bonus under the agreement of January 14, 1955 independently of the Bonus Scheme it had exceeded its jurisdiction and its award cannot be upheld.
The question still remains as to whether on a proper construction of paragraph 3 of the Bonus Scheme these malis had any right to bonus.
That was undubitably the question referred to the Tribunal.
The words requiring construction are "on domestic and personal work".
The Tribunal held that malis working in bungalows belonging to the appellants were not working for the home or household of private persons or individuals and were therefore not on domestic work.
It also held that as the malis work under the direction and control of the appellants and were liable to be transferred from one bungalow to another or to some other work they were not on personal work.
We are unable to accept this construction of paragraph 3 of the Bonus Scheme.
Domestic means as of the home.
We feel no doubt that the malis who were working in the bungalows occupied by the officers were working in the home of the officers.
They were, therefore, on domestic work.
The work they were doing would not cease to be domestic work because the bungalows belonged not to the officers but to the appellants.
Whether a work 889 is domestic or not would depend on its nature.
Suppose an officer has employed his own mali for working in the bungalow garden, that mali would surely be on domestic work.
This is not disputed.
The nature of that work would not change because the the mali was working not under the orders of the officer occupying the bungalow but under the appellants, nor because the bungalow did not belong to the officer but to the appellants.
Nor for the same reason does the fact that the malis were employed by the appellants and not by the officers make any differences The fact that Malis might be transferred to other jobs and cease to be malis altogether is also irrelevant.
On such transfer they might become entitled to bonus.
The exception in paragraph 3 deprives them of the bonus only for the time they are malis on domestic and personal work.
Paragraph 3, of the Bonus Scheme contemplated malis who were employees of the colliery owners and were yet on domestic work.
The Tribunal thought that paragraph 3 only contemplated cases of malis appointed by the officers who were paid some allowance by the colliery owners for keeping malis in the gardens of the bungalows occupied by them.
It may be that malis to engaged would be the employees of the colliery owners, as the term employee is defined in the Act under which the Bonus Scheme was framed, but we see no reason to restrict malis on domestic work referred to in paragraph 3 to such malis only.
As we have said earlier, whether a malis on domestic work or not would depend on the nature of the work.
As the work which the malis with whom we are concerned did, was domestic work.
these malis must be deemed to be within the exception mentioned in paragraph 3.
They would not cease to be malis on domestic work because they had been working in the bungalows belonging to the appellants or were under their control and orders.
We further feel no difficulty in holding that 890 these malis were on personal work.
The word "personal" is obviously used in the sence of work for an individual as distinguished from work for the Coal mine as an institution.
These malis were undoubtedly working for the officers as individuals.
Therefore they were on personal work.
For these reasons in our view the malis in the present case were not entitled to any bonus under the Bonus Scheme.
As in our opinion the order of reference does not raise any question as to whether the malis were entitled to bonus apart from the Bonus Scheme, it is unnecessary for us to express any opinion on that question and we do not do so.
The result is that this appeal allowed and we set aside the award of the Tribunal in so far as it is concerned with the two points of dispute earlier set out which had been referred to it.
We do not think it a fit case to make any order for costs.
Appeal allowed.
| In exercise of the power conferred by 5. 5 of the Coal Mines Provident Fund and Bonus Schemes Act, 1948, the Central Government framed a Bonus Scheme for the payment of bonus to employees of coal mines.
Paragraph 3 of the scheme made every employee in a coal mine eligible for a bonus except, infer alia, "a mali on domestic and personal work".
The question for consideration was whether under this paragraph the malis working in the officers ' bungalows had any right to bonus. ^ Held, that these malis were not entitled to any bonus under the Bonus Scheme.
Paragraph 3 contemplated malis who were employees of the colliery owners and were yet on domestic work.
Domestic meant as of the home.
The malis 884 who were working in the bungalows occupied by the officers, were working in the homes of the officers.
They were therefore, on domestic work.
The work they were doing did not cease to be domestic work because the bungalows belonged not to the officers but to the appellant or because they were under the control and orders of the appellant.
Further, these malis were on personal work.
The word "personal" was used in the sense of work for an individual as distinguished from work for the coal mine as an institution.
These malis were undoubtedly working for the officers as individuals.
| The appellant manufactured hume pipes and had factories in different parts of India, Pakistan and Ceylon.
For determining the available surplus for the payment of bonus for the year 1954 55 the appellant claimed deductions as prior charges on account of (i) losses suffered on the Lahore factory written off, (ii) expenditure on patents written off, and (iii) debenture redemption reserve.
It also claimed 6% return on the preference shares as return on paid up capital.
The losses on the Lahore factory had been incurred in the previous years which had been carried forward from year to year and had been written off as irrecoverable in the bonus year.
The amounts spent on the purchase of the patents which had been worked off in the previous years had also been written off in the bonus year.
The appellant had issued debentures in 1942 43 redeemable in 1962 63 and claimed Rs. 3,50,000 as the annual contribution towards the redemption reserve.
The appellant bad issued preference shares on which the shareholders, under the terms of the issue, were not entitled to more than 5%, but the appellant claimed a return of 6% on these hatres also as return on paid up 949 capital as provided in the Full Bench formula.
The dispute regarding bonus had been raised by the workmen of the Wadala factory alone, the workmen of other factories having settled the matter had been paid the agreed bonus.
The respondents claimed that the bonus calculations should not be made on the basis of All India figures but on the basis of the actual amounts paid or payable by the appellant under the settlements.
Held, that the losses on the Lahore factory and the patents written off could not be allowed as prior charges as they were merely debits in connection with the working of previous years.
Nor could the amount on account of the debenture redemption reserve be allowed as a prior charge as no such charge was envisaged by the Full Bench formula of the Labour Appellate Tribunal ; but this amount could be taken into consideration when distributing the available surplus among the various interests entitled thereto.
In determining the available surplus the Full Bench formula must be adhered to in its essential particulars as otherwise there would be no stability or uniformity of practice.
A deduction of more than 5% return on the preference shares could not be allowed as that was the maximum return which the shareholders could get on these shares.
Even though the Full Bench formula mentioned 6% return on paid up capital it was not to be literally construed and the Tribunal could, if the circumstances warranted, increase or decrease the rate.
In calculating the actual amount of bonus to be paid calcu lations had to be made on the basis of All India figures otherwise the respondents would have an advantage over those workmen with whom settlements had been made and would get larger amounts of bonus merely by reason of the fact that the appellant had managed to settle the claims of those workmen at lesser figures.
| The respondents filed a suit against the petitioner in 1954 for the possession of certain property and for mesne profits and obtained decree in their favour.
The petitioner 's appeal to the High Court was dismissed in April 1959 and a petition for special leave to appeal to this Court was granted in June, 1959.
Thereafter, the 7th respondent died in November 1959.
The petitioner filed the present applications in October 1964 for bringing on record the legal representatives of the 7th respondent and for condonation of delay on various grounds.
It was also contended on behalf of the petitioner that in view of the fact that after the preliminary decree for mesne profits had been passed, the respondents/plaintiffs brought the heirs and legal representatives of the deceased 7th respondent on record in the final decree proceedings within the time prescribed, and as the legal representatives were brought on record at one stage of the suit on the basis of the rule laid down by the Privy Council in Brij Inder Singh vs Kanshi Ram, 44 I.A. 218, no question of abatement would arise in respect of the appeal; that the final decree proceedings are a stage in the suit and the appeal is another stage in the suit and, therefore, the bringing on record of the legal representatives in one stage of the suit will enure for all stages of the suit.
HELD: (i) On the facts of the case there were no sufficient grounds for condoning the delay in bringing the legal representatives of the 7th respondent on the record.
(ii) The order bringing the legal representatives of the respondent on record in the final decree proceedings cannot enure for the benefit of the appeal filed against the preliminary decree.
The appeal therefore abated so far as the 7th respondent was concerned.
[217D] An order bringing the legal representatives of a deceased party on the record passed at the stage of an interlocutory application in a suit, or passed while an appeal is pending where the suit is subsequently remanded to the trial court or if passed while an appeal is pending against an interlocutory order in passed while an appeal the subsequent stages of the suit ' in all that suit, would enure for made at one stage of the suit be it the suit these.
cases the order is final appeal against the interlocutory order or final order in the suit, for here the appeal is only a continuation of the suit.
But the same legal position cannot be invoked where an order is made in a suit subsequent to the filing of an appeal at an earlier stage.
Such an order cannot be Projected,backwards into the appeal that has already been filed so as to become an order in that appeal [216F 217D] Brij Inder Singh vs Kanshi Ram, 44 I.A. 218 distinguished.
Shankarnaraina Saralaya vs Laxmi Hengsu, A.I.R. 1931 referred to.
N)3S.C.I. 1 212
| In these two appeals the same questions of law arise and the facts in C.A. No. 166 of 1962 are similar to those in C.A. 167 of 1962 which are stated below.
The appellant in C.A. No. 167 of 1962 is the owner of certain lands situated in the city of Kanpur.
The land is occupied by a Mill and godowns and no part of the land is waste land or arable land.
In 1932 the U. P. Government sanctioned by a notification a Scheme (Scheme No. XX) of the improvement Trust, Kanpur.
This Trust has been replaced by the Development Board, Kanpur, by reason of the Kanpur Urban Area Development Act, 1945.
426 In 1955 the Housing Department of the Government of U.P, sponsored a scheme for building industrial tenements.
Part of the scheme concerned the locality in which the land in dispute is situated.
In 1956 a notification was issued under section 4 of the Land Acquisition Act, 1894, by the Governor of U.P. to the effect that the plots in dispute were required for the construction of tenements tinder the subsidized industrial.housing scheme of the U.P. Government as well as for general improvement and street scheme No. XX of the Board.
This was followed by a notification under section 6 of the Land Acquisition Act stating that the case being one of urgency the Governor was pleased under sub sections
(1) and (I A) of section 17 of that Act to direct that the Collector of Kanpur, though no award under section II had been given, might on the expiration of the notice mentioned vs 9(1) take possession of land mentioned in the schedule.
Subsequently a notice under section 9 was issued which stated that possession of the land will be taken within 15 days.
The appellant thereupon filed a writ petition under article 226 of the Constitution in the High Court.
Two main points were raised in the petition.
Firstly, it was contended that as the acquisition was for the purpose of Scheme No. XX of the Board action had to be taken in accordance with section 114 of the Kanpur Act and the schedule thereto and as no action had been so taken the proceedings for acquisition were bad.
In the second place, it was urged that it was not open to the Governor to issue the notification under section 6 of the Land Acquisition Act without first taking action under section 5A thereof.
The High Court rejected both these contentions and in the result dismissed the writ petition.
The present appeal was filed with a certificate issued by the High Court.
In the appeal before this Court the same questions which were agitated before the High Court were raised.
Held it is only when the Board proceeds to acquire land by virtue of its powers under section 71 that section 114 comes into play and the proceedings for acquisition have to take place under the Land Acquisition Act as modified by section 114 read with the schedule.
But where the acquisition is, as in the present case, by the Government under the Land Acquisition Act, for public purposes though that purpose may be the purpose of the Board, the Kanpur Act has no application at all and the Government proceeds to acquire under the provisions of the Land Acquisition Act alone.
From the scheme of the Act it is clear that compliance with the provisions of s.5 A is necessary before a notification 427 can be issued under section 6.
Even where the Government makes a direction under section 17(1) it is not necessary that it should also make a direction under section 17(4).
If the Government makes a direction only under section 17(1) the procedure under section 5 A would stil have to be followed before a notification under section 6 is issued.
It is only when the Government also makes a declaration under section 17(4) that it becomes necessary to take action under section 5 A and make a report thereunder.
Under the Land Acquisition Act an order under section 17(1) or section 17(4) can only be passed with respect to waste or arable land and it cannot be passed with respect to land which is not waste or arable land on which buildings stand.
just as section 17(1) and section 17(4) are independent of each other, section 17(1.A) and section 17(4) are independent of each other and an order under section 17 (I A) would not necessarily mean that an order under section 17(4) must be passed.
The right to file objections under section 5 A is a substantial right when a person 's property is being threatened with acquisition and that right cannot be taken away as if by a side wind because section 17(1 A) mentions section 17(1).
Section 17(1 A) mentions section 17(1) merely to indicate the circumstances and the conditions under which possession can be taken.
It was not open to the State Government to say in the notification under section 4 that proceedings under section 5 A will not take place.
This part of the notification under section 4 is beyond the powers of the State Government and in consequence the notification under section 6 also, as it was issued without taking action under section 5 A, must fail.
| Certain disputes between the appellant and its workmen were referred to the industrial tribunal for adjudication by the State Government under the provisions of the .
The award made by the tribunal provided, inter alia, (1) that if a workman had to work on a weekly off or on a holiday he should be paid 1 1/2 times his wages and dearness allowance over and above a substituted holiday, and (2) that all the workmen shall be granted 15 days privilege leave in a year which could be allowed to be accumulated up to 45 days.
The appellant applied to the Government under section 36A of the Act stating that the directions given by the tribunal had to be clarified on the grounds, inter alia, (1) that the reason for directing the additional payment for working on a weekly off or on a holiday was that the workman was deprived of an opportunity to spend his time in the company of his colleagues and refresh himself, but that there was no basis for this since the whole factory worked on weekly off or on a holiday, and (2) that the accumulation of privilege leave of 45 days to all workmen was not justified.
The tribunal made a clarification as regards privilege leave confining it to only those workmen who had put in 240 days or more of actual working during the previous calendar year so as to be in conformity with the provisions of the , but as regards others matters it held that the directions given were quite clear and that under the guise of clarification the appellant could not seek a modification of the award under section 36A. ^ Held, that 36A of the , was intended to empower a tribunal to clarify the provisions of the award passed by it where a difficulty or doubt arose about their interpretation, and not to review or modify its own order.
Any question about the propriety, correctness or validity of any provision of the award would be outside the purview of the enquiry contemplated by that section.
| During consolidation proceedings in a village, under the Uttar Pradesh Consolidation of Holdings Act, 1954, a question of title arose, and the Consolidation Officer referred the question to the Civil Judge who referred it to an arbitrator appointed under section 37 of the Act.
The Arbitrator submitted his award to the Court.
The appellants filed objections under section 15 of the , and the Civil Judge modified the award.
On appeal by the respondents, the District Court held that the appeal was maintainable and that the Civil Judge was not justified in modifying the award.
A revision petition to the High Court filed by the appellants was dismissed.
In appeal to this Court, it was contended that section 39 of the , which provides for appeals does not apply to arbitrations under section 37 of the U.P. Act.
HELD:The decision of the Civil Judge modifying, the award was appealable under section 39 of the .
[67 A].
The effect of section 37 of the U.P. Act read with sections 46 and 47 of the is, to apply sections 15 and 39 of the to the proceedings under the U.P. Act; and under section 12(5) of the U.P. Act what is made final is the decision of the arbitrator as it emerges after appropriate proceedings, under the provisions of the .
[65 G H; 66 H].
Carju Prasad vs Civil Judge, Farrukhabad, I.L.R. [1959].
1 All354 and Sayed Ulla Khan vs The Temporary Civil Judge, Sultanpur, , approved.
Attar Singh vs State of u.p.
[1959] Supp. 1 S.C.R. 928, explained.
| The respondent was holding the post of an Assistant to the Additional Development Commissioner, Planning, Bangalore.
A departmental enquiry was held against him and the Enquiry Officer recommended that the respondent be reduced in rank.
After considering the report of Enquiry Officer, the Government issued a notice calling upon respondent to show cause why he should not be dismissed from service.
The reply of the respondent was that the entire case had been foisted on him.
After considering his representation, the Government passed an order dismissing him from service.
The reason given for his dismissal was that the respondent had on two earlier occasions committed certain offences and he had been punished for the same.
However, those facts were not given as reasons for the proposed punishment.
of dismissal from service.
541 The respondent filed a petition in the High Court under article 226 of the Constitution for quashing the order of his dismissal.
The High Court quashed the order of dismissal on the ground that the two circumstances on which the Government relied for the proposed infliction of punishment of dismissal were not put to the respondent for being explained by him in the show cause notice which was issued to him.
The appellant came to this Court by special leave.
The contentions of the appellant were that the Government was entitled to take into consideration the previous record of Government servant in awarding punishment to him and it was not incumbent on it to bring to the notice of the Government servant the said fact in the second notice.
Moreover, as the Government servant in this case had knowledge of his two.earlier punishments he was not in any way prejudiced by their non disclosure in the second notice.
Dismissing the appeal, Held, that it was incumbent upon the Government to give the Government servant at the second stage reasonable opportunity to show cause against the proposed punishment and if the proposed punishment was also based on his previous punishments or his previous bad record, that should be included in the second notice so that he may be able to give an explanation.
The doctrine of "presumptive knowledge" or that of "purposeless enquiry" is subversive of the principle of "reasonable opportunity".
Secretary of State for India, vs I. M. Lal, [1945] F.C.R. 103, Khern Chand vs Union of India, ; , Gopalrao vs State, I.L.R. , Shankar Shukla vs Senior Superintendent of Post Offices, Lucknow Division, A.I.R. 1959 All. 624 and State of Assam vs Bimal Kumar Pandit, [1964] 2 S.C.R. referred to.
| The grandfather and great grand father of the respondents and the father of the appellant were brothers.
By a registered deed (Ext. 39) the elder brother purportedly gave the younger brother (appellant 's father) some lands for separate living and maintenance of himself, and his male lineal descendants for ever.
The lands in dispute were a part of the lands covered by the deed.
In their suit, the plaintiffs alleged that the suit lands were part of Desgat Watan estate which, by virtue of an immemorial family and territorial custom, was impartible and the junior members were given lands only for their maintenance, and that till his death, the appellant 's father continued, to be an undivided member of the joint family consisting of himself and the plaintiffs, and that on the death of the appellant 's father the lands should go to them.
The trial court held: (1) that the impartibility of the estate and the rule of primogeniture had not been proved; (2) that there was severance of the joint family in 1902 since when the brothers were living separately; (3) that on the abolition of Watans by Bombay Act 60 of 1950, the suit lands which originally were Watan lands, were re granted in favour of the appellant 's father and that the plaintiffs tacitly assented to the regrant of the lands exclusively in his favour.
On appeal, the High Court affirmed the view of the trial court that the estate was not impartible and that the onus of proving partition was on the defendant (appellant herein).
It was held that Ext.
39 did not establish that the brothers were divided in 1902 and that the suit lands were allotted to the appellant 's father; that on the erroneous but honest belief that Desgat lands were impartible, the elder brother granted the lands to his brother and his descendants in the male line in lieu of their maintenance and that the younger brother having died without male issue, the tenure came to an end whereupon the plaintiffs who were the surviving male members of the family, were entitled to resume the lands.
The High Court remitted the matter to the trial court with certain directions.
In appeal to this Court, the appellant contended: (i) that her father prior to the execution of Ext.
39, had clearly intimated to his brother his intention to divide the estate and to live separately after division, resulted in a severance of the joint family status, and that such severance was evident from the recitals in Ext.
39 and the subsequent conduct of the members of the erstwhile family.
162 Since the appellant 's father after such division was holding, the suit lands as his separate property, the same were inherited by the appellant to the exclusion of the plaintiffs.
(ii) Since the regrant of the suit lands to the appellant 's father created new rights exclusively in his favour, the regrant did not enure for the benefit of the plaintiffs.
Allowing the appeal and dismissing the plaintiff 's suit ^ HELD: 1.
Unity of ownership and commonsality of enjoyment are the essential attributes of an undivided Hindu family of Mitakshra concept.
So long as the family remains undivided no member can predicate a definite share to himself.
Cesser of this unity and commonsality means cesser or severance of the joint family status, which in Hindu Law amounts to partition, irrespective of whether it is accompanied or followed by a division of the properties by metes and bounds.
Disruption of joint status covers both division of right and division of property.
Division of joint status may be brought about by any adult member of the joint family by intimating the others his intention to separate and enjoy his share in the family property in severalty.
Such intimation may be an explicit declaration (written or oral) or manifested by conduct of the members of the family.
[170A B] (i) In the instant case, Ext.
39 speaks of a division of the joint family status and separation of interests.
The trial judge translated the term "Vibhaktarahave" in Marathi, as connoting division of status.
But the High Court did not agree with the translation made by the trial judge, and preferred to rely on the translation by the High Court translator.
Except for the English translation of the word "Vibhaktarahave" there is no substantial difference between the two translations.
[171 A B] The word "Vibhaktarahave" is a compound of two words viz., "Vibhakta" and "Rahave".
"Vibhakta" appears to have its roots in the Sanskrit word "Vibhaga".
"In the Mitakshra, Vijnanesvara, defines the word 'Vibhaga ', which is usually rendered into English by the word 'partition ' as the adjustment of diverse rights regarding the whole by distributing them in particular portions of the aggregate".
"Rahave" means "living".
Understood in its etymological sense the word "Vibhaktarahave" means living separately after division.[172H] (ii) None of the four features which, according to the High Court, militate against the literal interpretation of the word "Vibhaktarahave", viz., that the deed was one for maintenance, that it was executed by the elder brother, that the lands were given to the appellant 's father and his descendants in the male line and that the appellant 's father would not have remained contended with only a small portion instead of claiming entire half share detracts from the conclusion that in substance and reality the document evidence a division of joint family status as a result of an intimation by the appellant 's father to his brother of his intention to live separately after division.
[173D] 2.
Section 92 of the Evidence Act prohibits only the varying of terms of a document, not the memorandum or recitals of facts, bereft of dispositive terms, particularly when the correctness of the whole or any part of the recital is in question.
[174E] 163 In the instant case the preliminary recital does not fall under the dispositive or operative portion of the document.
The bar under section 92 against the admissibility of extrinsic evidence for the purposes of showing that the insertion of the words 'for your maintenance ' in the recital is wrong, is not attracted.
[174G] 3.
(a) When there is a dispute in regard to the true character of a writing evidence de hors the document can be led to show that the writing was not the real nature of the transaction but was only illusory which cloaked something else and that the apparent state of affairs was not the real state of affairs.
[174H] Chandi Prasad Singh vs Piari Bidi, CA No. 75 of 1964, decided on 16 3 1966, Bhagwan Dayal vs Reoti Devi, ; ; referred to.
(b) The preliminary recital in Ext.
39 raises an inference that sometime prior to the date of the deed the younger brother had clearly intimated to his coparcener of his intention to sever the joint family status and to enjoy the joint family property in severalty.
Disruption of the joint family status ensued.
From that date onwards the brothers ceased to be coparceners.
That is, at the time of the execution of the deed, joint family status did not exist.
There is no evidence that after the severance of the joint family status there was a re union.
[175 E F] (c) It cannot be said that the preliminary recital furnished little or no evidence that the younger brother intimated in clear terms his intention to sever the joint family status.
The document had been let in evidence more than 70 years after its execution.
All those who might have given evidence were dead.
In such a situation it is permissible to draw reasonable inferences to fill the gap of details obliterated by time.
[175H; 176A] Chintamanibhatla Vankat Reddy vs Rani of Wadhawan; 47 I.A. 6 at p. 10; Sree Sree Iswar Gopal Jien Thakur vs Pratapmal Begaria, ; referred to.
(d) Once it is found that the division of joint status preceded the execution of the deed, the elder brother had no power to impose a condition that the land was being given to his younger brother and male lineal descendants for their maintenance.
[176 E F] (e) The expression 'Potgi ' (maintenance) or 'Nirwahkrit ' used in the deed could not be construed as conferring an estate with restricted rights of ownership to the younger brother and his descendants.
The deed evidences a permanent transfer of land to be enjoyed from generation to generation.
Moreover the younger brother remained in full ownership of the land till his death.
After the abolition of Watans he alone applied for re grant of this land in his favour.
The plaintiffs were aware of this position.
[177A B]
|
Civil Appeals.
Nos. 89, 90 and 126 to 128/61.
Appeals from the judgment and order dated November 8, 1957, of the Kerala High Court in o. Ps.
Nos. 70 and 71 of 1956(K) and 2, 6 and 7 of 1955 E. M.C. Setalvad, Attorney General of India and R. Gopalakrishnan, for the appellants in a. As, Nos. 89 and 90 of 61.
G. section Pathak and V, A. Seyid Muhammad, for the respondent in C. As.
Nos. 89 and 90 of 61.
A. V. Viswanatha Sastri, A. George Titus, R. Mahalingier and M. R. Krishna Pillai, for the appellants in C. As.
126 to 128 of 61.
G. section Pathak and Sardar Bahadur, for the respondents in a. As, Nos, 126 to 128 of 1961.
744 1962.
January ` 24.
The Judgment of B. P. Sinha, C. J., P. B. Gajendragadkar, K. N. Wanchoo and M. Hidayatullah, JJ., Was delivered by Wanchoo, J, J. C. Shah, J., delivered a separate judgement.
WANCHOO, J. These five appeals on certificates granted by the High Court of Kerala raise a common question of law and will be dealt with together.
Two of them (appeals 89 and 90) are from what was formerly the Cochin area and the other three are from what was the Travancore area.
They relate to a tax on tobacco in these areas.
As the facts, laws and rules in the two areas are similar we propose to deal in detail with the appeals from the Cochin area.
In 1909, Act VII of 1084 was passed by the Maharaja of Cochin to consolidate and amend the law relating to tobacco and was called the Cochin Tobacco Act, VII of 1084 (hereinafter called the Cochin Act).
Section 4 of the Cochin Act prohibited the possession for sale, transport, import or export, sale and cultivation of tobacco except as permitted under the Act or the rules framed thereunder.
section 5 of the Act gave power to the Diwan to make rules from time to time consistent with the Act to permit.
absolutely or subject to any conditions, and also to regulate the possession for sale, transport, import or export, sale and cultivation of tobacco as well as the form of duty leviable on the sale of tobacco by retail.
The remaining provision of the Act deal with offences, prosecutions punishment, confiscation and other ancillary matters such as arrest and siezure, with which we are not concerned in the present appeals.
Reference may however be made to section 18 which provided that "no action shall lie against the sirkar or against any officer of the Excise department for damages in any civil court for any act bona fide done or ordered to be done in pursuance of this Act, or of any law for 745 the time being in force relating to tobacco revenue.
Rules were framed under the Cochin Act called the Tobacco Cultivation Rules, which, by the first rule provided that "the cultivation of tobacco plant is prohibited except under a licence and shall be restricted to such parts or localities of the State, as may, from time to time, be fixed by the Diwan. . " Rule 3 provided for drying, curing, manufacturing and storing of the tobacco, cultivated in the State, to be done under the supervision of an officer of the Excise Department in licensed manufacturing yards and storehouses.
Rule 4 provided for licensed for manufacturing yards and store houses.
Rule 5 laid down that the licences would be in force for one official year and were to be issued on payment of a fee of Rs. 50/ for each licence, Under r. 6, the tobacco crop could only be harvested after permission obtained from the Inspector of Excise and under r.7 the harvesting was to be done by the licensed cultivator under the general superintendence of the Sub Inspector.
Of the locality in which the area cultivated lay and the harvested corp was to be transported only under permits granted by him from such area to the manufacturing yard where alone manufacture was to be undertaken.
Rule 8 provided for the maintenance of a stock book by a licensee of a storehouse or n manufacturing yard.
Rule 13 provided that the licensed manufacturer and the storehouse keeper would sell or otherwise dispose of his stock only to licensed dealers and there was prohibition against the disposal or sale of tobacco to any person who had not the required license to possess the same.
Rule 15 made it an office for any one to cultivate, dry, cure, manufacture, store, transport, sell or otherwise dispose of tobacco in contravention of the Rules.
In addition to these Rules, there were further Rules also framed under the Cochin Act with, 746 respect to import of tobacco into the State, and all import was prohibited except under the provisions of the Diwan 's notification describing the sale of tobacco shops and licences.
Possession of tobacco for the purpose of sale was also prohibited except under the provisions for the sale of tobacco shops and licences.
Export of tobacco was also prohibited except with the special sanction of the Commissioner of Excise.
It further appears that the system in force for the collection of tobacco revenue up to August 1950 was to auction what were called A class and B class shops and the last of such auction was held under the notification dated May 30, 1919.
In addition there were a class shops, the licence for which was granted either on the recommendation or in consultation with class licensees at the discretion of the Excise Commissioner or any other officer authorised by him on payment of the prescribed fee.
This system along with the Rules already referred to was in force on April 1, 1950.
On April 1, 1950, after the Constitution had come into force and Travancore Cochin has become a Part State thereunder, the Finance Act, No. XXV of 1950, extended the , No.1 of 1944 (hereinafter called the Central Act), to the Part State of Travancore Cochin by section 11 thereof.
Section 13 (2) of the Finance Act, further provided that "if immediately before the 1st day of April, 1950, there is in force in any State other than Jammu and Kashmir a law corresponding to, but other than, an Act referred to in sub section
(1) or (2) of section 11, such law is hereby repealed with effect from the said date. " It seems that in consequence of this provision in the Finance Act, 1950, the rules which were in force on April l, 1950, were changed in the Cochin area by a notification dated August 3, 1950, and the system of auction sales of A clause and shops was done away with and instead 747 graded licence fees were introduced for various classes of licensees, including class licensees.
Similar change was made for the Travancore area by notification dated January 25, 1951.
These Rules introduced by these two notifications also did away with the control of cultivation, drying, curing, manufacturing and wrare housing which were in force under the earlier Rules, so that these new Rules were only concerned with licensing of A, and C class shops.
A class licensees under the new Rules were called stockists, class licensees were wholesale sellers and a class licensees were retailers.
The system for A class licensees was that they were to pay a minimum annual fee for a Maximum quantity of tobacco or tobacco goods possessed by them and additional fee for further additional quantity, Thus, for example, in the case of jaffra tobacco it was provided that maximum annual fee would be Rs.1,500/ for a minimum of 100 candies and further fee of Rs.1,000 for additional quantity of 100 candies or part there of.
The appellants of Cochin area were tobacco dealers and holders at the time they filed their petitions in 1956 of A class licences.
The main contention raised on their behalf in their petitions was that the Cochin Act stood repealed by the Finance Act 1950, on the introduction of the Central Act in the part State of Travancore Cochin from April 1, 1950 in consequence, the notification which was issued on August 3, 1950, or on January 25, 1951, framing new Rules for the issue of licences and prescribing rules therefor under the powers conferred under the Cochin Act or the similar Travancore Act were ab initio void, because the Acts under which the notifications were; purported to be issued stood repealed from April 1, 1950.
In addition various other grounds were raised challenging the validity of the new Rules which, however, we do not think it necessary for the purposes of these appeals to set out here, 748 The petitions were opposed on behalf of the State and it was contended that the Cochin Act or the similar Travancore Act did not stand repealed from April 1, 1950, In consequence it was urged that the State was competent to frame new Rules which it did under the Cochin Act or the similar Travancore Act.
Further the case of the State was that the graded licence fee introduced after April 1, , was a tax which was sustainable under item 60 or 62 of List II of the Seventh Schedule to the constitution.
The High Court dismissed the petitions holding that the laws under which the new Rules were framed were in force and were justifiable under item 62 of List II of the Seventh Schedule.
Unfortunately, though the judgment of the High court mentions the contention of the appellants that on the extension of the Central Act with effect from April 1, 1950, by the Finance Act, 1950, the Cochin Act as well as the similar Travancore Act ceased to be operative from that date, there is no discussion in the judgment with regard to this contention, and the High Court did not consider whether in view of s.13(2) of the Finance Act, 1950, the Cochin Act as well as the similar Travancore Act stood repealed from April 1, 1950.
If the effect of section 13(2) of the Finance Act, 1950, was to repeal the Cochin Act as well as the similar Travancore Act, from April 1, 1950, there will be no law in operation which would justify the framing of the new Rules either in August 1950 or`in January 1951 and it would then be unnecessary to consider whether a law contain in,as provisions similar to those contained in the notification would be within the competence of the State legislature under item 62 of` List ll of the Seventh Schedule.
That question would only arise if the Cochin Act or the similar Travancore Act survived the repeal effected by section 13(2) of the Finance Act.
749 We have therefore to see what the provisions of the Finance Act are in this Connection.
As already indicated, B. 11(1) of the Finance Act extends the Central Act and the Rules and orders made thereunder which were in force immediately after the commencement of the Finance Act to all Part States, except the State of Jammu and Kashmir.
Consequently, the Central Act as well as the Rules and orders made there under become applicable to the Part State of Travancore Cochin from April l, 1950.
Further section 13(2) of the Finance Act specifically provides that from April 1, 1950, any law corresponding to the Central Act will be repealed from that date.
The contention on behalf of the appellants is that the Cochin Act as well as the similar Travancore Act was a law corresponding to the Central Act and therefore stood repealed as from April 1, 1950, under B. 13(2) of the Act.
and it is this contention that we have to examine.
It was pointed out by this Court in The Custodian of Evacuee Property vs Khan Saheb Abdul Shakoor, etc.
(1) that where the Act repealed provides substantially for all matters contained in the Act effecting the repeal there is correspondence between the two Acts and the earlier Act would thus stand repealed; it is not necessary that there should be complete identity between the repealing Act and the Act repealed in every respect, Therefore, when section 13 (2) of the Finance Act provides that on the extension of the Central Act from April 1, 1950, to the Part State of Travancore Cochin, any law corresponding to the Central Act is repealed with effect from that date, all that we have to see whether the law repealed substantially provided for the same matters as the Central Act, even though it may not be identical in all respects.
Let us therefore turn to the Cochin Act and the rules framed thereunder to see if it substantially 750 provides for the same matters with which the Central Act and the Rules and Orders made thereunder deal.
The main contention on behalf of the respondent in this connection is that the Central Act is an Act imposing a duty of excise on tobacco under item 45 of List I of the Seventh Schedule to the Government of India Act, 1935 (now corresponding to item 84 of List I of the Seventh Schedule to .
the constitution), and such duty of excise is a duty on goods manufactured or produced in India.
Thus according to the respondent, the main feature of the Central Act is the imposition of a tax on goods produced or manufactured in India and unless the Cochin Act or the similar Travancore.
Act also imposes a tax on goods produced or manufactured in what was formerly Cochin or Travancore State these would be no question of correspondence between the Central Act and the Cochin Act or the similar Travancore Act.
Reference was also made to In Re the Central Provinces and Berar Sales of Motor Spirit and Lubricants Taxation Act.
1938 Central Provinces and Berar Act XIV of 1938) Province of Madras v Messrs. Boddu Paidanna and Son(2) and Governor General in Council vs Provinces of Madras (3), where the nature of a duty of excise was considered.
In the first case it was held that the primary meaning of "excise duty" was of a tax on articles produced or manufactured in the taxing country (see p. 40).
It was also observed in that case that it could not be denied that laws were to be found which impose a duty of excise at stages subsequent to the manufactures or production.
In the second case it was held that duties of excise were duties levied on the manufacture or producer of the commodity taxed.
In the third case, the Privy council approved of the view of the Federal Court as to the nature of the duty of excise.
It may therefore be accepted that a duty of excise is a 751 tax on goods produced or manufactured in the taking country.
It may also be accepted that generally speaking the tax is on the manufacturer or the producer,.
though it cannot be denied that laws are to be found which impose a duty of excise at stages subsequent to the manufacture or production.
We cannot however forget that the Cochin Act or the similar Travancore Act was passed by State in which there were no such Constitutional provisions as are to be found in the Government of India Act and it legislative Lists and this aspect will have to be borne in mind when judging the question of correspondence between the Central Act and the Cochin Act or the similar Travancore Act.
Now the Central Act provides by section 3 for the levy and collection of duties of excise on all excisable goods other than salt which are produced or manufactured in India and also a duty on salt manufactured in or imported by land into any part of India.
Further section 6 of the central Act gives power to the central Government to issue licences and prohibits any person from engaging in the wholesale purchase or also whether on his own account or as a broker or commission agent or the storage of any excisable goods except under the authority and in accordance with the terms and conditions of a licence granted under the Central Act.
In Chaturbhai.
M. Patel vs The Union of India (1) where the various provisions of the Central Act (including section 6) and the rules framed thereunder were attacked on the ground that they had nothing to do with the levy and collection of duties of excise, this court held that the various provisions of the Central Act and the Rules made thereunder were essentially Connected with levying and collection of excise duty and in its true nature and character the Central Act remained one under item 45 of List I and that the incidental trenching upon the provincial field would not affect its constitutionality.
The nature of the Rules the 752 considered will appear from the following observations at p. 371: "It (the Central Act) is a fiscal measure to levy and realise duty on tobacco.
The method of realising duty must be left to the wisdom of the legislature taking each individual trade and its peculiarities and difficulties which arise in that matter.
Various provisions of the Act and the Rules show that the authorities are on the track of the movement of tobacco from the time it is grown to the time it is manufactured and sold in the market and the various provisions of the Act and the Rules made thereunder have been considered necessary for effectuating the purpose of the Act.
" It is true that the Central Act provides for the levy of excise duty under section 3 but in order to carry out that purpose it has provided for licences under section 6.
The Rules also provide in Chap.
III for levy and refund of duty, in Chap.
V for manufactured goods other than salt, in Chap.
VII for warehousing, in Chap.
VIII for licensing.
Thus in order to levy excise duty under the Central Act, there are provisions in the Rules which start in the case of tobacco from the stage of cultivation and continue right up to the time the finished product reaches the hand of the retailer and thus becomes a part of the commons stock for purposes of sale to the consumers.
We have also seen that the Cochin Act similarly provides for control on tobacco from the stage at which it is grows to the stage till`it reaches Glass licensees who sell it in retail to the consumers.
The Cochin Rules may not be so detailed as the Rules under the Central Act but their main object and purpose is the same, namely, to keep a check on tobacco from the time it is grown to the time it reaches the a Glass licensee who eventually sells it to the consumer.
Further if one looks at the Rules 753 under the similar Travancore Act in vol.
II of the Travancore Excise Manual which were in force on A April 1, 1950, in relation to tobacco it will be found that there are elaborate rules in Part III from pp.
257 to 325 dealing with all aspects of control relating to tobacco.
IV deals with bonding and issue; Chap.
V with licences for sales, Chap.
VI with transport and possession.
Further there are rules at p. 296 for cultivation, curing and warehousing.
Then at p. 14 are rules for the manufacture of cigars, cheroots and snuff in bond.
It will thus be clear r that the Cochin as well as the Travancore Rules provided for similar central of tobacco as under the Central Act and show that the authorities in Travancore and Cochin were also on the track of the movement of tobacco from the time it was grown and manufactured to the time it was sold in the market.
It would therefore follow that the Cochin Act as well as the similar Travancore Act along with the Rules corresponded to the Central Act substantially and would thus be repealed by section 13(2) of the Finance Act, 1950.
But it is urged on behalf of the State that there is no provision for charging duty in the Cochin Act or the similar Travancore Act and therefore all these provisions in the Rules for control from the time of cultivation to the time of the final stage of sale to the consumer, even though they are similar to the Rules under the Central Act, would not make the Cochin Act or the similar Travancore Act a corresponding Act to the Central Act.
There is no doubt that there is no provision corresponding to section 3 of the Central Act in the Cochin Act or in the similar Travancore Act.
Under the Cochin Act the tax was levied by virtue of the power conferred on the Diwan under section 5 to make rules for the purpose.
Under the similar Travancore Act, the provision is contained in section 31 which provides that the Diwan may with the sanction of the ruler make rules permitting 754 absolutely or subject to the payment of any duty or fee or to any other conditions, and regulating within the whole or any specified part of Travancore, the cultivation, manufacture, possession, transport, import and sale of tobacco.
So in both the former States, the Act did not contain a charging section and the duty was levied by the Rules framed by the Diwan under the powers conferred on him by the Act.
In essence, therefore, the provision for charging the tax was made in the Rules.
Further it is true that the method by which the tobacco revenue was realised was through auction sales of the right to possess and sell tobacco.
But we must not forget that the Cochin Act as well as the similar Travancore Act was passed by a Ruler who was not trammelled by a constitution like the Government of India Act, 1935, and its Legislative Lists.
The method evolved for realising tobacco revenue was to auction the right to poses and sell tobacco and the amounts received at such auctions would cover what would be duty under section 3 of the Central Act and licence fee under section 6 thereof.
It is urged however that this does not amount to duty on goods produced, nor is the duty in such a case paid by the manufacturer or producer of the goods.
We have already indicated that the essence of the duty of excise as held by the Federal Court and the Privy Council is that it is a duty on the goods manufactured or produced in the taxing country.
Further as generally the duty is on the goods produced or manufactured it is paid by the producer or manufacturer, though as in the case of all indirect taxes it is passed on eventually to the consumer in the shape of being included in the price and is thus really borne by the consumer.
Further the cases on which reliance bas been placed on behalf of the State also show that laws are to be found which impose duty of excise at stages subsequent to manufacture or 755 production.
As a matter of fact, even in British India before 1935 there used to be public auctions of the right to possess and sell excisable goods like country liquor, ganja and bhang aid the amount realised was excise revenue.
It is also obvious that this system of auction is not a system of levying sales tax because it has nothing to do with the levy on each sale, which is the essence of a sales tax.
It seems that in the former States of Travancore and Cochin, auction system continued right up to the time the constitution came into force and even for sometime thereafter.
It seems under the circumstances that the auction system which was in force was only a method of realising duty through the grant of licences to those who made the highest bid at the auctions.
The fact therefore that this system was used instead of the system of charging of duty as provided in section 3 of the Central Act would not in our opinion make any difference to the nature of the impost which was in force on the relevant date, namely, April 1, 1950.
It was however urged that under this system even tobacco which was not produced or manufactured in the State but was imported from outside was included for the purpose of licences granted under it.
That is undoubtedly so.
But from the Rules which were in force regarding cultivation, curing, manufacturing and so on of tobacco within the State it would not be unreasonable to infer that the substantial part of the income from auctions was still in the nature of excise duty.
Even in the case of imported tobacco, only with respect to that part of it which was eventually sold to the consumer as it was imported without any processing or treatment in the State, it can be said that the impost which fell on it was not in the nature of excise duty.
However, there is no way of differentiating this part of the revenue from the rest and considering the elaborate provisions as to the control of tobacco trade from the grower right up to the time that the 756 goods were sold to the public in retail sale it would r in our opinion be not unreasonable to hold that the Cochin Act as well as the Travancore Act was in substance an Act corresponding to the Central Act.
Therefore when the Central Act was extended to the Part State of Travancore Cochin by section 11 (1) of the Finance Act and the Finance Act specifically provided by section 13 (2) for the repeal of corresponding law, the result was that the Cochin Act as well as the similar Travancore Act stood repealed.
There would be no power in the State Government thereafter to frame new Rules either in August 1950 or in January 1951 for there would be no law to support the new Rules and without such law the new Rules could not impose a tax as that would clearly offend article 265 of the Constitution.
Further as soon as the Cochin Act as well as the similar Travancore Act stood repealed on April 1, 1950, by virtue of a 13(2) of the Finance Act there could be no question of their being sustained under item 62 of List II of the Seventh Schedule for that would only arise if these were not repealed as corresponding law by s.13(2).
Turning now to the three Travancore appeals it is enough to pay that they stand on the same footing as the two Cochin appeals.
If anything the Travancore Act as well as the Travancore Rules which were in force on April 1, 1950 are more elaborate than the Cochin Act and the Cochin Rules.
Further the Travancore Act by section 31 actually refers to manufacture also.
The Cochin Act did not refer to manufacture in the Act itself though there was provision for manufacture in the Rules framed under the Act.
What applies therefore to the Cochin Act and the Rules framed thereunder applies in force to the Travancore Act and the Rules framed thereunder and there is no doubt that the Travancore Act and the Rules framed thereunder were also a law corresponding to the Central Act and the Rules framed thereunder.
The Travancore Act therefore also stood repealed from April 1, 1950.
There 757 would thus be no law to support the Rules framed by the State Government in January 1951 and, therefore the Rules must fall.
It appears that these new Rules have been abrogated as from January 1958.
So it Was urged on behalf of the State that this Court should not grant a mere declaration as to the invalidity of the Rules when they are no longer in existence.
This argument in our opinion has no force because we must look to the situation as it was when the petitions were presented.
The Cochin petitions were presented in 1956 and the Travancore petitions were presented in 1955 and at that time the Rules were in force and they continued in force till December 1957.
Therefore the petitioners would be entitled to a declaration that the Rules were invalid because at any rate that would give them relief so far as the period after their petitions is concerned while the Rules remained in force.
We therefore allow the appeals and set aside the order of the High Court.
The petitions are allowed and it is hereby declared that the new Rules purporting to be framed either under the cochin Act or under the Travancore Act in August 1960 and thereafter in January 1951 were invalid ab initio and have no force and effect.
The appellants will get their costs from the State one set of hearing costs.
SHAH, J.
In this group of five appeals the principal question which falls to be determined is whether within the meaning of a 1:3(2) of the Finance Act, 1950 (which by section 11 thereof extended the Central Excise & Salt Act, I of 1944, to the Part b States), there was, immediately before the 1st of April 1950, in force in Part State of Travancore Cochin, a law Corresponding to the Central Excise & Salt Act, 1944 It is common ground that if there was such a law in force, by virtue of s.13(2) of the Finance Act of 1950, that law stood repealed, 758 The appellants in Civil Appeals Nos.89 and 90 of 1961 were carrying of the former state of Cochin.
Appellants in Civil Appeals 126 to 128 of 1961 were residents of and carried on business in tobacco with in territory of the former State of Travancore.
On July 1, 1949 the States of Travancore and Cochin from themselves into a Union under a common administration, but by the virtue of Travancore Cochin Administration Law ,6 of 1125 (M.E.), the Acts which were previously in force.
In the Territory of the former State of Travancore , there was in force the Travancore Tobacco Regulation I of Travancore in 1911.
By section 3 of the Act,"Tobacco" was define as including "snuff, cigars cigarettes, beedies, tobacco powder and other preparations or admixtures of tobacco" Section 4 of the Act imposed excepts as permitted by the Act or by any other enactment relating to tobacco for the time being in force by the Rules published under the Act or any other such enactment prohibitions against cultivation, manufacture possessions transport, importation exportation or sale of tobacco.
By Chapter III of the Act power was conferred upon the officers of the Excise Department to search house suspected to contain tobacco and provision was made for incidental matters.
Chapter IV dealt with offences and punishments and by section 31 the Diwan of the State was authorised, with the sanction of the Ruler, from time to time, by Notification in Gazette to make rules consistent with the Act amongst other subject permitting absolutely or subject to the payment of any duty or fee or to any other conditions and regulating within the whole or to any other conditions and regulating within the whole or any specified part of the State of Travancore, cultivation manufacture possession transportation 759 import and sale of tobacco; authorising the establishment of warehouses or bankshalls for storing tobacco legally cultivated or imported into the territory fixing the mode, time and place of levy T of duty, regulating the special custody of tobacco warehoused and the levy of fees for warehousing and transport, and generally to carry out the provisions of the Act.
Rules were framed in 1913 in exercise of the powers under section 31 of the Tobacco Act whereby restrictions were imposed upon the import and export of tobacco and provision was made for bonding tobacco in warehouses and for the issue of licences for bonding tobacco.
Provision was also made for licensing retail sale for tobacco and for transport and possession thereof.
Certain other rules regulating cultivation, curing and warehousing tobacco and for the issue of licences for those purposes were promulgated in 1937.
Rules were also framed regulating the manufacture of cigars, cigarettes and cheroots in bonds under licences.
It is unnecessary to set out these rules in detail, it may suffice to observe that cultivation, curing, manufacture, possession, transport, importation and exportation and sale of tobacco was controlled by a system of licensing.
Certain licences were issued free of charge and in respect of certain other licences, especially storage and sale, fee had to be paid to the State.
Similarly, in the State of Cochin there was enacted by the Ruler of Cochin the Cochin Tobacco Act of 1084 (M.E.) on May 3, 1909.
By section 3(d) of that Act, tobacco was defined as inclusive of "snuff, cigars and preparations of which tobacco forms a part " By section 4, except as permitted by the Act or by the Rules made thereunder, possession for the purposes of sale, transport, import, export, sale and cultivation of tobacco were prohibited.
By a 5, the Diwan of the State was authorised from time to time after previous publication, to make rules consistent with the Act to permit abso.
760 lutely or subject to any Conditions regulating the possession, transportation, importation or exportation and sale and cultivation of tobacco.
Contravention of the Act and the Rules or orders made under the Ace were penalised by section 6.
Rules were framed in 1923 under the Cochin Tobacco Act providing for a system of licensing for cultivation, manufacture and storage of tobacco and for incidental matters.
Control was maintained over harvesting, weighment, storage, stock taking and transport of tobacco, and also on the export and import of tobacco.
The authorities administering the provisions of the Tobacco Act and the Rules framed thereunder were the Commissioner of Excise and officers subordinate to him in the Excise Department.
Licences for storage were to be annual licences and to be issued on payment of licence fee.
Under the Cochin Act and the Rules framed thereunder control was maintained on tobacco at all the stages of its production, manufacture and disposal.
From a resume ', of the provisions of these two Acts and rules and notifications issued thereunder, it is manifest that on the production, manufacture storage and sale of tobacco control was imposed and the administration of this control was left in the hands of the Excise Departments of the two States.
As stated hereinbefore, by virtue of Act VI of 1125 (M.E.), the two Acts in operation within the territories of the two States were continued even after the Union of Travancore and Cochin as formed, and by article 372 of the constitution the provisions of the two Acts remained in operation in the respective area of the former States even after the Part`B State of Travancore Cochin came into being on January 26, 1950.
By s.11 of Finance Act 25 of 1950 certain Acts including the Central Excises & Salt Act, 1 of 1944, and all Rules and orders made thereunder in force from time to time before the commencement of the 761 Finance Act were extended with effect from April 1, 1950, to the part B States (except the State of Jammu & Kashmir), It was provided by section 13(2) "that if immediately before the 1st of April, 1950, there was in force in any State other than Jammu & Kashmir a law corresponding to but other than the Act referred to in sub section
(1) section 11 such law" shall stand repealed with effect from the said date.
Presumably, on account of the application of the Central Excises & Salt Act, I of 1944, by section 11 of the Finance Act, 1950, the Part B State of Travancore Cochin published fresh sets of Tobacco Rules.
These Rules were issued on January 25, 1951, in purported exercise of the powers conferred by the Travancore Regulation I of 1087 (M.E.) and the Cochin Tobacco Act of 1084 (M.E.).
Rule 14 (which is common to both the sets of Rules) provides that "the vend of tobacco of all kinds is prohibited throughout the state, except under a licence".
Rule 15 provides that the "licence for the vend of tobacco shall be of the following description: (i) Stockist or 'A ' Class licence; (ii) Wholesale or 'B ' Class licence ; and (iii)Retail or 'C ' Class licence." Rule 16(i) and (ii) provides: "(i) Holders of Stockist or 'A ' Class licences shall be entitled to purchase tobacco from any dealer within or without the State without any quantitative restriction.
This class of licensees shall sell only to other 'A ' Class licensees or to 'B ' Class licence, (ii) The annual fees for these licences shall be as follows: (Then follows a table which sets out minimum fee prescribed for varieties of tobacco stocked upto the maximum 762 prescribed quantity and the additional fee payable for stocking additional quantities.)" The appellants in all these appeals were 'A ' Class stockists and were called upon to pay licence fee prescribed by these Rules.
They claimed that they were not liable to pay licence fee under the Rules framed in 1951 because there was absolute delegation of legislative power by the Rules, that the levy infringed their fundamental rights under articles 14 and 19(1)(g) of the Constitution, that the duty levied was in any event an excise duty, and because the fee represented a tax on trade, calling or employment and on that account was subject to the constitutional restriction imposed by article 276 (2) of the Constitution.
They also contended that the Tobacco Acts of the Travancore State and the Cochin State, which had been kept alive by Act 6 of 1125 (M.E.) and by article 372 of the Constitution were superseded by the application of the , by section 11 of the Finance Act, 1950.
The High Court of Travancore Cochin in the petitions for writs of mandamus and other writs negatived the contentions raised by the appellants that the Acts and the Rules amounted absolute delegation of legislative power or that the fundamental rights under articles 14 and 19(1)(g) and the restrictions imposed by article 276(2) of the Constitution were infringed thereby.
The High Court also held that the duty levied was not an excise duty and presumably on that account declined to consider the question whether the Tobacco Acts of the States of Travancore and Cochin had been superseded either wholly of partially by the application of the of 1944.
The Travancore and the Cochin Acts do not directly levy any duty on production or manufacture of tobacco.
Restrictions, it is true, are imposed 763 the growing, curing, manufacture, storage, import and export by requiring that licences shall be obtained for those purposes and prescribing penalties for violating the provisions of the Acts and the Rules.
It also appears that the trade in tobacco was regulated before the formation of the B State of Travancore Cochin, by holding auctions for the rights to sell tobacco.
These auctions were held by Excise Commissioners and the highest bidder in the auction got the right to deal in tobacco, and the two Acts were enacted for regulating and controlling the sale of tobacco, but the State did not levy any duty on the manufacture or production of tobacco.
The licence fee for the issue of a licence for growing, curing, manufacturing, exporting, importing or storing is not in itself an excise duty on the manufacture or production.
The Federal Court In the matter of the Central Provinces and Berar Sales of Motor Spirit and lubricants Taxation Act, 1938 observed: . . at the date of the Constitution Act (Government of India Act 1935) though it seems that the word 'excise ' was not infrequently for the administration of a particular indirect tax (as salt excise or opium excise), the only kind of excise duties which were known in India by that name were duties collected from manufacturers or producers, and usually payable on the issue of the excisable articles from the place of manufacture or production.
This also may not be conclusive in itself, but it seems a not unreasonable inference that Parliament intended the expression 'duties of excise ' in the Constitution Act to be understood in the sense in which upto that time it had always in fact been used in India, where 764 indeed excise duties of any other kind were unknown.
Nor indeed are excise duties properly so called often to be found at the present day which are not collected at the stage of production or manufacture, whatever may have been the case in Blackstone 's time and whatever may have been the reasons for Johnson 's definition of 'Excise ' in the first edition of his Dictionary (1755). "(Per Gwyer C.J.) This view was approved by the Judicial Committee in The Governor General in Council vs The Province of Madras An excise duty is according to the Indian Statute, a duty on the manufacture or production of goods and the duty which was levied in the States of Travancore and Cochin on the storage of tobacco cannot be regarded as a duty of excise.
But that conclusion is not decisive of the problem under consideration.
The question has still to be considered whether the Travancore and Cochin Acts and the Rules framed thereunder were law "corresponding" to the , extended under the Finance Act, 1950.
The expression "corresponding" does not postulate identity of the State Law and the statute extended by section 11 of the Finance Act: if there was in force at the material time law in the Part B State dealing with a particular subject matter and the law extended by section 11 of the Finance Act, 1950, dealt with the same subject matter and the two laws though not identical still were such that if they stood together there would have been legislative duplication or overlapping, the law in force in Part B State would be regarded as corresponding to the law extended by the Indian Finance Act and hence repealed by the operation of section 13(2).
Let us examine the scheme of the of 1944 for the purpose of 765 ascertaining whether the Travancore and the Cochin Tobacco Acts and Rules frame thereunder are law corresponding to the , wholly or partially.
The , was enacted to consolidate and amend the law relating to Central duties of excise on goods manufactured or produced in certain parts of India and to salt.
The expression "excisable goods" is defined in section 2(d) as meaning "goods specified in the First Schedule as being subject to a duty of excise and includes salt".
By section 2(f) the expression "manufacture" is defined as inclusive of "any process incidental or ancillary to the completion of a manufactured product, and (i) in relation to tobacco includes the preparation of cigarettes, cigars, cheroots, biris, cigarette or pipe or hookah tobacco, chewing tobacco, or snuff x x x".
By section 3 it is provided that there shall be levied and collected in such manner as may be prescribed duties of excise on all excisable goods other than salt which are produced or manufactured in India x x x and at the rates set forth in the First Schedule.
By section 6, certain incidental operations are made subject to licence and it is provided: The Central Government may, by notification in Official Gazette, provide that, from such date as may be specified in the notification, no person shall, except under the authority and in accordance with the terms and conditions of a licence granted under this Act, engage in (a) the production or manufacture of any specified goods included in the First schedule or of saltpetre or of any specified component parts or ingredients of such goods or of specified containers of any specified excisable goods, or (b) the wholesale purchase or sale (whether on his own account or as a broker or commission agent or the storage of any excisable goods specified in this behalf in Part A of the Second Schedule".
By virtue of these provisions power is conferred upon the Central Government to impose restrictions 766 upon the rights to produce, manufacture and to engage in any process of production or manufacture of the excisable goods or in the wholesale purchase or sale of excisable goods this power is conferred indisputably as ancillary to enforcing the law enacted for the levy and collection of excise duty.
By section 9 contraventions of the provisions of the Act and notifications thereunder are penalised.
Power to forfeit goods is conferred by section 10.
By Chapter III, power to arrest and to summon persons to give evidence or produce documents in inquiries under the Act to search and the procedure to be followed by officers in charge of police stations, inquiries to be made by Central Excise Officers against arrested persons forwarded to them are made.
Chapter VI deals with adjudication of confiscations and penalties, and Chapter VII enacts certain supplementary provisions.
The Schedule to this Act sets out the descriptions of various goods and the rates of duty chargeable in respect thereof.
The primary purpose of the Act is to levy and collect excise duty in respect of goods specified in the First Schedule and with that object in view, diverse provisions are enacted.
Tobacco is under the Act an excisable commodity, and duty at rates specified in the Schedule is leviable in respect of different forms of tobacco.
By section 6(b) wholesale purchase or sale, or storage of excisable articles is prohibited.
By Rule 7 of the Central Excise Rules, 1944, duty is made payable by every person, who produces, cures, manufactures or who stores in any warehouse any excisable goods.
Rule 174 which occurs in Chapter VII deals with licensing.
It provides, in so far as it is material, that. "Every manufacture, trader or person hereinafter mentioned, shall be required to take out a licence and shall not conduct his business in regard to such goods otherwise 767 than by the authority, and subject to the terms and conditions of a licence granted by a duly authorised officer in the proper From: (1) Matches x x x (2) Unmanufactured products.
Curers, brokers, Commission agents and wholesale dealers who purchase such products from cures, all brokers, commission agents and wholesale dealers doing business in unmanufactured tobacco; all holders of private bonded store rooms or warehouses; (3) Other excisable goods except salt (a) Manufacturers; and (b) x x x Rule 175 deals with the procedure for obtaining a licence.
By the 1st clause it provides that every person desiring to engage in operations requiring the possession of a licence aforesaid shall apply in writing every year for a licence or renewal thereof to the licensing authority who shall be such officer as the Central Board of Revenue may authorise in this behalf.
Rule 176 prescribes Forms application for licences and cl.
(2) provides that every such application for licence shall, where a fee is prescribed in the subjoined Table, be accompanied by a Central Excise Revenue Stamp showing payment of such fee under item No. 2 in the Table "a wholesale dealer in unmanufactured tobacco who purchases for the purpose of trade or manufacture" the to pay graded fee set out in the second and the third columns.
Item 6 deals with the duty payable by the holder of a private bonded store room or warehouse.
Rule 178 provides for the Forms of licence.
The appropriate forms of licence in respect of storage of tobacco for sale are Form L 2 (application for licence to carry on wholesale trade 768 in unmanufactured products liable to a central duty of excise), Form L 3 (application for licence as broker or commission agent in respect of unmanufactured products liable to a central duty of excise), and Form L 5 (application for licence for a private bonded warehouse storeroom for the storage of excisable goods).
It is manifest that under the Rules so framed duty is imposed to obtain a licence on payment of fee for storage of tobacco for sale.
It is not disputed that the appellants in all the appeals took out licences under rules 174 and 178 of the and paid the licence fee in that behalf to the Central Government.
The appellants were also required to pay licence fee for the storage of tobacco for sale under the provisions of the Travancore and the Cochin Tobacco Acts and the Rules framed thereunder on January 25, 1951.
It is true that under the , the provision for obtaining licences for storage is a provision ancillary to the recovery of excise duty, whereas under the Travancore and the Cochin Acts, the levy of licence fee was imposed in pursuance of a scheme for maintaining control on the sale of tobacco without expressly levying any excise duty.
But on that account, it cannot be said that the provisions relating to the requirement of licences and the payment of licence fees for storage of tobacco for sale under the Travancore and the Cochin Acts were not provision corresponding to the provisions of section 6(b) under the and the rules framed under the Act requiring that licences shall be taken out for storage of tobacco for sale and fee shall be paid in respect thereof.
In my judgment the relevant rules made under the Travancore and the Cochin Tobacco Acts requiring licences to be taken for storage of tobacco and in force on April, 1, 1950, were law corresponding to the provisions of the Central Excise and Salt Act, 1944, and the rules 769 framed thereunder which required licences to be taken out for storage of tobacco and for payment of licence fee in respect thereof and to that extent the provisions imposing an obligation to take out licences and to pay licence fees under the Tobacco Acts of Travancor and the Cochin States were superseded and the State of Travancore Cochin had no authority to promulgate rules 14, 15 and 16 under the Notification issued in the Travancore Cochin Government Gazette dated January 25,1951, and to levy licence fee for storage of tobacco.
It is unnecessary to consider whether the remaining provisions of the Travancore and the Cochin Tobacco Acts and the Rules framed there under were law corresponding with the .
For these reasons I agree that the appeals be allowed, and the order passed by the High Court be set aside.
In each petition a writ will issue declaring that the levy of licence fee under the Notification dated January 25, 1951, is without authority of law, and that the State of Travancore Cochin do forbear from levying and collecting the licence fee.
Appeals allowed.
| ln 1909 the Ruler of the erstwhile State of Cochin enacted the Cochin Tobacco Act of 1084 (M.E.) with the object of controlling the cultivation, production, manufacture, storage and sale of tobacco.
Rules were framed under the Act for regulating the cultivation, possession, transportation and sale of tobacco and a system of licensing was introduced for that purpose.
Licences for storage were to be annual and to be issued on payment of licence fee.
The authorities administering the provisionals of the Act and the Rules framed thereunder were the (commissioner of Excise and his subordinates.
The system in force for the collection of tobacco revenue was to auction what were called A class and class shops.
A law similar to that prevailing in Cochin was promulgated in 1911 by the Ruler of Travancore as the Travancore Tobacco Regulation of 1087 (M.E.).
The two States merged themselves in 1919 as the State of Travancore Cochin but the two Acts continued to remain in force in the respective territories.
On April 1, 1950, after the Constitution of India had come into force and Travancore cochin had become a 742 Part B State thereunder by s.11 of the Finance Act, 1950, the central Excises and Salt Act,194,was ex tended to that State.
Section 13(2) of the Finance Act, 1950,provided that "if immediately before the 1st day of April,.1950, there is in force in any State other than Jammu and Kashmir a law correspo nding to,but other than, an Act referred to in sub s.(1) or (2) of s.11, such law is repealed with effect from the said date.
" After this provision in the Finance Act, 1950, the Rules which were in force on April 1, 1950, were changed in the Cochin area by a notification dated August 3, 1950, and the system of auction sales of A Class and Class shops was done away with and instead graded licence fees were introduced for various classes of licensees.
Similar change was made for the Travancore area by notification dated January 25, 1951.
The appellants who were carrying on business in tobacco within the territories of Travancore and Cochin challenged the legal its of the notifications of August 3, 1950,and January 25, 1951, on the ground that the Cochin Tobacco Act and the Travancore Tobacco Regulation under which the notifications were purported to be issued, were law corresponding to the , and so they stood repealed from April 1, 1950, by virtue of the operation of sections 11 and 13(2) of the Finance Act.
It was contended for the State of Kerala that the main feature of the Central Excise and Salt Act, 1944, was the imposition of a duty of excise on goods produced or manufactured in ,India and that there was no provision for charging duty in the Cochin Act or the similar Travancore Act and therefore all these provisions in the Rules for the control of tobacco from the time of cultivation to the time of the final stage of sale to the consumer, even though they were similar to the Rules under the Central Act, would not make the Cochin Act or the similar Travancore Act a law corresponding to the Central Act.
^ Held, that the rules framed under the Cochin Tobacco Act of 1084(M.E.) and the Travancore Tobacco Regulation of 1087 (M E.) requiring licences to be taken out for storage and sale of tobacco and for payment of licence fee in respect thereof were law corresponding to the provisions of the , and, hence, were superseded on April 1, 1950, by virtue of section 1312) of the Finance Act, 1950.
consequently, the new Rules framed in August 1950 and January 1951 for the respective areas of Cochin and the respective areas of Cochin and Travancore for the issue of license and payment of fee therefore for storage of tobacco, were invalid ab initio.
Per Sinha, C. J., 'Gajendragadkar,Wanchoo and Hidayatullah, JJ. (I) The Cochin Tobacco Act, 1084 743 (M.E.), as well as the Travancore Tobacco Regulation, 1087(M.E.), were in substance law corresponding to the , and therefore, stood repealed on April 1, 1950.
(2) The auction system which was in force under the Cochin and Travancore Acts was only a method of realising duty through the grant of licences to those who made the highest bid at the auctions.
The fact that this system was used instead of the system of charging of duty as provided in s.3 of the Central Excise and Salt Act, 1944, would not make any difference to the nature of the impost; the income from auctions was in the nature of excise duty.
Per Shab, .J.
An Excise duty is, according to the Indian statute, a duty on the manufacture or production of goods and the duty which was levied in the States of Travancore and Cochin on the storage of tobacco cannot be regarded as a duty of excise.
In re The Central Provinces and Berar Sales of Motor Spirit and Lubricants Taxation Act, 1938, , The Province of Madras vs Messrs Boddu Paidanna and Sons, , Governor General in Council vs Province of Madras, (1945) ' L.R. 72 I.A. 91 and Chaturbhai, M. Petal vs The Union of India, ; , considered.
| The appellants were tobacco merchants in Baroda in Gujarat State and were holding Central Excise licence in Forms L 2 and L 5 for the purpose of storing, selling and processing duty paid and non duty paid tobacco.
On December 23, 1958 while the process of mixing some tobacco was going on in a godown where duty paid tobacco was.
kept, the Superintendent of Central Excise., Preventive Headquarters, Baroda and his party raided the premises of the appellants and seized a mixture of tobacco weighing 1,64,834.50 lbs.
tobacco This mixture included 60,770 lbs.
of tobacco on which duty had not been paid.
After the 'appellants were issued a show cause notice why action should not be taken against them under rule 40 of the Central Excise Rules, 1944, and after they had filed their reply, the Collector, Central Excise, by his order dated April 13, 1959 held the appellants guilty of contravening rule 40 levied on them a penalty of Rs. 2,000 as well as the duty payable under the law, and also ordered the confiscation of the entire quantity of the tobacco seized.
As he gave the appellants the option of redeeming the same on payment of a fine of Rs. 1 lakh, they paid the fine under protest and secured release of the tobacco.
The appellant 's appeal as well as revision against the Collector 's order under the provisions of the Central Excise and Salt Act, 1944, were both dismissed.
The appellants then filed a writ petition under article 226 of the Constitution challenging the legality of the Collector 's order but this was dismissed by the High Court.
In appeal to this Court the only challenge was to the Collector 's order of confiscation.
It was contended, relying on the decision in Messrs. Valimahomed Gulamhusain Sonavala & Co. vs
C.T.A. Pillai, (1960) 42, B.L.R., p. 634, that the Collector could not have confiscated the tobacco mixture as it consisted of both duty paid tobacco as well as tobacco on which duty had not been paid, the alternative contention was that the Collector could not in any extent have.
confiscated more than 60,770 lbs.
of mixture which could be said to represent tobacco on which duty had not been paid.
HELD: Rule 40 permits the Central Excise.
authorities to confiscate only those goods on which duty had not been paid.
It does not permit them either specifically or by necessary implication to confiscate other goods.
Therefore it was not permissible for the Collector to confiscate the entire tobacco mixture.
At the same time no person can be permitted to benefit by his wrongful act.
No rule of law should be so interpreted as to permit or encourage its circumvention.
If by the wrongful act of a party he renders it impossible for the authorities to confiscate under 581 rule 40 the non duty paid goods, it is open to those authorities to confiscate from out of the goods seized, goods of the 'value reasonably representing the value of the non duty paid goods mixed in the goods seized.
Applying that rule to the facts of the present case it follows that although the appellants were guilty under Rule 40 of an unlawful act in mixing duty paid tobacco with non duty paid tobacco, the Collector could have confiscated out of the tobacco seized so much of it as can be held to reasonably represent the value of the tobacco on which the duty had not been paid.
[586 G 581 B] As the parties were agreed that the value of the tobacco used in the mixture for which no duty had been paid could be fixed at Rs. 35,000,.
the fine to be levied on the appellant in lieu of the confiscation that could have been ordered had to.
be fixed at Rs. 35,000.
The Collector therefore had to refund to the appellant a sum of Rs. 65,000.
Institutes of Justinian, p. 104; Williams on Personal Property (18th edition) p. 50; Spence and Ant.
vs The Union Marine Insurance Co. Ltd., Law Reports (Common Pleas) 3, 1867 68 and Smurthwaite and Ors.
vs Hannay and Ors.
, [1894] A.C.p. 494; referred to.
| The respondent manufactures cigarettes at its factory upon which Excise Duty is levied by the Assistant Collector of Central Excise, Calcutta Division.
The rates varied according to the provisions of Finance Act, 1951, and 1956 and the Additional Duty of Excise (Goods of Special Importance) Act, 1957.
The Company was required to furnish quarterly consolidated price lists and the particulars of cigarettes to be cleared were furnished by the Company as required by Rule 9 of the Central Excise Rules.
For facilitating collection of duty, the Company maintained a large sum of money in a Current Account with the Central Excise authorities, who used to debit this account for the duty leviable on each stock of cigarettes allowed to be removed.
The Company used, to furnish its quarterly price lists to the Collector ,on forms containing nine columns and until July 1957, so long as this form was used by the Company, no difficulty was experienced in checking prices.
But after this column was dropped from the new form of six, columns, the Excise authorities encountered some difficulty in valuing the cigarettes for levying Excise Duty.
They therefore, changed the basis of assessment from the Distributors selling price to the wholesale cash selling price at which stockists or agents were selling the same in the open market.
The authorities informed the Company of this change of basis on 5 11 58 by letter, which also asked the Company to furnish its price lists immediately for determining the correct assessable value of its cigarettes.
Two days thereafter, the authorities served a notice upon the Company demanding payment of Rs. 1,67,072,40 P. as Basic Central Excise Duty and Rs. 74,574,85 P. as Additional Central Excise Duty on ground of short levy for a certain brand of cigarettes cleared from Company 's Factory between 10th August 1958, After another five days, the authorities sent another notice demanding more than Rs. 6 lakhs as Basic Central Excise Duty and more than Rs. 2 lakhs as Additional Central Excise Duty.
On the following day, the authorities sent a third notice under Rule 10 A of the Central Excise Rules, demanding more than Rs. 40,000/as Central Excise Duty and more than Rs. 16,000/ as Additional Duty.
The Company challenged these notices by a writ before the High Court.
, The High Court quashed the notices on the ground that the Company had not been given an opportunity of being heard.
No appeal was filed by the other side against this decision, but when the case went back to the Collector, he issued P. fresh notice on 24 4 1960.
By this notice, for certain periods, a sum of more than Rs. 10 lakhs was levied as Basic Central Excise Duty and a total sum of more than Rs. 3 lakhs as Additional Duty, and this amount had been provisionally debited in the Company 's Account on the basis of the price list supplied by the Company and the Company was informed that if it desired a personal hearing, it 823 can appear before the authorities to make the final assessment in accordance with law.
The Company challenged the validity of this notice dated 24 4 60 on the ground that the notice was barred by limitation and was 'issued without jurisdiction, so that no proceedings could be taken.
The learned single Judge, as well as the Divisional Bench of the High Court allowed the petition on the ground that the notice was barred by time under Rule 10 of the Central Excise Rules because the notice was held to be fully covered by Rule 10 and by no other rule.
The case was certified under article 33(a), (b) and (d) for an appeal to this Court.
Rule 10 of the Central Excise Rules provides that when duties or charges have been short levied through inadvertence or misconstruction etc., the person chargeable with the duty so short levied, shall pay the deficiency or pay the amount paid to him in excess on written demand by the proper officer within three months from the date on which the duty or charge is paid or adjusted in the owner 's account, if any, or from the date of making the refund.
It was contended that this was substantially a provisional assessment covered by Rule 10 B.
The Division Bench of the High Court, however, refused to agree that the impugned notice of 24 460 fell under Rule, 10 A.
The reason given for this refusal was that such a case was neither taken before the learned single Judge, nor could be found in the grounds, of the appeal despite the fact that the appellant had ample opportunity of amending its Memorandum of Appeal.
Allowing the appeal.
HELD : (i.) That the High Court erroneously refused to consider whether the impugned notice fell under Rule 10 A.
The applicability of Rule 10 A was very much in issue because the Collector in his affidavit denied that Rule 10 A of the said rules had any application to the facts of the case.
(ii) It cannot be accepted that merely because the current account kept under Rule 9 indicated that an accounting had taken place, there was necessarily a legally valid or complete levy.
The making of debit entries was only on ground of collection of the tax.
Even if payment or actual collection of tax could be spoken of as a defective levy, it was only provisional and not fINal.
It could only be closed or invested with validity after carrying out the obligation to make an assessment that really determines whether the levy is short or complete.
It is not a faCtual or presumed levy which could prove an assessment.
This has to be done by proof of the actual steps taken which constitute assessment.
[836D] A mechanical adjustment, or settlement of accounts by making debit entries was gone through in the present case, but it cannot be said that any such adjustment is assessment which is a quasi judicial process and involves due application of mind to the facts, as well as to the requirements of law.
Rule 10 and 10 A seems to be so widely worded as to cover any inadvertence error etc.; whereas Rule 10 A would appear to cover any deficiency in duty if the duty has for any reason, been short levied, except that it would be outside the purview of Rule 10 A if its collection is expressly provided or by any rule.
Both the rules as they stood at the relevant time, deal with collection, and not with assessment.
In N. B. Sanjana 's case ; this Court indicated that Rule 10 A which was residual.
in character, would be inapplicable if a case fell within a specified category of cases mentioned in Rule 10.
It was pointed out in Sanjana 's case that the reason for the addition 824 of the new rule 10 A was a decision of the Nagpur (Chotabhai Jethabhai 's case; A.I.R. 1952 Nagpur 139), so that a fresh demand may be made on a basis altered by law.
The excise authorities had made a fresh demand under Rule 10 A, the validity of which was challenged, but it was upheld by a Full Bench decision of the High Court of Nagpur.
This Court, in Chotabhai Jethabhai 's case also rejected the assessee 's claim that Rule 10 A was inapplicable after pointing out that the new rule was specifically designed for the enforcement of the demand like the present one.
[836F 837E] (iii)The present case, therefore, falls within the residuary clause of unforeseen cases from the provisions of section 4 of the Act, read with Rule 10 A, an implied power to carry out or complete an assessment, not specifically provided for by the rules, can be inferred.
Therefore, it is wrong to hold that the case falls under Rule 10 and not under Rule 10 A.
| % As a result of the order passed by the High Court, proceedings under section 44(2a) of the West Bengal Estates Acquisition Act, 1953 were re opened by the Special Revenue officer and final orders were passed on 9.2.1982.
The Ist respondent preferred an appeal against this order before the 9th Additional District Judge, the competent authority to hear an appeal.
On 1.12.83 the Ist respondent obtained an opinion of the Advocate General regarding the aforesaid proceedings, and filed that opinion with an application.
The Additional District Judge passed an order on 25.2.86 rejecting the prayer of the Ist respondent that the appeal be disposed of in accordance with the opinion of the Advocate General, but observed that the opinion of the Advocate General could only be looked into as the ground of appeal on behalf of the Ist respondent.
The date of hearing of the appeal was fixed on 19.4.86 to suit the convenience of the Advocates of the parties.
A petition under article 227 was filed in the High Court against the 818 aforesaid order by the Ist respondent.
The High Court treated this petition as a revision application challenging the order passed by the Additional District Judge on 25.2.86, and held that the Additional District Judge should have disposed of the appeal in accordance with the opinion of the Advocate General, and quashed the proceedings under Section 44(2a) as well as the appeal that was pending hearing before the Additional District Judge.
Allowing the Appeal by the State this Court, ^ HELD: l.
The High Court lost sight of the fact that the only grievance against the order of the 9th Additional District Judge was that he refused to decide the appeal in accordance with the opinion of the Advocate General and that he did not give an early date of hearing.
The question about the suo moto proceedings under section 44(2a) and the validity of the Amendment Act, 1969 and its effect were not considered by the appellate authority and in fact the appeal was still pending before the 9th Additional District Judge which was yet to be heard and disposed of.
[823G H] 2.
The High Court after examining the legal aspect without having been raised before it decided the matter so that neither appeal remains nor any proceedings remain and in doing so the High Court went on without there being proper grounds before it and without giving an opportunity to the appellant State of West Bengal, to have their say in this matter.
[824A B] 3.
The order passed by the High Court dated 20.5.87 is, therefore, completely without jurisdiction and on matters which were not before it and also without giving adequate opportunity of hearing and, therefore, deserves to be quashed, and is quashed.
[824B c] 4.
The appeal that was filed by the Ist respondent before the 9th Additional District Judge was pending when the High Court passed the impugned order, revives.
It could not be said that the appeal is disposed of as observed by the High Court.
It is directed that the appeal which was pending before the 9th Additional District Judge shall be heard by the Additional District Judge in accordance with law.
[824C D]
| The respondents instituted a passing off action in the High Court of Mysore for a declaration that they were exclusive owners of a certain trade mark and for a permanent injunction restraining the appellants from passing off their goods as that of respondents.
By section 105 of the Trade and Merchandise Mark Act such an action may be instituted in any court not inferior to a District Court having jurisdiction to try the suit.
It appears that on the day the suit was instituted the District Court was closed and there was no Judge functioning in the District Court who was on duty and competent to exercise the powers of the District Court.
The High Court entertained the plaint and granted temporary injunction.
In appeal by special leave : HELD:(i) The High Court of Mysore is by its constitution primarily a court exercising appellate jurisdiction; it is competent to exercise original jurisdiction only in those matters in respect of which by special Acts it has been specifically invested with jurisdiction.
It would be competent to exercise original jurisdiction under section 105 of the Act if it was invested with ordinary original jurisdiction of a District Court and not otherwise.
[802 D F] As a Court of appeal it undoubtedly stands at the apex within the State, but on that account it does not stand invested with original jurisdiction in matters not expressly declared within its cognizance.
[802 H] (ii) Power under section 24 of the Code of Civil Procedure to try and dispose of a proceeding after transfer from a court lawfully seized of it does not involve a power to entertain a proceeding which is not otherwise within the cognizance of the High Court.
[803 C D] (iii) Section 151 of the Code of Civil Procedure preserves the inherent powers of the Court, but it does not authorise the High Court to invest itself with jurisdiction where the jurisdiction is not conferred by law.
[803 D E] (iv) By "jurisdiction" is meant the extent of the power which is conferred upon the court by its constitution to try a proceeding : its exercise cannot be enlarged because an extraordinary situation "requires" the court to exercise it.
[803 H 804 A]
| The Government of Kerala issued a Notification dated 18.9.1974 under Section 1 (5) of the extending the provisions of the Act to six kinds of establishments viz. Hotels, Restaurants, Shops, Road Transport Motor Establishments, Cinemas and Newspaper Establishments.
The appellant Company, carrying on the business of clearing and forwarding at the port of Cochin, received notice for payment of its contribution under the Act.
Denying its liability to pay, it filed an application before the Employees ' Insurance Court under Section 75 of the Act, contending that the Notification was not applicable to it because its establishment was not a shop, but the same was dismissed.
On appeal a Division Bench of the High Court held that the establishment of the appellant falls within the purview of the term `shop '.
In appeals to this Court it was contended on behalf of the appellant that (1) though `shop ' would take within it other establishments like hotels or restaurants yet they have come to be specifically mentioned.
In view of that enumeration of other establishment in contradistinction to shops the 910 word `shop ' must be held to relate to a place where commercial activity of buying and selling merchandise takes place otherwise the enumeration of other establishment becomes meaningless; (2) in view of the fact that the notification specifically enumerates the other establishments, the intention has been clearly brought out not to give a wider meaning of the term `shop ' as otherwise the term `shop ' itself would be enough to cover other establishments like hotels, restaurants, cinema etc.
From this point of view, the activity carried on by the appellant merely processing the document at the customs clearing house without rendering any service to the customers at the appellant 's office of establishment cannot be said to fall within the meaning of `shop '.
Dismissing the appeals, this Court HELD: Per Sharma, J.
In view of the consistent interpretation of the notification which has been followed in the country, the question should not be reopened for fresh consideration.
[912 B] Per Mohan, J. (For Himself and Venkatachala, J.) Concurring: 1.
The Employee 's State Insurance Act is an Act to provide certain benefits to employees in case of sickness, maternity and employment injury and makes provision for certain other matters in relation thereto.
Under Section 1(4), in the first instance, it is made applicable to all factories.
But the Act envisages the extension of benefit to the employees in other establishments or class of establishments, industrial commercial, agricultural or otherwise.
The extension of benefit is to be done by means of a notification by the Appropriate Government.
Thus the benefits conferred by the Act cover a large area of employees than what the Factories Act and the akin legislations intended.
The conclusion is inescapable that it is a welfare legislation.
The endeavour of Court should be to place a liberal construction so as to promote its object.
The object is to envelop as many establishments as possible without leaving any room for doubt.
That is precisely what the Notification intends to do.
[915D, E,F,920 A] 2.
The Notification catalogues six establishments one of which is `shop '.
Merely because other establishments which are akin to shop are enumerated, it does not, in any manner, oblige the Court to give a narrow 911 meaning to the word `shop ' nor does it any way dilute the meaning of `shop '.
The appellant is carrying on stevedoring, clearing and forwarding operations.
Clearing the documents, even it be in the custom house, is necessary for the export or import of goods.
These services form part of the carriers job.
It cannot be gainsaid that the appellant is rendering service to cater the needs of exporters and importers and others who want to carry the goods further.
Therefore, it is a shop carrying on a systematic economic or a commercial activity.
This would be enough to bring the appellant without specifically enumerating the specific activities carried on by the appellant.
[913H, 919H, 920A B] Hindu Jea Band, Jaipur.
vs Regional Director Employees ' State Insurance Corporation, Jaipur, ; and M/s International Ore & Fertilizers (India) Pvt. Ltd. vs Employees ' State Insurance Corporation; , , relied on.
Wharton 's Law Lexicon, 14th Edn. 929 and Words and Phrases Legally defined, 2nd Edn. 73, referred to.
| Various contracts for sale of goods had been made between the parties in Bombay each of which contained an arbitration clause.
Disputes having arisen in March, 1952, in respect of these contracts, they were referred to arbitration and a composite award was made on October 7, 1952, against the respondent.
One of these disputes had arisen out of a forward contract in groundnuts.
The respondent applied to have the award set aside on the ground that the forward contract in groundnuts was illegal as such a contract was prohibited by the Oilseeds (Forward Contract Prohibition) Order, 1943, issued under the Essential Supplies (Temporary Powers) Act, 1946, passed by the Central Legislature.
The appellant contended that the Essential Supplies (Temporary Powers) Act, 1946, was repugnant to the Bombay Forward Contracts Control Act, 1947, passed by the Provincial Legislature of Bombay which had received the assent of the Governor General of India and therefore under section 107(2) of the Government of India Act, 1935, which applied, the Bombay Act prevailed in Bombay in preference to the Central Act and under the Bombay Act Forward Contract in groundnut was valid.
The High Court accepted the contention of the respondent and set aside the award.
Section 8 of the Bombay Act provided: "Every forward con tract for the sale or purchase of, or relating to, any goods specified in the notification under sub section (3) of section 1 which is entered into, made or to be performed in any notified area shall be illegal if it is not entered into, made or to be performed" and thereafter, set out the manner in which and the persons between whom such contracts could be made and also made punishable a person making a contract declared illegal.
Section 3 of the Central Act provided, "The Central Govern ment may by notified order provide for prohibiting trade and commerce" in any essential commodity.
Under this section the Oilseeds (Forward Contract Prohibition) Order was passed prohibiting forward contracts in groundnuts, which was one of the essential commodities specified in the Central Act.
Held, The Bombay Act did not make any contract legal.
Its only effect was to render certain forward contracts illegal if not 781 made in compliance with its terms while the Central Act made the contracts to which it applied, illegal.
There was, therefore, no repugnancy between the Bombay Act and the Central Act and both of them applied to Bombay.
Article 372 of the Constitution continued both these Acts, and so there is no provision in the Constitution under which any one of them may be said to apply to the exclusion of the other.
A composite award in respect of more than one dispute which is not severable, must be set aside as a whole if any of the disputes had been illegally referred.
| The Income tax officer, Dacca, acting under the Bengal Agricultural Income tax Act, 1944, sent by registered post a notice to the Manager of an Estate belonging to the Tripu ra State but situated in Bengal, calling upon the latter to furnish a return of the agricultural income derived from the Estate during the previous year.
The notice was received by the Manager in the Tripura State.
The State, by its then Ruler, instituted a suit in June, 1946, against the Province of Bengal and the Income tax Officer, in the court of the Subordinate Judge of Dacca for a declaration that the said Act in so far as it purported to impose a liability to pay agricultural income tax on the plaintiff was ultra vires and void, and for a perpetual injunction to restrain the defend ants from taking any steps to assess the plaintiff.
The suit was subsequently transferred to the Court of the Subor dinate Judge of Alipore.
The partition of India under the Indian Independence Act took place on the 158h August 1947, and the 2 Province of East Bengal in which the Estate was situated, was substituted as a defendant in the place of the Province of Bengal on an application made by it, and in its written statement it contended that the court of Alipore which was situated in West Bengal had no jurisdiction to proceed with the suit.
The High Court of Calcutta, reversing the order of the Subordinate Judge of Alipore held that the provisions of the Indian Independence (Legal Proceedings) Order, 1947, and the Indian Independence (Rights, Property and Liabili ties)Order, 1947, did not apply to the case and, as the matter was accordingly governed by the rules of internation al law, the court of Alipore had no jurisdiction to proceed with the suit: Held per KANIA C.J., PATANJALI SASTRI, MUKHERJEA and CHANDRASEKHARA AIYAR JJ.
(FAZL ALI J. concurrinG) The suit was not one with respect to any property transferred to East Bengal by the Indian Independence (Rights, Property and Liabilities) Order, 1947, nor was it a suit in respect of any "rights" transferred by the said Order, inasmuch as the Province of East Bengal obtained the right to levy income tax not by means of any transfer under the said Order, but by virtue of sovereign rights which were preserved by section 18 (3) of the Indian Independence Act, 1947, and article 12 (2) of the said Order had no application to the case.
Held per KANIA C.J., PATANJALI SASTRI, MUKHERJEA AND CHANDRASEKHARA AIYAR J.J. (FAZL ALI J, dissenting.) (i) Since the object of the Indian Independence (Rights, Property and Liabilities) Order, 1947, was to provide for the initial distribution of rights, properties and liabili ties as between the two Dominions and their Provinces, a wide and liberal construction, as far as the language used would admit, should be placed upon the Order, so as to leave no gap or lacuna in relation to the matters sought to be provided for.
The words "liability in respect of an action able wrong" should not therefore be understood in the re stricted sense of liability for damages for completed acts, but so as to cover the liability to be restrained by injunc tion from completing what on the allegations in the plaint are illegal or unauthorised acts which have been commenced.
As the Province of Bengal was, on the: allegations in the plaint, liable to be restrained from proceeding with an illegal assessment, that liability was, accordingly, a liability in respect of "an actionable wrong other than breach of contract" with in the meaning of article 10 (2) (a) of the above said Order; and, as the cause of action arose wholly in Dacca within the Province of East Bengal, that liability passed to the province of East Bengal under article 10 (2) (a), the latter must be deemed to be substituted as a party to the suit and the suit must continue in the court of the Subordinate Judge of Alipore, under Art.4 of the Indian Independence (Legal Proceedings) Order, 1947.
(ii) Assuming that the cause of action did not wholly arise 3 in Decca, article 10 (9.) (c) would apply and the Province of East Bengal would still be liable, though jointly with the Province of West Bengal.
(iii) As the suit was not one "to set aside or modify any assessment made under the Act", section 65 of the Bengal Agricultural Income tax Act, 1944, had no application and the suit was therefore one in respect of an "actionable" wrong within the moaning of article 10 (2) (a).
Per FAZL ALI J.
The words "liability in respect of an actionable wrong other than breach of contract" in article 10 of the Indian Independence (Rights, Property and Liabili ties) order 1947, refer to liability capable of being ascer tained in terms of money such as liability for damages for tort and not liability in any abstract or academic sense.
Even if a meaning, as wide ' as they can bear in a legal context, is given to the words "actionable wrong" and "liability" two elements are necessary to constitute an actionable wrong, namely, (i) an act or omission amounting to an infringement of a legal right of a person or breach of duty towards him, and (ii) damage or harm resulting there from.
The mere issuing of a notice under section 4 of the Bengal Agricultural Income tax Act, 1944, by the Income tax Officer is not an actionable wrong because no right known to law is infringed thereby and no action for damages can be main tained in respect of such an act, even assuming that the Income tax Officer had exceeded his powers or acted under an invalid provision of law.
No "liability for an action able wrong" was thus involved in the suit and no liability in respect of such a wrong could therefore be said to have been transferred to the Province of East Bengal within the meaning of article 10 (2.) of the said Order so as to entitle the plaintiff to continue the suit against the Province of East Bengal under article 10 (2).
For the purpose of understanding the full scope of section 65 of the Bengal Agricultural Income tax Act, 1944 it is necessary also to read the latter part which provides that no suit or other proceeding shall lie against any officer of the Crown for anything in good faith done or intended to be done under the Act.
" The latter part of the section clearly excludes the jurisdiction of the courts to prevent the Income tax Officer from proceeding with an assessment which has been started and the section must on a fair construction be held to bar all suits in connection with such assessment whether against the State or an Income tax Officer of the State.
If, therefore, no suit or action lies, there cab be no liability for an actionable wrong.
[The nature of actionable wrongs and torts discussed.] Judgment of the Calcutta High Court reversed.
|
iminal Appeals Nos. 146 and 147 of 60.
Appeals by special leave from the judgment and order dated February 11, 1960, of the Madhya Pradesh High Court in Criminal Revisions Nos.
270 to 274 of 1959.
G. C. Mathur, for the appellants.
I. N. Shroff, for the respondents.
February 5.
The Judgment of the Court was delivered by KAPUR, J.
There are two appeals directed against the order of the High Court of Madhya 22 Pradesh reiecting a Reference made by the Sessions Judge against the prosecution of.
the appellant for contravening the provisions of the C. P. and Berar Sales Tax Act (C. P. XXI of 1947), hereinafter called the 'Act '.
A firm of which five brothers including the two appellants were partners submitted their sales tax returns for the quarters beginning June 1, 1947, to the quarters ending December 31, 1951.
A .complaint was filed against the partners on July 19, 1957, on the ground that the returns filed by them were false and the accounts produced were incorrect and therefore an offence under section 24(1)(b) and (g) of the Act was committed.
On December 12, 1958, an objection was taken by the accused.
persons that under section 26(2) of the Act, the prosecution could not be instituted as it was barred by time, having been instituted more than three months after the commission of the offence.
The learned, Magistrate did not go into the objection on the ground that it was not the proper forum for raising the objection.
Four revisions were taken to the Sessions Judge who on May 4, 1959, made a reference to the High Court for quashing the proceedings But the High Court rejected the reference on the ground that a person making a false return neither acts nor purports to act under the Act and therefore section 26(2) is not applicable to him.
It is against that order that these peals were brought by Special Leave.
In order to decide this question, it is necessary to refer to the relevant provisions of the Act.
Under section 10 of the Act every dealer is required to furnish a return when called upon to do so and every registered dealer is required to furnish returns by such dates as may be prescribed.
The ap pellants are registered dealers and they have made returns under that section.
Section 15 deals with 23 production and inspection of accounts and section 24 enumerates the offenses under the Act.
The alleged offence of the appellants falls under is.
34(1) (b) and (g).
failing without sufficient use to submit any return or furnishing false returns and knowingly producing incorrect accounts, registers or documents or knowingly furnishing incorrect information.
Section 26 relates to the protection of persons acting in good faith and limitation for suits and prosecutions.
The section when quoted is as follows section 26 (1) "No suit, prosecution or other legal proceedings shall lie against any servant of the Government for anything which is in good faith done or intended to be done under this Act or rules made thereunder.
(2) No suit shall be instituted against the Government and no prosecution or suit shall be instituted against 'any person in respect of anything done or intended to be done under this Act unless the suit or prosecution has been instituted within three months from the date of the act complained of.
" For the appellants, it was contended that the words "no prosecution or suit shall be, instituted against any person in respect of anything done" in sub section
(2) of section 26 cover their cases also and they fall within the words ",any person".
The respondent 's submission on this point was that the two sub sections of section 26 should be read together and the intention of the Legislature was to give protection to Government servants in regard to prosecutions or other legal proceedings.
That, in our opinion, is not *hat the words used in sub section
(2) mean.
, They are words of wider import and would cover cases of all persons including persons other than Government servants.
There are ' no words restricting the meaning of "any person" and no 24 reason has been shown why those words should not include the appellants.
The ground on which the High Court rejected the Reference was that in its opinion the appellants neither acted nor purported to act under any of the provisions of the Act when they filed false returns or produced false accounts and in fact they were rendering.
themselves liable to punishment under the provisions of section 24 of the Act.
It observed as follows : "The test whether an act is done or intended to be done under a certain law might well be whether the person who committed it can, if challenged, reasonably justify his act under any provision contained in that law".
This opinion is, in our view, not sustainable.
When the appellants submitted their returns they did so under section 10 of the Act and when they produced their accounts they did so under section 15 of the Act.
Therefore both the making of the returns and production of the accounts were done under the Act and cannot be said to be outside the provisions of the Act.
In our opinion the High Court was in error in rejecting the Reference.
The appeals are therefore allowed, the order of the High Court is set aside aid the proceedings in the trial court are quashed.
Appeals allowed.
| The appellants submitted their returns of sales tax.
More than three months afterwards a complaint was filed against them under section 24(1)(b) and (g) of the C. P. and Berar Sales Tax Act ' alleging that the returns filed Were false and that the accounts produced were incorrect.
They contended that the prosecution was barred by section 26(2) of the Act which provided that no prosecution shall be instituted against any person in respect of anything done or intended to be done under the Act unless it was instituted within three months from the date of the act complained of.
Held, that the prosecution was barred by section 26(2) of the Act.
The words "any person" in section 26(2) were words of wide import and included the appellants.
There was no reason to restrict them to Government servants.
Both the making of the return and the production of the accounts were acts done under the Act; the return being filed under section 10 and the accounts being produced under section 15 of the Act.
Section 26(2) was thus clearly applicable to the case.
| Certain amounts collected by the appellants as sales tax were included in their turnover by the sales tax authorities.
They contested the constitutional validity of the Madras General Sales (Definition of Turnover and Validation of Assessments) Act, 1954, on the ground inter alia that the Sate Legislature went beyond its legislative competence under entry 54 of List If of the Constitution in enacting by the impugned Act that the amounts collected by the dealer by way of tax shall be deemed to have formed part of his turnover.
Held, that entry 54 of List II of the Seventh Schedule of the Constitution is similar to entry 48 of List 11 of Sch.
Vil of the Government of India Act, 1935 sales under which have been held to be transactions passing title to the Goods from the seller to the buyer and that a mere executory agreement was not a sale within the meaning of that entry.
The same meaning must be given to entry 54.
571 State of Madras vs Gannon Dunkerly & Co., Ltd., ; and Sales Tax Officer vs M/s. Budh Prakash jai Prakash; , , referred to.
Under sections 2(i) and 2(h) of the Madras General Sales Tax Act, 1939, the expression "turnover" means the aggregate amount for which goods are sold either for cash or deferred payment or other Valuable consideration, and when a sale attracts purchase tax which is passed on to the consumer what the buyer has to pay includes the tax and the aggregate amount to be paid would fall under the definition of turnover.
When the seller passes on the tax and the buyer agrees to pay sales tax in addition to the price, the tax is really part of the entitle considerations.
Papreka Ltd. vs Board of Trade, , Love vs Norman Wright (Builders) Ltd., , followed.
Asoka Marketing Co. Ltd. vs The State of Bihar, [1959] IO S.T.C. 110 and Tata Iron and Steel Co. vs The State of Bihar, ; , referred to.
Although section 8B of the Madras General Sales Tax Act, 1939 and the Turnover and Assessment Rules separately mentioned the amounts collected as tax for the purpose of paying such amounts to the Government, no immutable distinction was drawn between the sale price and the tax nor was any such distinction maintained under section 2 of the impugned Act.
Assuming that such a distinction did exist the Legislature was competent to enact under entry 54 in List II of the Constitution that the tax shall be deemed to have formed part of the turnover and obliterate the distinction for the limited period during which the impugned Act operated.
The impugned Act was therefore valid.
The Deputy Commissioner of Commercial Taxes vs M. Kyishna swami Mudaliar, [1954] 5 S.T.C. 88, held not applicable.
Sri Sundararajan & Co. vs The State of Madras, [1956] 7 S.T.C. 105, approved.
The Government of Andhya vs East India Commercial Co., Ltd., [1957] 8 S.T.C. 114 and Bengal Immunity Co., Ltd. vs State Of Bihar,[1955] 2 S.C.R. 603, referred to.
| A and B were tried together at one trial, A of offences under sections 120 B, 409,477 A and 471 read with section 476 Indian Penal Code and B of offences under sections 120 B,409 read with 109 298 and 471 read with 467 Indian Penal Code.
The Sessions judge who tried them convicted A of all the offences charged and B of the first two charges.
On appeal the High Court acquitted both of them.
The State appealed to the Supreme Court.
The respondents contended: (i) that there was a misjoinder of charges and persons on account of the cumulative use of the various clauses of section 239 of the Code of Criminal Procedure which was not permissible, (ii) that no charge of conspiracy could be framed after the conspiracy had fructified, (iii) that the Sessions judge had failed to inform the accused of their right under 3. 342 ( 4 ) of the Code to examine themselves as witnesses, (iv) that the pardon had been granted to the approver illegally, (v) that the approver had been allowed illegally to refresh his memory by reference to documents at the time when he was examined before the Court, and (vi) that the account books of certain firms which contained no entries regarding payments alleged to have been made to them were inadmissible in evidence.
Held that there was no misjoinder of charges and of accused persons.
It is open to the Court to avail itself cumula tively of the provisions of the different clauses of section 239 of the Code for the purpose of framing charges.
Sections 233 to 236 do not override the provisions of section 239.
But the provisions of sections 234 to 236 can also be resorted to in the case of a joint trial of several persons permissible under section 239.
Even if there was a misjoinder the High Court was incompetent to set aside the convictions without coming to the definite conclusion that the misjoinder bad occasioned failure of justice.
Re: Fankaralapati Gopala Rao, A.I.R. 1936 Andhra 21 and T.B. Mukherji vs State, A.I.R. 1954 All.
501, not approved.
State of Andhra Pradesh vs Kandimalla Subbaiah, , K.V. Kriahna Murthy Iyer vs State of Madras, A.I.R. 1954 S.C. 406, Willi (William) Slaney vs State of Madhya Pradesh.
; , Birichh Bhuian vs The State of Bihar.
(1964) Supp.
2 S.C.R. 328.
Held further that where offences have been committed in pursuance of a conspiracy, it is legally permissible to charge the accused with these offences as well as with the conspiracy to commit those offences.
Conspiracy is an entirely independent offence and though other offences are committed in pursuance of the conspiracy, the liability of the conspirators for the conspiracy itself cannot disappear.
299 State of Andhra Pradesh vs Kandimalla Subbaiah. , relied on.
S, Swamirathnam vs State of Madras, A.I.R. 1957 S.C. 340 and Natwarlal Sakarlal Mody vs State of Bombay, Cr.
A. No. 111 of 1959, dt 19.1.196 1, referred to.
Held further, that there was no violation of the provisions of section 342 of the Code.
The Sessions Judge had erred on the side of overcautiousness by putting every circumstance appearing in the evidence to the accused.
Copies of the questions put to the accused were given to them before hand.
Any point left over in the questions was covered in the written statements filed by the accused.
In such circumstance the length of the questions or of the examination could not prejudice the accused.
Further, there was no duty cast on the Court to inform the accused of their right under section 342 (4) to examine themselves as witnesses.
They were represented by counsel who must have been aware of this provision.
Held further, that the pardon was legally granted to the approver under section 337 of the Code and was a valid pardon.
The offences with which the accused were charged were all such in respect of which a pardon could be granted under section 337 (1).
The offences under section 467 read with section 471 which was exclusively triable by a court of sessions and the offence under section 477 A which was mentioned in section 337 (1) itself and thus both fell within the ambit of section 377 (1).
the offence under section 409.
and consequently the offence under section 120 B also, was punishable with imprisonment for life or with imprisonment not exceeding ten years and was an "offence punishable with imprisonment which may extend to ten years" within the meaning of section 337 (1).
Further, tinder G.O. No. 3106 dated September 9, 1949, the Madras Government, the power of a District Magistrate to grant pardon was specifically conferred on Additional District Magistrates, and the Additional District Magistrate, (Independent) who granted the pardon in the present case was competent to do so.
Held further, that the Sessions judge acted legally and properly in allowing the approver to refresh his memory, while deposing, by referring to the account books and other documents produced in the case.
Where a witness has to depose to a large number of transactions and those transactions are referred to or mentioned either in the account books or in other documents there is nothing wrong in allowing the witness to refer to the account books and the documents 300 while questions are put to him.
Such a course is specifically permitted by sections 19 and 160 of the Evidence Act.
Held further, that the account books of the firms which contained no entries with respect to payments alleged to have been made were not relevant under section 34 of the Evidence Act, as that section is applicable only to entries in account books regularly kept and says nothing about non existence of entries.
But they were relevant under section I I of the Act as the absence of the entries would be inconsistent with the receipt of the amounts which was a fact in issue.
They were also relevant under section 5 to prove the facts alleged by the prosecution that payments were never made to these firms and that those firms maintained their accounts in the regular course of business, and both these were relevant facts.
Queen Empress V. Grees Chander Banerjee (1884) I.L.R. IO Cal, 1024, and Ram Pershad Singh vs Lakhpati Koer, Cal. 231, referred to.
| The appellant owned a cardamom plantation.
For the assessment year 1957 58, he submitted a return under the Madras Plantations Agricultural Income tax Act, 1955.
The Agricultural Income tax Officer did not accept the return, and 'added to the income the value of stocks of cardamom sold in the accounting year.
The High Court in revision, confirmed the assessment made by the Department.
In appeal to this Court, it was contended that: (1) the agricultural produce itself was income and became charged to tax under the Act when it was received and not when it was sold, used or consumed, and therefore, the High Court ought to have directed determination of the produce which was actually derived from agriculture in the year of account and ought to have brought to tax only that quantity and excluded the value of the rest of the produce received in earlier years, from taxation; and (2) from the fact that the appellant applied to compound the tax for the earlier years, it must be inferred that the produce which was sold by him in the year of account had already suffered tax in the earlier years.
HELD : (1) Merely because the produce of the plantation was received in the earlier years, income derived from sale of that produce in the year of account was not exempt from tax under the Act in that year.
[953 B] Section 3 of the Act read with the definition of "agricultural income" charges to tax the monetary return either as rent or revenue or agricultural produce from the plantation.
The expression "income" in its normal con notation does not mean mere production or receipt of a commodity which may be converted into money.
Income arises when the commodity is disposed of by sale, consumption or use in the manufacture or other processes carried on by the assessee qua that commodity.
It is not necessary, however, for income to accrue that there must be a sale of a commodity : consumption or use of a commodity in the business of the assessee from which the assessee obtains benefit of the commodity may be deemed to give rise to income.
[952 G H; 953 A B] Dooars Tea Co. Ltd. vs Commissioner of Agricultural Income tax, West Bengal; , , referred to.
(2) It had to be proved by evidence that the crop sold related to the years in respect of which the assessee had applied to compound the tax, but there was no such evidence.
[954 F]
| Assessment orders were passed by the Sales Tax Officer allowing the deductions of two amounts claimed by the respondent dealer under section 5(2)(a)(ii) of the Orissa Sales Tax Act in respect of goods sold to a registered dealer.
The respondent dealer filed appeals to the Assistant Collector Sales Tax, challenging the assessment on grounds which were not relevant and against those decisions revisions were filed by the dealer.
While the revisions were pending the Orissa Sales Tax Act was amended by Orissa Sales Tax (Amendment) Act (Orissa Act, 10 of 1957) with the result that revisions were treated as appeals to the Sales Tax Tribunal, and it enabled the Government to file cross objections.
In pursuance, the State filed cross objections challenging the deductions on the ground that the dealer had not produced any declaration as required under r. 27(2) of the Orissa Sales Tax Rules, 1947.
The Tribunal upheld this objection and directed that fresh assessments be made.
On statement of the case, the High Court answered that the assessing officer was not wrong in allowing the deductions.
On appeal by special leave).
Held:(i) There is nothing in section 5 (2) (a) (ii) itself that disentitles a selling dealer to a deduction, but if the contingency provided in the proviso occurs, then the price of goods is included in the taxable turnover of the buying dealer.
(ii)The production of a declaration under r. 7(2) is not always obligatory on the part of a selling dealer when claiming the exemption.
It is open to him to claim exemption by adducing other evidence so as to bring the transaction within the scope of section 5(2)(a)(ii).
Rule 27(2) must be reconciled with the section and the rule can be reconciled by treating it as directory.
But the rule must be substantially complied with in every case.
It is for the Sales tax Officer to be satisfied that, in fact.
the certificate of registration of the buying dealer contains the requisite statement, and if he has any doubts about it, the selling dealer must satisfy his doubts.
But if he is satisfied from other facts on the record, it is not necessary that the selling dealer should produce a declaration in the form required in r. 27(2).
before being entitled to a deduction.
Member Sales tax Tribunal, Orissa vs Mls.
section Lai & Co. (1961) 12 S.T.C. 25, referred to.
| Based on the audit report dated January 5, 1973 revealing an embezzlement having been committed by the Respondent on 22.8.1972, a challan was presented against him on the 13th October, 1976 under Sec.
406 Penal Code for misappropriating the amounts deposited with him as a Cashier of the Tanda Badha Co operative Society, district Patiala.
The Trial Court convicted the respondent under section 406 Penal Code and sentenced him to rigorous imprisonment for one year and to pay a fine of Rupees one thousand.
The respondents ' appeal to the High Court was allowed accepting the plea of bar of limitation under section 468 of the Criminal Procedure Code.
Hence the State appeal after obtaining special leave of the Court.
Dismissing the appeal, the Court, ^ HELD: (1) Taking any of these dates, namely, 22nd August 1972, (Commission of embezzlement), and 5th January 1973 (date of detection of embezzlement) the prosecution was barred by limitation under sections 468(2) (a) and 469(b) of the Code of Criminal Procedure.
Therefore, the conviction and the sentence of the respondent as also the entire proceedings culminating in his conviction became non est.
G] (ii) The object of the Criminal Procedure Code in putting a bar of limitation on prosecution was clearly to prevent the parties from filing cases after a long time, as a result of which material evidence may disappear and also to prevent abuse of the process of the court by filing vexatious and belated prosecutions long after the date of the offence.
The object which the statute seeks to subserve is clearly in consonance with the concept of fairness of trial as enshrined in article 21 of the Constitution of India.
It is, therefore, of the utmost importance that any prosecution, whether by the State or a private party must abide by the letter of law or take the risk of the prosecution failing on the ground of limitation.
[351 E F] 350
| The appellant effected sales during the period 26 1 1950 to 31 3 1950, whereunder the property in the goods passed in the State of Bihar but delivery was effected outside Bihar for consumption outside Bihar.
In some of these sales the goods were delivered in the State of first destination for consumption therein whilst in other cases the goods were not for consumption in the State of first delivery of destination.
The appellant contended that both these categories of sale were exempt from tax under article 286(1)(a) as they were outside sales.
Held (per Hidayatullah, Das Gupta and Rajagopala Ayyangar, JJ.) that the sales where delivery in the State of first destination was for consumption therein, were outside the State of Bihar within the Explanation to article 286(1)(a) and Bihar could not tax them, but the sales where delivery in the State of first destination was not for consumption therein were not " Explanation Sales " and were not " outside " sales and Bihar could tax them.
Where the property in the goods passed within the State as a direct result of the sale the sale was not an " outside " sale for the purpose of article 286(1)(a) unless it fell within the Explanation.
In the first category of sales the appellant was entitled to the.
exemption and it was not necessary for it to prove that the goods delivered for consumption in the State of first destination were actually consumed therein.
The State of Bombay vs United Motors (India) Ltd., and Bengal Immunity Company Ltd. vs The State of Bihar, , referred to.
Burmah Shell Oil Storage & Distributing Co. of India Ltd. vs The Commercial Tax Officer, C. A. No. 751 of 57 and C. A. No. 10 of 1958 (Unreported), relied on.
Per section K. Das and Shah, Jj.
Section 33 introduced in the Bihar Sales Tax Act by the Adaptation of Laws Order, 1951, engrafted the same restrictions on the taxing power of the State on the pre Constitution statutes as were imposed by article 286 upon post Constitution statutes.
Section 33(1)(a)(1) of the Act took away only the power to tax " Explanation Sales " but not the power to tax " non Explanation Sales ".
A sale in which goods had been delivered outside Bihar, but not as a direct result of 277 the sale or not for the purpose of consumption in the State of first delivery was not covered by the Explanation, and the right to tax the sale, if it arose otherwise under the Act, was not impaired by section 33(1)(a)(i).
| The appellants carried on the business of Commission Agents in Jaggery in Andhra Pradesh.
They arranged for the sale of jaggery charging a small commission for their service and rendering an account to their Principals in respect of those sales.
Every buyer was fully apprised of the fact that he was purchasing jaggery of specified agriculturist Principals and not that of the appellants.
Till about 1963 under section II of the Andhra Pradesh General Sales Tax Act, 1957, commission agents were required to obtain and were being issued licences and if they conformed to the conditions of those licences, they were not subjected to tax.
In 1963 the principal Act was amended by Andhra Pradesh General Sales Tax Amendment Act 16of 1963.
By the new section I I introduced by the Amending Act the Agentsof resident Principals were made liable for assessment and collection of tax though the liability of the Agent was made co extensive with that of the principal.
The High Court held that in assessing the Agent the turnover of those Principals whose turnover was below the taxable limit of Rs. 10,000 could not be taken into account.
As a consequence of this decision the Andhra Pradesh General Sales Tax Amendment Act 5 of 1968 was enacted and a new section I 1 substituted for the existing section.
This section II was given retrospective effect from 1st August 1963.
The object of this amendment was to enable the taxing authorities to assess levy and collect tax or penalty under the Sales Tax Act from the Agent irrespective of the fact that the Principal was not liable to tax.
This new section was also struck down by the High Court, on the ground that it was violative of article 14 of the Constitution.
In view of this judgment which restored the legal position to that prevailing before the Amendment, large sums of money which bad been collected as tax from the Agents became refundable.
To meet this situation the Andhra Pradesh Legislature enacted the Andhra Pradesh General gales Tax Amendment Act 9 of 1970, Section 8 of which validated the assessments already made.
Under section 9 Agents who had not collected the tax from their Principals were exempted from tax.
Under section I I Agents who had collected the tax were made liable to pay the same.
In writ petitions under article 226 filed by Agents it was contended that section II as amended and section 9 of the Amending Act were violative of article 14.
The High Court held that section 1 1 was valid but section 9 violated article 14.
In appeal filed against the High Court 's judgment by certificate, HELD:(i) The appeals filed by the agents were not maintainable.
What was sought to be recovered from the appellants was in respect of a tax collected on past dealings and not with respect to the future transactions.
The tax had already been collected, no doubt at first illegally, but 368 due to the Amendment Act, that collection had become legal and as dealers, the appellants were liable to pay that amount to the State.
As there was nothing to show that what was sought to be recovered from the dealer was more than what he had collected he had not suffered any loss nor any disadvantage which would entitle him to seek a remedy under article 226 of the Constitution [373B C] (ii) Section 9 had been wrongly struck down by the High Court as invalid.
This section was enacted by the legislature with the object of removing shortcomings in the principal Act which were found wanting by judicial interpretation.
The interregnum between the declaration by the High Court of certain provisions of the Act as being unconstitutional and the attempt of the legislature to remedy the defects and to give retrospective effect thereto created two distinct categories between the same class of dealers namely those who had collected the tax whether they were assessed or not and those who had not collected the tax.
This classification was certainly reasonable and was related to the object which the Amendment Act sought to achieve.
The dealers who had not collected the tax could not have collected it as the law stood and therefore the legislature thought it just or proper to collect the tax from those who were not liable.
Even this exemption was given to those who could establish that they had not in fact collected it, the burden of which was upon those who claimed the exemption.
[374D E],
|
Appeals Nos. 344 346 of 1960.
Appeals by special leave from the judgment and order dated September 8. 1958, of the Madhya Pradesh High Court (Indore Bench), Indore, in Civil Second Appeals Nos.
11.0 1,12 of, 1952.
section T.Desai and J. B. Dadachanjifor the appellant.
B. Sen,J. Bhave and 1.
N. Shroff,for the respondent.
July 17.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
These three consolidated appeals by special leave are against a common judgment and order of the High Court of Madhya Pradesh, dated September 8, 1958, in three second appeals filed under R. 13 of the Indore Industrial Tax Rules, 1927 of the former Holkar State, which were in force before the State became part of Madhya Bharat State.
They concern three assessments relating to the assessment years, 1941,1942 and 1943 respectively.
These second appeals were originally filed in the Madhya Bharat High Court as early as 1952 ; but the records of the appeals 'were destroyed by fire and had to be reconstructed.
By the time the appeals were ready, Madhya Bharat had merged in the new state of Madhya Pradesh, and the appeals were accordingly heard by a Divisional Bench of that High Court.
The appellant is a Textile Mill and a public Joint Stock Company called the Nandlal Bhandari Mills, Ltd. The appellant had appointed a" firm, Messrs Nandlal Bhandari and Sons as agents, secretaries and treasurers of the Mills, and under cl.
(6) of the agreement of agency, it agreed to pay to the agents an office allowance, commission on the Company 's net profits and commission on the sale proceeds.
of sales of yam, cloth, etc.
The 861 remuneration of the agents for the three accounting years was as follows : ___________________________________________________________ Remuneration As per Accounting Years, agree ment.
1941 1912 1943 Rs. Rs. Rs. __________________________________________________________ Clause 6 1500 18,000 18,00018,000 (a) Fixed P.M. for the for the monthly allow year.
ance as office allowance.
(b) Commission @ 16% 2,68,335 6,15,946 10,52,939 on the Com net on painy 's Net profits Profits.
(c) Commission @ 1 9 0 1,10,156 1,10156 1,64,751 2,71,672 on the sale Per Cent, proceeds of on sales sales of yarn, cloth etc.
___________________________________________________________ In computing the tax, the Mills claimed to deduct under R. 3(2)(ix) of the Rules the above amounts paid as remuneration.
The Rule reads : "(ix) any expenditure (not being in the nature of capital) incurred solely for the purposes of earning such profits or gains." The Assessing Officer accepted the appellant 's claim for deduction but only as.
to a part.
We are not required in these appeals to consider the correctness of the quantum of the deduction in view of what transpired later.
The Assessing Officer also disallowed certain other claims made by the appellant, which again need 'not be mentioned.
The appellant then.
appealed to the Appellate Authority, and on December 31, 1951 the Appellate Authority, while accepting some of 862 the appellant 's other contentions upheld the order refusing to deduct the agent,s commission on profits under R. 3(2)(ix).
Three second appeals were preferred in the Madhya Bharat High Court under R. 13 of the amended Rules.
They were dismissed by the High Court of Madhya Pradesh, and hence the present appeals.
The Indore Industrial Tax Rules were first promulgated in 1926 by a Cabinet Resolution (No. 373 dated March 22, 1926).
In 1927, by, Cabinet Resolution No. 1991 dated November 23 1927, the Rules were modified, and the new Rules, were made applicable retrospectively from May 1, 1926.
These Rules were framed for the levy of the tax and for ascertainment and determination of the income of cotton mills.
The taxcalled the "Industrial Tax" was leviable under R. 3, which imposed the charge.
It says that the Industrial Tax shall be payable by an assessee in respect of the profits or gains of any Cotton Mill industry carried on by him in the Holkar State.
Sub r.
(2) of R. 3 provides that such profits or gains are to be computed after making allowances, inter alia, for any expenditure incurred solely for the purpose of earning such profits or gains, R. 6, which is a part of the Rule imposing a charge, lays down the rates which are : (a) on all incomes up to Rs. 50,000, at 1 1/2 annas per rupee, and (b) above, at 2 1/2 annas per rupee.
The short question thus was whether in computing the profits and gains of the appellant, the remuneration paid to the agents was deductible under R. 3 (2) (ix).
It is necessary At this stage to see the legislative machinery existing in the Holkar State in 1927 and onwards.
On February 27, 1926, His Highness Maharaja Tukoji Rao III abdicated, and, his son, H.H. Maharaja Yeshwant Rao Holkar, became the Ruler, whose installation ceremony ' was performed on March 11, 1926.
A Regency Council was appointed under the orders of the 863 Government of India for the administration ' of the State during the minority of the Maharaja.
This Regency Council, which was called the Cabinet, was entrusted with the administration of the State according to existing rules and practice, under the supervision and with the advice of the Agent to the Governor General in Central India.
Prime Minister of the State was the Chairman.
H. H. Maharaja Yeshwant Rao Holkar attained majority on September 6, 1929 and resumed sovereign powers on May 9, 1930.
It was during the minority of the Ruler that the Cabinet had promulgated the amended Rules of 1927.
In 1931, the decision of the Privy Council in the well known case of Pondicherry Railway Co., Ltd. vs Commissioner oF Income tax (1) was rendered.
In that case, a Railway Company had agreed to make over to the French Colonial Government half of the Company 's net profits in consideration of a 99 year concession.
This was sought to be deducted by the Company from its assessable profits as an expenditure incurred solely for the purpose of earning such profits.
The Privy Council disallowed the deduction.
Lord Macmillan observed as follows : "A payment out of profits and conditional on profits being earned cannot accurately be described as a payment made to earn profits.
It assumes that profits have first come into existence.
But profits on their coming into existence attract tax at that point and the revenue is not concerned with the subsequent application of the profits.
" It seems that, as a result of this decision, a notification was issued in August, 1931, and another on February 2/3, 1932 by the Commerce.
and Industry Department of the Holkar State.
The latter notification reads as follows (1) (1931) L.R. 38 I.A. 239. 864 "Commerce and Industry Department Notification.
Notification No. 1 dated the 2nd/3rd Feb. 19 32.
In continuation of this office Notification No. 4733 dated the 6th December, 1927 (Vide Issue No. 11 dated the 12th December, 1927, of the Holkar Sirkar Gazette) embodying modified rules for the levy of the Industrial Tax the Cabinet,in their Resolution No. 1072 dated the 25th August, 1931, have ordered that the Agents ' Commission on 'Profits ' should not be allowed to be deducted from the assessable profits.
" It is, to be noticed that this notification refers to the earlier notification No. 4733 of December 6, 1927, under which were published the amended Industrial Tax Rules, 1927, and to the notification of August 1931.
The latter has not been produced before us.
This notification led to representations by the persons affected by it.
The Maharaja of Holkar thereupon referred the matter for the opinion of the, Full Bench of the High Court of the State.
It appears that the opinion of the High Court was in favour of disallowing such deductions.
On July 14, 1933, another notification (No. 13) was issued which reads as follows : "In continuation of this office Notification No. 1 dated 3rd February,, 1932, it is hereby published for the information of the mills and factories concerned that on submission of the Prime Minister 's (Legal Department) report No. 25 dated 11th May, 1933, His Highness the Maharaja is please to order (vide Huzur Shri Shankar, Order No. 173 dated 29th June,1933) that the opinion of the Full Bench of the High Court being that the Managing Agent 's Commission an profit 's is 865 not an item of expenditure incurred solely for the purpose of earning the said profit within the meaning of Rule 3(2)(ix) of the said Industrial Tax Rules and this being.
also the view of the Cabinet as expressed in their resolution No. 1072 dated 28th August, 1931, the aforesaid Cabinet Resolution be given effect to and the industrial tax due on the amount of the managing agent 's commission on profits be recovered with effect from the date of the said Cabinet Resolution.
" This notification, it is contended before this Court had not the force of law and was not enforceable against the appellants, who claim that they are entitled to show that the remuneration paid to the agents was deductible from the profits of the Mills before.
computing the Industrial Tax.
In this connection, the appellants wish to use the later decisions of the House of Lords in The Union Cold &wage Co., Ltd. vs Adamson(1) and of the Privy Council in The Indian Radio and Cable Communication Co., Ltd. vs Commissioner of I Income tax (2), in which the decision in the Pondicherry Railway Company case (3) was explained.
In the case before the Privy Council, Lord Maugham observed: "It is not universally true to say that a, payment the making of which is conditional 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 commission on the profits of a company '.
If a company having made; an apparent net profit, of pound 10,000 has then to pay pound 1,000 to directors, or managers as the contractual recompense for their service during the year, it: is plain that the real net profit is only pound 9,000.
" (1) (2) (3) (1931) L.R. 58 (1) A. 239.
866 Lord Macmillan in the former case observed that the Pondicherry Railway Company case (1) must be read in the context of the facts of that case, and the obligation was first to find out the net profits of the company and then to divide them.
These two sets of cases proceed upon different principles.
If the agreement is to share the profits the expenditure cannot properly be treated as one incurred solely for the purpose of earning such profits; but if a slice of the profits is;to be paid to persons as remuneration to help in the earning of the profits, the deduction can be claimed.
All this would of course be pertinent to consider, if there was no legislative enactment on the subject.
If the matter was not one concluded by law, then there would be room for judicial interpretation of the Rule.
The rival claims in these appeals are thus confined to the legislative force of the notifications issued in 1931, 1932 and 1933 respectively,.
The appellant 's contention is that the notifications were not an act of legislation but an interpretation by the Sovereign.
Mr. Desai concedes that if they be regarded as legislation, then the later decisions of the Privy Council and some of this Court cannot be called in aid, because where the law itself speaks with clarity, judicial interpretation is out of place.
He contends, how ever that the two notifications were not framed as rules and were not expressly stated to be amendments of the rules then existing.
He points out that after the first notification which was nothing more than an administrative direction to the assessing officers to include in the profits the remuneration of the agents, the opinion of the High Court was obtained, and the second notification merely pointed out that the earlier notification was to be given effect to, and did no more than add a second administrative direction.
On the other side, it is contended that the Cabinet could make laws as often as it pleased and that (1) (1931) L. R. 58 I. A. 239.
867 the notifications must be read either as independent rules or as a legislative explanation of R. 3 (2) (ix).
In so far as the legislative supremacy of the Cabinet was concerned, no question was raised before us.
When the Indore Industrial Tax Rules, 1926 were framed, they came into existence by virtue of a Cabinet Resolution of that year.
When they were modified, they were superseded by yet another Cabinet Resolution of the year 1927, which promulgated the new Rules with retrospective effect from May 1926.
The source of the Rules 'was thus a Resolution of the Cabinet on both the occasions, and it is not denied that the Rules thus framed had legislative sanction and were unquestionable.
When the Cabinet promulgated its notifications in 1931, 1932 and 1933, it followed the same procedure, and it stated that the notification of 1932 was " 'in continuation of this office Notification No. 4733 dated December 6, 1927.
" This has reference to that notification under which the Indore Industrial Tax Rules, 1927 were orginally published.
From this, it follows that new Rules were framed by a resolution of the Cabinet and were promulgated by a notification in the Gazette as part of the Rules.
The mode followed in 1926 and 1927 was repeated in 1932 and 1933 and also presumably in 1931, though the notification of that year has not been printed in the record of this case.
This view was taken by the Full Bench of the ' Madhya Bharat High Court in Raj Kumar Mills Ltd. vs Madhya Bharat State (1).
The question which is involved in these appeals also arose in that case.
It was observed by the Full Bench : "This Notification makes it abundantly clear that His Highness the Maharaja ordered that the industrial tax due on the amount of the managing agent 's commission on profits be recovered.
This being.
an order of the (1) A.I.R. 1953 Madbya Bharat 135. 868 ruler, who enjoyed sovereign Powers, that order is not open to challenge.
This is a mandate emanating from a sovereign and as such has the force of law.
This Court has, therefore, no power to go behind the order and enquire as to whether the managing agent 's commission on profits is an item of expenditure solely incurred for the 'purpose of earning profits or not: In this view of the matter the point at issue is concluded by Huzur Shri Shanker order No. 173 dated 29th June, 1933.
" Thus view was affirmed by the High Court of Madhya Pradesh in the judgment under appeal.
In our judgment, the two notifications cannot be described as "judicial ,interpretation".
If any this, they must be interpreted as legislative exposition of R. 3(2)(ix) and in the nature of an explanation.
This Court in Ameer un nissa Begum vs Mahboob Begum in dealing with the 'Firmans" of His Exalted Highness the Nizam of Hyderabad, observed as follows : "It cannot be disputed that prior to the integration of Hyderabad State with the Indian Union and the coming into force of the Indian Constitution, the Nizam of Hyderabad enjoyed uncontrolled sovereign powers.
He was the supreme legislature, the supreme judiciary and the, supreme head of the executive, and there were no ;constitutional limitations upon his authority to act in any of these capacities.
The 'Firmans ' were expressions of the sovereign will of the Nizam and they were binding in the same way as any other law; nay they would override all other laws which were in conflict with them.
so long as a particular 'Firman ' held the field, that alone would govern or regulate (1)A.I.R. 869 the rights of the parties concerned, though it could be annulled or modified by a latter 'Firman ' at any time that the Nizam willed.
" The same can be said of the Ruler of the Holkar State.
When to the order of the Ruler was added the usual mode of making and promulgating rules, the position which emerges is really unassailable.
Mr. Desai in attempting to show that the ruling does not apply to the case, raised two contentions.
The first was based upon a more recent decision of this Court in Madhaorao vs State of Madhya Bharat (1), where certain Kalambandis of the Maharaja of Gwalior were considered.
This Court in deciding whether the Kalambandis were existing law under article 372 of the Constitution, observed : "In dealing with the question as to whether the orders issued by such an absolute monarch amount to a law or regulation having the force of law, or whether they constitute merely administrative orders, it is important to bear in mind that the distinction between executive orders and legislative commands is likely to be merely academic where the Ruler is the source of all power.
There was no constitutional limitation upon the authority of the Ruler to act in any capacity he liked ; he would be the supreme legislature, the supreme judiciary and the supreme head of the executive, and all his orders, however issued, would have the force of law and would govern and regulate the affairs of the State including the rights of its citizens.", It was, however, pointed out in the case that even where an order is issued by the sovereign ruler, one must look to the character of the order and its content to find out whether it enacted a binding rules (1) ; 870 Mr. Desai has constructed his entire argument on the basis of these observations, and has contended that the orders only expressed an opinion and did not bind.
He pointed out as the second limb of his argument that these notifications were not expressed as a rule but as an order, and that they did not seek to amend the rules, nor to add to them.
He referred to other notifications in which a legislative act was clearly discernible, as for example, Notification No. 22/Com.
dated May 17, 1946, by which for the existing Rule 4, a new Rule was substituted.
An examination of the Rules, however, shows that there was no set pattern of language.
Some of the Rules do not read like rules at all.
Notes have been appended to the rules, which are not rules proper, and R. 29 says : "All matters not dealt with in these rules may be submitted to the member incharge., Commerce and Industry Department for decision.
" The existence of such a rule seems to obliterate the frontiers between legislative, judicial and executive exercise of the power of a State, such as we understand it.
There being no invariable use of a clear cut legislative language, each general order emanating from the sovereign ruler and promulgated in the same manner as any other rule and having its roots in a resolution of the Cabinet must be regarded as one binding upon the subject.
This is the purport of the decisions of this Court, and the present case falls in line with those which have been previously decided.
There is nothing in the content, the character or the nature of these notifications, which would put them on a level lower than the Rules, which had been earlier promulgated.
In our opinion., the judgment of the High Court under appeal is correct, and the appeals are accordingly dismissed with costs, one set.
Appeals dismissed.
| By a Cabinet Resolution of the Holkar State certain Rules known as The Indore Industrial Tax Rules were framed for the purpose of levying industrial tax.
After the decision of the Privy Council in cherry Railway Go.
, Ltd. vs Commissioner Income, tax, (1931) L. R. 58 1.
A. 239, disallowing deduction , of Commission paid out of profits to agents from the assessable profits; the Government of Holkar State of which the Maharaja was the Supreme Ruler; issued certain Notifications ordering that the Agents ' Commission on profits should not be allowed to be deducted from the assessable profits.
The appellants who under an agreement paid commission to their agents out of the company 's net profits contended, inter alia, that the Notifications in question did not have the force of law and was not enforceable against the appellants.
Held, that every general order emanating from the sovereign ruler having its roots in a resolution of the cabinet must be regarded as a law binding on the subject and the Notifications disallowing commission paid to, agents to be deducted from the assessable profits were therefore binding on the appellants, because that was the normal mode by which laws were made in the Holkar State.
Rajkumar Mills Ltd. vs Madhya Bharat State, A. I. R. 1953 Madhya Bharat 135, approved.
Ameer un nissa Begum vs Mahboob Begum, A. I. R. , followed.
The Union Cold Storage Co., Ltd. vs Anderson, (1931) 16 T. C. 293 and The Indian Radio and Cable Communications Co., Ltd. vs Commissioner of Income tax, , discussed.
Madharao vs State of Madhya Bharat, ; , referred to. 860
| The respondent, filed petitions under Am.
226 and 227 in the Assam High Court asking that notifications by the State Government of the transfer of one District & Sessions Judge and the appointment and posting of another be quashed on the ground that the High Court alone could make the transfers and.
in any event, the High Court was to be consulted and was not consulted before the impugned orders were made.
The High Court held that there was no consultation with regard to the posting of one of the District Judges and that his transfer was irregular as the High Court alone could have ordered it; and furthermore that the transfer of the other.
District Judge was for a like reason also irregular.
Holding, however, that none of the District Judges could be said to occupy wrongly the office of District & Sessions judge, the High Court declined the writ of quo warranto and dismissed the petition, but without costs to the State Govenment.
One of the learned Judges of the High Court who comprised the Division Bench that heard the petitions,, in a separate but concurring judgment, passed some scathing remarks on the action of the Government which he described as mala fide and actuated by some ulterior motive.
On being moved by the State Government, the High Court granted certificates under article 132 of the Constitution to appeal to the Supreme Court on the ground that the judgment involved the interpretation of articles 233 and 235 of the Constitution.
By these appeals the State Government sought a reversal of the opinion of the High Court on the two Articles.
Three questions arose for decision in the appeal: (a) who is to order transfer of a District Judge the State Government or the High Court; (b) is the provision regarding consultation in article 233 mandatory or directory and if the former, whether the High Court was not in fact consulted; and (c) whether the remarks complained of about the State Government made by the learned Judge should be expunged.
HELD: (i) Under article 233 the Governor is only concerned with the appointment, promotion and posting to the cadre of district Judges but not with the transfer of District Judges already appointed or promoted and posted to the cadre.
The latter is a matter of control of District Judges which is vested in the High Court under article 235.
[460 G] The word posting means either to station some one at a place or to assign someone to a post, I.e. a position or a job, especially one to which a person is appointed.
In article 233 it bears the second meaning.
The word occurs in association with the words 'appointment ' and 'promotion ' and takes its colour from them.
These words indicate the stage when 454 455 a person first gets a position or job and 'posting 'by association means the assignment of an appointee or promotee to a position in the cadre of District Judges.
The word 'posting ' cannot be understood in the sense of 'transfer ' when the idea of appointment and promotion is involved in the combination.
This meaning is quite out of place because 'transfer ' operates at a stage beyond appointment and promotion.
Transfer, therefore, falls within the control vested in the High Court.
[460 C G] State of West Bengal vs Nripendranath Bagcht,[1966] 1 S.C.R. 771, referred to.
(ii) As the High Court acting under article 235 and not the State Government is the authority to make transfers, no question can arise of a consultation on this account.
In the present case, however, consultation as required by article 233, was necessary before one of the District Judges was promoted and posted as a District Judge.
Chandra Mohan vs U.P. , referred to.
(iii) The power to expunge is an extraordinary power and can be exercised only when a clear case is made out.
Although the opinion of this Court may be that the learned Judge need not have made the remarks complained of, it could not be said that in making them he acted with such impropriety that the extraordinary powers should be exercised.
[462 DIP]
| % In a batch of Writ Petitions filed in this Court the petitioners challenged the imposition of sales tax and surcharge on bread, rusk and bun under the A.P. Sales Tax Act, 1957 as illegal, contending that bread and biscuits belonged to one homogeneous class but had been treated differently for purposes of taxation under Schedule 1, Item No. 117 and Item No. 129 of the Act, that the purchasers and sellers of bread and biscuits had been differently taxed, and that the multiple point tax violated Article 19(1)(g) of the Constitution.
Dismissing the writ petitions, ^ HELD: The economic wisdom of a tax or lack of it are within the exclusive domain of the legislature.
The only question for the Court to consider is whether there is rationality in that behalf of the legislature that capacity to pay the tax increased by and large with the increase of receipts.
From any point of view, there is rationality in this proposition.
It is sound commonsense and is in consonance with social justice.
Therefore, the challenge to the imposition, under Article 14 as well as Article 19(1)(g) of the Constitution is not sustainable.
[9D F] State of Andhra Pradesh & Anr.
vs Nalla Raja Reddy & Ors. ; ; New Menek Chowk Spinning and Weaving Mills Co. 8 Ltd. and Ors.
vs Municipal Corporation of the City of Ahmedabad and others.
; , ; Annapurna Biscuit (Mfg.) Co. and Another vs The State of U.P. and Another, [1975] 35 S.T.C 127 and Hoechst Pharmaceuticals Ltd. and Another Etc.
vs State of Bihar and others, , referred to.
| Each of these appeals by special leave was directed against the award made by the Labour Court.
The appellant in Civil Appeal No. 5415 of 1985, a foreman in the Mechanical Construction Division under the Irrigation Department, had filed an application under Section 33C 2 of the ( 'the ') before the Labour Court for the recovery of arrears of annual increments.
The appellant in Civil Appeal No. 2168 of 1987 was a T. Mate in the P.W.D. Drainage Division.
When his services were terminated without complying with the requirements of the law, he challenged the termination before the Labour Court.
The appellant in the remaining appeal was an operator in the Mechanical Division, under the Irrigation Department of Haryana State.
His services were terminated and thereupon he approached the Labour Court challenging the order of termination.
In each of these cases, challenge was advanced by the Governmental authority to the maintainability of the application before the Labour Court on the ground that the employer was not an 'industry ' and the did not apply.
The Labour Court upheld the objection and declined relief to the appellants.
Allowing the appeals with observations, the Court, ^ HELD: The common question in these appeals was whether the Irrigation Department was an 'industry '.
The definition of 'industry ' is given in Section 2(j) of the .
By Section 2(c) of the Amending (46 of 1982) this definition had been amended but the amendment has not 617 yet been brought into force.
Since the amended statutory definition was not yet in force, the parent definition and the judicial pronouncements thereon had to be referred to for finding the law.
The field is covered by pronouncements of this Court and is not necessary to go beyond the precedents such as decisions in D.N. Banerji vs P.R. Mukherjee & Ors., ; ; State of Bombay and Ors.
vs The Hospital Mazdoor Sabha & Ors ; ; Corporation of the City of Nagpur vs Its Employees, ; ; Management of Safdarjang Hospital vs Kuldip Singh Sethi, ; ; and the decision of a seven Judge Bench in Bangalore Water Supply and Sewerage Board vs A. Rajappa & Ors., ; [621F G] In case the Irrigation Department was accepted to be an "industry", there was no dispute that each of the appellants would be a 'workman ' and each of the claims would constitute an "industrial dispute" as defined in Section 2(s) and (k) of the , respectively .
[621G] Judicial notice could be taken of the position that Haryana and Punjab originally constituted one State and Haryana became separate from 1966.
The Irrigation Department of the erstwhile Punjab State was discharging the State 's obligations created under the .
The Administration Report of the year 1981 82 of the Public Works Department, Irrigation Branch, which really deals with the Irrigation Department, was produced before the Court.
[634B C] Counsel for the appellants placed before the Court some cases of different High Courts in support of his stand that the Irrigation Department should be considered as an industry, i.e. Madhya Pradesh Irrigation Karamchari Sangh vs State of Madhya Pradesh & Anr., ; State of Rajasthan vs The Industrial Tribunal, Rajasthan, ; Dinesh Sharma & Ors.
vs State of Bihar & Ors.
, [1983] Bihar L.J.R. 207 and Chief Engineer, Irrigations Orissa vs Harihar Patra & Anr., [638E F] On the tests, as already laid down in the judgments, the Court did not think the facts found in this case could take the Irrigation Department outside the purview of the definition of 'Industry '.
The main functions of the Irrigation Department where subjected to the Dominant Nature test evolved by Krishna Iyer J. in Bangalore Water Supply and Sewerage Board vs A. Rajappa & Ors., ; , decided by a seven Judges Bench, clearly come within the ambit of industry.
618 Perhaps keeping in view the observations of the learned Judges of the seven Judges Bench, the definition of industry as occurring in section 2(j) of the was amended by 46 of 1982.
However, the Court could not gather as to why even six years after the amendment to the definition of industry in section 2(j) of the came on the statute book, the same had not been brought into force.
The court on more than one occasion had indicated that the position should be clarified by an appropriate amendment, and, when keeping in view the opinion of this Court, the law was sought to be amended, it was appropriate that the same should be brought into force as such or with such further alterations as might be considered necessary and the legislative view of the matter, made known and the confusion in the field, cleared up.
Bare Acts and Commentaries on the had brought in the new definition, deleting the old one with a note that the new provision had yet to come into force.
This situation had further added to the confusion.
[639F H; 640A B] The appeals succeeded.
It was made clear that in the event of the definition of industry being changed either by enforcement of the new definition of industry or by any other legislative change, it would always be open to the aggrieved Irrigation Department to raise the issue again and the present decision would not stand in the way of such an attempt in view of the altered situation.
[640B C] D.N. Banerji vs P.R. Mukherjee & Ors., ; ; State of Bombay & Ors.
vs The Hospital Mazdoor Sabha & Ors., ; Corporation of the City of Nagpur vs Its Employees, ; ; Management of Safdarjang Hospital vs Kuldip Singh Sethi, ; ; Bangalore Water Supply and Sewerage Board vs A. Rajappa & Ors.
, ; ; om Prakash vs M/s Executive Engineer, SYL, Kurukshetra & Ors.
[1984] Current L.J. 349; State of Punjab vs Kuldip Singh & Anr., ; Madhya Pradesh Irrigation Karamchari Sangh vs State of Madhya Pradesh & Anr., ; State of Rajasthan vs The Industrial Tribunal, Rajasthan, ; Dinesh Sharrna & Ors.
vs State of Bihar & Ors.
, [1983] Bihar L.J.R. 207 and Chief Engineer, lrrigation, Orissa vs Harihar Patra & Anr., , referred to.
| The assessee appellant is a public limited company owning textile Mills at Indore and carrying on the business of manufacture and sale of textiles.
During the assessment year 1942 43, it effected in British India the following categories of sales viz. (a) sales canvassed by the company 's representatives amounting to Rs. 6,46,028, (b) sales canvassed through brokers and agents in British India Merchants and their brokers during their visit at Indore amounting to Rs. 2,86,224 and (iv) Sales to British Indian Merchants at the time of their own or their brokers visit at Indore amounting to Rs. 2,55,916/ .
In 1968(1) S.C.R. 47, on an appeal, by Revenue, arising out of a reference u/s 66(1) of the Income Tax Act, this court held that the income by way of the Sales of Rs. 14,80,059/ in respect of the appellant company was income "accrued or arose" within British India and a proportionate part of it was assessable to Indian Income Tax.
This court remitted the case to the High Court to answer the reference regarding the correctness of the determination of the profits on the sales computed by the Tribunal by application of Rule 33 and also whether 1/3 of the profits so determined could be said to accrue or arise in British India, which the High Court answered in favour of the Revenue.
In the appeals before this Court it was found that the High Court had not taken into account the relevant circumstances for answering the reference since it was contended by both the parties that Rule 33 was not applicable to the facts of the case.
As per the directions, the Tribunal submitted a supplementary statement of the case wherein it found (1) that in respect of the sales canvassed by the companies representatives and through brokers and agents amounting to Rs. 9,37,919 it was just and equitable to apportion 15% of the profits said to have arisen and accrued in British India and (ii) that in respect of the sales to British Indian Merchants and/or their brokers during their visit at Indore amounting to Rs. 5,42,140/ .
7 1/2 per cent of the profits could be said to have accrued and arisen in British India.
As the profits were found to represent 31.12 per cent of the turnover, the profits in respect of the turnover of Rs. 9,37,919 were calculated at the rate of 4 1/2 per cent (i.e. 15% of 31.12 per cent) which amounted to Rs. 42,200/ .
Similarly the profits in respect of the turnover of 5,42,140/ @ the rate of 2 1/4% (7 1/2 per cent of 31.12 per cent) amounted to Rs. 12,200.
The total profits for the year 1942 43 was Rs. 54,400 (Rs. 42,200+12,200), according to the Tribunal.
Accepting the appeals, the Court, ^ HELD: (i) The question as to what proportion of the profits of the sales in the four categories arose or accrued in British India is essentially one of fact depending upon the circumstances of the case.
In the absence of some statutory or other fixed formula; any finding on the question of proportion involves same element of guess work.
The endeavour can only be to be approximate and there cannot in the very nature of things be great precision and exactness in the matter.
As long as the proportion fixed by the Tribunal is based upon the relevant material, it should not be disturbed.
[716C D] (ii) In the instant case, the profit which arose and accrued in British India to the assessee appellant for the assessment year 1942 43 was Rs. 54,400.
It 713 is just and equitable to apportion 15% of the profits of sales in categories (a) and (b) and 7 1/2 per cent of the profits of sales in categories (c) and (d) as accruing or arising in British India.
[716D E]
| Held (Per section R. DAs, ACTING C.J., VIVIAN BOSE, BHAGWATI and B.P. SINHA, JJ.
JAGANNADHADAS J., dissenting) that section 5(1) of the Taxation on Income (investigation Commission) Act, 1947 (Act XXX of 1947) is ultra vires the Constitution as it is discriminatory and violative of the fundamental right guaranteed by article 14 of the Constitution by reason of two amendments which were made in section 34 of the Indian Income Tax Act, 1922 (Act XI of 1922) one in 1948 by the enactment of the Income Tax and Business Profits Tax 1248 (Amendment) Act, 1948 (Act XLVIII of 1948) and the other in 1954 by the enactment of the Indian Income Tax (Amendment) Act, 1954 (Act XXXIII of 1954).
If the provisions of section 34(1) of the Indian Income tax Act as it stood before its amendment by Act XLVIII of 1948 had been the only provisions to be considered, the Court would have reached the same conclusion as it did in A. Thangal Kunju Musaliar vs M. Venkitachalam Potti & Anr., ([1955] 2 S.C.R. 1196), but the position was materially affected by reason of two amendments made in that section by two Acts, one in 1948 and the other in 1954.
Amended section 34(1) of the Indian Income tax Act was substantially different from the old section 34(1) which was in operation up to the 8th September 1948.
The words "if in consequence of definite information which has come into his possession the lncome tax.
Officer discovers that income, profits or gains chargeable to income tax have escaped assessment in any year. . . which appear in the old section were substituted by the words "if the Income tax Officer has reason to believe that by reason of the omission or failure on the part of the assessee. . income, profits or gains chargeable to income tax have escaped The requisites of (i)"definite" information (ii) which had " come into" possession of the Income tax Officer and in consequence of which (iii) he "discovers" that income, profits or gains chargeable to income tax bad escaped assessment, were no longer necessary and the only thing which was required to enable the Income tax Officer to take proceedings under section 34(1) as amended was that he should have reason to believe that by reason of the omission or failure on the part of the assesses income, profits or gains chargeable to income tax had escaped assessment for a particular year.
Whereas before this amended section 34(1) came to be substituted for the old section 34(1) there was no com parison between the provisions of section 5(1) of Act XXX of 1947 and section 34(1) of the Indian Income tax Act as it then stood, the provisions of section 34(1) as amended after the 8th September 1948 could stand comparison with the provisions of section 5(1) of Act XXX of 1947 and the cases which were covered by section 5(1) of Act XXX of 1947 could be dealt with under the procedure laid down in section 34(1) of the Indian Income tax Act.
After the 8th September 1948, therefore, even in the case of substantial evaders of income tax who were a distinct class by themselves intended to be treated by the drastic and summary procedure laid down by Act XXX of 1947, some cases that were already referred by the Central Government for investigation by the Commission could be dealt with under that Act and other cases, though falling within the same class or category, could be dealt with under the procedure prescribed in the amended section 34(1) of the Indian Income tax Act.
The persons who were thus dealt with under section 34(1) of the Indian Income tax Act had available to them the whole procedure laid down in that Act including the right to inspect documents and the right to question the findings of fact arrived at 1249 by the Income tax Officer by the procedure of appeal and revision and ultimate scrutiny by the Income tax Appellate Tribunal which was denied to those persons whose cases had been referred by the Central Government for investigation by the Commission under s.5(1) of Act XXX of 1947.
Different persons, though falling under the same class or category of substantial evaders of income tax, would, therefore, be subject to different procedures, one a summary and drastic procedure and the other a normal procedure which gave to the assessees various rights which were denied to those who were specially treated under the procedure prescribed in Act XXX of 1947.
Per JAGANNADHADAS J.
The class of persons falling under section 5(1) of the Taxation on Income (Investigation Commission) Act, 1947 (Act XXX of 1947) is totally different from that which falls within amended section 34 of the Indian Income Tax Act 1922 (Act XI of 1922) and therefore section 5(1) of Act XXX of 1947 is not unconstitutional as offending article 14 of the Constitution.
Suraj Mall Mohta vs A. V. Visvanatha Sasttrii and Another ([1955] 1 S.C.R. 448), Shree Meenakshi Mills Ltd. vs A. V. Visvanatha Sastri and Another ([1955] 1 S.C.R. 787), A. Thangal Kunju Musaliar vs M. Venkitachalam Potti & Anr.
and M. Venkitachalam Potti & Anr.
vs A. Thangal Kunju Musaliar, ([1955] 2 S.C.R. 1196), Syed Qasim Bazvi vs The State of Hyderabad and Others ([1953] S.C.R. 581), Habeeb Mohamed vs The State of Hyderabad ([1953] S.C.R. 661) and Gangadhar Baijnath and others vs Income tax Investigation Commission, etc.
(A.I.R. 1955 All. 515), referred to.
| The appellant owned a cardamom plantation.
For the assessment year 1957 58, he submitted a return under the Madras Plantations Agricultural Income tax Act, 1955.
The Agricultural Income tax Officer did not accept the return, and 'added to the income the value of stocks of cardamom sold in the accounting year.
The High Court in revision, confirmed the assessment made by the Department.
In appeal to this Court, it was contended that: (1) the agricultural produce itself was income and became charged to tax under the Act when it was received and not when it was sold, used or consumed, and therefore, the High Court ought to have directed determination of the produce which was actually derived from agriculture in the year of account and ought to have brought to tax only that quantity and excluded the value of the rest of the produce received in earlier years, from taxation; and (2) from the fact that the appellant applied to compound the tax for the earlier years, it must be inferred that the produce which was sold by him in the year of account had already suffered tax in the earlier years.
HELD : (1) Merely because the produce of the plantation was received in the earlier years, income derived from sale of that produce in the year of account was not exempt from tax under the Act in that year.
[953 B] Section 3 of the Act read with the definition of "agricultural income" charges to tax the monetary return either as rent or revenue or agricultural produce from the plantation.
The expression "income" in its normal con notation does not mean mere production or receipt of a commodity which may be converted into money.
Income arises when the commodity is disposed of by sale, consumption or use in the manufacture or other processes carried on by the assessee qua that commodity.
It is not necessary, however, for income to accrue that there must be a sale of a commodity : consumption or use of a commodity in the business of the assessee from which the assessee obtains benefit of the commodity may be deemed to give rise to income.
[952 G H; 953 A B] Dooars Tea Co. Ltd. vs Commissioner of Agricultural Income tax, West Bengal; , , referred to.
(2) It had to be proved by evidence that the crop sold related to the years in respect of which the assessee had applied to compound the tax, but there was no such evidence.
[954 F]
| The respondent was appointed as a temporary clerk in an engineering division of the Government.
The attempt of another clerk to impersonate and appear for him in a depart mental examination was detected.
The Executive Engineer obtained explanations from both the clerks and reported the matter to the Superintending Engineer, who brought the matter to the notice of the ChiefEngineer.
The Chief Engi neer wrote to the Superintending Engineer to award suitable punishment.
The Superintending Engineer passed the order that the respondent a "temporary clerk is hereby served with one month 's notice to the effect that his services shall not be required after one month from the date of receipt of this notice.
" The respondent filed a suit challenging the order on the ground that the termination was one passed by way of punishment and therefore attracted Art 311 of the constitution;.
and since the provisions of the Article had not been complied had not been complied with the order was void.
The Trial Court and the First Appellate Court dismissed the suit.
But the High Court went,through the official correspondence preceding the passing of the impugned order, and observing that a close scrutiny of the facts on record showed that the order was passed by way of punishment on the basis of the enquiry proceeding and as a result of the recommendation by the Executive Engineer followed by the direction issued by Chief Engineer, allowed the second appeal.
Allowing the appeal to this Court, HELD :(1) It is no longer open to any one to urge that the constitutional position in regard to cases of the present nature is not clear.
An examination of the deci sions of this Court shows that there is no real conflict in their ratio decidendi.
Even if there is a conflict, the proper course for a High Court is to find out and follow the opinion expressed by larger benches of this Court in preference to those expressed by smaller benches of this Court.
This practice is followed by those Court itself and has hardened into a rule of law.
[475B C] Union of India & Anr.
K.S. Subramanian; , , followed.
State of U.P. & Ors vs Sughar Singh [1974] 2 .S.C.R. 335: ; , The State of Punjab vs
P.S. Cheema A.I.R. 1975 S.C. 1096, Satish Chandra Anand vs The Union of India ; , Shyam Lal vs State of U.P. ; , Parshotam Lal Dhingra vs Union of India ; , Gopi Kishore Prasad vs Union of India AIR. , The State of Orissa & ,Anr.
vs Ram Narayan Das ; , Madan Gopal vs State of Punjab [1963] 3 S.C.R. 716, Rajendra Chandra Banerjee vs Union of India ; , Champakal Chimanlal Shah vs The Union of.
India , Jagdish Mitter vs Union of India A.I.R. 1964 S.C. 449, State of Punjab & Anr.
vs Shri Sukh Raj Bahadur ; , Union Of India 463 & Ors.
R.S. Dhaba , State of Bihar & Ors.
vs Shiva Bhikshuk Mishra R.S. Sial vs The State of U.P. & Ors. , Shamsher Singh & Anr.
vs State of Punjab ; and The Regional Manager & Anr.
vs Pawan Kumar Dubey [1976] 3 S.C.R. 540 referred to.
(2) Before it is held that an order terminating the services of a Government servant amounts to punishment the Court must hold that either of the two tests,namely, (a) that the servant had a right to the post or (b) that he had been visited with evil consequences such as forfeiture of pay etc., is satisfied.
Therefore, an order terminating the services of a temporary servant or probationer under the Rules of employment and without anything more will not attract article 311.
Where a departmental enquiry is contem plated but an enquiry is not in fact proceeded with, article 311 will not be attracted unless it can be shown that the order, though.
unexceptionable in form, is made following a report based on misconduct.
Even though misconduct, negli gence, inefficiency or other disqualification may be the motive for the order of termination, if a right exists under the contract or the rules to terminate his services, then article 311(2) is not attracted unless the misconduct or negli gence is the very foundation of the order.
Where there are no express words in the impugned order itself ' which throw a stigma on the Government servant, the Court would not delve into secretariat files to discover whether some kind of stigma could be inferred on such research.
[469 A B; 473 C; 471 H; 475 F] Parshotam Lal Dhingra vs Union of India [1958] S.C.R. 828, R.S. Sial vs The State of U.P. & Ors.
[1974] 3 S.C.R. 754, Shamsher Singh & Ant.
vs State of Punjab ; and 1.
N. Saksena vs State of Madhya Pradesh ; followed.
(3) The respondent was a temporary hand and had no right to the post.
Under the contract of service and the service rules applicable to him the State had the right to terminate his services by giving him one month 's notice.
The order ex facie is an order of termination of service sim pliciter.
It does not cast any stigma on the respondent nor does it visit him with evil consequences, nor is it founded on misconduct.
Therefore, the respondent could not invite the Court to go into the motive behind the order and claim the protection of article 311(2) of the Constitution.
[475 D E] (4) The High Court failed to appreciate the true legal .and constitutional position and upset the concurrent findings of fact arrived at by the Courts below, ignoring the well settled principle of law that a second appeal cannot be entertained on the ground of erroneous findings of fact, however, gross the error might seem to be.
[475 G H] Paras Nath Thakur vs Smt.
Mohani Das & Ors.
[1960] 1 S.C.R. 271.
Sri Ramanuja Jeer & Ors.
vs Sri.
Ranga Ramanuja Jeer & Anr. ; , P. Ramachandra Ayyar vs Ramalingam ; and Madamanchi Ramappa & . Anr.
vs Muthaluru Bojappa ; , referred to.
|
minal Appeal No. 102 of 1960.
Appeal by special leave from the judgment and order dated October 7, 1959, of the Punjab High Court in Criminal Revision No. 610 of 1959.
Hardev Singh and Y. Kumar, for the appellants.
section M. Sikri, Advocate General for the State of Punjab, N. section Bindra and P. D. Menon, for the respondent.
February 6.
The four appellants were at one time members of the Pepsu Police force and were charged, before the First Class Magistrate at Faridkot, with having committed three offenses : (1) under section 26 of the PepsU Public Safety Ordinance (No. 7 of Samvat 2006), (2) under section 33 of the said Ordinance, and (3) under section 1 of the impugned Act.
We shall be referring to the provisions of the relevant enactments in due course.
The accused pleaded not guilty and were tried by the learned Magistrate who by his judgment dated August 28, 1958, held the 27 prosecution case fully established against all the accused.
He convicted the four appellants under section 26 of the Public Safety Ordinance and sentenced them to imprisonment for six months.
The third appellant alone Was convicted of the offence under a. 33 of the same Ordinance and was sentenced to imprisonment for six months.
Appellants 1, 2 and 4 were further convicted of offenses under section 3 of the impugned Act and sentenced, to imprisonment for six months, the several sentences against the respective accused being directed to run concurrently.
The appellants filed an appeal to the Sessions Judge at Bhatinda who upheld the convictions but reduced the sentences.
In respect of the offence under section 26 of the Public Safety Ordinance the sentence passed against the four appellants was reduced to imprisonment for three months while in respect of the third accused who had been addition ally sentenced under section 33 of the Ordinance the same was reduced to imprisonment for 11 /2 months and the sentences on appellants 1, 2 and 4 under section 3 of the impugned Act was reduced to imprisonment for three months, the sentences again being directed to run concurrently.
With these modifications the appeals stood dismissed.
The appellants thereafter preferred a revision to the, High Court and this was heard by a learned Single Judge who while accepting the revision of the appellants in so far as it related to their conviction and sentence under section 26 of the Ordinance.
maintained the other convictions and sentences but reduced the sentences.
It is from this judgment of the High Court that this appeal has been preferred by the four appellants.
It would be seen from the above narrative that the appeal is concerned with the propriety of the conviction of appellants 1, 2 and 4 of an offence under a. 3 of the impugned Act and of the third appellant under section 33 of the Ordinance, all the appellants having been acquitted by the High Court of the charge against them under s, 26 of the 28 Ordinance.
It is therefore not necessary to refer to the terms of section 26 or the offence constituted by it.
In the Courts below including the High Court no challenge was made as regards the legality of any of the provisions of law of the violation of which the appellants were found guilty but before us though learned Counsel did not raise any contention regarding the validity of section 33 of the Pepsu Public Safety Ordinance, challenged the constitutionality of section 3 of the impugned Pepsu Police (Incitement to disaffection) Act which appellants 1, 2 and 4 were found to have violated and for which they were sentenced to a term of imprisonment.
Learned Counsel for the appellants raised for our consideration three points : (1) the constitutional validity of s.3 of the impugned Act, (2) if section 3 were constitutional and valid whether appellants 1, 2 and 4 were proved to have been guilty of an offence for violating that provision, and (3) whether appellant 3 was property held guilty of an offence under section 33 of the Pepsu Public Safety Ordinance.
We shall first take up for consideration the attack on the validity of section 3 of the impugned Act.
Patiala and East Punjab State Union, commonly called Pepsu was one of the States specified in Part B of the First Schedule to the Constitution when the Constitution was brought into force in January 1950.
For reasons not necessary to be stated here, the administration of Pepsu was taken over by the President under article 356 of the Constitution.
The powers of the State Legislature were declared by the Presidential Proclamation issued on March 4, 1953.
to be "exercisable by or under the authority of Parliament" (vide article 356(1)(b) ).
Thereafter Parliament enacted Act XXII of 1953 which received the assent of the President on May 17, 1953, which was entitled : "The Patiala and East Punjab States Union Legislature (Delegation of Powers) Act, 1953.
" Section 3 of this enactment provided 29 "The power of the legislature of the State of Patiala and East Punjab States Union to make laws which has been declared by the proclamation to be exercisable by or under the authority of the Parliament is hereby con ferred on the President.
" There are other provisions which are contained in the other subsections of section 3 but these have no relevance for this appeal.
In exercise of the power thus delegated to him by Parliament the President enacted Pepsu Act 1 of 1953 whose long title runs : "An Act to provide a penalty for spreading disaffection among the police and for kindred offenses.
" It is the 3rd section of this enactment whose validity is challenged in this appeal and that reads "3.
Penalty for causing disaffection, etc.
Whoever inte ntionally causes or attempts to cause, or does any act which he knows is likely to cause, disaffection towards any Government established by law in India amongst the members of a police force, or induces or; attempts to induce, or does any act which he knows is likely to induce, any member of a police force to withhold his services or to commit a breach of discipline shall be punishable with imprisonment which may extend to six months, or with fine, or with both. " The attack upon the validity of this provision was rested on its being violative of the freedom guaranteed by article 19(1)(a), the submission being that the section was Dot saved by article 19(2).
Before considering the arguments advanced it is necessary to mention, for being put aside, that in construing the validity of section 3 of the impugned Act 30 the provision contained in article 33 of the Constitution has no relevance.
That Article enacts : "article 33.
Parliament may by law determine to what extent any of the rights conferred by this Part, shall in their application to the members of the Armed Forces or the Forces charged with the maintenance of public order, be restricted or abrogated so as to en,sure the proper discharge of their duties and the maintenance of discipline among them.
" No doubt, the impugned provision is concerned with ensuring discipline among the forces charged with the maintenance of public order but as the powers of the President were exercised by virtue of the delegation contained in section 3 of Act XXII of 1953 under which only the powers of the State Legislature were vested in him, any law enacted by him would not have the force of Parliamentary legislation contemplated by article 33.
Article '33 being out of the way the very short question that has to be considered is whether the impugned provision is saved by Art '.
19(2), for 'it is common ground that provision does not violate any freedom other than that of ""free speech and expression" guaranteed by article 19 (1) (a).
Article 19(2) as it stands after the amendment by the Constitution (First Amendment) Act of 1951 reads : " 19(2) Nothing in sub clause (a) of clause (1) shall affect the operation of any existing law, or prevent the State from making any law, 'in so far as such law imposes reasonable restrictions on the exercise of the right conferred by the said sub clause in the interest of the security of the State, friendly relations with foreign States, public order, decency or morality, or in relation to contempt of Court, defamation or incitement to an offence.
" of the criteria set out in this clause the one relevant 31 in the present context is that which refers to "in the interests of. . public order".
The contention urged by learned Counsel was that section 3 was too wide in that it embraced within itself not merely matters which might have relevance to circumstances intimately connected with the maintenance of public order, but also those whose connection with it might be remote or fanciful.
While not seriously disputing that seducing the loyalty of the police force, or inducing the.
members thereof not to do their duty might imperil public order and so fall within the limit of restrictions permissible of imposition under article 19(2), learned Counsel laid, stress on the fact that the impugned section made it an offence to induce a member of the police force to "commit a breach of discipline," laying special emphasis on the fact that the words "breach of discipline" besides being vague, might include within itself acts which might be innocent as well as others of varying degrees of culpability.
The content of the expression "in the interests of. . public order" has been the subject of detailed and elaborate consideration by this Court in Superintendent, Central Prison, Fatehgarh vs Ram Manohar Lohia (1) where the effect of the First (Constitution) Amendment by which the words "for the maintenance of public order" were replaced by the words ",in the interests of public order" was considered in the light of the previous decisions of this Court on that topic, Subba Rao, J., speaking for this Court said that the expression "Public order" in the juxtaposition of the different grounds set out in article 19(2) was synonymous with "public peace, safety and tranquility".
He also pointed out that the expression ,in the interests of public order" though undoubtedly wider than the previous phrasing ",for the maintenance of public order" could not mean that the existence of any remote or fanciful connection between the impugned act (1) ; 32 and public order was sufficient to sustain the validity of the law, but that on the other hand, the connection between the act prohibited or penalised and public order should be intimate; in other words there should be a reasonable and rational relation between it and the object sought to be achieved, viz., public order.
The nexus should thus be proximate not far fetched, problematical or too remote in the chain of its relation with public order.
Keeping this exposition in mind.
the question to be considered is whether the connection between what is prohibited or penalised by the impugned provision and public order, i.e., the ensuring of tranquility and orderly life is so remote or fanciful as to lead to an inference that there is no proximate connection between the two.
We have no hesitation in answering this question against the appellants.
The impugned enactment seeks to lay an embargo on certain activities in the interests of the Police service which is the arm of the State barged with the duty of ensuring and maintaining public order.
The efficiency of that service and its utility in achieving the purpose for which it is formed aid exists is sought to be secured by penalising attempts to undermine its loyalty and dissuade the members of that force from performing their functions and being available to the State as a disciplined body, Any breach in the discipline by its members must necessarily be reflected in a threat to public order and tranquility.
If the police force itself were indisciplined they could hardly serve as instruments for the maintenance of public order or function properly as the machinery through which order could be maintained among the general public.
As we have pointed out earlier, learned Counsel did not seriously contest that the impugned provision in so far as it penalised the creation of disaffection among members of the police force or the incitement of the members of the police force to withhold their services from the government could properly be sustained as enacted 33 ", 'in the interests of public order," We consider that attempts to induce indiscipline among the police do not stand on any different footing.
We do not further consider well founded the submission of learned Counsel that the word "discipline" or the .Phrase "breach of discipline" is vague.
We have therefore no hesitation in rejecting this challenge to the validity of a. 3 of the impugned Act.
The next question that was urged by learned Counsel was that the High Court was wrong in considering that the three appellants 1, 2 and 4 were guilty of any contravention of section 3 of the Act.
We do not consider that this submission is justified.
It is needless to point out that in considering an appeal which comes before us by special leave this Court normally accepts as final every finding of fact reached by the High Court as well as its appreciation of oral testimony and that if there is evidence which could serve as a basic for any finding reached by the High Court the same cannot be canvassed before us.
If the submission of learned Counsel is viewed in the light of this principle it appears to us that there is hardly any scope for argument as regards what might be termed the merits of the case.
One of the "witnesses whose evidence has been accepted by the Courts below and which is referred to in the judgment of the learned Judge in the High Court was Krishan Dayal P.W. 4 who deposed to the accused saying ",Police brothers, come and join us, stop the office work; we will sit here in dharma, start hunger strike. . and would not allow the office work to run.
" It is clear from this evidence that the accused had induced or had attempted to induce members of the police force to withhold their services as also to commit a breach of discipline by staying away without doing their duty.
In our opinion, it is not shown that the conviction of appellants 1, 2 and 4 of an offence under section 3 of Act 1 of 1953 was improper or illegal.
34 The last of the points arising in the appeal is as regards the conviction of Lal Singh the third appellant .of an offence under, section 33 of the Ordinanoe.
Section 33 of the Ordinance runs : ,"Whoever induces or attempts: to induce any public servant or any servant of local authority to disregard or fail in his duties as such servant shall be punishable with imprisonment which may extend to one year or with fine or with both.
" As regards this appellant this is what the learned Judge of the High Court stated : "As againat Lal Singh there is evidence of P. 'W. 11 Kartar Singh and P.W. 18 Balwant Singh, Foot Constable that he asked them to disobey their officers and should give up government work.
His offence under section 33 of the Ordinance is substantiated.
" As we have pointed out earlier, the validity of a. 33 of the Ordinance was not challenged and the only question therefore was whether the third appellant was properly held guilty of the offence.
It was not disputed that the two prosecution witnesses 11 & 18 did state on oath the matters referred to by the learned Judge.
In view of what we have stated earlier as regards the manner in which this Court deals with appeals under article 136 there is no ground shown for interfering with the conviction of the third appellant or the sentence passed.
Before parting with this case it is necessary to advert to one matter.
In the course of his arguments learned Counsel for the appellant drew our attention to certain police rules framed 'by the State Government which prohibited policemen from joining unions and sought to raise a point that the said rule was unconstitutional as in violation of Art.19(1)(b) and that II the activities of the four 35 accused were in reality an attempt to form an union and that therefore we should consider the legality of this rule of the police force in considering the propriety of their Convictions.
Though there is a reference to the rule in the judgment of the High Court, it is referred to only incidentally and as part of the narrative in detailing the activities of the accused.
The offence with which the accused were charged was certainly not the violation of that rule, which if might be pointed out did not create any offence, so that the validity of that rule was wholly irrelevant to their guilt when charged with substantive offences under the various enactments we have noticed earlier.
It need hardly be pointed out that the fact that a person is engaged in asserting a fundamental right affords no defence to a charge of having contravened a valid penal statute while so engaged.
In the High Court the validity of the police rule was never challenged and in the circumstances we declined to permit learned Counsel to argue any question before us in relation to the validity of that rule.
The appeal fails and is dismissed.
| Section 3 of the Pepsu Police (Incitement to disaffection) Act 1953, provided: "Whoever intentionally causes or attempts to cause, or does any act which he knows is likely to cause, disaffection towards any Government established by law in India amongst the members of a police 'force, or induces or attempts to induce, 'or does any act, which he knows is likely to induce, any member of a police force to withhold his services or to commit a breach of discipline shall be punishable with imprisonment.
" After the administration of the State of Pepsu was taken over by the President under article 356 of the Constitution of India, Parliament enacted a law by which the power of the legislature of the State of Pepsu was conferred on the President.
By virtue of this power the President enacted the Pepsu Police (Incitement to Disaffection) Act, 1953, the object of which was to provide a penalty, inter alia, for spreading disaffection among the police.
The appellants were charged with having induced or attempted to induce members of the police force to withhold their, services and thus to commit a breach of discipline by staying away without doing their duty, and thereby having committed an offence under section 3 of the Act.
They were convicted by the Magistrate and the conviction was confirmed by the High Court.
The appellants challenged the validity of the conviction on the ground that section 3 was violative of the freedom guaranteed by article 19(1)(a) of the Constitution and was not saved by article 19(2).
Held, that section 3 of the Pepsu Police (Incitement to dis affection) Act, 1953, did not infringe article ' (19)(1)(a) of the Constitution and was intra vires.
The Police service is an arm of the State charged with the duty of ensuring and maintaining public order and since any breach of discipline on the part of its members might 26 result in a threat to public order, section 3 must be held to be valid as having been enacted "in the interests of public order" within the meaning of article 19(2).
Superintendent, Central Prison, Fatehgarh vs Ram Manohar Lohia, ; , relied on.
Held, further, that article 33 of the Constitution was not ;applicable because Parliament had delegated the powers of the legislature of the State to the President and any law enacted by him would not have the force of Parliamentary legislation contemplated by article 33.
| The appellant was driving his auto scooter rikshaw which on account of a sudden turn taken by the appellant struck a truck.
After the impact the appellant lost control of his scooter rickshaw and crashed into a tree.
As a result a man and a woman received simple in juries and the child whom the woman was holding in her arms received fatal injuries.
The appellant and the truck driver were charged under section 304A of the Indian Penal Code and were convicted by the trial court.
The Additional Sessions Judge allowed the appeal of the truck driver but held the appellant guilty.
On revision a single Judge of the High Court confirmed the conviction of the appellant.
In appeal to this Court by special leave.
HELD : (i) According to the findings of the three courts below the appellant suddenly turned to the right without paying proper heed to the truck coming from the opposite direction and in doing so he was both rash and negligent.
Under article 136 of the Constitution this Court would not like to appraise the evidence again for determining how far the concurrent conclusion of the three ,court below upholding the appellant 's act as rash and negligent was justified.
[207H] (ii) The criminal proceeding against the appellant had gone on for a little more than 8 years.
The circumstances in which the collision between the truck and the appellant 's scooter occurred seemed prima facie to suggest that both the drivers were to blame.
Harassment of a criminal trial for more than 8 years and the expense which the appellant must have incurred could legitimately be taken into account when considering the question of sentence to be imposed by this Court at this point of time.
[208F] [Sentence of imprisonment reduced to period already undergone.
The Court also observed that the investigation of the case was not conducted on scientific lines and that the undue delay in the disposal of the case was a matter of concern.]
| Seven persons including S (the appellant) and T were tried together, five under section 396 I.P.C. and the appellant and T under section 396 read with section 109 I.P.C. The prosecution case depended only on circumstantial evidence and mainly on the testimony of two witnesses.
The trial court convicted six accused, including the appellant and acquitted one.
On appeal to the High Court by the convicted persons additional evidence was recorded and section and T were also reexamined as accused for explaining the prosecution evidence.
In the High Court prosecution relied on the following five circumstances against S and T : 1.
Bitter enmity between G and C on the one side and S and T who were fast friends on the other; 2.
The nature of the incident suggests that the primary object of the culprits was to commit the murder of G and C and having failed to kill C his property was looted as incidental venture; 3.
On the evening preceding the night of dacoity S and T were seen in the company of five or six persons including the accused Gajju armed with kanthas, ballas and lathis, 4.
S, who was inimical to G and C, raised false alarm at the time of dacoity to show false sympathy; and 5.
On the following morning after dacoity S lodged F.I.R. by way of Peshabadi for putting the police on wrong track.
The appeal was dismissed by the High Court.
According to both the courts below S and T were, not amongst the dacoits.
They were only stated to have assembled at the time of the dacoity.
S is a first cousin of G and C, two victims of the dacoity.
G was killed during the course of the dacoity.
On appeal by special leave in the Supreme Court counsel for the respondent State contended that it should not interfere with the conclusions of the two courts below holding the appellant guilty.
Disagreeing with this contention.
HELD: This Court undoubtedly does not normally proceed to review and reappraise for itself the evidence in criminal cases when hearing appeals under article 136.
But when the judgment under appeal has resulted in grave miscarriage of justice by some misapprehension or mistake in the reading of evidence or by ignoring material evidence then this Court is not only empowered but is expected to interfere to promote the cause 827 of justice.
Article 136 is worded in very wide terms and the power conferred by it is not hedged in by any technical hurdles.
This over riding and exceptional power has been vested in this Court to be exercised sparingly and only in furtherance of the cause of justice.
In the present case which depends only on circumstantial evidence.
the courts below have completely ignored the warning given by this Court in Hanumant vs The State of Madhya Pradesh [1952 S.C.R. 1091] against the danger of conjectures and suspicions taking the place of proof.
Evidence on basic or primary facts has of course to be approached in the ordinary practical way but the conclusions in the case of circumstantial evidence must necessarily point only to the guilt of the accused excluding any reasonable possibility of innocence.
[832 B].
After considering the evidence on the record, HELD : None of the five circumstances were established on the record; nor could they be considered either singly or collectively to be sufficiently cogent to bring home to the appellant abetment of the offence charged beyond the possibility of reasonable doubt.
The evidence in the case did not satisfy the test required in cases founded on circumstantial evidence.
The appeal was allowed.
| Held, per MAHAJAN, MUKHERJEA, DAs and CHANDRASEKHARA AIYAR, JJ.
(PATANJALI SASTRI C.J. dissenting).
Section 12 of the Bombay Public Safety Measures Act, 1947, in so far, at any rate, as it authorises the Government to direct particular "cases" to be tried by a Special Judge appointed under the Act does not purport to proceed on any classifica tion and therefore contravenes article 14 of the Constitution and is void under article 13 on the principles laid down in the cases of State of West Bengal vs Anwar Ali Sarkar ([1952] S.C.R. 284) and Kathi Raning Rawat vs Tht State of Saurash tra ([1952] S.C.R. 435).
The appellants who were accused of having committed murder and other serious offences were directed by the Government of Bombay by an order made on the 6th August, 1949, to be tried under the Bombay Public Safety Measures Act by a Special Judge appointed under the Act, charges were framed against them on the 13th January, 1950, and they were convicted in March, 1950.
On appeal it was contended before the High Court that the trial and conviction were illegal as the Bombay Public Safety Measures Act was void under article 13 read with article 14of the Constitution which came into force on the 26th January, 1950, but the High Court held that as the proceedings against the accused had commenced before the Constitution, the provisions of articles 13 and 14 did not apply and the conviction was not illegal.
Held,by a majority, that although substantive rights and liabilities acquired or accrued before the date of the Constitution remain enforceable, it cannot be held that after that date, those rights or liabilities must be en forced under the particular procedure that was in force before that date, although it has since that date been repealed or come into conflict with the fundamental right to equal protection of the laws guaranteed by the 711 Constitution, as there is no vested right in procedure.
The fact of reference of "cases" to the Special Judge before the Constitution came into force has no reasonable relation to the objects sought to be achieved by the Act, the discrimi nation therefore continued after the Constitution came into force and such continuation of the application of the dis criminatory procedure to the cases of the appellants after the date of the Constitution constituted a breach of the fundamental right guaranteed by article 14, and the appellants were therefore entitled to be tried under the ordinary procedure after the date of the Constitution.
PATANJALI SASTRI C.J. (contra).
Granting that section 12 of the Bombay Act must, in view of the decision in Anwar Ali Sarkar 's case, be held to be discriminatory and void in so far as it empowers the State Government to refer individual cases to a Special Judge for trial, the trial of the appel lants which had validly started before the Special Judge who had been empowered to try the case cannot be vitiated by the Constitution subsequently coming into force.
The provisions of the Constitution relating to fundamental rights have no retrospective operation and do not affect a criminal prose cution commenced before the Constitution came into force.
The jurisdiction of the Special Judges validly created and exercised before the Constitution and their competence to try the cases referred to them cannot be affected by the special procedure becoming discriminatory.
The correct view is that article 14 does not affect pending trials even in matters of procedure.
Moreover the appellants against whom proceedings had been commenced before the Special Judge, were not in the same situation as others and there was nothing discriminatory in a law which permits them to be tried under the special procedure which was applicable to them when the proceedings were started against them.
| The High Court allowed the writ petition and quashed the order of the Deputy Director of consolidation.
The appellants filed appeal in this Court against the order of the High Court.
The appeal came up for hearing on May 7, 1987, when it was dismissed for default of appearance, where after an application for restoration was filed on the ground that counsel for the appellants was busy in the High Court at the time of hearing of the appeal.
This Court found no justification for recalling its order, dismissing the appeal, but in view of the fact that the appellants would suffer for no fault of theirs, decided to hear the matter, directing that this practice should not be permitted in this Court any further.
Dismissing the appeal (on merits), the Court, ^ HELD: There is no merit in the appeal.
The High Court was right in holding that the respondents (concerned) were in possession of the land in 1958 when the case started under section 145 of the Cr.
P.C. and their date of occupation could not be later than 8.5.1958, so that the six years ' period of limitation for a suit for their eviction under section 209 of the Zamindari Abolition and Land Reforms Act would start running from July 1, 1958 and expire on June 30, 1964 i.e. before the consolidation operations commenced.
The appellants contended that there was a break in the possession of the respondents concerned between 8.5.1958 and 29.1.60, but during that period the land was in the custody of the Criminal Court which must be deemed to have been holding possession of the land on behalf of the person eventually found to be entitled to possession.
The respondents had matured their title by adverse possession and there could be no warrant for denying them the status of rightful owners.
There was no break in the possession of the respondents and they must be held to have been in continuous occupation at least from May, 1958.
1877A F]
| The appellant was convicted and sentenced to two years ' imprisonment and fine of Rs. 2,000 and imprisonment for six months and fine of Rs. 500 for car lifting and scooter poaching.
On the question of sentence.
Allowing the appeals, ^ HELD : (a) The sentence of imprisonment is reduced to the extent of the period already undergone; but the sentences of fine and the alternative period of imprisonment in case of default are maintained.
[865 H] (b) The long protracted litigation from 1971 onwards is some deterrent for a young man in his 20s.
The youthful age of the offender is a factor which deserve consideration.
A long period of incarceration may brutalise a boy and blunt his finer sensibilities so that the incarceration may perhaps be more criminal than the one at the point of entry.
The offender having served a term of nearly six months must have realised that the game of crime does not pay.
[864 D, 865 C] (c) Payment of fine brings home the sense of responsibility in a surer fashion than even short terms of imprisonment in some cases.
[865 C]
| On the question whether the provisions of the Probation of offenders Act 1958 should have been applied in this case, Allowing the appeal, ^ HELD: (1) Even though the point relating to the applicability of s.6 was not raised before the Presidency Magistrate or the High Court, this Court is bound to take notice of the provisions of that section and give its benefit to the appellant, particularly since it is a section which is intended for the benefit of juvenile delinquents reflecting the anxiety of the Legislature to protect them from contact or association with hardened criminals in jails and retrieve them from a life of crime and rehabilitate them is responsible and useful members of society.
[665 B C] (2) Section 6 lays down an injunction not to impose a sentence of imprisonment on a reason who is under 21 years of ' age and is found guilty of having committed an offence punishable with imprisonment other the that for if unless it is satisfied that it would not be desirable to deal with him under section 3 or section 4. 'This inhibition on the power of the court to impose a sentence of imprisonment applies not only at the state of trial but also at the stage of "High, Court or any other court when the case comes before it in appeal or revision" section 11 (i) [664 H] In the instant case the appellant was below 21 years of age.
The appellant was at one time a well known child film actor and won several awards for acting in films.
Subsequently he fell in bad company and took to evil ways.
The offence of theft of two Sarees, though it could not be lightly ignored.
was of minor.
character and this was the first offence of the appellant.
It Count be said that it would not be desirable to deal with the appellant under section 3 or section 4 of the Act.
[665 G H]
| % This Criminal Appeal against the judgment and order of the Gujarat High Court and the connected Special Leave Petitions against the orders of the various Designated Courts in the State constituted under the Terrorist & Disruptive Activities (Prevention) Act, 1987, raised common questions for consideration.
It was enough to set out the facts in the appeal.
There was an armed clash involving the appellants, as a result whereof the police apprehended the appellants and produced them before the Designated Court.
The appellants moved an application for bail which was rejected by the Designated Court.
The appellants moved the High Court under section 439 read with section 482 of the Code.
The High Court rejected the bail application on the ground that it had no jurisdiction to entertain such an application under section 439 of the Code or by recourse to its inherent powers under section 482.
Aggrieved by the decision of the High Court, the appellants appealed to this Court for relief by special leave.
On the view the Court took as to the nature of the function of the Designated Courts in dealing with the bail applications within the constraints of section 20(8), it was not necessary to deal with the facts of the connected special leave petitions directed against the orders of the different Designated Courts, rejecting the bail applications.
Allowing, the appeal and the special leave petitions partly, the Court, ^ HELD: These cases mainly raised two questions of substantial 226 importance.
The first was as to the jurisdiction and powers of the High Court to grant bail under section 439 of the Code of Criminal Procedure, 1973 or by recourse to its inherent powers under section 482 to a person held in custody for an offence under sections 3 and 4 of the Terrorist & Disruptive Activities (Prevention) Act, 1987, and secondly, as to the nature of the restraint placed on the power of the Designated Courts to grant bail to such a person in view of the limitations placed on such power under section 20(8) of the Act.
[246G H] The Act being a special Act must prevail in respect of the jurisdiction and power of the High Court to entertain an application for bail under section 439 of the Code or by recourse to its inherent powers under section 482.
Under the scheme of the Act, there is complete exclusion of the jurisdiction of the High Court in any case involving the arrest of any person for an offence punishable under the Act or any rule made thereunder.
There is contrariety between the provisions of the Act and the Code.
Under the Code, the High Court is invested with the various functions and duties in relation to any judgment or order passed by a criminal court subordinate to it.
The Act creates a new class of offences called terrorist acts and disruptive activities and provides for a special procedure for the trial of such offences.
The jurisdiction and power of a Designated Court are derived from the Act and it is the Act that must primarily be looked to in deciding the question before the Court.
Where an enactment provides for a special procedure for the trial of certain offences, it is that procedure that must be followed and not the one prescribed by the Code.
[239B C; 240A,D] No doubt, the legislature has, by the use of the words 'as if it were ' in section 14(3) of the Act, vested a Designated Court with the status of a Court of Session, but the legal fiction contained therein must be restricted to the procedure to be followed for the trial of an offence under the Act i.e. such trial must be in accordance with the procedure prescribed under the Code for the trial before a Court of Session, in so far as applicable.
[240D F] Though there is no express provision excluding the applicability of section 439 of the Code similar to the one contained in section 20(7) of the Act in relation to a case involving the arrest of any person for an offence punishable under the Act or any rule thereunder, yet that result must, by necessary implication, follow.
The source of power of a Designated Court to grant bail is not section 20(8) of the Act, as it only places limitations on such power, but it does not necessarily follow that the power of a Designated Court to grant bail is relatable to section 439 of the Code.
The 227 Designated Court is a 'court other than the High Court or the Court of Session ' within the meaning of section 437 of the Code.
The exercise of the power to grant bail by a Designated Court is not only subject to the limitations placed by section 20(9) which in terms provides that the limitations on grant of bail specified in section 20(8) are in addition to the limitations under the Code or any other law for the time being in force on the grant of bail.
It, therefore, follows that the power derived by a Designated Court to grant bail to a person for an offence under the Act is derived from the Code and not section 20(8) of the Act.
The controversy as to the power of the High Court to grant bail under section 439 of the Code must also turn on the construction of section 20(8) of the Act.
[241B E] In view of the explicit bar in section 19(2), there is exclusion of the jurisdiction of the High Court.
It interdicts that no appeal or revision shall lie to any court, including the High Court, against any judgment, sentence or order, not being an inter locutory order, of a Designated Court.
While it is true that Chapter XXXIII of the Code is still preserved, as otherwise the Designated Court would have no power to grant bail, still the source of power is not section 439 of the Code but section 437, being a court other than the High Court or the Court of Session.
Any other view would lead to an anomalous situation.
If it were to be held that the power of a Designated Court to grant bail was relatable to section 439, it would imply that not only the High Court but also the Court of Session would be entitled to grant bail.
The power to grant bail under section 439 is unfettered by any conditions and limitations like section 437.
It would run counter to the express prohibition contained in section 20(8) of the Act.
The Court upheld the view of the High Court that it had no jurisdiction to entertain an application for bail under section 439 or under section 482 of the Code.
[243G H; 244A B,D] As regards the approach which a Designated Court has to adopt while granting bail in view of the limitations placed on such power under section 20(8), the sub section in terms places fetters on the power of a Designated Court on the grant of bail and limitations specified therein are in addition to the limitations under the Code.
In view of these more stringent conditions, a Designated Court should carefully examine every case before it for finding out whether the provisions of the Act apply or not.
A prayer for bail ought not to be rejected in a mechanical manner.
[244E G] The Designated Courts had not in these cases carefully considered the facts and circumstances and had rejected the bail applications mechanically.
In the criminal appeal, the facts were already set out.
In 228 the special leave petitions Nos.
2369 and 2469 of 1967, the prosecution had been started at the instance of the management of a textile mill.
The other cases had arisen out of communal riots.
Normally, such cases have to be dealt with under the ordinary procedure prescribed by the Code, unless offences under sections 3 and 4 of the Act are made out.
The Designated Courts are under a duty to examine the circumstances closely from this angle.
That had not been done.
It was, therefore desirable to set aside the orders passed by the various Designated Courts and remit the cases for fresh consideration.
[246D F] The appeal and the special leave petitions partly succeeded.
While upholding the judgment and order of the High Court, dismissing the applications for bail under section 439 of the Code of Criminal Procedure, 1973, the Court granted leave and set aside the impugned orders passed by the various Designated Courts in the State, dismissing the applications for bail, and directed them to consider each particular case on merits as to whether it fell within the purview of section 3 and/or section 4 of the Act, and if so, whether the accused in the facts and circumstances of the case were entitled to bail while keeping in view the limitations on their powers under section 20(8) of the Act.
Where the Designated Courts find that the acts alleged in the police report or complaint of facts under section 14(1) do not fall within the purview of section 3 and/or section 4 of the Act, they shall in exercise of the powers under section 10 of the Act transfer the cases for trial to the ordinary criminal courts.
The accused persons, enlarged on bail by this Court, should continue to remain on bail until their applications for bail were dealt with by the Designated Courts with advertence to the observations made above.
[246F H; 247A B] In Re the Special Courts Bill, 1978, [1979] 2 S.C.R. 476; Balchand Jain vs State of Madhya Pradesh, ; ; Ishwar Chand vs State of Himachal Pradesh, I.L.R. (1975) H.P. 569 and V.C. Shukla vs State through C.B.I., , referred to.
|
No. 435 of 1958.
Appeal from the judgment and order dated September 20, 1956 of the Allahabad High Court in special Appeal No. 243 of 1955.
Naunit Lal for the appellant.
G.N. Dikshit and C. P. Lal for the Respondent.
February 8.
The following Judgment of the Court was delivered by MUDHOLKAR, J. This is an appeal by certificate from the judgment of the High Court of 107 Allahabad reversing the decision of a single Judge of that Court directing the issue of a writ of Mandamus against the respondents under article 226 of the Constitution.
The points which arise for consideration in the appeal are whether the appellant who was at the relevant time the lessee of a right to collect tolls from persons, vehicles etc., crossing the river by public ferry at Pipraghat, District Ballia was bound to allow State carriage buses belonging to the Government of Uttar Pradesh to cross the river by the ferry without collecting any toll or was entitled to claim abatement of rent from the Government under the proviso to s.15 of the Northern India Ferries Act 1878 (hereafter referred to as the Act).
In order to appreciate the points a few facts need to be stated.
There is a ferry at the village Pipragbat, district Ballia for crossing the river and the right to collect tolls in respect of that ferry is put to public auction annually.
The highest bidder at the auction gets the right.
The rent or licence fee is collected from him in monthly installments during the year with respect to which the right was purchased by the licensee.
The appellant was the highest bidder for the year 1954 and the licence fee payable by him was Rs. 31,751/ .
The practice right upto 1954 was to allow the lessee to collect a toll of Rs. 5 1 0 from every stage carriage bus.
Till March 9 of that year only privately owned stage carriage buses used to ply on the route in which the ferry crossing was comprised.
Thereafter the route has been taken over by the Roadways Department of the State of Uttar Pradesh.
From March 9 to March 16, the appellant realised tolls at Rs. 5.1 0 from the State owned stage carriage buses when he was informed by a letter by the first respondent that he should allow the Roadways buses to use the ferry for crossing and recrossing the river on credit till March 31, 1954 and should thereafter submit his bill with 108 respect to the tolls to the Roadways Department of the Government He was also informed that further orders will be issued on April 1, 1954.
The appellant accordingly allowed the Roadways buses to use the ferry for crossing and recrossing the river and submitted his bill to the Roadways Department on March 31, 1954.
That bill was, however, not paid.
On April 1, 1954 he received two communications from respondent No. 1 by one of which hi) was informed that no toll is leviable on the Roadways vehicles and by another he was asked to pay the monthly installment of the licence fee without making any deduction therefore consequent upon the exemption of the Roadways buses from tolls.
The appellant had moved the High Court of Allahabad.under article 226 of the Constitution for the issue of a writ directing the respondent "to refrain from precluding the petitioner from charging tolls from the Roadways buses", to issue a writ commanding the respondents to allow abatement to the appellant and to issue an interim direction to the respondents asking them to refrain from realising the unpaid monthly installments of the licence fees till the decision was given.
Before the petition was decided the appellant 's licence had run out and, therefore, at the hearing the appellant confined himself to one relief, that is, commanding the respondents to allow rebate one account of the exemption of the Roadways buses from liability to pay the tolls.
The petition was, however, not amended.
We may incidentally mention that apart from the reliefs above referred to, the appellant claimed two more reliefs, one of which was to pass any such other and further order as may be deemed fit and proper.
The learned single Judge of the High Court who decided the petition in the first instance came 109 to the conclusion that the appellant was entitled to abatement of rent under the third paragraph of a. 15 of the Act and directed the issue of a writ to the respondents directing them to " 'perform their statutory duty relating to abatement of rent" payable by the appellant consequent on the exemption of Roadways buses from payment of tolls under the aforesaid provision before claiming or recovering arrears of rent from him.
The respondents preferred an appeal under the Letters Patent which was heard by a Division Bench of the Allahabad High Court.
The learned Judges held that a licensee is not entitled to abatement of rent unless the Government makes a declaration under s.15 of the Act subsequent to the grant of licence to him.
It pointed out that the G.O. No. 1946/17 ,51 dated December 11, 1951 upon which reliance was placed by the learned single Judge being prior in point of time to the grant of the licence to collect tolls to the appellant, did not entitle him to claim abatement.
It, however, held that the appellant may be entitled to claim abatement of rent or licence fee under the general law but that such a relief could be claimed only in a suit but not in a proceeding under article 226 of the Constitution.
They thus allowed the appeal and dismissed the petition.
Section 15 of the Northern India Ferries Act, 1878 runs thus : "Toll., according to such rates as are from time to time fixed by the State Government, shall be levied on all persons, animals, vehi cles and other things crossing any river by a public ferry and not employed or transmitted on the public service: Provided that the State Government may from time to time, declare that any persons, animals, vehicles or other things shall be exempt from payment of such tolls.
110 Where the tolls of a ferry have been let under section 8, any such declaration, if made after the date of the lease, shall entitle the lessee to such abatement of the rent payable in respect of the tolls as may be fixed by the Commissioner of the division or such other officer as the State Government may, from time to time, appoint in this behalf by Dame or virtue of his office.
" The proviso to the section confers upon the State Government power to declare from time to time any , persons, animals, vehicles etc., exempt from payment of such tolls.
Before the question of allowing abatement of rent or licence fee can arise it must first be established that there was a valid exemption with respect to any vehicles etc., under section 15 of the Act.
The section also provides that where such declaration is made subsequent to the grant of licence to collect tolls under section 8 the licensee is entitled to abatement of rent: The Government order to which reference has been made in the two judgments of the High Court runs as follows: "Subject: Exemption from payment of toll.
I am desired to say that a question has been raised whether the Roadways Motor Vehicles should be exempt from payment of ferry tolls while crossing any river by a public ferry.
Government have given their full consideration to this matter and have come to the conclusion that the motor vehicles run by the Roadways with the operational staff accompanying them on duty fall under the exemption granted from payment of ferry toll in paragraphs 2(a) of notification No. 252/ IX 209/(10) dated March 16, 1925 111 (published on page 347 of the District, Board Manual).
2.lam, however, to observe that the passengers traveling in these vehicles with their goods and all the private goods, being transported in the Roadways trucks shall be liable to the payment of tolls as heretofore according to the rates fixed by the Local Government.
3.The District Magistrate, District Board and ferry contractors in your division may please be informed accordingly.
" It may be pointed out that this order, if what appears to be merely a communication addressed to certain authorities can be regarded as a Government order, does not, itself confer any exemption with respect to the buses run by the U. P. Roadways but sets out the opinion of the Government that such buses must be regarded as being exempted under a notification of March 16, 1925 issued under "section 15 of the Act.
That notification reads thus: "2.
The following shall be exempt from the payment of tolls: (a)All persons animals and vehicles crossing any river by a public ferry when employed or transmitted on the public or District Board service.
" Admittedly at that date the State was no running any bus services in the United Provinces (now the State of Uttar Pradesh).
May be there were no Government owned buses at all in any other province of India at that time.
Moreover it would not be reasonable to assume that a State enterprise of this kind was even in the contemplation of.
the LT.
P, Government at that time.
At that time, apart from running some railways the State had not entered the commercial field.
It is in the light of these facts that the language of the notification of March 16, 1925, must be interpreted.
112 What the notification exempts is a vehicle crossing the river on 'public or district board service '.
Could it be said that plying motor buses by way of commercial activity is running it on a public service? It is undoubtedly not easy to define what is "public service" and each activity has to be considered by itself for deciding whether it is carried on as a public service or not.
Certain activities will undoubtedly be regarded as public services, as for instance, those undertaken in the exercise of the sovereign power of the State or of governmental functions.
About these there can be no doubt.
Similarly a pure business undertaking though run by the Government cannot be classified as public service.
But where a particular activity concerns a public utility a question may arise whether it falls in the first or the second category.
The mere fact that activity may be useful to the public would not necessarily render it public service.
An activity however beneficial to the people and however useful cannot, in our opinion, be reasonably regarded as public service if it is of a type which may be carried on by private indi viduals and is carried on by government with a distinct profit motive.
It may be that plying stage carriage buses even though for hire is an activity undertaken by the Government for ensuring the people a cheap, regular and reliable mode of transport and is in that sense beneficial to the public.
It does not, however, cease to be a com mercial activity if it is run with profit motive.
Indeed even private operators in order to attract custom are also interested in providing the same facilities to the public as the Government undertaking provides.
Since that is so, it is difficult to see what difference there is between the activity carried on by private individuals and that carried on by Government.
By reason of the fact that a commercial undertaking is owned and run by the State 113 it does not ipso facto become a 'public service '.
It is not disputed before us that the Roadways department of the Government of U. P. is running a profit making and a profitable activity by excluding every kind of competition.
In the circumstances, therefore, we find it impossible to hold that its vehicles crossing over ferries can be regarded as crossing on public service.
They are, therefore, not entitled to any exemption under the notification of March 15, 192 5.
Since they are not entitled to any exemption the question of abatement of rent does not arise.
It is true that the petitioner, as already stated, confined himself at the stage of arguments in the High Court to the relief of abatement, because of change of circumstances which took place between the date of filing his petition and its hearing.
He did so evidently upon a misunder standing of the legal position with regard to the scope of the notification of March 16.
However, the appellant has raised ,in alternative contention in his Statement of the case to the effect that the Roadways buses which carry passengers are used by the Government for carrying on a commercial undertaking and that; there fore they do not come within the exemption made by the notification of the year 1925.
In view of this and of the fact that the petition which contains a prayer for grant of ,other relief ' has not been amended and is thus in its original form we see no difficulty in granting appropriate relief to the appellant.
In the result we allow the appeal and set aside the judgment of the Division Bench as well as of the single judge of the High Court of Allahabad and direct that a writ in the nature of mandamus shall issue to the respondents directing them to pay to the appellant full tolls with respect to every 114 crossing of the, Roadways buses over the ferry between March 16, 1954, and the date on which the licence in favour of the appellant expired.
The costs of the appellant here and in the High Court will be borne by the respondents.
Appeal allowed.
| The appellant being the highest bidder at a public auction got the right to collect the toll in respect of ferry for crossing the river of Piprighat for the year 1954.
The practice upto 1954 was to allow the licensee to collect the toll from every stage carriage bus.
Till March of the year 1954 only privately owned stage carriage buses used to ply on the route.
Thereafter the route was taken over by the Roadways department of the State of Uttar Pradesh.
The applicant was informed inter alia that no toll was leviable on the Roadways Vehicles and was asked to pay the monthly installments of the license fee without making any deduction therefore consequent upon the exemption of the Roadways buses from tolls.
The point for consideration inter alia is whether the 106 appellant was bound to allow the state carriage buses of U.P. Government to cross the river by ferry without collecting any toll.
Held, that the notification No. 252/IX 209/(10) dated March 16, 1925 exempts a vehicle crossing the river on 'public or district board service ', and it could not be said that plying motor buses by way of commercial activity is running it on a public service.
The vehicles of the Roadways department of the Government of Uttar Pradesh crossing over ferries cannot be regarded as crossing on public service.
It may be that plying stage carriage buses even though for hire is an activity undertaken by the Government for ensur ing the people a cheap, regular and reliable mode of transport and is in that sense beneficial to the public, but it does not cease to be a commercial activity if it is run with profit motive.
The vehicles of the Roadways crossing the river cannot be exempted under the Notification of March 15,1925.
Held, further that activities undertaken in the exercise of the sovereign power of the state or of Governmental functions are undoubtedly to be regarded as public services but a pure business undertaking though run by the Government cannot be classified as public service.
An activity however beneficial to the people and however useful cannot reasonably be regarded as public service and cease to be a commercial undertaking if it is of a type which may be carried on by private individuals and is carried on by Government with a distinct profit motive.
By reason of the fact that a commercial undertaking is owned and run by the State, it does not ipso facto become a "public service".
| The appellant was at the relevant dates posted as Subordinate Judge at Masulipatam and Amalapuram.
Charges were made against him of bribery and serious irregularities in the discharge of official duties, and they were enquired into by one of the judges of the Madras High Court who sent his reports on August 2o, ,953, and November Io, 953.
On the basis of the reports the High Court decided on January 25, 1954, that the appellant should be dismissed from service on the charge of bribery and removed from service on the charge of irregularities, and on January 28, 1954, placed him on suspension until further orders.
The appellant moved the High Court under article 226 of the Con stitution of India for quashing the order of suspension on the ground (1) that under r. 4(I)(a) of the Andhra Civil Services (Disciplinary Proceedings Tribunal) Rules, 1953, an enquiry into the 415 conduct of a Government servant drawing a monthly salary of Rs. 15o and above could be made only by a Tribunal to be appointed by the Government, and that as the rule came into, effect from October 1, 1953, the order of the Madras High Court dated January 28, 1954, was without jurisdiction, and (2) that the order was repugnant to article 31I of the Constitution of India.
The High Court dismissed the application and on appeal against the judgment.
Held:(1) that in view of the amendment of r. 4 Of the Andhra Civil Services (Disciplinary Proceedings Tribunal) Rules, 1953, on April II, 955, excluding, with retrospective effect, the jurisdiction of the Tribunal in respect of enquiries into the conduct of the judicial officers, the order of the Madras High Court dated January 28, 1954, was not open to attack.
(2)that an order of suspension pending final orders is neither one of dismissal nor of removal of service within article 311 of the Constitution.
(3)that under r. 13 of the Madras Civil Services (Classification, Control and Appeal) Rules, the High Court had the power to impose suspension pending enquiry into grave charges under r. 17(e) against the Members of the State judicial Service.
| The petitioners were owners of Stage Carriage Services holding permits under the Motor Vehicles Act of 1939.
The State Government of Orissa, in pursuance of its scheme of a Nationalised State 'Transport as contemplated by the Orissa Motor Vehicles (Regulation of Stage Carriage and Public Carrier 's Services) Act of 1947 (Orissa Act XXXVI of 1947) and Orissa Act I of 1949, which amended the provisions of the Motor Vehicles Act of 1939, issued notifications under those Acts intimating the owners of different Stage Carriage Services operating different routes within the districts of Orissa that with effect from the 1st of January, 1955, either the Orissa Road Transport Co. Ltd., or the State Transport Service, formed under the two Acts, would exclusively operate the said routes.
The owners impugned the Acts as unconstitutional and violative of their funda mental rights.
It was contended that the two Acts, whose provisions were materially different, discriminated against them and in favour of the aforesaid transport services as also in their arbitrary application to different zones and territories of the State and contravened article 14 of the Constitution.
It was further contended that the provisions of the Acts and rules framed thereunder infringed articles 19(1)(f) and (g) by putting restrictions on the rights to hold property and to practise trade and business, that the Notifications 29 purporting to take away their transport business amounted to confiscation without compensation and infringed article 31(2) and lastly, that the impugned Acts violated freedom of inter state and intrastate trade guaranteed by article 301 of the Constitution.
Held, that the owners of Stage Carriage Services operating a particular route or in a particular area formed a separate group or class by themselves and so long as each one of such a group or class was governed by the same Act and treated the best judge as to which of the two impugned Acts, or the Act of 1939 which they sought to amend, should, in its administrative convenience, be applied to a particular locality or what mode it should follow for the implemen tation of its scheme and such zonal or territorial divisions it thought fib to make for that purpose according to different circumstances prevailing in different localities could not be held to be either discriminatory or violative of the equal protection of law.
That the position of the permit holders under the two Acts was not on a par, and was materially different and they fell into two distinct classes and, consequently payment of compensation under one and non payment under the other did not make for discrimination.
That the contention that the impugned Acts created a monopoly in favour of either the Joint Stock Company or the State by ousting the private Stage Carriage Services from the business and thereby infringed article 19(1)(f) was no longer tenable in view of article 19(6) of the Constitution as amended by the Constitution (First Amendment) Act of 1951.
Saghir Ahmad vs The State of U. P. ([1965] 1 S.C.R. 707), held inapplicable.
Bhikaji Narain Dhakras vs The State of Madhya Pradesh ([1955] 2 S.C.R. 589), applied.
That the provisions of the impugned Acts could not be held to contravene articles 19(1)(f) and 31(2) of the Constitution as the Act of 1947 did provide for compensation for premature termination and under the Act of 1949, renewal could not be claimed as a matter of right and any deprivation of proprietary right would be by authority of law.
That freedom of inter state or intrastate trade guaranteed by article 301 of the Constitution is not one of the fundamental rights that can be enforced under article 32 of the Constitution and article 305 as amended by the Constitution (Fourth Amendment) Act of 1955 was a complete answer to that contention of the petitioners.
| The petitioner in their writ petitions to this Court contested the ban on sale within the State of Maharashtra, of tickets of lottories organised by the Indian Red Cross Society, Dadra and Nagar Haveli branch and authorised by the administration of Dadra and Nagar Haveli.
Dismissing the writ petitions, ^ HELD: (1) (i) The Bombay Lotteries (Control and tax) and Prize Competition (Tax) Act, 1958 is an Act to control and tax lotteries and prize competition in the State of Maharashtra.
The Act contains detailed provisions for the licensing, regulation and control of lottery within the State of Maharashtra.
Section 32(c), provides that nothing in the Act shall apply to "a lottery specially authorised by the State Government." [203G H] (ii) In the case of lotteries authorised by the Government of Maharashtra, the Government of Maharashtra may retain to itself all necessary powers for the regulation and control and the prevention of misuse of fund and exploitation of guileless members of the public.
In the case of lotteries authorised by the Government of other States it may be difficult and even impossible for the Government of Maharashtra to take adequate regulatory steps to prevent abuse of the authority given by Governments of other States to non Governmental agencies to organize lotteries.
It may be equally difficult for the Governments of other States to take 202 adequate measures for prevention of abuse of such authority within the State of Maharashtra.
[204C D] 2.
No hostile discrimination whatever is involved in not extending the exemption from the applicability of the Bombay Lotteries (Control and Tax) and Prize Competition (Tax) Act, 1958 'to lotteries authorised but not organized by the Government of other States '.
[204D] 3.
Lotteries organised by the Government of India or the Government of the State have been taken out from Entry 34 of List II of Schedule VII by Entry 40 of List 1.
There is, therefore no question about the competence of the Legislature of Maharashtra to legislate in respect of the sale or distribution, in the State of Maharashtra, of tickets of all lotteries organized by any agency whatsoever other than the Government of India or the Government of a State.
[203E F] H. Anraj and others vs State of Maharashtra, explained.
| In February, 1963, the first respondent, Regional Transport Authority, granted a permit to the third respondent for running a town bus service in Raipur, but as the latter was unable to.
put the service into operation, the permit was revoked in September, 1964.
Thereafter, the first respondent granted a temporary permit to the appellant for a period of two months and in November, 1964 pending the grant of a permit for permanent regular operations, granted a second temporary permit to the appellant for four months.
The third respondent thereupon filed a petition in the High Court for a writ of certiorari to quash the order of the first respondent granting a temporary permit to the appellant on the ground, inter alia, that such grant was in violation of section 62 of the Motor Vehicles Act.
The High Court allowed the petition, being of the view that a temporary permit could not be granted for any route when there was a permanent need for providing transport facilities on that route and it had been decided to invite applications for that purpose.
In the appeal before this Court, it was also contended that the provision in section 62 that a temporary permit could be granted for a period not "in any case" to exceed four months meant that under no circumstances could a temporary permit be granted on any route for more than a total period of four months.
On the other hand, it was the appellant 's contention that in the circumstances of the case, there was a "particular temporary need" within the meaning of section 62(c) and the High Court was in error in taking the view that whenever there was a permanent need, there could be no temporary need.
HELD: (i) The Regional Transport Authority was right as a matter of law in granting a temporary permit to the appellant under section 62(c) of the Act in the circumstances of the case.
[790 C] After the regular permit granted to the third respondent was ,cancelled, in view of a shortage of transport vehicles on the route the Regional Transport Authority thought it fit to provide for this temporary need until permanent regular operations could be introduced in accordance with the procedure prescribed in section 57.
There was no reason why the clause "to meet a particular temporary need" should be given any special or restricted meaning.
There is no antithesis between a particular temporary need and a permanent need and it is manifest that these two kinds of need may co exist on a particular route.
[789 G H] 786 787 (ii) The words "in any case" in section 62 do not mean "in any circumstance".
The section means that at any one time the Transport Authority is not permitted to issue to any person a temporary permit for a period exceeding 4 months; but if the temporary need persists then, except where an abuse of the power is shown, it would be permissible to grant a second temporary permit to meet the temporary need.
[790 D F] Jairam Dass vs Regional Transport Authority, I.L.R. ; Chandi Prasad Mahajan vs The Regional Transport Authority, Gauhati, I.L.R., , approved.
Sri Rama Vilas Service Ltd. vs The Road Traffic Board, Madras, A.I.R., 1948 Madras 400, Balagangadharan vs Regional Transport Board, Quilon, A.I.R., 1958, Kerala 144, Shah Transport Co., Chhindwara vs The State of Madhya Pradesh, A.I.R., 1952 Nagpur 363, Mallasattappa vs The Chairman, Regional Transport Authority, Bangalore, A.I.R., , disapproved.
| Dismissing the appeal by special leave, the Court ^ HELD: (1) A bare reading of sections 68A to contained in Chapter IV A, which was added to the Act by Central Act 100 of 1956, makes it clear that they provide for nationalisation of road transport services.
However, such nationalisation, in view of the provisions of section 68C, is not nationalisation for nationalisation 's sake but nationalisation with a view to the achievement of certain specified objects.
Unless a scheme conforms to the two conditions referred to in section 68C, namely, (a) the S.T.U. is competent to prepare and publish a scheme under section 68C only after it has formed the opinion that it is necessary in the public interest that road transport services covered by the scheme should be run and operated by itself, whether to the exclusion, complete or partial, of other persons or otherwise; and (b) the necessity for the road transport services to be run and operated by the S.T.U. must flow, in its opinion, from the purpose of providing ar.
efficient, adequate, economical and properly coordinated road transport service, it will fall outside the ambit of section 68C. [1012A, 1013H, 1014A C] Section 68D gives the right to certain persons, associations and authorities to file objections to a scheme published under section 68C within the specified period of thirty days of its publication and also lays down the procedure for the hearing and disposal of such objections by the State Government.
The procedure provided in section 68D is designed to (a) enable parties affected by the scheme to point out flaws therein; (b) enable the State Government to find out which flaws, if any, the scheme suffers from, and (c) enable the State Government either to remedy the flaws by a suitable modification of the scheme or to rescind the scheme altogether.
Under section 68(2), every objector or his representatives and the representatives of the S.T.U. have to be given an opportunity of being heard in the matter and it is only thereafter that the State Government has to exercise its power to approve or modify the scheme, which power includes the power not to approve the scheme at all and to drop it in its entirety.
[1014D F] Malik Ram vs State of Rajasthan, ; at 981, followed.
1006 Section 68D does not specify the type of objections envisaged by it but then their purpose being to point out flaws in the scheme they must be confined to the matters covered by section 68C.
If the opinion forming the basis of the scheme does not suffer from errors such as may render it abnoxious to the dictates of section 68C and on the other hand, conforms to the conditions laid down in that section, the scheme would be unobjectionable.
Objections may thus be made to show: (a) that it is not necessary in the public interest for the concerned road transport services to be operated by the S.T.U.; (b) that it is not necessary in the public interest that such services be taken over by the S.T.U. to the complete exclusion (if such exclusion is envisaged by the scheme) of other persons and that their partial exclusion would suffice; (c) that it is not necessary in the public interest that such services shall be taken over by the S.T.U. even to the partial exclusion of others; (d) that the scheme is not calculated to provide an efficient road transport service; (e) that the scheme would not provide an adequate road transport service; (f) that the road transport service envisaged by the scheme would not be economical; or (g) that the road transport service provided for by the scheme would suffer from lack of proper coordination.
[1014H, 1015A E] Objections falling outside these seven categories would not be admissible inasmuch as they would not have anything to do with any of the conditions which a scheme must satisfy in order to be covered by section 68C. [1015E F] 2.
In order to find out if the scheme fulfils the requirements of section 68C a comparison of the attributes of the two services, such as quality, capacity, financial implications and coordination would certainly fall within the scope of the inquiry to be conducted by the State Government, although a comparison would not be permissible for the sole purpose of finding out whether the private operators should be given a preference over the State Transport Undertaking.
If such a comparison as held to be permissible is ruled out, the result would be to shut out from the enquiry held by the State Government under section 68D most of the material relevant for determination of the validity of the scheme a result contemplated neither by section 68D nor by the decision of this Court in ; [1018A C] Objections calculated to show that a scheme does not provide a road transport service which can be considered efficient, adequate.
economical o} properly coordinated would certainly lie; and the adjectives "efficient", "adequate", "economical" and "properly coordinated are not absolute but more or less comparative terms.
[1017E F1].
Capital Multi Purpose Co operative Society, Bhopal and others vs The State of Madhya Pradesh and others; , , explained.
Objections of a "personal" nature may be of two types.
(i) those challenging the scheme on the ground that it harms an existing operator and, (ii) those which indicate the details of the services afforded by an existing operator for the purpose of showing that service envisaged by the scheme would in comparison not be efficient, adequate, etc.
Objections of the second type would be admissible, while those of the first type, would be wholly irrelevant to the determination of the validity of the scheme in view of the postulates of section 68C and would, therefore, be inadmissible.
[1018E G] Gullapalli Nageswara Rao and others vs Andhra Pradesh State Road Transport Corporation and Another, [1959] Suppl.
1 S.C.R. 319, distinguished.
1007 4.
It is true that the State Government was acting in the discharge of its quasi judicial functions and it could devise its own procedure (in the absence of express provisions to the contrary) so that its functions could be effectively discharged.
Further, when the statute gives the power to the State Government to afford to the objectors a reasonable opportunity of being heard and to take evidence, oral as well as documentary, in support of their objections, the power to send letters of request to witnesses to appear and give evidence or to produce documents is inherent in the situation and needs no statutory sanction, although the power to enforce their attendance or compel them to produce documents is lacking on account of absence of conferment thereof by a statute.
[1021D F] Nehru Motor Transport Co operative Society Limited vs The State of Rajasthan, [1964] 1 S.C.R. 220, followed.
Sub rule (5) of rule 5 of Uttar Pradesh State Transport Services (Development) Rules, 1958 serves a salutary purpose and, that is, that the inquiring authority may shut out all evidence which is sought to be brought on the record but which is either irrelevant or otherwise inadmissible.
[1022G H, 1023A] 6.
In the instant case, no right of the appellants can be said to be infringed when their applications for summoning witnesses and production of documents were rejected by the State Government and the rejection is not illegal.
[1022E F] Capital Multi Purpose Co operative Society, Bhopal and Others vs The State of Madhya Pradesh and Others, ; ; applied.
| Section 68F(1D) of the provides that no permit shall be granted or renewed during the period intervening between the date of publication, under section 68C of any scheme and the date of publication of the approved or modified scheme, in favour of any person in relation to an area or route or portion thereof covered by that scheme.
Respondent No. 2 was a private operator operating a Stage carriage route.
Its permit was due to expire on October 9, 1974 and it applied for its renewal.
The application was notified on June 5, 1974 under section 57(3) of the .
Objections to the renewal application were filed by the appellant Corporation on June 25, 1974 which also simultaneously applied for the grant of a permit to itself.
The Regional Transport Authority fixed December 21, 1974 for hearing and the case was adjourned.
In the meanwhile, respondent No. 2 filed a Writ Petition and challenged the validity of Rule 155A of the Motor Vehicles Rules and obtained stay of the hearing of the matter which was pending before the Regional Transport Authority.
The validity of the said rule was upheld by the High Court and the writ petition was dismissed.
A draft scheme of road transport service of the appellant corporation was published on June 4, 1976 under section 68C of the Act and that scheme overlapped a section of the route operated by respondent No. 2.
The Regional Transport Authority rejected the application of respondent No. 2 on October 30, 1976 and granted a permit to the appellant, which order was confirmed by the State Transport Appellate Tribunal.
The High Court, however in revision took the view that the matter fell within the purview of sub section (1D) of section 68, but held on a reading of the decision in Cheran Transport Co. Ltd. vs Kanan Lorry Service & Anr. ; , that the case fell within the purview of the "rider" to proposition No. 2 set out in that judgment with reference to the proviso to section (1D) of section 68F of the Act and allowed the revision petitions.
Allowing the appeals to this Court, ^ HELD: (i) By virtue of the clear provision of sub section (1D) of section 68F of the Act, no permit could be granted or renewed during the period intervening between the date of publication of the scheme under section 68C, and the date of publication of the approved or modified scheme, in favour of any person in any class of road transport service.
[72E] 70 (ii) The High Court clearly went wrong in thinking that the case fell within the purview of the proviso to sub section (1D) and it consequently erred in taking into consideration the so called rider to proposition 2 mentioned in the judgment in Cheran 's case.
[72F] (iii) The proviso would have been applicable only if the period of operation of the permit of the respondent had expired after the publication of the scheme prepared under section 68C; but that was not so in this case.
[72F] In the instant case, it was respondent No. 2 who filed a fruitless writ petition and prevented the disposal of the renewal application for a long time by obtaining a stay order.
| The petitioners were dealers carrying on business in the City of Madras in the sale and purchase of yarn.
The dealers in the State of Andhra used to place orders for the purchase of yarn with the petitioners in Madras, where the contracts were concluded and the goods were delivered ex godown at Madras and thereafter despatched to the purchasers who would take delivery of them within their State.
The present dispute related to sales in which property in the goods sold passed outside the State of 1423 Andhra, but the goods themselves were actually delivered as a result of the sale for consumption within that State.
After the coming into force of the Constitution of India the President in the exercise of the powers conferred by article 372(2) made Adaptation Orders with reference to the Sales Tax Laws of all the States, and as regards the Madras General Sales Tax Act, 1939, he issued an Amendment inserting a new section, section 22 in that Act, which was a verbatim reproduction of the Explanation to article 286 (i)(a) of the Constitution.
Oil July 13, 1954, the Board of Revenue (Commercial Taxes) in the State of Andhra, acting on the decision in The State of Bombay and another vs The United Motors (India) Ltd., and others; , , called upon dealers in the State of Madras to submit returns of their turnover of sales in which goods were delivered in the State of Andhra for consumption.
Thereupon they filed the present petitions under article 32 Of the Constitution challenging the demand on the grounds, inter alia, that the sales proposed to be taxed were inter State sales and that they were immune from taxation under article 286(2) Of the Constitution.
While the petitions were pending the Supreme Court pronounced on September 6, 1955, its judgment in The Be gal Immunity Company Limited vs The State of Bihar and others, [1055] 2 S.C.R. 603, according to which the petitioners were not liable to be taxed.
But before final orders were passed on the petitions Parliament passed Sales Tax Laws Validation Act, 1956, section 2 whereof provided that no law of a State imposing or authorising the imposition of tax on inter State sales during the period between April 1, 1951, and September 6, 1955, shall be deeme to be invalid or ever to have been invalid merely by reason of the fact that the sales took place in the course of the inter State trade.
That section further provided that taxes levied or collected on such sales during the aforesaid period shall be deemed to have been validly levied or collected.
It was the con tention of the State of Andhra that by reason of the aforesaid provision it had the right to impose tax on inter State sales during the aforesaid period.
On the other hand the petitioners contended, inter alia, that (I) section 22 Of the Madras General Sales Tax Laws Validation Act, 1956, which gave validity to laws which imposed a tax, did not authorise the imposition, (2) the Sales Tax Laws Validation Act was ultra vires article 286(2), (3) section 22 of the Madras Act was not a "law of a State" within article 286(2) and section 2 of the impugned Act, (4) the impugned Act only validated levies already made and did not authorise the initiation of fresh proceedings for imposing tax, (5) section 22 having been unconstitutional when it was enacted and therefore void, no proceedings could be taken thereunder on the basis of the Validation Act, as the effect of unconstitutionality of the law was to efface it out of the statute book, and (6) the proposed levy was bad as infringing the Rule which provided that the sale of yarn could be taxed only at one point.
It was also contended that under the Constitution it was only the Parliament that has the competence to impose tax on inter State sales and that the Sales Tax Laws Validation Act 1424 was bad in that it gave validity, to the laws of the State to impose the tax : Held (Sarkar J. dissenting), that section 22 of the Madras General Sales Tax Act, 1939, did in fact impose a tax on the class of sales covered by the Explanation to article 286(1)(a) but that it was conditional on the ban enacted on article 286(2) being lifted by law of Parliament as provided therein, and that it was therefore validated by section 2 of the Sales Tax Laws Validation Act, 1956.
The construction put upon the Explanation to article 286(1)(a) of the Constitution in The Bengal Immunity Company case that it merely prohibited the outside States from imposing a tax on the class of sales falling within the Explanation and did not confer on the delivery State any power to impose a tax on such sales has no application to a taxing statute of a State the object of which was primarily to confer power on the State to levy and collect tax.
Section 22 and section 2(h) of the Madras General Sales Tax Act must be read together as ' defining the sales which are taxable under the Act.
Mettur Industries Ltd. vs State of Madras, A.I.R. 1957 Mad.
362, The Mysore Spinning and Manufacturing Co. Ltd. vs Deputy Commercial Tax Officer, Madras, A.I.R. 1957 Mad. 368 and Dial Das vs P. section Talwalkay, A.I.R. 1957 Bom.
71, approved.
Mathew vs Travancore Cochin Board of Revenue, A.I.R. 1957 T. C. 300, Cochin Coal Co. Ltd. vs The State of Travancore Cochin, (1956) 7 Sales Tax Cases 731 and The Government of Andhra vs Nooney Govin arajulu, (1957) 8 Sales Tax Cases 297, disapproved.
Queen vs Burah, (1878) 5 I.A. 178 and In Ye The , etc.
; , relied on : Held (Per section R. Das, C. J., Venkatarama Aiyar, section K. Das and Vivian Bose, JJ.) that (i) the Sales Tax Laws Validation Act, 1956, is in substance one lifting the ban on taxation of interState sales and is within the authority conferred on Parliament tinder article 2 6(2) and further that under that provision it was competent to Parliament to enact a law with retrospective operation.
Punjab Province vs Daulat Singh, (1946) L.R. 73 I.A. 59, distinguished.
The United Province vs Atiqa Bcgum, , (2) the Adaptation Order made by the President under article 372(2) is valid and is not open to attack on the ground that it goes beyond the limits contemplated by that Article.
(3)the expression " law of a State " in article 286(2) and section 2 of the Sales Tax Laws Validation Act means whatever operates as law in the State, and that section 22 of the Madras General Sales Tax Act is a law within those enactments.
1425 (4) section 2 of the Sales Tax Laws Validation Act validates not only the levies already collected but also authorises the imposition of tax on sales falling within the Explanation which had taken place during the period specified in section 2.
The Act is not a temporary Act though its operation is limited to sales taking place within a specified period.
Dial Das vs P. section Talwalkay, A.I.R. 1937 Bom.
71, in so far as it held that it was not competent to the State to start fresh proceedings for assessment, disapproved.
(5) though section 22 of the Madras General Sales Tax Act was unconstitutional when enacted the effect of the unconstitu tionality was not to efface it out of the statute book.
Unconstitutionality might arise either because the law is in respect of a matter not within the competence of the legislature or because the matter itself being within the competence, its provisions offend some constitutional restrictions.
Which a law which is not within the competence of the legislature is a nullity a law on a topic within its competence but repugnant to any constitutional prohibition is only unenforceable.
In the latter class of legislation when once the constitutional prohibition is removed the law becomes enforceable without re enactment.
Where an enactment is unconstitutional in part but valid as to the rest, assuming that the two portions are severable, it cannot be held to have been wiped out of the statute book, as admittedly it must remain there for the purpose of enforcement of the valid portion.
Moreover in the view that the impugned law is conditional legislation it cannot be held to have become non est.
Behram Khurshed Pesikaka vs The State of Bombay, [1955] I S.C.R. 6I3 and A. V. Fernandez vs State of Kerala, ; , distinguished.
Bhikaji Narayan Dhakras and others vs The State of Madhya Pradesh and a other; , , relied on.
(6) under Entry 42 in List 1, Sch.
VII of the Constitution, legislation with respect to inter State trade and commerce is exclusively within the competence of Parliament.
Under Entry 54, List 11, taxes on sale of goods is within the exclusive competence of the State Legislature, and reading the two Entries together Entry 42 must be construed as excluding the power to tax sale of goods.
The scheme of the Entries in the Lists is that taxation is regarded as a distinct matter and is separately set out.
Entry 42, List 1, must therefore be construed as not including the power to impose tax on inter State sales.
(7) the proposed imposition does not infringe the rule that the sales of yarns should be subject to taxation at a single point because the proposed levy is by the State of Andhra and the rule in question prohibits only multiple taxation in the same State.
Per Sarkar J.
The Sales Tax Act does not authorise the taxation of a sale under which goods are delivered in the State of 1426 Andhra but the property in them passes outside that State.
The Explanation in section 22 of the Act only contemplates a State other than Andhra as the State inside which a sale shall be deemed to have taken place.
The words " for the purposes of clause (a)(i) " have the same meaning in the Explanation in article 286(1) as in the Explanation in section 22 of the Act, and the present case is not distinguishable from the decision in The Bengal Immunity Company Limited vs The State of Bihar and others,
|
minal Appeal No. 187 of 1959.
129 Appeal by special leave from the judgment and order dated August 18, 1958, of the Punjab, High Court in Criminal Original No. 20 of 1958.
Gopal Singh and P. D. Menon, for the appellants.
R. section Gheba, for respondent No. 1. 1962.
February 8.
The Judgment of Das and Subba Rao, JJ, was delivered by Das, J., Dayal, J. delivered a separate judgment.
S.K. DAS, J. This is an appeal by special leave from the judgment and order of the Punjab High Court dated August 18, 1958 by which the said Court found the two appellants guilty of contempt of court and.
instead of committing them for such contempt, administered a warning to them and directed them to pay Rs. 50/ each as costs of the respondent Gurbachan Singh.
The two appellants before us bear the same name.
One of them was the Sub Divisional Officer, Sirsa, District Hisear and the other Naib Tehsildarcum Managing Officer, Sirsa, same district at the relevant time.
In this judgment we shall call the Sub Divisional Officer as the first appellant and the Naib Tehsildar as the second appellant.
The facts alleged against the appellants were these.
One Budh Singh, a displaced person, was allotted some land in village Jagmalera, Tehsil Sirsa, District Hissar.
The land allotted to Budh Singh was, it was stated by the appellants, forcibly occupied by the respondent Gurbachan Singh.
The respondent was not a legitimate allottee and the appellants, who were concerned in their official capacity with the allotment and management of land for displaced persons, were naturally anxious to oust the respondent and deliver possession to Budh Singh of the land allotted to him.
On May 9. 1958 appellant No. 1 made an order that Budh Singh and other allottees like him would be given possession ' of the land, allotted to them.
The date fixed for such 130 delivery of possession was May 20, 1958.
On May 16, 1958 Gurbachan Singh and a number of other persons who were similarly threatened with dispossession filed petitions to the High Court under article 226 of the Constitution challenging the legality of the action threatened against them.
These petitions were put up before the learned Chief Justice on that very day, namely, May 16, 1958, when he issued an order staying delivery of possession till May 19, 1958, when the petitions were to come up for admission before a Division Bench, On May 19, 1958, the Division Bench extended the operation of the stay order until May 23, 1958.
In the High Court the appellants did not dispute that the first order staying delivery of possession up to May 19, 1958 was communicated to them on May 19, 1958 on which date the notice from the High Court reached Sirsa.
It appears that a notice of the second order extending the stay of delivery possession till May 23, 1958, was not officially communicated to the appellants till May 21, 1958.
The allegation on behalf of the respondent was that on May 20, 1958, which was the relevant date, the two appellants were informed by certain interested persons, to whom we shall presently refer, that in extension of the stay order up to May 23, 1958, had been granted by the High Court ' In spite of this information, however, the second appellant, in consultation with and under instruction, of the first appellants formally dispossessed the respondent and handed over possession of the land to Budh Singh.
In these circumstances the allegation on behalf of the respondent was that the two appellants bad committed contempt of court by disobeying the order of the, High Court staving delivery of possession till May 23. 1958.
The respondent made an application, to the High (court, for taking suitable action against the two appellants.
This application was made, oil May 27, 1958.
On this application the High Court 131 issued notice and after hearing the parties, Falshaw, J. (as he then was) who dealt with the application came to the conclusion that the two appellants were aware of the order of the High Court extending the operation of the stay order and yet they disobeyed the said order by dispossessing the respondent and handing over possession to Budh Singh.
He held them guilty of contempt of court, but at the same time expressed the opinion that the appellants honestly believed that they were not bound to hold their hands in the absence of an official communication of the 'High Court 's order extending the operation of the stay order.
In this view of the matter, the learned Judge instead of committing the two appellants for contempt of court merely administered a warning to them and directed them to pay the costs of the respondent.
On behalf of the, appellants several points have been urged in support of their contention that they were not guilty of contempt of court.
Firstly, it has been contended that on the materials on the record, the High Court was wrong in proceeding on the footing that the two appellants were informed by the interested parties that an extension of the stay order up to May 23, 1958, had been granted in the case of the respondent.
It has been argued before us that on May 20, 1958, the appellants did not know that the stay order had been extended till May 23, 1958, in the writ petition filed on behalf of the respondent Gurbachan Singh, though in another case of Didar Singh relating to allotted land in the same village, the appellants were informed by an advocate that the stay order had been extended till May 23, 1958.
It has been contended before us that in the absence of positive evidence fixing the two appellants with knowledge of the extension of the stay order in the particular case of the respondent, the High Court was wrong in finding that the two appellants had willfully disobeyed the order of the High Court.
132 In order to appreciate this argument urged on behalf of the appellants it is necessary to state some more facts.
In para.
17 of the application which the respondent made to the High Court for taking necessary action against the appellants for alleged contempt of court, it was stated that at 6 30 a.m. on May 20, 1958, two persons named Bir Singh and Avtar Singh went personally to the house of appellant No. 2 and told him that the stay order had been extended by the High Court and that they had been informed by the advocate on telephone.
This allegation was supported by an affidavit made on behalf of the respondent.
Appellant No. 2, however, denied this allegation in his counter affidavit.
In paras.
18, 19 and 20 of his petition the respondent stated that at about 7 40 a.m. on May 20, 1958 a written application was filed before appellant No. 2 in which it was stated that the High Court had stayed delivery of possession till May 23, 1958; this application was drafted by an advo cate named Ganga Bishan, who acted on behalf of Didar Singh.
The application was presented to appellant No. 2 in presence of two other persons named Mastan Singh and Teja Singh.
Thereafter, an affidavit was also made on behalf of Didar Singh.
This affidavit was presented to appellant No. 2 'at about 8.15 a.m.
Thereafter, appellant No. 2 went in a 'jeep ' to appellant No. 1 in order to consult the latter.
Appellant No. 2 saw appellant No. 1 in the latter 's court room.
He came out within a few minutes, and told Ganga Bishan that the affidavit should be presented to appellant No. 1.
Thereupon, another application was written on behalf of Didar Singh and this was presented to appellant No. 1 supported by the affidavit already made on behalf of Didar Singh.
Appellant No. 1 did not, however, pass necessary orders on the application till about 10 a.m., when he made an endorsement to the effect that the Tehsildar, Sirsa, should take 133 necessary action, When the application was taken to the Tehsildar, he noted on it that the Naib Tehsildar, namely, appellant No. 2 had already left for the village to deliver possession.
Thereupon Avtar Singh, Bir Singh, Didar Singh and Mastan Singh went to village Jagmalera where the lands lay and again met appellant No. 2.
The application made to appellant No. 1 with his orders thereon was shown to appellant No. 2.
It was alleged that appellant No.2 was also shown the wording of the stay order as received by_ the party through a special messenger.
Appellant No. 2, however, replied that he had been ordered to dispossess the respondent and insisted on his proceeding with the dispossession.
In his counter affidavit appellant No. 2 admitted that on May 20, 1958 an application was presented to him by Didar Singh at about 7 40 a.m.
He further admitted that an affidavit in support of the application was also presented to him.
Appellant No. 2 then made the following significant statements.
"On receipt of these documents I told Shri Didar Singh that I could not act on the application and suspend the proceedings for dispossession unless I was shown the order of stay alleged to have been made by the High Court.
" Appellant No. 2 explained his conduct by referring to the background of quarrel and enmity between the parties which had led to several criminal cases between them.
Appellant No. 2 said in his counter affidavit that with this background of enmity he felt that though Didar Singh was an interested party, it would not be safe to accept the statements of facts contained in the application or affidavit made on behalf of Didar Singh at their face value.
Appellant No. 2 also admitted that he consulted appellant No. 1, who also advised that it would not 134 be safe, to act on the statements made in the application or affidavit.
Appellant No. 2 also admitted that Ganga Bishan Advocate, presented the applications to him.
He also admitted that the application which was filed by Ganga Bishan to appellant No. 1 was received back with the orders of appellant No. 1 thereon at about 6 p.m. on May 20, 1958, while appellant No. 2 was returning from the village.
Appellant No. 2 denied that he was shown the wording of the stay order of the High Court.
He admitted, however, that he was asked not to proceed with delivery of possession on account of the High Court.
Appellant No. 1. also made similar statements in his counter affidavit.
He admitted that at about 9 a. m. on May 20, 1958 an application supported by affidavit was made to him on behalf of Didar Singh and be then endorsed the application to the Tehsildar for necessary action.
Unfortunately, the applications which were made to appellants 1 and 2 have not been filed and we do not know the precise contents of the two applications.
We have, however, affidavits made on behalf of Didar Singh, Teja Singh, Ganga Bisban and Avtar Singh.
The learned Advocate for the parties have taken us through those affidavits.
The argument presented on behalf of the appellants is that though they knew of the extension of the stay order in Didar Singh 's case by reason of the application and affidavit filed on his behalf before them, they did not know that a similar extension of the stay order had been granted by the High Court in the other cases as well.
This argument has been pressed before us with some vehemence and we proceed now to consider it.
It is worthy of note that such an argument which goes to the very root of the matter was not presented to the High Court.
It is not disputed that ",disobedience of a judgment or order requiring a person to do any act other than the payment of money, or to 135 abstain from doing anything is a contempt of court punishable by attachment or committal" ; but disobedience, it is argued, if it is to be punishable as a contempt, must be willful ; in other words, the party against whom a proceeding by way of contempt is taken must know that order before, it can be said that he has disobeyed it.
It is somewhat surprising that if the stand of the appellants was that they did not know of the order made by the High Court on May 19, 1958, in the respondent 's case, such a point was not urged in the High Court.
Falshaw, J., (as he then was) said in his judgement that it was not in dispute before him that on the morning of May 20, 1958, both the appellants were informed that an extension of the stay order upto May, 23, 1958, had been granted by the High Court.
This state ment of the learned Judge must have reference to the case of the respondent which he was considering.
Apart, however, from the point that, such an argument on behalf of the two appellants was not presented in the High Court, it appears to us that on the affidavits made available to the Court, the only reasonable inference is that though the application and the affidavit were made on behalf of Didar Singh, both the appellants were informed that the High Court had granted an extension of the stay order in all 4 he cases.
It is admitted on both sides that there were three cases in which delivery of possession had to be given of lands in village Jagmalera.
It is also not seriously in dispute that on May 9, 1958, appellant No. 1 made an order directing that delivery of possession should be given to the allottees of their respective areas and persons in unauthorised occupation would be dispossessed.
On May 16, 1958 three writ petitions were made which were placed before the Chief Justice who made an interim order of stay lasting for three days.
On May 19, 1958 the writ petitions were placed before a Division Bench for admission and that Bench 136 extended the stay order till May 23, 1958.
These are the admitted facts.
It is also, admitted that the respondent Gurbachan Singh did not appear before the appellants on May 20, 1958, a fact which has been emphasised by the learned Advocate for the appellants.
Lot us, however, see what the affidavits filed in the case show.
Teja Singh said in his affidavit that Harbans Singh Gujral, who was the advocate acting on behalf of the petitioners in all the, cases, told him on the telephone on May 19, 1958 that the High Court had extended the stay order in all the cases upto May 23, 1958.
Teja Singh accompanied Didar Singh, Ganga Bishan, Mastan Singh and others to the village on May 20, 1958, and he said that an application was made to appellant No. 2 in which it was stated that the stay order had been extended by the High Court.
The affidavit of Ganga Bishan is very significant in this connection.
He said that on May 20, 1958, he drafted the application which was later made to appellant No. 2.
Ganga Bishan said that it was stated to appellant No. 2 that the stay order made by the High Court related to all the cases of village Jagmalera.
He further said that appellant No. 2 was informed that stay of delivery of possession had been extended by the High Court upto May 23, 1958 ; appellant No. 2, however, wanted to be ,shown the order of the High Court ; thereupon an affidavit of Didar Singh to the effect that the stay order had been extended by the High Court upto May 23, 1958, was filed.
Ganga Bishan also said that appellant No. 1 was also informed that the High Court had extended the stay order upto May 23, 1958.
The affidavits made on behalf of Didar Singh and Avtar Singh were also to the same effect.
In view of these affidavits we find it very difficult to hold that the.
appellants knew of the stay 'order only in Didar Singh 's case but did not know of the stay order in the other oases.
It is worthy of note here that 137 in the counter affidavits filed on behalf of the appellants the point was made on their behalf was that they considered it unsafe to rely on the applications and affidavits made, in view of the background of enmity between the parties.
The two appellants did not say in their counter affidavits that they came to know of the stay order only in one case and not in the others such a point does not appear to have been specifically made on behalf of the appellants at any stage of the proceedings in the High Court.
Therefore, we have come to the conclusion that the appellants knew of the order of the High Court in all the cases and it is not correct to say that the appellants knew of the order of the High Court only in one case and not in the others.
We find it difficult to believe that Ganga Bishan would not tell the appellants that the High Court had extended the stay order in all the three cases of the village Ganga Bishan says in his affidavit that he did tell the appellants of the extension of the stay order in all the three cases and there was no counter affidavits on behalf of the appellants traversing the statements made by Ganga Bishan.
We must, therefore, overrule the first point urged on behalf of the appellants.
The second point which has been urged on behalf of the appellants is that in the absence of an official communication of the order, they were justified in not acting on what they came to know from interested parties and their advocate.
The learned Advocate for the appellants has submitted that in a case of this nature, before willful disobedience of the order of the High Court could be imputed against the appellants, it was legally essential that the order should be officially communicated or served on the appellants and in the absence of such communication or service, the proceeding for contempt must fail.
We are unable to accept this contention as correct.
138 The legal position has been very succinctly put by Oswald: "The judgment or order should be served on the party personally, except in the following cases: (1) prohibitive orders, the drawing up of which is not completed; (2) orders em bodying an undertaking to do an act by a named day; (3) orders to answer interrogatories or for discovery or inspection of documents: (4) where an order for substituted service has been made; (5) where the respondent has evaded service of the order.
In order to justify committal for breach of a prohibitive order it is not necessary that the order should have been served upon the party against whom it has been 'granted, if it be proved that he had notice of the order aliunde, as by telegram.
or newspaper report, or otherwise, and knew that it was intended to be enforced, or if he consented to the order, or if he was present in Court when the order was pronounced.
, or when the motion was made, although he left before the order was pronounced.
" (Oswald 's Contempt of Court, 3rd Edn.
199 and 203).
The order in the present case was a prohibitory order and if the appellants knew that the High Court had prohibited delivery of possession till May 23, 1958, it was undoubtedly the duty of the appellants to carry out that order.
We do not think that the appellants can take up the plea that as the order had not been officially communicated to them, they were at liberty to ignore it.
The appellants were officers whose duty it was to uphold the law and if they knew that a valid order had been made by the High Court staying delivery of possession, they disobeyed that order at their peril.
There may be circumstances where officials 139 entrusted with the duty of carrying out a legal order may have valid reasons to doubt the authenticity of the order conveyed to them by interested parties and in those circumstances it may be said that there was no willful disobedience of the order made.
We do not, however, think that the appellants in the present case had any real justification for doubting the authenticity of the order made by the High Court, even though the order had not been officially communicated to them.
The appellants knew that an interim order of stay had been made by the High Court on May 16, 1958; that order was in force till May 19, 1958.
Thereafter the appellants were informed not merely by interested parties but by an Advocate, who was an officer of the Court, that the High Court had extended the stay order upto May 23, 1958.
A formal application supported by an affidavit was made to that effect.
Despite the reason alleged by the appellants that there was a background of enmity between the parties, we do not think that the appellants have given any good reasons on which they were entitled to doubt the authenticity of the order communicated to them by Ganga Bishan, an Advocate acting on behalf of Didar Singh.
It is worthy of note that the appellants did not deliver possession in Didar Singh 's case.
They were content with delivering possession in the case of the respondent only.
Taking into considerations all these, circumstances we are satisfied that there was in this case in the eye of the law, a willful disobedience of the order of the High Court staying delivery of possession, even though the appellants might have wrongly but honestly believed that it was not safe to act on the information given to them by Ganga Bishan.
The learned Advocate for the appellants has referred us to a number of decisions, English and Indian, relating to mandatory orders, or 140 orders for the payment of money, or orders which require under the rules of the Court to be served in particular manner.
In re: Holt (an Infant)(1); Ex parte Lingley (2); In re: Tuck March vs Loosemore (3); Dwijendra Krishan Datta vs Surendra, Nath Nag Choudhury (4): and Gordon vs Gordon (5).
In those decisions it was held that it was necessary to have the order properly served before charging a person with disobedience of it.
We do not think that those decisions are in point, because we are dealing with a prohibitory order and in the matter of a prohibitory order it is well settled that it is not necessary that the order should have been served upon the party against whom it has been granted in order to justify committal for breach of such an order, provided it is proved that the person complained against had notice of the order aliunde.
The distinction between prohibitory orders and orders of an affirmative nature was adverted to in N. Baksi vs O. K. Ghosh (6) and a large number of decisions were referred to in support of the rule that in respect of a prohibitory order, service of the order was not essential for founding an action in contempt.
We do not think that any useful purpose will be served by examining those decisions over again.
We are content to adopt for the purposes of this case the rule as succinctly put by Oswald and quoted earlier in this judgment.
Lastly our attention has been, drawn to the statements made by the respondent in para.
22 of his petition to the effect that though appellant No. 2 made a report about delivery of possession in respect of the land of the respondent, no actual dispossession could be made because cotton crop was standing on the land and a large number of persons had gathered there.
The argument before us is that if, according to the respondent (1) (3) (5), (1946) 1 AU E.R. 246.
(2) (4) A.I.R. 1927 Calcutta 548.
(6) A.I.R. 1957 Patna 528, 141 himself, no actual dispossession took place then this is not a fit case in which action for contempt should be taken against the appellants.
It has been submitted on behalf of the appellants that contempt proceedings are of an extraordinary nature and the Court should be reluctant to exercise its extraordinary power if the action complained of is of a slight or trifling nature and does not cause any substantial loss or prejudice to the complainant.
It has been argued that if the respondent himself said that he had not been actually dispossessed, then there was no reason for proceeding against the appellants for contempt of court.
Secondly, it is pointed out that the appellants offered an apology in case the High Court held that they should have taken action on the information given to them by Ganga Bishan.
As to the second submission, it is enough to point out that in a matter relating to contempt of court, there cannotbe both justification and apology, (See M. Y.Shareef vs The Hon 'ble Judges of the High Courtof Nagpur (1).
As to the first submission wemay draw attention to the statements of appellant No. 2 in para.
21 of his affidavit in which he said that so far as the respondent 's land was concerned, possession was delivered to Budh Singh.
This statement of appellant No. 2 clearly shows that the two appellants took the very action which was prohibited by the High Court by its order dated May 19, 1958.
We are, there fore, unable to accept the submission that there was no foundation for taking action against the appellants for contempt of court.
This disposes of all the points urged on behalf of the appellants.
As to the punishment imposed, the learned Judge took into consideration that the appellants wrongly but honestly might have believed that they were not bound to hold their hands in the absence of an official communication of the order (1) ; 142 of the High Court.
That belief afforded no defence to the charge of contempt of court, but was a consideration relevant to the sentence.
In our opinion, there are no grounds for interference with the order of the High Court.
The appeal accordingly fails and is dismissed.
RAGHUBAR DAYAL, J.
I have bad the privilege of perusing the, Judgment of my learned brother section K. Das, J., but regret My inability to hold that the appellants committed contempt of Court.
I need not repeat the facts set out in the majority judgment.
No conviction for committing contempt of Court can be based on the finding of the High Court that the appellants delivered possession believing that they were not bound to hold their hands in the absence of the official communication of the High Court 's order.
The finding means that they delivered possession not in defiance of the High Court 's order, but because they honestly thought that in the absence of the official communication of the order, they could not act on the supposition that the original stay order, which was to be effective up to May 19, 1958, continued to be effective.
If in their honest opinion no stay order existed at the time, their conduct cannot be said to amount to willful disobedience of the High Court 's order extending the stay order up to May 23, 1958.
No question of willful disobedience can arise when the very existence of the order is not believed.
The question of obedience or disobedience arises only after the party knows of the order and if the party does not know the order, no such question can arise.
The allegations in the petition by the first respondents filed in the High Court, did not make out that the appellants delivered possession, the 143 delivery of which had been stayed upto May 23, 1958, by the High Court by its order dated May 19, 1958.
This is clear from the statements in paragraphs 21 and 22 of the petition.
They are : " 21.
However when actually he attempted to start the work of dispossession, he found that a large number of people were collected at the spot and apprehending that the police force already taken to the spot might not be sufficient to cope up with the situation if some trouble arose, he withdrew from the spot.
22.That although in the land possessed by the petitioner in Jag Malera, cotton crop was standing in some of the fields and no proceedings for dispossession of the petitioner could be taken by respondent No. 2 on account of the presence of a large number of persons at the spot, respondent No. 2, however, madesome report later on that the petitioner hadbeen actuary dispossessed of his lands and the same was given over to Budh Singh at the spot.
In the other cases, however, he made a report that be could not deliver possession on account of the presence of a mob at the spot and that the police force with him being too small, was not sure to cope up with the situation.
" These paragraphs can only mean that appellant No. 2 attempted to start the work of dispossession, but did not proceed further, and withdrew from the spot in view of an apprehension of breach of peace and that be made some report of a fictitious kind to the effect that the petitioner had been actually dispossessed of his land and possession had been given over to Budh Singh at the spot.
It Was emphasized that actual possession could not have be on delivered on account of the standing cotton crop.
It follows that even on the statements 144 of the first respondent in his petition for action against the appellants for contempt of Court, there was no assertion that they had disobeyed the stay order by delivering possession to Budh Singh.
In the absence of such an assertion, no action could have been taken or ought to have been taken against the appellants.
Contempt proceedings are criminal or quasi criminal proceedings.
It is essential that the accusation made against the opposite party by the petitioner for taking action against him should be precise and should ,clearly make out that the opposite party had, by some specific act, committed contempt of Court.
the conviction of the opposite party must rest on the facts alleged and proved by the petitioner.
A conviction may also rest on the sole admission of the alleged condemner if that establishes his committing contempt of Court, but, in that case, his admission should be taken as a whole and not that its incriminating part be taken out of the context and made the basis for conviction.
It is immaterial that appellant No. 2 stated in his reply that actual possession of the land in the unauthorised possession of the first respondent was delivered to Budh Singh and that at the time no cotton crop was standing and that the respondent was adopting a contradictory position.
The High Court did not give any finding on this question.
It simply said in its judgment, due to the misreading of the allegations in the petition. "In spite of this fact it is alleged that in the village the Naib Tehsildar formally dis possessed ' the present petitioner and handed over his land to one Budh Singh. " The respondent made no statement about the Naib Tehsildar formally dispossessing him and banding over the land to Budh Singh.
145 A clear cut finding on the disputed fact whether actual possession had been delivered or not is not to be given in summery proceedings for contempt of Court.
If actual possession had been delivered to Budh Singh, there must have been some good reason for the respondent not to admit it in his petition and that can only be that in any future dispute where the question of possession of the respondent or of the Budh Singh be in question, the respondent be not confronted with his own admission in his petition and affidavit accompanying it.
It may be mentioned that identical statements where made in paragaraphs 21 and 22 of the affidavit.
There might be some other reason for the respondent not to admit the delivery of possession, but it is clear that the respondent did not come to Court with clean hands and, in the circumstances, proceedings for contempt of Court on his application was wrong exercise of discretion.
However, the main fact remains that no allegation was made in the petition that the respondents had delivered possession.
The appellants were not served, by the time the delivery of possession may be supposed to have taken place, with the order of the High Court extending the stay, order up to May 23, 1958.
The telegram sent by the counsel of Gurbachan Singh from Chandigarh, reached the first appellant, the Sub Divisional Officer, at 1 30 p.m., on May 10, 1958, and any order of his on it did not reach appellant No. 2 till 6 p.m., by which time, according to him, possession had been delivered.
The formal stay order from the High Court reached much later.
It may not be necessary to serve prohibitive order on the party against whom it is granted, but that party must have notice of the order before it can be expected to obey it can be committed for contempt of Court for disobeying it.
This is what 146 Oswald states at page 203 of his book on 'Contempt of Court ', III Edition.
He says: "In order to justify committal for breach of a prohibitive order it is not necessary that the order should have been server upon the party against whom it has been granted, if it be proved that he had notice of the order aliunde, as by telegram, or newspaper report, or otherwise,. " It would appear from the later part of the observation that it was sufficient that the party concerned gets notice of the prohibitive order by any means, specially by telegram or newspaper report.
is however not what was held in the cases referred to by Oswald in support of his statement.
Notice to the party concerned, of the prohibitive order, in those cases was communicated by the Court through its regular procedure or by a Solicitor of the Court.
In In re Bryant (1) the parties concerned wet,(, informed by the solicitor of the judgment debtor that the debtor had filed a liquidation petition in the London Bankruptcy Court and that application would be made at the next sitting of the Court to restrain further proceedings under the execution.
The auctioneer concerned received a telegram from Bryant 's solicitors referring to the parties to the case and stating that injunction staying sale and further proceedings Lad been granted that morning and that the order would be served as soon as possible.
The auctioneer, how ever, proceeded with the sale.
It was in these circumstances that the parties concerned were held to have disobeyed the order of the Court and to have committed its contempt.
The solicitor was an officer of the Court.
This case is no authority for the proposition that information conveyed to the party concerned (1) I.R. 147 by telegram from a person who is not an officer of the Court would amount to the requisite notice of the prohibitive order by the party concerned.
In Ex parte Langley, Ex parte Smith, In re Bishop (1) the facts were as follows.
Bishop filed a liquidation petition in the London Bankruptcy Court on August 6, 1879.
The same day the Court passed an order restraining until the 8th of September, further proceedings in several actions which had been commenced against the debtor and, inter alia restraining the sheriff of Kent, his officers and servants, from taking any further proceedings in an action which had been brought against the debtor by Messrs. Wade and Thurston.
The sheriff had fixed the sale of the attached furniture of the debtor on the 6th of August, having adjourned it from the 5th in order to afford an opportunity to the debtor to pay the debt.
Smith was he sheriff 's officer who was in charge of the sale.
His assistant, Emmerson and Langley, an auctioneer, were to carry out the sale.
Emmerson had directions to start the sale at 11 'clock and not a moment later.
Langley, however, postponed the same to 12 o 'clock, on his own responsibility, due to paucity of persons present.
Langley received a telegram from one Matthews, the manager of the hotel in which the debtor was carrying on business as a licensed victualer, saying: "Smith gone to Canterbury.
You had better stop Bale on your own account, as I know it is all right.
" The auctioneer was also informed by the debtor 's son and another person between 11 and 12 o 'clock that the debtor would come down by the mid day train from London with the money to pay the execution debt.
The sale was again put off to 1 o 'clock when it did start.
After a few lots had been sold, Emmerson received a telegram purporting to be (1) L.R. (1979) 13.Ch.
D. 110 148 from Learyod & Co., Solicitors, London, to the sheriff 's officer in possession stating: "Take notice, the London Court of Bankruptoy has made an order restraining you from selling or taking any further proceedings in the action against Bishop".
The telegram was shown to Lanoley who thought it to be a ruse on the part of the debtor but was prepared to stop the sale temporarily till instructions from Smith.
Emmerson sent a telegram to Smith saying: "Langley just received telegram to stop sale.
Shall we proceed? People are waiting your reply.
" Smith 's reply was: "If telegram to Langley does not state Defendant filed petition or money paid, sell at once" ' The sale thereafter proceeded.
Langley and Smith were committed for contempt by Bacon C J.
But on appeal they were acquitted.
James, L. J., said at page 116: "With regard to the sheriff 's officer, he does not seem to have been a party to the alleged contempt at all, because I do not think the mere fact of the telegram is sufficient to bring home to him any Participation in the supposed contempt." He further said at page 117, in considering the case of the auctioneer.
"It appears.
to me that he might have taken some steps (though I do not know what steps I should have taken if I bad been in his position) to ascertain whether an order had really been made by the Court.
Perhaps some auctioneers would have done so.
But he has taken upon himself to swear positively (and he 149 has not been cross examined) that which Lord Eldon, in Kimpton vs Eve ; , field to be sufficient.
He swears that he did not believe that there had been any proceedings whatever in the Bankruptcy Court it, or that any such order had been made.
A person in I such a position, and a sheriff 's officer is placed in great difficulty upon receiving a telegram of this kind, knowing nothing at all of the person who may have gone to the post office and sent it, a telegram which might just as well have been sent by the debtor or by Matthews, or any one else on behalf of the debtor, in the name of Messrs. Learoyd.
I am very far from saying that notice of an order cannot be given by telegram.
But it is very difficult to commit for contempt where a man says that which the auctioneer does here, under circumstances which certainly give color to his assertion, and there is some amount of probability that he may, having regard to what had already taken place that ay, not have believed that any order had been made by the Court, and have had no suspicion whatever that he was disobeying any order of the Court when he continued the sale.
" Thesinger, L. J., said at p. 119: I in no way dissent from the proposition laid down by him(Bacon, C.J.) in this case and also in In re Bryant (supra), that, under certain circumstances, a telegram may constitute such a notice of an order of a Court as to make a person who disregards the notice and acts in contravention of the order, liable for the consequences of a contempt of Court. .But the question ineach case, and depending upon the particular circumstances of the case must be or was there or was there not such a notice given to the person who is charged with 150 contempt of Court that you can infer from the facts that he had notice in fact of the order which had been made? And, in a matter of this kind, bearing in mind that the liberty of the subject is to be affected, I think that those who assert that there was such a notice ought to prove it beyond reasonable doubt." He further stated at page 121: "But, on the other hand, he has positively sworn that, coupling what had happened before with the telegram, he bona fide believed that he was not bound to act upon the telegram which he had received, and that there had been no proceedings which would justify him in stopping the sale.
He has not been cross examined, and nothing has been proved to show that his affidavit is not true.
Under such circumstances the observations of Lord Eldon, in Kimpton vs Eve (supra) seem to me pertinent and material, and I may add that in a case like the present the benefit of any doubt ought to be given to the person charged with contempt.
" The further remarks of James L. J., at page 122 point out the proper way of communicating a notice about injunction orders to the parties concerned by the solicitor of the party obtaining the order from the Court.
He says: "I wish to add this, that when parties who .obtain an injunction wish to communicate it by telegram, there is a very obvious mode by which they can prevent difficulties like this.
If the solicitor, instead of telegraphing to the sheriff 's officer, were to telegraph to some solicitor as his agent at the place, and tell him to go and give notice of the order, then the person affected would have the responsibility 151 of an officer of the Court for what he was doing.
" This case well illustrates the difficulties of the parties against whom a prohibitive order is made when they are informed by a telegram about these orders having been made by the Court oven when the telegram was from a solicitor of the Court.
The difficulties would be still greater if the telegram was one from a; person who is not a solicitor and therefore an officer of the Court.
In The Seraglio(1) notice of the issue of warrant which was subsequently disobeyed was sent by telegram by the marshal to the customhouse officer at Plymouth who went on board the seraglio to inform those in charge of the ship.
The master of the Seraglio, however by the owner 's order, left Plymouth with the custom house officer on board.
The warrant was served on him subsequently.
Sir James Hannon said at page 121.
"It must be understood that a litigant cannot be disregard a notice sent to him by telegraph by an officer of the Court.
" In none of the cases referred to, a party 1s said to have received information of the Court 's injunction order through any source having no connection with the court Passing the order.
I would not like an extension if this, practice of holding a person guilty of contempt even though he is not served with the order, to cases in which his alleged knowledge of the order is dependent on the veracity of the witnesses examined by a party praying for action against the other.
Conviction for contempt of Court must depend on unimpeachable evidence of the knowledge of the alleged contemner about the order said to have been disobeyed.
In support of the note that it could be proved that the party proceeded against had notice of the (1) 152 order by newspaper report or otherwise, Oswald has referred to Daniell 's Chancery Practice, Vol '.
1, Edition 7, page 1368.
That edition is not available, but in the 8th edition of that book, Vol.
II, at page 1413, is noted the practice in urgent cases thus : "In such (urgent) cases, the practice is to serve the party enjoined personally with notice in writing that the injunction has been granted, and that the order will be drawn up and served as soon as it can be passed through the offices ; or else to procure a transcript of the minutes of the order signed by the Registrar, and to serve the same personally by delivering a copy of it, showing at the same time the original transcript so signed ; and either the notice or the copy of the minutes will be sufficient to render the defendant or other person enjoined guilty of a contempt, if he acts in opposition to the injunction.
" I do not find any reference that knowledge of the party proceeded against through a newspaper report or otherwise, and not through Court, has been considered sufficient for contempt proceedings.
Again, at page 1419, have been mentioned certain other means through which the party proceeded against could have been informed of the injunction order.
They are practically those summarized in Oswald 's note.
In the appeal before us, I am not satisfied that the appellants had been informed that the High Court had passed an order staying the delivery of possession in proceedings on the writ petition filed by respondent Gurbachan Singh.
The communication made to the appellants about the stay order of the High Court is said to be through the applications and affidavit presented by Didar Singh to the appellants on May 20, 1958, and through a 153 chit said to have come from the advocate of the High Court regarding the injunction order.
Didar Singh had put in another writ petition against his threatened dispossession by appellant No. 1 through appellant No. 2.
There is said to have been ' a third writ petition by another person praying for similar relief.
All these petitions were separately dealt with by the High Court.
Separate stay orders were passed on them.
These five affidavits, in view of their contents, are not sufficient to prove that the appellants had been informed through these documents that the High Court had extended the stay orders in all the three cases.
viz., the cases on the writ applications of Gurbachan Singh, Didar Singh and another third person.
No statement is made in any of the affidavits that the applications and affidavits presented to the appellants mentioned that the High Court had stayed the delivery of possession in all the three cases.
It is not stated by Didar Singh and Mastan Singh what was written on the chit sent by the advocate of the High Court and whether that chit related to the order in the case of Didar Singh alone or referred to the orders in all the cases.
As Didar Singh claimed a receipt for the presentation of the application and affidavit to appellant No. 2, the latter, after consulting the prosecuting inspector, went to appellant No. 1 for consultation and was advised to, return the application to Didar Singh if he insisted on getting a receipt.
The application and the affidavit were therefore then returned to one Ganga Bishan.
The chit alleged to have been sent by the High Court advocate has not been produced.
The application presented to appellant No. 2 in the village and returned by him in the Sub Divisional Officer 's Court, though presumably in possession of Didar Singh, has not been filed.
They would have indicated what their contents were.
That 154 would have been the best evidence of what was conveyed to appellants Nos. 1 and 2.
Ganga Bishan 's statement.
that he had drafted the application addressed to appellant No. 2 to the effect that the stay order issued by the High Court in Jag Malera Namdhari cases had been extended, is not the best 'evidence of what the application (a fair copy presumably), actually contained, an application which is in the possession of Didar Singh.
Of course, the application and affidavit presented to the Sub Divisional Officer, are in the possession of the State.
No attempt was made by the respondent to summon them or to file certified copies of those documents in these proceedings in the absence of the best evidence, the documents, I am not prepared to hold that the application and affidavit filed by Didar Singh must have referred to all the cases.
Normally, he had no business to refer to the stay orders in the other cases and to make prayer for the stay of delivery of possession in all the cases.
He had to restrict his application and affidavit to his own case.
Further, whatever was stated in the application and the affidavit,, in the nature of things, was not on the basis of personal knowledge of Didar Singh Didar Singh himself did not even have the telephonic communication with his counsel at Chandigarh.
The telephonic communication was between Teja Singh and that counsel.
Appellant No. 2 states and I see no reason to doubt that statement that in the background of the facts about the possession over the land he did not consider it advisable and safe to accept the statement of facts contained in the application or affidavit on its face value.
Lastly, the presence of Ganga Bishan, Advocate, on the occasions of the presenting of the application and affidavit to appellants Nos. 1 and 2, is 155 stated in all the affidavits.
But it is only in paragraph 5 of Didar Singh 's affidavit that it is stated that Babu Ganga Bishan, Advocate, presented the application and the affidavit to the Sub Divisional Officer.
Ganga Bishan himself does not state so.
It is not stated anywhere that Ganga Bishan had been engaged as counsel by Didar Singh.
It would appear a bit unusual that 'in the presence of a duly appointed advocate, applications and affidavits be presented by Didar Singh personally and not through his counsel.
On the basis of the statements and the affidavits, I am not prepared to hold that Galiga Bishan was the duly appointed counsel for Didar Singh.
He may be accompanying Didar .Singh like other persons on account of his interest in the matter.
Further, any request by him to the Sub Divisional Officer for passing the necessary orders on the application of Didar Singh, as stated by him in paragraph 3 of his affidavit, cannot lead to the conclusion that be professionally represented Didar Singh, as similar requests were made, according to his own affidavit, by the other persons also, who had accompanied Didar Singh to the Sub Divisional Officer 's Court.
The Sub Divisional Officer, therefore, could not have treated his request to be a statement of fact about the High Court 's extending the stay order up to May 23, 1958.
Ganga Bishan does not state that he told the Court that the High Court had extended the duration of the stay order or that he requested the Sub Divisional Officer, who is also the Sub Divisional Magistrate, to stay the delivery of possession in view of the application filed by Didar Singh.
He simply states: "Several requests were made to the Sub Divisional Magistrate by us that necessary orders on the application presented to 156 him be made and the Managing Officer be called back." Even if Ganga Bishan bad stated that the High Court bad extended the order, his statement too, had no better value when he could not speak about that order on the basis of personal knowledge or on the basis of any communication to him by the Advocate of the High Court.
He has not stated in his affidavit that he was present when the order was passed or that he had received any communication from the High Court Advocate.
I am therefore of opinion that his merely accompanying Didar Singh and others did not invest any greater weight to the correctness of the statements made in the application and the affidavit.
The public officers are not to blame if they do not take at face value what is contained in deliberately prepared applications and affidavits.
I have already mentioned of the way in which the crucial basic fact to be mentioned in the petition for contempt proceedings against the appellants had not been mentioned and statements were made in a way which at first sight could lead to the impression that the delivery of possession had been made in defiance of the order of the High Court.
I am therefore of opinion that it is not established the respondents did not rely on the statements in the application and the affidavit mala fide because they were bent upon delivering possession in defiance of the orders of the High Court.
I find in this case that on May 16, orders of the High Court were obtained for serving the stay order upon the appellants through the petitioner respondent, but no such order was obtained for serving the order dated May 19.
In view of the urgency of the matter, the respondent and others who bad obtained extension of the stay orders on 157 the 19th could have and should have obtained similar orders of the High Court for serving them.
If that precaution had been taken %gain on May 19, 1958, probably what happened subsequently on the spot and thereafter, would not have taken place.
I am therefore of opinion that the appellants committed no contempt of Court, and would allow their appeal.
By COURT : In accordance with the opinion of the majority, the appeal fails and is dismissed.
Appeal dismissed.
| The appellants, one a Sub Divisional Officer and the other a Naib Tehsildar, were entrusted with the duty of allotting land to displaced persons.
The first respondent forcibly occupied the land allotted to B.
On May 9, 1958, the first appellant ordered that B and other allottees similarly situated would be given possession of lands allotted to them on May 20, 1958.
On May 16, 1958.
the first respondent and others threatened with dispossession filed petitions in the High Court under article 226 of the constitution and obtained interim stay of delivery of possession till May 19, 1958, when the petitions would come up before the Division Bench for admission.
On May 19, 1958, the Division Bench extended the operation of the stay order until May 23, 1958.
The notice of the first stay order reached the appellants on May 19, 1958, but no notice of the second order was officially communicated to them till May 21, 1958.
It was alleged that on May 20, 1938, the appellants, although informed of the second stay order by certain interested persons and the Advocate for one of the parties, formally dispossessed the respondent in disobedience of the Court 's order and handed over possession of the land to B. On the complaint of the respondent the High Court field that the .appellants were guilty of contempt of Court and, instead of committing them for contempt, administrated a warning as the appellants honestly believed that they were not bound to stay delivery of possession in absence of an official communication.
The appellants appealed by special leave.
Held, (per Das and Subba Rao, JJ.)that in a case of contempt for disobedience of a prohibitive order, as distinguished from an order of affirmative nature, it was not necessary to show that notice of the prohibitory order was served upon the party against whom it was granted.
It would be sufficient if it was proved that the party had notice of it aliunde.
N.Baksi vs O. K. (Thosh, A. T. R. (19.)7) Patn.
528, referred to.
128 There may be circumstances where officials entrusted with the carrying out of a legal order might have valid reasons to doubt The authenticity of the order conveyed to them by interested parties.
But in the present case there could hardly be any such reasons.
The appellants had really no justification for doubting the authenticity of an order communicated to them by an Advocate.
Held, further.
that in a matter relating to contempt of court, there cannot be both justification and apology.
shareef vs The Hon 'ble Judges of the High Court of Nagpur; , , referred to.
Although the appellants might have honestly believed that they were not bound to bold their band in absence of an official communication, that would be no defence to the charge of contempt of court, but only a relevant consideration in awarding the sentence.
Per Daval, J. Contempt proceedings are criminal or quasi criminal in nature and it is essential that before any action can be taken the accusation must be specified in character.
In the instant case, the respondent did not state that he was formally dispossessed.
This would 'be for some reason if actual posssssion had been delivered.
He could not be said to have come to court with clean hands.
Further, the finding of the High Court that the appellants delivered possession honestly believing that they were not bound not to do so in the absence or the official communication meant that there was no defiance of the High Court 's order.
There could be no willful disobedience since there was no belief in the existence of the order.
It may not be necessary that the party against whom a prohibitory order was made must be served with the order, but it should have notice of the order before it could be expected to obey.
Such notice must be from sources connected with the court passing the order.
The alleged knowledge of the party cannot be made, to depend on the veracity of the witnesses examined by the party praying for action.
In re Bryant L.R (1987 6) In Ex Parte Langly, Exparte Smith.
In re Bishop L. R. and The Seraglio.
L. R. , discussed.
| By an order dated 16th August 1969, the appellant was appointed by respondent 2 the Bihar School Examination Board as a Special Officer (Stores) for a period not exceeding six months in the pay scale of Rs. 300 20400 EB 20 500, with usual allowances.
The services were, however, continued till 10th March, 1971, when it was intimated that the said post of Special Officer would be abolished with effect from 1st April 1971, and consequently his services were terminated.
The appellant riled a suit and obtained an injunction against the abolition of the post and the termination of his services.
In the suit, a compromise was arrived at between the Board and the appellant, whereby he was appointed as Section Officer in the General Cadre and his pay as Special Officer was to be protected.
Pursuant to this compromise, the Board by order dated 20th March, 1972 appointed him on the vacant post of Section Officer, with a personal pay of Rs. 70 per month.
Later, by an order dated 11.11.86, respondent No. 2 regularised the appointment from the date of his appointment as Special Officer viz. 16.8.69.
However, respondent No. 5 promoted to one of the posts of Section officers on 27 8 70, contended that the seniority given to the appellant in the post of Section Officer w.e.f. 16 8 69, ie.
from the date of his appointment as Special Officer was illegal.
In the Seniority list of Section Officers prepared by respondent No. 2, the appellant was shown above respondent No. 5 and he was granted promotion to the post of Asstt.
Secretary on 20th March, 1982, and to that of Deputy Secretary on 29.11.87.
12 Against the said list of seniority, respondent No. 5 filed a writ petition in the High Court, formally challenging the order of dt 11th Nov., 1986 in terms of which the inter se seniority list was prepared.
The High Court held that the post of Special Officer occupied by the appellant was a temporary post, which was abolished, and therefore, he would have to rank below respondent No. section The appellant came to this Court.
Allowing the Appeal, HELD: The approach of the High Court was not correct.
The appellant was appointed in a higher post with a higher salary scale.
He was in fact compulsorily transferred from that post to the post of Section Officer and after that transfer by the same order of 20th March, 1972, the post of Special Officer was abolished.
The order is also capable of being interpreted as an order of amalgamation of the ex cadre post of a Special Officer with the cadre post of Section Officer.
[15H G] The consequence of both the interpretations of the said order is the same, viz. that the appellant would get seniority from the date of his appointment as Special Officer.
[15G] It is true that there is nothing on record except the order of 20th March, 1972, to show that in the temporary post of Special Officer which was created for the first time on 16th August, 1969, that the appointment of appellant was ever regularised and the appellant was appointed regularly to the same.
However, on this aspect, we must go by the intention revealed in the resolutions and orders of the Board itself.
The Board 's intention is clear.
It treated the post as regular.
The appellant was appointed to it in a substantive vacancy and in accordance with the condition governing it.
There is accordingly nothing, which militates against the seniority given to the appellant.
[16A D] The Direct Recruit Class II Engineering Officers ' Association and Ors.
vs State of Maharashtra & Ors.
, ; and State of Bihar& Ors. etc.
vs Akhouri Sachindra Nath & Ors., [1991] Suppl. 1 SCC 334, referred to.
| In a writ petition filed under article 226 of the Constitu tion impugning his dismissal from service, the respondent contended that since he had not been given a reasonable opportunity of meeting the allegations against him, his dismissal was void.
writ petition was dismissed.
Thereupon, the respondent flied a suit in a civil court challenging his dismissal on the ground, among others, that since he had been appointed by the Inspector General of Po lice, his dismissal by the Deputy Inspector General of Police was wrong.
The State took the plea that the suit was barred by res judicata.
Dismissing the suit, the trial court held that it was not barred by res judicata.
The first appellate court dismissed the respondent 's appeal.
Purporting to follow a line of decisions of this Court, the High Court held that only that issue between the parties would be res judicata which was raised in the earlier writ petition and was decided by the High Court after contest and since in this case the respondent did not raise in the earlier writ petition the plea of competence of the Deputy Inspector General of Police to dismiss him.
the parties were never at issue on it and that the High Court never consid ered and decided this issue in the writ petition.
On the question of invoking the principle of constructive res judicata by a party to the subsequent suit on the ground that the matter might or ought to have been raised in the earlier proceedings, the High Court held that this question was left open by the Supreme Court in Gulabchand Chhotalal Parikh vs State of Bombay ; , and allowed the respondent 's appeal.
Allowing the States appeal to this Court.
HELD: The High Court was wrong in its view because the law in regard to the applicability of the principle of constructive res judicata having been clearly laid down in Devi Lal Modi vs Sales Tax Officer Ratlam and Others ; it was not necessary to reiterate it in Gulabchand 's case as it did not arise for consideration in that case.
The clarificatory observation in Gulabchand 's case was misunderstood by the High Court in observing that the matter had been left open by this Court.
The doctrine of res judicata is based on two theo ries: (i) the finality and conclusiveness of judicial deci sions for the final termination of disputes in the general interest of the community as a matter of public policy, and (ii) the interest of the individual that he should be pro tected from multiplication of litigation.
[430 D] 2.
(a) In certain cases, the same set of facts may give rise to two or more causes of action.
In such cases res judicata is not confined to the issues which the Court is actually asked to decide but covers issues or facts which are so clearly part of the subject matter of the litigation and so clearly could have been raised that it would be an abuse of the process of the court to allow a new proceeding to be started in respect of them.
This rule has sometimes been referred to as constructive res judicata which is an aspect or amplification of the general principle.
[431 A] (b) Section 11 of the Code of Civil Procedure, with its six explanations, covers almost the whole field, but the section has, in terms, no application to a petition for the issue of a high prerogative writ.
[431 D] (c) Although in the Amalgamated Coalfields Ltd. and others vs Janapada Sabha, ; this Court held that constructive res judicata being a special and artifi cial form of res judicata should not generally be applied to writ petitions, in Devilat Modi 's this Court held that if the doctrine of constructive 429 res judicata was not applied to writ proceedings, it would be open to a party to take one proceeding after another and urge new grounds every time, which was plainly inconsistent with considerations of public policy.
The principle of constructive res judicata was, therefore, held applicable to writ petitions as well.
[433 G & 434 D] 3.
The High Court missed the significance of these deci sions and relied upon L. Jankirama lyer and 'Others vs
P.M. Nilakanta lyer and Others [1962] Supp. 1 S.C.R. 206 which had no bearing on the controversy.
In Gulabchand 's case, this Court observed that it did not consider it necessary to examine whether the principle of constructive res judicata could be invoked by a party to the subsequent suit oft the ground that a matter which might or ought to have been raised in the earlier proceeding but was not so raised therein could be raised again relying on which the High COurt concluded that the question was left open by this Court.
This in turn led the High Court to hold that the principle of resjudicata could not be made applicable to a writ petition.
[435 E F] In the instant case, the respondent did not raise the plea that he could not be dismissed by the Deputy Inspector General of Police.
This was an important plea which was within his knowledge and could well have been taken in the writ petition.
Instead he raised the plea that he was not afforded a reasonable opportunity of meeting the case in the departmental inquiry.
It was therefore not permissible for him to take in the subsequent suit the plea that he had been dismissed by an authority subordinate to that by which he was appointed.
That was clearly barred by the principle of constructive res judicata and the High Court erred in taking a contrary view.
[436 A B]
| The appellant was a temporary sub inspector of Police.
While he was posted at Shahjahanpur the Superintendent of Police, Shahjahanpur commenced disciplinary proceedings against him on the charge that he had violated Rule 29 of the U.P. Government Servants Conduct Rules, 1956 in as much as without prior permission of the Government he had contracted a second marriage in November, 1964, while his first wife was alive.
At the stage of evidence, the Deputy Inspector General of Police, Bareilly made an order on March 12, 1970 quashing the disciplinary proceedings on the ground that the offence has been committed at Pithoragarh, situated in a different police range, and therefore, the proceedings taken against the appellant were incompetent.
Meanwhile, on March 8, 1970, the Inspector General of Police, Uttar Pradesh, had issued a letter to all Superintendents of Police in the State directing them to submit a list of Sub inspectors whose reputation and integrity were very low or who were generally involved in scandalous conduct, drinking, immorality or other acts injurious to the reputation of the Police Service or who were involved encouraging crime.
The Superintendent of Police, Shahjahanpur included the name of the appellant in the list submitted by him.
On April 27, 1970, the Dy.
Inspector General of Police made an order terminating the services of the appellant, reciting that the services of the appellant "are no more required and that he will be considered to have ceased to be in service. " The appellant filed a Writ Petition against the order terminating his services and claimed that the order contravened Article 311(2) of the Constitution inasmuch as it was an order imposing the punishment of dismissal or removal from service without satisfying the conditions prescribed therein.
Allegations of malafide were also made.
The Writ Petition was dismissed.
An appeal to the Division Bench was also dismissed.
Hence the appeal by special leave.
Dismissing the appeal, the Court.
^ HELD: 1.
It is now settled law that an order terminating the services of a temporary Government servant and ex facie innocuous in that it does not cast any stigma on the Government servant or visits him with penal consequences must be regarded as effecting a termination simpliciter, but if it is discovered on the basis of material adduced that although innocent in its 614 terms the order was passed in fact with a view to punishing the Government servant, it is a punitive order which can be passed only after complying with article 311(2) of the Constitution.
[615H, 616A B] 2.
The question which calls for determination in all such cases is whether the facts satisfy the criterion repeatedly laid down by this Court that an order is not passed by way of punishment, and is merely an order of termination simpliciter, if the material against the Government servant on which the superior authority has acted constitutes the motive and not the foundation for the order.
The application of the test is not always easy.
In each case it is necessary to examine the entire range of facts carefully and consider whether in the light of those facts the superior authority intended to punish the Government servant or, having regard to his character, conduct and suitability in relation to the post held by him it was intended simply to terminate his services.
The function of the Court is to discover the nature of the order by attempting to ascertain what was the motivating consideration in the mind of the authority which prompted the order.
[616B E] In the instant case: (a) the appellant was a temporary Government servant, and the question whether he should be retained in service was a matter which arose directly during the drive instituted by the Inspector General of Police in March 1970 for weeding out Police Officers who were unsuitable or unfit to be continued in service; (b) the material which the Superintendent of Police considered was sufficient to lead to the conclusion that the appellant, who was a temporary Government servant, was not suitable for being retained in service his general character and conduct led to that impression and there was nothing to show that the impugned order was made by way of punishment; (c) the circumstance that a disciplinary proceeding had been instituted against him earlier does not in itself lead to the inference that the impugned order was by way of punishment, and (d) the impugned order was not intended by way of punishment.
[616E G] State of Maharashtra vs Veerappa R. Saboji and Anr. ; ; applied.
State of Bihar and Ors.
vs Shiva Bhikshuk Mishra, ; State of U.P. & Ors.
vs Sughar Singh ; and Regional Manager & Anr.
vs Pawan Kumar Dubey; ; ; distinguished.
| The appellant was a sub tenant of S on a monthly basis commencing from April 1, 1954.
S was the tenant of the Respondent from September 15, 1943 on a monthly rental.
On June 16, 1955, the respondent obtained a decree of ejectment against section In view of sub s(2) of section 13 of the West Bengal Premises Rent Control (Temporary Provisions) Act, 1950, the appellant became the tenant of the respondent after the determination of the tenancy of section The respondant gave a notice to the appellant asking him to deliver possession of the premises on the expiry of the last day of April 122 1957, since he being a statutory tenant had not paid rent since June 16, 1955.
The respondant instituted a suit for ejectment, which was decreed, and an appeal to the High Court by the appellant was unsuccessful.
On appeal by special leave, it was contended that the notice was invalid for under the law the notice must be to require the appellant to deliver possession on the expiry of the month of tenancy, that the tenancy was from the 16th of a month as the decree for ejectment against S was passed on June 16, 1955 and that this notice required the delivery of possession on the expiry of the last day of April.
Held: The contention was untenable and rightly rejected by the High Court.
The provisions of Sub section
(2) of section 13 of the West Bengal Rent Control (Temporary Provisions) Act, 1950 only lay down that the sub tenant would become the tenant of the landlord if the tenancy in chief is determined, on the same terms and conditions on which the sub lessee would have held under the tenant if the tenancy of the tenant had not been determined.
This means that the terms and conditions of the tenancy between the erstwhile sub tenant and the landlord continue to be the same which were the terms and conditions of the sub tenancy.
The period of monthly tenancy commencing from the first of the month and expiring on the last day of the month, was in no way affected by the provisions of Sub section
(2) of section (13) whose effect was simply that the sub tenant instead of being sub tenant of the tenant who had been ejected, got a direct connection with the landlord and became his tenant in chief.
| The appellant was arrested under section 3 Of the (lV Of 1950) as amended by the amending Act Of 1951.
The grounds of his detention were communicated to him as required by section 7 Of the Act and his case was thereafter put up before the Advisory Board constituted under section 8 of the Act.
The Board reported that there was sufficient reason for his detention and thereupon the Cen tral Government acting under s.11 (1) of the Act confirmed the order of detention and directed that such detention should continue for a period of twelve months from the date of detention.
The appellant challenged the validity of this order by an application to the Punjab High Court under article 226 of the Constitution for a writ of habeas corpus and contended that sub section
(1) of section 11 of the Act was constitu tionally invalid as it contravened the provision of article 22(4)(a) of the Constitution.
The High Court found against him.
The same point was canvassed in appeal to this Court and it was contended that the expression 'such detention ' occurring in sub cl.
(a) of cl.
(4) of article 22 referred to detention for a period longer than three months mentioned in cl.
(4) Of the Article and section 11(1) of the Act, in so far as it permitted detention for more than three months without a specific report from the Advisory Board that there was sufficient cause for detention for more than three months, was ultra vires.
It was contended on behalf of the Union of India that the expression ,such detention ' referred to 'preventive detention ' occurring in the first line of cl.
(4) of article 22 and what an Advisory Board contemplated by sub cl.
(a) of that clause was intended to do was only to give its opinion as to whether there was sufficient cause for the detention itself and not as to the period of deten tion.
Held (per Bhagwati, jafer Imam, section K. Das and J. L. Kapur Jj.
Sarkar J. dissenting).
The contention advanced on behalf of the respondent was correct and the appeal must fail.
The expression 'such detention ' in article 22(4)(a) of the Constitution refers to preventive detention and not to any period for which such detention should continue and section 11(1) of the does not contravene the provision of article 22(4)(a) of the Constitution, 461 The true scope and effect of cl.
(4) of article 22 must be judged in the light of the entire scheme envisaged by article 22 and so understood, it becomes clear that the Constitution could not have intended that while the determination of the necessity of preventive detention should be left to the Executive, the determination of the period for which such detention should continue should be left to the Advisory Board.
In the very nature of things any decision as to the period of such detention can be taken only by the detaining authority upon which has been placed the responsibility for the detention.
The reference to the Advisory Board is intended to be a safeguard against any possible misuse of its power by the Executive and affords a machinery for the review of its decision on the basis of the representation made by the detenu, the grounds of detention or the report of any Officer who may have passed the order.
It is not a limitation on the Executive 's discretion as to the discharge of its duties connected with preventive detention.
A. K. Gopalan vs The State of Madyas, ; , referred to.
An examination of the scheme of the Act shows that its provisions are in conformity with the relevant provisions of the Constitution.
While the Act authorises detention for more than three months, it does provide for a reference of the order of detention to the Advisory Board and it is only after the Advisory Board has made its report that the Gov ernment can fix the period of detention under section 11(1) of the Act.
Makhan Singh Tarsikka vs State of Punjab, ; and Dattatreya Moreshway Pangaykar vs State of Bombay, ; , referred to.
Held further, that where the appropriate authority refuses to disclose any facts or particulars as to dates, persons and place, on the ground that such disclosure would be against public interest, under cl.
(6) of article 22, the person in detention cannot be heard to say, apart from the question of mala fides, that the grounds did not disclose the necessary facts or particulars or that in the absence of such facts or particulars he was not in a position to make an effective representation.
In the present case the grounds gave him a sufficient opportunity to make an effec tive representation.
Lawrence Joachim Joseph D 'Souza vs The State of Bombay, ; and State of Bombay vs Atma Ram Sridhay Vaidya, ; , relied on.
The test of the mala fides of the Executive in passing an order of preventive detention is whether the Executive in making such order was actuated by any ulterior purposes other than those mentioned In the order of detention.
462 Per Sarkar, J.
The expression 'such detention in article 22(4)(a) of the Constitution means detention for a period longer than three months and cannot mean detention simplic iter.
The object of article 22(4) is to impose a limitation on the power which the Parliament and the State Legislatures have, under article 246 of the Constitution, to enact laws for preventive detention by making such detention, where it is to be extended beyond three months, dependent on the opinion of an Advisory Board.
There is nothing in the language of article 22(4) to show that the safeguard the Constitution intended to provide by the opinion of the Advisory Board is available in other cases of detention.
A. K. Gopalan vs The State of Madras, ; referred to.
It cannot be said that since the Act provides for the ob taining of the opinion of the Advisory Board as to the sufficiency of the cause for detention, that opinion, in view of article 22(4)(a), necessarily is as to the sufficiency of the cause for detention for more than three months.
Where the statute does not contain the provision that the Advisory Board must report that in its opinion there is a sufficient cause for detention for more than three months, as required by article 22(4)(a) of the Constitution, the lacuna cannot be deemed to be cured by implication.
A statute which authorises detention for a period longer than three months without making a provision that the opinion of the Advisory Board must be obtained that there is sufficient cause for detention for a period longer than three months is to that extent invalid.
Makhan Singh Tarsikka vs The State of Punjab, (1952) S.C.R. 368 and Dattalreya Moreshwar Pangarkay vs
The State of Bom bay; , , considered.
| The appellant, a temporary lady constable, was discharged from service by an order under Rule 12.21 Volume 7 of the Punjab Police Rules 1934 on the allegation that she was unlikely to prove an efficient police officer.
A representation made by her to the Deputy Inspector General of Police against that order was rejected.
A revision filed by the appellant against the latter order was dismissed.
A suit filed by her challenging the order of discharge as bad, arbitrary and against the principles of law was dismissed.
This order was confirmed by the District Judge and the High Court in appeal.
In the appeal to this Court by special leave it was contended for the appellant that the impugned order of discharge from service was made not in accordance with the said Rule, in accordance with the terms and conditions of the service, but was made by way of punishment on the ground of her misconduct, as found on the basis of the investigation of certain allegations behind her back, without giving her any opportunity of hearing in the enquiry or to cross examine the witnesses.
Allowing the appeal, the Court, ^ HELD: The impugned order of discharge, though couched in innocuous terms and stated to be made in accordance with the provisions of Rule 12.21, Vol.7 of the Punjab Police Rules, 1934, was really a camouflage for an order of dismissal from service on the ground of misconduct as found on an enquiry into the allegations behind her back.
It was penal in nature as it cast a stigma on the service career of the 501 appellant.
This order was made without serving the appellant any chargesheet without asking for any explanation from her without giving any opportunity to show cause against the purported order of dismissal from service and without giving any opportunity to cross examine the witnesses.
It, therefore, contravenes article 311(2) of the Constitution and is liabie to be quashed and set aside.
[503F G; 504B; 506B C] P.L. Dhingra vs Union of India, [1958] SCR p. 828 at 862, K.H. Phadnis vs State of Maharashtra, [1971] SCR (Supp.)) p. 118, State of Bihar & Ors.
vs Shiva Bhikshuk Mishra, at 196, Shamsher Singh & Anr.
vs State of Punjab, [1975] 1 SCR p. 814 at 837 and Anoop Jaiswal vs Government of India & Anr., [1984] 2 SCR p. 453, referred to.
| The Punjab Government acquired certain parcels of land belonging to two brothers Land N who refused to accept the compensation offered to them and applied to the Government of Punjab under r. 6 of the Punjab Land Acquisition (Defence of India) Rules, 1943, to refer to arbitration their joint claim based on the allegation that the land belonged to them jointly.
The State Government referred the matter to an arbitrator as required under r. 10 who passed an award in favour of both L and N ordering inter alia payment of an amount higher than what was offered to them by the Government.
The Government appealed against the said award to the High Court.
During the pendency of the appeal before the High Court respondent L died and as no application for bringing on record his legal representative had been made within the time limit, the High Court dismissed the appeal holding that the appeal had abated against L and that its effect was that the appeal against N also abated.
Held, that there can be no question of abatement of appeal against the correspondents of the deceased respondent as Order 22 Rule 4 of the Code of Civil Procedure does not provide for the same but in certain circumstances the appeal cannot proceed against them and such a result depends on the nature of the relief sought in the appeal.
If the Court can deal with the matter in controversy so far as regards the rights and interest of the appellant and the respondents other than the deceased respondent, it has to proceed with the appeal and decide it; otherwise it will have to refuse to proceed further with the appeal and therefore dismiss it.
Ordinarily, the consideration which will weigh with the court in deciding upon the question whether the entire appeal had abated or not will be whether the appeal between the appellants and the respondents other than the deceased respondent can be said to be properly constituted or can be said to have all the necessary parties for the decision of the controversy before the court and the tests to determine this have been described thus: (a) when the success of the appeal may lead to the court 's coming to a decision which will be in conflict with the decision between the appellant and the deceased respondent and therefore which would lead to the court 's passing a decree which will be contradictory to the decree which had become 637 final with respect to the same subject matter between the appellant and the deceased respondent; (b) when the appellant could not have brought the action for the necessary relief against those respondents alone who are still before the court and (c) when the decree against the surviving respondents, if the appeal succeeds, be ineffective that is to say it could not be successfully executed.
The abatement of an appeal against the deceased respondent means not only that the decree between the appellant and the deceased respondent has become final but also as a necessary corollary that the appellate court cannot in any way modify that decree directly or indirectly.
When the decree in favour of the respondents is joint and indivisible, the appeal against the respondents other than the deceased respondent cannot be proceeded with if the appeal against the deceased respondent has abated.
In the present case the appeal against N alone was not pro perly constituted when the appeal against L had abated and the State appeal against N alone could not proceed.
|
l Appeals Nos.
67 to 75 of 1959.
Appeals by special leave from the judgment and order dated May 7, 1954 of the U.P. Board of Revenue, in Second Appeals Nos.
53 to 61 of 1945 46.
section P. sinha, J. P. Goyal and Sadhu Singh, for the appellants.
Bishan Narain and E. L. Mehta, for the respondents.
February 15.
The Judgment of the Court was delivered by RAGHUBAR DAYAL, J.
These nine.
appeals, by special leave, are against the orders of the Board of Revenue, Uttar Pradesh, dismissing nine 219 second appeals filed by the appellants in circumstances hereinafter, mentioned, on the ground that the orders of the First Appellate Court in three other connected first appeals had become final and operated as res judicata.
Khub Chand had three sons Karan Singh, Hoshiar Singh and Mukhtiar Singh.
Each of these brothers instituted four suits.
Hoshiar Singh instituted suit No. 48 of 1944 under section 175 of the U.P. Tenancy Act, 1939 (U.P. XVII of 1939), against one Bhartu, suit No.49 against Har Gyan, Mukhtiar Singh and Data Ram, sons of Sis Ram, brother of Bhartu, suit No.50 against Har Gyan and Mukhtiar Singh, sons of Sis Ram, and suit No. 51 against one Banwari.
Karam Singh similarly instituted suits Nos. 63, 61, 60 and 62 against similar defendents respectively.
Mukhtiar Singh 's suits against those defendants, respectively.
were Nos.67, 65, 64 and 66.
Each of these suits was for different sets of plots.
The allegations of the plaintiffs in each suit and the contentions of the defendent in each suit were similar and therefore similar issues were framed in each suit and all the suits were tried together and were disposed of by one common judgment.
Twelve decrees were, however, prepared.
Against the twelve decrees the defendants judgment debtors in each decree filed twelve first appeals in the Court of the Additional Commissioner, Meerut Division.
The Additional Commissioner dismissed three appeals for default, These were the appeals which were filed against Hoshiar Singh, Karam Singh and Mukhtiar Singh by Banwari.
The Additional Commissioner heard the remainmg nine appeals on merits and dismissed them.
The defendants judgment debtors then filed nine second appeals before the Board of Revenue.
They were dismissed as barred by res judicata on May 7, 1954.
The applications for special leave were filed in this Court in November 1954.
Special leave was 220 granted on April 18, 1955.
By the time the appeals came up for hearing, some other events took place and as a result of them the respondents filed an application for adducing additional evidence under O.XLV, rr. 1 to 5, Supreme Court Rules in November 1959, and also included in their statement of case a narration of those events and their effect.
It appeals that the villages in which the lands in suit were situate, come under Consolidation Operations under the U.P. Consolidation of Holding.s Act, 1953(U. P. V of 1954), hereinafter called the Act, sometime in July 1954, when a declaration was issued by the State Government under s.4 of the Act to the effect that it had been decided to make a Scheme of consolidation for that area.
In December 1954, a statement of plots and tenure holders was prepared and in May 1955 a statement of proposals under s.19 was prepared; in August 1955 final statements in chak form 25 were issued.
On October 17, 1955, the State Government published a notification under s.52 of the Act.
section 52 of the Act then read: "As soon as may be after the tenure holders have entered into possession of their new holding in pursuance of ;Section 26, the State Government shall issue a notification in the Official Gazette that the Consolidation opera tions have been closed in the village and the village shall then cease to be under consolidation operation.
" It is thus seen that this village remained under Consolidation operations from some time in July 1954 to October 17, 1955.
The appellants did not file any objections before the Consolidation authorities under s.12 of the Act disputing the correctness or the nature of the entries in the statement prepared under s.11 or under s.20 against the statement of proposals prepared under s.19 221 Section 21 provides for the fixing of a date for the enforcement or the consolidation scheme.
Section 25 provides for the issuing of the allotment order showing the new fields allotted to each tenure holder in accordance with the said scheme.
Section 26 provides for the tenure holders to enter into possession of the fields allotted to them on or after a certain date.
Section 27 provides for the preparation of new village maps, khasra and the record of rights, in accordance with the Provisions of the U. P. Land Revenue Act, 1901.
Its sub s (2) provides that all entries in the record of rights prepared under sub s.(1) small be final and conclusive, Section 30 provides that the rights, title, interest and liabilities of the tenure holder in his original holding shall be extinguished and he will have the same rights, title, interest and liabilities subject to modification, if any, in the plots allotted to him under s.25 with effect from the date on which he enters into possession of the plots allotted to him.
It was contended for the respondents that in view of these consolidations operation and s.5 of the Act, as amended up to date, these appeals have become infructuous as this Court cannot pass any orders on the merits of the controversy.
The Act has been amended several times since it was origi nally enacted.
The various amendina Acts are: Act XXVI of 1954 which came into force on December 13, 1954; Act XIII of 1955 which me into force on June 10, 1955; Act XX of 1955 whcih came into force on October 21, 1955; Act XXIV of 1956 which came into force on July 3, 1956; Act XVI of 1957 which came into force on May 25, 1957 and Act XXXVIII of 1958 which came into force on November 19, 1958.
During the period the village in suit was under Consolidation Operations, the Act applicable 222 to the proceedings was the Original Act as amended by Acts XXVI of 1954 and XIII of 1955.
The other Acts came into force subsequent to the issue of the notification under s.52 of the Act.
It is necessary to bear this in mind in view of the contentions raised.
Section 5 of Act V of 1954 was as follows (1) Upon the publication of the declaration under section 4, the district or the local area; as the case may be, shall be deemed to be under consolidation operations from the date of such publication until this publication of the Notification under section 52 in the official Gazette to the effect that the consolidation operations have been closed.
(2) Where a district or any other local area is under consolidation operations, the duty of preparing and maintaining the maps the khasra and the annual register under Chapter ITI of the U.P. Land Revenue Act, 1901, shall stand transferred to the Settlement Officer (Consolidation), and thereupon all the powers conferred on the Collector, Assistant Collecter and the Tahsildar under the said Chapter shall, so long as that district or the area remains under consolidation operations be exercised respectively by the Settlement Officer (Consolidation), Consolidation Officer and the Assistant Consolidation Officer.
" Act XXVI of 1954 deleted the last portion of sub s.(2) commencing from the words "and there.
No change in this section was made by the Amending Act XIII of 1955.
There was therefore nothing in this section which in any way would have affected the hearing of these appeals, during or after the consolidation operations.
223 Section 12 of Act V of 1954 provided for the publication of the statement of plots and tenure holders prepared under section II and for filing objections disputing the correctness or nature of entries in it.
Its subsections (4), (5) and (6) were : " (4) Where the objection filed under sub section (1) involves a question of title and such question has not already been determined by a competent court, the Consolidation Officer shall refer the question for determination to the Arbitrator.
(5) All suits or proceedings in the court of first instance or appeal in which a question of title in relation to same land has been raised, shall be stayed.
(6) The decision of the Arbitrator under sub section (4) shall be final.
" There was nothing in these sub sections which provided as to how the suits or proceedings stayed been under sub section (5) would be decided or how matters in connection of which no objection bad raised under s.12 would be dealt with.
These provisions too did not affect the pending Appeals as no objection had been filed under s.12.
Act XXVI of 1954 amended sub s.(4) to the effect that the objection coming under sub s.(4) would be referred to the Civil Judge, who will then refer it to the Arbitrator, and substituted another sub section in the place of original sub s.(5).
The substituted sub s.(5) read : "(5) Upon the making of reference under sub section (4) all suits or proceedings in the Court of first instance, appeal, reference or revision in which the question of title in relation to the same land has been raised, shall be stayed." This amendment in sub s.(5) stayed the suits and 224 proceedings not only in the Courts of the first instance and appeal but also in the Courts of reference and revision, but did not affect these appeals.
Sub s.(2) of s.27 as originally enacted, was not amended up to the 17th October, 1955.
Its sub s.(2) made the entries in the record of rights Prepared under sub s.(1) final and conclusive. 'We are not concerned with its effect in these appeals.
Section 49 of the Act bars the jurisdiction of Civil Courts.
This section, before its amendment by Act XTTT of 1955, which came into force on June 10, 1955, did not bar the institution of a suit or proceedings in the, revenue court.
It did so after the amendment.
;,) appeals had been filed long before the amendment.
We may state that no objection was raised on behalf of the respondent to the effect that these appeals could not have been instituted, but we have discussed that matter, in view of the fact that the appeals were filed after the State Government had made a declaration under s.4 of the Act.
We have not been referred to any provision in these, Acts, viz. Act V of 1954, Act xxvr of 1954 and Act XIII of 1955 which would lead to the conclusion that these appeals have become infructuous.
Act XX of 1955 made an amendment in s.27 of the Act.
The amendment however does not affect the question before us.
Act XXIV of 1956 which came into force on July 3, 1956, substituted a new section 5 in the place of the old.
The substituted section 5 read : "5.
When the declaration under section 4 has been published in the Gazette, the consequences as hereinafter set forth shall, 225 from the date specified thereunder till the publication of the notification under section 52 in the Official Gazette to the effect that the consolidation operations have been closed, ensue in the area to which the declaration relates, namely ; (a) the district or the local area, as the case may be, shall be deemed to be under consolidation operations from the specified date, and the duty of preparing and maintaining the khasra and the annual Register under Chapter III of the U.P. Land Revenue Act, 1901, shall stand transferred to the Settlement Officer (Consolidation), and (b) all proceedings for the correction of any such records pending before any court or authority shall be stayed but without pre judice to the right of the persons affected to agitate the question before the Assistant Consolidation Officer under sub section (3) of Section 8, or in proceedings commenced under and in accordance with section 10" Clearly, cl.
(b) does not apply to these appeals as they have not arisen out of proceedings for the correction of village records.
Act XXIV of 1956 made certain amendments in section 11 with which we are not concerned.
We are not also concerned with the amendments this Act made in subs.
(1) of section 12.
It substituted a new sub section (5) and added sub section
These new subsections (5) and (7)are: "(5) Upon the publication of the statement under section 11, all suits or proceedings in the Court of first instance, appeal, reference or revision, in which the question of title in respect of any plot mentioned in the statement with reference to clause (c) of sub section (1) of section II has been raised, shall be 226 stayed to the extent it relates to such plot and shall thereafter be disposed of in the manner prescribed.
(7) A question of title in respect of any plot mentioned in the statement in clause (c) Of sub section 1 of section 11, which might and ought to have been raised under subsection (1) but had not been raised, shall not be raised in any objection filed under subsection (2) of section 20, or under sub section (1) of section 34.
" It is for the first time that such suits and proceedings in the various Courts had to be stayed in which a question of title in respect of any plot mentioned in the statement with reference to el.
(c) of sub section
(1) of section 11 had been raised and that these stayed suits or proceedings were to be decided subsequently in the manner prescribed, i. e., in the manner laid down under rules framed under the Act.
These provisions of sub section
(5) do not affect the appeals as they were prospective in operation and could apply to those cases only in which at atements under section 11 were filed after the amendment had been made.
The amendments made by the other sections of this Act and Act XVI of 1957, do not affect the hearing of the appeals in any way.
Thereafter case Act XXXVIII of 1958.
This Act again substituted a new section 5, and the relevant portion of the substituted section reads: 5.Upon the publication of the notification under section 4 in the Official Gazette, the consequences, as hereinafter set forth, shall, subject to the provisions of this Act, from the date specified thereunder till the publication of notification under section 52 or sub section (1) of section 6, as.
the case may 227 be, ensue in the area to which .
the declaration relates; namely x x x x x (b) (1) all proceedings for correction of the records and all suits for declaration of rights and interest over land , or for posses sion of land or for partition, pending before any authority or court, whether of first ins tance, appeal or reference or revision, shall stand stayed, but without prejudice to the right of the persons affected to agitate the right or interests in dispute in the said pro ceedings or suits before the consolidation au thorities under and in accordance with the provisions of this Act and the Rules made thereunder: (ii) the findings of consolidation autho rities in proceedings under this Act in respect of such right or interest in the land, shall be acceptable to the authority or court before whom the proceeding or suit was pending which may, on communication thereof by the parties concerned.
proceed with the proceeding or suit, as the case may be; These provisions operate prospectively.
The consequences mentioned in section 5 ensue upon the publication of the notification under section 4 in the Gazette and continue up to the publication of the notification under section 52.
They do not continue thereafter and could not operate on these cases in which the notification under section 52 was issued on the 17th October 1955.
They do not therefore bar the hearing of these appeals.
These a peals have not.
therefore become infructuous.
Sections 7, 8, 9, 10, 11, 11 A, 11 B, 12, 12 A, 12 B, 12 C and 12 D have been substituted by new section which apply to proceedings taken in consolidation operations subsequent to the coming into force of 'the Amending Act XXXVIII of 1858.
Sub section
(1) of 228 is.
12 makes it clear that the matters mentioned in that sub section cannot be raised subsequent to the date of notification under section 52.
There has been no material change made in as. 27 and 30, but section 49 now reads: "49.
Notwithstanding anything contained in any other law, for the time being in force the declaration and adjudication of rights of tenure holders in respect of land lying in an area, for which a declaration has been issued under section 4, or adjudication of any other right arising out of consolidation proceedings and in regard to which a proceeding could or ought to have been taken under this Act, shall be done in accordance with the provisions of this Act and no civil or revenue court shall entertain any suit or proceeding with respect to rights in such land or with respect to any other matters for which a proceeding could or ought to have been taken under this Act.
" This now provides that the adjudication of ' rights of tenure holders in respect of land lying in an area under consolidation operations shall be done in accordance with the provisions of the Act.
This leads practically to the same result to which cl.
(ii) of sub section
(b) of section 5 leads to.
The provisions of this section are not expressly limited to the period between the declaration under section 4 and the notification under section 52, but can be so construed as they relate back to section 5 (b) (ii) of the Act as the declara tion and adjudication of rights have to be done in accordance with the provisions of the Act.
Further the amended provision would apply to the proceedings regarding rights in land in the area for which a declaration under section 4 has been issued after the amendment.
We are therefore of opinion that these appeals have not become infructuous.
229 On the merits, we are of opinion that the Board of Revenue erred in holding that the appeals before it were barred by res judicata.
It is essential for any previous Adjudication of a point to bar its consideration second time that, the previous adjudication must have been between the same parties and that it be with respect to the same matter.
The three suits in which judgments became final were against one Banwari and ', not against any of the present appellants.
The matter in issue in those three suits were also different 'from that in the suits which have given rise to these appeals.
Each of the twelve suits related to different plots.
A common judgment on account of similar questions being raised for decision in the different suits, does not always make that judgment amount to one judgment in those suits.
Such a judgment will ordinarily be deemed to be really so many judgments as the suits disposed of by it.
This Court expressed a similar view in Badri Narayan Singh vs Kamdeo Prasad Singh(1).
We therefore allow the appeals, set aside the order of the Court below and remand the appeals to it for further hearing and decision according to law. ' We may make it clear that it can take into consideration the effect of the Consolidation Act and proceedings thereunder, after giving an opportunity to the parties to submit what, they like in regard to them costs to abide the result.
Appeals.
| K, H and M filed four suits each against four sets of defendants in respect of different sets of plots under section 175 U. P. Tenancy Act, 1939.
Since similar points were involved the twelve suits were tried together and were disposed of by a common judgment decreeing them.
Twelve decrees were prepared and the defendants preferred twelve appeals to the Additional Commissioner.
Three appeals by one set of the defendants B were dismissed for default and the remaining nine were dismissed on merits.
Against the dismissal of the nine appeals on merits the three sets of defendants preferred nine second appeals before the Board of Revenue but they were dismissed as barred by res judicata on May 7, 1954.
In November, 1954, the appellants filed petitions for special leave before the Supreme Court and on April 18, 1955, special leave was granted.
In July 1954, the villages in Which the lands in suit were situate came under consolidation operations under the U. P. Consolidation of Holdings Act, 1953, and the operations were completed by the publication of a notification 218 under section 52 of the Act on October 17, 1953.
The appellants did not file any objections before the consolidation authorities.
The respondent contended that in view of the consolidation operations the appeals before the Supreme Court had become infructuous.
Held, that the appeals had not become infructuous.
There was nothing in the U. P. Consolidation of Holdings Act, 1953, as it stood during the period the village in suit was under consolidation operations which could have in any way affected these appeals, during or after the consolidation operations.
The subsequent Amending Acts did not affect the appeals as they were prospective in operation and applied only to cases where the consolidation operations were started after the Amending Acts had come into force.
Held, further that the appeals before the Board of Revenue were not barred by resjudicata.
It was essential for the bar of res judicata that the previous and judication must have been between the same parties.
The three suits in which judgments had become final were against one B and not against any of the appellants .
The matter in issue in those three suits was different from that in the other nine suits as each of the suits related to different plots.
The common judgment was really twelve judgments in the twelve suits.
Badri Narayan Singh vs Kamdeo Prasad Singh, (1962) 3. section C. R. 759 referred to.
| The respondents in all these appeals are "extra depart mental agents" within the meaning of Rule 2(b) of the Posts and Telegraphs Extra Departmental Agents (Conduct of Service) Rules, 1964 issued under the authority of the Government of India.
They were either dismissed or removed from service during the period between January 1, 1966 and June 18, 1974, admittedly without complying with the provi sions of article 311(2) of the Constitution.
The question in each case is whether the respondent held a "civil post" as contemplated in article 311(2) of the Constitution.
The High Court of Kerala, Andhra Pradesh & Orissa held that the respondents held a civil post under the Union of India and the orders terminating their services in violation of article 31.1(2) of the Constitution were invalid.
Dismissing the appeals the Court, HELD: (1) An "extra departmental agent" held a "civil post" and his dismissal or removal would be invalid, if there was non compliance with article 311 (2) of the Constitu tion.
[680 B C. 682 E] (2) An extra departmental agent is not a casual worker, but he holds a post under the administrative control of the State.
It is apparent from the 1964 Rules that the em ployment of an extra departmental agent is in a post which exists "apart from" the person who happens to fill it at any particular time.
Though such a post is outside the regular civil service, there is no doubt it is a post under the State.
[681 E F] State of Assam & Ors.
vs Kanak Chandra Dutta ; @ 682 applied.
(3) The 1964 rules make it clear that these extra departmental agents work under the direct control and super vision of the authority who obviously have the right to control the manner in which they must carry out their du ties.
There can be no doubt, therefore, that the relation ship between the Postal Authorities and the extra departmen tal agents are of master and servant.
[662 C E] Venkataswamy vs Superintendent, Post Offices, AIR 1957 Orissa 112; V. Subbaravalu vs Superintendent of Post Offices, AIR 1961 Madras 166, held inapplicable.
| It appears that proceedings under r. 12(5) of the Central Sales Tax (Orissa) Rules 1957 and under sub section
(4) of section 12 of the Orissa Sales Tax Act, 1947 were initiated against the petitioners for the assessment year 1980 81 in relation to assessment of tax on sales in the course of inter state trade and commerce under the and inside sales effected during the year in question under the Orissa Sales Tax Act, 1947.
Despite repeated opportunities to get themselves ready for the assessment of tax and to produce their account books and other documents, they sought adjournments on the one pretext or another.
Eventually the Assistant Sales Tax Officer, Cuttack II circle, Cuttack before whom the assessment proceedings were pending, refused to grant any further adjournment and proceeded to best judgment assessment and treated the gross turnover of Rs. 7,13,94,903.63 p. as returned by the petitioners for purposes of the to be their taxable turnover.
Similarly, he treated the gross turnover of Rs. 2,02,07,852.65 p returned by the petitioners as representing inside sales vis a vis the State of Orissa to be their taxable turnover.
After allowing adjustment of Rs. 27,88,388.47 p paid by the petitioners, the learned Sales Tax Officer raised a demand for the payment of a sum of Rs. 43,57,101.89 p towards tax on sales in the course of inter State trade and commerce payable under the and after allowing adjustment of Rs. 1,08,480.11 p paid by the petitioners, he raised the demand for payment of a sum of Rs. 13,06, 069.60 p as tax payable under the Orissa Sales Tax Act, 1947.
Thus the petitioners were faced with a total demand of Rs. 56,57,171.49 p for the assessment year 1980 81.
The petitioners instead of preferring appeals under sub s (1) of section 23 of the Act filed petitions before the High Court under article 226 of the Constitution challenging the validity of the two orders of assessment.
The High Court was not satisfied that this was a case of inherent lack of jurisdiction or any violation of principles of natural justice and accordingly held that they were not entitled to invoke the extraordinary jurisdiction of the High Court under article 226 of the Constitution, Dismissing the Petitions, ^ HELD: In the provenance, of tax where the Act provides for a complete machinery which enables an assessee to effectively raise in the courts the question of the validity of an assessment denied an alternative jurisdiction 744 to the High Court to interfere under article 226 of the Constitution.
The phrase "made under the Act" describes the provenance of the assessment; it does not relate to its accuracy in point of law.
The use of the machinery provided by the Act, not the result of that use, is the test.
[748 G H; 749 A] Under the scheme of the Act, there is hierarchy of authorities before which the petitioners can get adequate redress against the wrongful act complained of.
They have the right to prefer an appeal before the prescribed authority under sub section
(1) of section 23 of the Act.
If they are dissatisfied with the decision in the appeal, they can prefer a further appeal to the Tribunal under sub section
(3) of section 23 of the Act, and then ask for a case to be stated on a question of law for the opinion of the High Court under section 24 of the Act.
The Act provides for a complete machinery to challenge an order of assessment, and the impugned orders of assessment can only be challenged by the mode prescribed by the Act and not by a petition under article 226 of the Constitution.
[751 F H] Raleigh Investment Company Limited vs Governor General in Council, 74 IA 50, followed.
K.S. Venkataraman & Co. vs State of Madras ; and State of Uttar Pradesh vs Mohammad Nooh ; ; distinguished.
The question whether a provision is ultra vires or not cannot obviously be decided by any of the authorities created by the Act and therefore cannot be the subject matter of a reference to the High Court or a subsequent appeal to this Court.
No such question arises in a case like the present where the impugned orders of assessment are not challenged on the ground that they are based on a provision which is ultra vires.
This is a case in which the entrustment of power to assess is not in dispute and the authority within the limits of his power is a Tribunal of exclusive jurisdiction.
The challenge is only to the regularity of the proceedings before the learned Sales Tax Officer as also his authority to treat the gross turnover returned by the petitioners to be the taxable turnover.
Investment of authority to tax involves authority to take transactions which in exercise of his authority the taxing officer regards as taxable and not merely authority to tax only those transactions which are, on a true view of the facts and the law, taxable.
There is no justification for extending the principles laid down in Raleigh Investment Company 's case or Mohammad Nooh 's case to a case like the present where there is an assessment made by the learned Sales Tax Officer under the Act.
[749 E H; 753 A B] The question whether another adjournment should have been granted or not was within the discretion of the learned Sales Tax Officer and is a matter which can properly be raised in an appeal under sub section
(1) of section 23 of the Act.[751 D] The rule laid down in Mohammad Nooh 's case which requires the exhaustion of alternative remedies is a rule of convenience and discretion, rather than a rule of law.
[751 E] 745 The Act provides for an adequate safeguard against an arbitrary or unjust assessment.
The petitioner have a right to prefer an appeal under sub section
(1) of section 23 of the Act subject to their payment of an admitted amount of tax as enjoined by the proviso thereto.
As regards the disputed amount of tax, they have the remedy of applying for stay of recovery to the Commissioner of Sales Tax under cl.
(a) of the second proviso to sub section
(1) of section 13 of the Act.
It is for the Commissioner to decide whether or not there should be such stay on such terms and conditions as he thinks fit, looking to the nature of the demand raised in the facts and circumstances of the present case.
[752 E F; 753B C]
| The appellant was a chartered accountant and a partner of a firm of auditors.
This firm acted as auditors of two companies, among others, registered under the Indian , the entirety of the shares of one of which are owned by the Union Government and the entirety of the shares of the other by the West Bengal Government.
The appellant was declared elected to the Lok Sabha.
His election was challenged by two voters of the constituency by means of an election petition.
The main ground raised was that the appellant was at the relevant period the holder of an office of profit under the Government of India as well as the State Government and hence he was disqualified from standing for election under article 102(1)(a) of the Constitution.
The Election Tribunal accepted this contention and declared the election of the appellant void.
The appellant filed an appeal before the High Court in which he did not succeed.
The present appeal was by virtue of a certificate granted by the High Court under article 133(1)(c) of the Constitution.
It was contended before this Court that on a true construction of the expression "under the Government of India or the Government of any State" occurring in cl.
(a) of article 102 (I.) of the Constitution the appellant could not be said to hold an office of profit under the Government of India or the Government of West Bengal.
It was argued that the various tests, namely, who has the power to appoint, who has the right to remove, who pays the remuneration, what are the functions and who exercises the control should all co exist and each must show subordination to the Government.
The fulfillment of some of the tests alone, would not be sufficient to determine that a person holds an office of profit under the Government.
It was contented on behalf of the respondent that the tests were not cumulative and that the court should look to the substance rather than to the form.
Held : (i)For holding an office of profit, under the Government a person need not be in the service of the Government and there need not be any relationship of master and servant between them.
312 (ii)The examination of the various provisions of the Com panies Act, 1956 (sections 224, 227, 618 and 619) showed that so far as the two companies in question were concerned the appellant was appointed as an auditor by the Central Government, was removable by the Central Government, that the Comptroller and the Auditor General of India exercised full control over him and that his remuneration was fixed by the Central Government under sub section
(8) of section 224 of the though it was paid by the companies concerned.
(iii)Where the several elements, the power to appoint, the power to dismiss, the power to control and give directions as to the manner in which the duties of the office are to be performed and the power to determine the question of remuneration are all present in a given case then the officer in question holds the office under the authority so empowered.
It is not necessary that all these must co exist nor is the fact that the source from which the remuneration is paid is not from public revenue decisive.
(iv)The appellant held an office of profit under the Government of India within the meaning of article 102(1)(a) of the Constitution of India and as such he was disqualified for being chosen as a member of Parliament.
Maulana Abdul Shakur vs Rikhab Chand, [1958] S.C.R. 387, distinguished.
Ramappa vs Sangappa, ; , referred to.
| The respondents filed a suit against the petitioner in 1954 for the possession of certain property and for mesne profits and obtained decree in their favour.
The petitioner 's appeal to the High Court was dismissed in April 1959 and a petition for special leave to appeal to this Court was granted in June, 1959.
Thereafter, the 7th respondent died in November 1959.
The petitioner filed the present applications in October 1964 for bringing on record the legal representatives of the 7th respondent and for condonation of delay on various grounds.
It was also contended on behalf of the petitioner that in view of the fact that after the preliminary decree for mesne profits had been passed, the respondents/plaintiffs brought the heirs and legal representatives of the deceased 7th respondent on record in the final decree proceedings within the time prescribed, and as the legal representatives were brought on record at one stage of the suit on the basis of the rule laid down by the Privy Council in Brij Inder Singh vs Kanshi Ram, 44 I.A. 218, no question of abatement would arise in respect of the appeal; that the final decree proceedings are a stage in the suit and the appeal is another stage in the suit and, therefore, the bringing on record of the legal representatives in one stage of the suit will enure for all stages of the suit.
HELD: (i) On the facts of the case there were no sufficient grounds for condoning the delay in bringing the legal representatives of the 7th respondent on the record.
(ii) The order bringing the legal representatives of the respondent on record in the final decree proceedings cannot enure for the benefit of the appeal filed against the preliminary decree.
The appeal therefore abated so far as the 7th respondent was concerned.
[217D] An order bringing the legal representatives of a deceased party on the record passed at the stage of an interlocutory application in a suit, or passed while an appeal is pending where the suit is subsequently remanded to the trial court or if passed while an appeal is pending against an interlocutory order in passed while an appeal the subsequent stages of the suit ' in all that suit, would enure for made at one stage of the suit be it the suit these.
cases the order is final appeal against the interlocutory order or final order in the suit, for here the appeal is only a continuation of the suit.
But the same legal position cannot be invoked where an order is made in a suit subsequent to the filing of an appeal at an earlier stage.
Such an order cannot be Projected,backwards into the appeal that has already been filed so as to become an order in that appeal [216F 217D] Brij Inder Singh vs Kanshi Ram, 44 I.A. 218 distinguished.
Shankarnaraina Saralaya vs Laxmi Hengsu, A.I.R. 1931 referred to.
N)3S.C.I. 1 212
| The Income tax Officer, Madura, issued notice under section 18A (1) of the Indian Income Tax Act, 1922, for payment of advance tax.
R, the then manager of the Hindu Undivided family availed of the option to submit a revised estimate for the years 1946 47 and 1948 49.
The assessment of these two years were completed respectively in November, 1950 and February, 1951, as the total income assessed far exceeded the estimate submitted by R, the Income tax Officer ordered the respondent, the legal representative of R, to pay the interest under section 18A (6) of the Act.
On appeal, the Income tax Appellate Tribunal reduced the income and the Income tax Officer in giving effect to the said order reduced the interest and called upon the respondent to make payment.
The respondent asked the Income tax Officer not to levy interest under section 18A (6), submitting that the levy was illegal and unjustified, alternatively he requested that the interest be waived by virtue of the powers vested on the Income tax Officer under proviso 5 to section 18A (6) which was added by section 13 of Act 25 of 1953, with retrospective effect from April 1952.
The Income tax Officer and the Inspection Assistant Commissioner declined to accede to the request.
The respondent then moved the High Court at Madras for a writ under article 226 cancelling the levy of interest on the ground among others that refusal by the Revenue authorities to cancel the levy was arbitrary and not based on any judicial exercise of the discretion vested by the Act.
The High Court upheld the plea, ordered the Income tax Officer to decide whether the respondent had made out a case for the exercise of the discretion.
The only question in the appeal before the Supreme Court was whether benefit of the said 5th proviso to section 18A (6) may be granted in respect of assessments of income which were completed by the Income tax officer before April 1952.
614 ^ Held, that the jurisdiction under 5th proviso of section 18A (6) of the Income tax Act may be exercised by the income tax Officer in all cases which were pending on April 1, 1952 before him or any superior authority having under the Act power to modify the assessment of income.
| The Sales Tax Officer assessed tax for the assessment years 1958 1959 and 1959 60, on the respondent assessee by two separate orders.
The assessee filed appeals against those orders before the Appellate Authority.
On May 10, 1963, when the appeals came up for hearing, the assessee was absent.
The appeals were, therefore.
dismissed in default by virtue of Rule 68(5) of the U.P. Sates tax Rules.
Sub rule (6) of Rule 68.
provided for setting aside such dismissal and for re admission of the appeal.
On the same day (May 10, 1963), the assessee made two applications in accordance with Sub rule (6) for setting aside the dismissal.
During the pendency of those applications, Subrule (5) of Rule 68 was declared ultra vires the rule making authority by Manchanda J. of the High Court who further held that the Appellate Authority could not dismiss an appeal in default but was bound to decide it on merits even though the appellant be absent.
When these applications under r. 68(6) came up for hearing.
on 20 10 64, the Appellate Authority dismissed them outright in view of the ruling of Manchanda J. Against the order of dismissal of his appeals, the assesees on 16 12 1964 filed two revision petitions under section 10 of the Sales tax Act, before the [Judge (Revisions) Sales tax].
These revisions petitions having been filed more than 18 months after the dismissed of the appeals which was the maximum period of limitation prescribed by sub section
(3) of section 10 were prima facie time barred.
They were however, accompanied by two application 's in which the assessee prayed for exclusion of the time spent by him in prosecuting the abortive proceedings under r. 68(6) for setting aside the dismissal of his appeals.
The Revisional Authority found that the assessee had been pursuing his remedy under r. 68(6) with due diligence and in good faith.
It therefore excluded the time spent in those proceedings from computation of limitation by applying section 14, Limitation Act and in consequence, held that the revision petitions were within time.
On the motion of the Commissioner of Sales tax.
the Judge (Revisions) Sales *ax made two references under section 11(1) of the Sales_tax Act to the High Court for answering the following question of law "Whether under the Circumstances of the case, section 14 of the Limitation Act extended 'the period for filing of the revisions by the time during which the restoration applications remained pending as being prosecuted bona fid.
" The references were heard by a Full Bench of three learned Judges each of whom wrote a separate Judgment.
Dwivedi J. with whom Singh J. agree utter refraining the question held "that the time spent in prosecuting the application for setting aside the order of dismissal of appeals in default can be 744 excluded from computing the period of limitation for filing the revision by the application of the principle underlying section 14(2), Limitation Act.
" Hari Swarup J. was of the opinion : "The Judge (Revisions) Sales tax while hearing the revisions under section 10 of the U.P. Sales Tax Act does not act as a Court but only as a revenue tribunal and hence the provisions of the Indian Limitation Act cannot apply to proceedings before him.
If the Limitation Act does not apply then neither section 29(2) nor is 14(2) of the Limitation Act will apply to proceedings before him." The learned Judge was further of the view that the principle of section 14(2) also, could not be invoked to extend the time beyond the maximum fixed by the Legislature in sub section (3 B) of section 10 of the Sales tax Act.
These appeals have been preferred on the basis of the special leave granted by this court.
Allowing the appeals, HELD : (i) If the legislature wilfully omits to incorporate something of an analogous law in a subsequent statute, or even if there is a casus omissus in a statute, the language of which is otherwise plain and unambiguous, the Court is not competent to supply the omission by engrafting on it or introducing in it, under the guise of interpretation, by analogy or implication, something what it thinks to be.
a general principle of justice and equity.
To do so "would be entrenching upon the preserves of Legislature", the primary function of a court of law being jus dicere and not jus dare.
[749D E] (ii) If the ' legislature in a special statute prescribes a certain period of limitation for filing a particular application thereunder and provides in 'clear terms that such period on sufficient cause being shown, may be extended, in the maximum, only upto a specified time limit and no further, then the tribunal concerned has no jurisdiction to treat within limitation, an application filed before it beyond such maximum time limit specified in the statute, by excluding the time spent in prosecuting in good faith and due diligence any prior proceeding on the analogy of section 14(2) of the Limitation Act.
[751D E] Ramdutt Ramkissen Dass vs E. D. Sesson & Co. A.I.R. 1929, P.C. 103 and Purshottam Dass Hassaram vs Impex (India) Ltd. A.I.R. 1954 Bom.
309, referred to.
(iii) In view of the pronouncements of this Court in Shrimati Ujjani Bhai vs State of U.P., and jagannath Prasad vs State of U.P. ; , there is no room for argument that the Appellate Authority and the Judge (Revisions) exencising jurisdiction under the U.P. Sales Tax Act, 1948, are 'Courts '.
They are merely administrative Tribunals and "not courts".
Section 14, Limitation Act, therefore, does not, in terms apply to proceedings before such Tribunals.
[747E] (iv) Three features of the scheme of provisions of section 10(3)(i) and section 10(3B) are noteworthy.
The first is that no limitation has been prescribed for the suo matu exercise of its jurisdiction by the Revising Authority.
The second is that the period of one year prescribed as limitation for filing an application for revision by the aggrieved party is unusually long.
The third is that the Revising Authority has no discretion to extend this period beyond a further period of six months, even on sufficient cause shown.
The three stark features of the scheme and language of these provisions, unmistakably show that the legislature has deliberately excluded the application of the principles of Ss. 5 and 14 of the Limitation Act.
except to the extent and in the truncated form embodied in sub section
(3 B) of section 10 of the Act.
[748D F]
| The first respondent B purchased a Touzi in 24 Parganas Collectorate at a revenue sale held on 9th January, 1942.
As such purchaser he acquired under section 37 of the Bengal Revenue Sales Act, 1859, the right "to avoid and annul all under tenures and forthwith to eject all under tenants" with certain exceptions which are not material here.
In exercise of that right he gave notices of ejectment and brought a suit in 1946 to evict certain under tenants including the second respondent herein and to recover possession of the lands.
The suit was decreed against the second respondent who preferred an appeal to the District Judge, 24 Parganas, contending that his under tenure came within one of the exceptions referred to in section 37.
When the appeal was pending, the Bill which was later passed as the West Bengal Revenue Sales (West Bengal Amendment) Act, 1950, was introduced in the West Bengal Legislative ASsembly on 23rd March, 1950.
It would appear, according to the "statement of objects and reasons" annexed to the Bill, that great hardship was being caused to a large section of the people by the application of section 37 of the Bengal Land Revenue Sales Act, 1859, in the urban areas and particularly in Calcutta and its suburbs where "the present phenomenal increase in land values has supplied the necessary incentive to speculative purchasers in exploiting this provision (section.
37) o/the law for unwarranted large scale eviction" and it was, therefore, considered necessary to enlarge the scope of protection already given by the section to certain categories of ,tenants with due safeguards for the security of Government revenue.
The Bill was eventually passed as the amending Act and it came into force on 15th March, 1950.
It substituted by section '4 the new section 37in place of the original section 37 and it provided by section 7 that all pending suits, appeals and other proceedings which had not already resulted in delivery of possession, shall abate.
Thereupon B contending that section 7 was void 588 as abridging his fundamental rights under article 19(1)(f) and article 31 .
moved the High Court under article 228 to withdraw the pending appeal and to determine the constitutional issue raised by him.
The appeal was accordingly withdrawn and the case was heard by Trevor Harries C.J and Banerjee J. who, by separate but concurring Judgments, declared section 7 unconstitutional and void.
They held that B 's right to annul under tenures and evict undertenants being a vested right acquired by him under his purchase before section 37 was amended, the retrospective deprivation of that right by section 7 of the amending Act without any abatement of the price paid by him at the revenue sale was an infringement of his fundamental right under article 19 (1)(f) to hold property with all the rights acquired under his purchase, and as such deprivation was not a reasonable restriction on the exercise of his vested right, section 7 was not saved by cl.
(5) of that article and was void.
The State of West Bengal preferred the present appeal to the Supreme Court: Held, per PATANJALl SASTRI C.J. Article 19 (1) (f) has no application to this case.
The word "hold" in the article means own.
The said sub clause (f) gives the citizen of India the abstract right to acquire, own and dispose of property.
This article does not deal with the concrete fights of the citizens of India in respect of the property so acquired and owned by him.
These concrete rights are dealt with in article 31 of the Constitution.
Under the scheme of the Constitution all those broad and basic freedoms inherent in the status of a citizen as a free man are embodied and protected from invasion by the State under cl.
(1)of article 19, the powers of State regulation of those freedoms in public interest being defined in relation to each of those freedoms by cls.
(2) to (6) of that article, while rights of private property are separately dealt with and their protection provided for in article 31, the cases where social control and regulation could extend to the deprivation of such rights being indicated in para.
(ii) of sub clause (b) of cl.
(5) of article 31 and exempted.
from liability to pay compensation under cl.
Held, per PATANJALI SASTRI C.J. (MEHR CHAND MAHAJAN ' and GHULAM HASAN JJ.
concurring) (i) Article 31 protects the right to property by defining the limitations on the power of the State to take away private property without the consent of the owner.
Clauses (1) and (2) of article 31 are not mutually exclusive in scope and content, but should be read together and understood as dealing with the same subject, namely the protection of the right to property by means of limitations on the State 's power referred to above, the deprivation contemplated in clause (1) being no other than the acquisition or taking possession of the property referred to in cl.
The words "taking of . . possession or . . acquisition" in article 31(2) and ' the words "acquisition or requisitioning" in entry 589 No. 33 of List I and entry No. 36 of List II as also the words "acquired or requisitioned" in entry No. 42 of List III are different expressions connoting the same idea and instances of different kinds of deprivation of property within the meaning of article 31(1) of the Constitution.
No cut and dried test can be formulated as to whether in a given case the owner is "deprived" of his property within the meaning of article 31; each case must be decided as it arises on its own facts.
Broadly speaking it may be said that an abridgement would be so substantial as to amount to a deprivation with in the meaning of article 31, .if, in effect, it withheld the property from the possession and enjoyment of the owner, or seriously impaired its use and enjoyment by him or materially reduced its value .
The expression "taking possession" in art 31(2) of the Constitution can only mean such possession as the property taken possession of is susceptible to and need not be actual physical possession. ' (ii) It is difficult to hold that the abridgement sought to be effected retrospectively of the rights of a purchaser at a revenue sale is so substantial as to amount to a deprivation of his property within the meaning of article 31(1) and (2).
No question accordingly arises as to the applicability of el.
5(b)(ii) of article 31 to the Per DAs J. (1) The abridgement of the rights of the purchaser at a revenue sale brought about by the new section 37 amounts to nothing more than the imposition of a reasonable restriction on the exercise of the right conferred by article 19(1)(f)in the interests of the general public and is perfectly legitimate and permissible under cl.
(5) of that article.
It is well settled that the statement of objects and reasons is not admissible as an aid to the construction of a statute but it can be referred to only for the limited purpose of ascertaining the conditions prevailing at the time which actuated the sponsor of the Bill .to introduce the same and the extent and urgency of the.
evil which he.
sought to remedy.
Those are matters which must enter into the judicial verdict as to the reasonableness of the restrictions which article 19(5) permits to be imposed on the exercise of the right guaranteed by article 19(1)(f).
(II) The correlation between article 19(1)(f) and article 31 is that if a person loses his property by reason of its having been compulsorily acquired under article 31 he loses his right to hold that property and Cannot complain that .his fundamental right under article 19(1)(f)has been infringed.
The rights enumerated in article 19(1) subsist while the citizen has the legal capacity to exercise them.
A.K. Gopalan 's case ; and Chiranjit Lal 's case ; referred to.
590 For the purpose of this appeal the.
matter proceeds on the footing that article 19 relates to abstract right as well as to right to concrete property.
(III) The true scope and effect of cls.
(1) and (2) of article 31 is that cl.
(1) deals with deprivation of property in exercise of police power and enunciates the restrictions which our Constitution makers thought necessary or sufficient tO be placed on the exercise of that power, namely, that such power can be exercised only by authority of law and not by a mere executive fiat and that cl.
(2)deals with the exercise of the power of eminent domain and places limitations on the exercise of that power.
These limitations constitute our fundamental rights ' against the State 's power of eminent domain.
(IV) Both these clauses cannot be regarded as concerned only with the State 's power of eminent domain, because then (a) cl (1) would be wholly redundant, for the necessity of a law is quite clearly implicit in cl.
(2) itself; (b) deprivation of property otherwise than by taking of possession ' or acquisition of it will be outside.
the pale of constitutional protection: (c) there will beno protection against the exercise of police power in respectOf property either by the executive or by the legislature.
Chiranjit Lals case ; and The Bihar Zamindari case referred to.
(V) The State 's police power is not confined (a) within the ambit of article 19 forto say otherwise ,will mean: (i) that there is no protection for any person, citizen or non citizen, against exercise of police power by the executive over property; (ii) that although in cls.
(2) to (6) there is protection against ' (iei) legislature in respect of "restriction" there is no protection against "deprivation"; or (h) within d. (5) (b) of article 31 because to say otherwise will mean :__ (i) that the police power which is inherent in sovereignty and does not require express reservation has been unnecessarily defined and reserved; (ii) that the Constitution does not prescribe any test for the 'validity of the laws which fail within the clause and, therefore, the law failing within the clause may be as archaic, offensive and .
unreasonable as the legislature may choose to make it; (iii) that the clause gives no protection against the executive; (iv) that the exercise of the police power by the legislature is confined within ' the very narrow and inelastic limits of the clause and that no beneficial or social legislation involving taking 591 of property can be undertaken by the State if the law falls outside the clause except on terms of payment of compensation; (v) that acqUiSition Of property for which compensation is Usually provided, e.g.; acquisition of land for a public park, hospital Or z 'dearing a slum area will henceforth be permissible without the law providing any compensation; (VI) The argument that if article 31(1) is read as a fundamental right against deprivation of property by the executive and article, 31(2) as laying down the Iimits of State 's power of eminent domain then there will be no real protection.
whatever, for the State will deprive a person of his property without compensation by simply making a law is not tenable because (i) there will certainly be protection against the execute just as the 29th clause of the Magna Charts was a protection against the British Crown; (ii)" 'there is protection under article 31(2) against the legislature in the matter of taking of possession Or.
acquisition for compensations to be given and under cl.
(5) of art, 19 against unreasonable ' restraint: (iii) the absence of protection against the legislature in other cases is not greater than the absence of protection against the legislature in respect of taxation and if the legislature can be trusted in the latter case it may equally he ' trusted in the former case.
(VII) Every taking of a thing into the custody of the State or its nominee does not necessarily mean the taking of possession Of that thing within the meaning of art 31(2) so as to call for compensation.
The police power is exercised in the interest of the community and the power of eminent domain is exercised to .
implement a public purpose and in both cases there is a taking of possession of private, property There is however a marked difference between the exercise of these two sovereign powers.
It is easy to perceive, though somewhat difficult to express, the .distinction between the two kinds of taking of possession which undoubtedly exists.
In view of the wide sweep of the State 's police power it is neither desirable nor possible to lay down a fixed general test for determining whether the taking of possession authorised by any particular.
law falls within one category or the other.
Without, therefore, attempting any such 'general enunciation of any inflexible rule it is possible to say broadly that the aim, purpose and the effect of the two kinds of taking of possession are different and that .
in each "case the provisions of.
the particular law in question" will have to 'be carefully scrutinised in order to determine in which category ' falls the taking of possession authorised by such law. = A consideration of the ultimate aim, the immediate purpose ::and the mode and manner of the taking 'of possession and, the duration". 'for which such possession . is taken, the effect of ' it ' on the rights of 'the person dispossessed and other such like elements must all determine the judicial verdict.
592 (VIII) Treating the right to annul under tenures and to eject under tenants .and decree for ejectment as "property" as used in article 31(2) the State has not acquired those rights for there has been no transfer by agreement or by operation of law of those rights from the respondent B to the State or anybody else.
The purchase being at a Revenue sale to.
which West Bengal Act VII of 1950 applies, the purchaser of the property has been deprived of this right by authority of law and the case falls within cl.
(1) of article 31 and no Within cl.
(2) of article 31.
If the impugned section is regarded as imposing restrictions on the purchaser, such restrictions in the circumstances of the case are quite reasonable and permissible under article 19(5) and, in the premises, the _plea of unconstitutionality cannot prevail and must be rejected.
Pet ' JAGANNADHADAS J. (i) On the assumption that the question raised in this case is one that arisesunder article 19(1)(f)and (5) of the Constitution, the impugned section of the West Bengal Act VII of 1950 is intra vires because the restrictions are reasonable within the meaning of article 19(5) of the Constitution; (ii) that article 19(1)(f) while probably meant to relate tot he natural rights of the citizens comprehends within the scope also concrete property rights.
The restrictions on the exercise of rights envisaged in article 19(5) appear to relate normally, if not invariably to concrete property rights; (iii) that cl.
(1).of article 31 cannot be construed as being either a declaration or implied recognition of the American doctrine of "police power".
It comprehends within its scope the requirement of the authority of law, as distinguished from executive fiat for the exercise of the power of eminent domain, but its scope may well be wider.
"Acquisition" and "taking possession" in article 31(2) cannot be taken as necessarily involving transfer of tide or possession.
The words or phrases comprehend all cases where the title or possession is taken out of the owner and appropriated without his consent by transfer or extinction or by some other process, which in substance amounts to it, the possession in this context meaning such possession as the nature of the property admits and which the law recognizes as possession.
(iv) In the context of article 31(2) as in the cognate context article 19(1)(f) the connotation of the word "property"is limited by the accompanying words "acquisition" and "taking possession".
In the present.
case the right to annul under tenures cannot in itself be treated as property for it is not capable of independent acquisition or possession.
The deprivation of it can only amount to a restriction on the exercise of the fights as regards the main property itself and hence must fall under article 19(1)(f) taken with 19(5).
Butchers Union etc.
Co. vs Crescent City etc.
Co.; , , Punjab Province vs Daulat Singh and Others ([1946] F.C.R. 1), Chiranjit Lal Chauduri vs The Union of India and Others ([1950] S.C.R. 869), A.K. Gopalan vs The State of Madras ([1950] S.C.R. 88), P.D. Shamdasani vs Central Bank of India ([1952] S.C.R. 391), Ministry of State.
for the Army vs Dalziel ; , Pennsylvania Coal Co. vs Mahou , Dwarkadas Shrinivas vs Sholapur Spinning and Weaving Mills Ltd. ([1954] S.C.R. 674), ' State of Madras vs V.G. Row ([1952] S.C.R. 597), Ram Singh vs The State of Madras ([1951] S.C.R. 451), State of Bihar vs Maharajadhiraja Kameshwar Singh of Darbhanga ([1952] S.C.R. 889), Noble State Bank vs Haskeli ; , Eubank vs Richmond (226 U.S. 137), Ioseph Hurtado V. People of California (1883) (10 U.S. 516), referred to.
|
l Appeals Nos.
51 and 52/61 Appeals from the judgment and decree dated September 23, 1959, of the Allahabad High Court (Lucknow Bench) at Lucknow in C. M. Applications Nos. 15 (O.J.) and 16 (O.J.) of 1957 respectively.
C. B. Agarwala and C. P. Lal, for the Appellants (in both the appeals).
A. V. Viswanatha Sastri, and K. L. Arora, for Respondent No. 1 (in both the appeals).
February 7.
The Judgment of the Court was delivered by SARKAR, J.
These two appeals have been heard together.
The, appellants in each case are the State of Uttar Pradesh, for short called U. P. and some of its officers and the respondents in one appeal are Lakshmi Ice Factory and certain of its workers and in the other the Prakash Ice Factory and certain of its workers.
These appeals involve a question of construction of certain provisions of the U. P. , hereafter referred to as the Act.
By a Notification issued on February 10, 1956, the Government of U. P. referred certain disputes which had cropped up between each of the Ice Factories and its respective workmen, to an Industrial Tribunal for adjudication.
The details of these disputes are not material for these appeals.
The Tribunal heard the matters but failed to pronounce its award in open court.
Instead, on November 8, 1956, the Registrar of the Tribunal informed the Ice Factories that the award of the Tribunal had been submitted to the Government.
On December, 15, 1956, the award was published in the U. P. Gazette and it appeared from this publication that the award was dated November 8, 1956.
On December 26, 1956, the Regional Conciliation Offi cer appointed under the Act " called upon the Ice 61 Factories to implement the award immediately.
Thereupon the Tee Factories moved the High Court at Allahabad on January 3, 1957 under article 226 of the Constitution for writs quashing the award and prohibiting the Government and the workmen from taking steps to implement it.
They contended that the award sought to be enforced was a nullity as it had not been pronounced in open court as required by certain rules to which reference will presently be made.
By a judgment passed on September 23, 1959, the High Court allowed the petitions of the Ice Factories and issued writs quashing the Notification publishing the award.
The appeals are against this judgment of the High Court.
Section 3 of the Act gives the Government power in certain circumstances to make provisions by general, or special order (1) for appointing Industrial courts, (2) for referring any industrial dispute for adjudication in the manner provided in the order and (3) for matters incidental or supplementary to the other provisions of the order.
Under this power the Government had issued an Order dated July 14, 1954 and this Order is hereafter called the "Statutory Order.
" It was under powers conferred by the Act read with the Statutory Order that the Government had issued the Notification of February 10, 1956.
In exercise of powers conferred by el. 8 of the Statutory Order the Government had set up the Tribunal.
Clause 9 of the Statutory Order provides for the procedure to be followed by the Tribunal.
Sub clause (7) of this clause is in these terms: "The decision of the Tribunal shall be in writing and shall be pronounced in open court and dated and signed by the member or members of the Tribunal, as the case may be, at the time of pronouncing it.
" Clause 11 of the Statutory Order gives power to Government to refer any industrial dispute to the Tribunal.
Sub clause (9) of el. 9 of the Statutory Order 62 gives power to the Tribunal to make Standing Orders relating to its practice and procedure.
Under this sub clause the Tribunal framed certain Standing Orders.
Standing Order No. 36 provided.
"Judgment shall be pronounced in open court either immediately after the close of the arguments or on a subsequent date of which previous notice shall be given to the parties.
It shall then be signed and dated by the Tribunal.
" Acting presumably under Standing Order No. 36, the Tribunal in the present case bad fixed a date on which it would pronounce its judgment in open court.
This date does not appear on the record but on September 25, 1956, the Tribunal informed the parties that the date for pronouncing the award had been changed to October 9, 1956.
On that date, however, the award was not pronounced in open court, nor was any intimation of any other date for its pronouncement given to the parties.
The lee Factories first came to know of the making of the award from the letter of the Registrar of the Tribunal dated November 8, 1956 earlier referred to.
The award had in fact never been pronounced in open court.
The first question is whether the provisions in sub el.
(7) of el. 9 are imperative.
The High Court held that they were and thereupon quashed the Notification publishing the award.
The appellants contend that the High Court was in error and that the provisions are only directory and that the failure of the Tribunal to pronounce the award in open Court did not result in the award becoming void.
The Ice Factories contend for the contract view.
Mr. Aggarwala for the appellants referred us to the rule of construction stated in Maxwell on Interpretation of Statutes, 10th ed.
at p. 381, which is as follows : ",Where the prescriptions of a statute relate to the performance of a public duty and 63 where the invalidation of acts done in neglect of them, would work serious general inconvenience or injustice to persons who have no control over those entrusted with the duty without promoting the essential aims of the Legislature, such prescriptions seem to be generally understood as mere instructions for the guidance and government of those on whom the duty is imposed, or, in other words as 'directory only".
Ho said that sub el.
(7) of cl. 9 of the Statutory Order imposed a public duty on the Tribunal and as none of the contesting parties to the proceedings before the Tribunal had any control over it, the provision in the Statutory Order as to how the Tribunal is to discharge its duty must be regarded as merely directory and therefore a disregard of that provision by the Tribunal would not render the thing done by it a nullity.
It seems to us that the rule read from Maxwell is not applicable to this case.
It applies only when to hold the prescriptions in a statute as to the performance of a public duty to be imperative would work injustice and hardship without serving the object of the statute.
None of these conditions are present ill the statute now before us.
The rule may be illustrated by reference to the case of Montreal Street Railway Co. vs Normandin(1) which is cited in Maxwell 's book.
That was a case in which certain Statutory provisions as to how the jury list was to be revised had not been followed and the question arose whether the verdict of a jury empannelled out of a list revised in disregard of the provision was a nullity.
It was hold that the verdict was not a nullity as the provision regarding the revision of the jury list was merely directory.
It was further held that the object of the provision was to distribute the burden of jury equally between all liable to it, to secure effective jurors likely to attend and lastly to prevent packing of the jury.
It was said that "It does far less harm to allow cases tried by a jury formed as this one was (1) ; 64 with the opportunities there would be object to any unqualified man called into the box, to stand good, than to hold the proceedings null and void.
So to hold would not, of course, prevent, the courts granting new trials in cases where there was reason think that a fair trial had not been had": P. 176).
The case in hand is wholly different.
The proceedings that were had before the Tribunal would not become null and void if we hold el.
9(7) of the Statutory Order to be imperative,.
A view that the provision was imperative would cause no serious hardship to any one.
The Government can always require the Tribunal to pronounce, its decision in open court extending, if necessary for the purpose.
he time fixed for giving its decision.
Either party of the proceeding can also ask the Government to call upon the Tribunal to pronounce its award in open court.
There is no doubt that the Government will go call upon the Tribunal when the defect s brought to its 'notice for the Government itself referred the matter to the Tribunal for if decision.
As soon as the Tribunal pronounces it,; award in open court, the proceedings will become fully effective.
It is also an accepted rule of construction that enactments regulating the procedure in courts are usually imperative : Maxwell on Interpretation of statues 10th ed.
p. 379.
It further appears to us that the object of the legislature would be defeated by reading cl.
9(7) of the Statutory Order as containing a provision which is merely director vs We now proceed to ascertain that object from the, other provisions in the Statutory Order, the Act and connected legislation.
Section 6 of the IT.
P. Act provides as follows : (1) When an authority to which an industrial dispute has been referred for 65 adjudication has completed it,% enquiry, it shall, within such time as may be ,specified, submit its award to the State Government.
(2) The State Government may. enforce for such period as it may specify all or any of the decisions in the award.
It was under this section that the Tribunal submitted it,% award to the Government and the Government issued the Notification in the Gazette dated December 15, 1956 earlier mentioned and directed that the award be enforced for a period of one year from the date of the publication.
Since the award has to be submitted to the Government by the Tribunal under section 6 of the Act, the award has to be in writing, for a verbal award cannot obviously be submitted to the Government.
It would therefore appear that the provision in sub cle.
(7) of el. 9 of the Statutory Order that the decision of the Tribunal shall be in writing is imperative, This would be an indication that the other provisions in the same sub clause connected with it were intended to be equally imperative.
Then we find that el.
18 of the Statutory Order is in these terms : "The Tribunal or the adjudicator shall hear the dispute and give its or his decision within 180 days (excluding holidays but Dot annual vacations observed by courts subordinate to the High Court) from the date of reference made to it or him by the State Government and shall thereafter as soon as possible, supply a copy of the same to the parties to the dispute. . .
Provided that the State Government may extend the said period from time to time.
" It seems to us that the provision in this clause in clearly mandatory.
The Tribunal has no power to make an award after the time mentioned in it; if it had, the proviso to el.
18 would be wholly unnecessary.
The result therefore is that it is 66 obligatory on the Tribunal to give its decision within 180 days from the date of the reference.
A decision given, that is an award made, beyond this period would be a nullity.
Now when cl. 18 talks of giving a decision, it can only mean giving it in the manner indicated in sub cl, (7) of cl. 9 of the Statutory Order, that is, by pronouncing it in open court, for that is the only manner of giving a decision which that order contemplates.
It would follow that the terms of cl.
9(7) were imperative, for otherwise no one would know whether the terms of el. 18 of the Statutory Order had been complied with, that is to say, no one would know whether the award was void or not.
The provisions of cl.
IS may thus be rendered nugatory by holding el.
9(7) to be only directory.
It would follow that unless the provision as to the pronouncement of the award in open court was mandatory, the intention of the framers of the Statutory Order would be defeated.
Sub clause (2) of cl. 24 of the Statutory Order also leads to the same conclusion.
That sub clause is in these terms : "Clerical or arithmetical mistakes in decisions or awards, or errors arising therein from any accidental slip or omis sion may, within one month of giving the decision or award be corrected by the Tribunal or the adjudicator, either of its or his own motion or on the application of any of the parties.
" Under this rule therefore clerical or arithmetical errors or slips may be corrected within one month of the giving of the decision and the parties have the right to apply for such corrections within that time.
The Tribunal has no right to correct an error beyond that time.
Nor has a party a right to move the Tribunal for making any such corrections after the time has expired.
In order that the intention of cl. 24 (2) may be, given effect to, it is necessary that the date of the 67 giving of the decision should be known.
It cannot promptly be known to the parties unless the award is pronounced in open court.
If any other Manner of the giving of the decision was permissible as would be the result if it was not obligatory to pronounce the decision in open court, then a party may be deprived of its right under cl. 24 to move the Tribunal for correction of errors.
It is for this reason that cl.
9(7) provides that the decision shall be dated and signed at the time of pronouncing it in open court.
This signing and dating of the award after its pronouncement in open court makes it possible to see whether the terms of cls.
18 and 24 (2) have been complied with in any case.
The third thing which to our mind indicates that pronouncement in open court is essential is cl. 31 of the Statutory Order.
That clause is in these terms : "Except as provided in this Order and in the Industrial Disputes (Appellate Tribunal) Act, 1950, every order made or direction issued under the provisions of this Order shall be final and conclusive and shall not be questioned by any party thereto in any proceedings.
" The Industrial Disputes (Appellate Tribunal) Act, 1950 provides for appeals from decisions of certain Industrial Tribunals to the Appellate Tribunal established under it.
Clause 31 therefore makes a decision of the Tribunal on a reference to it final subject to an appeal if any allowed under the Industrial Disputes (Appellate Tribunal) Act, 1950.
Under a. 7 of the Act of 1950, an appeal shall lie to the Appellate Tribunal from any award or decision of an Industrial Tribunal concerning certain specified matters.
Now an Industrial Tribunal mentioned in section 7 includes a Tribunal set up under a State law which law does not provide for an appeal : see a. 2(o)(iii) of the Act of 1950.
The U. P. Act does not provide for any appeal expressly but cl. 31 of the Statutory Order makes a decision of the Tribunal final subject to 68 the provisions of the Act of 1950.
It would therefore appear that an appeal would lie under the Act of 1950 to the Appellate Tribunal constituted under it from a decision of a Tribunal set up under the Statutory Order.
Now under a. 10 of the Act of 1950, an appeal is competent if preferred within thirty days from the date of the publication of the award where such publication is provided for by the law under which the award is made, or from the date of the making of the award where there is no provision for such publication.
Now the U.P. Act or the Statutory Order does not provide for any publication of an award.
Therefore an appeal from the Tribunal set up under the Statutory Order has to be filed within thirty days from the making of the award.
Hence again it is essential that the date of the making of the award shall be known to the parties to enable them to avail themselves of the right of appeal.
This cannot be known unless the judgment is pronounced in open court for the date of award is the date of its pronouncement.
Hence again pronouncement of the judgment in open court is essential.
If it were not so, the provisions for appeal might be rendered ineffective.
For all these reasons it seems to us that the clear intention of the legislature is to make it imperative that judgments should be pronounced in open court by the Tribunal and judgments not so pronounced would therefore be a nullity.
In the view that we have taken it is unnecessary to deal separately with Standing Order No. 36.
The provisions of that Standing Order and cl.
9(7) of the Statutory Order are substantially the same.
They should therefore be interpreted in the same way.
In any case since we have held the el.
9(7) of the Statutory Order to be imperative.
it would not matter whatever view is taken of the Standing Order for the latter cannot affect the former.
69 Mr. Aggarwala then argued that cl.
9(7) of the Statutory Order and Standing Order No. 36 were ultra vires as being in conflict with the Act under which they had been framed.
His contention was this : Under section 6 of the Act all that the Tribunal has to do is to submit its award to the Government after the conclusion of the enquiry before it.
The section does not require the Tribunal to pronounce its decision in open court.
The provisions in the Statutory Order and the Standing Order both of which were made under powers contained in the Act, were therefore in conflict with section 6 and of no effect.
Hence he contended that the question whether the provisions of cl.
9(7) of the Statutory Order or of the Standing Order No. 36 were imperative did not really arise.
It seems to us that this contention of Mr. Aggarwala is without any foundation.
Section 6 when it requires that the Tribunal shall submit its award to the Government necessarily contemplates the making of the award.
Neither section 6 nor any other provision in the Act provides how the award is to be made.
Under section 3(g) however the Government has power by general or special.
order to provide for incidental or supplementary matters necessary for the decision of an industrial dispute referred for adjudication under any order made tinder section 3. 'rho provision as to the pronouncement of the decision in open court in (19(7) of the Statutory Order clearly is within the power,; contemplated in section 3(g).
Section 6 does not prohibit the making of such a provision.
Its main purpose is to direct that the Tribunal shall submit the award to the Government so that it may be enforced.
It has nothing to do with the manner in which the 'Tribunal is to make 70 its award.
A rule duly framed under the Act requiring the Tribunal to pronounce its decision in open court is therefore not in conflict with section 6.
The result is that these appeals fail and are dismissed with costs.
Appeals dismissed.
| The Government of Uttar Pradesh under section 3 of the U.P. , and the Statutory orders framed thereunder referred certain.
disputes between the respondent Ice Factories and the respective workmen to an Industrial Tribunal.
The Tribunal heard the matters but failed to pronounce its award in open court, as required under the clause 9 (7) of the Statutory Orders.
Instead the Registrar of the Tribunal informed the Ice Factories that the award of the Tribunal had been submitted to the Government.
The award was published in the U.P. Gazette and the Regional Conciliation officer called upon the Ice Factories to implement the award immediately.
The Ice Factories moved the High Court at Allahabad alleging that the award was a nullity as it had not been pronounced in open court as required under the clause 9 (7) of the Statutory Orders and asking for writs to quash it.
High Court issued the writs quashing the Notification publishing the award.
The questions are whether the provisions of sub cl.
(7) of cl. 9 of the Statutory Orders are imperative or merely directory and whether that sub clause is ultra vires as being in conflict with the Act under which it had been framed.
Held, that the clear intention of the legislature is to make it imperative that judgments should be pronounced in open court by the Tribunal and a judgment not so pronounced would therefore be a nullity.
The provision in sub cl.(7) of cl. 9 of the Statutory Order is imperative and not directory.
Held, further, that the provisions as to the pronouncement of the decision in open court contained in cl. 9 (7) of the Statutory Order was clearly within the powers contemplated in section 3 (g) of the Act and section 6 of the Act does not prohibit the making of such provisions.
A rule duly framed under the Act requiring the Tribunal to pronounce its decision in open court is therefore not in conflict with section 6 of the Act.
Montreal Street Railway Co. vs Normandin, ; , referred to.
| The disputes between the appellant companies and the workmen which were referred to the Industrial Tribunal for adjudication, related to wages, dearness allowance and gratuity.
The companies raised objections to the award of the Tribunal on various grounds.
Held:(i) The reference in the award to the recommendations of the Tripartite Conference wherein the need based minimum wage was evolved, did not vitiate the award, as the final decision was based not on them but on a consideration of the wages prevalent incomparable concerns so far as clerical and subordinate staff were considered.
(ii) In applying the industry cum region formula for fixing wage scales the Tribunal should lay stress on the industry part of the formula if there were large number of concerns in the same region carrying on the same industry, but where the number of industries of the same kind in a particular region was small, it was the region part of the formula which assumed importance particularly in the case of clerical and subordinate staff.
In the present case, the Tribunal was right in leaning more on the region part of the industry cum region formula and less on the Industry part.
Workman of Hindustan Motors vs Hindustan Motors, [1962] 2.
J.352 and French Motor Car Company vs Their Workman [1963] Supp.
considered.
(iii)The Tribunal was not justified in creating two classes of higher unskilled and lower unskilled in the category of unskilled factory workmen in the matter of fixation of wage scales.
(iv)Employees getting same wages should get the same scales of dearness allowance irrespective of whether they were working as clerks, or members of subordinate staff or factory workmen.
(v)In fixing the same rates of dearness allowance for factory workmen as for clerical staff, it was necessary for the Tribunal when making comparisons to take into account the total wage packet and then compare it with the total wage packet of comparable 363 concerns and thus arrive at a just figure for basic wage for each category of factory workmen.
(vi)There is nothing in law to prevent an industrial tribunal from granting adjustments to the employees in the revised wage scales even in a case where previously pay scales were in existence, but this has to be done sparingly, taking into consideration the facts and circumstances of each case.
| The appellants, a Hindu undivided family, carrying on business in the former State of Mysore, were assessed under the Mysore Income tax Act for the year of assessment 1949 50 corresponding to the year of account July 1, 1948, to June 30, 1949.
The Indian Income tax Act came into force in that area in April 1, 1950, and on December 26, 1950, notice under section 22(2) of that Act was served upon the appellants to submit their return for the assessment year 1950 51.
On September 8, 1952, the appellants submitted their return stating that they had no assessable income for that year.
The Income Tax Officer passed on that return an order, "no proceeding", and closed the assessment.
When the appellants submitted their return for the next assessment year, their books of account disclosed an opening cash credit balance of Rs. 1,87,000 and odd on July 1. 1949.
They failed to produce the books of account of the previous years, and the Income tax Officer held that Rs. 1,37,000 out of the said opening balance represented income from an undisclosed source.
The appellants submitted a fresh return for the assessment year 1950 51 purporting to do so under section 22(3) of the Indian Incometax Act.
Pursuant to the direction of the Appellate Assistant Commissioner, the Income Tax Officer on October 15, 1957, served on the appellants a notice under section 34 of the Act and thereupon the appellants moved the High Court under article 226 for an order quashing the said notice and the proceeding as without jurisdiction.
The High Court dismissed the petition.
Held, that it was not correct to say that the issue of the notice for reassessment was without jurisdiction as the assessment was yet pending.
Under section 23(1) of the Indian Income tax Act, it is open to the Income tax Officer, if he is satisfied as to correctness of the return filed by the assessee, to assess the income and determine the sum payable on the basis of the return without requiring the assessee either to be present or to Produce evidence.
The order 'no proceeding recorded on the.
return must, therefore, mean that the Income Tax Officer bad accepted the previous return and assessed the income as nil.
A revised return under section 22(3) filed by the assessee may be 912 entertained only before the order of assessment and not thereafter.
Lodging of such a return after the assessment is no bar to reassessment under section 34(1) of the Act.
It could not be said, having regard to the provisions of section 13(1) of the Finance Act (XXV of 1950) and cl.
5(1) of Part.
B States (Taxation Concessions) Order 1950, issued by the Central Government under section 60A of the Indian Income tax Act, that for the assessment year 1950 51 the appellants were assessable under the Mysore Income tax Act and not under the Indian Income tax Act.
| (14 of 1947) section 18 Applicability of.
The appellant company had its establishments in a number of States in the country.
In its establishment at Kanpur there were two unions, one of which, the Shramik Sangh, was affiliated to the Federal Union comprising of some of the trade unions in the various establishments while the other, the Karamachari Union, was not.
A demand relating to revision of dearness allowance among others, was raised by both the Unions at Kanpur.
The Shramik Sangh and the appellant entered into a settlement.
Karamchari Union which was not a party to the settlement, made an application to the State Government to constitute a conciliation board for reference of the dispute.
The Board was constituted.
In the meantime, however, to bring the settlement within the purview of the U.P. the Shramik Sangh applied for the constitutation of a conciliation board.
A conciliation board was constituted and the memorandum of settlement arrived at between the parties was registered even though the dispute on the same point raised by the Karamchari Union was pending before the Conciliation Board all the while.
The dispute raised by the Karamchari Union was, therefore, referred to a Tribunal under s 4K of the Act.
The Tribunal rejected the appellant 's contention that it had no jurisdiction to adjudicate on the dispute.
On appeal to this Court it was contended that it was implicit in the various provisions of the U.P. Act that a settlement arrived at before a Conciliation Board by a Union of the majority of workmen was binding on all the workmen and that in the absence of a provision like section 18 of the it was not permissible for the Karamchari Union to contend that the settlement would bind only the members of the Shramik Sangh and in any event reference of the dispute to a Tribunal was without jurisdiction.
Dismissing the appeal, ^ HELD: 1.
The State Government rightly took the view that the controversy raised by the Karamchari Union was an industrial dispute.
[922 G H] 2.
A reading of the relevant provisions of the U.P. , clearly shows that there is nothing in the Act to require that the dispute 912 or difference should be raised by all the workmen of the industry, or by everyone of them, or even by a majority of them.
It is enough if the controversy is between the employer on the one side and workmen on the other.
There is also nothing in the Act to require that the workmen raising the controversy should form a majority of the employees, the reason being that where it is found that the controversy affects, or will affect, the interests of workmen as a class, the law envisages that, in the interest of industrial peace, it should be examined and decided in one of the modes provided by it.
[917 D F] 3.
An individual dispute cannot, however, be said to be an industrial dispute unless the other workmen associate themselves with it.
No hard and fast rule can be laid down to decide when and by how many workmen an industrial dispute could be raised within the meaning of the Act, or whether a minority union or even an unrecognised union, could raise an industrial dispute.
It is enough if there is a potential cause of disharmony which is likely to endanger industrial peace, and a substantial number of workmen raise a dispute about it, for then it is permissible to view it as an industrial dispute within the meaning of clause (1) of section 2 of the Act, and to refer it for adjudication to a tribunal.
[917 F H] 4.
The settlement arrived at with the Federal Union did not bind the Karamchari Union as it was not a party to it and was not affiliated to the Federal Union.
Section 18 of the Central Act provides that a settlement arrived at by agreement between the parties otherwise than in the course of conciliation proceedings shall be binding on the parties to the agreement.
[918 E] 5.
Moreover, the settlement arrived at with the Shramik Sangh was under the provisions of the U.P. Act and, therefore, section 18 of the Central Act had no application.
There is no provision similar to it in the U.P. Act.
[918 G] 6.
There was no occasion for invoking section 7 of the U.P. Act.
That section is mainly intended to serve the purposes contemplated by section 3 of the Act, namely, securing the public safety or convenience or the maintenance of public order or supplies and services essential to the life of the community or for maintaining employment etc.
It cannot therefore be said that the settlement arrived at by the Sangh became binding on all workmen including the Karamchari Union which was not a party to it nor is there any other provision in the Act or the Rules making the settlement binding on the Karamchari Union.
Nor again can it be said that section 3(d) of the U.P. Act justifies the argument that merely because a union, consisting of a majority of workers, can represent all the workmen, the settlement arrived at before a conciliation board would bind those who are not parties to it.
[919 B, C, F G] 7.
In the absence of any prohibitory provision in the Act it cannot be said that the State Government had no jurisdiction to make a general reference under section 4K of the U.P. Act merely because the settlement was made by a majority union and was binding on the Shramik Sangh.
The Tribunal has found it as a fact that the Karamchari Union represented a substantial number of the workmen of the company at Kanpur, and there is no reason why they should be debarred from raising a dispute for the benefit of all the workmen as a class.
It is well recognised, that "collective bargaining" can take place between the employer and a bona fide labour union and there is nothing on the record to show that the Karamchari Union was not a bona fide union.
[920 A C] 913 In the instant case the Shramik Sangh entered into the settlement in collusion with the company and the Conciliation Board finalised the settlement even though the Karamchari Union 's dispute was still pending.
No effort was made to make it a party to the proceedings.
Although, to begin with, a both the Shramik Sangh and the Karamchari Union were opposed to the settlement earlier arrived at by the Federal Union the Shramik Sangh changed its stand and endorsed the settlement of the Federal Union when it was placed on the notice board.
The Tribunal also found as a fact that the settlement was not even put on the notice board of the company.
In these circumstances if the State Government had decided to make a reference of the dispute to the Tribunal it could not be said that it did not apply its mind to the controversy or committed an illegality in doing so.
[920 H 921 C] 8.
Even assuming that the earlier settlements were in the nature of a package deal arrived at between the company and the Federal Union it cannot be said that there was any legal bar to the reference of the dispute regarding one particular item of the package deal for adjudication by the tribunal so as to vitiate the reference.
The company brought this aspect of the matter specifically to the notice of the State Government.
The point does not, however, relate to the jurisdiction or the maintainability of the reference under section 4K for it is essentially a matter for the Tribunal 's examination with due regard to the evidence before it.
[921 F G] Herbertsons Ltd. vs Workmen of Herbertsons Ltd. & Ors. ; and New Standard Engg.
Co. Ltd. vs M. L. Abhyankar & Ors., ; held inapplicable.
| The Settlement Officer under the Madras Estates (Abolition and Conversion into Ryotwari) Act, 1948 suo motu made an inquiry as to whether a particular village notified by the State Government was an estate or not within the contemplation of section 9(2) of the Act and held that it was not an "inam estate" within the meaning of section 2(7) of the Abolition Act but that the village became an estate by virtue of Madras Estates Land (3rd Amendment) Act, 1936.
Ther appellants unsuccessfully appealed to the Estate Abolition Tribunal.
The appellant then instituted a suit (O.S. 47 of 1953) against the State Government for a declaration that the village was not an "estate" under section 3(2)(d) of them Madras Estates Land Act, 1908 and consequently Madras Estate (Reduction of Rent) Act, 1947 and the Abolition Act were not applicable to it.
The trial court decreed the suit.
The State Preferred an appeal.
During the pendency of the appeal the appellant filed a suit (O.S. No. 101 of 1954) against the respondents for recovery of certain amount as rent or damages in respect of lands cultivated by them in the village in dispute.
The respondents contended that the village was an estate within the meaning of the Act and that it had been so held by the Settlement Officer.
Ultimately both the parties filed a joint memo on 26th March, 1958 that they would abide by the decision of the High Court or the Supreme Court in the appeal or revision arising out of the suit (O.S. 47/53) on the question whether the village was or was not an "estate" under, section 3(2)(d) of the Madras Estates Land Act.
The High Court (in A.S. No. 668 of 1954 which was an appeal arising out of O.S. 47 of 1953) confirmed the decree of the trial court that the village in dispute was not an 'estate '.
The State did not appeal, with the result that the High Court 's decision became final and the decree dated 28th March, 1958 became, effective.
Against the decree of 28th March, 1958 the appellants preferred an appeal (A.S. 239 of 1961) to the High Court.
The appeal related only to the extent of the land in the possession of the respondents and the quantum of rent or damages.
The appellants ' claim was that the entire land was under cultivation of the respondents and so the lower court was wrong in not decreeing the appellants ' claim for rent or damages in toto.
The respondents raised a preliminary objection at the time of hearing of the appeal that the suit itself was incompetent as the Civil Court had no jurisdiction to decide whether the suit village was an estate or not and, therefore, any (decision given by the High Court would not bind the parties and the decree in O.S. 101 of 1954 would be without Jurisdiction rendering it null and void and that the Settlement Officer was the competent authority to decide the tenure of the village and his deci sion had become final in view of the introduction of section 9A by Act 20 of 1960.
The High Court upheld the preliminary objection of the respondents and rejected the contentions of the appellants that since section 9A was inserted by an amendment which came into force on 23rd June, 1960, it could not affect the compromise decree of the court passed on March 28, 1958 or the decree of the High Court by which both the parties agreed to abide by the decision of the High Court or the Supreme Court in appeal or revision arising out of O.S. 47 of 1953.
The High Court held that the Civil Court was not the forum for the suit as framed by the appellants and the questions raised in the suit L748SuP CI/74 656 including the claim for arrears of rent or damages, were outside the jurisdiction of the Civil Court, and so dismissed the appeal.
Allowing the appeal, HELD:1 (a) There is no doubt that the question was within the competence of the Civil Court.
Under the Abolition Act, as it stood at the material date, the inquiry of the Settlement Officer could legitimately be confined to the ascertainment of only two disputes of fact, viz., (i) Was the village an "inam village"? (ii) If so, was it an 'Inam Estate ' as defined in section 2(7) of the Abolition Act ? Once issue (ii) was determined, the inquiry would be complete and the limits of his exclusive jurisdiction circumscribed by section 9(1) reached; if he went beyond those limits to investigate and determine something which is unnecessary or merely incidental or remotely related to issue No. (ii), 'then such incidental or unnecessary determination could be questioned in a Civil Court.
[668FG] (b) Any finding recorded by the Settlement Officer regarding the property in question being an 'inam village ' or not, ' is not final or conclusive it being a finding of a jurisdictional fact only, the Preexistence of which is a sine qua non to the exercise of his exclusive jurisdiction by the Settlement Officer.
[668H] (c) The legislature must have visualised that under the cloak of an erroneous finding as to the existence or nonexistence of this prerequisite, the Settlement Officer may illegally clutch at jurisdiction not conferred on him or refuse to exercise jurisdiction vesting in him.
Perhaps that is why the statute does not leave the final determination of this preliminary fact to the Settlement Officer/Tribunal and his erroneous finding on that fact is liable to be questioned in a Civil Court.
Once it is held that determination of this fact is not a matter of the exclusive jurisdiction of the Settlement Officer, the appellants cannot be debarred on the basis of any doctrine of res judicata from getting the matter fully and finally adjudicated by a court of competent jurisdiction.
[669B C; E] Addanki Tiruvenkata Tata Desika Charyulu vs State of Andhra Pradesh A.I.R. 1964 S.C. 807 followed.
District Board, Tanjore vs Noor Mohammed, (1952) 2 MJ.
586 (S.C.) referred to.
(2) It is well settled that ordinarily when the substantive law is altered during the pendency of an action, rights of the parties are decided according to law, as it existed when the action was taken unless the new statute shows a clear intention to vary such rights.
A plain reading of the impugned Act would show that there was nothing of this kind which expressly or by necessary intendment affects pending actions.
[67OC D] (b) There is no non obstante clause in the amending Acts 17 and 18 of 1957 with reference to pending or closed civil actions.
These amending Acts ' were published in the government gazette of December 23, 1957 and will therefore be deemed to have come into force from that date only.
They could therefore be construed as having prospective operation only.
[67OG H] (c) In the Amending Act 20 of 1960 also no back date for its commencement has been mentioned.
It will, therefore, be deemed to have commenced on June 23, 1960 which is the date on which it was published in the Government gazette.
[674E] Section 9A takes in its retrospective sweep only those decisions of the Settlement Officer or the Tribunal which at the commencement of 'the Amending Act 20 of 1960 were subsisting and had not been totally vacated or rendered non est by a decree of a competent court.
[675 F] In the instant case the decision of the Settlement Officer dated September 2, 1950 was not such a decision.
It had ceased to exist as a ' result of the inter linked decree in O.S. 47 of 1953 and O. section 101 of 1954 passed before the enactment of the Amending Act.
The Amending Act of 1960, therefore, does not in any way affect the finality or the binding effect of those decrees.
[675G] 657 (d) Order 23 rule 3 C.P.C. not only permits a partial compromise and adjustment of a suit by a lawful agreement, but further gives a mandate to the court to record it and pass a decree in terms of such compromise or adjustment in so far as it relates to the suit.
If the compromise agreement was lawful the decree to the extent it was a consent decree was not appealable because of the express bar in section 96(3) of the Code.
[672E] Raja Sri Sailendra Narayan Bhanja Deo vs State of Orissa ; , Shri Prithvi Cotton Mills Ltd. vs Broach Borough Municipality and Reid vs Reid at 408, followed.
(e) In any suit the parties, in order to avoid unnecessary expenses and botheration, could legitimately make an agreement to abide by a determination on the same point in issue in another pending action in an advanced stage There was nothing unlawful and improper in such an arrangement particularly when the interests,of the respondents were sufficiently safeguarded by the State.
By no stretch of reasoning it could be said that the agreement was collusive or was an attempt, to contract out of the statute.
In the instant case as soon as the parties made the agreement to abide by the determination in the appeal (A. section 668) and induced the court to pass a decree in terms of that agreement the principle of estoppel underlying section 96(3) C.P.C. became operative and the decree to the extent it was in terms of that agreement became final and binding between the parties.
It was as effective in creating an estoppel between the Parties as a judgment on contest.
[672F C & 673C] In the instant case that part of the decree in suit No. 101 of 1954 and the appeal from that decree could not be said to be a continuation of that part of the claim which had been settled by agreement.
The combined effect of the two integrated decrees was to completely vacate and render non est decision dated September 2, 1950 of the Settlement Officer.
[673F] Raja Sri Sailendra Narayan Bhanja Deo vs State of Orissa ; applied.
Per Krishna Iyer, J. concurring Courts have to be anchored to well known canons of statu tory construction and if they are out of tune With the law maker 's meaning and purpose the legitimate means of setting things right is to enact a new Interpretation Act.
[678B] The Indian Constitution, adopting the fighting faith of equal I protection of the laws to all citizens, necessarily contemplates a new jurisprudence where vested rights may be, and often times are, extensively interfered.
with for achieving the founding fathers ' social goals.
Legislative exercises directed towards distributive justice as in the present case, cannot be considered in the light of dated value system, though sanctified by bygone decisions of Courts.
[677H] In the present case the Act in question is clear about its intent and its application gives little difficulty.
| The respondent workman was dismissed by his employer, the appellant, pending adjudication of an:industrial dispute, and without the permission of the Industrial Tribunal, relating to the discharge of 7 other employees working as apprentices under the appellant.
The respondent raised a dispute before the Industrial Tribunal under section 33A of the , and his case was that he was concerned in the dispute relating to the said 7 employees and gave evidence on their behalf and that his dismissal was solely due to the interest he took in their cause.
The Tribunal found in his favour and passed an award directing his reinstatement.
The appellant contended that the respondent was incompetent to raise the dispute under section 33A of the Act.
The question for decision, therefore, was one relating to the construction of section 33(1)(a) of the Act: 351 Held, that the expression " workmen concerned in such dis pute " occurring in section 33(1)(a) of the , as amended by Act 36 of 1956, includes not merely such workmen as are directly or immediately concerned with the dispute, but also those on whose behalf the dispute is raised as well as those who, when the award is made, will be bound by it.
Eastern Plywood Mfg. Co. Ltd. vs Eastern Plywood Mfg. Workers ' Union, and Newtone Studios Ltd. vs Ethirajula (T.R.), , approved.
The New jehangir Vakil Mills Ltd., Bhavnagar vs N. L. Vyas & Others, A.I.R. 1959 BOM.
248, disapproved.
| The first respondent, in 1938, obtained a decree against the appellants branch of a joint family, and in 1941, commenced proceedings for the execution of the decree in Allahabad.
Meanwhile, in 1939, a final decree had been passed in a suit for partitioning the family properties among the members of the joint family, and the matter was taken up in appeal to the High Court of Allahabad.
Certain orders were passed by the High Court which were construed by the executing court in the years 1941 and 1942 as stay orders of the execution proceedings commenced by the respondent.
The High Court passed a final decree in the partition suit in December 1949, but did not immediately discharge the Receivers who were appointed during the pendency of the suit.
The respondent revived the execution proceedings in May 1,950 and a mill belonging to the joint family was attached and sold 'but the sale was set 'aside in 1955 as the appellant 's branch applied for relief under the U.P. Encumbered Estates Act, 1934.
Thereafter, in ' 1956, the decree in favour of the respondent was transferred to Madras High Court for execution and on 13th August, 1956, the respondent filed an execution application, for attainment of certain properties which fell to the appellant 's share.
High Court of Madras in Letters Patent Appeal held that the execution application was in time.
On the question whether the execution application dated 13th August, 1956, was in time, or barred by limitation, HELD : (i) The respondent bonafide pursued execution against the mill and since his good faith was not questioned before the Appellate Court it was not open to the appellant to do so in this Court.
[370 A, C] (ii) It was not possible to spell out any order of partial stay on the facts and circumstances of the present case.
The facts that the Receivers were not finally discharged in 1949 when the final decree by the High Court was passed in the partition suit, and the understanding of the parties and the executing court that execution was stayed by the High Court, indicate that the stay was in unqualified terms.
Therefore, the respondent could not have applied earlier 'for execution with respect to other property of the joint family either at Allahabad or at Madras.
[369 A C, D G] (iii) Further, when the execution proceedings were revived in May 1950 the executing court held that execution proceedings had been stayed till December 1949 and the appellant did not challenge the order of attachment and sale of mill on the ground that the proceedings were barred by limitation.
Therefore, the appellant was barred by the principle of res judicata from questioning the order of May 1950 on the ground of limitation.
[371 D E] 365 (iv) Section 15 of the Limitation Act states that in computing the period of limitation prescribed the time of the continuance of the injunction staying execution shall be excluded.
The word "prescribed" would apply not only to Limitation Act but also to the limitation prescribed in general statutes like the Civil Procedure Code.
Section 48 of the Code, as it then stood, laid down 12 years as the maximum limit of the period of execution but it did not prescribe the period within which each application for execution was to be made.
Such an application was to be made within three years from the dates mentioned in third column of Article 182 of the Limitation Act, 1908.
Therefore, an application for execution of a decree must first satisfy Article 182 and it would then have to be found out as to whether section 48 of the Civil Procedure Code operated as a further bar.
[370 C H; 371 A B] (v) Since the execution proceedings were stayed in the present case, the 'respondent was entitled to claim its benefit of section 15 of the Limitation Act in respect of the period of stay of the execution of his decree, from June 194.1 till end of 1949; and since the execution application of 1950 was finally disposed of in 1955, the present application filed in 1956 was within time.
[372 E]
| One 'BC ', governed by the Mitakshra School of Hindu Law, being issueless and apprehending the claim to his property after his death as reversioners by his only brother 'RR ' and his nephew 'K ' who were inimical to him since the partition of their ancestral property in 1899, and possible harassment of his wife and 'G ', the respondent, executed a Will on September 21, 1916, in the Urdu script.
The respondent 'G ' being the son of the testator 's sister married to testator 's wife 's brother was doubly related.
As per the Will, 'G ' was to perform the obsequies and other annual death ceremonies etc.
, being his 'waris ' and the "Malik Kamil ' absolute owner" having all the proprietary powers and the power of making transfers of all sorts", while his wife was to be in possession and enjoyment of the property during her life time.
From the date of death of the testator in 1918 for about 18 years the widow and 'G ' lived in cordiality but got estranged later due to estrangement of feelings resulting in several civil and criminal litigation between them.
The widow died in 1948 executing a gift deed and a Will in respect of certain properties in favour of the appellant 'NL '. 'G ' filed a civil suit claiming his rights under the Will dated 21 September, 1916, and the appellant defendant contested it on pleas that the widow of 'BC ' having an absolute right over the property under the said Will validly made the gift deed and the Will of 1948 in his favour and that the respondent plaintiff had no locus standi to file the suit.
The suit was decreed.
On appeal to the Allahabad High Court, as there was a difference of opinion between the Judges of the Division Bench on the nature of the widow 's estate, one opining as the Will conferring a "limited estate" and the other opining as conferring an "absolute estate" the appeal was set down to a third Judge who agreed with the view that the Will conferred only a "limited estate" upon the widow and dismissed the appeal.
Confirming the decree of the courts below and dismissing the appeal by certificate, the Court, ^ HELD : (1) The following are the established principles for construing the language of the Will.
(a) In construing a document whether in English or in vernacular the fundamental rule is to ascertain the intention from the words used; the surrounding circumstances being considered to find out the intended meaning of such words employed therein.
[927F G] (b) In construing the language of the Will the court is entitled to put itself into the testator 's armchair and is bound to bear in mind also other matters than merely the words used like the surrounding circumstances, the position of the testator, his family relationship, the probability that he would use words in a particular sense all as an aid to arriving at a right construction of the Will, and to ascertain the meaning of its language when used by that particular testator in that document.
[927G H, 928A] (c) The true intention of the testator has to be gathered not by attaching importance to isolated expressions but by reading the Will as a whole with all its provisions and ignoring none of them as redundant or contradictory.
[928B] (d) The court must accept, if possible, such construction as would give to every expression some effect rather than that which would render any of 925 the expression inoperative.
The court will look at the circumstances under which the testator makes his Will, such as the state of his property, of his family and the like.
Where apparently conflicting dispositions can be reconciled by giving full effect to every word used in a document, such a construction should be accepted instead of a construction which would have the effect of cutting down the clear meaning of the words used by the testator.
Further, where one of the two reasonable constructions would lead to intestacy, that should be discarded in favour of a construction which does not create and such hiatus.
[928C E] (e) It is one of the cardinal principles of construction of Wills that to the extent that it is legally possible effect should be given to every disposition contained in the Will unless the law prevents effect being given to it.
Of course, if there are two repugnant provisions conferring successive interests, if the first interest created is valid the subsequent interest cannot take effect but a court of construction will proceed to the farthest extent to avoid repugnancy, so that effect could be given as far as possible to every testamentary intention contained in the Will.
[928E G] Ram Gopal vs Nand Lal and others ; Venkata Narasimha vs Parthasarathy, 42 Indian Appeals 51/72; Gnanambal Ammal vs T. Raju Ayyar and others, ; Raj Bajrang Bahadur Singh vs Thakurain Bakhtraj Kuer, ; Pearey Lal vs Rameshwar Das [1963] Supp.
SCR 834/839/842 and Ramachandra Shenoy and Anr.
vs Mrs. Hilda Brite and others. , applied.
(ii) The term "malik" when used in a Will or other document as descriptive of the position which a devisee or donee is intended to hold, has been held apt to describe an owner possessed of full proprietary rights, including a full right of alienation, unless there is something in the context or in the surrounding circumstances to indicate that such full proprietary rights were not intended to be conferred, but the meaning of every word in an Indian Will must always depend upon the setting in which it is placed, the subject to which it is related and the locality of the testator from which it may receive its true shade of meaning.
The intention of the testator will have to be gathered from all the relevant and material contents in the entire Will made in situation in which the testator was placed in life in the background of his property, his inclinations, wishes, desires and attitudes as can be clearly and unambiguously found either from the recitals from the instrument or from absolutely undoubted contemporaneous legally admissible evidence.
Hence, even the words "malik muakkil" can be qualified by other words and circumstances appearing in the document.
[930 B C & G H] Sasiman Chowdhurain and others vs Shib Narayan Chowdhury and others, 49 Indian Appeals 25/35; Musammat Surajmani and others vs Rabi Nath Ojha and another, 35 Indian Appeals 17; Krishna Biharilal vs Gulabchand and others, (1971) Supp.
SCR 27 and Dhyan Singh and anr.
vs Jugal Kishore and anr.
, [1952] SCR 478, discussed.
(iii) In the instant case, the testator intended a life estate for his wife so long as she lived as is clear from the reading of the present Will as a whole.
This is consistent with his description of Gokul as "my heir (waris)" after his death.
It is further consistent with the recital that "if per chance, Mrs. Jarian dies in my life time, then Gokul, aforesaid will be the absolute owner (malik kamil) of the estate left by me (matruka meri) and he shall have power of making all sorts of transfers (aurusko har qism ke aktiyarat inteqalat hasil honge)".
In obvious contrast even though Smt.
Jarian was made the malik of his entire estate after his death "having all the proprietary rights" nothing is stated about her "power of making all sorts of transfers" which power is expressly mentioned as belonging to him and also exclusively conferred upon Gokul after Smt.
Jarian 's death.
While describing his own "proprietary powers" the testator made reference to his "power of making transfers of all sorts".
This power of making transfers which was prominent in the mind of the testator at the time of execution of the Will is conspicuous by total omission in relation to Smt.
Jarian 's enjoyment of the property.
The testator has made the distinction between mere ownership of property and ownership of the same coupled with a transfer in every way.
[931 A D] 926 Further, from the recitals in the Will about his only reversioners viz., his brother and nephew "might trouble and harass my wife Mst.
Jarian and my sister 's son Gokul", it is clear that the testator never intended that his property should pass to his brother and nephew.
This intention would be achieved by holding that there was a devise of a life estate to his wife and an absolute estate thereafter to Gokul indicating a different line of inheritance in the Will on the other hand, if any absolute estate would have been conferred on the widow, then on her death the property would have passed on by inheritance to her husband 's heirs who were none else than the brother and the nephew of the testator.
There was no other heir of Mst.
Jarian to inherit the property after her death.
[931 G H, 932 A B] A plenitude of absolute estate in favour of the wife will make the absolute bequest to Gokul void in law.
No such repugnant interpretation detrimental to the interest of Gokul can be made in the light of the entire tenor of the instrument.
The testator intended to bequeath in favour of his widow only a life estate and after her death an absolute estate to Gokul.
[932B C]
|
Appeal No. 280 of 1961.
Appeal by special leave from the judgment and order dated August 2, 1960, of the Rajasthan High Court in D. E. Civil Misc.
(Election) Appeal, No. 1 of 1960.
G.S. Pathak, A. V. Viswanatha Sastri, section N. Andley and P. L. Vohra, for the appellant.
G. C. Mathur, for the respondent No. 2. 1962.
February 8.
This appeal by special leave arises out of an election petition filed by the appellant challenging the validity of the election of respondent No. 1, Lal Singh on several grounds.
The appellant is an elector in the Chittorgarh Constituency and the election which led to the present petition was held in March.
1957, for the Rajasthan Legislative Assembly from the said constituency.
As a result of the election, respondent No. 1 was declared to have been duly elected on the 11th March, 1957.
He secured 7272 votes whereas respondent No. 2 Laxman Singh s/o Maharawal Sir Bijey Singh secured 7261 votes and respondent No. 3 Chhoga lal secured 569 votes.
The appellant 's case was that respondent No. 1 's election wag invalid inasmuch as he had practiced corrupt practices at the said election.
According to the appellant, respondent No. 1 procured or abetted or attempted to procure either by himself or by his agents or by other persons with his connivance or that of his agents the reception of invalid votes and as a result of the said votes, the result of the Election had been materially affected The appellant stated in detail the manner in which the said invalid votes bad been procured.
The appellant further pleaded that respondent No. 1, his agents and other persons with the connivance of respondent No. 1 or that of his agents published such 116 statements of facts (Exts. 3 & 6) which were false and which they either believed to be false or did not believe to "be true, in relation to the personal character or conduct of respondent No.2 which were likely to prejudice the prospect of respondent No. 2 at the election.
It is on these two grounds that the appellant claimed a declaration that the election of respondent No. 1 was invalid.
He also claimed that respondent No. 2 should be declared to have been validly elected.
Respondent No. 2 filed his written statement supporting the petition but he did not appear before the Tribunal at the hearing.
Respondent No. 3 did not appear at all, while respondent No. 1 denied all the allegations made by the appellant and contended that the election petition filed by the appellant should be dismissed.
On the pleadings of the parties, the Election Tribunal framed as many as 26 issues.
In substance it held that the several allegations made by the appellant in respect of the receipt of invalid votes bad not been proved and so the first ground on which respondent No. 1 's election was challenged by appellant, could not succeed.
In regard to the second ground on which respondent No. 1 's election was challenged by the appellant, the Tribunal held that Ext.
3 had been published by the agent of respondent No. 1 but not with his express consent and in regard to Ext.
6, the Tribunal was not satisfied that, it had been published by respondent No. 1 's agent.
That is how even the second ground made by the appellant disputing the validity of respondent No. 1 's election did not succeed.
In the result, the election petition was dismissed.
Against the said decision, the appellant preferred an appeal in the Rajasthan High Court.
The High Court confirmed the finding of the Tribunal on the first point in regard to the receipt of invalid votes.
It is true that the High Court was not 117 satisfied with the approach adopted by the Tribunal in dealing with this part of the case and it thought that some of the reasons given by the Tribunal in support of its conclusions were not satisfactory.
Even, so, the High Court felt that the final conclusion of the Tribunal was, on the whole, correct and need not be reversed.
Thus both the Tribunal and the High Court have recorded findings against the appellant on the first part of his case.
In regard to the second contention raised by the appellant, the High Court has accepted the finding of the Tribunal about the publication of Ext.
In regard to the other document Ext.
6, the High Court has reversed the conclusion of the Tribunal and hold that the said document had been published for the benefit of respondent No. 1 and differing from the view taken by the Tribunal, the High Court has hold that the Publication of both the pamphlets was with consent of respondent No. 1 and so was outside the purview of section 100(2) of the Representation of the People Act 1951 (43 of 1951) (hereinafter called the Act).
Having thus found that the two pamphlets had been published by the agent of respondent No.1 and with his consent, the High Court preceded to examine the question as to whether the material allegations made against respondent No. 2 by the said pamphlets were true or false.
The High Court bold that the said material allegations were false and it came to the conclusion that they were calculated to effect prejudicially the prospects of the election of respondent No.2.
The High Court was however, not satisfied that the said allegations had relation to the personal character or conduct of respondent No. 2 and so it held that the corrupt practice alleged by the appellant against respondent No. 2 on the strength of the said two pamphlets under section 123(4) of the act had not been proved.
, The result was that though the High Court differed from the Election Tribunal in regard to some of the findings recorded 118 by the Tribunal on the second ground, its ultimate conclusion was the same as that of the Tribunal.
The appeal preferred by the appellant was accordingly dismissed.
It is against this order that the appellant has come to this Court by Special leave.
In this appeal, the only question which we are called upon to consider is whether the two pamphlets justify the contention of the appellant that respondent No. 1 has committed a corrupt practice under section 153(4).
The question as to whether respondent No. 1 's election has been materially assisted by the receipt of invalid votes, is concluded by concurrent finding of ' fact recorded against the appellant and so we have not allowed Mr. Sastri to dispute the correctness of that finding.
Before dealing with the short point raised for our decision under section 123(4) of the Act, it is necessary to set out the material portion of the pamphlets on which the appellant 's case of corrupt practice is based.
The relevant portion in the pamphlet Ext.
3 to which objection is taken by the appellant reads thus . (1) Enemy of Democracy? (2) Agent of the foreigners strangling the freedom of Bharat? (3) Supporter and collaborator of the conspiracy of Pakistani attack on Bharat? (4) Bringer of tyrannical rule of Rajas in Rajasthan? (5) Destroyer of Hindu Muslim unity by raising the slogan of Ram Rajya? (6) Purchaser of the opponents of the Congress by means of Money? 119 "Maharawal of Dangarpur, Shri Laxman Singh, who was defeated in the last election by thousands of votes, has come to mislead the people of Chittor, has come to push back the backward district of Chittor by 100 years, has come to destroy the peace and tranquility of Chittor under cover of communal organisation, has come to provide means to the public to spend their hard earned money on drinking orgies, has come to intensify again the tyranny of Raja Maharajas in Rajasthan, has come to make a gift of Kashmir to the aggressor Pakistan, has come to enslave India again by collaborating with Pakistan and Pakistan 's friends.
He is a friend of Raja Maharajas and an enemy of cultivators and laborers.
He wants to grant land to Bhooswamis and thereby oust the cultivators and wants to establish once more his pagent by exploitation of the hard labour of cultivators.
" The other pamphlet contains substantially the same portion and so it need not be reproduced.
It is urged for the appellant that in describing respondent No. 2 as the agent of foreigners strangling the freedom of Bharat.
the personal character of respondent No. 2 has been falsely and adversely criticised.
The same comment is made in respect of the description of respondent No. 2 as the supporter and collaborator of the conspiracy of Pakistani attack on Bharat and in support of this argument, reliance has been placed on the further statement in the pamphlet that respondent No. 2 had come to make a gift of Kashmir to the aggressor Pakistan and had come to enslave India by collaborating with Pakistan and Pakistan 's friends.
It is also argued that describing respondent No. 2 as the purchaser of the opponents of the Congress by means of money, attracts the provisions of 123 (4).
It is mainly on these three allegations in the 120 pamphlet that the case of the appellant rests and the argument is that by making these allegations, the private character of respondent No. 2 has been falsely vilified and that the said vilification was reasonably calculated to prejudice the prospects of his election.
On the other hand, for respondent No. 1 Mr. Mathur who appeared amicus curaie at our request has contended that the three allegations, though false, cannot be said to touch or effect the private character of respondent No. 2.
He has argued that in dealing with section 123 (4), it is necessary to make a distinction between the personal or private character or conduct of a candidate and his public or political character.
Mr. Mathur 's contention is that though the criticism made against respondent No. 2 by the impugned pamphlet may be extravagant, unreasonable.
and false, it is nevertheless criticism made against him in his public and political character and as such, a. 123 (4) cannot be invoked.
It is, therefore, necessary to determine the true scope and effect of the relevant provision in a. 123 (4).
Section 123 deals with corrupt practices and amongst them, is the corrupt practice specified by subjection (4).
That sub section reads thus : "The publication by a candidate or his agent or by any other person, of any statement of fact which is false, and which he either believes to be false or does not believe to be true, in relation to the personal character or conduct of any candidate, or in relation to the candidature, or withdrawal, or retirement from contest, of any candidate, being a statement reasonably calculated to prejudice the prospects of that candidates election.
" It would thus be seen that the publication in question must be by a candidate or his agent or by any other person ; the said publication should be 121 in regard to a statement of fact which is false and which he either believes to be false or does not believe to be true ; that it must have relation to the personal character or conduct of the candidate, or should have relation to the candidature with drawl or retirement from contest of any candidate and that it should be a statement reasonably calculated to prejudice the prospects of that candidate 's election.
All the requirements of this subsection, except one, are held to have been satisfied by the High Court.
The only requirement of the sub section which has not been satisfied according to the High Court is that the statement has no relation to the personal character or conduct of respondent No. 2.
Mr. Sastri contends that this finding of the High Court is erroneous in law.
It would be noticed that in prescribing the requirement that the false statement should have relation to the personal character of the candidate, a distinction is intended to be drawn between the personal character of the candidate and his public or political character.
The provision postulates that if a false statement is made in regard to the public or political character of the candidate, it would not constitute a corrupt practice even if it is likely to Prejudice the prospects of that candidate 's 'election.
This assumption is presumably based on the theory that the electorate being politically educated and mature, would not be deceived by a false criticism against the public or political character of any candidate.
The public and political character of a candidate in open to public view and public criticism and even if any false statements are made about the political views of a candidate or his public conduct or character, the electorate would be able to judge on the merits and may not be misled the allegations by any false allegations in that behalf.
It is on this theory that false statements of fact effecting the public or political character of a candidate are not brought 122 within the mischief of sections 123(4).
In order that the elections should be free, it is necessary that the electorate should be educated on political issues in a fearless manner and so, the Legislature thought that full and ample scope should be left for free and fearless criticism by candidates against the public and political character of their opponents.
But the position with regard to the private or personal character of the candidate is very different.
Circulation of false statements about the private or personal character of the candidate during the period preceding elections is likely to work against the freedom of election itself inasmuch as the effect created by false statements cannot be met by denials in proper time and so the Constituency has to be protected against the circulation of such false statements which are likely to effect the voting of the electors.
That is why it is for the protection of the constituency against acts which would be fatal to the freedom of election that the statute provides for the inclusion of the circulation of false statements concerning the private character of a candidate amongst corrupt practices.
Dissemination of false statements about the personal character of a candidate thus constitutes a corrupt practice.
Though it is clear that the statute wants to make a broad distinction between public and political character on the one hand and private character on the other, it is obvious that a sharp and clear cut dividing line cannot be drawn to distinguish the one from the other, In discussing the distinction between the private character and the public character, sometimes reference is made to the " 'man beneath the politician" and it is said that if a statement of fact affects the man beneath the politician it touches private character and if it affects the politician.
It does not touch his private character.
There may be some false statements of fact which clearly affect the private character of 123 the candidate ; if, for instance, it is said that the candidate is a cheat or murderer there can be no doubt that the statement is in regard to his private character and conduct and so if the statement is shown to be false, it would undoubtedly be a corrupt practice Similarly, if the economic policy of the party to which the candidate belongs or its political ideology is falsely criticised and in strong words it is suggested that the said policy and ideology would cause the ruin of the country, that clearly would be criticism, though false, against the public character of the candidate and his political party and as such, it would be outside the purview of the statute.
But there may be oases on the border line where the false statement may affect both the politician and the man beneath the politician and it is precisely in dealing with cases on the border line that difficulties are experienced in deter mining whether the impugned false statement constitutes a corrupt practice or not.
If, for instance, it is said that in his public life, the candidate has utilised his position for the selfish purpose of securing jobs for his relations, it may be argued that it is criticism against the candidate in his public character and it may also be suggested that it nevertheless affects his private character.
Therefore, it is clear that in dealing with corrupt practices alleged under is.
123(4) where we are concerned with border line cases, we will have to draw a working line to distinguish private character from public character and it may also have to be borne in mind that in some cases, the false statement may affect both the private and the public character as well.
In the present case, we are satisfied that the allegation made in the pamphlet that respondent No. 2 is a purchaser of the opponents of the Congress by means of money clearly attracts the 124 provisions of sections 123(4).
In plain terms, the statement amounts to an allegation that respondent No. 2 buys by offering bribes the votes of the opponents of ' the Congress.
Bribery is itself a a corrupt practice and if it is said against a candidate that the practices the corrupt practice of buying the votes of the opponents of the Congress by means of bribery, that clearly and unequivocally affects his private character.
Offering a bribe in an election introduces an element of moral turpitude and it cannot be denied that a person who offers bribe loses reputation as an individual in the eyes of the public.
The statement alleges that the bribes are offered by respondent No. 2 for the pur pose of election and in that sense it may be that it is his public character which is falsely criticised.
But,in our opinion, it would be idle to contend that it is a false statement only against the public character of respondent No. 2.
Having regard to the moral turpitude involved in the offering of the bribe, the statement in question undoubtedly affects his private character as well.
Unfortunately, in dealing with this point, the High Court does not appear to have considered this statement at all.
It has dealt with this problem in very general terms.
It has observed that the impugned statements all refer to the Maharawal as one of those various persons of his class who as a body appear to be responsible in the opinion of the writer for the political mischiefs referred to in the statements, land that a general reading of the document shows that the attack upon him is a part of a bigger Organisation of individuals who do not appear to be as the writer thinks, well inclined towards the progress of the country.
It is perfectly true that in dealing with the contention that the false statement contained in the pamphlet amounts to a corrupt practice under as. 123(4), it is necessary to read the document as a whole before determining the effect of any particular objectionable statement.
125 But reading the document as a whole, we see no justification whatever for the view expressed by the High Court that the criticism made in the document is, directed against a body of persons and not against respondent No. 2 himself.
The failure of the High Court to deal with the several specific statements on which the argument of the appellant is based, has introduced a serious infirmity in its final conclusion.
If only the High Court had considered whether the allegation that respondent No. 2 was the purchaser of opponents of the Congress by means of money, we are inclined to think that the High Court would not have brushed aside.
the appellant 's case with the general observations which it has made in its judgment.
We are, therefore, satisfied that the appellant is right in contending that the false statement of fact to which we have just referred constitutes a corrupt practice under as.
123(4) of the Act.
In that view of the matter, it is unnecessary to consider whether the other impugned statements of fact also ,attract the provisions of as.
123(4).
In the result we must reverse the finding of the High Court that publication of the impugned pamphlets does not constitute a corrupt practice under as.
123(4).
The result of this conclusion inevitably is that the election of respondent No. 1 must be declared to be invalid because there is no doubt that the corrupt practice proved in this case falls under section 191(b) and is outside the purview of section 100(2).
That takes to us the question as to whether respondent No. 2 can be declared to have been validly elected at the election in question.
This question will have to be decided in the light of provisions of section 101(b) of the Act.
The said section provides, inter alia, that " 'if any person who has lodged a petition has, in addition to calling in question the election.
of the returned candidate, 126 claimed a declaration that any other candidate has been duly elected and the Tribunal is of opinion that but for the votes obtained by such returned candidate by corrupt practices such other candidate would have obtained a majority of the valid votes, the Tribunal shall after declaring the election of the returned candidate to be void declare such other candidate to have been duly elected.
" This question has not been considered by the High Court and it cannot be decided unless the relevant facts are examined on the merits and that normally would mean our remanding the case to the High Court for the decision of the point in accordance with law.
We do not, however, propose to adopt such a course in view of the fact that it would be futile to give any further 'lease of life to this petition.
The election which is challenged took place in 1957 and in fact we are now on the verge of fresh elections which would take place this month That is why we think it would serve no purpose in sending the matter back for the decision of the question as to whether on the evidence adduced in the case, respondent No. 2 can be declared to have been validly elected.
The result is, the appeal is allowed and the election of respondent No. 1 is get aside.
Since respondent No. 1 did not appear, there would be no order as to costs.
Appeal allowed.
| Respondent 1 was declared elected to the Legislative Assembly.
His election was challenged, inter alia, on the ground that he had committed the corrupt practice under section 123 (4) of the Representation of People Act, 1951 of making false statements in relation to the personal character or conduct of Respondent 2, a defeated candidate The statements were contained in a pamphlet issued by the agent of Respondent 1 with his consent.
Among other statements the pamphlet contained a false statement that the Respondent 2 wits "purchaser of the opponents of the Congress by means (if money".
Respondent 1 contended that the statement related to the public or political character of Respondent 2 and not to his private character and did not fall within take mischief of section 123 (4).
Held, that the statement related to the personal character of Respondent 2 and Respondent 1 was guilty of the corrupt practice under section 123 (4) of the Act.
The offending statement amounted to an allegation that Respondent 2 bought the votes of the opponents of the Congress by offering bribes.
Bribery was itself a corrupt practice and an allegation of bribery involved moral turpitude and clearly and unequivocally affected the private character of Respondent 2. 115
| The respondent was the successful candidate at the general election held in March, 1957, for the Punjab Legislative Assembly.
The appellant who was one of the unsuccessful candidates, filed an election petition and challenged the validity of the respondent 's election on the grounds, inter alia, that the latter was not a citizen of India and was, therefore, not qualified to stand for election.
It was found that he was born of Indian parents sometime in 1927 in India as defined in the Government of India Act, 1935, in a village which since August 15, 1947, became part of Pakistan, that in 1944 he had moved from his home district to Jullunder in what is now the territory of India, and that after August 15, 1947, he definitely made up his mind to settle in India with the intention of residing there permanently.
There was some evidence to show that he went to Burma in January, 1950, and made unsuccessful attempts to secure permission from the Government of Burma to stay there permanently.
The question was whether the respondent could be deemed to be a citizen of India within the meaning of article 6 of the Constitution of India.
Held:(1) that the expression " migrated to the territory of India " in article 6 of the Constitution means " migrated at any time before the commencement of the Constitution to a place now in the territory of India ".
(2)that in article 6 the words " migrated to the territory of India " mean " come to the territory of India with the intention of residing there permanently ".
(3)that where a person moves from one country to another and has, at the time of moving, a intention to remain in the country where he moved only temporarily, but later on forms the intention of residing there permanently, he should be held in law to have migrated to that country at the later point of time.
(4)that for applying the test of being " ordinarily resi dent in the territory of India since the date of his migration " in article 6(b)(i), what is necessary to be shown is that during the period beginning with the date on which migration became 577 complete and ending with November 26, 1949, as a whole, the person has been " ordinarily resident in the territory of India ".
Whether he was not in India on January 26, 1950, or whether he formed an intention of taking up his permanent residence in Burma when he left for that place in January, 1950, was not relevant.
(5)That the words " ordinarily resident " in the Consti tution mean " resident during this period without any serious break ".
It is not necessary that for every day of this period the person should have resided in India.
(6)that the respondent satisfied the requirements of article 6 ofthe Constitution and that his claim to be deemed a citizen of India must be upheld.
| The petitioner was appointed as Excise Sub Inspector in February 1964 in the State of U.P. and was later promoted as Excise Inspector on ad hoc basis on February 24, 1972.
He was confirmed as Excise Sub Inspector w.e.f. April 1, 1967.
Though promoted on ad hoc basis, the petitioner has continuously been working as Excise Inspector since February 24, 1972.
Raghubir Singh and Ram Dhan, respondents are direct recruits to the post of Excise Inspector and they had joined the cadre later in point of time than the petitioner i.e. after 24.2.1972.
They were promoted to the post of Excise Superintendent on 29.9.1983 and the petitioner was ignored.
Being aggrieved the petitioner has filed this petition under Article 32 of the Constitution.
According to the State and other respondents, the petitioner 's promotion to the post of Excise Inspector being on ad hoc basis was against the 1967 rules, he continues to be an ad hoc appointed and as such is not a member of the Excise Inspectors service constituted under the rules.
His name has not been shown in the seniority list of Excise Inspectors.
According to them his case has rightly not been considered for further promotion.
On the other hand, it is contended on behalf of the petitioner that the 1967 Rules in as much as they confine the channel of promotion to Tari Inspectors and Clerks were wholly arbitrary and as such violative of Articles 14 and 16 of the Constitution.
It is submitted on his behalf that the petitioner is, in any case, entitled to be promoted substantively to the cadre of excise Inspectors under 1983 rules and he is also entitled to fixation of seniority by counting his entire service as Excise Inspector from 1972 onwards.
Respondents concede that the petitioner can be appointed under 1983 rules, but contend that he is not entitled to the benefit of past service for purposes of seniority.
885 Allowing the writ petition this Court HELD: When the 1967 rules were enforced on May 24, 1967 there was in existence a permanent cadre of Excise Sub Inspectors.
The nature of duties of both the cadres were similar.
The Excise Inspectors, on molasses duty of the ranges, used to supervise the work of excise Sub Inspectors under them.
The Excise Sub Inspectors were thus natural contenders for the post of Inspectors.
There was no justification whatsoever with the framers of the 1967 rules to have kept the Excise Sub Inspectors out of the channel of promotion to the post of Excise Inspectors.
Prime facie there is no escape from the conclusion that the Excise Sub Inspectors were dealt with in an arbitrary manner by the framers of 1967 rules.
[890H 891B] It is not disputed that under the 1983 rules, the petitioner is eligible to be promoted and appointed as Excise Inspector.
[891C D] The 1983 rules came into force on March 24, 1983.
There is nothing on the record to show as to why the petitioner was not considered for promotion under the 1983 rules till today.
Inaction on the part of the State Government is wholly unjustified.
The petitioner has been made to suffer for no fault of his.
He has been serving the State Government as Excise Inspector since February 24, 1972 satisfactorily.
[891E] Rule 21(i) of the 1983 rules specifically permits substantive appointment to the cadre of Excise Inspectors with back date.
In all probability the provision of back date appointment was made in the 1983 rules to do justice to persons like the petitioner.
The petitioner is eligible under the rules to be appointed as Excise Inspector by way of promotion.
Accordingly the Court directed that the petitioner shall be deemed to be appointed by way of promotion as substantive Excise Inspector under the 1983 rules with effect from February 24, 1972.
The petitioner shall be entitled to the benefit of his entire period of service as Excise Inspector from February 24, 1972 towards fixation of his seniority in the cadre of Excise Inspector.
The petitioner shall be considered for promotion to the post of Excise Superintendent from a date earlier than the date when respondents Ram Dhan and Raghubir Singh were promoted to the said post.
The petitioner shall also be entitled to be considered to the post of Assistant Excise Commissioner in accordance with the rules from a date earlier than the date when any of his juniors were promoted to the said post.
[891G, 892B E] None of the respondents who have already been promoted to the 886 higher rank of Excise Superintendents or Assistant Excise Commissioners be reverted to accommodate the petitioner or any other person similarly situated.
The State Government shall create additional posts in the cadre of Excise Superintendents and Assistant Excise Commissioners to accommodate the petitioner and other similar persons, if necessary.
[892F] Masood Akhtar Khan & Ors.
vs State of Madhya Pradesh, ; Direct recruits Class II Engineering Officers Association vs State of Maharashtra & Ors., ; ; P. Mahendran & Ors, etc.
vs State of Karnataka Singh & Ors.
, ; ; Krishena Kumar & Ors.
vs Union of India & Ors.
, ; ; A.K. Bhatnagar & Ors.
vs Union of India & Ors.
, ; ; Baleshwar Dass & Ors. etc.
vs State of U.P. & Ors.
, [1981] 1 S.C.C. 449; Narender Chadha & Ors.
vs Union of India & Ors.
, ; and Kumari Shrilekha Vidyarthi etc.
vs State of U.P. & Ors.
, , referred to.
| The appellant filed a suit for evicting his tenant Bhagwandas Kanu etc.
after giving them a notice to quit.
The Trial Court dismissed the suit but on appeal, the First Appellate Court passed a decree for eviction against the respondents.
In second appeal before the High Court, the respondents assailed the validity of the notice to quit, on the ground that it did not conform with the requirements of section 106 of the Transfer of Property Act.
The High Court allowed the appeal holding that the notice to quit did not clearly terminate the tenancy on the expiration of the, month of the tenancy, and was invalid.
Allowing the appeal by special leave, the Court, HELD: A notice to quit must be construed ut res magis valeat quam pereat.
It must not be read in a hyper critical manner, nor must its interpretation be affected by pedagogic pendantism or over refined subtlety, but it should be construed in a common sense, way.
The notice to qui re quired the respondents to vacate "within the month of Octo ber 1962", otherwise they would be treated as trespassers from 1st November, 1962.
This makes the intention of the authors of the notice clear that they were terminating the tenancy only with effect from the end of the month of October 1962 and not with effect from any earlier point of time during the currency of that month.
Sidebotham vs Holland ; Harihar Banerji vs Ramsashi Roy 45 I.A. 222, applied.
| The appellant entered into contract with Government for the supply of goods, and in the assessment year 1942 43 Rs. 10,80,653 and in the assessment year 1943 44, Rs. 7,45,336 were assessed as its income by the Income tax Officer.
The supplies to Government were made for.
Jaipur by the appellant, and payment was by cheques which were received at Jaipur.
The contention of the appellant was that this income was received at Jaipur outside the then taxable territories.
This contention was not accepted by the Income tax Appellate Tribunal, Delhi.
The appellant then applied for a reference to the High Court under section 66(1) of the Indian Income tax Act, and by its order dated December 10, 1952, the Tribunal referred the following question for the decision of the High Court.
" Whether on the facts and circumstances of the case the profits and gains in respect of the sales made to the Government 211 of India were received by the assessee in the taxable terri tories ?" The High Court remanded the case to the Tribunal for a supplemental statement of case calling for a finding on the question " whether the cheques were sent to the assessee firm by post or by hand and what directions, if any, had the assessee firm given to the department in the matter ".
The appellant questioned the order of the High Court relying on the decision in New Jehangir Vakil Mill 's case; , Held, that the enquiry in such cases must be to see whether the question decided by the Tribunal admits of the consideration of the new point as an integral or an incidental part thereof.
The supplemental statement which the Tribunal is directed to submit must arise from the facts admitted and/or found by the Tribunal and should not open the door to fresh evidence.
Held, further, that the question as framed in this case was wide enough to include an enquiry into whether there was any request, express or implied, that the amount of the bills be paid by cheques so as to bring the matter within the dicta of this Court in the Ogale Glass Works case, [1955] 1 S.C.R. 185 or Jagdish Mills case; , In the absence of anything expressly said in the Order of the High Court to the contrary, it cannot be held that the direction given would lead inevitably to the admitting of fresh evidence as that has been prohibited by the New Jehangir Vakil Mills case.
The New Jehangir Vakil Mills Ltd. vs The Commissioner of Income tax, ; , distinguished.
Jagdish Mills Ltd. vs Commissioner of Income tax, ; , Keshav Mills Co. Ltd., vs Commissioner of Income tax, , Sir Sobha Singh vs Commissioner of Income tax, , Kirloskar Bros. Ltd.v.
Commissioner of Income tax, [1952] 21 I.T.R. 82, Commissioner of Income tax vs Ogale Glass Works Ltd. , Commissioner of Income tax vs Kirloskar Bros. Ltd., and Mrs. Kusumben D. Mahadevia, Bombay vs Commissioner of Income tax, Bombay, ; , referred to.
| Thakur Sangram Singh, the father of the appellant was a jagirdar of Thikana Diggi in the erstwhile State of Jaipur.
His jagir was resumed on 1st of July, 1954 under section 21 of the Rajasthan Land Reforms and Resumption of Jagirs Act, 1952 entitling him to compensation on the date of resumption of his jagir under section 26 of the Jagirs Act.
The compensation was to be determined according to the principles laid down in the Second Schedule attached to the Act.
If the jagir was a settled one the compensation would be assessed on the basis of the rent rates as settled in settlement operation which were prevalent on the date of resumption and as entered in the Revenue records of the village within the meaning of section 6(3) (a)(i) read with the definition of "settled village" contained in section 2(n).
If on the other hand, the jagir was an unsettled one the compensation would have to be assessed on the actual income from the rents during the three agricultural years: 1949 50, 1950 51 and 1951 52 as provided in section 7 of the Act.
Prior to the date of resumption settlement operation were going on under the Jaipur State Grants Land Tenures Act, 1947 in respect of the jagir.
The rent rates proposed by the Settlement Officer were published in the Rajasthan Gazette dated 23rd of August, 1952.
The rent rates fixed were made applicable with effect from Ist of July 1953 and, therefore, on the date of resumption, namely, on Ist July, 1955, rent rates assessed by the Settlement Officer and approved by the Government were in force, for the purpose of payment of compensation under the Jagirs Act.
Sangram Singh challenged the validity of the rent rates fixed under the settlement operation by means of a writ petition No. 308 of 1953.
The High Court quashed the order settling the rent rates being in flagrant violations of sec.
82 (1) (a) and (b) of the Jaipur State Grants Land Tenures Act, 1947 with a direction to settle fresh rent rates in accordance with the said provision.
Pursuant to the order of the High Court fresh rent rates were settled by the Settlement Officer on 6th of June, 1955 with retrospective operation from Ist July, 1953.
According to the new settlement the total rental income from the jagir was reduced from Rs. 1,31,657.48 to Rs. 82,501 50.
475 The Jagir Commissioner by his order dated 25th November, 1960 granted compensation on the basis of the rent rates assessed in 1955.
The Jagirdar unsuccessfully preferred an appeal before the Board of Revenue.
Sangram Singh died in the mean time so his son the appellant challenged the order of the Board of Revenue on two grounds: (1) that the compensation should have been assessed on the basis of rent rates determined in 1953 as it stood on the date of resumption.
(2) or in the absence of a valid settlement on the basis of actual income from rents during the three agricultural years.
Treating the Jagir as unsettled, the High Court rejected both the grounds.
Hence the appeal by certificate under Article 133 (1) (a) of the Constitution.
Allowing the appeal and remanding the case, the Court ^ HELD: 1.
As a result of the quashing of the order of Settlement of rent rates of 1953 by the High Court, the jagir would be taken as an unsettled one on the date of resumption.
The quashing of the order of Settlement only means tabula rasa (clean slate) as if there was no determination of rent rates in 1953.
[479 E F] 2.
The criterion to determine whether a particular jagir is a settled one or not is to see whether the rent rates determined in settlement operations have been made applicable.
It is only from the date of effectuation of a valid settlement of rent rates in respect of a particular jagir which makes the jagir a settled one.
[480 C D] 3.
Section 86 of the Jaipur State Grants Land Tenures Act, 1947 clearly indicates that the rent fixed by the Settlement Officer shall normally be payable from the first of July next following the date of such order and further authorises the Settlement Officer to make the same shall be payable from some earlier date.
The realisation of rent from a retrospective date will not make the jagir in question a settled one as from that date.
The settlement of rent rates is one thing and the realisation of rent on the basis of the settlement is quite another.
In the case of a settled village the compensation would be determined on the basis of the rent rates settled during the settlement operation recorded in the Revenue Papers on the date of resumption.
Thus it is the effectuation of the rent rates determined during the settlement made prior to the date of resumption which would make the village a settled village as on that date.
[480 F H] In the instant case, the jagirdar became entitled to compensation on the date of resumption.
If the village was an unsettled village on the date of resumption he would be entitled to compensation on the basis of the village being unsettled.
The right of compensation vested in the jagirdar on the date of resumption and he could not be deprived of his right by a subsequent amendment unless the amendment in law specifically or by necessary implication provided for depriving the jagirdar of his vested right.
There is nothing in the definition of the term "settled" under sec 2 (n) of the Act or in sec.
86 of the Jaipur State Grants Land Tenures Act to indicate that the Legislature intended to affect the vested right.
[481 A D]
| The petitioner, an officer of the Madras Government, was employed in Central Provinces and Berar for the purchase of grains on behalf of the Madras Government.
He along with many others, was under prosecution before a Special Magistrate, Nagpur (Mad by a Pradesh), on charges for offences under section 420 of the Indian Penal Code etc.
for causing loss to the Madras Government.
The Special Magistrate trying the case was appointed by the Madhya Pradesh Government under section 14 of the Code of Criminal Procedure and as the petitioner was a servant of the Government of Madras, the prosecution against him was initiated with the sanction given by the Government of Madras under section 197 of the Code of Criminal Procedure.
Held, (i) that section 14 of the Criminal Procedure Code in so far as it authorises the Provincial Government to confer upon any person all or any of the powers conferred or conferrable by or under the Code on Magistrates of the first, second or third class in 169 respect of particular oases and thereby to constitute a Special Magistrate for the trial of an individual case, does not violate the guarantee under article 14 of the Constitution as the Special Magistrate in the present case had to try the case entirely under the normal procedure and no discrimination of the kind contemplated by the decision in Anwar Ali Sarkar 's Case ([1952] S.C.R. 284) arose in the present case.
A law vesting discretion in an authority under such circumstances cannot be discriminatory and is, therefore, not hit by article 14 of the Constitution.
(ii) It is not for the very Government which accords sanction under section 197(1) to specify also the Court before which the trial is to be held under section 197(2) and therefore in a case to which section 197(1) applies, the exercise of any power under section 14 is not excluded.
The word "Court" in sub section (2) of section 197 is not the same thing as a "person" in sub section (1) of section 14.
The practice of direct approach to the Supreme Court under article 32 (except for good reasons) in matters which have been taken to the High Court and found against, without obtaining leave to appeal therefrom, is not be encouraged.
Gokulchand Dwarkadas Morarka vs The King (A.I.R. 1948 P. C. 82) referred to; and Anwar Ali Sarkar 's case ([1952] S.C.R. 284) distinguished.
| These Civil appeals and special leave petitions centred round one point, namely, the validity of the Bombay Motor Vehicles Tax Act, 1958 as amended by Section 3 of the Maharashtra Act XIV of 1987 and Section 6 of the said Act as amended by Maharashtra Act XXXIII of 1987 and the Maharashtra Act IX of 1988.
Section 3 of the said Act XIV of 1987 added sub section (IC) to provide for the levy of one time tax at 15 times the annual rate on all motor cycles in the State.
The said provisions further provided that in the case of motor cycles owned by a company or other commercial organisation, the one time tax was to be levied at thrice the rate.
Section 6 of the said Act XIV of 1987 added sub section (6) to section 9, enabling a registered owner of a motor cycle or tricycle to obtain refund of `Lone_time tax" under certain conditions.
Petitions were filed in the High Court by the respondents in the appeals and petitioners in the special leave petitions, challenging the amended provisions of the principal Act.
The High Court held that (i) the levy of the one time tax was beyond the legislative competence of the State Legislature and also beyond Entry 57 of List II of the Seventh Schedule, and (ii) the provision for imposition of levy at thrice the rates on the vehicles owned by a firm or company, were neither discriminatory nor arbitrary.
The High Court struck down Act XIV of 1987.
The appeals by leave were filed by the State and the special leave petitions were fixed by the petitioners in this Court against the decision of the High Court.
In the meanwhile, the Maharashtra Legislature enacted Maharashtra Act XXXIII of 1987, which deleted Section 3(4) of the principal Act as amended by the PG NO 482 PG NO 483 Maharashtra Act XIV of 1987, whereby the existing provisions of refund for temporary non user were made inapplicable in cases of motor cycles and tricycles, restricting the right of refund to Section 9(6) in the contingencies mentioned therein.
It also introduced sub section (7) to section 9 conferring the right of refund in respect of motor cycles and tricycles in accordance with the rates specified in the Fifth Schedule.
But the said schedule did not prescribe a separate rate of refund for the company owned vehicles.
Therefore, the refund in respect of the company owned vehicles was the same as that payable to individual owned vehicles even though the tax paid on former class of vehicles was three times.
Soon thereafter, the Maharashtra Legislature enacted Act IX of 1988, whereby the only relevant change for the present purpose was that the rate of refund was enhanced to three times in respect of the company owned vehicles.
Before this Court, the appellant State submitted that the amendments enacted by the Maharashtra Acts XXXllI of 1987 and IX of 1988 had brought the principal Act as amended by the Maharashtra Act XIV of 1987 within the constitutional requirements of making one time tax 's regulatory and compensatory tax and that it was not necessary to decide if the Act as it stood when it was challenged before the High Court? was beyond the legislative competence of the State Legislature.
The respondents in the appeals and the petitioners in the special leave petitions urged that as even after the amendment no refund was available in respect of a vehicle which had been registered for more than 13 years? the effect of that was that no refund al all was available in respect.
of the tax paid for a vehicle for the 14th and 15th years.
The impugned levy of tax ceased to be compensatory or regulatory and was void under Entry 57 of List II and was violative of Article 301 of the Constitution.
Disposing of the appeals and dismissing the special leave petitions the Court.
HELD: The tax imposed on the motor vehicles or a class of motor cycles would not be valid unless it is compensatory or regulatory or does not have any nexus with the vehicles using the roads.
In such a case.
the levy would be Section of the said Act XIV of 1987 added sub section (IC) to provide for the levy of one time tax at 15 times the annual rate on all motor cycles in the State.
The said provisions further provided that in the case of motor cycles owned by a company or other commercial organisation, the one time tax was to be levied at thrice the rate.
The fact that the act, as at present, did not provide for refund in the 14th and 15th years, did no make the law outside the competence of the State Legislature.
he concept PG NO 484 of "regulatory and compensatory" tax does no imply mathematical precision of quid pro quo.
[489E] After the amendment, the Act came with in the constitutional requirements of making he one time tax a regulatory and compensatory tax.
It was true that the Act has no provided for refund in the 14h and 15h years but that does no make he law out sides the competence of the State Legislature.
It is no mathematical precision that is necessary nor can it be.
there is in the provisions as amended, as amended, a discernible and an identifiable object behind the levy and a nexus between the subject and the object of the levy, [491E F] Two principles have to be emphasised, firstly, that the tax must be regulatory and compenstaory and secondly, there must be no discrimination.
A taxation law cannot claim immunity from the equality clause in Article 14 of the Constitution, but in view of the intrinsic complexity of fiscal adjustments of diverse elements, a considerable wide discretion and latitude in the matter of classification for taxation purpose is permissible.
The life of Motor cycles and tricycles normally exceeds 25 years.
Non refund for certain period is no conclusive of the matter.
Even if mathematical provision is no possible, it cannot be said that it is wholly unmathematical.
The collection of ax for a period of 15 ears at one point of time is a convenient method enabling the owner o use he vehicle for more than 25 years without having to pay the tax periodically and pay the enhanced tax at may be levied during the 25 years of life of the vehicle.
Regulatory and compensatory tax can be levied to the extent e State is required to pay for rendering the services.
[491G;492A C] The Act, as at present, is not violative of Article 145 of the Constitution.
The fact that the company owned vehicles are taxed that three times the rate payable by individuals, does not make the legislation violatvie of Article 14.
Histrocially, the company owned vehicles are always been taxed at a rate higher that the individually owned vehicles.
he legislature has he power to distribute tax burden in a flexible manner and the Court would no interfere with the same.
It could not be said that there was differentiation without any basis and as such there was discrimination.
[492E H] In view of the principles applicable to the taxation laws and various other factors, the Maharashtra Act as amended from time to time does not suffer from any vice of being not regulatory or compensatory taxation nor from the vice of being violative of Article 14 of the Constitution, and the challenge to the provisions of the Act as amended PG NO 485 after the judgment of the High Court could not be maintained.
[494G ;495A] After the amendments afore mentioned the Act does no suffer from the vice mentioned in the judgment of the High Court .
The appeals were allowed thus, and the challenge made in the special leave petitions was dismissed.
[495] The taxes would be realised in accordance with the Act and the necessary adjustments would be made accordingly.
[495C] Bolani Ors.
Ltd. vs State of Orissa.
; ; G.K. Krishnan vs The State of Tamil Nadu & Anr., [1975] 2 S.C.R. 715; Malwa Bus Service (P) Ld.
vs State of Punjab and Ors.
, ; ' International ouris Corporation vs State of Haryana & Ors., ; ; Income tax Officer, shillong & Anr.
vs N. Takim Roy Rymbai, etc., ; Mrs. Meenakshi & Ors.
vs, State of Karnataka & Ors., AIR 1983 SC 1283; Anant Mills Co. Ltd. vs State of Gujarat and Ors., [1975] 3 S>.C.R. 220; Khandige Sham Bhat & Ors.
vs The Agricultural Income tax Officer; , and State of Karnataka vs K. Gopalakrishna Shenoy and Another, ; , refered to.
|
Appeal No. 175 of 1951.
Appeal by Special Leave from the Order and Decree dated the 30th March, 1951, of the High Court of Judicature at Patna (Ramaswami and Rai JJ.) in Miscellaneous Appeal No. 19 of 1951 arising out of the Order dated the 18th December, 1950, of the 'Court of the Additional Sub Judge Second at Gaya in Title Suit No. 47 of 1950.
N. C. Chatterjee (Rameshwar Nath, with him) for the appellant.
M. C. Setalvad Attorney General for India, and Mahabir Prasad, Advocate General of Bihar (B. J. Umrigar with them) for the respondent.
February 3.
The Judgment of the Court was delivered by MAHAJAN J.
This appeal by special leave arises out of an application made by the State of Bihar against the Gaya Electric Supply Co. Ltd. under section 34 of the Indian Arbitration Act for stay of proceedings in a suit filed by the company on 28th September, 1950.
The facts relevant to this enquiry are these.
574 A licence of or the supply of electric energy in the town of Gaya was obtained by one Khandelwal in the year 1928 under the .
With the required sanction of the Government the licence was transferred to the company in 1932.
By a notification dated 23rd June, 1949, the licence was revoked by the Government with effect from 9th July, 1949.
Thereupon the company filed a suit against the State for a declaration that the revocation of the licence was arbitrary, mala fide and ultra vires.
During the pendency of the suit negotiations started between the company and the State for a settlement of the dispute and ultimately on 28th October, 1949, a deed of agreement was arrived at between them.
The effect of the agreement and the correspondence referred to therein was substantially as; follows : (a) That the company would withdraw the suit No. 58 of 1949 unconditionally on 25th October, 1949.
(b) That within three days of the withdrawal of ,the suit the State of Bihar would make an advance payment of rupees five lakhs to the company, and, simultaneously the company would formally hand over the possession of the undertaking to an authorized officer of the Government.
(c) That both parties will make their respective valuations within three months of talking over the undertaking and any balance of money found due to the company as per Government valuation will be paid to the company and in case of overpayment the excess paid to the company on account of the " on account payment " of rupees five lakhs will be refunded to the, Government.
(d) That in the case of any difference or dispute between,the parties over the payment of the balance which may be found due after valuation such dispute shall be submitted to the sole arbitration of a single arbitrator who should be a high government officer of the provincial government of rank equal to or higher than a Divisional Commissioner and his award shall be binding and final on both parties.
575 The arbitration clause is contained in a letter dated 13th October, 1949, and was substantially accepted by the company in its letter dated 17th October, 1949.
As set out by the State Government in its application under section 34, it runs as follows " In the case of any difference or dispute between the parties over the valuation as arrived at by the Government and that arrived at by the company, such difference or dispute, including the claim for additional compensation of 20 % shall be referred to arbitration. " In pursuance of the agreement the respondent took over the undertaking on 28th October, 1949, and also made a payment of rupees five lakhs to the company.
On the 19th January, 1950, the company sent a statement of valuation of the assets amounting to RS.
22,06,072, to the Chief Electrical Engineer, Bihar.
The Chief Electrical Engineer characterized the valuation of 22 lakhs by the company as fantastic and stated that according to a rough valuation the amount would be ' approximately five lakhs and that the final valuation would be settled after the company had furnished a detailed history of the plants and machineries.
The company declined to give any further details and stated that time was of the essence of the. contract and it would be extended from 28th January, to 15th February, 1950 On 6th April, 1950, the Chief Electrical Engineer intimated that the 'valuation amounted to Rs. 6,56,221.
No reply to this letter was received and the State Government intimated to the company that as difference and dispute had arisen relating to valuation, Mr. M. section Rao, I.C.S. was being appointed as sole arbitrator to decide the dispute.
On 28th September, 1950, the company instituted the suit, the subject matter the application for stay, after necessary notice under section 80 of the Code of Civil Procedure.
In the plaint it was alleged ,that as the State Government had failed and neglected to make its valuation or to make payment to the 576 company by the 15th March, 1950, it committed a breach of the agreement and by reason of this breach the company had rescinded the agreement and had forfeited the sum of five lakhs paid as advance by the State.
The company prayed inter alia for the reliefs of declaration that the, electrical undertaking belonged to them, for damages, for appointment of receiver and for injunction.
On the 9th October, 1950, the State Government filed the present appli cation under section 34, of the Indian Arbitration Act.
It was stated therein that the company had with a, dishonest and mala fide motive and with a view to avoid the decision of the matter in dispute in arbitration instituted the suit on incorrect and false allegations.
that the arbitration agreement was still subsisting and valid and binding on the parties and could not be taken as having been rescinded as alleged by the company, that the cause of action as alleged in the plaint being noncompliance with the agreement the suit arose out of and related to the agreement and was covered by the arbitration clause and that the State Government was ready and willing to have the dispute settled by arbitration.
The company denied the allegations of mala fides and pleaded that the arbitration clause was no longer in existence and that even assuming it to be in existence, the suit was in no way connected with the 'same and it was contended that the suit should not be stayed.
The subordinate judge held that the suit was no in respect of any matter agreed to be referred, and that the court had no ' jurisdiction to stay the proceedings.
In the result the stay application was dismissed.
Against this order the State Government appealed to the High Court.
The High Court held that the dispute in the suit was one which arose out of or was in respect of the agreement and that the question in the suit was directly within the scope of the arbitration clause.
By an order of this court dated 22nd May, 1951, the company was granted special leave ' under article 136(1) of the Constitution. ' 577 Section 34 of, the Indian Arbitration Act runs thus "Where any party to an arbitration comment Cost any legal proceedings against any other party to the agreement in respect of any matter agreed to be ,referred, any party to such legal proceedings may, apply to the judicial authority before which the proceedings are pending to stay the proceedings, and if satisfied that there is no sufficient reason why the matter should not be referred in accordance with the arbitration agreement and that the applicant was, at ,the time when the proceedings were commenced, and still remains, ready and willing to do all things necessary to the proper conduct of 'the arbitration, such authority may make an order staying the proceedings.
" From the language of the section it is quite clear that the legal proceeding which is sought to be stayed must be in respect of a matter which the parties have agreed to refer and which comes within the ambit of the arbitration agreement.
Where, however, a suit is commenced as to a matter which lies outside the submission, the court is bound to refuse a stay.
In the words of Viscount Simona L. C. in Heyman vs Daruins Ltd ' (1).
the answer to the question whether a dispute falls within an arbitration clause in a contract must depend on (a) what is the dispute, and (b) what disputes the arbitration clause covers.
If the arbitration agreement is broad and comprehensive and embraces any dispute between the parties "in respect of" the agreement, or in respect of any provision in the agreement, or in respect of anything arising out of it, and one of the parties seeks to avoid the contract, the dispute is referable to arbitration if the avoidance of the contract arises out of the terms of the contract itself. ' Where, however, the party soaks to avoid the contract for reasons dehors it, the arbitration clause cannot be resorted to as it goes along with other terms of the contract.
In other words, a party cannot rely on a term of the contract (1) , 578 to repudiate it and still say the arbitration clause should not apply.
If he relies upon a contract, be must, rely on it for all purposes .
Where, however, an arbitration clause is not so comprehensive and is not drafted in the broad language which was, used in the House of Lords,case, namely ' "in respect of" any agreement, or in respect of something, arising out of it", that proposition does not hold good.
The arbitration clause is a written submission agreed to by the parties in a contract and like every written submission to arbitration must be considered according to its language and in the light of the circumstances in which it is made.
Now as regards the first question, viz., what is the present dispute about, the answer is to be gathered from paragraphs 14 to 17 of the plaint.
It is averred therein that the Government of Bihar committed breach of the agreement and failed to make any, valuation of the undertaking or pay the balance of the compensation money, that time being of the essence of the contract, the defendant failed and neglected to complete the valuation within the time originally fixed or the extended time, and that by reason of the breach of contract the plaintiff rescinded the agreement and forfeited the sum of rupees five lakhs and that it is entitled to compensation for the wrongful deprivation of the use of its property.
No claim has been made in the plaint for the valuation of the undertaking or for the payment of any compensation for the undertaking; on the other hand, the claim in the suit is founded on the rescission of the agreement containing the arbitration clause and on a breach of that agreement.
These are matters which may well be said to arise out of the agreement and if the arbitration clause was broadly worded and stated that all disputes arising out of the agreement would be referred to arbitration, it could then probably have been said that the scope of the suit was within the ambit of the arbitration clause, but the clause here is differently worded.
The clause here is that if any difference.
or dispute arises between the parties over the payment of the 579 balance which may be found due after valuation such dispute shall be submitted to the sole arbitration of a single arbitrator.
The scheme of the agreement is that the Government was to make a valuation as laid ' down in the within three, months of taking over the undertaking and any balance of money found due to the company as per Government valuation was to be paid by the Government, and in case of over payment, the excess paid to the company on account of the "on account payment" of rupees five lakhs mentioned in paragraph 1 had to be refunded to government.
In the case of any difference between the parties over the valuation as arrived at by the Government and that arrived at by the company, such difference or dispute, including the claim for additional compensation of twenty per cent.
had to be referred to arbitration a scope of it is arbitration clause is a very narrow one.
It only confers jurisdiction on the arbitrator on the question of valuation of the undertaking pure and simple and does not say that all disputes arising out of the agreement or in respect of it will be decided by arbitration.
Questions relating to the breach of contract or its rescission are outside the reach of this clause.
The arbitrator has not been conferred the power by this clause to pronounce on the issue whether the plaintiff was justified in claiming that time was of the essence of the contract and whether the State Government committed a breach of the contract by not making a valuation within the time specified.
This clause is therefore no answer to the company 's querry "Show me that I have agreed to refer the subject matter of the suit to an arbitrator.
" Besides this clause in the agreement there is nothing else which can deprive the court of its jurisdiction to decide the plaintiff 's suit as brought.
Ramaswami J., with whom Rai J. concurred, held that upon a perusal of the term,; of the contract and of the correspondence it was obvious that no stipulation was made that the compensation money 75 580 should be paid within the period of three months, that on the contrary, the intention of the parties that the Government would pay compensation money only after the award had been made by the arbitrator.
Now this is the very point which would be in issue in the suit itself, and the learned Judge was in error in considering and deciding this point in this enquiry under section 34.
The validity of the plaintiff 's contention in the suit cannot be gone into by that court exercising jurisdiction under this section as its function is a very limited one.
The only point in such cases to be decided is whether the claim which is brought whether it is good, bad or indifferent comes within the submission to arbitration.
It may be that there are grounds upon which the defendant would be able to satisfy the proper tribunal that the plaintiff 's claim was frivolous and vexatious, but those considerations, as pointed out by Banks L. J in Monro vs Bognor Urban Council (1), are material only if the question to be considered is whether the case made was a frivolous and vexatious one and ought to have had no weight at all upon the question of what the plaintiff 's claim in fact was and one can only find out what his claim is by looking at the plaint.
The learned Judges in the High Court seem to have thought that the arbitration clause here had been drafted broadly and that all "disputes arising out of or in respect of the agreements were referable to arbitration.
Their reliance on the decision of the Calcutta High Court in Harinagar Sugar Mills Ltd. vs Skoda India Ltd.(") in support of the decision indicates the error.
In that case the arbitration clause was drafted in a comprehensive language and stated that a dispute arising out of the agreement had to be referred to arbitration.
Their reference to the case of Governor General in Council vs Associated Livestock Farm Ltd. (3) also shows that they were under the same erroneous impression.
In this case the arbitration clause was in these terms : (1) [1915] 3 K.B. i67.
(2) (3) A.I.R. 1948 Cal, 230, 581 "Any dispute or difference arising out of the contract shall be referred to the arbitration of the officer sanctioning the contract whose decision shall be final and binding.
" It is obvious that these decisions could have no relevance to the arbitration clause as drawn up in the present case.
If the nature of the claim is as we have indicated above, it seems plain that it does not come within the scope of the submission.
In our judgment, therefore, the decision of the learned Subordinate Judge was right and the Judges of the High Court were in error in reversing it.
In the result the only course open to us is to allow the appeal with costs and to say that the plaintiff 's claim is not within the scope of the submission and that the petition under section 34 was rightly dismissed by the Subordinate Judge.
Appeal allowed.
Agent for the appellants Rajinder Narain.
Agent for the respondent P. K. Chatterji.
| If the arbitration agreement is broad and, comprehensive and embraces any dispute between the parties in respect of the agreement, or in respect of any provision in the agreement, or in respect of anything arising out of it, and one of the parties seeks to avoid the contract, the dispute is referable to arbitration if the avoidance of the contract arises out of the terms of the contract itself.
Where, however, the party seeks to avoid the contract for reasons dehors it, the arbitration clause cannot be resorted to as it goes along with other terms of the contract.
In other words, a party cannot rely on a term of the contract to repudiate it and still say the arbitration clause should not apply.
Where, however, an arbitration clause is not so comprehen sive and is not drafted in the broad language namely " in respect of " any agreement, or "in respect of something arising out of it", that proposition does not hold good.
The arbitration clause is a written submission agreed to by the parties in a contract and like every written submission to arbitration must be considered according to its language and in the light of the circumstances in which it is made.
Disputes which arose between the State of Bihar and an Electric Supply Company whose licence had been revoked by the State were settled by an agreement which provided that the State should make an advance payment of Rs. 5 lakhs to the company, and the company should hand over the undertaking to the State.
The undertaking was to be valued, within 3 months and if any money was found due to the company as per the Government valuation over 5 lakhs it will be paid to the company and if the valuation was less than 5 lakhs the company would refund the excess received by it.
The agreement, contained an arbitration clause which ran as follows: " In the case of any difference or dispute between the parties over the valuation as arrived at by the Government and that arrived at by the company any such difference or dispute including the claim for additional compensation of 20% shall be referred to arbitration.
" The company instituted a suit against the State alleging that the State bad failed to make its valuation.
and to make, payment of the excess within the time fixed and as time was of the essence of the contract, it had rescinded the agreement, and praying for a declaration that the undertaking belonged to it, for damages and appointment of a receiver.
The State applied under section 34 of the Arbitration Act for stay of the suit: Held, that the scope of the arbitration clause was very narrow; it conferred jurisdiction on the arbitrator only on the question of valuation of the undertaking pure and simple.
Questions relating to the breach of contract or its rescission were outside the scope of the clause and the suit could not be stayed under section 34.
Heyman vs Darwins Ltd. (119421 A.C. 356) referred to.
Harinagar Sugar Mills Ltd. vs Skoda (India) Ltd. (A.I.R. and Governor General in Council vs Associated Livestock Farm Ltd. ([1937] distinguished.
| The appellants owning mini steel plants have been getting supply of electricity from the Respondent Board.
The Board revised its terms and conditions for supply of electricity, and concessional tariff of 11 paise per unit for 3 years from 1.11.1977 was applied to five steel plants.
This tariff was subsequently enhanced to 12.5 paise per unit.
However, the concessional tariff was not extended to one of the appellants viz. M/s. Andhra Steel Corporation since a Writ Petition had been filed by it claiming that the agreement entered into with the Respondent Board for availing high tension electric supply was no longer in force.
In respect of the other steel plants, the Bard extended the concessional tariff subject to escalations and other terms and conditions and fixed a certain minimum consumption.
However, the tariff was revised to 16 paise without reference to the maximum demand charges from 1.3.1978.
In reply to a clarification sought by the Respondent Board, the State Government clarified that the Government order did not preclude the Board from applying the normal terms and conditions of supply and prescribing the monthly minimum charges and the working out of the escalated rate from time to time.
Subsequently the State Government withdrew the concessional tariff.
The State Government made a further clarification that its intention was to allow the concessional tariff without limiting the concession by imposition of minimum 625 consumption charges till the end of March, 1979.
Aggreived by the withdrawal of the concessional tariff, the mini steel plants filed Writ Petitions before the High Court contending that it was not open to the Electricity Board to have levied minimum charges and it was bound to supply electricity to them at the concessional tariff fixed by the State Government.
It was also contended that State Government 's subsequent clarification should prevail over the earlier one.
Violation of principales of natural justice, doctrine of promissory estoppel and right based on doctrine of legitimate expectation were also contended.
It was further contended that the directions were issued under section 78A of the Electricity Supply Act and hence they were of a compulsory nature and binding on the Board.
The Andhra Steel Corporation contended that while applying the concessional tariff to other mini steel plants, the Electricity Board was not justified in refusing the same to it thereby singling it out and hence its action was discriminatory and male fide.
The High Court rejected the various contentions and dismissed the Writ Petitions.
Aggrieved by the dismissal of their Writ Petitions, the mini steel plants filed appeal before this Court, raising the same contentions as were advanced before the High Court.
Dismissing the appeals, this Court, HELD: 1.
In granting concessional tariff obviously it does not appear to be the purpose to compel the Electricity Board to maintain the supply of the contracted load of electricity to the appellants by incurring loses.
The only purpose in directing supply of energy at concessional rates was to reduce the charges of actual energy consumed by the appellants and this purpose could not be frustrated till the Electricity Board complied with the direction of supplying electricity to them at the concessional rate.
Though the order dated 16.1.80 in substance amounts to a clarification of the earlier order of clarification dated 5th December,1978, it states nothing as to why the clarification contained in the order dated 5th December, 1978 in categorical terms did not express the real intention of the State Government in issuing the earlier Government orders granting concessional tariff.
The orders 626 granting concessional tariff, did not either expressly or by necessary implication grant immunity to the mini steel plants from their obligation to pay minimum charges and this having been categorically stated by the State Government in its clarificatory order dated 5th December, 1978 there was apparently no basis for issuing the second clarificatory order dated 16th January, 1980.
It was issued on some representation made by the mini steel plants at a point of time when Writ Petition on their behalf had already been filed in the High Court and matter was sub judice.
In such a situation, apart from the propriety of issuing the second clarificatory order on 16th January, 1980 it is obvious that what was contained in this order is analogous to an averment made by the State Government in reply to the Writ Petitions filed on behalf of the appellants and it has no bearing in finding out the true import of the orders of the State Government granting concessional tariff.
[633C D;636A E] Amalgamated Electricity Co. vs Jalgaon Borough Municipality, ; and Bihar State Electricity Board vs Green Rubber Industries, [1990] 1 SCC 731, referred to.
By the Government Orders dated 2nd November, 1977 and 26th November, 1977 concession was granted to the appellants.
This is manifest from the government Orders themselves which expressly used the expression "concessional power tariff" or "concessional tariff".
At no stage, the appellants disputed that what was extended to them by the said Government Order was by way of concession.
In view of the settled law.
Neither of the two orders viz., order dated 5.12.78 and 12.3.79 can be said to be illegal on the ground that they were passed in violation of principles of natural justice.[633F H] Shri Bakul Oil Industries vs State of Gujarat, ; ; relied on.
With regard to the plea of promissory estoppel, it is not the case of the appellants that they established their mini plants after the grant of concessional Tariff by the said two Government Orders and but for the grant of such concessional tariff they would not have established their mini steel plants.
The necessary facts so as to sustain the plea of promissory estoppel are not pleaded or established by the appellants.
[635B D] 4.
There is nothing on record to substantiate the plea of doctrine of legitimate expectation on the basis of which the appellants could be held entitled to any relief.[635G] 627 5.
On the facts of the present appeals it is not necessary to go into the question whether the power of fixing tariff under section 49 of the Electricity Supply Act could be regulated by a direction under section 78A thereof.
The electricity Board proceded to implement the directions with regard to fixation of concessional tariff issued by the State Government and resolved to realise electricity charges from the appellants only at the concessional tariff of 12.2 p. as fixed in the Government Order dated 26th November, 1977.
It, however, took the further view that the directions issued by the Government did not have any bearing on the obligation of the appellants to pay minimum charges which they were bound to pay under the agreements executed by them even though such minimum charges were to be calculated at the rate of 12.2 p. per unit subject to escalation as indicated in the Government Orders in question.
Such minimum charges were payable even if no electricity was consumed by the appellants for any reason whatsoever.
[631B D]
| The appellant company was a dealer in ghee and groundnut oil etc.
The Deputy Commercial Tax Officer assessed it to sales tax for the year 1948 49 on a turnover of Rs. 28,69,151 and odd.
Similarly for the year 1949 50 the appellant was assessed to sales tax on a turnover of Rs. 28,72,o83 and odd.
The appellant challenged these assessments and its appeal before the Commercial Tax Officer having failed the two matters came up in second appeal before the Sales Tax Appellate Tribunal.
In the Tribunal the appellant did not place any materials in support of its contentions and the two appeals were disposed of by the Tribunal holding that the appellant was correctly assessed to sales tax.
In respect of the aforesaid orders of the Tribunal the appellant filed applications for review under section 12A(6)(a) of the Madras General Sales Tax Act, 1939 (Mad.
Act IX Of 1939), taking the plea that in the first case the materials could not be placed before the Tribunal as there was none to instruct the appellant 's advocate in English or Telegu, and in the second case the relevant correspondence was mixed up with other records.
The Tribunal rejected the applications for review on the ground that a failure to produce the necessary materials in support of a plea taken before it, due either to gross negligence or deliberate withholding, did not come within the reason of section 12A(6)(a) of the Act.
The High Court upheld the decision of the Tribunal.
On appeal by special leave in one case and a certificate of the High Court in the other: Held, that the provision in section 12A(6)(a) of the Madras General Sales Tax Act, 1939 (Mad.
Act IX Of 1939), permits a review when through some oversight, mistake or error the necessary facts, basic or evidentiary, were not present before the Court when it passed the order sought to be reviewed, but a party was not 805 entitled to ask for a review when it had deliberately or intentionally withheld evidence in support of a claim made by it.
State of Andhra vs Sri Arisetty Sriyamulu, A.I.R. 1057 Andhra Pradesh 130, not approved.
| After the estates and tenures of proprietors or tenure holders had passed to and became vested in the State by virtue of the Bihar Land Reforms Act, 1950, the Revenue Authorities interfered with the rights of those ex proprietors and ex tenureholders to hold Melas on lands which were occupied by them thereafter as occupancy raiyats and collected tolls from such Melas on behalf of the Government whereupon those intermediaries made applications to the High Court for writs restraining the Government from such interference which were allowed by the High Court.
During the pendency in this Court of these appeals preferred by the Officers of the State of Bihar against the order of the High Court the Bihar Land Reforms Amendment Act, 1959, was passed amending the Bihar Land Reforms Act of 1950 with retrospective effect by which the word Mela was added after the words jalkars, hats and bazars in section 4, cl.
(b) of the amended Act.
Further amendments provided inter alia that the State Government and not the intermediaries except with the consent of the State Government shall have the right to hold such Melas.
The main question arising for decision in these appeals and certain other applications made to this Court under article 32 of the Constitution of India was whether the amending legislation violated articles 14, 19 and 31 of the Constitution.
Held, that the Bihar Land Reforms Amendment Act, 1959, is a law providing for the acquisition by the State of rights in an "estate" within the meaning of article 31A of the Constitution and even if it is assumed that it abridges the rights conferred by articles 14, 19 and 31 of the Constitution its provisions are not void on that ground.
The amending legislation was within the legislative com petence of the Legislature under article 246 of the Constitution and after its amendment the legislative list permitted the State 383 Legislature to enact a law of acquisition even without a public purpose.
The State of Bihar vs Sir Kameshwar Singh, [1952] S.C.R. 889, considered.
| On December 19, 1953, the appellant, a company registered in West Germany, entered into a contract with a company in India to set up a complete coke oven battery ready for production as well as by products plants at Sindri in the State of Bihar, agreeing to erect and construct buildings, plants and machinery and deliver and supply accessories and articles from Germany and also locally from India, and render services fully described in the First Schedule, for an all inclusive price of Rs. 2,31,50,000.
The contract provided that in case the contractor failed to complete the works within the period specified therein the Indian company might take possession of the works and the materials which would become its property and complete the works and deduct from the agreed price the expenses incurred in such completion.
Under cl.
15(ii) of the contract all materials brought by the contractor upon the site shall immediately become the company 's property, but such of them as during the progress of the works.
were rejected by the company ceased to be Company 's property, and after the coke oven and byproducts plants had been constructed the contractor was entitled to remove the surplus materials.
The clause further provided that the company shall not be liable for any loss if the materials were destroyed by fire or otherwise.
Under the Bihar Sales Tax Act, 1947, in a contract for, execution of works, the materials used 11 82 therein are treated as sold by the contractors and their value is taken as the sale price liable to be taxed.
The execution of the works was completed in 1955 as provided in the agreement and on March 20, 1956, the sales tax authorities issued a notice to the appellant to the effect that it was liable to pay tax for the three years 1952 to 1955, under the provisions of the Act.
The appellant represented that it had only supplied materials in execution of works contract, that there was no sale of any goods or materials by it and that the proceedings for taxing this supply of materials as if they had been sold were illegal.
The sales tax authorities having proceeded to take further steps to levy the tax in spite of its representations, the appellant filed a petition before the High Court of Patna under articles 226 and 227 of the Constitution of India for quashing the proceedings.
The High Court took the view that under cl.
15(ii) of the contract in question the property in the materials was to pass to the Indian company as soon as they were brought on the site, and that, in effect, amounted to a sale of those materials by the appellant to the company.
The Court, however, dismissed the petition on the ground that the facts had not yet been fully investigated and that it would be open to the sales tax authorities to investigate the facts and upon the proper construction of the contract come to the finding whether and if so to what extent, the appellant was liable to pay sales tax.
Held (Shah, J., dissenting): (1) that on its proper construction the agreement dated December 19, 1953, was a contract entire and indivisible for the construction of specified works for a lump sum and not a contract of sale of materials as such and that the sales tax authorities had no right to impose a tax on the materials supplied in execution of that contract on the footing that such supply was a sale.
The State of Madras vs Gannon Dunkerley & Co. (Madras) Ltd., ; and Peare Lal Hari Singh vs The State of Punjab, ; , followed.
(2) that where proceedings are taken before a tribunal under a provision of law, which is ultra vires, it is open to a party aggrieved thereby to move the court under article 226 for issuing appropriate writs for quashing them on the ground that they are incompetent, without his being obliged to wait until those proceedings run their full course.
The State of Bombay vs The United Motors (India) Ltd., ; , Himmatlal Harilal Mehta vs State of Madhya Pradesh, ; and The Bengal Immunity Company Ltd. vs State of Bihar, , relied on.
In the present case, the sales tax authorities sought to maintain the liability of the appellant to pay tax in respect of materials supplied by it only under the contract dated December 19, 953, and on the basis of the legality of the provisions 83 of the Bihar Sales Tax Act, 1947.
Consequently, the proceedings taken by them must be held to be illegal and must be quashed.
Per Shah, J. Under the agreement dated December 19, 1953, there was a contract for the construction of a coke oven battery and by products plant, and also to deliver and supply accessories and articles.
Even if this delivery and supply was incidental to the works contract, it could not be assumed without investigation that it was not a part of a transaction of sale liable to tax.
The investigation of facts on the question of liability to pay tax has to be made by the taxing authorities in whom that jurisdiction is vested.
Before these facts are ascertained, by merely looking at the terms of the written contract and without any investigation as to the true nature of the transaction, the High Court could not decide whether the contract performed was a pure works or construction contract or was a composite contract.
The High Court was, therefore, right in declining to issue the writ prayed for.
| The appellant State issued a notification under section 4 of the West Bengal Estates Acquisition Act, 1953 covering the land comprised in the tea garden of the respondent company.
The Revenue Officer issued notices to the respondent company initiating proceedings for assessment of rent.
The Company objected stating that it was not an intermediary within the meaning of the Act and since its tea estate comprised of free hold land the Revenue Officer had no jurisdiction to assess the rent under Section 42(2) of the Act.
The Revenue Officer rejected the contention and fixed the rent at Rs.2,375.94 per year.
On revision preferred by the State, the Revenue Officer determined the rent at Rs.8,765.24 per year.
The Company preferred appeals before the Tribunal.
The appeals were dismissed in default and the restoration applications were also rejected.
Thereafter, the Company preferred applications before the High Court under Section 115 CPC read with Article 227 of the Constitution for restoration of the two appeals, and obtained stay of the operation of the Revenue Officer 's order.
During the pendency of the cases, the Additional Deputy Commissioner informed the respondent that inspite of the repeated reminders the company had not executed the long term lease for 30 years on prepayment of the requisite number of instalments or rent and cess.
The respondent company replied pointing out that the High Court had granted the stay order and therefore the matter stood stayed till the disposal of the said cases.
Thereafter, the Collector served upon the Company, a notice under section 106 of the Transfer of Property Act, 880 1882 determining the tenancy of the company In respect of the tea garden on the expiry of the specified date.
The company was required to hand over the vacant and peaceful possession of the tea garden.
In reply to the said notice, the company stated that in view of the stay order granted by the High Court no further proceedings be taken.
Thereafter the Collector took over the possession of the tea garden.
The applications before the High Court were still pending.
However, aggrieved by the order of the Collector taking over its tea garden, the Respondent preferred a Writ Petition before the High Court Allowing the writ petition, the High Court directed the appellant State Government and other authorities to deliver the possession of the tea garden to the Company within a month.
Aggrieved by the High Court 's order, the State as also the West Bengal Tea Development Corporation to whom the possession of the tea garden is transferred by the State, preferred appeals, before this Court.
Disposing of the appeals, this Court, HELD:1.
The Revenue Officer had initially determined the rent at the rate of Rs.2,371.94 per year, but the same was not accepted by the Government and on a representation made by the State Government, the Revenue Officer had refixed the rent at Rs.8,769.24 per year by order dated 22.8.1968.
The Company had challenged the rent refixed at Rs. 8.769.24 and the High Court had stayed the order of the Revenue Officer fixing the rent at the rate of Rs.8,769.24.
In view of these circumstances, it was necessary on the part of the Collector to have passed an order of summary settlement as contemplated under Form I Schedule F of the West Bengal Estates Acquisition Rules, 1954.
The High Court was, therefore, right in holding that the Collector had no jurisdiction to terminate the tenancy on the ground of non payment of rent for not executing a lease deed inasmuch as the Collector had not mentioned in the notice terminating the tenancy under Section 106 of the Transfer of Property Act, that he was prepared to accept the rent at the rate of Rs. 2,375.94 per year as determined initially by the Revenue Officer.
[886 F H; 887 A,B] 2.In order to do complete justice between the parties, it is proper that the respondent Company should be given the prosession of the tea garden provided the Company pays the entire arrears of rent from 27.7.1965to 21.4.1981, the date when the Company was dispossessed, 881 calculated at the rate of Rs. 8,769.24 per year after adjusting any amount already paid, within three months.
There would be no necessity for the Collector to make any order of summary settlement and a long term lease should be executed as contemplated under sub section (3) of Section 6 of the West Bengal Estates Acquisition Act, 1953.
As soon as the arrears of rent are paid by the Company and a lease deed is executed, the Company should be handed over the possession of the tea garden.
In case any increase in the amount of rent is permissible under the law due to lapse of time, the State Government would be free to take the same into consideration while granting the long term lease.
[887 B D]
| Section 22 A of the was inserted in the Act by the Electricity (Amendment) Act, 1959 (32 of 1959).
Sub section 1 of section 22 A authorised the State Government to issue direction to a licensee to supply energy to an establishment in preference to any other consumer, if in its opinion it is necessary in the public interest to give such direction and (ii) if the establishment in question is in the opinion of the State Government as establishment used or intended to be used for maintaining supplies and services essential to the community and the decision of the State Government that in its opinion the establishment is used or intended to be used for maintaining supplies and services essential to the community is notified by that Government in the Official Gazette.
Sub section (3) of Section 22 A provides that where in any agreement by a licensee, whether made before or after the commencement of the Electricity (Amendment) Act, 1959 for the supply of energy with any establishment referred to in sub section (1) expires, the licensee shall continue to supply energy to such establishment on the same terms and conditions as are specified in the agreement until receipt of a notice in writing from the establishment requiring discontinuance of the supply.
The Respondent Municipality which was under an obligation to make reasonable and adequate provision for lighting of public streets, places and buildings situated within its limit, entered into an agreement on August 14, 1940 with the Appellant Company which was licensee under the Electricity Act, 1910.
The period during which the supply of electrical energy was to be made under the said agreement was 20 years from the date on which it was executed.
On May 10, 1960 the Company wrote a letter to the municipality that the said agreement was to come to an end and on its expiry, the Company was not under any obligation to continue to supply energy to the Municipality as per the rates, terms and conditions stated in the agreement.
The company also informed that if the municipality was not willing to purchase energy at the revised rates the supply would be discontinued on the expiry of the period of the agreement.
The municipality thereafter wrote a letter on August 6, 1960 requesting the Company to renew the agreement on the same terms and conditions.
The Company by its reply informed the municipality that it would not supply electrical energy on the same terms and conditions and insisted on payment being made at the revised rates as stated in its letter dated May 10, 1960.
The municipality thereafter filed a suit relying upon the provisions of sub section (3) of section 22 A 477 of the Act, for a declaration that it was entitled to the supply of electrical energy from the Company on the same terms and conditions as were specified in the agreement, until the Company received a notice in writing from the municipality requiring it to discontinue the supply.
The company contested the suit on the ground that the municipality was not entitled to the benefit of sub section (3) of section 22 A of the Act as it was not an establishment to which the said provision was applicable.
The Trial Court held that in the absence of a notification as required by sub section (1) of Section 22 A of the Act the municipality was not entitled to claim the benefit of the provision and therefore no relief could be granted in the suit and accordingly dismissed the suit.
The municipality 's appeal to the District Court was dismissed, but the second appeal was partly allowed by a Single Judge of the High Court, and a decree was passed granting relief in favour of the municipality declaring that the company was bound under sub section (3) of section 22 A of the Act to continue to supply electrical energy to the municipality at the same rates and on the same terms and conditions as were specified in the agreement, dated August 14, 1960.
The Letters Patent Appeal filed by the company was dismissed by the Division Bench of the High Court, which however certified the case as a fit one for appeal under Article 133(1)(c) of the Constitution.
In the appeal to this Court, on the question whether the municipality was an establishment which can claim the benefit of sub section (3) of section 22 A of the Act.
^ HELD: 1.
The High Court was in error in ignoring the requirements which an establishment had to satisfy before claiming the benefit of sub section (3) and in holding that if in the opinion of the Court, the establishment satisfied that it was being used or intended to be used for maintaining supplies and services essential to the community, it could claim the benefit of sub section (3) even though no notification had been issued by the State Government under sub section (1) of Section 22 A of the Act.
[489H 490B] 2.
If the agreement referred to in sub section (3) of section 22 A of the Act is an agreement entered into by a licensee with an establishment which is at the time of the agreement, an establishment referred to in sub section (1) of section 22 A of the Act, then the provision in sub section (3) making it applicable to agreements made before the commencement of the Electricity (Amendment) Act, 1959 by which section 22 A was introduced becomes meaningless because the formation of the two opinions of the State Government that an establishment is being used or intended to be used for maintaining supplies and services essential to the community and that it is necessary to issue a direction in respect of it under sub section (1) can only be done after section 22 A of the Act was introduced in the Act and there would be no establishment satisfying the requirements of section 22 A(1) before section 22 A(1) was introduced.
[486 G 487 A] 3.
Sub section (1) of section 22 A of the Act was enacted by the Parliament for the purpose of enabling the State Government to issue a direction and subsection (3) was enacted for the purpose of providing for the continuance of an agreement entered into by a licensee with an establishment referred to in sub section (1) of section 22 A. What, is however, common to the two sub sections is that the establishment referred to in sub section (1) and an establishment 478 referred to in sub section (3) of section 22 A should be of the same kind that is it should be an establishment which is in the opinion of the State Government used or intended to be used for maintaining supplies and services essential to the community and the fact of formation of such opinion is notified in the Official Gazette.
It should satisfy the test laid down in sub section 22 A(1) of the Act.
[487 C E] 4.
There is no impediment for the State Government issuing a notification under sub section (1) of section 22 A in order that an establishment notified therein gets the benefit of sub section (3) of section 22 A of the Act.
[487 H 488 A] 5.
The words 'referred to in sub section (1) appearing in sub section (1) of section 22 A of the Act are descriptive of and define the establishment to which sub section (3) of section 22 A applies and in order to identify such establishment, recourse should be had to the latter part of sub section (1) which lays down the criteria which such establishment should satisfy.
[488 B] 6.
A statutory definition or abbreviation should be read subject to all the qualifications expressed in the Statute and unless the context in which the word defined appears otherwise requires, it should be given the same meaning given by the words defining it.
[488 C] 7.
The power to issue a notification under section 22 A(1) of the Act involves an element of selection and the said process of selection cannot be construed as an empty formality which can be dispensed with.
Nor can that power of selection which is entrusted to the State Government by the Parliament be claimed by the Courts.
It is for the State Government to notify the establishment which should be the beneficiary of a direction to be issued under section 22 A(1) or which is entitled under section 22 A(3) of the Act to the supply of electrical energy on the same terms and conditions as are specified in the agreement entered into by it with the licensee even after the expiry of the agreement until such establishment serves a notice in writing on the licensee asking the licensee to discontinue the supply.
[488 H 489 B] 8.
Section 22 A of the Act, suggests that the intention of Parliament appears to be that the State Government can issue a direction only in the case of an establishment which in its opinion satisfies the qualifications mentioned therein and that sub section (3) should be applicable only to an establishment which in the opinion of the State Government satisfies the said qualifications.
[488 E] 9.
Sub section (3) of section 22 A of the Act makes a serious inroad into the rights of the licensee flowing from a contract stipulating a specific period during which it should subsist and compels the licensee to supply energy to the establishment even after the expiry of the agreement until a notice is issued in writing by the establishment requiring the licensee to discontinue the supply.
[489 D]
| The right of appeal is a matter of substantive right and not merely a matter of procedure, and this right becomes vested in a party when the proceedings are first initiated in, and before a decision is given by, the inferior Court and such a right cannot be taken away except by express enactment or necessary intendment.
Section 22(l.) of the Central Provinces and Berar Sales Tax Act, 1947, provided that no appeal against an order of assessment should be entertained by the prescribed authority unless it was satisfied that such amount of tax as the appellant might admit to be due from him, had been paid.
This Act was amended on the 25th November, 1949, and section 22(l) as amended provided that no appeal should ])a admitted by the said authority unless such appeal was accompanied by satisfactory proof of the payment of the tax in respect of which the appeal had been preferred.
On the 28th of November, 1947, the appellant submitted a return to the Sales Tax Officer, who, finding that the turnover exceeded 2 lacs, submitted the case to the Assistant Commissioner for disposal and the latter made an assessment on the 8th April, 1950.
The appellant preferred an appeal on the 10th May, 1950, without depositing the amount of tax in respect of which he had appealed.
The Board of Revenue was of opinion that section 22(l.) as amended applied to the case as the assessment was made, and the appeal was preferred, after the amendment came into force, ' and rejected the appeal.
Held, (i) that the appellant had a vested right to appeal when the proceedings were initiated, i.e., in 1947, and his right to appeal was governed by the law as it existed on that date ; (ii) that the amendment of 1950 cannot be regarded as a mere alteration in procedure or an alteration regulating the exercise of the right of appeal, but whittled down the right itself, and it had no retrospective effect as the Amendment Act of 1950 did not expressly or by necessary intendment give it retrospective effect, and the 988 appeal could not therefore be rejected for non payment of the tax in respect of which the appeal was preferred.
Colonial Sugar Refining Co. Ltd. vs Irving , Nanabin Aba vs Sheku bin Andu (I.L.R. , Delhi Cloth and General Mills Co. Ltd. vs Income tax Commissioner, Delhi (54 I.A. 421), Kirpa Singh vs Rasaldar Ajaipal Singh (A.I.R. 1928 Lab. 627), Sardar Ali vs Dalimuddin (I.L.R. applied.
Badraddin Abdul Rahim vs Sitaram Vinayak Apte (I.L.R. disapproved.
In re Vasudeva Samiar (A.I.R. 1929 Mad. 381), Ram Singha vs Sankar Dayal (I.L.R. 50 All. 965), Radhakisan vs Sri Dhar (A.I.R. , Gordhan Das vs Governor General in Council (A.I.R. 1950 Punj. 103) and Nagendra Nath Bose vs Monmohan referred to.
|
Appeal No. 356 of 58.
Appeal by special leave from the judgment and order dated January 21, 1955, of the Bombay High Court in Civil Revision Application No. 813 of 1953.
section T. Desai, section N. Andley and Rameshwar Nath, for appellant.
I. N. Shroff, for the respondent.
99 1961.
August 9.
The judgment of the Court was delivered by SHAH, J.
Pot No. 68 Town Planning Scheme No. 1 Jamalpur Ahmedabad, part of survey No. 405 Mouje Rajpur Hirpur admeasuring approximately 38 Gunthas was owned by, Bai Jekor and her two sisters.
By a lease dated October 15, 1934, this plot of land was granted in lease by the owners in perpetuity to Gajjar Ramanlal Gordhandas and his brother at annual rental of Rs.558.
The lesseesGajjars sublet by a lease dated February 7, 1946, the plot also in perpetuity to Narsaji Chenaji Marwadihereinafter referred to as the respondent at an annual rental of Rs. 1,425.
The respondent by deed dated April 25, 1947, sublet the plot to Subhadra hereinafter referred to as the appellant it an annual rental of Rs. 2,225.
In all these three deeds, it was recited that the lessees may construct buildings on the land and for obtaining sanction in that behalf, the lessors shall make applications to the Collector or any other authority for that purpose.
The plot on the dates of the three leases was assessed for agricultural purposes.
Under the Bombay Land Revenue Code V of 1879, land assessed for agricultural purposes may be used for non agricultural purpose if permission in that behalf is granted by the Collector.
The appellant applied for permission for conversion of user of the land to non agricultural purposes, and the Collector of Ahmedabad by order dated November 11, 1949, sanctioned conversion of the user.
Thereafter, the appellant by application dated October 27, 1950, applied to the Court of Small Causes., Ahmedabad for fixation of standard rent of the plot under section 11 of the Bombay Rents, Hotel and Lodging Houses Rates, Control Act 57 of 1947 hereinafter referred to as the Act.
The respondent contended that the land when granted in lease being agricultural, the provisions of Bombay Act did not apply thereto ;ad the application, was not maintainable.
The 100 Court of Small Causes upheld the contention of the respondent and dismissed the application.
This order was confirmed in appeal to the District Court at Ahmedabad and in a revision application to the High Court of Judicature at Bombay.
The, appellant has, with special leave, appealed to this court against the order of the High Court.
It is common ground that till November 11, 1949, the plot was assessed for agricultural purposes under the Bombay Land Revenue Code.
In the year 1947, the plot was undoubtedly lying fallow, but on that account, the user of the land cannot be deemed to be altered.
User of the land could only be altered by the order of the Collector granted under section 65 of the Bombay Land Revenue Code.
Section 11 of the Bombay Act 57 of 1947 enables a competent court upon application made to it for that purpose to fix standard rent of any premises.
But s.11 is in Part 11 of the Act and by section 6 cl.
(1), it is provided that in areas specified in Schedule I Part II applies to premises let for residence, education, business, trade or storage.
There is no dispute that Part II applied to the area in which the plot is situate ; but before the appellant could maintain an application for fixation of standard rent under section 11, she had to establish that the plot of land leased was "premises" within the meaning of section 5 (8) of the Act and that it was let for residence, education, business, trade or storage.
For the purposes of this appeal, it is unnecessary to consider whether the plot was let for residence, education, business, trade or storage.
The expression ",premises" is defined by section 5 (8) and the material part of the definition is : "In this Act, unless there is anything repugnant to the subject or context x x x x (8) " 'premises" means (a) any land not being used for agricultural purposes, 101 (b) any building or part of a building let separately (other than a farm building) including (i) the garden, grounds, garages and out houses if any, appurtenant to such building or part of a building, (ii) any furniture I supplied by the landlord for use in such building or part of a building, (iii) any fittings affixed to such building or part of a building for the more beneficial enjoyment thereof.
x x x x Reading section 5 sub cl.
(8) with section 6(1), it is manifest that Part If of the Act can apply in areas specified in Sch.
II to lands (not being used for agricultural purposes) let for residence, education, business, trade or storage.
The material date for ascertaining whether the plot is " 'premises" for purposes of section 6 is the date of letting and not the date on which the application for fixation of standard rent is made by the tenant or the landlord.
We agree with the High Court that the plot in dispute could not be regarded as "premises" inviting the application of Part II of the Act.
The application filed by the appellant under section 11 for fixation of standard rent was therefore not maintainable, The appeal fails and is dismissed with costs.
Appeal dismissed.
| The owner of a certain plot of land granted a perpetual lease of it on an annual rent to some persons who sublet it to the respondent on a higher rent.
The respondent sublet the plot to the appellant on a still higher rent.
In all the three deeds of lease it was recited that the lessee might construct buildings on the land after obtaining sanction of the appropriate authority but on the dates of all the three leases the plot was assessed for agricultural purposes under the Bombay Land Revenue Code, 1879.
The appellant obtained sanction of the Collector for conversion of user of the land to non agricultural purposes.
The appellant thereafter applied to the court for fixation of standard rent of the plot under 's.11 of the Bombay Rents, Hotel and Lodging Houses Rates Control Act, 1947.
The 'respondent contended that the land when granted in lease being agriculture I, the provisions of the Act did not apply thereto.
The question which arose for decision was whether the plot of land was 'Premises ' within the meaning of s.5(8)of the Act.
Held, that the material date for ascertaining whether the plot is 'premises ' is the date of letting and not the date of the application for fixing the standard rent.
In the present case the plot in dispute could not be regarded as 'premises ' under section 5(8) of the Bombay Act on the date of letting and the application for fixation of standard rent was not maintainable.
| Sub section (2) of section 3 of the Madras Estates Land (Reduction of Rent) Act XXX of 1947 authorises the State Government to fix the rates of rent payable in respect of each class of ryoti land in each village in the estate after considering the recommendations of the special officer and the remarks of the Board of Revenue thereon and by virtue of section 8(1) no order under this subsection is liable to be questioned in a court of law.
The appellants filed a suit questioning the legality of the notification reducing the rates of rent in respect of the delta dry ryoti lands in a village.
They contended that the class of land had been determined to be delta dry land exclusively on the basis of the settlement register which did not contain any entry with respect to the village in question, that the settlement register could not be considered to be conclusive, and that proper factual inquiry was necessary, because, the determination affected the appellant 's proprietary rights.
The trial court decreed the suit.
The High Court held that the civil courts had no jurisdiction to entertain the suit.
Allowing the appeals, HELD : The Special Officer had an obligation, under section 2 of the Reduction of Rent Act, to determine in respect of a village the average rate of cash rent per acre for each class of ryoti land in existence at the time of the commencement of the Act, such as, wet, dry and garden.
had to be determined on the basis of relevant material.
The Special Officer, however, proceeded to found his determination only on the report of the Special Assistant which only took into account the entry in the settlement register with respect to the soil of another village.
This really meant that the determination of the Special Officer was solely based on the settlement register containing no entry in regard to the village in question.
This material is irrelevant and cannot constitute a rational basis for founding thereon the determination of the Special Officer.
His determination must, therefore, be held to be based on no evidence, with the result that it must be held to be in violation of the fundamental principles of judicial procedure.
A fortiori the order of the Government made under section 3(2) exclusively on the basis of the recommendation of the Special Officer must in consequence be held 10 be not in conformity with the provisions of the Reduction of Rent Act and.
therefore, Outside the purview of section 3(2) of that Act.
Section 8(1) would accordingly be inapplicable and the jurisdiction of civil courts cannot be excluded.
[724 F 725 C] Secretary of State vs Mask and Company, (1940) 67 I.A. 222 and O. K. Mitthuswamy Nudaliar & Ors.
vs State of Madras, C.A. Nos.
1011 1017 '65, dt. 31 7 68.
referred to.
Dhujabhai and Ors.
vs State of Madhya Pradesh & Ors.
; , followed.
| These three groups of special leave petitions/appeals/writ petitions concern the policy and legality of the levy of Court fees under the Provisions of the Karnataka Court Fees and Suits valuation Act, 1958, the PG NO 155 PG NO 156 Rajasthan Court Fees and Suits Valuation Act, 1961 and the Bombay Court Fees Act, 1959.
The petitioners from Rajasthan had challenged before the High Court the constitutional validity of the provisions of section 20 read with Article 1 Schedule 1 of the Rajasthan Act which prescribed and authorised the levy of court fees on an uniform ad valorem basis without the prescription of any upper limit.
the High Court upheld the constitutionality of the impugned provision.
The appeal and the special leave petitions from Karnataka are directed against the common order of the Karnataka High Court upholding the validity of the corresponding provision of the Karnataka Act which similarly imposed an ad valorem court fee without prescribing any upper limit.
The writ petitions have challenged the provision directly in this Court.
So far as the Bombay Act is concerned, the State of Maharashtra has come up in appeal against the judgment of the Division Bench of the Bombay High Court affirming the order of the learned Single Judge striking down the provisions of section 29(1) read with entry 10 of Schedule I of the Act in so far as they purport to prescribe an ad valorem court fee, without any upper limit, on grants of probate, letters of administrative etc., while in respect of all other suits, appeal and proceedings an upper limit of court fee of Rs.15,000 is prescribed.
The High Court held this prescription of ad valorem court fee without any upper limit on this class of proceedings alone was constitutionally impermissible in that it sought to single out this class of litigants.
It was contended on behalf of the petitioners/appellants that (i) the imposition of court fees at nearly 10% of the value of the subject matter in each of the courts through which the case sojourns before it reaches a finally would seriously detract from fairness and justness of the system; (11) the exaction of ad valorem fee uniformly at a certain percentage of the subject matter without an upper limit or without the tapering down after a certain stage onwards would negate the concept of e fee and part take of the character of a tax outside the boundaries of the State 's power; (111) the ad valorem yardstick, which is relevant and appropriate to taxation, is wholly inappropriate because the principle or basis of distribution in the case of a fee should be the proportionate cost of services inter se amongst the beneficiaries; (iv) in the very nature of the Judicial process, a stage is reached beyond which there could be no proportionate or progressive increase in the services rendered to a litigant either qualitatively or PG NO 157 quantitatively; (v) in the process of `adjudication of disputes before courts, judicial time and the machinery of justice are not utilised in direct proportion to the value or the amount of the subject matter of the controversy; (vi) a recognition of the outermost limit of the possible services and a prescription of a corresponding upper limit of court fee should be made, lest the levy, in excess of that conceptual limit, becomes a tax; and (vii) though India is a federal polity, the judicial system, however, is an integrated one and that therefore different standards of court fee in different States would be unconstitutional .
The contentions of the State were that (i) as long as their power to raise the funds to meet the expenses of administration of civil justice was not disputed and as long as the funds raised show a correlation to such expenses, the States should have sufficient play at the joints to work out the incidents of the levy in some reasonable and practical way; (ii) it would, quite obviously, be impracticable to measure out the levy directly in proportion to the actual judicial time consumed in each individual case, hence the need to tailor some rough and ready workable basis which, though may not be an ideal or the most perfect one, would at least be the least hostile; (iii) if an upper limit is fixed and the collection fell short of what the Government intends and is entitled to collect, this would eventually result in the enhancement of the general rates of court fee for all categories; (iv) if the value of the subject matter is a relevant factor in proportioning the burden of the court fee.
where the line should be drawn in applying the principle it is more a matter of legislative wisdom and preference than of the strict judicial evaluation and adjudication; and (v) courts cannot compel the State to bring forth any legislation to implement and effectuate a Directive Principle.
Dismissing the appeals, writ petitions and the special leave petition, this Court, HELD: ( I) All civilised Governments recognise the need for access to justice being free.
Whether the whole of the expenses of administration of civil justice also in addition to those of criminal justice should be free and met entirely by public revenue or whether the litigants should contribute and if so, to what extent, are matters of policy.
[170G] (2) A fee is a charge for the special service rendered to a class of citizens by Government or Government agencies and is generally based on the expenses incurred in rendering the services.
[174B] PG NO 158 The Commissioner, Hindu Religious Endowments, Madras vs Lakshmindra Thirtha Swamiar of Shirur Mutt., [1954] SCR (1) 1005 and Om Prakash Agarwal vs Guni Ray, AIR 1986 (SC) 726 referred to.
(3) It is for the governmental agencies imposing the fee to justify its impost and its quantum as a return for some special services.
(4) Once a broad correlation between the totality of the expenses on the services, conceived as a whole, on the one hand and the totality of the funds raised by way of the fee, on the other, is established, it would be no part of the legitimate exercise in the examination of the constitutionality of the concept of the impost to embark its effect in individual cases.
Such a grievance would be one of disproportionate nature of the distribution of the fees amongst those liable to contribute and not one touching the conceptual nature of the fee.
[184A B] (5) The test is one of the comprehensive level of the value of the totality of the services, set off against the totality of the receipts.
If the character of the `fee ' is thus established, the vagaries in its Distribution amongst the Class, do not detract from the concept of a `fee ' as such, though a wholly arbitrary distribution of the burden might violate other constitutional limitations.
[185G] Municipal Corporation of Delhi & Ors.
vs Mohd .
Yasin.
, ; H.H. Sudhundra Thirtha Swamiar vs Commissioner for Hindu Religious & Charitahle Endowments., [1963] Supp. 2 SCR 302; Sreenivasa General Traders & Ors.
vs Andhra Pradesh & Ors., ; State of ' Maharashtra & Ors.
vs The Salvation Army, Western India Territorv ; Kewal Krishan Puri & Anr.
vs State of Punjab & Ors. ; Secretary.
Government of ' Madras, Home Department & Anr.
vs Zenith Lamp & Anr.
vs State of Kanataka, AI 1979 (SC) 119; The Commissioner Hindu Religious Endowments Madras vs Sri Lakshmindra Thirtha Swantiar of Sri Shirur Mutt., ; ; Om Prakash Agarwal vs Giri Raj Kishori, 730; N.M. Desai vs The Teesteels Ltd. & Anr., AIR 1980 (2) SC 2125; Lady Tanumuti Girijaprasad & Anr.
vs Special Rent Acquisition Officer, Western Railway Special Civil Application No. 979 of 1970 with Special Civil Application 287 of 1967; The City Corporation of Calicut vs Thachambalath Sadasvian & Ors., , referred to.
Indian Organic Chemicals vs Chemtax Fibres, Secretary, Government of Madras Home Department vs Zenith Lamp & Electrial Ltd., ILR 1968 (Madras) 247 overruled.
PG NO 159 (6) Though legislative measures dealing with economic regulation are not outside article 14, it is well recognised that the State enjoys the widest latitude where measures of economic regulation are,concerned.
These measures for fiscal and economic regulation involve an evaluation of diverse and quite often conflicting economic criteria and adjustment and balancing of various conflicting social and economic values and interests.
It is for the State to decide what economic and social policy it should pursue and what discriminations advance those social and economic policies.
In view of the inherent complexity of these fiscal adjustments, courts give a larger discretion to the Legislature in the matter of its preferences of economic and social policies and effectuate the chosen system in all possible and reasonable ways.
[187G H; 188A B] East India Tobacoo Co. vs State of Andhra Pradesh, ; The State of Gujarat & Anr.
vs Shri Ambica Mills Ltd. Ahmedabad, referred to.
(7) The lack of perfection in a legislative measure does not necessarily imply its unconstitutionality.
It is rightly said that no economic measure has yet been devised which is free from all discriminatory impact and that is such a complex arena in which no perfect alternatives exist, the court does well not to impose too rigorous a standard of criticism.
under the equal protection clause.
reviewing fiscal services.
[189F G ] G.K. Krishnan etc.
vs The Slate of Tamil Nadu [1975] 2 SCR 715 730; San Antonic Independent School Districf vs Bodriguer.
411 U.S.I. at p. 41.
Income Tax Officer, Shillong & Anr.
vs N. Takim Roy Rymbai etc.
; , referred to.
It is trite that for purposes of testing a law enacted by one State in exercise of its own independent legishtive powers for its alleged violation of Article 14 it cannot be contrasted with laws enacted by other States.
[192C] The State of Madhya Pradesh vs G.C. Mandawar, ; , referred to.
(9) Having regard to the nature and complexity of this matter It is, perhaps, difficult to say that the ad valorem principle which may not be an ideal basis for distribution of a fee can at the same time be said to be so irrational PG NO 160 as to incur any unconstitutional infirmity.
The presumption of constitutionality of laws requires that any doubt as to the constitutionality of a law has to be resolved in favour of constitutionality.
Though the scheme cannot be upheld, at the same time, it cannot be struck down either.
[192E F] (10) The State is in theory entitled to raise the totality of the expenses by way of fee.
Any interference with the present yardstick for sharing the burden might in turn produce a yardstick less advantageous to litigants at lower levels.
[192G] (11) The High Court has struck down the provisions of section 29(1) read with entry 10 of Schedule I of the Bombay Court Fees Act, 1959 on the ground that the levy of court fee on proceedings for grant of probate and letters of administration ad valorem without the upper limit prescribed for all other litigants is discriminatory.
If in respect of all other suits of whatever nature and complexity an upper limit of Rs.15,000 on the court fee is fixed, there is no logical justification for singling out this proceeding for an ad valorem impost without the benefit of some upper limit prescribed by the same statute respecting all other litigants.
[193A B; F] (12) The Directive Principles of State Policy though not strictly enforceable in courts of law, are yet fundamental in the governance in the country.
They constitute fons juris in a Welfare State.
[194E] U.B.S.E. Board vs Hari Shanker, AIR 1979 SC 69 referred to.
(13) The power to raise funds through the fiscal tool of a `fee ' is not to be confused with a compulsion to do so.
| In this appeal by special leave brought by the auction purchaser against the Judgment of the Madras High Court the sole question for consideration is as regards the period of limitation for making a deposit to make an application under Rule 89 of Order XXI of the Civil Procedure Code, 1908 to set aside the sale of immovable property sold in execution of a decree.
Whether the deposit is to be made within 30 days from the date of the sale as required by sub rule (2) of Rule 92 of Order XXI or within 60 days from the date of sale as provided in Article 127 of the ? Following its earlier decision in Thangammal & Ors. vs V.K. Dhanalakshmi & Anr.
and the decision of this Court in Basavantappa vs Gangadhar Narayan Dharwadkar & Anr., the High Court had held that Article 127 governed the period of limitation to make a deposit in terms of Rule 89.
Setting aside the judgment of the High Court on the question of limitation, this Court in allowing the appeal, HELD: The correct construction of Rule 92(2) of Order XXI of the Civil Procedure Code, 1908 leads to the irresist ible conclusion that the time for making a deposit in terms of Rule 89 of Order XXI is 30 days, and Article 127 of the prescribing the period for making an application under Rule 89 has no relevance to the prescribed time for making the deposit.
Neither provision has any effect on the other as to time.
[489G H; 490A] Basavantappa vs Gandadhar Narayan Dharwadkar & Anr., ; , over ruled.
Nalinakaya Bysack vs Shyam Sunder Haldar & Ors.
, ; at 545; Mersey Docks vs Henderson, [1988] 13 App.
595,602; 484 SUPREME COURT REPORTS [1990] 1 S.C.R. Crawford vs Spooner, [1846] 6 Morre P.C. 1, 8, 9; Seaford Court Estates vs Asher, All E.R., [1949] 2.155 at 164 M. Pentiah & Ors.
vs Muddala Veeramallappa & Ors., ; at 314 Heydon 's case ; 76 ER 637; Dakshayini & Ors.
vs Madhavan, AIR 1982 Kerala 126, referred to.
| The appellant landlord filed an eviction suit for possession of the demised premises mainly on the ground of arrears of rent under Section 12(3) of the Bombay rent Act, 1947.
The suit was settled between the parties.
By the terms of the compromise, possession would be given by the tenant to the landlord by 10 October 1970, or the landlord may recover possession by execution based on this decree; but, if the tenant paid the entire arrears in full by 10 October 1970, the landlord would not execute the decree for possession.
The tenant failing to pay the entire arrears as stipulated the landlord decree holder filed execution proceedings.
The executing Court issued a warrant for possession but the Appellate Court set aside the order and dismissed the prayer for eviction.
The High Court remanded the matter to the Appellate Court to determine the character of the compromise terms.
That court again allowed the appeal and dismissed the execution proceedings altogether.
On appeal, the High Court agreed with the Appellate Court.
It found 730 that clause permitting eviction was penal in nature and therefore, not enforceable.
The questions before this court were:did the parties to the compromise intend to create or continue the relationship of landlord and tenant; whether the compromise terms in the consent decree were penal in nature or merely gave a concession; and whether Section 114 Transfer of Property Act could be invoked while executing a decree for possession, notwithstanding Section 12(3) of the Bombay Act.
Allowing the appeal, this Court, HELD: It is well settled that a decree passed on the basis of a compromise by and between the parties is essentially a contract between the parties which derives sanctity by the court superadding its seal to the contract.
But all the same the consent terms retain all the elements of a contract to which the court 's imprimaturs is affixed to give it the sanctity of an executable court order.
The court will not add its seal to the compromise terms unless the terms are consistent with the relevant law.
(735 H) If the law vests exclusive jurisdiction in the court to adjudicate on any matter, the court will not add its seal to the consent terms unless it has applied its mind to the question.
In such a case it is the independent satisfaction of the court which changes the character of the document from a mere contract to a court 's adjudication which will stop the tenant from contending otherwise in any subsequent proceedings and operate as resjudicata.
(736 B) The character of the con sent decree will depend on the nature of the dispute resolved and the part played by the court while superadding its seal to it.
(736 C) (2) If a defendant is required to suffer the consequence of his failure to abide by terms stipulated, such consequence would he penal in nature.
But if the defendant gets some benefit by complying with a requirement, such as clause can never be penal in character.
(739 B) (3) Admittedly the tenant had failed to pay or tender in court the 731 standard rent and permitted increases due to the landlord.
(736 E) The clause in the consent terms whereby, upon payment of the entire rent etc.
due from the tenant, by a stipulated date was dearly to secure his dues i.e. arrears of rent etc.
This is in the nature of a concession.
Where a landlord grants a concession and agrees that if the entire arrears is cleared by a stipulated date, he will not insists possession that will not render the clause penal in nature.
(739 E) (4) If the condition precedent for availing of the benefit of concession under clause (3) of the consent terms is satisfied, the relationship of landlord and tenant continues but if the tenant fails to comply with the condition precedent for availing (of the benefit or concession the forfeiture operates and the tenant becomes liable for eviction under the decree.
(739 G) (5) After the enactment of clause (b) to section 12(3) which is a special provision incorporating the equity provision contained in section 114, T.P. Act, in a modified form, cases governed under the Act must he resolved in accordance with section 12(3) of the Act and not under section 114, T.P. Act.
The landlord 's right to seek eviction has been drastically reduced and circumscribed by sections 12and 13 of the Act.
Similarly the tenant must also seek protection from eviction by complying with the requirements of the Act.
(740 B) If such is not the legal position, Sections 12 (3) (a) and 12 (3) (b) would be rendered wholly nugatory.
Under the Act a tenant is allowed to continue in possession notwithstanding the termination of the contractual tenancy if the abides by the provisions of the Act.
If he fails to abide by the requirement of section 12(3) of the Act, he must take the consequences flowing therefrom.
There is no question of granting him double protection.
(740 C E) Krishnabai vs Hari, 8 BLR 813 and Gajanand Govind vs Pandurang Keshav, 53 B.L.R. 100, referred to.
(840 B) Pradesh Kumar Bajpai vs Binod Behari Sharkar, [1980] 3S.C.R. 93, relied on.
(840 H)
| In 1945 the first respondent Trustees of Port of Bombay, granted lease of plot owned by them for the purpose of erecting a godown for carrying on commercial activities at a monthly rent of Rs. 925.
In 1946 the lessee erected a permanent godown.
In 1958, he granted lease of the said godown to the petitioners.
The first respondent filed a suit against the heirs of the original lessee for eviction on the ground of termination of tenancy, and obtained a decree.
When warrant of possession was sought to be executed, the petitioners obstructed the execution of the decree.
The first respondent thereupon took out a Chamber Summons for removal of obstruction under order 21 Rule 97 101 C.P.C.
The petitioners contended that as they were lessees under the original lessee they were entitled to protection of the Bombay Rent, Hotel and Lodging Houses Rates (Control) Act, 1947 the Bombay Rent Act which applied to the building erected by a lessee from the local authority.
The trial court rejected the petitioners ' objection and allowed the Chamber Summons.
The appeal of the petitioners was dismissed by the Single Judge of the High Court holding that they were not entitled to the benefit of the Bombay Rent Act.
The contentions arising out of the Easement Act and alleged acquiescence of the first respondent were negatived.
The Letters Patent Appeal was also dismissed by the Division Bench.
On the question whether the petitioners were entitled to protection under section 4(1)(a) of the Bombay Rent Act.
484 dismissing the Special Leave Petition, ^ HELD: Where a building was erected by the lessee not pursuant to or not under any agreement with the lessor then the case did not fall under section 4(1)(a) of the Bombay Rent, Hotel and Lodging Houses Rates (Control) Act, 1947.
[486G] Section 4(1) gives immunity to the local authority in respect of the land which it has let out to the lessee and that immunity cannot be taken away merely because the lessor on his own volition and without being in obligation under any agreement choses to put up structures on that land.
Therefore, if the premises belonged to the Government or a local authority then the Act would not apply.
[486H; 487A, D] In the instant case, The lands belong to the local authority but the structures were put on by the lessees of the first respondent not under any building lease, and such protection cannot be claimed in respect of these premises.
In view of the fact that the original lease was only a monthly tenancy and not a building lease, the High Court was right in dismissing the objections on behalf of the petitioners.
Since the petitioners have been in possession of the premises for some time, the petitioners are allowed to continue to remain in the premises upto 15th September, 1988.
[489F, H] Kanji Manji vs The Trustees of the Port of Bombay, [1962] Suppl.
3 S.C.R. 461 applied.
| On November 16, 1949, the respondent was convicted under sections 38o and II4 of the Indian Penal Code.
On October 5, 1957, the Deputy Commissioner of Police, Bombay, acting under section 57(1) of the Bombay Police Act passed an order externing him from the limits of Greater Bombay.
Later he was prosecuted and convicted under section 142 of the Bombay Police Act by the Presidency Magistrate for returning to the area from which he was externed.
On an application for revision the High Court acquitted the respondent upholding his contention that section 57 of the Bombay Police Act was not retrospective and was not applicable unless the conviction on which the externment was based took place after the Act came into force.
On appeal by the appellant with the special leave of this Court it was 27 Held, that though statutes must ordinarily be interpreted prospectively unless the language makes them retrospective, either expressly or by necessary implication, and penal statutes creating new offences are always prospective, penal statutes creating disabilities though ordinarily interpreted prospectively are sometimes interpreted retrospectively when the intention is not to punish but to protect the public from undesirable persons whose past conduct is made the basis of future action.
Midland Ry.
Co. vs Pye, IO C.B. (N.S.) 179, Rex vs Birth whistle, (1889) 58 L.J. (N.S.) M.C. 158, Queen vs Vine, [1875] IO Q.B. 195, Ex Parte Pratt, , Bourke vs Nutt, [1898] I Q.B. 725, Ganesan vs A.K. Joscelyne, A.I.R. 1957 Cal.
33, Taher Saifuddin vs Tyebbhai Moosaji, A.I.R. 1953 Bom.
183, The Queen vs Inhabitants of St. Mary Whitechapel, ; : ; and Rex vs Austin, , considered and applied.
Section 57 of the Bombay Police Act did not create a new offence but was designed to protect the public from the activities of undesirable persons convicted of particular offences and enabled the authorities to take note of their activities in order to put them outside the areas of their activities for preventing any repetition of such activities in the future.
The verb " has been " as used in section 57 meant " shall have been Legislation which takes note of a convicted offender 's antecedents for restraining him from his acts cannot be said to be applied retrospectively as long as the action taken against him is after the Act comes into force.
The Act in question was thus not applied retrospectively but prospectively.
An externment order must be bona fide and must relate to a conviction which is sufficiently proximate in time.
| This petition for special leave to appeal was filed against the judgment and order of the High Court, whereby the High Court had held that the petitioner was not a sub tenant and as such he was bound by the decree passed against the tenant for eviction.
The petitioner challenged before this Court the finding of the High Court and contended that he was a sub tenant with the knowledge and consent of the landlord and as such the decree of eviction passed against the tenant did not bind him because in the suit he had not been a party.
He should have been made a party to the suit.
Dismissing the petition, the Court, HELD: The High Court was right.
The attention of the Court was drawn to an agreement of 1st September, 1966, with the contention that that was an arrangement of sub letting and in that document one of the attesting witnesses was the landlord himself, and, therefore, the subletting was done with the knowledge and consent of the landlord and, as such, was valid.
[1088G] One of the attesting witnesses to the said agreement was Md. Ali, the respondent herein, who was at the relevant time the landlord, now represented by his legal representatives in this petition.
On a construction of the different clauses of the aforesaid document, the Court was of the opinion that this was an agreement of the business of the tenant.
It was not and could not be construed as an agreement of subtenan cy.
There was no parting of possession of the premises.
There was only a right to "manage" the business, looking after the existing business with fixed monthly payments and this could not be construed as an agreement of sub tenancy.
Therefore, though the landlord had knowledge of the docu ment, it could not be said to be consent to an agreement 1088 of sub tenancy.
The attention of the Court was drawn to section 2(4) on the expression 'tenant ' in the West Bengal premises Tenancy Act, 1956.
That definition did not affect the position of the petitioner in this case as there was no sub tenancy in the case.
[1090C E, G] The High Court was right in the view it took.
[1088F] M/s. Girdhar Lal & Sons vs Balbir Nath Mathur and oth ers, , referred to.
|
Appeal No. 24 of 1961.
APPeal from the judgment and order dated November 20, 1958, of the Bombay High Court in Special Civil Application No. 2789 of 1958.
A.S. R. Chari and K. R. Choudhuri, for the appellants.
S.T. Desai, and V. J. Merchant, for respondents Nos. 2 and 4 and the Intervener (The Bombay Incorporated Law Society).
February 13, The Judgment of the Court was delivered by GAJENDRAGADKAR, J.
This appeal arises out of a dispute between the appellants, the National Union of Commercial Employees & Anr, and the respondents Pereira, Fazalbhoy and Desai who constitute an Attorneys ' firm by name M/s. Pereira Fazalbhoy & Co. It appears that in August, 1957 159 the appellant wrote to the respondent firm setting forth certain demands on behalf of its employees.
These demands related to bonus for the years 195556 and 1956 57 and to certain other matters.
As the parties could not agree, the dispute was taken before the Conciliation Officer.
The Conciliation Officer also failed to bring about a settlement and so he submitted his failure report to the Government of Bombay.
Thereafter, the State Government referred the dispute in regard to the bonus for the two years 1956 and 1957 for adjudication before an Industrial tribunal under section 12(5) of the Industrial Disputes Act (No. 14 of 1947) (hereinafter called the Act).
Before the Tribunal, the respondents raised a preliminary objection.
They urged that the profession followed by them was not an industry within the meaning of the Act, and so the dispute raised against them by the appellants was not an industrial dispute within the meaning of the Act; the contention was that the dispute not being an industrial dispute under the Act, the reference made by the Government was incompetent and so, the Tribunal had no jurisdiction to adjudicate upon this dispute.
The Tribunal upheld the preliminary objection and recorded its conclusion that it had no jurisdiction to adjudicate upon the dispute as it was not an industrial dispute.
The order thus passed by the Tribunal was challenged by the appellants before the High Court at Bombay by special Civil Application No. 2789 of 1958 filed under Articles 226 and 227 of the Constitution.
The High Court considered the rival contentions raised before it by the appellants and the respondents and came to the conclusion that the respondent 's firm did not constitute an industry and so the dispute between the said firm and its employees was nut ail industrial dispute which could validly form the subject matter of a reference under the Act.
In that view of the matters the High Court hold that the Industrial Tribunal was 160 right in refusing to make an order on the reference and so the appellants ' writ petition was dismissed.
The appellants then applied for and obtained a certificate from the High Court and it is with the said certificate that the present appeal has come to this Court; and the short question which it raises for our decision is whether the respondents ' firm which carries on the work of Solicitors in Bombay can be aid to constitute an industry under section 2(j) of the Act.
In dealing with this question, it would be necessary to refer to the decision of this Court in the State of Bombay vs The Hospital Mazdoor Sabha (1).
Both parties agreed that the present dispute would have to be determined in the light of the decision of this Court in that case.
Let us, therefore, indicate the effect of the said decision.
In the Hospital case (1), this Court had occasion to consider whether the services of workmen engaged as ward servants in the J.J. Group of Hospitals, Bombay, under State control were workmen and whether the Hospital Group itself constituted.
an industry under the Act or not.
Both the questions were answered in the affirmative and in rendering those answers, the scope and effect of the definition of the word industry ' used in section 2(j) of the Act was considered.
This Court held that the words used by section 2 (j) in defining industry ' in an inclusive manner were of ' wide import and had to be read in their wide denotation.
Even so, this Court stated "that though section 2(j) uses words of very wide denotation, a line would have to be drawn in a fair and just manner so as to exclude some callings, services or undertakings from its purview.
If all the words used are given their widest meaning all services and all callings would come within the purview of the definition; even service rendered by a servant purely in a personal or domestic matter (1)[1960] 2 section C.; R.866.
161 or even in a casual way would fall within the definition.
It is not and cannot be suggested that in its wide sweep the word "service ' is intended to include service howsoever rendered in whatsoever capacity and for whatsoever reason." (p. 876).
That is why this Court proceeded to consider where the line should be drawn and what limitations can and should be reasonably implied in interpreting the wide words used in section 2(j).
In dealing with the somewhat difficult question of drawing a line, this Court observed. ,"as a working principle, it may be stated that an activity systematically or habitually undertaken for the production or distribution of goods or for the rendering of material services to the community at large or a part of such community with the help of employees is an undertaking.
Such an activity generally involves the co operation of the employer and the employees; and its object is the satisfaction of material human needs It must be organised or arranged in a manner in which trade or business is generally organised or arranged.
It must not be casual nor must it be for oneself ' nor for pleasure.
Thus, the manner in which the activity in question is organised or arranged, the condition of the (co operation between employer and the, employee necessary for its success and its object to render material service to the community can be regarded as some of the features which are distinctive of activities to which section 2 (1) applies." (P. 879).
It was in the light of this working principle that this Court came to the conclusion that the State was carrying on an undertaking in running the Group of Hospitals in question In dealing with the question of hospitals, this Court also referred to a material circumstance which supported the conclusion that running of hospitals is an industry under the Act.
Section 2 (n) of third Act defines "public utility service and under it five separate categories 162 of public utility service are enumerated.
Clause (VI) of section 2 (n) provides that any industry specified in the Schedule as therein indicated would also be a public utility service.
In 1956, Entry No. 9 among others, was added in the First Schedule specifying another public utility service.
This Entry refers to service in hospitals and dispensaries.
Therefore, it was clear that since the validity of this entry was not disputed, after service in hospitals and dispensaries was included in the First Schedule.
it was inarguable that the hospital would not be an industry under the Act ; unless a hospital was an industry under the Act, service in the hospitals could not be regarded as public utility service.
That is how this Court held that in running the J.J. Hospital Group in Bombay, the State , Government was carrying on an undertaking which was an industry under section 2(j).
The question which calls for our decision in the present appeal is : what would be the result of the application of the working test laid down by this Court in the Hospital case 1 in relation to the controversy between the parties in the present appeal ? Mr. Chari for the appellants contends that in dealing with the question as to whether the respondents carried on an industry under a. 2 (j), it is necessary to distinguish between professional service rendered by an individual acting by himself and similar service rendered by a firm consisting of several partners, because he suggests that professional service individually rendered stands on a different footing from professional service which is rendered in an organised and institutionalised manner.
The Organisation of professional service which leads to its institutionalisation attracts 'the provisions of section 2(j) inasmuch as in such organised service there is bound to be co operation between the employers and the employees engaged by the firm for doing different categories of work According to Mr Chari, the employment of (1) [1960] 2S.C.R. 86, 163 differentcategories of staff facilitates the work of the solicitors and it enables them to dispose of more work more quickly and more efficiently and he suggests that the presence of such co operation between the employees and their employers in the Organisation of the solicitors ' firm satisfies the working test laid down by this Court in the Hospital case(1).
Tn our opinion, the distinction sought to be drawn by Mr. Chari between professional service rendered by an individual acting by himself and that rendered by a firm is not logical for the purPose of the application of the test in question.
What is true about a firm of solicitors would be equally true about an individual Solicitor working by himself.
the firm engages different categories of employees a single solicitor also engages different categories of employees to carry out different types of work and so the presence of co operation between the employees working in a solicitor 's office and their employers the solicitor, could be attributed to 'the work of a single solicitor as much as to the work of the firm ; and, therefore, if Mr. Chari is right and if the firm of solicitors is 'held to be an industry under the Act, the office of an individual solicitor cannot escape the application of the definition of section 2(j).
That is why we think it would not be reasonable to deal with the matter on the narrow ground suggested by Mr. Chari by confining our attention to the organisational or institutionalised aspect of a solicitors firm.
When in the Hospital case (1) this Court referred to the Organisation of the undertaking involving the co operation of capital and labour or the employer and his employees, it obviously meant the, cooperation essential and necessary for the purpose of rendering material service or for the Purpose of production.
It would realised that the concept of industry postulates partnership (1) ; 164 between capital and labour or between the employer and his employees.
It is under this partnership that the employer contributes his capital and the employees their labour and the joint contribution of capital and labour leads directly to the production which the industry has in view.
In other words, the co operation between capital and labour or between the employer and his employees which is treated as a working test in determining whether any activity amounts to an industry, is the co. operation which is directly involved in the production of goods or in the rendering of service.
It cannot be suggested that every form or aspect of human activity in which capital and labour cooperate or employer and employees assist each other is an industry.
The distinguishing feature of an industry is that for the production of goods or for the rendering of service, co operation between capital and labour or between the employer and his employees must be direct and must be essential.
Take, for instance, a textile mill.
The employer contributes capital and installs the machinery requisite for the mills and the employees contribute their labour and by their cooperation assist the employer in producing the textile goods.
When we refer to textile labour in relation to industrial disputes under the Act, we refer to workmen who are engaged in the work of producing textile goods.
It is obvious that in regard to textile mills, a large majority of workmen concerned in carrying out the activities of most of the departments of the textile mills contribute directly in one form or another to the production of textile goods.
It may be that even in a textile mill a very small minority of workmen may not be directly concerned with the production of textile goods ; but even so, their work is so integrally connected with the work carried on by the majority of workmen employed that they are treated as forming part of the same labour force.
Thus, there can be no doubt that 165 when a textile mill is regarded as an industry, it is, because capital and labour jointly contribute to the ' production of goods which is the object of the mill.
Let us consider the case of the hospitals.
In ' the hospitals, the service to the patients begins with proper diagnosis followed by treatment, either medical or surgical, according to the requirements of the case.
In the case of medical treatment, the patients receive medical treatment according to the prescription and are kept in the hospital for further treatment.
In surgical cases the patients receive surgical treatment by way of operation and then are kept in the hospital for further treatment until they are discharged.
During the period of such treatment, all their needs have to be attended to, food has to be supplied to them, nursing assistance has to be given to them, medical help from time to time has to be rendered and ail incidental services required.
for their recovery have also to be rendered.
Now, in the case of the activities of an organised Hospital, the co operation of the employees is thus directly involved in rendering one kind of service or another which it is the duty of the hospital to render.
It is true that the patients are drawn to the hospitals primarily because of the doctors or surgeons associated with them.
But there can be no doubt that the work of the hospital and its purpose are not achieved merely when a surgical operation is performed or medical prescription provided.
After medical treatment is determined or a surgical operation is performed, the patient coming to a hospital as an indoor patient needs all kinds of medical assistance until he is discharged and the services rendered to him both initially and thereafter until his discharge are all services which the hospital has been established to render and it is in the rendering of the said services that the employees of the hospital co operate and play their part.
That is how the test of cooperation between 166 the employer and his employees is satisfied in regard to hospitals which are properly organised and maintained.
It is, of course, true that the quality, the importance and the nature of the service rendered by different categories of employees in a hospital would not be the same, but nevertheless, all the categories of service rendered by respective classes of employees in a hospital are essential for the purpose of giving service to the patients which is the objective of the hospital.
That is how the hospitals satisfy the test of co operation between the employer and his employees.
Does a solicitors ' firm satisfy that test ? Superficially considered, the solicitors ' firm is no doubt organised at; an industrial concern would be organised.
There are different categories of servants employed by a firm, each category, being assigned separate duties and functions.
But it must be remembered that the service rendered by it solicitor functioning either individually or working together with partners is service which is essentially individual ; it depends upon the professional equipment, knowledge and efficiency of the, solicitor concerned.
Subsidiary work which is purely of an incidental type and which in intended to assist, the solicitor in doing his job has no direct relation to the professional service ultimately rendered by the solicitor.
For his own convenience, a solicitor may employ a clerk because a. clerk would type his opinion ; for his convenience.
, a solicitor may employ menial servant to keep his chamber clean and in order ; and it is likely that the number of clerks may be large if the concern is prosperous and so would be the number of menial servants.
But the work done either by the typist or the stenographer or by the menial servant or other employees in a solicitor 's firm is not directly concerned with the service which the solicitor renders to his client and cannot, therefore, be said to 167 satisfy the test of co operation between the employer and the employees which is relevant to the purpose.
There can be no doubt that for carrying on the work of a solicitor efficiently, accounts have to be kept and correspondence carried on and this work would need the employment of clerks and accountants.
But has the work of the clerk who types correspondence or that of the accountant who keeps accounts any direct or essential nexus or connection with the advice which it is the duty of the solicitor to give to his client? The answer to this question must, in our opinion, be in the negative.
There is, no doubt, a kind of co operation between the solicitor and his employees, but that co operation has no direct or immediate relation to the professional service which the solicitor renders to his client.
Therefore, in our opinion it is difficult to accept the plea that a solicitor 's firm carrying on the work of an Attorney is an industry within the meaning of section 2(j).
There is no doubt that the words used in section 2(1) are very wide, but as has been held by this Court in the can of Hospital is necessary to draw a line in a fair and just manner putting some limitation upon the width of the said words and a working test has been enunciated in that behalf.
The application of the said teat to the facts in the present appeal leads to the conclusion that the work of solicitors Which the respondents are carrying on as a firm is not an industry under section 2(j) of the Act.
That is the view taken by the Bombay High Court and we think, that view is right.
It may be added that the same view has been taken by the Calcutta High Court in the case of Brij Mohan Bagaria vs N. C. Chaterjee (2) and D.P. Dunderdele vs G. P. Mukherjee(3 ').
Looking at this question in a broad and general way, it is not easy to conceive that a liberal profession like that, of an.
attorney could have been (1) (2) 1958 A.I.R. 1938 Cal. 460.
(3) A.I.R.Cal.
168 intended by the Legislature to fall within the definition of "industry" under section 2(j).
The very concept of the liberal professions has its own special and distinctive features which do not readily permit the inclusion of the liberal professions into the four corners of industrial law.
The essential basis of an industrial dispute is that it is a dispute arising between capital and labour in enterprises where capital and labour combine to produce commodities or to render service.
This essential basis would be absent in the case of liberal professions.
A person following a liberal profession does not carry on his profession in any intelligible sense with the active co operation of his employees and the principal, if not the sole, capital which he brings into his profession is his special or peculiar intellectual and educational equipment.
That is why on broad and general considerations which cannot be ignored, a liberal profession like that of an attorney must, we think, be deemed to be outside the definition of "industry" under section 2(j) In this connection, it would be useful to refer to the observation made by Isaccs and Rich JJ., in the Federated Municipal and Shire Council Employees ' Union of Australia vs Melbourne Corporation (1).
"The concept of an industrial dispute", said the learned Judges.
may thus be formulated: Industrial disputes occur when, in relation to operations in which capital and labour are contributed in cooperation for the satisfaction of human wants or desires, those engaged in co operation dispute as to the basis to be observed, by the parties engaged, respecting either a share of the product or any other terms and conditions of their co operation.
This formula excludes the two extreme contentions of the claimant and the respondents respectively.
It excludes, for instance, the legal and the medical professions, because they are not carried on in any intelligible sense by the Cooperation of (1) (1919)26C.L.R.508,554. 169 capital and labour and do not come within the sphere of industrialism.
It includes, where the necessary co operation exists, disputes between employers and employees, employees and employees, and employers and employers.
It implies that "industry" to lead to an industrial dispute, is not, as the claimant contends, merely industry in the abstract sense, as if it alone effected the result, but it must be acting and be considered.in association with its co operator "capital" in some form so that the result is, in a sense, the outcome of their combined efforts".
Those observations support the view which we hive taken about the character of co operation between the employer and employees which affords a relevant test in determining whether the enterprise in question is an industry or not.
Co operation to which the test refers must be co operation between the employer and his employees which is essential for carrying out the purpose of the enterprise and the service to be rendered by the enterprise should be the direct outcome of the combined efforts of the employer and the employees.
There is one more minor point which still remains to be considered.
Mr. Chari argued that it would be idle for the respondents to contend.
that the work of their firm is not an industry under a. (2j) because they have themselves described their work as the work of carrying on business of solicitors.
It appears that the document of partnership executed between the different partners of the firm provided, inter alia, that all expenses of the business of the partnership or losses incurred in carrying on the business of the partnership shall be.
borne out of the profits or capital of the partnership.
It is on the use of the word "business" in this clause that Mr. Chari relies.
In support of his argument,he referred us to a decision of Farwell, J., in Dickson vs Jones (1).
In that case, the Court was concerned to examine the validity of an agreement between the, plaintiff, solicitor, and his junior clerk, who (1) 170 was subsequently articled to him.
This agreement provided that the latter would not ,,at, any time hereafter practice as a solicitor within a radious of 15 miles from the Town Hall, Hanley, aforesaid, or solicit any client of the solicitor".
Farwell J., held that "the combination of a restriction over an area so great as a radious 15 miles and one extending to the whole life of the defendant, articled clerk, was, in the circumstances, wider than was necessary for the protection of the plaintiff and was, therefore, unenforceable as being in Undue restraint of trade".
The argument is that the validity of an agreement between a solicitor and his articled clerk was tested on the ground that it was an agreement in restraint of trade, and so the solicitor 's work must be held to be a " 'trade," under section 2(j).
There is obviously no force in this argument.
If in their deed of partnership the respondents described the work of partnership as the business of solicitors, that can hardly assist the appellants in contending that the work carried on by the firm is industry under section 2(j).
The work of a solicitor is, in a loose sense, of course, of business, and so if the solicitors entered into an agreement in restraint of trade, its validity would have to be judged on the basis that their work in the nature of business.
That, however, is hardly relevant in determining the question as to whether the said work is an industry under section 2(j); as we have already made it clear, the definition of the word , 'industry" is couched in words of very wide denotation.
But that precisely is the reason ,why a line has to be drawn in a just and fair manner to demarcate the limitations of their scope and that necessarily leads to the adoption of some working test.
Therefore, in our opinion, the argument that the respondents themselves have called their work as "business" is of no assistance.
The result is, the appeal fails; there would be no order as to costs.
Appeal dismissed.
| The respondents were a firm carrying on the work of solicitors in Bombay.
For the years 1956 and 1957 a claim for bonus was made against them by their employees.
Before.
the Industrial Tribunal to which the dispute was referred by the State Government for adjudication under the provisions of the , the respondents contended that the profession followed by them was not an industry within the meaning of section 2(j) of the Act, that the dispute raised against them was not an industrial dispute under the Act, and that, therefore, the reference made by the Government was incompetent.
Held, that the work of solicitors is not an industry within the meaning of section 2(j) of the , and that, therefore, any dispute raised by the employees of 158 the solicitors against them cannot be made the subject of reference to the Industrial Tribunal.
The distinguishing feature of an industry is that for the production of goods or for the rendering of service, co operation between capital and labour or between the employer and his employee must be direct.
A person following a liberal profession does not carry on his profession in any intelligible sense with the active co operation of his employees, and the principal, if not the sole, capital which he brings into his profession is his special or peculiar intellectual and educational equipment.
Consequently, a liberal profession like that of a solicitor is outside the definition of "industry" under section 2(j) of the Act.
State of Bombay vs The Hospital Mazdoor Sabha, ; , explained and distinguished.
Brij Mohan Bagaria vs N.(,.
Chatterjee, A.I.R. 1958 Cal.
460 and D. P. Dunderdele vs G. P. Mukherjee, A. 1.
R. , approved.
Observations in Federated Municipal and Shire Council Employees ' Union of Australia vs Melbourne Corporation, ; , relied on.
| The appellant Bank was a society registered under the Bombay Co operative Societies Act, 1925 and with the coming into force from May 1, 1962 of the Gujarat Co operative Societies Act, 1961, it came to be governed by the said Act.
By Notification No. BIR 1362 5 H dated March 2, 1963, the Government of Gujarat directed under section 2(4) of the Bombay Industrial Relations Act, 1946 (Bombay Act 11 of 1947) that all the provisions of the said Act shall apply with effect from March 15, 1963 to the business of banking by Co operative Banks in the Saurashtra and Kutch areas of the State, registered and deemed to be registered under the Gujarat Co operative Societies Act, 1961.
The second respondent, Babu Bhai Negracha who was working as an additional supervisor in the Dasada Branch of the appellant Bank and whose services were terminated by an order dated February 21, 1962, by giving him one month 's pay in lieu of notice under Staff Regulation No. 15, filed an application in the Labour Court Rajkot, alleging that his services had been illegally and maliciously terminated as an act of victimisation on account of his trade union activities and praying for setting aside the order of his termination of service and for reinstatement with full back wages.
The Labour Court by its order dated June 11, 1963, over ruled the preliminary objection raised by the appellant Bank, namely, that "the Bombay Industrial Relations Act, 1946 under which the application was made by the respondent was not applicable to its case, as it was a co operative society governed by the Gujarat Co operative Societies Act, under which only the Registrar or his nominee had jurisdiction to decide the dispute, and the Labour Court had no jurisdiction to entertain and decide the application".
The appellant Bank 's writ petition challenging the said order of the Labour Court was dismissed by the Gujarat High Court by its judgment dated August 25, 1967.
Dismissing the appeal by certificate, the Court ^ HELD: 1.
No new plea can be raised for the first time in the Supreme Court, as a matter of right.
In the instant case, the new plea that "the appellant is not doing banking business" was not entertained for the reasons 1024 namely (i) it was much too belated; (ii) it stood in direct contradiction to the position taken by the appellant in its writ petition and the affidavit in support thereof in the High Court wherein it had been clearly admitted that "the society is engaged in the business of banking" and (iii) it was not a purely legal plea but a mixed plea of law and fact and could not be determined on the basis of material already on the record.
[1027 F G] 2.
The expression "any dispute" referred to in Section 54 of the Bombay Cooperative Societies Act, 1925 and in Section 96 of the Gujarat Cooperative Societies Act, does not cover a dispute of the kind raised by respondent 2 against the appellant bank.
[1034 C] (a) It is clear from the object and the scheme of the Acts of 1925 and 1961 that the legislature never intended to give such a wide scope to the expression "any dispute" so as to cover all classes of disputes whatever be their nature as the prefix "any" to "dispute" appears to give.
The term "dispute" means a controversy having both positive and negative aspects.
It postulates the assertion of a claim by one party and its denial by the other.
[1031 C D] (b) The expression "any dispute" has not been defined in the Acts of 1925 and 1961.
This expression has been used in a narrower sense limited to contested claims of a civil nature, which could have been decided by civil or revenue courts, but for the provisions with regard to compulsory arbitration by the Registrar or his nominee found in Section 54 of the Bombay Act of 1925 and in Section 96 of the Gujarat Act, 1961.
The words "as if the dispute were a suit and the Registrar as Civil Court" occurring in sub section (k) of Section 97 of the Gujarat Act, also make this position clear.
[1031 C, D, E, G] (c) The compulsory arbitration by the Registrar on reference under section 96 is only a substitute for adjudication of disputes of a civil nature normally tried by the Civil Court.
It is incumbent, under sub section (2) of section 96 of the 1961 Act, on the Registrar to decide as a preliminary issue, whether the dispute is of a kind under sub section (1) of section 96 falling within his jurisdiction.
If this preliminary issue is found in the negative he will have no further jurisdiction to deal with the matter.
[1031 F, G 1032 F] (d) Thus considered, a dispute raised against the Society by its discharged servant claiming reliefs, such as, reinstatement in service with back wages, which are not enforceable in a civil court, is outside the scope of the expression "touching the management of the Society" used in section 96(1) of the Act of 1961, and the Registrar has not jurisdiction to deal with and determine it.
What has been directly bidden "out of bounds" for the Registrar by the very scheme and object of the Act, cannot be directly inducted by widening the connotation of 'management '.
Such a dispute squarely falls within the jurisdiction of the Labour Court under the Bombay Industrial Relations Act.
[1036 E G] 3.
The law of Industrial disputes or Industrial Relations is a special law dealing with rights and obligations specially created by it.
The provisions in section 54 of the Bombay Act and in section 96 of the Gujarat Act being general provisions in accordance with the maxim generalia specialibus non derogant, nothing in these general provisions can derogate from Bombay Industrial Relations Act, and the Cooperative Societies Act must yield to the special provi 1025 sions in the Bombay Industrial Relations Act, whenever a dispute clearly comes within the language of the latter Act.
Section 166(1) of the Gujarat Act, in terms, bars the jurisdiction only of Civil or Revenue Court, and not of the Labour Court or any Industrial Tribunal constituted under the Bombay Industrial Relations Act or Industrial Disputes Act.
The legislature never intended to oust the jurisdiction of the Labour Court or the Industrial Tribunal to determine claims and industrial disputes which cannot be adjudicated by the ordinary Civil Court.
[1032 H, 1033 A, 1034 A B] In the instant case : (a) The Labour Court is competent to grant the relief of reinstatement while in view of section 21(b) of the Specific Relief Act, then in force, the Civil Court was not competent to grant that relief.
If a Court is incapable of granting the relief claimed, normally the proper construction would be that it is incompetent to deal with the matter.
[1033 F, H] (b) The dispute was raised by the second respondent by writing an approach letter to his employee, the appellant, as required by the Bombay Industrial Relations Act.
In substance, it was an industrial dispute.
It was not restricted to a claim under the contract or agreement of employment.
[1033 F G] (c) The rights and reliefs claimed by the second respondent could not be determined and granted by a Civil Court in a suit.
His allegation was that his services were terminated unfairly and vindictively because of his legitimate trade union activities, as an act of victimisation.
The relief claimed is reinstatement in services with back wages.
The rights claimed are those which are conferred on workmen and employees under the Bombay Industrial Relations Act to ensure social justice.
Such rights which do not stem from the contract of employment can be enforced only in the Labour Court constituted under B.I.R. Act.
[1033 B F] Jullundur Transport Cooperative Societies Ltd. vs Punjab State, AIR 1959 Pun. 34; approved.
Rohtas Industries Ltd. vs Brijnandan Pandey, ; ; referred to.
(d) Neither the Registrar nor his nominee will be competent to grant the relief of requiring change in the service conditions of the employee.
Such a relief could be granted by the Industrial Tribunal which under the Industrial Disputes Act, has the jurisdiction even to vary contracts of service between an employer and employees.
[1037 C D] Co operative Central Bank Ltd. vs Additional Industrial Tribunal, Hyderabad ; applied.
Farkhundali Naunhay vs V. B. Potdar, AIR 1962 Bom.
362 over ruled.
| The appellant an owner of a hotel was prosecuted along with five others for forcibly dispossessing the complainant who was the Manager of the Hotel and further for misappropriating certain properties including some money belonging to the complainant.
According to the appellant, the complainant was merely a licensee.
The Trial Court acquitted accused Nos. 3 to 6 and convicted accused No. 1 and 2.
The High Court admitted the appeal of accused No. 2 and acquitted him.
The appeal of the appellant accused No. 1 was, however, rejected by the High Court it limine without giving any reasons for the rejection.
On an appeal by Special Leave, ^ HELD: 1.
There is a whole catena of cases which have come up to this Court from the Bombay High Court in which this Court has consistently disapproved of the practice followed by the Bombay High Court of not giving reasons when exercising its power of summary dismissal of criminal appeals which lie both on questions of fact and law.
In other High Courts such appeals are automatically admitted.
The power of summary rejection under section 421 of the Criminal Procedure Code should be only exercised when the Court is satisfied from a, perusal of the judgment as well as the record that there is absolutely no reasonable possibility of its success for reasons to be mentioned in the order of dismissal.
In the present case, it cannot be said that there are no arguable points.
It is difficult to believe that the judgments of this court have neither come to the knowledge of the Bombay High Court nor were cited on behalf of ' the appellant In any case, the law having been declared by this Court, it is the duty of the Bombay High Court to act in accordance with Article 141 of the constitution and to apply it by giving proper reasons to justify whatever be its view.
The judgment of the Bombay High Court was set aside and it was directed that the case should, be treated as admitted for regular hearing in she Bombay High Court and should be disposed of in accordance with law.
[688 C, E, F, G, 689 AB] F
| The appellant was elected to the House of the People from a constituency in the State of Madhya Pradesh.
The respondents were the ,other contesting candidates.
Respondent No. 1 filed an election petition challenging the election of the appellant.
That election petition was dismissed by the Election Tribunal.
Against the order of the TribunaL the first respondent preferred an appeal to the High Court under section 116 A 134 159 S.C. 9.
130 of the Representation of the People Act, 1951.
Admittedly, the appeal was filed more than 30 days after the order of the Election Tribunal.
If the time requisite for obtaining a copy of the order of the Tribunal was excluded, the appeal was filed within 30 days.
However, if that was not 'done, the appeal was out of time.
The contention of the appellant before the High Court was that the respondent No. 1 was not entitled in law to exclude the time taken by him in obtaining the copy of the order of the Tribunal.
That contention was rejected by the High Court.
The High Court also found that the appellant was guilty of two, corrupt practices and hence his election was set aside.
The appellant came to this Court by special leave.
The only question raised before this Court was whether for 'the purpose of computing the period of 30 days prescribed under section 116 A(3) of the Act, the provisions of section 12 of the Limitation Act could be invoked or not.
Dismissing the appeal, Held: (per B. P. Sinha, C.J., K. Subba Rao, Raghubar Dayal and N. Rajagopala Ayyangar JJ.) (i) The exclusion of time provided for by section 12 is permissible in computing the period of limitation for filing.the appeal in the High Court.
Per B. P. Sinha, C.J., K. Subba Rao and N. Rajagopala Ayyangar JJ.) (ii) Though the right of appeal is conferred by section 116 A of the Representation of the People Act, 1951, and it is by virtue thereof that the appeal was filed by respondent in the High Court, it is still an appeal " under the Code of Civil Procedure, 1908, to the High Court".
To attract article 156 of the First Schedule to the Limitation Act, it is not necessary for an appeal to be an "appeal under the Code of Civil Procedure" that the right to prefer the appeal should be conferred by the Code of Civil Procedure.
It is sufficient if the procedure for the filing of the appeal and the power of the Court for dealing with the appeal, when filed, are governed by the Code.
Per Raghubar Dayal and Mudholkar JJ.
There is no warrant for holding that an appeal which is not given by the Code of Civil Procedure is still an appeal under the Code merely because its procedural provisions govern its course.
Where a right of appeal is given by some other law, the appeal must be regarded as one udder that law and not under the Code of Civil Procedure.
There is no reason for construing the words "under the Code of Civil Procedure" as meaning "governed in the matter of procedure by the Code of Civil Procedure".
Held:(iii) (per B. P. Sinha, C.J., N. Rajagopala Ayyangar and Raghubar Dayal JJ.) The entire sub section
(2) of section 29 of the Limitation.
Act has to be read as an integrated provision and the conjunction "and" connects the two parts and makes it necessary for attracting cl.
(a) that the conditions laid down by the opening words of sub section
(2) should be satisfied.
131 Per Subba Rao and Mudholkar JJ.
The second limb of sub section
(2) of section 29 is wide enough to include a suit, appeal or an application under a special or local law which is of a type for which no period of limitation is prescribed in the First Schedule.
Per Subba Rao J.
The use of the word "any" clearly shows that the second part of sub section
(2) of section 29 does not depend on the first part or vice versa.
The second part of sub section
(2) is an independent provision providing for that category of proceedings to which the first part does not apply.
Held: (i) that section 116 A does not provide an exhaustive and exclusive code of limitation for the purpose of appeals against orders of Tribunals and also does not exclude the general provisions of the Limitation Act.
Section 29(2)(a) of the Limitation Act speaks of express exclusion and there is no express exclusion in section 116 A(3) of the Representation of the People Act, 1951.
Moreover, the proviso to section 116 A(3) from which an implied exclusion is sought to be drawn does not lead to any such necessary implication.
The proviso only restores the power denied to the Court under section 29(2)(b) of the Limitation Act.
If this proviso had not been there, section 29(2)(b) would have excluded the operation of section 5 of the Limitation Act with the result that even if a sufficient cause for the delay existed, the High Court would have been helpless to excuse the delay.
(ii)S. 12(2) of the Limitation Act applies to an appeal to the High Court against the order of the Tribunal.
An order made under section 98 of the Representation of the People Act, 1951, if it contains also the reasons for it, is a composite document satisfying the definition of a judgment as well as that of an order and thereby attracting the relevant provisions of section 12 of the Limitation Act.
Section 12(2) does not say that the order mentioned therein shall be only such order as is defined in the Civil Procedure Code.
If a statute provides for the making of an order and confers a right of appeal to an aggrieved party against that order within a prescribed time, the time requisite for obtaining a copy of the order can be excluded.
The Act of 1951 empowers the Tribunal to make an order and gives a right of appeal against that order to the High Court and therefore section 12(2) is directly attracted without any recourse to the definition of an order in the Code of Civil Procedure.
Per Mudholkar J.
The first limb of section 29(2) is concerned only with the proceedings under special or local law for which a period of limitation is prescribed in the First Schedule to the Limitation Act.
If for such a proceeding the period to be found in the First Schedule is different from that prescribed under a special or local law, certain consequences will follow under the provision.
No inconvenience is to be caused by giving a literal and natural interpretation to the expression used by the legislature in the first portion of sub section
(2) of section 29 because cases of other kind can easily come under the second portion thereof.
Case Law referred to. 132
| Certain properties belonging to the appellants were attached by the City Civil Court in Bombay in execution of a decree.
The appellant engaged the respondent firm of Solicitors who by Vakalat executed in their favour by the appellants agreed to act, appear and plead for them in the City Civil Court.
The respondents took out three Chamber Summonses on behalf of the appellants for raising the at tachment.
Thereafter, they submitted three bills.
Since the bills remained unpaid, they obtained an order from the Prothonotary of the High Court directing the TaXing Master to tax the bills.
The appellants filed an appeal against the order of the Prothonotary which was dismissed by the Chamber Judge with liberty to the Taxing Master to decide whether the respondents were entitled to be remunerated on the original side scale of fees as between an attorney and client.
The Taxing Master rejected the appellants ' contention and taxed the respondents ' bills according to the scale of fees applicable on the original side by the High Court.
A Chamber Summons filed by the appellants before a Single Judge was dismissed.
An appeal before the Division Bench by the appellants also failed.
In an appeal by Special Leave the appellants contended: 1.
The Solicitors ' bill for cost and remuneration in respect of the work done by them in the City Civil Court cannot be taxed by the Taxing Master of the Original Side, High Court.
The bill in any event cannot be taxed according to the scale of fees applicable on the original side as between an attorney and client, particularly in view of the provisions contained in the Legal Practitioners Fees Act, 1926, Bombay City Civil Courts Act, 1948 and the Bombay City Civil Court Rules, 1948 as well and the rules framed by the Bombay High Court under section 2 24 ( 1 ) (d) under the Government of India Act, 19 3 5.
Dismissing the appeal, HELD: 1.
Rule 569 of the Rules of the High Court of Bombay (Original side) 1957, authorises the Taxing Master to tax the bills of cost on every side of the High Court except the Appellate side of the High Court and in the Insolvency Court.
All other bills of cost of attorneys shall also be taxed by him when he is directed to do so by a judge 's order.
There is no justification for the appellants ' con tention that "other bills of cost" must be construed to mean other bills of cost relating to matters on the original side of the High Court.
Rule 573 as amended prescribed a limitation of 5 years for lodging the bill of cost for taxation after the disposal of the suit or the proceedings in the High Court.
In respect of matters which are not the subject of any proceedings in the High Court the attorney has to lodge his bill of cost for taxation within 5 years from the completion of the matter.
The necessity for making this provision arose because rule 568 empowers the Taxing Master to tax the attorneys bill of cost in all matters except those on the Appellate side of the High Court.
The Bombay High Court, over a long Course of years has consist ently taken the view that the Taxing Master has Jurisdiction to tax attorneys bills of cost in relation 8 436SC1/77 352 to the professional services rendered by them whichever be the court in relation to which the services are rendered except the Appellate side of the High Court, in regard to which an exception has been expressly carved out by the rule.
[354 G H, 355 A G] Nowroji Fudumli Sirdar vs Kanga & Savani, 28 Born.
L.R. 384, Chitnis & Kanga vs Wamanrao section Mantri, and M/s. Pereta Fazalbhoy & Co. vs The Rajputana Cold Stor age & Refrigeration Ltd., approved.
The preamble and the statement of objects and reasons of the Legal Practitioners Fees Act 1926 shows that the Act was passed in order to give effect to the recommendations of the Indian Bar Committee that in any case in which a Legal Practitioner has acted or agreed to act he should be liable to be sued for negligence and be entitled to sue for his fees.
The Indian Bar Committee recommended by para 42 of its report that the distinction relating to suing for negligence and being sued for fees was not of great impor tance since suits by or against Legal Practitioners in re spect of fees and the conduct of cases were extremely rare.
But it was necessary to provide that in any case in which a Legal Practitioner had acted or agreed to act he should be liable to be sued for negligence and be entitled to sue for his fees.
The definition of Legal Practitioner in the 1926 Act is the same as in the (which includes an attorney).
Section 3 of the Act of 1926 provides that any Legal Practitioner who acts or agrees to act for any person may by private agreement settle with such person the terms of his engagement and fees to be paid for his professional services.
Section 4 of the Act pro vides that any such Legal Practitioner shall be entitled to institute and maintain legal proceedings for the recovery of any fee due to him under the agreement or if no such fee has been settled a fee computed in accordance with the law for the time being in force in regard to the computation of the cost to be awarded to a party in respect of the fee of his Legal Practitioner.
It may be that if an attorney institutes a suit he may be governed by section 4 but it really confers an additional right on the Legal Practitioner to institute a suit and cannot be construed as detracting from any other right which he may possess in regard to the taxation and recovery of his fees.
[358 G H, 359 A B, F H] 3.
The High Court was in error in observing that alterna tively there was an apparent conflict between section 4 of the 1926 Act and the original side rules relating to the taxation of an attorney 's bills of cost.
Bearing in mind the true object and purpose for which the 1926 Act was passed and the drive of section 4, there is no conflict, apparent or real between the 1926 Act and the High Court Rules of 1957.
[360 D E] 4.
The rules framed by the High Court under section 224(1)(d) of the 1935 Act, are rules for fixing and regulat ing the fees payable as costs by any ' party in respect of the fees of his adversary 's attorney.
These rules according to their very terms have nothing to do with the taxation of any attorney 's bill of cost as between himself and .his own client.
[360 F G] 5.
The combined effect of section 4 of the 1926 Act and the Rules framed by the High Court under section 224(1)(d) is that if an attorney who has appeared or acted for his client in the City Civil Court sues his client for fees he cannot recover in the suit anything more than what is per missible under the Rules framed by the High Court under section 224(1)(d).
However, that do not affect the right of an attorney to have his bill taxed by the Taxing Master on the original side scale.
[361 C D] 6.
Section 18(2) of the Bombay City Civil Courts Act.
1948 provides that in respect of suits transferred from the High Court to the City Civil Court costs incurred in the High Court till the date of the transfer of the suit are to be assessed by the city Civil Court in such manner as the State Government may after consultation with the High Court determine by rules.
Rule 2 framed under section/8(2) pro vides that even as regards the fees of attorneys the Regis trar of the City Civil Court is given the Vower to tax and allow all such costs and out of pocket expenses as shall have been properly incurred by an attorney upto the date of transfer of the suit.
The rule further provides that after the date 353 of the transfer such fees shall be taxed and allowed as in the opinion of the Registrar are commensurate with the work done by the advocate having regard to the scale of fees sanctioned for the advocates in the City Civil Courts Rules.
The said rule, applies only to transferred suits.
It has no application to the suits and proceedings instituted in the City Civil Court after 148.
[361 D H] M/s. Sandersons & Morgans vs Mohanlal Lalluchand Shah, A,I.R. distinguished.
The Taxing Master, however, before allowing the cost claimed by the attorney from his client must have regard to the fact that the attorney has appeared in a subordi nate court and to the scale of fees generally prevalent in that Court.
[363 G H] The Court observed that power similar to the power of taxation of a bill costs between the advocate and client which is found in Supreme Court Rules, 1966, should be conferred on appropriate officers of the Court subordinate to the High Court.
Such a power may enable the presiding Judge to control the professional ethics of the advocates appearing before them more effectively than is possible at present.
[362 A G]
| The appellant instituted a suit for the recovery of money against the respondents in a Court in Gwalior State in May 1947.
The respondents who were residents in U. P. did not appear before the court and in November 1948 the Gwalior Court passed an ex partc decree.
On September 14, 1951, the Gwalior Court transferred the decree for execution to Allahabad, and on October 16, 1951, the appellant filed an application for execution of the decree before the Allahabad Court.
The respondents contended that the decree being a decree of a Foreign Court to whose jurisdiction they had not submitted was a nullity and the execution application in respect thereof was not maintainable.
Held, that the decree was not executable at Allahabad.
Per Kapur, Ayyangar and Mudholkar, JJ.The decree of the Court in Gwalior State sought to be executed was a foreign decree which not change its nationality inspite of subsequent constitutional changes or amendments in the Code of Civil Procedure.
On the day on which it passed the decree the Gwalior Court was a foreign Court within the meaning of section 2 (5) of the Code.
None of the conditions necessary to give its judgment extra territorial validity existed (i) the respondents were not the subjects of Gwalior; (ii) they were not residents in Gwalior at the time the suit was filed, (iii) they were not temporarily present in gwalior when the process was served upon them, (iv) they did not select the forum which passed the decree against them, (v) they did not voluntarily appear before the court, and (vi) they had not contracted to submit to the jurisdiction of the 579 by the Indian Code, was a different court from that which passed the decree under the Local Code, and was not the court.
which passed the decree within the meaning of section 39.
Sections 37 to 42 of the Code deal with execution of decree., passed by the courts governed by the Indian Code.
The decree could not be executed under the provisions of section 43 of the Code at any time.
After its adaptation in June 1950, section 43 applied to "a decree passed by a Civil Court in a Part B State".
There were no Part B States at the time when the decree was passed and these words could not be read as "a decree passed by a civil court in what became a Part B State".
Nor could the decree be executed under section 44 as that section was also inapplicable to this decree.
Article 261 (3) which provides that the final judgments or orders of Civil Courts in any part of the territory of India shall be capable of execution anywhere within that territory is inapplicable to the decree of the Gwalior court as the, provision is prospective and not retrospective.
Per Sarkar and Das Gupta, JJ.
Even in the decree passed by Gwalior Court was not a foreign decree the Allahabad Court had no power to execute it either under section 38 or under sections 43 or 44 of the Code of Civil Procedure.
Section 38 provides that a decree may be executed either by the court which passed it or by the court to which it is sent for execution.
The Allahabad Court was not the court which passed the decree.
Section 39 empowers the court which passed the decree to transfer it for execution to another court.
The word "court" in the phrase "court which passed the decree" in section 39 contemplates only courts governed by the Indian Code of Civil Procedure.
The Gwalior ,.Court which was governed by the Gwalior Code when it passed the decree had a distinct identity from the court at Gwalior after it came to be governed by the Indian Code.
The Court which transferred the decree was accordingly not the court which passed the decree and the order of transfer was not a valid order.
Section 43 of the Code provided for the execution of decrees passed by the Civil Courts in places where the Indian Code did not extend.
The decree of the Gwalior Court did not fall within this section as it stood before the Constitution.
A, After the adaptation in 1950 the section applied to a decree passed "by a Civil Court in a Part B State".
These words could not be read as "by a civil court in an Indian State which has later been included in a Part B State".
The Gwalior Court which passed the decree was not a Civil Court in a Part B State. 'Section 44 was equally inapplicable to the decree,.
The section after adaptation in 1950 580 applied only to decrees of revenue courts.
Before the adap tation it could apply only if there was a notification issued by the U. P. Government but no such notification was issued.
| The appellants were workmen employee, of the first respondent company.
It was alleged that they assaulted another workman as a result of which he sustained bleeding injuries on his head.
A chargesheet was drawn up by the management was served on the appellants, which was followed by a composite domestic enquiry at the end of which all of them were dismissed from service.
The appellants moved five different applications before the Labour Court questioning the validity of the domestic enquiry as also the legality and propriety of the orders terminating their services.
The Labour Court finding that the domestic enquiry was held according to the relevant rules, and that there was evidence in support of the alleged misconduct, held that the management was justified in imposing the penalty of dismissal from service.
The appellants filed five Separate revision petitions before the Industrial Court under sections 66 and 67 of the Madhya Pradesh Industrial Relations Act, 1960.
The President of the Industrial Court finding that the entire approach of the Inquiry Officer Manager in arriving at the findings of mis conduct in the domestic enquiry appeared to be biased and unfair and that the conclusions neither fair nor reasonable, held that the dismissal could not be sustained.
All the revision petitions were therefore allowed, and the orders of the Labour Court dismissing the applications were set aside, and 773 the matters were remanded for a fresh decision after giving the parties due opportunity to adduce evidence in respect of the alleged misconduct.
The respondent company filed writ petitions before the High Court questioning the correctness of the order of the Industrial Court and a Division Bench held that the Industrial Court exceeded its jurisdiction by interfering with the findings of facts, and as this was an error apparent on the face of the award, quashed the decision of the Industrial Court.
Allowing the appeals to this Court, ^ HELD: 1.
(i) Times without number, it has been pointed out that article 226 is a device to secure and advance justice and not otherwise.
[787E] Sadhu Ram vs Delhi Transport Corporation, ; , referred to.
(ii) ordinarily, the Courts exercising extraordinary jurisdiction is loathe to interfere with an order remanding the matter to the authority directed to investigate facts.
[787F] D.P. Maheshwari vs Delhi Administration and Ors., , referred to.
In the instant case, the Industrial Court had made an order of remand.
The High Court was not justified in interfering with the same.
By this uncalled for interference, it has merely prolonged the agony of the unemployed workmen and permitted the jurisdiction of the High Court under article 226 to he exploited by those who can well afford to writ to the detriment of those who can ill afford to wait by dragging the latter from court to court for adjudication of peripheral issues more vital to them.
[787F G] 2.
(i) Dismissal from a service is an order made under the relevant standing orders.
A relief against such an order can be obtained by making an application under section 61 to the Labour Court.
Against the order made by the Labour Court under section 61, a revision would lie under section 66 to the Industrial Court.
[779H; 780C] (ii) If and when an application under section 61 is made the Labour Court will have jurisdiction to decide the legality and propriety of the order of dismissal or removal from service.
When jurisdiction is conferred upon the Labour Court, not only to examine the legality of the order as also the propriety of the order, the Labour Court can in exercise of the jurisdiction examine the propriety or impropriety of the order.
[781C] 3.
(i) The main part of Sec. 66 clearly spells out the jurisdiction of the Industrial Court to pass any order in reference to the case brought before it as it thinks fit '.
The expression 'as it thinks fit; confers a very 774 wide jurisdiction enabling it to take an entirely different view on the same set of facts: The expression 'as it thinks fit ' has the same connotation, unless the context otherwise indicates 'as he deems fit '.
[785B C] Raja Ram Mahadev Paranjype and ors.
vs Aba Maruti Mali and ors., [1962] Suppl.
1 SCR 739; referred to.
(ii) Sub cl.
(c) of the first proviso to Section 66 (1) will permit the Industrial Court to interfere with the order made by the Labour Court, if the Labour Court has acted with material irregularity in disposal of the dispute before it.
If the finding recorded by the Labour Court is such to which no reasonable man can arrive, the Industrial Court in exercise of its revisional jurisdiction would be entitled to interfere even if patent jurisdictional error is not pointed out.
[785E F] 4.
The expression propriety is variously understood; one meaning assigned to it being 'justice '.
Amongst various shades of meaning assigned to the expression, the dictionary sets out; 'fitness, appropriateness; aptitude; suitability etc. ' as some of them.
[781D E] 5.
If the justice or the justness in relation to a legal proceeding where evidence is led is questioned and the authority is conferred with jurisdiction to examine the propriety of the order or decision that authority will have the same jurisdiction as the original authority to come to a different conclusion on the same set of facts.
If any other view is taken, the expression 'propriety ' would lose all significance.
The expression 'legality and propriety ' has been used in various statutes where appellate or revisional jurisdiction is conferred upon a superior authority.
[781E G] Raman and Raman Ltd. vs The State of Madras and Anr., ; , Moti Ram vs Suraj Bhan and Ors.
, ; , Awdesh Kumar Bhatnagar vs The Gwalior Rayon Silk Mfg.
(Weaving) Co. Ltd and Anr.
[1972] Lab.
and IC. 842; referred to.
In the instant case, the Industrial Court while hearing the revision petitions found that the petitioners were trade union workers and that three of them were office bearers of the union, and that a material place of evidence clearly pointing to the contrary was wholly overlooked by the inquiry officer.
The Industrial Court also pointed out that report (Ex D/18) purporting to have been made by the assaulted worker to the factory Manager on the day following the date of occurrence when properly scanned appeared to be highly suspicious evidence because: 'it was not dated and did not bear the endorsement of the officer to whom it was presented.
After referring to other infirmities in the approach of the Labour Court, the Industrial Court concluded that the entire approach of the Manager in arriving at the findings of misconduct in his enquiry 'appeared to be biased and unfair ', and 'the conclusions neither fair nor reasonable and any order of dismissal based thereon could not be sustained. ' The Industrial Court was, therefore perfectly justified in interfering with the order of the Labour Court.
It merely set aside the award 775 of the Labour Court and did not proceed to re appraise the evidence but remitted the case to the Labour Court for fresh decision.
It was thus an eminently just order.
The High Court however, observed that the Labour Court could only interfere with the decision of the inquiry officer if the findings arrived at were perverse.
The High Court completely missed the ambit of jurisdiction of the Labour Court in that it had the jurisdiction to decide the legality and propriety of the order.
Impropriety as converse of propriety cannot be equated with perversity.
The High Court wholly, misread the relevant provision and interfered with the decision of the Industrial Court which was preeminently just and within the four corners of its jurisdiction.
[785G; 786A G; 787A D]
| The High Court allowed the writ petition and quashed the order of the Deputy Director of consolidation.
The appellants filed appeal in this Court against the order of the High Court.
The appeal came up for hearing on May 7, 1987, when it was dismissed for default of appearance, where after an application for restoration was filed on the ground that counsel for the appellants was busy in the High Court at the time of hearing of the appeal.
This Court found no justification for recalling its order, dismissing the appeal, but in view of the fact that the appellants would suffer for no fault of theirs, decided to hear the matter, directing that this practice should not be permitted in this Court any further.
Dismissing the appeal (on merits), the Court, ^ HELD: There is no merit in the appeal.
The High Court was right in holding that the respondents (concerned) were in possession of the land in 1958 when the case started under section 145 of the Cr.
P.C. and their date of occupation could not be later than 8.5.1958, so that the six years ' period of limitation for a suit for their eviction under section 209 of the Zamindari Abolition and Land Reforms Act would start running from July 1, 1958 and expire on June 30, 1964 i.e. before the consolidation operations commenced.
The appellants contended that there was a break in the possession of the respondents concerned between 8.5.1958 and 29.1.60, but during that period the land was in the custody of the Criminal Court which must be deemed to have been holding possession of the land on behalf of the person eventually found to be entitled to possession.
The respondents had matured their title by adverse possession and there could be no warrant for denying them the status of rightful owners.
There was no break in the possession of the respondents and they must be held to have been in continuous occupation at least from May, 1958.
1877A F]
|
Appeal No. 306 of 1961.
198 Appeal by special leave from the Judgment and order dated May 16.
, 1959, of the Industrial Court Bombay, in Appeal (I.C.) No. 90 of 1959.
J.P. Mehta and I.N. Shroff, for the appellant.
N.M. Barot, Secretary, Labour Association, for the respondent No. 3. 1962.
February 15.
The Judgment of the Court was delivered by GAJENDRAGADKAR, J.
The appellant, the Fine Knitting Co. Ltd., was incorporated in 1908 and its principal activity then Was to Manufacture hosiery.
In 1924, when the appellant shifted its factory from.
Barejadi to Ahmedabad, it installed spinning machinery with 9000 spindles with a view to ensure suitable and even supply of yarn for its hosiery manufacture.
On May 30, 1939, the Government of Bombay issued a notification under the Bombay Industrial Disputes Act, 1938 (No. XXV of 1938), whereby hosiery concerns were included in the definition of 'Cotton Textile Industry '.
Subsequently on July 17, 1945, another notification was issued as a result of which the hosiery manufacture was excluded from the Cotton Textile Industry and it was covered by a separate notification issued under the said Act.
This latter notification which was made applicable to the Hosiery Industry specified that the said notification inter alia, to all concerns using power and employing twenty or more persons which are engaged in the manufacture of hosiery or other knitted articles made of cotton and all processes incidental or supplementary thereto.
After this notification was issued, the appellant ceased to be covered by the extended and inclusive definition of the 'Cotton Textile Industry ' and was recognised as a Hosiery concern being engaged in the Manu facture of hosiery.
Later, in 1946, the Bombay Industrial Relations Act, 1946 (No. XI of 1947) (hereinafter called the Act.), was applied to the 199 industries to which the Bombay Industrial Disputes Act bad been applied, as a result of s.2(3) of the former Act.
In consequence, for the purposes of the Act, the appellant concern was recognised as an undertaking of the Hosiery Industry under section 11 This was the result of notification No. 10 of 1948, issued by the Registrar under the Act.
This position was recognised by the Industrial Tribunal in indus trial adjudications concerning disputes between the appellant and its workmen.
Even so, respondent No. 3, the Textile Labour Association, Ahmedabad, sought to reopen the issue by applying by to the Registrar on October 16 1953, that the appellant 's factory should be recognised as an undertaking both in the Cotton Textile Industry and the Hosiery Industry.
The Registrar who is the second respondent in the present appeal hold an enquiry and ultimately came to the conclusion that there was no justification for splitting up the concern into two units and recognising them as suggested by the third respondent.
The third respondent did not prefer an appeal against the said decision of the second respondent; but respondent No. 4 who are the five elected representatives of the employees of the appellant sought to challenge the said decision of the second respondent by preferring an appeal to the Industrial Court, respondent No. 1.
The appellant contended that respondent No. 4 were not entitled to prefer an appeal because they were not parties to the proceedings in the original application before the second respondent.
This preliminary objection was upheld and the appeal preferred by respondent No. 4 was dismissed.
The result was that the order passed by the Registrar rejecting the application made by respondent No. 3 concluded the dispute.
Even while the said appeal was pending before the first respondent, respondents Nos. 3 and 4 200 initiated the present proceedings by means of two applications made before the second respondent in which the same relief was claimed that the appellant concern should be recognised as an undertaking both in the Cotton Textile Industry and in the Hosiery Industry.
The second respondent, however, rejected these applications on the ground that since he gave his earlier decision, there had been no change of circumstances and so there was no justi fication for reconsidering the matter over again.
The third and the fourth respondents then went in appeal before the first respondent and their appeals were allowed by the first respondent and a direction was issued that the appellant company should be recognised as two undertakings one in the Cotton Textile Industry and the other in the Hosiery Industry.
The appellant then moved the High Court of Bombay under Articles 226 and 227 of the Constitution and challenged the validity of the order passed by the first respondent.
, In the High Court the parties took an order by consent on August 20, 1958.
As a result of this consent order, the direction issued by the first respondent was set aside and the matter was remanded to the second respondent to enable him to hold a fresh enquiry and to dispose of the dispute between the parties in accordance with law.
On February 14, 1959, the second respondent pronounced his decision.
He came to the conclusion that in the circumstances disclosed on evidence, the best courts would be to recognise the spinning and hosiery sections of the appellant company as two separate undertaking and treat them as two separate enterprises.
That is why under section 11(1) he decided to recognise the Fine Knitting Co. Ltd. (Hosiery Section) and the Fine Knitting Co. Ltd. (excluding Hosiery Section) as undertakings in the Hosiery Industry and the Cotton Textile Industry respectively The appellant was aggrieved by this order and so is preferred appeals before the first 201 respondent.
The respondents Nos. 3 and 4 also challenged the decision of the second respondent and contended that the entire concern of the appellant should be treated as Cotton Textile Undertaking.
All the three appeals failed and the first respondent confirmed the order passed by the ,second respondent.
The result is that the appellant concern is recognised as consisting of two undertakings, the Hosiery Section and the rest excluding the Hosiery Section.
It is against this order of the first respondent that the appellant has come to this Court by special leave.
The first point which Mr. Mehta has strenuously urged before us on behalf of the appellant is that on a proper application of the tests laid down by this Court, it should be held that the spinning and the Hosiery Sections in the appellant 's establishment are one concern and in support of this argument he has referred us to the decisions in the Associated Cement Companies Ltd. vs Their Workmen(1), Pratap Press vs Their Workmen (2) and Pakshiraja Studios V.
Its Workmen (3).
This question has been recently considered by this Court in the case of the Honorary Secretary, The South India Millowners ' Association vs ' The Secretary,Coimbatore District Textile Workers ' Union, Coimbatore (1).
in which judgment has been pronounced on February 1, 1962.
In the last mentioned case, this Court has examined the relevant earlier decisions and has come to the conclusion that though the question about the unity of two industrial establishments has to be considered in the light of the relevant tests laid down from time to time, it would be unreasonable to treat any one of the said tests as decisive.
As has been observed in that case, in dealing with the problem, several factors are relevant, but it must be remem bered that the significance of the several factors (1) [1960) I S.C.R. 703.
(3) [19611 (2) [1960] I. L.L,J. 497.
(4) [1962] Supp. 2 S.C R. 925 202 would not be the same in each case nor their importance.
It is in the light of these decisions that the point raised by Mr. Mehta has to be considered .
Mr. Mehta contends that in the present case there is unity of ownership and as a necessary corollary, there is unity of management , supervision and control; there is unity of purpose and design and he argues that there is complete functional integration.
According to him , as no hosiery could be maufactured without yarn, there is such a functional unter dependence between the cannot exist without the former.
There is also unity of finance and in consequence, there is one capital and depreciation fund account, of expenditure and income, one balance sheet and one profit and loss account .
There is also unity of employment and the two concerns functions under the same roof; so there is unity of habitiation .
It is on these grounds that Mr.
Mehta contends that the first and the second respondents were in error in splitting up the appellant 's establishment into two sections and recoginsing them separately as such.
In dealing with the significance and the effect of the factors on which Mr.
Mehta has righlty relied it is necessary to bear in mind certain other relevant factors on which the decision under appeal is substantially based.
It is true that in 1924, the spinning section of the establishment may have begun as a subsidiary to the hosiery section and in order to serve as its feeder.
But the evidence on the record clearly shows that the position is now reversed and that the spinning section has now assumed major importance and hosiery takes a minor place in the industrial activities of the app minor place in the industrial activities of the appellant.
The inspection notes made by the second respondent show that it was admitted by the 203 management that the spinning, section has now developed to such an extent that it is like aspinning mill by itself; it can no longer be regarded as a minor, section attached to the hosiery works.
It was conceded before the second respondent that only about 20% of the yarn manufactured in the spinning section is consumed for hosiery purposes while the rest is available to be sold in the market.
The production.
figures in the spinning section and the consumption of the yarn produced in that section unmistakably point to the fact that the spinning section is no longer a minor department run by the appellant solely for the purpose of its hosiery section.
ID 1955 in the months of November and December, the production in the Spinning department was worth Rs. 1,17,742 whereas whatever was consumed in the knitting department was only Rs. 23,817 leaving a balance which was sold for Rs. 93,925.
The corresponding figures for the year, 1956 are Rs. 6,70,854, Rs. 1,40,105 and Rs.5 30,749.
Similar figures for 1957 are Rs.8, 17, 153, Rs. 1,31,725 and Rs. 7,04,018 and for 1958 are Rs. 6,68,095, Rs. 1,26,252 and Rs. 5,40,873.
The balance sheet for the year 1954 shows that the total hosiery sale was worth Rs. 2,37,232 6 0 whereas the total yarn sale was worth Rs. 14,82,705 5 0.
Similarly, for the year.
1955, the, hosiery sale was kW. 2 56,986 and the yarn :sale was Rs. 14,44,929.
strength of the employees engaged in the two respective sectors tells the same story.
The table prepared by the second respondent from the information supplied by the management shows that for the year 1955, spinning employees were 174, hosiery employees 56 and the common workmen 35.
For the year 1956, the figures were 217, 54 and 38; for 1957, the figures were 194, 65 and 38; and for 1958 the figures were 178, 60 and 32.
Mr. Mehta quarrels with some of these figure but does not dispute the broad conclusion which is drawn from the figures that the number of employees engaged in the spinning section is far more 204 than that employed in the hosiery section.
Thus, there can be no doubt that the spinning activity of the, appellant which may have begun as subsidiary to the hosiery activity has now grown in importance and has taken a place of pride in the industrial activity of the appellant considered as a whole; it can no longer be regarded as subsidiary to hosiery.
It is common ground that by the notification issued under the Cotton Textile (Control) Order, 1948, the appellant is called upon to supply to the Government the prescribed quantity of yarn produced by the spinning department.
It is unnecessary to refer to the details of the order or to the extent of the yarn required to be supplied by the appellant under it.
What is significant is the fact that by the application of the order issued in that behalf, the Government has treated the appellant as a producer who has a spinning plant and in that sense, the existence of the spinning activity of the appellant has been treated as an independent activity liable to be controlled by the notification issued under the Cotton Textile (Control) Order, 1948.
Then as to the argument that the spinning and the hosiery are functionally integrated, it is clear that hosiery can exist without spinning, provided the industry engaged in hosiery purchases yarn required for the purpose of hosiery.
That is one aspect of the matter.
But the more important aspect on which reliance has been placed against the appellant is that the appellant 's spinning department produces yarn of all counts some of which would admittedly not be useful for hosiery work.
When the appellant was asked whether the allegation made by respondents Nos. 3 and 4 in that behalf was true or not, the management of the app ellant hesitatingly denied the said allegation.
But an advertisement published in the local daily "Sandesh" was produced by respondents Nos.
3 205 and 4 and it clearly showed that yarn of all counts was offered by the appellant for sale in the general market.
Therefore, it would be idle to contend that the spinning work carried on in the spinning department is meant exclusively or solely for the hosiery department.
If the spinning department produces yarn which is not useful or necessary for, and which cannot be used by, the hosiery sections the only inference is that the spinning department is working on its own and is producing yarn to be sold in the market.
That being so, the argument of functional inter dependence or integrality cannot be treated as valid.
Besides, it is not disputed that when the knitting department was closed in 1948, the spinning department was not.
If the two departments are functionally inter dependent, the closure of the one without the closure of the other may need an explanation.
The explanation which has appealed to the first and the second respondents apparently is that though the spinning work carried on by the appellant may, to some extent, be useful for the hosiery work, the major part of its work is carried on independently with an eye on the market and so the closure of the hosiery cannot and did not affect the continuance of the spinning department.
There is yet another circumstance on which considerable reliance has been placed by the first and second respondents in rejecting the appellant 's contention that the two departments constitute one unit.
This circumstance refers to the conduct of the appellant itself in dealing with the employees engaged in spinning and in knitting departments.
It is admitted that the minimum wages paid to the employees in knitting differed from the minimum wages paid to the employees in spinning and so does the amount of dearness allowance paid to the respective employees differ.
It is difficult to understand how an employer can make a distinction ui 206 the payment of minimum wages between one class of employees and another if both the classes of employees are engaged in different departments Of the same establishment or concern.
If there is unity of employment and unity of purpose and design as suggested by Mr. Mehta, it is inconceivable that the employees engaged in two departments integrally connected with each other and constituting one unit would be paid different minimum wages.
What is true about the minimum wages and the dearness allowance is also true about the bonus.
It appears that even in years in which the appellant made profits and actually paid bonus to the work men employed in the spinning department, no bonus was paid to the employees engaged in the knitting department.
That again can be explained and justified only on the basis that the appellant treated the two departments as distinct and separate and so the employees in the one got bonus and not the employees in the other.
It was suggested by Mr. Metha that the genesis of the present dispute lies in the anxiety of the third respondent to take within its jurisdiction the employees engaged by the appellant in its spinning depart ment.
On the other hand, Mr. Barot for respondents Nos. 3 and 4 contends that the present trouble arose because the appellant began to deny to its employees in the spinning department the benefits of all relevant conditions of service which were applicable to the employees in the Textile Industry in Ahmedabad.
Whatever may be the background of the dispute and its genesis, it is clear beyond doubt that the way in which the appellant has treated its employees in spinning is distinguished from its employees in knitting leads very strongly to the inference that the, appellant treated the two departments not as one unit but as separate units each one functioning on its own and independently of the other.
It is in the light of these circumstances that 207 the first and the second respondents were not impressed by the relevant factors on which the appellant relied in support of its plea of the unity of the two activities and came to the conclusion that the two activities were separate and as such, as must be separately recognised under, section 11.
We do not see how the appellant can successfully challenge the correctness of this conclusion.
There is one more point which yet remains to be considered.
Mr. Metha argues that the impugned order recognising two different undertakings under section 11(1) is not justified by the provisions of the statute.
Section II provides that the Registrar may, after making such inquiry as he deems fit, recognise for the purposes of the Act (1) any concern in an industry to be an undertaking ; (2) any section of an undertaking to be an occupation.
The argument is that section II (1) does not authorise the splitting up of a concern into two undertakings.
A concern, says Mr. Metha, is the whole of the concern or establishment run by the appellant and as such it has to be recognised as one undertaking in so far as the order under appeal treats the appellant 's concern as two undertakings, it is contrary to section 11(1).
We are not impress,, (I by this argument.
The appellant is undoubtedly engaged in the hosiery industry and that part of its business cannot be recognised as Cotton Textile Industry because it is a concern engaged in spinning only which can be recognised under that category.
If that is so, industrial activity of the appellant in relation to hosiery industry must be recognised separately from the textile undertaking.
If one concern or company carries on several businesses or undertakes different types of industrial works, these businesses or works would amount to separate enterprises or undertakings and would have to be 208 recognised as such.
In fact, if the appellant itself has been treating the two kinds of work separately and has thus split up its whole business into two independent sections, it is not easy to understand why the Registrar cannot recognise the existence of two undertakings carried on by the appellant and treat the said undertakings as such.
We see no justification for the assumption made by Mr. Metha that section II (1) does not permit the recognition, of several undertakings carried on by the same company separately.
It all depends on whether the undertakings are separate, distinct and independent of each other or are functionally integral or inter dependent.
In the former case, the Registrar would be, justified in treating the several undertakings separately while in the latter case, he may recognise all of them as one undertaking.
There is one minor point to which reference may incidentally be made.
It appears that before the first respondent, it was urged by the appellant that the present applications made by respondents Nos. 3 and 4 were barred by res judicata.
The argument was that since the second respondent had on an earlier occassion considered the merits of the case and refused to grant the request made by the third respondent for recognising the two undertakings separately, the same question could not be re agitated again before the same authority.
In our opinion, there is no substance in this argument.
As we have already pointed out, when the second respondent passed his earlier order, an appeal was preferred against the said order by the fourth respondent before the first respondent.
That appeal was, however, dismissed on the ground that the fourth respondent was not party to the proceedings before the second respondent and, therefore, he could not prefer an appeal.
If the fourth respondent had no right to make an appeal because he was not a party.
to the said.
proceedings, it is difficult to see, how he can 209 be precluded from making the present application on the ground of res judicata.
At the highest, a plea of res judicata pay perhaps be raised against the third respondent but that would not be effective in view of the fact that in the present case, an application has been made by the fourth respondent as well.
That is why Mr. Mehta did not seriously press the point of res judicata before us.
In the result, fails the appeal and is dismissed with costs.
Appeal dismissed.
| The appellant Company was incorporated in 1908 and its principal activity then was to manufacture hosiery.
In 1924 when the appellant shifted its factor to Ahmedabad it installed spinning machinery with a view to ensure suitable and even supply of yarn for its hosiery manufacture.
Originally, a notification had been issued on May 30, 1939, under the Bombay Industrial Dispute Act, 1938, whereby hosiery concerns were included in the definition of "Cotton Textile Industry",, but subsequently on,July 17, 1945, another notification was issued as a result of which the Hosiery manufacture was excluded from the Cotton Textile Industry and it was covered by a separate notification.
For the purposes of the Bombay Industrial Relations Act, 1946, the appellant concern was recognised as an undertaking of the hosiery industry by the Registrar under section II of that Act.
Subsequently as a result of certain proceedings taken by the Textile Lobour Association of Ahmedabad, the Registrar decided 197 to recognise the appellant concern as consisting of two undertakings, the hosiery section and the rest excluding the hosiery section and this decision was confirmed by the Industrial Court.
The appellant challenged the order of the Industrial Court on the grounds (1) that the spinning and the hosiery sections in its establishment were one concern because (a) there was unity of ownership, management, supervision, con trol and employment, (b) there was complete functional integration, and (c) the two sections were functioning under the same roof, and (2) that, in any case, section 11 of the Act did not authorise the splitting up of a concern into two undertakings.
The evidence showed that though in 1924 the spinning section had begun as a subsidiary to the hosiery section in order to serve as its feeder, later on the spinning section developed to such an extent that it became a spinning mill by itself and could no longer be regarded as a minor section attached to the hosiery works, that only 20% of the yarn manufactured by the spinning section was con sumed for hosiery purposes while the rest was sold in the market, that the spinning department produced yarn of all counts, some of which could not be used for hosiery work, that when the knitting department was closed in '1948, the spinning department was not.
It was also found that the amount paid to the employees in each of the two departments by way of minimum wages and dearness allowance was different.
Held, that the decision of the Registrar recognising the hosiery and spinning departments of the appellant concern as separate undertakings under s.11 of the Bombay Industrial Relations Act, 1946, was correct, Held, further, that the question whether the several undertakings carried on by the same company are separate or not depends on whether they arc distinct and independent of each other or are functionally integral or inter department and that the Registrar was within his powers under section II of the Act to come to a decision on this question on the basis of the circumstances disclosed on evidence.
Associated Cement Companies Ltd. vs Their Workmen, (1960) 1 S.C.R.703, Pratap Press vs Their Workmen, (1960) 1 L. L. J. 497 Pakshiraja Studios vs Its Workmen.
and Honorary Secretary, The Soath India Millowrers 'Asso ciation vs The Secretary Coimbatore District Textile Workers ' Union, Coimbotore (1962) Supp. 2, S.C.R. 926 relied on.
| The respondent is a manufacturer of cotton yarn and is registered as a dealer under the U.P. Sales Tax Act, 1948.
This act came into force on April 1, 1948.
Under this Act, sales tax was payable on sales of cotton yarn at a uniform rate of 3 pies in a rupee.
Under section 3(A) of the Act the Government of U.P. issued a notification declaring that with effect from June 9, 1948, the Sales Tax would be charged at the rate of six pies per rupee in respect of sales of the cotton yam.
In the present case, the assessee had opted under section 7 of the Act to be assessed on the turnover of previous year.
The Sales Tax Officer held on the basis of the notification dated June 9, 1948, that the rate of three pies per rupee in respect of sales of cotton yarn was to apply in the year of assessment for the first 69 days and for the remaining part of the year the rate of six pies per rupee was to apply.
The decision of the Sales Tax Officer was affirmed by the Judge (Revisions) Sales Tax.
The Judge referred the case to the High Court.
On reference the High Court held on the basis of its judgment in Modi Food Products Ltd. that the rate of three pies per rupee would apply for the assessment of 1948 49 because the assessee had opted under section 7 to be assessed on the basis of the turnover of the previous year.
In the meantime the legislature of Uttar Pradesh by Act III of 1963 enacted section 31 which makes Sales tax exigible from an assessee who has opted to pay tax on the turnover of the previous year, as if the altered rates were in force during the previous year.
The amendment is given retroactive operation and applies to assessments pending or closed.
The question for consideration before this Court was whether this Amending Act would apply to the present assessment.
Held:(i) The law found incorporated in section 31 by Amending Act III of 1963 would apply to the present case.
This Court in giving its opinion on the question in the light of the amending Act is seeking to apply a legislative provision which was, by express enactment, in force at the time when the liability arose, for section 31 enacted by Act III of 1963 is to be deemed to have been in operation at all material times in supersession of the previous law declared by this Court in Modi Sugar Mills Ltd. 's case.
This Court is, therefore, not seeking to apply any law to the question posed before the High Court which was not in force on the date of the transaction which is the subject matter of the reference Modi Food Products Ltd. vs Commissioner of Sales tax, U.P. A.I.R. 1956 All.
35 and Commissioner of Sales tax, U.P. vs Modi Sugar Mills Ltd.; , explained.
384 (ii)When the question has been referred to the High Court and in the meantime the law has been amended with retroactive operation, it would be the duty of the High Court to apply the law so amended as if it applies.
By taking notice of the law which has been substituted for the original provision, the High Court is giving effect to the legislative intent and does no more than what must be deemed to be necessarily implicit in the question referred by the Tribunal, provided the question is couched in terms of sufficient amplitude to cover an enquiry into the question in the light of the amended law, and the enquiry does not necessitate investigation of fresh facts.
M/s. Chatturam Horilram Ltd. vs Commissioner of Incometax, Bihar and Orissa, ; and M/s. Rampur Distillery Chemical Works Ltd. vs Commissioner of Income tax, U.P., I.T. Reference No. 362/58 dt.
17 1 64, distinguished.
| The respondent firm Harivallabhdas Kalidas was appointed the Managing Agent of Shri Ambika Mills Ltd., the appellant in the connected appeal by means of a Managing Agency Agreement the relevant portion of which ran thus: (2)(a) The Company shall pay each year to the said Firm either the commission of 5 (five) per cent on the total sale proceeds of yarn, and of all cloth, manufactured from cotton, 51 silk, jute, wool, waste and other fibres and sold by the company, or a commission of three pies per pound avoirdupois on the sale, whichever the said Firm choose to take, and also a commission of 10 (ten) per cent on the proceeds of sale of all other materials sold by the Company and 10 (ten) per cent on the bills of any ginning and pressing factories and on any other work done by the Company.
" And by clause (5) it was provided: " (5) The remuneration payable to the said Firm under clause 2(a) shall be paid to the said Firm forthwith after the 31st day of December or such other date as the Directors may fix for the closing of the accounts of the Company in each year and after such accounts are passed by the company in General Meeting.
" Subsequently, at the request of the Managed Company the Managing Agents agreed to charge commission at 3 per cent on sales instead Of 5 per cent for the year ending December 31, 1950 and a resolution to that effect was passed by the Managed Company and a formal agreement to that effect was executed.
The income tax Authorities, however, taxed the Managing Agents for two assessment years on the basis that by entering into an agreement with the mills they had voluntarily relinquished certain sums of money as their commission which had accrued to them as income for the purpose of income tax.
An appeal was taken to the Income tax Tribunal which held that the agreement between the Managing Agent and the Managed Company to receive remuneration at 3 per cent on the total sale was valid and took effect from January, 1, 1950 and the questions whether the commission accrued on the proceeds of every single sale or only when the assessee firm exercised its option to charge it on the total sale proceeds or on the weight of the yarn sold and whether the Managing Agents would get their commission after the whole profit was determined at the end of the year, were decided in favour of the Managing Agents.
The High Court also on a reference made to it at the instance of the Commissioner of Income tax, answered the above mentioned question in favour of the Managing Agents.
On appeal by the Incomee tax Commissioner by special leave, Held, that on a proper construction of the agreement, it was clear that there was no accrual of commission till the end of the year and that it did not accrue as and when the sales took place.
The Managing Agents were to be paid at the end of the year and by agreeing to the modification of the agreement before then they had not voluntarily relinquished any portion of the commission.
Commissioner of Income tax, Madras, vs K.R.M.T.T. Thiagaraja Chetty and Co., ; , E.D. Sasoon and Co. Ltd. vs The Commissioner of Income tax Bombay City, [1955] i S.C.R. 313 and Commissioner of Inland Revenue vs Gardner Mountain and D ' Ambrumenil Ltd., , not applicable.
| A number of textile mills which were engaged in the business of manufacture and sale of rayon yarn and staple fibre, i.e. man made fibre, moved the High Courts under article 226 of the Constitution challenging the constitutional validity of the fee imposed upon them by the Textile Committee under rule 21 of the Textile Committee Rules.
1965 made by the Central Government under section 22 of the .
The levy of fee was challenged on the ground that the Textile Committee was not rendering any service to them by way of inspection or examination of rayon yarn and that the element of quid pro quo was totally absent.
The High Courts of Allahabad.
Andhra Pradesh, Gujarat and Madras upheld the validity of the levy, while the Kerala High Court took the contrary view.
The parties came up in appeal to this Court.
Four similar petitions pending in the High Court of Bombay were also transferred to this Court.
Before the Court, it was contended on behalf of the textile mills (1) the rayon yarn and nylon yarn manufactured by them was made wholly Of filaments and not of fibres and therefore the same are not textiles within the meaning of the definition of textiles ' as contained of S.2(g) of the Textile Committee Act.
and hence not liable to payment of any fee in accordance with rule 21 of the Textile Committee Rules; and (2) the Textiles Committee rendered no service to the writ petitioners because neither they needed the services of the Committee nor the Committee was in a position to render any service to them.
PG NO 880 PG NO 881 On behalf of the Revenue, the Additional Solicitor General contended (I) the levy under r. 21 of the Rules was not correlated to the power of inspection which the Textiles Committee had under section 11 of the Act, but was relatable to its power to levy fees under section 12 for the performance of its functions, powers and duties under section 4 (2) the avowed object and purpose of the Act, as was clear from section 3, was `quality control ' of all textile and it would be idle to contend that rayon yarn and nylon yarn which were but species of what was known as man made fibres, otherwise called artificial silk, and had a world market, should be outside the purview of the Act, (3) the Act and the words used therein had to be interpreted not on a technological or specialised scientific plane, but in a popular sense as understood by experts in the sphere of the textile industry and the commercial world dealing with it; and (4) the definition of 'textiles ' must be given a broad and liberal construction in furtherance of the object and purpose of the Act.
Dismissing the appeals filed by the textile mills and allowing the appeal filed by the Textile Committee, it was HELD: (1) In view of the fact that in the writ petitions filled in the High Courts the textile mills had stated that they were actually engaged in the manufacture of rayon yarn and nylon yarn both of which.
they averred, were `species of what was known as man made fibres '.
their contention that rayon yarn and nylon yarn manufactured by them were not `yarn ' and therefore did not fall within the definition of textiles under section 2(g) of the Act could be countenanced.
[899E, F] (2) There was no explicable reason for the Legislature to have excluded rayon yarn and nylon yarn from the purview of the definition of textiles in s.(2)(g) of the Act.
In the premise, the expression `textiles ' as defined in s.2(g) of the Act has to be given a broad and liberal construction, in furtherance of the purpose and object of the Act.
[901A B] (3) The Act and the words used therein have to be interpreted not on a technological or specialised scientific plane but in the popular sense as understood by experts in the sphere of the textile industry and the commercial world dealing with it.
[901D E] (4) The Industries (Development and Regulation) Act, 1951 treats rayon as well as nylon as textiles made of artificial (man made) fibres.
The Industries (Development and Regulation) Act, 1951 and the may properly be considered to be statutes in pari materia.
[905b] PG NO 882 (5) The Industries (Development and Regulation) Act is an Act earlier in point of time, and there is no reason why if a subsequent statute by the same Legislature can be pressed In aid for the purpose of interpreting, in the event of any doubt, the provisions of an earlier statute, the earlier statute cannot be made use of for the purpose of construing, in the event of ambiguity, the provisions of a later statute.
[905E] (6) Rayon and nylon yarn are not only made of 'other fibre ' but are also yarn of 'artificial silk ' within the meaning of section t(g) of the Act.
[904D] (7) The contention that rayon yarn and nylon yarn manufactured by the mills are made wholly of filaments and not of fibres and therefore did not come within the purview of textiles as defined in section 2(g) of the Act prior to its amendment and therefore were not liable for payment of the fee levied under r. 21 of the Rules, cannot prevail.[905F] (8) The grievance of the textile mills that there is no inspection of the rayon yarn and nylon yarn manufactured by them at the stage of production is belied by the fact that there is pre shipment inspection of the fabrics manufactured from such fibres for export.
[91OB C] (9) When the entire proceeds of the fee are utilised in financing the various projects undertaken by the Textiles Committee, as also the inspection of all textiles including man made fibres and textile machinery, the appellants cannot be heard to say that there is no reasonable and sufficient correlation between the levy of the fee and the services rendered.
[907C] (10) When the levy of the fee is for the benefit of the entire textile industry, there is sufficient quid pro quo between the levy recovered and the services rendered to the industry as a whole.
[91OD] (11) The conclusion is inevitable that the levy of the fee under r. 21 of the Textiles Committee Rules, 1965 by the Textiles Committee under sub section
(1) of section 12 of the is valid and constitutionally permissible.
[912B C] M/s Juggilal Kamalapat Cotton Spinning & Weaving Mills Co. Ltd. vs The Textiles Committee, Bombay, [1972] Tax L.R. 2104; The Travancore Rayons Ltd. r The Textiles Committee, ILR Sreeniwasa General Traders & Ors.
vs State of Andhra Pradesh, [1983] 3 SC R 843 referred to.
The PG NO 883 Gwalior Rayon Silk Manufacturing (Wvg.) Co. Ltd ., Birlagram Ujjain vs The Textiles Committee, Bombay, ,overruled.
| The appellant carried on the business of manufacturing and selling pharmaceutical products in Greater Bombay.
In disputes arising bet the appellant and the respondents the Industrial Tribunal had to deal with questions relating to dearness allowance, classification of grades and fixation of wages and the incentive bonus scheme as modified 'by the company.
In appeal against the award of the Tribunal, HELD : (i) The decisions of this Court in Gramophone Company Ltd. vs its Workmen and The Indian Link Chain Manufacturers Ltd. vs Their Workmen show that the Tribunal was justified in computing gross profits without deducting taxation, depreciation and development rebate.
The latter decision is directly in point to the effect that provision for depre ciation cannot be deducted.
[582E., 585B C] Gramophone Company Ltd. vs Its Workmen, and The Indian Link Chain Manufacturers Ltd. vs Their Workmen, , applied.
Ahmedabad Millowners ' Association Etc.
vs The Textile Labour Association, ; , referred to.
(ii)So long and to the extent that concerns having foreign collaboration are doing business in India and in a particular concerned region there is no reason why they should not be taken into account for purposes of being teated as comparable units, provided that the tests for such purposes as laid down by this Court are satisfied.
The object of industrial adjudication is to secure as far as possible uniformity of service conditions among industrial units in the same region,.
if a concern having foreign collaboration properly satisfies the tests of comparability it would be improper to regard such unit as uncomparable merely on the ground that it is a concern with foreign collaboration or interest and that the unit with which it is sought to be compared is entirely of Indian origin and resources.
[591A C] Chemical Industries and Pharmaceutical Laboratories Limited (Cipla) Bombay vs Their Workmen, [1957] I.C.R. Bombay 1206 and Alembic Chemical Works Ltd. Baroda vs Its, Workmen ; , Hindustan Antibiotics Ltd. vs The Workmen and Ors., ; , relied on.
(iii)On the materials before it the Tribunal was justified in treating M/S. Burroughk Wellcome & Co. as a unit comparable with the appellant.
568 The fact that Burroughs Wellcome employed a lesser labour force did not deserve much importance because the business performance of the two companies was equal.
Once Burroughs Wellcome Co. was treated as a comparable unit the wage scales awarded by the Tribunal could not be considered to be unjustified.
[598G 599A D] Workmen of New Egerton Woollen Mills vs New Egerton Woollen Mills and Ors., , applied.
(iv)On the facts of the case it was not possible to disagree with the view of the Tribunal that the impact of the Drugs (Price Control ) Order will not be such as to affect materially the business prospects of the appellant company.
If the Order materially affects the prosperity of the appellant 's trade it would be open to it to raise a dispute for the reduction in the wage structure and in case they are able to show that in view of the Drugs (Price Control) Order their financial position has weakened to such an extent that they cannot bear the burden of the wage structure fixed by the present award, the matter may have to be examined on its merits.
[598B C] Williamsons (India) Private, Ltd. vs Its Workmen, , referred to.
(v)The Tribunal had acted within its jurisdiction in classifying the workmen and fixing the scales of pay after fitting them in particular categories.
The objection based on section 10(4) of the must be rejected.
[599E 600B] (vi)When the Tribunal raised in the gratuity scheme the ceiling limit from 15 months to 17 1/2 months according to the pattern obtaining in Buroughs Wellcome Company there was no question of principle involved justifying an objection by the appellant company.
[60OC D] (vii)There were different systems of dearness allowance for the operators and the clerical and subordinate staff in the appellant company.
That such a different system of dearness allowance for employees working under the same employer is not warranted is clear from the decisions of this Court in the cases of Greaves Cotton & Co. and Bengal Chemical & Pharmaceutical Works Ltd. Therefore the Tribunal was justified in devising a uniform scale of dearness allowance applicable to all the employees of the appellant.
[600E F] Greaves Cotton and Co. and Ors.
vs Their Workmen, ; and Bengal Chemical & Pharmaceutical Works Ltd. vs Its Workmen; , , relied on.
(viii)From the date of the settlement in 1966 the cost of living index had very rapidly gone up by 220 points.
At the time when the demand for revision of wages scales and dearness allowance was made by the Unions and when the reference order was made by the Government, the cost of living index had gone up very high.
That clearly showed that the workmen bad made out a case for revision of wage scales and dearness allowance.
The contention of the appellant that because a system of dearness allowance already existed there should be no revision of the same, could not be accepted.
[6O2C; 601A] Co. ; and Remington and of India vs Its Workmen, , followed.
569 (ix)When the slab, system of dearness allowance was prevailing in the industry in the region the Tribunal committed no error in introducing a similar pattern in the case of the appellant.
[603C D] Kamani Metals & Alloys Ltd. vs Their Workmen, ; , referred to.
(x)In regard to the incentive Bonus Scheme the Tribunal had stated that the necessary material for that purpose had not been made available and as such it had not been possible to devise a scheme calculated to afford protection to the incentive earning of a workman at the raised base performance index.
This Court could do nothing further,in this 'regard and the result would be that observations made by the Tribunal will have full, effect.
[604G H]
| The appellants, owners of a hosiery factory, imported 27 knitting machines in 1972 under the import licence held by them.
According to the Customs authorities the machinery was not new as the licence permitted to import, but was old reconditioned, and that the price shown was much lower than the actual value.
After hearing the appellants, the Collector of Customs found that the appellants had committed breach of section l l l(d) and also of section l ll(m) of the and for both the counts he imposed the penalty, which was maintained by the Board.
On revision the Central Government reduced the penalty from Rs. 1,47,000 to Rs. 1,00,000 which had been imposed for breach of section 111 (m).
A writ petition filed by the appellants was dismissed by the High Court.
In the appeal to this Court, on behalf of the appellants it was contended that a penal provision has to be construed strictly and in absence of specific words requiring 'value ' to be mentioned, it could not be inferred that any difference in value could be made the basis of penalty.
On behalf of the respondents it was contended that although the term 'value ' was not in section 1 l l(m) before the 1973 amendment but that will make no difference as even without the term 'value ' a mis description could be interpreted to be a mis description on the basis of value stated and ultimately the goods found to be of a higher value.
By the amendment the Legislature had only tried to explain or clarify the position.
698 Allowing the Appeals, the Court, ^ HELD: 1.
The impugned orders are set aside and the penalty imposed on the appellants under section Ill(m) read with section 111(d) of the is quashed.
[704A B] 2.
Before the amendment in 1973, section 111(m) did not contemplate any difference in material particulars in respect of value but it referred matters other than the value.
[703B C] 3.
Unamended section 111(m) indicated that wherever goods actually imported are different in material particulars than the goods which were shown in the bill of entry or a declaration as contemplated in section 46 then it will be a breach of section 11 l(m).
The difference in particulars could be in respect of anything but value, as this sub clause clearly shows that the difference in value could not be made the basis of breach of this sub clause before the amendment of 1973, when the term 'value ' has been introduced into this sub clause.
[70 1 B C ] 4.
In order to interpret a particular provision and to infer the intention of the Legislature, the objects and Reasons stated in the Bill, when it is presented to the Legislature, could be used.
[703B ] 5.
The amendment inserting the term 'value ' in section 111(m) cannot be said to be explanatory.
[703Fl Union of India & ors.
vs M/s. Rai Bahadur Shree Ram Durga Prasad (P) Ltd. & ors.
; , , relied upon.
| The appellant was prosecuted for having purchased a certain quantity of ginger without obtaining a licence as required by the Gujarat Agricultural Produce Markets Act.
The trial court accepted the factum of purchase but it acquitted the appellant on the ground that the relevant notification in regard to the inclusion of ginger was not shown to have been promulgated and published as required by the Act.
On appeal, the High Court reversed the acquittal and sentenced the appellant to a fine of Rs. 10/ .
The High Court proceeded on the assumption that the notifications were property made.
In the erstwhile composite State of Bombay there was in operation The Bombay Agricultural Produce Markets Act of 1939.
On the bifurcation of the State in 1960 the said 1939 Act was extended by an appropriate order to the State of Gujarat.
That Act remained in operation in Gujarat till the year 1964 in which year the present Act came into force.
Section 5 of the Act requires the Director to notify in the Official Gazette his intention to regulate the purchase and sale of agricultural produce.
The section also requires the publication in Gujarati in a newspaper having circulation in the area.
The section further requires that the objections should be invited from the public.
Section 6(1) provides that after the expiry of the period for making objections and after considering the objections and suggestions received and after holding necessary inquiry, the Director may, by notification in the Official Gazette, declare the area specified in the said notification to be a market area in respect of the agricultural produce to be specified in the notification.
Sub section (1) of section 6 further requires that the notification under the said section shall be published in Gujarati in a newspaper having circulation in the said area.
Sub section (5) of section 6 provides that the Director may, at any time by notification in the official gazette, exclude any area from a market area specified in a notification issued under sub section
(1) or include any area therein and exclude from or add to the kinds of agricultural produce so specified.
The sale or purchase of the agricultural produce concerned without a licence is made an offence by section 36 of the Act.
On appeal by special leave, the appellant contended that the notification under section 6(5) of the Act, covering additional varieties of agricultural produce, must not only be published in the Official gazette but must also be published in Gujarati in a newspaper.
The respondent contended that (1) the procedure in regard to the publication which is laid down in sub section
(1) of section 6 must be restricted to notifications issued under that sub section and cannot be extended to those issued under sub section (5) of section 6; (2) Assuming that the words "this section" are wide enough to cover every sub section of section 6.
the word 'shall ' ought to be read as 'may '.
^ HELD: (1) Section 6(1) means what it says.
That is the normal rule of construction of statutes, a rule not certainly absolute and unqualified, but the conditions which bring into play the exceptions to that rule did not exist.
It is not reasonable to assume in the legislature an ignorance of the distinction between a "section" of the statute and the "sub section" of that section.
The requirement 452 laid down by section 6(1) that a notification under "this section" shall also be published in Gujarati in a newspaper would govern any and every notification issued under any par of section 6, that is to say, under any of the sub sections of section 6.
[455E G] (2) Sometimes the legislature does not say what it means.
That has given rise to a series of technical rules of interpretation devised or designed to unraval the mind of the law makers.
The words of the concluding portion of section 6(1) are plain and unambiguous rendering superfluous the aid of artificial guide lines to interpretation.
[455H 456A] (3) "Shall" must normally be construed to mean "shall" and not "may", for the distinction between the two is fundamental.
The use of the word "shall" or "may" is not conclusive on the question whether the particular requirement of law is mandatory or directory.
In each case one must look to the subject matter and consider the importance of the provision disregarded and the relation of that provision to the general object intended to be secured.
It is the duty of courts to get at the real intention of the legislature by carefully attending to the whole scope of the provision to be construed.
The amendment to section 6(1) notification in regard to matters described therein is equated with a fresh declaration of intention in regard to those matters, rendering it obligatory to follow afresh the whole of the procedure prescribed by section 5.
The object of these requirements is quite clear.
The fresh notification can be issued only after considering the objections and suggestions which the Director receives within the specified time.
In fact, the initial notification has to state expressly that the Director shall consider the objections and suggestions received by him within the stated period.
The publication of the notification in the Official Gazette was evidently thought by the legislature not an adequate means of communicating the Director 's intention to those who would be vitally affected by the proposed declaration and who would therefore be interested in offering their objections and suggestions.
It is a matter of common knowledge that publication in a newspaper attracts greater public attention than publication in the official gazette.
That is why the legislature has taken care to direct that the notification shall also be published in Gujarati in a newspaper.
A violation of this requirement is likely to affect valuable rights of traders and agriculturists because in the absence of proper and adequate publicity their right of trade and business shall have been hampered without affording to them an opportunity to offer objections and suggestions.
Once an area is declared to be a market area.
no place in the said area can be used for the purchase or sale of any agricultural produce specified in the notification without the necessary licence.
A violation of the said provisions attracts penal consequences under section 36.
It is.
therefore, vital from the point of view of the citizens ' right to carry on trade or business, no less than for the consideration that violation of the Act leads to penal consequences, that the notification must receive due publicity.
There is something in the very nature of the duty imposed by sections 5 and 6.
something in the very object for which the duty is cast.
that the duty must be performed.
[456C, 458B, F H, 459A B] (4) The legislative history of the Act reinforces this conclusion.
In the Bombay Act, which was made applicable to Gujarat till 1964, it was not necessary to publish in the newspaper notifications corresponding to section 6(5) notifications under the new Act.
The Gujarat Legislature, having before it the model of the Bombay Act.
made a conscious departure from it by providing for the publication of the notification in a newspaper and by substituting the word 'shall ' for the word 'may '.
[459D F] (5) A notification under section 6 must be published in Gujarati in a newspaper.
This requirement is mandatory and must be fulfilled.
Admittedly, the notification in question was not published in a newspaper at all, much less in Gujarati.
Accordingly, the inclusion of new varieties of agricultural produce in that notification lacks legal validity and no prosecution can be founded upon its breach.
[459E H] (6) The High Court took into consideration a wrong notification.
Reliance on the earlier judgment of Gujarat High Court on the construction of the Bombay Act was also wrong since the language there was wholly different.
[460E G] 453
| The appellants companies set up their factories within an "Industrial Area", No octroi duty was payable in respect of goods imported by the appellants into the Industrial Area for use in the manufacture of its products.
The State of Maharashtra constituted a Municipality for certain villages including the Industrial Area.
On representations made by the appellants and other manufacturers, the State proclaimed the exclusion of the Industrial Area from the Municipal Jurisdiction.
The Municipality made representations to the State requesting that the proclamation, be withdrawn, agreeing to exempt the factories in the Industrial Area from payment of octroi for seven years from the date of the levy.
The State acceeded to the request of the Municipality.
The appellants claimed to expand their activities relying upon the Municipality 's assurance and undertaking.
The Maharashtra Municipalities Act was enacted and the respondent Municipality took over the administration of the former municipality as its successor.
Thereafter, the respondent Municipality sought to levy octroi duty on the appellant amounting to about Rs. 15 lakhs per annum.
The appellants filed a petition under article 226 of the Constitution to restrain the respondent Municipality from enforcing the levy of the Octroi.
The High Court dismissed the petition in limine.
In appeal by special leave, HELD : The case must be remanded to the High Court for being readmitted to its file and dealt with and disposed of according to law.
The High Court may, in exercise of its discretion, decline to exercise its extra ordinary jurisdiction under article 226 of the Constitution.
But the discretion is judicial; if the petitioner makes a claim which is frivolous, vexatious, or prima facie unjust or which may not appropriately be true in a petition invoking extraordinary jurisdiction, the Court may decline to entertain the petition.
But a party claiming to be aggrieved by the action of a public body or authority on the plea that the action is unlawful, highhanded, arbitrary or unjust is entitled to a hearing of its petition on the merits.
Apparently the petition filed by the Company did not raise any complicated questions of fact for determination, and the claim could not be characterised as frivolous, vexatious or unjust.
The High Court has given no reason for dismissing the petition in limine, and on a consideration of the averments in the petition and the materials placed before the Court the appellants were entitled to have its grievance against the action of the Municipality, which was prima facie unjust, tried.
Merely because a question of fact is raised, the High Court will not be justified in requiring the party to seek relief by the somewhat lengthy, dilatory and expensive process by a civil suit against a public body.
The questions of fact raised by the petition in this case are elementary.
[858 C F] Public bodies are as much bound as private individuals to carry out representations or facts and promises made by them, relying on which 855 other persons have altered their position to their prejudice.
The obligation arising against an individual out of his representation amounting to a promise may be enforced ex contractu by a person who acts upon the promises when the law requires that a contract enforceable at law against a public body shall be in certain form or be executed in the manner prescribed by statute and if the contract be not in that form the obligation may still be enforced against the body in appropriate cases, in equity.
[859 D] If our nascent democracy is to thrive different standards "of conduct ,for the people and the public bodies cannot ordinarily be permitted.
A public body is not exempt from liability to carry out its obligation arising out of representations made by it relying upon which a citizen has altered his position to his prejudice.
[860 D] There is undoubtedly a clear distinction between a representation of an existing fact and a representation that something will be done in future.
The former may, if it amounts to a representation as to some fact alleged at the time to be actually in existence, raise an estoppel if another person alters his position relying upon that representation A representation that something will be done in future may result in a contract, if another person to whom it is addressed acts upon it.
A representation that something will be done in future is not a representation that it is true when made.
But between a representation of a fact which is untrue and a representation express or implied to do something in future there is no clear anti thesis.
A representation that something will be done in future may involve an existing intention to act in future in the manner represented.
If the representation is acted upon by another person it may, unless the statute governing the person making the representation provides otherwise, result in an agreement enforceable at law; if the statute requires that the agreement shall be in a certain form, no contract may result from the representation and acting thereupon but the law is not powerless to raise in appropriate cases an equity against him to compel performance of the obligation arising out of his representation.
[858 H 859 C] Union of India & Ors.
vs M/s. Indo Afghan Agencies Ltd., ; Robertson vs Minister of Pensions, ; Falmouth Board Construction Co. Ltd. vs Howell, , referred to.
|
Appeal No. 131 of 1961.
Appeal from the judgment and decree dated September 30, 1957, of the Kerala High Court in Appeal suit No. 19 of 1956 (T).
T. N. Subramania lyer, R. Mahalingier and M.R. Krishna Pillai, for the appellant.
V. A. Seyid Muhammed for the respondent.
September 14.
The judgment of the Court was delivered by KAPUR, J.
It is not necessary for me to give the facts of this case as they are set out in detail in the 65 judgments of my learned brethern Sarkar & Hidayatullah, JJ.
In my opinion this appeal should be dismissed and my reasons are these On the findings of the High Court it appears that the Bank had agreed to allow an overdraft to defendant No. 1 for Rs. 20,000/ , that the appellant gave a surety bond for the repayment of Rs. 25,000/ and when that was pointed out to defendant No. 1, the principal debtor, lie (the latter) made the alteration in the document by reducing the figure of Rs. 25,000/ to Rs. 20,000/ The case of the appellant was not that he never stood surety for defendant No. 1 but that he stood surety for Rs. 25,000/ which was subsequently altered to Rs. 20,000/ and that any change of figure was a material alteration resulting in the avoidance of the contract, even though the alteration might have been advantageous to him, the obliger.
It was argued that howsoever innocent the obligee might be or howsoever innocent the alteration might have been made so far as it is material the non accepting obliger the appel lant in this case cannot be held liable on the obligation in the altered form because he never made be consented to such an obligation and he can not be held liable on the obligation in the original form because the obligation was never assented to by the creditor respondent Bank.
Now an unauthorised material alteration avoids a contract so that if a promisee after a written contract has been executed materially alters it without the consent of the promisor whether by adding anything to the contract or striking out any part of it or otherwise the contract is avoided as against the person who was otherwise liable upon it (Halsbury 's laws of England, 3rd Edn., Vol. 8, para 301, p. 176).
It may also be taken to be the law that even if the alteration is made by a stranger without the knowledge of the promisee the other party is discharged if the contract is in possession of the promisee or his agent.
But if the contract is altered 66 by a stranger when the contract was not in the custody of the promisee the promisor is not discharged.
(Halsbury 's Laws of England, 3rd Edn., Vol. 8, para 301, p. '176).
There is also a further qualification and that is that if a guarantor entrusts a, letter of guarantee to the principal borrower and the principal borrower makes an alteration without the assent of the appellant then the Guarantor is liable because it is due to the act of the guarantor that the letter of guarantee remains with the principal debtor, in this case defendant No. 1, and what the principal debtor did will estop the guarantor from pleading want of authority (Williston on Contract, Vol.
para 1914, P.5354).
Thus the position in the present case comes to this.
The appellant agreed to stand surety for an overdraft allowed by the respondent Bank to the principal debtor, Shankaran.
The Bank required a guarantee in the form which was handed over to the principal debtor, Shankaran.
Shankaran got it filled by the appellant for a sum of Rs. 25,000/ .
The Bank did not accept the guarantee up to that limit but wanted the figure to be corrected i.e. by insertion of Rs. 20 000/ .
The document was there upon handed back to the principal debtor who, it is stated, altered the document.
At that stage the principal debtor was acting for and on behalf of the appellant because it was at his instance that the appellant was standing surety and the appellant handed over the deed of guarantee to the principal debtor for the pur poses of being given to the balik, the respondent.
In these circumstances the avoidance of contract by material alteration is in applicable because the document was not altered while in possession of the promisee or its agent but was altered by the principal debtor who was at the time acting as the agent of the guarantor, the appellant.
In these circumstances the plea of material alternation is of no avail to the appellant and the 67 appeal must therefore fail and is dismissed but no order as to costs.
SARKAR, J.
This appeal arises out of a suit filed by the respondent Bank against the appellant as the guarantor and one Sankaran as the principal debtor, to recover moneys advanced to the latter on an overdraft account.
The suit was decreed against Sankaran by the trial Court and he never, appealed from that decree.
We will, therefore, be concerned in this appeal only with the claim against the appellant.
The suit against the appellant was based on a letter of guarantee dated May 24, 1947.
It was stated in the plaint that by this letter of guarantee the appellant had undertaken to repay to the Bank the balance due on the overdraft account opened in favour of Sankaran, up to a maximum of Rs. 20,0001/ which was also the maximum amount for which the overdraft had been arranged.
The appellant 's defence to the suit was that he had agreed to guarantee the liability of Sankaran on the overdraft up to Rs. 5,000/ and had signed the letter guaranteeing thereby repayment up to that sum but the letter had been altered .without his consent by substituting Rs. 20,000/ for Rs. 5,000/ .
The appellant contended in the courts below that as this was a material alteration of the instrument of ' guarantee.
he was absolved of ill liability on it.
The trial court found, that the amount guaranteed had originally been mentioned in the letter as Rs. 25,000/ and this had been altered without the consent of the appellant to Rs. 20,000/ .
It observed that as it was not disputed that the alteration was material, the suit against the appellant had to be dismissed and passed a decree accordingly, obviously in the view that the alteration had avoided the instrument.
The respondent Bank then appealed to the High Court of Kerala, the High Court agreed with the trip 68 court that the letter of guarantee originally mentioned Rs. 25,000/ and this figure was later altered to Rs.20,000/ without the consent of the appellant.
It .added that probably the alteration had been made by the principal debtor, Sankaran.
It however held that the appellant had mentioned Rs. 25,000/ in the place of Rs. 20,000/ in the letter probably by a mistake and that the alteration had been made in order to carry out the common intention of Sankaran, the appellant and the Bank that for the overdraft accommodation of Rs. 20,000/ allowed to Sankaran the appellant would give a letter of guarantee to the Bank.
In this view of the matter the High Court, relying on the principle contained in section 87 of the , passed a decree against the appellant.
The appellant has come up to this Court in appeal against the judgment of the High Court.
Unfortunately, the Bank, for reasons unknown to us, has not appeared in this appeal.
Dr. Seiyid Muhammed argued the case for the Bank at our request and has rendered us great assistance.
Now, the provision of the on which the High Court relied in terms applies to a negotiable instrument which a letter of guarantee is not.
The principle of that provision may however be of wider application.
That principle has been formulated in Halsbury 's Laws of England, 3rd edn., vol.
11, p. 370, in the following words : "An alteration made in a deed, after its execution, in some particular which is not material does not in any way affect the validity of the deed;. . .
It appears that an alteration is not material . . . 'Which carries out the intention of the parties already apparent on the face of the deed.
It is now well settled that, this principle applies to instruments under hand also : see ibid 69 p. 380, f. n. (c) and Master vs Miller, (1791) 4.
Term Rep. 320.
The question then is, was the alteration in the letter of guarantee of the kind contemplated by this principle.
The learned judges of the High Court thought it was and so held that the letter of guarantee as altered could be enforced.
I am unable to accede to that view.
It seems to me that the intention to carry out which an alteration is permissible under the rule on which the High Court has relied, is the intention with which the instrument was executed.
That is why in formulating the rule it has been stated in Halsbury 's Laws of England that the intention has to be "already apparent on the face of the deed".
I need only refer to the observation of Le Blanc, J., in Knill vs Williams(1) in support of this proposition, "If I had thought that there was any evidence on which the jury might have found that the words afterwards added had been originally intended to have have been inserted, and were omitted by mistake, I 'Should certainly have left it to them so to find; the case of Kershaw vs Cox(2) being then fresh in my mind; but.
according to my recollection of the evidence, it was impossible for them to draw that conclusion from it.
The opinion which I delivered in Karshaw vs Cox can only be supported on the ground that the alteration there made in the bill the day after it was negotiated was merely the correction of a mistake made by the drawer of it, in having omitted the words, 'or order ', which it was intended at the time should be inserted.
" The two cases on which the learned judges of the High Court relied are also cases where the mistake was in writing the instrument.
In Lachmi Rai vs Srideo Rai(3) it was found that "the omission regarding the payment of interest was accidental" and in Ananda Mohan Saha vs Ananda Chandra Naha(4) where (1) ; (1809) 10 East. 931; (2) 3 Esp.
N. Cas. 246.
(3) A. I. R. 1939 All.
(4) (1916) 1.
L. R. 70 the instrument originally provided for interest on 'a loan of Rs. 200/ at Rs. 1/ per mensem and had been altered by the addition of the words "per cent", ' it was said "that it was the intention of the parties, as ' it seems to me to be obvious upon reading the document, that interest was to be paid at the rate of 'one rupee per cent.
per mensem".
It seems to me that if it were not so and the intention contemplated in the rule could be gathered from a pre existing agreement alone without caring to find out the intention with which the instrument was executed, then there would be no justification for the rule.
It would then warrant the alteration of an instrument intentionally written in variance with the pre existing agreement which a person was in law free to do, by the other party to it.
That would amount to making a new contract out of a written instrument by unilateral action and in disregard of the intention of the writer.
For such a position our laws make no provision.
It may be that a person who writes a document in terms which deliberately depart from the agreement pursuant to which it is written, may be liable on that agreement but he cannot be made liable on the document as altered by the other party to the agreement alone even though such alteration makes the document consonant with the agreement.
Now there is absolutely no evidence in this case that in writing the letter of guarantee the appellant had intended to mention the maximum amount of guarantee as Rs. 20,400/ and had by mistake written Rs. 25,000/ instead.
In holding that there was such a mistake, the High Court proceeded purely on the basis of conjecture which is evident from the language used by it.
It said, "probably defendent 2" (the appellant) "made a mistake in Ext.
C" (the letter of guarantee).
There was not the slightest warranty for; this conjecture.
In fact the evidence indicates that Rs. 25,000/ had been mentioned intentionally in the letter of guarantee.
That evidence was given by the 71 Banks agents too.
, He said that the overdraft arrangement commenced on February 24, 1947, when Sankaran executed a promissory note for Rs. 20,O00/ in favour of the Bank.
At that time the appellant was not available to sign the letter of guarantee.
The letter was typed by the Bank with blank spaces left for entries to be made by the guarantor regarding the maximum limit of the account, the rate of interest, and the date.
Sankaran brought this letter back to the Bank in May 1947.
At that time the space for the amount of the limit was filled up with the figure Rs.25,000/ .
Sankaran said that he required Rs.25,000/ and would renew the promissory note for that amount.
The Bank was not prepared to advance to him more than Rs. 20,000/ and so the letter of guarantee was returned to Sankaran who then took it away and brought it back some time later with the amount of the maximum limit corrected to Rs. 20,000/ .
This is all the evidence on the question.
I think it right to point out here that the Bank 's agent did not speak to any oral agreement with the appellant, nor indeed to any interview with him concerning the overdraft arrangement or the guarantee.
The appellant in his written statement no doubt admitted that he had agreed to guarantee the due repayment of the overdraft up to Rs. 5,000/ .
He did not however say that the agreement was verbal but mentioned the letter of guarantee.
The appellant 's admission can of course be taken against him but it must be taken as made and not a part of it only.
Again, no verbal agreement concerning the guarantee had been pleaded anywhere by the Bank, not even in the application that it filed in answer to the.
written statement of the appellant alleging that the letter of guarantee, having been materially altered no suit lay on it.
, Lastly, I have to observe that the trial court did not find,that any such oral agreement had been made.
If there ' had been any agreement, the letter of guarantee as typed.
out would have contained no blanks.
72 In these circumstances it is impossible to hold that there was any prior agreement about the guarantee or its limit, between the appellant and the Bank, and if there was not, the High Court 's view that in the letter of guarantee Rs. 25,000/ had been mentioned by mistake, would lose its foundation.
But even assuming a preexisting verbal agreement and in this case the agreement, if any, could only be verbal the fact that Sankaran made a request that the amount of the overdraft should be increased to Rs. 25,000/ would rather indicate that the letter of guarantee had intentionally stated Rs. 25,000/ as the amount of guarantee and this figure had not been written by any mistake.
It would be impossible to hold on this evidence that there had been any mistake in writing the letter of guarantee.
The evidence does not prove any pre existing agreement and tends to prove that there ha been no mistake in writing the letter of guarantee even if there was an agreement.
Therefore it seems to me that the High Court was in error in thinking that the alteration in this case had been made to carry out the intention of the parties.
The principle underlying section 87 of the has no application to the facts of this case.
Dr. Seiyid Muhammed, however, put the matter from another point of veiw.
He said that in order that an alteration in an instrument made without a party 's knowledge might be avoided against him that alteration had to be material and in support of it he referred us to a passage in Halsbury 's Laws of England 3rd Ed., vol.
11, p. 380.
He then said that no alteration could be material unless it was to the prejudice of a party.
He pointed out that the alteration in the present case had reduced the limit of the appellant 's liability from Rs. 25,000/ to Rs. 20,000/ and it was not therefore a material alteration.
Hence he contended that the letter of guarantee had not been avoided by the alteration.
I do not think that this contention assists the Bank at all.
I will assume that an alteration in an 73 instrument which is not to the prejudice of a party to it is not a material alteration and does not release him from his liability under the instrument.
This rule however does not make the instrument as altered binding on that party.
If it did, that would amount to changing by unilateral action the terms of a contract made by common consent or to changing the terms of an offer made by one without his consent.
As I have earlier said, none of these things can be done under our law.
I may add that I have not been able to find any authority laying down that in such a case the altered instrument would be binding.
All that we would get in this case if Dr. Seiyid Muhammed is right, is that the alteration might be ignored and, the instrument in its original form might be considered as existing unaffected by the alteration.
In the present case, therefore, we would have a letter of guarantee written by the appellant undertaking to repay the balance due by Sankaran on the overdraft account up to a limit of Rs. 25,000/ .
What then ? The suit is not on a contract to guarantee up to Rs. 25,000/ .
Indeed according to the Bank 's pleading and evidence there never was any agreement for such a guarantee between it and the appellant.
The letter, therefore cannot be considered as evidence of such a contract.
Further the evidence to which I have already referred proves that as an offer, the letter was not accepted by the Bank.
In fact the letter in its original form is of no assistance to the Bank at all in this case, it neither proves a guarantee for Rs. 25,000/ nor for Rs. 20,000/ .
But it is said that the letter contained an enforceable contract as it was supported by consideration which had already moved from the Bank, namely, the advance made to Sankaran before the date of the letter and the promise to make further advances.
Then it is said that inadequacy of consideration does not avoid a contract as stated in Explanation 2 of section 25 of the Contract Act, 1872, and therefore the Bank 's undertaking 74 to advance upto Rs. 20,000/ could support the appellant 's promise to guarantee up to Rs. 25,000/ .
But it is not the Bank 's case that there was such a contract of guarantee.
Its case was that the contract of guarantee was for Rs. 20,000/ .
That contract is not supported by the letter on which alone the suit is based.
If there was no contract as stated in the letter then.
no question of consideration to support it can possibly arise.
Therefore, it seems to me that the.
contention that the alteration was immaterial and did not affect the instrument so far as the appellant is concerned is to no purpose in the present case.
The position may then be thus stated.
We have, a suit against the appellant based on a written contract to guarantee repayment of Sankaran 's dues to the Bank up to Rs. 20,060/ .
There is no evidence of, any verbal contract of guarantee.
The appellant ' wrote a letter guaranteeing repayment of those dues up to Rs. 251000/ .
Sankaran also signed this letter but that signature is of no consequence to the question of guarantee which alone arises in this appeal for Sankaran could not guarantee his own debit and his signature would therefore only be evidence of his liability for the amount advanced to him by way of overdraft.
Such liability, however, he had already undertaken by executing a promissory note for Rs. 20,000/ in favour of the Bank.
His signature on the letter of guarantee therefore made no difference in the legal relations that have to be considered in this appeal.
Returning now to the letter of guarantee Written by the appellant, the Bank refused to accept that letter and, therefore, on the Bank 's own case no contract on its terms was ever made.
That letter was altered without the consent of the appellant probably by Sankaran by substituting Rs. 20,000/ for Rs. 25,600/ .
If the alteration was without the appellant 's consent, it could not have been authorised by him; if it had been, consent would be implied.
There is further neither evidence, nor pleading nor 75 finding of any such authority.
The altered document is not binding on tile appellant, for the alteration had not been made to carry out the intention of the: parties in the alteration is ignored, then the document creates no liability in the appellant, for the Bank refused to accept a guarantee on the terms Contained in the document before it was altered.
Further, the contract sued upon is different from the contract which might, have been made by the document as it stood before the alteration.
The unaltered document cannot establish the contract sued upon.
The conclusion to which I arrive then is that the suit against the appellant as framed must fail.
I would, therefore, allow the appeal with costs here and below and dismiss the suit against the appellant.
HIDAYATULLAH,J. I have had the advantage of ' reading the judgment prepared by my brother Sarkar.
In my opinion, and I say it with great respect, this appeal must fail.
I shall give my reasons briefly.
The facts of the case are simple.
The suit, out of which this appeal arises, was filed by the Thomco 's Bank Ltd, Trivandrum, (to be called in this judgment the 'Bank ') against V. Sankaran (the principal Debtor) and N. section Anirudhan (the surety and appellant before us).
The suit was based against V. Sankaran on a promissory note executed by him in favour of the Bank on February 24, 1947, (Exhibit B) and against the present appellant on a letter of guarantee dated May 24, 1947.
In so far as Sankaran has not appealed against the decree passed against him we need not mention the facts leading up to the promissory note which was prior in time.
Anirudhan in defending himself stated that the letter of guarantee was for Rs. 5,000 and that it had been altered without his knowledge and consent in a sum of Rs. 20,000/ .
The letter of guarantee is Exhibit C and the original does show two corrections in the figures as well as the written words mentioning the amount.
Figure "5" in the amount of Rs. 25,000/ in figures appears to have been 76 altered to "O"; and in the words "Rupees twenty five thousand" the word "five" has been struck out.
The appellant 's case that 5,000 in figures was altered to 20,000/ by the addition of the figure "2" and the alteration of the figure "5" into "O" and the corresponding change in the words by the addition of the words "twenty" and the scoring out of word "five" has not been believed.
Thus the case made out by Anirudhan has not been accepted.
The correction.
however, is patent and the question that has arisen in this case is whether by the alteration of the letter of guarantee the surety is discharged.
The finding of the High Court is that there was no prior oral agreement between the Bank and Anirudhan.
This letter, as is obvious from the dates, was give after the loan had already been made.
The contention of the Bank was that when Sankaran brought this letter and asked for additional loan of Rs. 5,000 the Bank refused to advance any further amount and declined to accept this letter of guarantee for Rs. 25,000 lest the Bank might be compelled to loan a further sum of Rs. 5,000.
Sankaran then took back the letter and after some time brought it back with the figure "5" changed into "O" and the word "five" scored out.
These corrections were not initialled either by Sankaran or by Anirudhan.
The Bank, however, accepted this letter and kept it and sued Anirudhan upon it.
The question is whether Anirudhan 's liability is discharged by the alteration in the document which alteration is not proved to have been made either by him or with his knowledge or consent.
It is conceded and indeed it is the law that only a material alteration makes a document void.
It is also the law that if the custodian of the document makes or allows an alteration to be made while the document is in his custody he cannot sue upon it because it is his duty to preserve the document in the state in which he got it.
In the present case, the 77 document was not altered by, Bank nor with the Bank 's consent or connivance while the document was in.
its custody.
The document was apparently altered either by Anirudhan or by Sankaran or by both.
If it was altered by Anirudhan, or by him and Sankaran together, the document still remains the document of Anirudhan and the suit of the Bank based upon it is competent against him.
If it was altered by Sankaran the question is whether the alteration was a material alteration to make it void against Anirudhan.
The High Court is of the opinion that it was not material.
I am inclined to accept the conclusion of the High Court.
Anirudhan by the letter to the Bank wished to guarantee an overdraft of Sankaran not exceeding Rs. 25,000/ .
His case that it was Rs. 5,000/ and not Rs. 25,000 has been disbelieved.
The document was originally written for an amount of Rs. 25,000/ which was reduced to Rs. 20,000/ 1 will assume, by Sankaran and the letter of guarantee was accepted by the Bank.
The question is whether by the reduction of the amount of the guarantee Anirudhan can say that the document executed by him has been materially altered and his liability is at an end.
In my judgment, in the present case it cannot be said.
The document still continues to represent what was intended by Anirudhan.
That intention was to guarantee a loan up to Rs. 25,000/ which includes the sum for Rs. 20,000/ for which the guarantee now stands.
The question is whether Anirudhan can say that this guarantee is at an end.
There are really two defences open to Anirudhan the surety.
The first is that he had offered to stand surety on certain terms and as those conditions have been altered he is discharged from any liability.
The second also depends on the alteration and it is that a document executed by him has been materially altered and is therefore void.
This is a plea of non est factum.
Both the arguments rest upon the alteration of the contract into which Anirudhan wished to enter.
A surety is considered a "favoured debtor" and his 78 liability is strictissimi juris.
Lord Westbury, L.C., in Blest vs Brown (1) stated this liability in the following words: "It must always be recollected in what manner a surety is bound.
You bind him to the letter of his engagement.
Beyond the proper inter pretation of that engagement you have no hold upon him.
He receives no benefit and no consideration.
He is bound, therefore, merely according to the proper meaning and effect of the written engagement that he has entered into.
If that written engagement is altered in a single line, no matter whether the alteration be innocently made, he has a right to say, " 'The contract is no longer that for which I engaged to be surety; you have put an end to the contract that I guaranteed, and my obligation, therefore, is at ail end.
" It is not necessary to go into the fact of that case where the surety guaranteed fulfilment of a contract for the supply of, flour to a banker who in his turn had undertaken to supply bread to Government.
The case turned upon stipulations by the Government and their breach and the decision cannot be regarded a ,direct authority, apart from the general observation, in the present case.
The statement of the law in Blest vs Brown (1) Was considered by the Court of Appeal in Holme vs Brunskill (2) in an appeal from a judgment of Denman, J. (later Lord Denman).
Cotton, L.J., stated the law in these words: "The true rule in my opinion is, that if there is any agreement between the principals with reference to the contract guaranteed, the surety ought to be consulted, and that, if he has not consented to the alteration, although in cases where it is without inquiry evident that the alteration is unsubstantial, or that it cannot be otherwise than beneficial to the surety, the surety may not be discharged; ), Yet, that if it is not self evident that (1) ; (1862) 4 De G. F. & J. 365 ; (2) 79 the alteration is unsubstantial, or one which cannot be prejudicial to the surety, the Court will not, in an action against the suerty, go into an inquiry as to the effect of the alteration. . " To this statement of the law, must be added the 'dissent of Brett, L.J., who stated that the surety in that case was not raleased observing that the doctrine of release of sureties was carried far enough and that lie would not carry it any further.
There is noticeable a difference between the strict rule stated by Lord Westbury and that stated by Cotton L. J., and the law now accepts that unsubstantial alteration which are to the benefit of the surety do not discharge the surety from the liability.
Of course, if the alteration is to the disadvantage of the surety, or its unsubstantial character is not self evident the surety can claim to be discharged.
The Court will not then inquire whether it in fact harmed the surety.
That dictum of Cotton L. J., was quoted with approval by the Judicial Committee in ward vs The National Bank of Neu Zealand.
Limited (1).
Other cases in which a similar liberal view is taken are mentioned in these two decisions.
Before I examine the position of Anirudhan with regard to the law applicable to sureties, I wish to refer to the law relating to the alteration of documents.
These two matters really go together in this case.
Here, again, the strict rule at one time was that the slightest alteration makes the document void.
The leading case for a long time was Pigot 's case (2) where Lord Coke stated the doctrine as follows: "These points were resolved: 1.
When a lawful deed is raised, whereby it becomes void, the obligor may plead non, est factum, and give the matter in evidence, because at the time of the plea pleaded, it is not his deed." "Secondly, it was resolved, that when any deed is altered in a point material, by the plaintiff himself, or by any stranger, without the privity (1) , (2) 11 Co.Rep.26 b;77E.R.177. 80 of the obligee, be it by interlineation, addition, raising, or by drawing of a pen through a line, or through the midst of any material word, that the deed thereby becomes void . so if the obligee himself alters the deed by any of the said ways, although it is in words not material, yet the deed ,is void: but if a stranger, without his privity, alters the deed by any of the said ways in any point material, it shall not avoid the deed.
" The passage is also to be found in an article "Discharge of Contracts by Alteration" by Williston in 18 Harvard Law Review, p. 105.
The strictness of this rule was tempered in subsequent cases and was departed from in Aldous vs Cornwell (1) where Lush, J. (speaking for Cockburn, C. J., Blackburn, J., and himself), after referring to numerous authorities,observed "This being the state of the authorities, we think we are not bound by the doctrine of Pigot 's case or the authority cited for it; and not being bound.
We are certainly not disposed to lay it down as a rule of law that the addition of words which cannot possible prejudice any one, destroys the validity of the note.
It seems to us repugnant to justice and common sense to hold that the maker of a promissory note is discharged from his obligation to pay it because the holder has put in writing on the note what the law would have supplied if the words had not been written.
" What is said here about an addition or alteration of a promissory note was prior to the enactment of the rule in Bills of Exchange Act in England which has altered the law with regard to negotiable instruments but the observations apply forcefully to a document of the type we have where there were.
two executants (one being the debtor and the other his surety and the debtor has not increased but reduced the amount of his own liability as well as that of his (1) 81 surety.
That immaterial alterations do not matter is borne out by the observation of Swinfen Eady, J., in Bishop of Creditor vs Bishop of Exeter (1) where Pigot 's case(2) and the earlier statement of the law in Sheppard 's Touchstone, 7th ed.
(Preston 's), p. 55.
, were not accepted.
During the course of the argument Swinfen Eady, J., referred to cases in which corrections in the testimonium of documents to accord them with existing facts were held not to be material alterations.
The question before me is whether a document jointly executed by two persons creating a liability equal for both is to be regarded as materially altered if the liability is reduced equally for both but the alteration is made only by one of them.
In my opinion, such an alteration must be regarded as unsubstantial and not otherwise than beneficial to the surety and it cannot attract the strict rule stated by Lord Coke or that stated by Lord Westbury in the cited cases.
me give an example: If A places an order with a trader for supply on credit of ten bags of wheat and B endorsed the order by writing, "I guarantee payment up to ten bags", can it be said that 'the guarantee by B is dissolved when A takes the note and finding that the tradesman has only six bags of wheat in stock, corrects his order as well as the endorsement by altering "ten ' into 'six '? In my opinion, to such a correction neither the one rule nor the other can apply.
The strict rule of law which was brought to our notice from the well known Suffell 's Case(3), where a Bank of England note was mutilated and its number destroyed, depended upon its special facts.
The number of the Bank of England note was considered its vital part and the alteration a material alteration.
Suffell 's Cage(3) was not followed by the Privy Council in a case where a bank note issued by bank which was only a contract and not currency, as in the other case, was destroyed because the owner had forgotten that the note was in the pocket of a garment and the garment had been washed.
The (1) (2) ; ; (3) 82 note was reconstructed and showed the contract but not the number.
The Privy Council held the bank liable even though the contract had been Altered by eraser (see Hong Kong and Shanghai Banking Corporation vs Lo Lee Khi(1).
These cases establish that both the limbs of the argument which Anirudhan can raise are not vali in the circumstances of this case.
In my judgment, the particular document in this, case cannot be said to have been materially altered, because.
it has not been altered in such a manner as to change its nature.
The alteration does not save the surety from liability arising under it.
The alteration was made by a co executant who reduced not only his own liability but that of the surety also.
indeed, the surety himself under stood the law to be this because he set up the case that the document originally guaranteed an overdraft of Rs. 5,000/ but was altered to guarantee an overdraft of Rs. 20,000/ .
This case has been proved false and he never set up the case that the document was void because the amount was reduced from Rs. 25,000/ to Rs. 20,000/ .
It does not lie in the mouth of Anirudhan.
to say the he meant.
to guarantee 25,000/ but.
not Rs. 20,000/ because he never went to the Bank and made this a condition of the agreement.
Now he cannot say that the document has; become void against him or that the contract which had emerged by the Bank 's acceptance of the document as altered does not bind him.
There is no need, in my opinion, to consider whether there was a prior oral agreement or not.
I agree there is no proof of such an agreement.
The letter of Anirudhan to the Bank was based on a consideration which had already moved to Sankaran and which Anirudhan wished to guarantee.
Even if treated as an offer by Anirudhan to the Bank, the Batik accepted the amended offer and Sankaran must be deemed to have had the authority to reduce the amount, (1) ; 83 though not to increase it.
The document was altered while in the possession of the very person who, as the agent of Anirudhan, brought it to the Bank on both the occasions.
Anirudhan must be deemed to have held out Sarikaran as his agent for this purpose and this creates an estoppel against Anirudhan, because the Bank believed that Sankaran had the authority.
The offer thus remains in its amended form an offer of Anirudhan to the Bank and the Bank by accepting it turned it into a contract of guarantee which was backed by the past consideration on which the offer of Anirudhan was originally based.
In my opinion, the appeal must fail.
I would, therefore, dismiss it.
By COURT : In accordance with the opinion of the majority, the appeal is dismissed.
There would be no order as to costs.
Appeal dismissed.
| The appellant agreed to stand surety for an overdraft allowed by the respondent Bank to section A blank form of guarantee was given by the Bank to S, who then had it filled up by the appellant stating the maximum amount which he guaranteed as Rs. 25000/ .
When S brought the letter of guarantee duly signed by the appellant and himself to the Bank the latter refused to accept the guarantee up to that limit as it was not prepared to give S accommodation for a larger sum than Rs. 20000/ and wanted it to be limited to Rs. 20000/ .
S then made alterations in the letter with the amount of the maximum limit corrected to Rs. 20000/ and gave it to the Bank.
In a suit instituted by the Bank against the principal debtor, S, and the appellant on the basis of the contract of guarantee for Rs. 20000/ , the appellant pleaded that as the document was altered without his knowledge or consent, he was discharged from his liability.
Held, (per Kapur and Hidayatullah, JJ., Sarkar, J., dissenting), that the appellant was not discharged from his liability under the contract of guarantee.
64 per Kapur, J. S was acting for and on behalf of the appellant since it was at his instance that the appellant was standing surety and the appellant handed over the deed of guarantee to S for the purpose of being given to the Bank.
The plea of avoidance of contract by material alteration was of no avail to the appellant because the document was not altered while in possession of the promisee but was altered by S who was at the time acting as the agent of the appellant.
per Sarkar, J. The suit against the appellant as framed must fail.
The altered document was not binding on the appellant, for the alteration had not been made to carry out the intention of the parties.
If the alteration, is ignored as immaterial, then the document creates no liability in the appellant, for the Bank refused to accept a guarantee on the terms contained in it before it was altered and therefore there was no contract made between the parties by the document.
Further, the contract sued upon is different from the contract which might have been made by acceptance of the document as it stood before the alteration.
The unaltered document cannot establish the contract sued on.
per Hidayatullah, J. The document in this case could not be said to have been materially altered because it was not al tered in such a manner as to change its nature.
The alteration was made by a co executant who reduced not only his own liability but that of the surety also.
The document was altered while in the possession of S, the very person who, as the agent of the surety, brought it to the Bank.
The surety must be deemed to have held out S as his agent for this purpose and this created an estoppel against the surety because the Bank believed that S had the authority.
Accordingly, the alteration of the document did not save the surety from liability under it.
| The property under dispute was put up for sale at two different auctions by the Managing Officer, Amritsar.
The Rehabilitation authorities cancelled the bid of the first auction purchaser Smt.
Rup Kaur, holding that she had failed to deposit the sale price in spite of issuing her a regis tered notice, and at the.
second auction the appellant 's bid was accepted.
In a petition filed under article 226, a Single Judge of the High Court found the findings of facts to be erroneous and the impugned order void, and granted a writ in favour of Smt.
Rup Kaur.
On appeal, the decision was upheld by a Division Bench of the High Court.
Dismissing the appeal the Court, HELD: (1) The High Court does not sit as a court of appeal to substitute its own judgment for that of the au thorities which are empowered to give their decisions, but apart from jurisdictional errors, the High Court may correct errors apparent on the face of the record.
An error to be apparent must be one which does not take prolonged arguments to bring it to the surface.
The Single Judge 's conclusion that provisions of Rule 90 of the Displaced Persons Compensation and Rehabilitation Rules, 1955, had not been complied with, was not erroneous.
[123C D. 126E F] S.L. Hegde & Ors.
M.B. Tirumale [1960] (1) SCR 890, ap plied Hiralal Kher vs The Chief Settlement Commissioner New Delhi , referred to.
(2) It is a settled rule of practice of this Court not to interfere with the ' exercise of discretionary powers of High Courts under article 226 of the Constitution merely be cause two views are possible upon the facts of a case.
For interference by this Court, the question must involve at least a matter of public or general importance or the injus tice suffered by an individual due to an error of law should be so gross as to touch the conscience of this Court in which case it would be deemed to be one of more than private importance.
[123E F]
| The appellant, a registered dealer under the Punjab General Sales Tax Act, 1948 despatched some part of the manufactured goods outside the state, without paying the tax on the taxable raw material consumed in the manufacture of such goods.
The assessing authority issued a show cause notice for the assessee 's failure to pay the said tax.
Interest was also demanded on the tax amount.
The assesses disputed its liability to pay penalty and interest on the amount of tax withheld on the plea that there was no wilful default on its part, as it was under a bona fide belief that no tax was to be paid on the raw material used in the manufactured goods sent outside State.
The assesses further stated that it had acted on legal advice that it was not liable to pay any Purchase Tax and, therefore, in the absence of a clear intention to avoid the payment of tax, there could be no question of imposition of penalty and demand for interest.
The assessee 's submissions did not find favour with the Revenue, as also the Tribunal, and the assesses sought a reference to the High Court under section 22(1) of the Act.
But the Tribunal rejected application for reference.
Thereafter the assesses preferred appeals to this Court, against the Tribunal 's rejection of reference as also the Tribunal 's order in appeal.
On behalf of the appellants, it was contended that the main question involved in this case is concluded by several decisions of this Court, and it was not liable to pay the tax, as demanded by the Revenue.
On behalf of the Revenue it was contended that the assesses was liable to pay the tax on the raw materials used in the manufactured goods sent outside the State.
Allowing the appeals, this Court, 348 HELD: 1.1 Under Section 4B of the Punjab General Sales Tax Act, 1948 the tax becomes exigible not on the purchase of the raw material or on the use thereof in the manufacture of a new and distinct commodity but only after the goods so manufactured are despatched to a place outside the State.
Once the goods are sent outside the State the purchaser is made liable to pay the tax at the rate prescribed on the purchase of such goods provided no tax is payable on the purchase thereof under any other provision of the Act.
It is obvious that the tax though described as purchase tax is in effect a tax on consignment since it becomes effective on the happening of an event which has nothing to do with the actual purchase.
Even if the raw material is used in the manufacture of any taxable goods, the purchaser does not become liable to pay tax on the raw material until the manufactured item is sent out of the State.
And between the manufacture of the goods out of the purchased raw material and their actual despatch outside the State there may be a long time gap.
The liability of tax only after despatch of the manufactured goods outside the State and that event may have no relation to the actual purchase or manufacture.
That being so, the tax though described as a purchase tax is actually a tax on the consigmment of the manufactured goods, the levy of which is beyond the competence of the State as the power to impose such tax is vested in Parliament by virtue of clause (h) of Article 269(1) of the Constitution read with Entry 92B in Schedule 7, List 1.
[352H; 353A E; 354B] 1.2.
Even though the language of section 4B of the Act is not identical to section 9(1) of the Haryana Sales Tax Act, it is in substance similar in certain respects, particularly in respect of the point of time when the liability to pay tax arises.
Under that provision also the liability to pay purchase tax on the raw material purchased in the State which was consumed in the manufacture of any other taxable goods arose only on the despatch of the goods outside the State.
[353D E] M/s. Goodyear India Ltd. vs State of Haryana, ; ; applied.
State of Tamil Nadu vs M. K. Kandaswami etc., [ 19761 1 SCR 38; referred to.
Since the Revenue was not entitled to levy the tax which it purported to levy as purchase tax on the raw material, there can be no question of imposition of penalty or interest on the unpaid amount of tax.
Therefore, the action taken in exercise of power under section 10(6) and section 11D of the Act cannot be allowed to stand.
[354G H] 349
| The appellants in execution of a decree passed in their favour for possession over a house obtained possession thereof on July 22, 1951.
The order for delivery of possession was made without notice to and in the absence of the respondent.
The respondent made an application in the Executing Court under sections 47, 144 and 151, Code of Civil Procedure for setting aside the ex parte order of delivery and for redelivery of possession of the house to him or in the alternative, for an order to the appellants for giving facilities for removing the moveables from the house.
The Executing Court upheld the contention of the appellant that 76 592 the respondent 's application was not maintainable.
On appeal by the respondent the High Court held that the Executing Court had no jurisdiction to order the eviction of the respondent because of the provisions of the Mysore House Rent and Accommodation Control Order, 1948, which was in operation on the date of eviction and under sections 9 and 16 of which certain restrictions were placed on the eviction of tenants.
On appeal to this Court by special leave, the appellants contended, inter alia, as they did in the High Court also , that the Mysore House Rent Control Order of 1948 was repugnant to the provisions of the (IV of 1882), which became applicable in the State of Mysore by Part B States (Laws) Act, 1951 (Act III of 1951), which came into force on April 1, 1951 ; and therefore the House Control Order could not operate on the rights of the parties on the day when the Executing Court made the order for delivery of possession to the appellants, i. e., July 9, 1951, or when delivery was actually given i.e., on July 22, 1951.
Held, that the came into force only when it was extended by notification dated September 12, 1951, under section 3 of that Act, i.e., from October 1, 1951, and therefore the Mysore House Rent and Accommodation Control Order, 1948, was not repealed as from April 1, 1951, when the Part B States (Laws) Act, 1951, came into force and was in force when the possession was delivered.
It was then an existing law which was saved by article 372 of the Constitution and remained unaffected by article 254, and the question of repugnancy to the (Act IV of 1882) did not arise in this case.
M/s. Tilakram Rambaksh vs Bank of Patiala, A.I.R. 1959 Punj.
440, considered.
Section 47 of the Code of Civil Procedure was applicable to the proceeding out of which this appeal has arisen because the question whether the decree was completely satisfied and therefore the court became functus officio was a matter relating to execution, satisfaction and discharge of the decree.
Ramanna vs Nallaparaju, A, I. R. and J. Marret vs Mohammad Shirazi and Sons, A.I.R. 1930 P. C. 86, considered.
Where the court was not aware of the statutory restriction by which the execution of a decree was prohibited and passed an ejectment decree against a tenant the Executing Court could not execute the decree and any possession given under an ex parte order passed in execution of such a decree could be set aside under section 151 of the Code of Civil Procedure.
K.Muhammad Sikri Sahib vs Madhava Kurup, A.I.R. 1949 Mad. 809, considered.
1 The contentions of the appellant based on the ground of res judicata and estoppel were without any force.
Sections 9(1) and 16 of the House Rent Control Order placed restrictions on 593 the power of the Court to execute the decree and ignoring them was not merely an error in the exercise of jurisdiction.
| The respondent Bank gave a loan to Godavari Sugars Refiners Ltd., of which defendants 1 to 3, as partners, were managing agents.
Subsequently the bank filed a suit for the recovery of the loan.
The appellant, a brother of defendant No. 1, was impleaded as defendant No. 4 and Godavari Sugars as defendant No. 5.
The suit was decreed and the decree was upheld by the High Court.
Only Defendant No.4 appealed tothis Court.
The decree against the appellant was passed on the basis of Exh.
1 6, a document which was signed by Defendants 1 & 4 and in which it was recorded that the title deeds Exhs.
A 7 and Exh.
A 8 had been deposited with the respondent bank as security for money due.
According to the appellant the said title deeds had been deposited by him as security for a loan given to him by the bank in his individual capacity, and that the signature of defendant No. I had been appended to Exh.
A 6 only because he bad an interest in one of the properties covered by Exhs.
A 7 and A 8. HELD.
If the parties intend to reduce their bargain: regarding the deposit of title deeds to the form of a document the document requires registration.
If on the other hand its proper construction and the surrounding circumstances lead to the. conclusion that the parties did not intend to do so, then, there being no express.
bargain the contract to create a mortgage arises by implication of the law from the deposit itself with the requisite intention, and the document being merely evidential does not require registration.
[220 H 221A] Rachpal Maharaj vs Bhagwandas Daruka & Ors., ; Pranjivandas Mehta vs Chan Ma Phee, L.R. 43 I.A. 123, Shaw vs Foster: ,341 and Subramonian The language of exhibit A 6 was undoubtedly wide and if it governed the agreement between the parties then there could be no doubt that the suit debts were also secured by the deposit of title deeds A 7 and A 8.
But exhibit A 6 could not be considered a contract governing the rights of the parties because: (a) it was incomplete inasmuch as certain unnecessary words which were meant to be struck out were not actually struck out; (b) while according to the plaintiff the appellant agreed to secure the debt due from the first defendant to the Bank in consideration of the Bank not pro ceeding against defendants 1 to 3, no such term was found in exhibit A 6; (c) from the recitals of Ex A 6 it was seen that the memorandum in question was intended to 'Put on record ' the terms already agreed upon.
If the parties intended that the document should embody the contract between them it would have been necessary to register the same under section 17 of the .
[22OA D] 14 1 section C. India/71 210 Exhibit A 6 was not registered.
If that document was considered as a contract of mortgage between the Bank and the depositors, the same not having been registered it was inadmissible in evidence.
If on the other hand that document was considered as a ' mere memorandum evidencing the deposit of title deeds in pursuance of an earlier contract then the correctness of the recitals therein could be gone into without being inhibited by sections 91 and 92 of the Evidence Act.
Whichever view was taken the plaintiff 's case must fail.
On an overall consideration of the evidence and probabilities of the case it was established that Exbs.
A 7 and A 8 were not deposited with the Bank to secure the debts due from defendant No. 1 to the Bank.
[222C E] The appeal must accordingly be allowed.
| During consolidation proceedings in a village, under the Uttar Pradesh Consolidation of Holdings Act, 1954, a question of title arose, and the Consolidation Officer referred the question to the Civil Judge who referred it to an arbitrator appointed under section 37 of the Act.
The Arbitrator submitted his award to the Court.
The appellants filed objections under section 15 of the , and the Civil Judge modified the award.
On appeal by the respondents, the District Court held that the appeal was maintainable and that the Civil Judge was not justified in modifying the award.
A revision petition to the High Court filed by the appellants was dismissed.
In appeal to this Court, it was contended that section 39 of the , which provides for appeals does not apply to arbitrations under section 37 of the U.P. Act.
HELD:The decision of the Civil Judge modifying, the award was appealable under section 39 of the .
[67 A].
The effect of section 37 of the U.P. Act read with sections 46 and 47 of the is, to apply sections 15 and 39 of the to the proceedings under the U.P. Act; and under section 12(5) of the U.P. Act what is made final is the decision of the arbitrator as it emerges after appropriate proceedings, under the provisions of the .
[65 G H; 66 H].
Carju Prasad vs Civil Judge, Farrukhabad, I.L.R. [1959].
1 All354 and Sayed Ulla Khan vs The Temporary Civil Judge, Sultanpur, , approved.
Attar Singh vs State of u.p.
[1959] Supp. 1 S.C.R. 928, explained.
| The respondents filed a petition in the High Court of Jammu Kashmir Motor Vehicles Rules.
The High Court held that the said rule was ultra vires as offending article 14 of the Constitution.
The appellants filed an application in the High Court for a certificate under article 132(1) of the Constitution which was rejected on the ground that no substantial question of law as to the interpretation of the Constitution was involved in the case.
Thereafter the appellant applied to this Court for special leave under article 132(2) of the Constitution, which was granted with liberty to the respondents to raise the question of maintainability of the appeal.
There was no controversy between the parties in regard to the interpretation of article 14 of the Constitution, and the dispute centered round the question whether the impugned rule stood the test of reasonable classification.
The respondents raised a preliminary objection that special leave under article 132(2) of the Constitution could be granted by this court only if it was satisfied that the case involved a substantial question of law as to the interpretation of the Constitution, and that since, in the present case, the interpretation of article 14 of the Constitution was not in dispute by reason of a series of decisions of this Court and no question of law, much less a substantial question of law, could arise for consideration, no special leave could be granted under the said Article.
It was contended on behalf of the appellants that whenever a question of classification was raised that by itself involved the interpretation of article 14 of the Constitution so far as the impugned classification was concerned.
Held, that the principle underlying article 132(2) of the Constitution is that the final authority of interpreting the Constitution must rest with the Supreme Court.
With that object that Article is freed from other limitations imposed under articles 133 and 134 and the right of appeal of the widest amplitude is allowed irrespective of the nature of the proceedings in a case involving only a substantial question of law as to the interpretation of the Constitution.
The interpretation of a provision means the method by which the true sense or the meaning of the word is understood.
Where 347 the parties agree as to the true interpretation of a provision or do not raise any question in respect thereof, the case does not involve any question of law as to the interpretation of the Constitution.
A substantial question of law cannot arise where that law has been finally and authoritatively decided by this Court.
In the instant case, the question raised does not involve any question of law as to the interpretation of the Constitution.
T.M. Krishnaswami Pillai vs Governor General in Council (1947) 52 C.W.N. (F.R.) 1, Bhudan Choudury vs The State of Bihar, ; , Chiranjit Lal Chowdhuri vs Union of India; , , Ram Krishna Dalmia vs justice Tendolkar; , and Mohammad Haneef Quayeshi vs State of Bihar, [1959] S.C.R.629, relied on.
| (14 of 1947) section 18 Applicability of.
The appellant company had its establishments in a number of States in the country.
In its establishment at Kanpur there were two unions, one of which, the Shramik Sangh, was affiliated to the Federal Union comprising of some of the trade unions in the various establishments while the other, the Karamachari Union, was not.
A demand relating to revision of dearness allowance among others, was raised by both the Unions at Kanpur.
The Shramik Sangh and the appellant entered into a settlement.
Karamchari Union which was not a party to the settlement, made an application to the State Government to constitute a conciliation board for reference of the dispute.
The Board was constituted.
In the meantime, however, to bring the settlement within the purview of the U.P. the Shramik Sangh applied for the constitutation of a conciliation board.
A conciliation board was constituted and the memorandum of settlement arrived at between the parties was registered even though the dispute on the same point raised by the Karamchari Union was pending before the Conciliation Board all the while.
The dispute raised by the Karamchari Union was, therefore, referred to a Tribunal under s 4K of the Act.
The Tribunal rejected the appellant 's contention that it had no jurisdiction to adjudicate on the dispute.
On appeal to this Court it was contended that it was implicit in the various provisions of the U.P. Act that a settlement arrived at before a Conciliation Board by a Union of the majority of workmen was binding on all the workmen and that in the absence of a provision like section 18 of the it was not permissible for the Karamchari Union to contend that the settlement would bind only the members of the Shramik Sangh and in any event reference of the dispute to a Tribunal was without jurisdiction.
Dismissing the appeal, ^ HELD: 1.
The State Government rightly took the view that the controversy raised by the Karamchari Union was an industrial dispute.
[922 G H] 2.
A reading of the relevant provisions of the U.P. , clearly shows that there is nothing in the Act to require that the dispute 912 or difference should be raised by all the workmen of the industry, or by everyone of them, or even by a majority of them.
It is enough if the controversy is between the employer on the one side and workmen on the other.
There is also nothing in the Act to require that the workmen raising the controversy should form a majority of the employees, the reason being that where it is found that the controversy affects, or will affect, the interests of workmen as a class, the law envisages that, in the interest of industrial peace, it should be examined and decided in one of the modes provided by it.
[917 D F] 3.
An individual dispute cannot, however, be said to be an industrial dispute unless the other workmen associate themselves with it.
No hard and fast rule can be laid down to decide when and by how many workmen an industrial dispute could be raised within the meaning of the Act, or whether a minority union or even an unrecognised union, could raise an industrial dispute.
It is enough if there is a potential cause of disharmony which is likely to endanger industrial peace, and a substantial number of workmen raise a dispute about it, for then it is permissible to view it as an industrial dispute within the meaning of clause (1) of section 2 of the Act, and to refer it for adjudication to a tribunal.
[917 F H] 4.
The settlement arrived at with the Federal Union did not bind the Karamchari Union as it was not a party to it and was not affiliated to the Federal Union.
Section 18 of the Central Act provides that a settlement arrived at by agreement between the parties otherwise than in the course of conciliation proceedings shall be binding on the parties to the agreement.
[918 E] 5.
Moreover, the settlement arrived at with the Shramik Sangh was under the provisions of the U.P. Act and, therefore, section 18 of the Central Act had no application.
There is no provision similar to it in the U.P. Act.
[918 G] 6.
There was no occasion for invoking section 7 of the U.P. Act.
That section is mainly intended to serve the purposes contemplated by section 3 of the Act, namely, securing the public safety or convenience or the maintenance of public order or supplies and services essential to the life of the community or for maintaining employment etc.
It cannot therefore be said that the settlement arrived at by the Sangh became binding on all workmen including the Karamchari Union which was not a party to it nor is there any other provision in the Act or the Rules making the settlement binding on the Karamchari Union.
Nor again can it be said that section 3(d) of the U.P. Act justifies the argument that merely because a union, consisting of a majority of workers, can represent all the workmen, the settlement arrived at before a conciliation board would bind those who are not parties to it.
[919 B, C, F G] 7.
In the absence of any prohibitory provision in the Act it cannot be said that the State Government had no jurisdiction to make a general reference under section 4K of the U.P. Act merely because the settlement was made by a majority union and was binding on the Shramik Sangh.
The Tribunal has found it as a fact that the Karamchari Union represented a substantial number of the workmen of the company at Kanpur, and there is no reason why they should be debarred from raising a dispute for the benefit of all the workmen as a class.
It is well recognised, that "collective bargaining" can take place between the employer and a bona fide labour union and there is nothing on the record to show that the Karamchari Union was not a bona fide union.
[920 A C] 913 In the instant case the Shramik Sangh entered into the settlement in collusion with the company and the Conciliation Board finalised the settlement even though the Karamchari Union 's dispute was still pending.
No effort was made to make it a party to the proceedings.
Although, to begin with, a both the Shramik Sangh and the Karamchari Union were opposed to the settlement earlier arrived at by the Federal Union the Shramik Sangh changed its stand and endorsed the settlement of the Federal Union when it was placed on the notice board.
The Tribunal also found as a fact that the settlement was not even put on the notice board of the company.
In these circumstances if the State Government had decided to make a reference of the dispute to the Tribunal it could not be said that it did not apply its mind to the controversy or committed an illegality in doing so.
[920 H 921 C] 8.
Even assuming that the earlier settlements were in the nature of a package deal arrived at between the company and the Federal Union it cannot be said that there was any legal bar to the reference of the dispute regarding one particular item of the package deal for adjudication by the tribunal so as to vitiate the reference.
The company brought this aspect of the matter specifically to the notice of the State Government.
The point does not, however, relate to the jurisdiction or the maintainability of the reference under section 4K for it is essentially a matter for the Tribunal 's examination with due regard to the evidence before it.
[921 F G] Herbertsons Ltd. vs Workmen of Herbertsons Ltd. & Ors. ; and New Standard Engg.
Co. Ltd. vs M. L. Abhyankar & Ors., ; held inapplicable.
|
iminal Appeal No. 58 of 1961.
231 Appeal by special leave from the judgment and order dated October 17, 1960, of the Bombay s High Court in Criminal Appeal No. 1235 of 1960.
R. H. Dhebar, for the appellant.
The respondent did not appear.
February 16.
The Judgment of the Court was delivered by Kapur J.
This appeal by Special Leave against the decision of the High Court of Bombay dismissing the State 's appeal against the acquittal of the respondent arises out of proceedings under section 66(1)(b) of the Bombay Prohibition Act, 1949 (Act25 of 1949), as amended, hereinafter called the Act '.
The respondent was arrested by Police Constable Laxman Sabaji on August 8, 1959, at 8 15 p.m. on the ground that he was smelling of liquor and bad therefore contravened the provisions of the Act.
The respondent was taken to the hospital where he was examined by Dr. Dadlani Prabhu Rochiram P. W., who has deposed that the respondent was Smelling of liquor but his speech, behaviour, gait, coordination and memory were normal.
From this he concluded that the respondent had consumed some alcoholic substance but was not under the influence of liquor.
In cross examination he stated that Tincture Neem would produce blood concentration of 0.146% M/V of ethyl alcohol.
The respondent in his examination under section 342 stated: Question: "What do you wish to say with reference to the evidence given and recorded against you? Answer :I have not consumed prohibited alcohol.
I had taken 6 ounces of Neem as I am used to it".
232 On this evidence the Presidency Magistrate Mr. Lokur acquitted the respondent.
He observed: "Neem is a medicinal preparation containing about 40% of alcohol and is readily available in the market.
I do not see why I should not accept the explanation given by the accused that he had taken Neem in order to satiate his craving for alcohol.
It has been held by Bavdekar and Chainani, JJ., in Criminal Appeal No. 1611 of 1954 dated 25 2 1954 that taking an excess dose of medicinal preparation does not amount to consumption of prohibited liquor.
In Criminal Appeal No. 1562 of 1959 State vs Domnic Robert D 'Sliva where a similar defence was taken up it was held that consumption of 6 ounces of essence of Neem did not constitute an offence.
Following these judgments I hold that the accused has not committed any offence.
I therefore acquit the accused".
Against this order an appeal was taken to the High Court and one of the grounds taken in the memorandum of Appeal was that the mere statement of the respondent that he had consumed 8 ounces of Tincture of Neem was not sufficient to rebut the presumption arising out of sub section
(2) of section 66 of the Act.
But the High Court dismissed the appeal in limine.
It is against that order that the State has come by Special Leave to this Court.
The main question raised on behalf of the State is that by the introduction of section 66(2) in the Act as a result of the Bombay Prohibition (Extension and amendment) Act, 1959, (Act 12 of 1959), the onus is on the accused person and that that onus had not been discharged in the present case.
Section 66(2) is as follows : section 66(2) ",Subject to the provisions of subsection 233 (3) wherein in any trial of an offence under clause (b) of sub section(1) for the consump tion of an intoxicant it is alleged that the accused person consumed liquor, and it is proved that the concentration of alcohol in the blood of the accused person is not less than 0.05 per cent.
weight in volume, then the burden of proving that the liquor consumed was a medicinal or toilet preparation, or an antiseptic preparation or solution, or a flavouring extract, essence or syrup, containing alcohol, the consumption of which is not in contravention of the Act or any rules, regulation or orders made thereunder, shall be upon the accused person,and the Court shall in the absence of such proof presume the contrary".
The argument was put in this way that if the prosecution proves that the concentration of alcohol in the blood of an accused person is more than 0.05% then under section 66(2) of the Act the burden was on him to show that the liquor which he had consumed was a medicinal or toilet preparation the consumption of which is not in contravention of the Act or any Rules made thereunder.
It was further submitted that in order to discharge the onus mere statement of the accused is not sufficient.
Our attention was drawn to the scheme and some of the provisions of the Act.
The prosecution, in the present case, has proved that the respondent 's breath was smelling of liquor and that on examination of his blood it was found to contain 0.146% bat the respondent gave an explanation showing that he had taken 6 ounces of Tincture of Neem and Dr. Dadlani Prabhu Rochiram has deposed that the consumption of 6 to 8 ounces of that substance will produce that amount of concentration of blood.
This was 234 accepted by the learned Presidency Magistrate and by the High Court.
Therefore on this finding it must be held that the explanation given by the respondent of the cause of his smelling of liquor and of the blood concentration was accepted by the High Court as being sufficient to discharge the onus placed on him.
But Mr. Dhebar for the State submits that mere statement of an accused person is not sufficient for the discharge of such onus and relies on a judgment of this Court in C. S.D. swamy vs The State (1), where Sinha, J. (as he then was), observed: "In this case, no acceptable evidence, beyond the bare statements of the accused, has been adduced to show that the contrary of what has been proved by the prosecution, has been established, because the requirement of the section is that the accused person shall be presumed to be guilty of criminal misconduct in the discharge of his official duties " unless the contrary is proved".
The words of the statute are peremptory, and the burden must lie all the time on the accused to prove the contrary".
All that the learned Judge there meant to Ray was that the evidence of the statement of the accused in the circumstances of that case was not sufficient to discharge the onus but that does not mean that in no case can the statement of an accused person be taken to be sufficient for the purpose of discharging the onus if a statute places the onus on him.
Under section 342 of the Criminal Procedure Code the Court has the power to examine the accused so as to en able him to explain any circumstance appearing in evidence against him.
Under sub section 3) of that section the answers given by an accused person may be taken into consideration in such enquiry or trial.
The object of examination under section 342 therefore is to give the, accused an opportunity to (1) ; , 471. 235 explain the case made against him and that statement can be taken into consideration in judging the innocence or guilt of the person so accused.
Therefore if the courts below have accepted this explanation it must be held that the respondent has discharged the onus which was placed on him by section 65(2) of the Act.
The appeal is therefore dismissed.
Appeal dismissed.
| Respondent was arrested by a police constable on the ground that he was smelling of liquor.
The doctor who examined him gave evidence at the trial that though the respondent had consumed alcoholic substance he was not under the influence of liquor.
In cross examination the doctor stated that consumption of Neem would produce a blood concentration of 0. 146%.
The respondent in examination under section 342 of the Code of Criminal Procedure stated that he had not consumed prohibited alcohol but that he had consumed six ounces of Neem.
He was acquitted by the Magistrate.
The appellant appealed to the High Court.
The main ground of appeal was that the mere statement of the respondent that he had consumed 6 ozs.
of Neem was not sufficient to rebut the presumption under sub section
(2) of section 66 of the Bombay prohibition Act, 1949, as amended by the Bombay Prohibition (Extension and amendment) Act, 1959.
The High Court dismissed the appeal in limine.
Thereupon the appellant appealed to the Supreme Court by way of Special Leave on the same ground as was raised before the High Court.
Held, that the statement of the accused recorded under section 342 of the Code of Criminal Procedure can be taken into consideration in judging the innocence or guilt of a person.
If the explanation given by the accused in his statement is acceptable to the court it must be held that the accused has discharged the burden under section 66 (2) of the Bombay Prohibi tion Act.
O. section D. Swamy vs State, 1, distinguished.
| The petitioner was convicted for the offence u/s 302 I.P.C. and sentenced to life imprisonment by the Sessions Judge.
The appeal preferred by him was dismissed by the High Court of Bombay in limine.
Hence the appeal by Special leave.
Allowing the petition and directing the High Court to admit the appeal and deal with it according to law, the court ^ HELD: An appellate Court has the undoubted power to dismiss an appeal in limine, as provided under section 384 of the Code of Criminal Procedure.
But, it is a power which must be exercised sparingly and with great circumspection, more so in a case where the conviction is for murder and the sentence is one of imprisonment for life, which are serious enough matters for the High Court to warrant admission of the appeal and fair and independent consideration of the evidence by the High Court.
Summary rejection of the appeal with the laconic expression, "dismissed" is a drastic step in such cases.[653 C E] To so reject an appeal is to practically deny the right of appeal.
Except in certain cases when an accused person has pleaded guilty and in petty cases every person convicted of an offence has a right of appeal under the Code; an appeal may be both against conviction and on facts and law.
A convicted person is entitled to ask an appellate Court to reappraise the evidence and come to its own conclusion.
Therefore, it is necessary to make a speaking order, while dismissing a criminal appeal.
[653 E F] Mustaq Hussain vs State of Bombay, [ ; ; Ramayya vs State of Bombay, ; ; Vishwanath Shankar Beldar vs State of Maharashtra, ; Siddanna Appa Rao vs State of Maharashtra A.I.R. 1970 S C. 977; Narayan Nathu Naik vs State of Maharashtra, A.l.
R. ; Govinda Kadutji Kadam vs State of Maharashtra, ; Shaik Mohamed Ali vs State of Maharastra, A.I.R. 1973 S.C. 43; 652 K.K. Jain vs State of Maharashtra, A.l.
R. ; Jeewan Prakash vs State of Maharashtra, A.I.R. 1973 S.C. 278; Mustaq Ahmed vs State of Maharashtra, A.I.R. 1973 S.C. 1122; Krishna Vithu Suroshe vs State of Maharashtra, A.I.R. ; Sampata Tatyada Shinde vs State of Maharashtra, A.I.R. 1974 S.C. 791; and Dagadu vs State of Maharashtra, ; reiterated.
| The appellant was convicted and sentenced under r. 125(a) Defence of India Rules for contravening el.
4(b) of the Maharashtra Jwar (Restriction on purchases and sale and control of movement) Order, 1964, for contravening Buldana District Price Control Order, 1965; and for contravening el.
3 of the Maharashtra Foodgrains (Declaration of Stock) (Second) Order, 1964.
The Magistrate further ordered that the maddamal (Juar) before the court be confiscated by the Government.
The .appellant appealed unsuccessfully to the Sessions Judge.
But the High Court set aside the conviction and sentence under el.
3 of the Maharashtra Food Grains (Declaration of Stock) Order, and maintained the other convictions in an appeal to this Court the appellant contended that (i) the High Court having set aside the conviction under el.
3 of the Maharashtra Foodgrains (Declaration of Stocks) (Second) Order, 1964 the order for forfeiture could not be maintained because the Maharashtra Jwar (Restriction on Purchase 'and sale and control of movement) Order,/964, and the Buldana District Jwar (Price Control) Order 1965 did not contain any provision authorising the court to forfeit; and (ii) r. 141(2) of the Defence of India Rules, 1962 was ultra vires because it laid down a rule of evidence contrary to the law contained in section 114 of the Indian Evidence Act.
HELD: (i) The order of forfeiture was illegal.
The only provision contained in the Maharashtra Jwar (Restriction on Purchase and Sale and Control of Movement) Order, 1964, is regarding forfeiture of packages covering or receptacles in which any stocks of juar are found.
This does not enable the Court to order forfeiture of juar.
The Buldana District Juar (Price Control) Order authorises the Collector to seize stocks but does not enable the Court to forfeit juar.
[274 H] (ii) r. 141(2) is within the powers conferred by section 3(1) of the Defence of India Act.
The fact that the rule is contrary to an existing Act does not matter because section 43 of the Defence of India Act provides that "the provisions of this Act or any rule made thereunder or any order made under any such rule shall have effect notwithstanding anything inconsistent therewith contained in any enactment other than this Act or in any instrument having effect by virtue of any enactment other than this Act." [275 F G]
| The appellant company carried on the business of manufacture, storage and sale of liquors Between June 1967 and April 1969 it transported various quantities of liquor from its distilleries in Uttar Pradesh to its bonded warehouse at Chandigarh On arrival the consignments were examined by the Officer in Charge of the warehouse and a shortage was found exceeding the wastage allowance permissible under rule 8 of the Punjab Bonded Warehouse Rules 1957 and April 1969, it Transported various quantities of liquor from its distilleries in Uttar Pradesh to its bonded warehouse at Chandigarh.
On arrival, the consignments were examined by the Officer in Charge of the warehouse, and a shortage was found, exceeding the wastage allowance permissible under rule of the Punjab Bonded Warehouse Rule, 1957.
The Excise and Taxation Commissioner, exercising the power of the Financial Commissioner, issued a show cause notice and then ordered the appellant to pay duty on the wastage in excess.
The appellant 's petitions to the High Court under Articles 226 and 227 of the Constitution, were dismissed.
It was contended before this Court, firstly that Rules 8 and 9 of the 1957 Rules under which the duty was sought to be imposed, were ultra vires the rule making power of the Financial Commissioner, and secondly, that these rules were invalid as they went beyond the scope of Ss. 16, 23 and 31 and Entry 51 List II, 7th Schedule of the Constitution, by imposing excise duty or counter vailing duty on articles which neither existed in the State nor were removed from the warehouse.
Dismissing the appeals the Court, ^ HELD .
(1) The impugned rules do not impose any duties or prescribe the rates thereof or create `any liability in respect thereof.
They are in essence and substance of a regulatory character rent to guard against perpetration of fraud or deception on the revenue.
They provide for and regulate the storage and subsequently the Removal of liquor from the bonded warehouse, on payment or otherwise of the duty which is chargeable under the Fiscal Rules of 1937, issued be the State Government.
The power exercised by the Financial Commissioner were clearly available to him under Sections 59 and 22 of the Act and he has not overstepped the same.
1513G H; 514A] (2) According to Section 31 of the Act read with Entry 51 of list II of the Seventh Schedule to the Constitution, countervailing duty can be imposed on liquor meant for consumption which is manufactured or produced elsewhere in India.
It is immaterial whether the liquor of which permits were obtained was consumed within the union territory of Chandigarh or was in existence in that territory or not.
Duty is sought to be charged on liquor which was actually manufactured and left Uttar Pradesh but was found short beyond the permissible limit and no reasonable explanation was tendered by the appellant in respect thereof.
[517D G] Kalyoni Stores vs The State of Orissa & ors.
[1966] I S.C.R. 865 referred to.
| These appeals by special leave arose from applications made by the respondents, who were employed as timekeepers in the time office of the Central Railway Workshop and Factory, Parel, Bombay, claiming payment of overtime wages under the (4 of 1936).
The case of the respondents was that they were workers within the meaning of section 2(1) of the (LXIII Of 1948) and as such were entitled to overtime wages under section 59 of the said Act.
Alternatively, they urged that even if they were not workers within the meaning of section 2(1) of the said Act, they would nevertheless be entitled to overtime wages under the section 59 by reason Of section 70 of the Bombay Shops and Establishments Act, 1948 (Bom.
79 of 1948).
The validity of the claim on both the grounds was disputed by the appellant.
The Authority under the found that only four of the respondents, who were required to do the work of progress timekeepers, could claim the status of workers within the meaning Of section 2(1) Of the and the rest were merely employees of the workshop, but the Authority accepted the alternative case made by the respond ents and directed the appellant to file a statement showing the overtime wages due to each of the respondents and ordered it to pay the same.
Held, that the Authority was right in the view that it took Of section 70 Of the Bombay Shops and Establishments Act, 1948, and its decision must be affirmed.
On a proper construction Of section 70 Of the Act it is clear that the first part of the section excludes a factory and its employees from the operation of the Act; but the second part makes the relevant provisions of the applicable to them.
The non obstante clause in the section shows that the employees in a factory, although they might not be workers within the meaning Of section 2(1) of the , are entitled to claim overtime wages as provided for by that Act.
It is not correct to say that section 4 Of the Bombay Shops and Establishments Act, 1948, has the effect of excluding the operation Of section 70 Of the Act.
Section 4 applies only to establishments and not to factories; but even if it applied, to factories 18 138 that cannot materially affect the application Of section 70 which is intended to operate not withstanding the other provisions of the Act.
Consistently with its policy, the Act, which provides for overtime wages for employees in all establishments, provides for overtime wages for employees in factories as well by making the relevant provisions of the applicable to them.
| The appellant was found preparing illicit liquor when the raiding excise party searched the room in which he was present.
The appellant pleaded that he had no concern with the bungalow searched and that he was not present when the search was taken and that he was falsely implicated in the case.
All the materials found in the room were seized.
The Excise Inspector had tested the contents of the drums with the aid of litmus paper, hydrometer, and thermometer and did not confine himself to smelling the contents of the drums.
The appellant was convicted by the trial court under section 60(a), U.P. Excise Act, 1910 for preparing illicit liquor and was sentenced to imprisonment and fine.
His conviction and sentence were confirmed both by the sessions Judge and the High Court.
The questions raised in this Court were (i) whether the smelling test employed by the Excise Inspector together with other circumstances were enough to justify the conclusion that the liquid recovered was illicit liquor of O.P. strength and (ii) whether the Excise Inspector could be considered an expert whose opinion about the nature of the liquor found was opinion evidence under section 45 of the Evidence Act.
Dismissing the appeal, HELD : (i) It is not desirable to lay down an inflexible rule on questions of fact even though their determination requires the adoption of scientific methods and tests.
It is really for the court of fact to decide whether, upon a consideration of the totality of the facts in a case, It has been satisfactorily established that the objects recovered from the possession of the accused included liquor of prohi bited strength Hydrometer test would be enough if the liquid was known to contain alcohol because it would help to determine the strength of alcoholic contents.
[825 D] In the instant case the false defence taken, that the appellant was not present at the house in question when it was searched, could indicate that he wanted to keep his distance from the recoveries made as he was aware of their incriminating nature.
Secondly, the appellant who was an employee in a liquor shop, could not be so ignorant about the nature of the liquid recovered as not to be able to raise the question before the trial court that the liquid under consideration was not "liquor" as defined in the Act.
There was no reason why the accused, who could be presumed to have enough knowledge about the composition and strength of the prohibited liquor, could not raise this question in the trial court so that the prosecution might cure whatever weakness there might be in the evidence on that point.
The Excise Inspector was cross examined at considerable length but the whole of it was directed at showing that the recoveries were not made from the possession of the appellant.
No question was put to him In cross examination to suggest that the appellant questioned the composition or strength of the liquid recovered as alcohol of prohibited strength or the competence of the Excise Inspector to give his conclusion on the strength of tests ad opted by him.
The appellant should not be allowed to raise it at a stage when it may be difficult or impossible to adopt a conclusive test.
The objects recovered from the possession of the appellant almost proclaim the nature of his activity and of the liquid which could be in his possession.
(ii)The competence of the Excise Inspector to test the composition and strength of the liquid was not questioned at all.
Nor was his competence questioned to give his conclusion on the strength of the tests adopted by him.
No defence evidence was led to indicate that the liquid could be anything else.
[826A] 822 In the instant case, the question of admissibility of the opinion of the Excise Inspector was, however, not raised before the Sessions Judge.
The Excise Inspector had deposed that he had put in 21 years ' service as Excise Inspector and had tested lakhs of samples of liquor and illicit liquor.
On the facts of this case this particular Excise Inspector could be.
treated as an expert within the meaning of section 45 of the Evidence Act.
The evidence was sufficient to prove the prosecution case beyond reasonable doubt.
[826 C] State of Andhra Pradesh vs Madiga Boosenna & Ors., ; , distinguished.
State vs Madhukar Gopinath Lalze, I.L.R. [1965] Bombay 257, and Ram Jus vs State, , referred to.
| The appellant Chhotu Singh, who had been granted C.L. III licence for vending country liquor in Village Sawli, applied for permission to shift his liquor shop from Village Sawli to Village Narsi Chaurasta as there was very little demand for country liquor in Sawli with a small population.
The Collector recommended the transfer of the shop of the appellant after making due enquiries contemplated in the guidelines laid down in the government circular dated April 27, 1984 for shifting shops.
The State Government granted the permission applied for by the appellant.
Upon the appellant 's shop being shifted to Narsi Chaurasta, the respondent No. S in the appeals, who already had a liquor shop in Narsi Chaurasta, challenged by a Writ Petition the permission granted by the Government to the appellant to shift his liquor shop to Narsi Chaurasta.
The High Court allowed the Writ Petition, quashing the order of the Government granting permission for shifting the liquor shop, on the ground that the said permission had been granted without the criteria laid down in the Government circular dated March 18,1982 being duly considered.
A review petition against the order of the High Court, allowing the Writ Petition, was dismissed.
The appellant Chhotu Singh has moved the Court by special leave against the orders of the High Court, allowing the Writ Petition and dismissing the review application, and the only question for consideration in the matter is whether the permission granted by the State Government for shifting the appellant 's C.L. III liquor shop from Village Sawli to Village Narsi Chaurasta is supported by the guidelines laid down in the latest government circular dated April 27,1984, which has superseded all the previous such circulars.
Allowing the appeals, the Court, 304 ^ HELD: The Collector had recommended permission for shifting the liquor shop of the appellant from Village Sawli to Village Narsi Chaurasta after making due enquiries, with regard to the shifting of the said shop, in accordance with the guidelines contained in the latest government circular on the subject, dated April 27, 1984, which had superseded the guidelines in the previous such circulars.
The sanction accorded to the shifting of the appellant 's shop is not in breach of the said latest circular dated April 27, 1984 and it cannot be assailed as arbitrary.
[306G, B; 307E, B C]
| The petitioner Company carrying on the business of manu facturing bidis and having its head office at Jabalpur in the State of Madhya Pradesh made certain purchases of tobacco in the State of Bombay.
The Sales Tax Officer assessed the petitioner to a purchase tax under the provisions of the Bombay Sales Tax Act, 1953.
The petitioner contested the assessment of 710 purchase tax on the grounds that those transactions and pur chases were " Outside the State of Bombay " within the meaning of article 286(1)(a) of the Constitution read with the Explanation, that the provisions of the Bombay Sales Tax Act, 1953, did not authorise the imposition, levy or collection of any purchase tax on the transactions in question and that the transactions took place in the course of inter State trade and commerce.
The petitioner 's appeal to the Assistant Collector of Sales Tax was dismissed and then the present petition for writs of mandamus and certiorari was filed in the Supreme Court.
The petitioner contended that the Bombay Sales Tax Act, 1953, did not authorise the imposition of a tax on the purchase of bidi tobacco which was not one of the goods specified in column 4 of Schedule B of the said Act.
The petitioner further contended that the purchased tobacco was delivered to it within the State of Bombay as a direct result of the purchase but it was intended to be sent to the State of Madhya Pradesh to be manufactured into bidis at that place.
The only thing which was done in the Bombay State was to remove the stem and dust from the tobacco which process did neither amount to " consumption " of tobacco as contemplated under the Explanation to article 286 of the Constitution nor did it convert the tobacco which was sent to the Head Office into an article " commercially different " from the tobacco purchased from the cultivators.
In their counter affidavit the respondents averred that the raw tobacco was converted into bidi pattis before it was sent outside Bombay State both of which were commercially different articles and the market value of which was also different.
These averments were not controverted by the petitioner.
Held, that the words " all goods other than those specified from time to time in Schedule A and in the preceding entries " in entry 8o of Schedule B of the Bombay Sales Tax Act, 1953, amounted to a specification of goods for the purposes of section lo of the Act and as bidi tobacco purchased by the petitioner was not within Schedule A or any of the earlier entries in Schedule B purchase tax at the rate mentioned against entry 8o was leviable under section 1o of the Act.
Whenever a commodity was so dealt with as to change it into another commercial commodity there was consumption of the first commodity within the meaning of the Explanation to article 286 of the Constitution.
State of Travancore Cochin vs Shanmugha Vilas Cashew Nut Factory, ; , followed.
The delivery of tobacco in Bombay State for changing it into bidi patti which is a commercially different article amount ed to delivery for the purpose of consumption and the purchase fell within the meaning of article 286(i)(a) of the Constitution and took place inside tile Bombay State.
|
Appeals Nos. 149 and 150 of 1961.
Appeals from the judgment and order dated September 23, 1968, of the Bombay High Court in I.T.R. No. 86 of the 1957.
R.J. Kolah, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the appellants.
K.N. Rajagopala Sastri and D. Gupta, for the respondent.
312 1962, February 19.
S.K. DAS, J. These are two appeals on a certificate of fitness granted by the High Court of Judicature at Bombay under,%.
66A(2) of the Indian Income tax Act, 1922.
The relevant facts which have given rise to them are shortly stated below.
The Indore Malwa United Mills, a limited liability company, is the appellant before us and will be referred to in this judgment as the assessee company.
The respondent is the Commissioner of Income tax(Central), Bombay.
The assessee company carried on a business of manufacture and sale of textile goods.
The manufacture was made at its mills in Indore which was Indian State before integration and had its own law as to income tax known as the Indore Industrial Tax Rules, 1927.
The sales of textile goods were made at various places, some inside and some outside the taxable territories of British India.
For and upto the assessment year 1949 50 the assessee company was treated as a non resident within the meaning of s.4A of the Indian Income tax Act, 1922.
For the assessment years 19 50 51, and 1951 52 which are two assessment years under consideration, the account years were the calendar years 1946 and 1950 respec tively.
Indore became a part of the taxable territories within the meaning of the Indian Income.
tax Act is the two assessment years and the assessee company was held to be "resident and ordinarily resident" with the meaning of that Act.
Upto the assessment year 1949 50 that part of its profits which was received in British India was subjected to tax together with its other income which accrued in British India, namely, interest on securities and interest on bank accounts.
In the assessments made for the assessment years 1948 49 and 1919 50 the 313 position of the assessee company was stated to be as follows: 1948 49 Income tinder the head 'Interest on securities ' .
Rs. 1,032 Income under the head 'Other sources ' interest from banks .
Rs. 231 Rs 1,263 Business loss Rs. 1,992/ .
Balance of lossRs.
729/ carried forward.
1949 50 Interest on securities .
Rs. 1,023 Bank interest .
Rs. 2 13 Rs.1,236 Less : loss of 1948 49 set off .
Rs. 729 Total income .
Rs. 507 In making the calculation of business profits or loss received or arising in the taxable territories, a proportion was struck between the total turn over of the assessee company and its sales the proceeds whereof were received in the taxable territories.
The following table, which is part of the order of assessment of 1950 51, shows clearly how the calculation was made.
314 1 2 3 4 5 Rs. Rs. Rs. Rs. Net profit Deprecia Busi Total of the as per ness turnover Assess company the Indian income of the ment befor al Income of the company year lowance Tax Act com of depre pany ciation (Col.2 minus col.3) 6 7 8 9 Rs. Rs. Rs. Rs. Sales for Business profit other Total in which considered as income come for proceeds having been accruing the prupose were received in the in the of assess received taxable terri taxable ment under in the tories(by appor terri the Indian taxable tioning the tories Icome Tax territories amount in Act.(Col.8) col. 4 in the proportion of col 5: col.6) 315 Daring the course of the assessment proceedings for 1950 51 the assessee company claimed that it was entitled to a set off of the entire losses of the assessment year 1948 49 which it was common ground before the Tribunal, came to Rs. 5,19,590/ , and not merely the proportionate loss.
The assessee company also claimed that the depreciation allowances of the two years 1948 49 and 1949 50 to which effect could not be given in those years and which had, therefore, to be carried forward should be added to the depreciation allowance of 1950 51 and be set off against the profits and gains of the assessee company liable to assessment in the assessment years in question.
It is to be noted that the assessment of the assessee company for the assessment years 1948 49 and 1949 50 was made both under the Indian Income tax Act and under the Indore Industrial Tax Rules, 1927.
Now the assessee company made two claims in the course of the assessment proceedings for 1950 51.
One was with regard to the loss of Rs. 5,19,590/ and the assessee company 's contention was that it was entitled to set off this loss against the profits made in its business in that year and it also contended that it was entitled to carry forward the unabsorbed depreciation into that year.
The first contention of the assessee company was rejected by the Tribunal but the second was allowed.
Two questions were then raised, one at the instance of the assessee company and the other at the instance of the Commissioner, dealing with the aforesaid two claims of the asseessee company.
These two questions were : " 1.
Whether the loss of Rs. 5,19,590/ of the year 1948 49 is liable to be set off against the assessee 's business income for the assess ment years 1950 51 and 1951 52 ? 2.
Whether the unabsorbed depreciation of the years 1948 49 and 1949 50 is liable to 316 be set off against the income of the assessee for the eassessment years 1950 51 and 1951 52.
" On being satisfied that aforesaid two questions arose out of its order, the income tax Appellate Tribunal, Bombay Bench A, referred them to the High Court of Bombay under s, 66(1) of the Indian Income tax Act.
The High Court answered the first question against the assessee company and the second question in its favour by its judgment and order dated September 23, '1958.
The assessee company then moved the High Court for a certificate under section 66A(2) of the Indian Income tax Act with regard to the answer given by the High Court to the first question and having obtained a certificate of fitness has preferred the two appeals to this Court.
We are concerned in these two appeals with the correctness or otherwise of the answer given by the High Court to the first question; the second question does not fall for our consideration.
On behalf of the assessee company section 24(2) of the Indian Income tax Act has been relied on in support of the claim that the assessee company is entitled to carry forward and set off the entire loss of Rs. 5,19,590/ incurred in the year 1948 49 against the assessee company 's business income for the assessment years 1950 51 and 1951 52.
Mr. Kolah appearing on behalf of the assessee company has put his argument in the following way.
First of all, he has submitted that the Income tax Officer wrongly proceeded on the footing as though the assessee company was carrying on two separate businesses, one within the taxable territories and the other outside them.
Mr. Kolah has contended that the business was one business within the meaning of section 10 of the Indian Income tax Act and in the two assessment years in question Indore having become a part of the taxable terri tories provisions in sub section
(2) of section 24 came into operation; therefore, the losses which the assessee 317 company sustained in 1948 49, being a previous year not earlier than the previous year mentioned in the sub section and the losses not having been set off under sub s.(1) of section 24, the assessee company was entitled to carry forward the losses and set them off against the profits and gains of the assessee company from the same business under any other head, as the time limit of six years had not expired.
As against this argument, the contention on behalf Of the respondent has been that s 24 has no application in the facts of the present case inasmuch as in the year 1948 49 in which year the losses had occurred, the assessee company was treated as a nonresident.
On behalf of the respondent it has been submitted that the provisions of section 24 are applicable only to profits and agains which are assessable under the Indian Income tax Act and in the case of non residents who were assessees in British India or in the taxable territories.
The claim to set off is only allowable in respect of loss of profits or gains incurred by the nonresidents under any of the heads mentioned in section 6, and section 24 is applicable only to such loss of profits arid gains which if they had been profits and gains would have been assessable in British India or the taxable territories.
It is contended that in the case of nonresidents, income accruing or arising without British India or without taxable territories is not liable to be assessed and the loss of such profits and gains is not contemplated to be set off within the provisions of sub sections
(1) and (2) of section 24 of the Indian Incometax Act,.
Before we consider these contentions it is necessary to set out the material provisions of the Indian Income tax Act as they stood at the relevant time.
(1) Subject to the provisions of this Act, the total income of any previous year of any person includes all income, profits and gains from whatever source derived 318 which (a) are received or deemed to be received in British India in such year by or on behalf of such person, or (b) x x x x (e) if such person is not resident in British India during such year, accrue or arise or are deemed to accrue or arise to him in British India during such year: x x x 14, (1) x xx (2) The tax shall not be payable by an assessee (a) x x x (b) x x x (c) in respect of any income, profits or gains accruing or arising to him within an Indian State, unless such income, profits or gains are received or deemed to be received in or are brought into British India in the pre vious year by or on behalf of the assessee, or are assessable under section 12B or section 42.
(1) Where any assessee sustains loss of profits or gains in any year under any of the heads mentioned in section 6, he shall be entitled to have the amount of the loss set off against his income, profits or gains under any other head in that year : Provided that, where the lose sustained is a loss of profits or gains which would but for the loss have accrued or arisen within an Indian State and would, under the provisions of clause (c) of subsection (2) of section 14, have been exempted from tax, such loss shall not be set off except against profits or gains accruing or arising within an Indian 319 State and exempt from tax under the said provisions.
x x x (2) Where any assessee sustains a loss of profit or gains in any year, being a previous year not earlier than the previous year for the assessment for the year ending on the 31st day of March, 1940, under the head "Profits and gains of business, profession or vocation", and the lose cannot be wholly set off under sub section (1) the portion not so set off shall be carried forward to the following year and set off against the profits and gains, if any, of the assessee from the same business, profession or vocation for that year; and if it cannot be wholly so set off, the amount of loss not so set off shall be carried forward to the follow ing year, and so on; but no loss shall be so carried forward for more than six years: Provided that (a) Where the loss sustained is a loss of profits and gains of a business, profession or vocation to which the first proviso to sub section (1) is applicable and the profits and gains of that business, profession or vocation are, under the provisions of clause (c) of sub section (2) of section 14, exempt from tax, such loss shall not be set off except against profits and gains accruing or arising in an Indian State from the same business, profession or vocation and exempt from tax under the said provisions; (b) Where depreciation allowance is, under clause (b) of proviso to clause (vi) of sub section of section 10, also to be carried forward, effect shall be given to the provisions of this sub section; x x x It may perhaps be stated here that Mr. Kolah has placed no reliance on the provisions of the Taxation Laws (Part B States) (Removal of 320 Difficulties) Order, 1950.
Clause 3 of the said Order provides that losses suffered in Indian States can be carried forward and set off only if under the State law they could be so carried forward or set off.
Admittedly, Under the Indore Industrial Tax Rules, 1927 there was no provision for the carrying forward of losses; therefore, cl. 3 of the Taxation Laws (Part B States)(Removal of Difficulties) Order, 1950 was of no assistance to the assessee company.
This view of the High Court has not been contested before us and we need, therefore, make no further reference to this aspect of the case.
The answer to the question which we have to consider depends on the true scope and effect of section 24 of the Indian Income tax Act.
Under the Indian Income tax Act, 1922, assessees are divided into three categories (a) resident and ordinarily resident, (b) resident but not ordinarily resident, and (c) not resident.
We are concerned in the present ' case with, an assessee who in the year in which the loss which is sought to be carried forward occurred, was a nonresident.
Sub section (1) of s.4, the material portion of which we have quoted earlier, states that person Who are not resident in India ire liable to charge under cl.
(a) or cl.(c) of the said subsection.
They may be taxed under cl.
(a) on income received or deemed to be received in India even if it accrues elsewhere, or under on income which accrues or arises or is deemed to corue or arise in India even if it is received elsehere.
The liability to tax in respect of income received in India is common to both residents and non residents and is imposed by the general clause (a).
A non resident, unlike a resident, is not argeable in respect of income accruing or arising without India and not received in India.
Section 4(2) (c), which is now deleted, had great importance when British India was distinct from Indian states, because it exempted income which accrued 321 or was received in the Indian States but was not brought into British India.
The deletion of this clause became inevitable upon,the merger of the Indian States.
This clause which wan inserted in 1941 exempted income accruing or arising within the Indian States; but the exemption did not apply if the income was received or deemed to be received in or was brought into the taxable territories in the previous year by or on behalf of the assessee or if the income was assessable under section 128 or section 42.
The Position, therefore, was that losses made in British India could not be reduced by adjusting against them the profits in the Indian States which were exempted under the clause, but the income exempted from the clause had,, however, to be included in the assessee 's total income for the purpose of determining the rate applicable to his taxable income.
But so far as a non resident was concerned the clause had no application, because a nonresident was not chargeable in respect of ' income accruing or arising without India and not received in India.
Now, we come to section 24, sub ss.(1) and (2) with the provisos appended thereto which we have quoted earlier in this judgment.
It appears that prior to 1950 profits accruing in the Indian States, later called Part B States, were exempt from tax under section 14(2)(c), unless they were, received in or brought into the territories then referred to as British India or were assessable under section 128 or section 42.
The first proviso to sub s.(1) as it stood at the relevant time dealt with losses accruing in the qaondam Indian States and provided that losses incurred in the Indian States should be set off only against profits accruing in the Indian States.
This was a reasonable provision, because an assessee who was not liable to tax in respect of his profits arising in the Indian States could not be allowed to set off his losses incurred in the Indian States against his profits arising in British India.
that losses incurred in an Indian State could be Similarly cl.(a) of the provision to sub s.(2) enacted that losses incurred in an Indian State could be 322 carried forward and set off only against profits accruing in an Indian State from the same business in a Subsequent year.
The argument on behalf of the respondent is that so far as a non resident is concerned, he is not chargeable in respect of income accruing or arising without India and not received in India.
Therefore, in his case it is unnecessary to go to the provisos, but section 24 itself has no application because sub section
(1) of section 24 when it refers to loss of profits or gains, has reference to taxable profits or taxable gains and sub s.(2) of section 24 can only be applied in a case where the loss cannot be set off under sub s.(1) because of the absence or inadequacy of profits etc.
In other words, the argument is that section 24 is applicable only to such loss of profits and gains which if they had been profits and gains would have been assessable in British India or the taxable territories; but in the case of nonresidents, income accruing or arising without British India or without the taxable territories not being liable to be assessed, the loss of such profits and gains is not contemplated to be set off within the provisions of section .24, sub sections
(1) and (2).
Mr. Kolah has pointed out that sub s.(2) of section 24 as also sub s.(1) talk of "any assessee" and he has argued that there is no reason why the provisions of sub s.(2) of section 24 should not the applicable to a non resident assessee.
He has further argued that whatever might have been the effect of the provisos in 1948 49, in 1950 51 Indore became part of the taxable territories and the assessee company became entitled to carry forward the losses up to six years and there is nothing in section 24(2) to prevent ' him from making the claim.
We are unable to accept this argument as correct.
Reading the provisions in section 24 with the provisions in s.4(1)(a) and section 1.4(2)(c) it seems clear to us that section (24)(1) when it talks of profits or gains has reference to 323 taxable profits or taxable gains in other words, it has reference to such profits and gains as would have been assessable in British India or the taxable territories.
It has no reference to income accruing or arising without British India or without the taxable territories which were not liable to be assessed in the case of non residents.
We are further of the view that for determining the nature of the losses under consideration in the present appeals, the relevant year was 1948 49, the year in which the losses occurred and the High Court rightly took the view that for the application of sub section
(2) of section 24, the losses must be such losses as could have been set off under sub s.(1) of section 24.
We agree with the view expressed by the High Court that the loss &mounting to Rs. 5,19,590/ was not such a loss as could have been set off either under sub section
(1) or sub section
(2) of section 24.
We have, therefore, come to the conclusion that the High Court correctly answered the question which was referred to it.
Accordingly, the appeals fail and are dismissed with costs, one hearing fee.
Appeals dismissed.
| The assessee company carried on a business of manufacture and sale of textile goods.
The manufacture was made at its mills in Indore which was an Indian State before integra tion and had its own law as to income tax known as the Indore Industrial Tax Rules, 1927.
The sales of textile goods so manufactured were made at various places, some inside and some outside the taxable territories of the then British India.
For and upto assessment year 1949 50 the assessee company was treated as a non resident.
Indore became a part of the taxable territories within the meaning of the Indian 311 Income tax Act, 1922 in the two assessment years 1950 51 and 1951 52 and the asscssee company was held to be "resident and ordinarily resident" within the meaning of that Act.
Upto the assessment year 1949 50 that part of its profits which was received by the assessee company in British India was subjected to tax together with it.
,; other income which accrued in British India.
In making the calculation of business profits or loss received or arising in the taxable territories, a proportion was struck between the total turnover and its sales the proceeds whereof were received in the taxable territories.
The assessee company raised two questions in the course of the assessment proceedings, one of which with regard to the entire loss of Rs. 5,19,590/ of the year 1948 49 which it claimed to set off against the profits made in its business in the two assessment years.
The assessee company contended that the business was one and under section 24 it was entitled to set off the losses which it had sustained in 1948 49.
The High Court decided this question against the assessee company, but gave a certificate under section 66A of the Act.
Held, on appeal, that the High Court correctly answered the questions the provisions of section 24 of the Act read with the provisions in section 4(1) (a) and (c) and section 14(2)(c) make it clear that sub s(1) of s: 24 when it talks of profits or gains has reference to taxable profits or taxable gains ; it has no reference to income accruing or arising without the taxable territories which were not liable to be assessed in the case of non residents.
In determining the nature of the losses under consideration in these appeals the relevant year was 1948 49, the year in which the losses occurred, and the High Court rightly took the view that for the application of sub s (2) of section 24, the losses must be such losses as could have been set off under sub s.(1) of section 24.
| The appellant, a registered dealer under the Punjab General Sales Tax Act, 1948 despatched some part of the manufactured goods outside the state, without paying the tax on the taxable raw material consumed in the manufacture of such goods.
The assessing authority issued a show cause notice for the assessee 's failure to pay the said tax.
Interest was also demanded on the tax amount.
The assesses disputed its liability to pay penalty and interest on the amount of tax withheld on the plea that there was no wilful default on its part, as it was under a bona fide belief that no tax was to be paid on the raw material used in the manufactured goods sent outside State.
The assesses further stated that it had acted on legal advice that it was not liable to pay any Purchase Tax and, therefore, in the absence of a clear intention to avoid the payment of tax, there could be no question of imposition of penalty and demand for interest.
The assessee 's submissions did not find favour with the Revenue, as also the Tribunal, and the assesses sought a reference to the High Court under section 22(1) of the Act.
But the Tribunal rejected application for reference.
Thereafter the assesses preferred appeals to this Court, against the Tribunal 's rejection of reference as also the Tribunal 's order in appeal.
On behalf of the appellants, it was contended that the main question involved in this case is concluded by several decisions of this Court, and it was not liable to pay the tax, as demanded by the Revenue.
On behalf of the Revenue it was contended that the assesses was liable to pay the tax on the raw materials used in the manufactured goods sent outside the State.
Allowing the appeals, this Court, 348 HELD: 1.1 Under Section 4B of the Punjab General Sales Tax Act, 1948 the tax becomes exigible not on the purchase of the raw material or on the use thereof in the manufacture of a new and distinct commodity but only after the goods so manufactured are despatched to a place outside the State.
Once the goods are sent outside the State the purchaser is made liable to pay the tax at the rate prescribed on the purchase of such goods provided no tax is payable on the purchase thereof under any other provision of the Act.
It is obvious that the tax though described as purchase tax is in effect a tax on consignment since it becomes effective on the happening of an event which has nothing to do with the actual purchase.
Even if the raw material is used in the manufacture of any taxable goods, the purchaser does not become liable to pay tax on the raw material until the manufactured item is sent out of the State.
And between the manufacture of the goods out of the purchased raw material and their actual despatch outside the State there may be a long time gap.
The liability of tax only after despatch of the manufactured goods outside the State and that event may have no relation to the actual purchase or manufacture.
That being so, the tax though described as a purchase tax is actually a tax on the consigmment of the manufactured goods, the levy of which is beyond the competence of the State as the power to impose such tax is vested in Parliament by virtue of clause (h) of Article 269(1) of the Constitution read with Entry 92B in Schedule 7, List 1.
[352H; 353A E; 354B] 1.2.
Even though the language of section 4B of the Act is not identical to section 9(1) of the Haryana Sales Tax Act, it is in substance similar in certain respects, particularly in respect of the point of time when the liability to pay tax arises.
Under that provision also the liability to pay purchase tax on the raw material purchased in the State which was consumed in the manufacture of any other taxable goods arose only on the despatch of the goods outside the State.
[353D E] M/s. Goodyear India Ltd. vs State of Haryana, ; ; applied.
State of Tamil Nadu vs M. K. Kandaswami etc., [ 19761 1 SCR 38; referred to.
Since the Revenue was not entitled to levy the tax which it purported to levy as purchase tax on the raw material, there can be no question of imposition of penalty or interest on the unpaid amount of tax.
Therefore, the action taken in exercise of power under section 10(6) and section 11D of the Act cannot be allowed to stand.
[354G H] 349
| The appellant used to invest his cash surplus in shares and securities and maintained an account book called Book No. 1 relating thereto.
During the period from 1930 to 1941 42 he purchased a large number of shares and securities which by the accounting year 1941 42 were of a value Rs. 1491 lacs.
He sold certain shares and securities of the value of several lacs and made certain amount of profit on those sales.
In 1940 the appellant borrowed a large amount of money from his brother, the Maharaja of Darbhanga and opened a new account named account No. 2 which contained all entries regarding shares purchased and sold out of the money borrowed from the Maharaja.
In the assessment year 1944 45 to 1948 49 the profits made by the (1) ; 288 appellant from purchase and sale of shares amounted to several lacs and the Income tax Officer held those to be liable to income tax as business profits.
The Appellate Assistant Commissioner upheld the assessments but excluded the profits for the years 1944 45.
On appeal by both the parties the Appellate Tribunal held on the evidence that the appellant was to be regarded as a dealer in shares and securities and therefore the profits were assessable to income tax.
The High Court stated the following two questions under section 66(2) of the Income tax Act and answered them in the affirmative: "(1) Whether in the circumstances of the case, there is material to support the finding of the Appellate Tribunal that the assessee was a dealer in shares and securities with respect to each of the account and, therefore, liable to be taxed? (2)Whether having regard to the finding of the Appellate Tribunal in respect of 1941 42 assessment, it was open to the Appellate Tribunal in the present case to hold that the profits and transactions of sale and purchase of shares and securities amounted to profits of business and so liable to be taxed?" On appeal by special leave the appellant contended inter alia, that being a Zamindar the buying and selling of shares was not his normal activity and he did not carry on any such business but his purchases and sales were in the nature of investments of his surplus monies and therefore the excess amounts received by sales were capital receipts being merely surplus and not profits.
Held, that on the materials produced and on the facts proved the appellant must be held to have been rightly assessed.
The principle applicable to such transactions is that when an owner of an ordinary investment chooses to realise it and obtains a higher price for it than the original price paid by him, the enhanced price is not a profit assessable to income tax, but where as in the present case what is done is not merely a realisation or a change of investment but an act done in what is truly the carrying on of a business the amount recovered as appreciation will be assessable.
G.Venkataswami Naidu & Co. vs The Commissioner of Income tax, [1959] Supp. 1 S.C.R. 464, Oriental Investment Company Ltd. vs The Commissioner of Income tax, ; , Raja Bahadur Kamakshya Narain Singh vs Commissioner of Income tax, Bihar and Orissa, (1943) L.R. 70 I.A. 180, discussed.
The substantial nature of the transactions, the manner in which the books were maintained, the magnitude of the shares purchased and sold and the ratio between the purchases and sales and the holding justified tile Tribunal to come to the conclusion that the appellant was dealing in shares as business.
The High Court could not interfere with those findings and it rightly answered the questions in the affirmative.
There is no such thing as res judicata in income tax matters 289 and it was quite open to the Appellate Tribunal to give the finding that it did.
| A public notice under section 22(1) of the Income tax Act, 1922 was published on May 1, 1045, requiring every person whose total income exceeded the maximum amount which was not chargeable to income tax to file returns for the assessment year 1945 46.
On January 5, 1950, the assessee submitted a voluntary return showing an income of Rs. 1,935 for the assessment year 1945 46 and added a footnote to the return that his wife had sold her old ornaments and deposited a sum of Rs. 59,026 with the Assar Syndicate in which he was a partner.
The Income tax Officer, who had discovered these credits while examining the accounts of the Assar Syndicate, ignored the voluntary return, and, on February 27, 1950, issued a notice under section 34(1) of the Act calling upon the assessee to submit his return.
On March 14, 1950, the assessee submitted an identical return.
The Income tax Officer made the assessment on February 26, 1951, and included the sum of Rs. 59,026 in the total income of the assessee.
The assessee contended that the assessment was invalid as it was completed more than four years after the end of the assessment year in violation Of section 34(1)(b).
The appellant contended that the voluntary return was no return as it did not disclose any taxable income and the assessment was valid under the proviso to section 34(3) Of the Act, having been made within one year of the notice issued under section 34(1).
Held, that the assessment was invalid.
The voluntary return filed by the assessee, even though it did riot disclose any taxable income, was a good return and could not be ignored.
As such no question arose under section 34(1) of income escaping assessment and the Income tax Officer was not justified in issuing the notice under section 34(1).
The proviso to section 34(3) was applicable only when there was a Proper notice issued under section 34(1) and the appellant could not take advantage of the time allowed by this proviso.
The assessment was clearly made beyond four years of the end of the assessment year 1945 46 and was time barred.
Harakchand Makanji & Co. vs Commissioner of Income tax, All India Groundnut Syndicate Ltd. vs 115 Commissioner of Income tax, (1953) 25 I.T.R. go and P. section Rama Iyer vs Commissioner of Income tax, (1957) 33 I.T.R. 458, approved.
Commissioner of Agricultural Income tax vs Sultan Ali Gharami ; B. K. Das & Co. vs Commissioner of Income tax, and Commissioner of Income tax vs Govindlal Dutta (1957) 33 ; , disapproved.
| This was an appeal on a certificate of fitness granted by the High Court against its judgment on a reference made under Section 66(1) of the Indian Income tax Act ("the said Act").
The appellant/assessee owned some agricultural land, which the assessee developed into building sites.
The assessee leased out the building sites to various parties.
The leases were for 99 years.
The assessee received amounts of 'salami ' or premium for the said leases.
Question arose whether the assessee was liable to pay capital gains tax on the amounts of 'salami ' or premium received.
The assessee contended before the Income tax Officer that no capital gains tax could be levied on the said leases as the land was agricultural and that Section 12 B of the said Act did not come into play as only lease hold rights had been conveyed by the assessee to the lessees under the leases in question.
Both these contentions were rejected by the Income tax Officer, the Appellate Assistant Commissioner and the Income tax Appellate Tribunal.
Arising from the decision of the Tribunal, two questions were referred to the High Court, viz. (1) Whether the land sold by the assessee constituted a capital asset within the meaning of Section 12 B of the said Act or was agricultural land as defined in Section 2(4A) of the Act, and (2) Whether the transaction of lease effected by the assessee amounted to a transfer within the meaning of Section 12 B of the said Act so as to attract liability for capital gains tax.
The High Court answered both the questions in the affirmative and against the assessee.
Leave was granted by the High Court to the assessee to appeal to this Court only in respect of the second question.
990 The appellant assessee had contended that Section 12 B of the said Act could have no application as the land in question was Inam land which must have been granted as a pure gift., to the ancestor of the assessee, and that Section 12 B was applicable only in the case of assets where there was a cost of acquisition.
The respondent had urged that the assessee could not raise this contention as it did not arise out of the decision of the Tribunal and was not reflected in the questions referred by the Tribunal particularly in the question in respect of which the certificate of appeal had been granted.
The Court dismissed the appeal upholding the submissions of the respondent.
It was, ^ HELD:that the question in respect of which certificate of fitness had been granted, clearly related to one controversy, namely, whether the provisions of Section 12 B could be brought into play in this case as the transfer was of lease hold interest in immovable property for 99 years and not an outright sale or transfer of the complete interest of the transferor in the immovable property.
The question as to whether Section 12 B could be brought into play where the property sold had not cost anything to acquire as it was gifted, had not been urged before the income tax authorities, the Tribunal or the High Court and was not covered by the decision of the Tribunal or the High Court.
This case fell within the category of cases where the question of law concerned is neither raised before the Tribunal nor considered by it, and in such a case the question would not be a question arising out of the order of the Tribunal notwithstanding that it may arise on the findings given by it, as held by this Court in Commissioner of Income Tax, Bombay vs Scindia Steam Navigation Co. Ltd., ; Merely because a question of law might arise on the facts found by the Tribunal, this would not render it a question arising out of the decision of the Tribunal.
[995B C,G] As regards the question whether the provisions of Section 12 B could be brought into play, although what was transferred was only lease hold interest in the lands in question, it was significant that the leases were for a long period of 99 years and in all the transactions of lease, premium had been charged by the assessee for the grant of the lease concerned.
Under the leases, the assessee had parted with an asset of an enduring nature, namely, the rights to possession and enjoyment to the properties leased for 99 years subject to certain conditions regarding termination of the leases.
It could not be said that the provisions of Section 12 B of the said Act could not be brought into play.
The grant of the leases amounted to a transfer of capital assets as contemplated under Section 12 B of the said Act.
[996G H;997A B] 991 C.I.T. vs Srinivasa & Setty, ; ; Commissioner of Income Tax, Bombay vs Scindia Steam Navigation Co. Ltd., [1961] 42 ITR p. 589 and Traders and Miners Ltd. vs Commissioner of Income Tax, Bihar and Orissa, , referred to.
| The assessee company went into liquidation on August 8, 1960.
The Income tax officer, while determining the taxable income of the assessee company at Rs. 5,79,978 for the assessment year 1963 64, was of the opinion that this amount would attract liability for super profits tax also and therefore asked the assessee company to file its return.
The assessee company submitted its return showing the chargeable profits as 'nil ', contending that there could be no liability to super profits tax in respect of a company in liquidation since the formula laid down in the Second Schedule to the for calculation of the 'standard deduction ' was inapplicable on account of the fact that a company in liquidation could not be said to have paid up share capital as on the first day of the previous year relevant to the assessment year which was long subsequent to the winding up.
The Income Tax officer however overruled the aforesaid contention and worked out the chargeable profits at Rs. 2,04,740 after adopting a minimum amount of Rs. 50,000 mentioned in s.2 (9) of tho Act as a "standard deduction".
The said order was confirmed in appeal by the Appellate Assistant Commissioner.
But, on further appeal by the assessee company the Income tax Appellate Tribunal while allowing the appeal held: (1) that in the hands of the liquidator there is only one integral fund which could not be split up into share capital, reserve profits and therefore s.27 of the Act was clearly attracted to the case; and (ii) that no assessment to super profits could be made on a company in liquidation since section 4 of the Act would not apply to the assessee company in liquidation as the standard deduction was incapable of ascertainment.
The High Court, rejected the reference made at the instance of the Revenue.
972 Dismissing the appeal by the Revenue, ^ HELD: (1) After a company has gone into liquidation it cannot be said that as on the first day in any subsequent year forming the previous year relevant to the assessment year, there exists in the hands of the liquidator any amount distinctly forming the paid up share capital of the company or any sum that can be characterized as "reserve.
" The distinction between capital, reserve and tho accumulated profits disappears in respect of a company in liquidation after the date of its winding up and there is only one integrated or consolidated fund in the hands of the liquidator.
The concept of a fluctuating share capital or reserve which is the basic premise necessary to attract the applicability of rule 1 of the Second Schedule is wholly foreign in respect of a company in liquidation.
[977H; 978E F] (2) It is clear from the definition of "standard deduction" that for the purpose of calculation of "standard deduction" one has to ascertain the capital of the company as computed in the manner specified in Second Schedule.
But, it is important to notice from the terms of Rule I of Second Schedule that unless the company can be said to have a paid up share capital as on the first day of the previous year relevant to the assessment year the formula laid down in the rule for computation of capital of the company cannot have any application and the calculation of "standard deduction" being based wholly on the capital of the company, it becomes wholly incapable of ascertainment.
[976B; 977F G] Commissioner of Inland Revenue vs George Burrell, 1924 2 [K.B.] 52, 63 and Birch vs Cropper [1889] L.R. 14 App.
525, 546 referred to.
Commissioner of Income tax vs Girdhars and Co. Private Ltd, ; followed.
(3) Under the scheme of the Income tax Act 1961, charge of tax will not get attracted unless the case or transaction falls under the governance of the relevant computation provisions.
The character of the computation provisions in each case bears a relationship to the nature of the charge.
Thus, the charging section and the computation provisions together constitute an integrated code.
When there is a case to which the computation provisions cannot apply at all.
it is evident that such a case was not intended to fall Within the charging section.
The scheme of the being similar to that of the Income tax Act 1961, it has to be held that inasmuch as the provisions contained in the Act for computing the capital of the company and its reserves and cannot have any application in respect of a company in liquidation and consequently the 'standard deduction ' is incapable of ascertainment, the charge of super profits tax under section 4 of the Act is not attracted to such a cases.
[978G H ; 979A C] Commissioners of Income tax, Bangalore vs B.C. Srinivasa Setty; , ; referred to.
| The assessee, a partnership firm, enjoyed the status of a registered firm for the assessment years 1960 61, 1961 62 and 1962 63.
In the assessment proceedings for the year 1962 63 the assessee claimed that a loss of Rs.60,054 suf fered in the speculation business in the assessment year 1960 61 and the loss of Rs.6,839 suffered in the assessment year 1961 62 should be set off against the speculation profit of Rs.58,102 for the assessment year 1962 63.
The Income Tax Officer rejected the assessee 's claim holding that as the assessee was a registered firm, the losses could be carried forward and set off only by the partners and not by the firm.
The appeal by the assessee before the Assistant Appellate Commissioner was dismissed.
In the appeal to the Tribunal, the Tribunal held that the right to carry forward the losses relating to the as sessment years 1960 61 and 1961 62 was governed by the Indian Income Tax Act, 1922 and that section 75(2) of the Income Tax Act, 1961 which was applicable to the assessment year 1960 61 had no application in the facts of this case; that when an Act was passed repealing an earlier enactment, it could not be said to supersede any right already accrued under the repealed enactment unless there was something in the repealing Act to indicate that clearly and, therefore, the assessee was entitled to have the losses brought forward from the preceding two years and set off against the profits earned for the year 1962 63.
In the Reference, the High Court held: (1) that a right had 943 accrued to the assessee by virtue of 1922 Act which entitled him to have the losses from speculation business in respect of the assessment year 1960 61 and 1961 62 to be carried forward and set off against the profits in speculation business of future years; (2) that was a right which had accrued to it before the 1961 Act was brought into force; (3) that by virtue of section 6 of the General Clauses Act that right continued to subsist and (4) that the Tribunal was right in holding that the assessee was entitled to set off the speculation losses suffered in the assessment years 1960 61 and 1961 62 against the speculation profits of the assessment year 1962 63.
Dismissing the Appeal of the Revenue, HELD: 1.
The Allahabad High Court was in error in the view it took in the decision in Commissioner of Income Tax, Kanpur vs Mangi Ram Gopichand, but it was right in the judgment under appeal and the question was properly answered.
[951 G H] 2.
The right created by the operation of section 24(2) of 1922 Act is a vested right.
[951 A B] Gujarat Electricity Board vs Shantilal R. Desai, ; at 587 and Isha Valimohamad & Anr.
vs Haji Gulam Mohamad & Haji Dada Trust, [1975] 1 S.C.R. 720 at 723, referred to.
Under the Income Tax Act of 1922, the assessee was entitled to carry forward the losses of the speculation business and set off such losses against profits made from that business in future years.
The right of carrying forward and set off accrued to the assessee under the Act of 1922.
A right which had accrued and had become vested continued to be capable of being enforced notwithstanding the repeal of the statute under which that right accrued unless the re pealing statute took away such right expressly or by neces sary implication.
This is the effect of section 6 of the .
[951B D] 4.
Whatever rights are expressly saved by the 'savings ' provision stand saved.
But, that does not mean that rights which are not saved by the 'saving ' provision are extin guished or stand ipso facto terminated by the mere fact that a new statute repealing the old statute is enacted.
Rights which have accrued are saved unless they are taken away expressly.
This is the principle behind section 6(c) of the .
[951E F] 944 5.
The right to carry forward losses which had ac crued under the repealed Income Tax Act of 1922 is not saved expressly by section 297 of the Income Tax Act, 1961.
But it is not necessary to save a right expressly in order to keep it alive after the repeal of the Old Act of 1922.
Section 6(c) of the saves accrued rights unless they are taken away by the repealing statute.
Taking away of any such rights by section 297 either expressly or by implication is not found.
[951 F] Commissioner of Income tax Kanpur vs Mangiram Gopi Chand, , overruled.
State of Punjab vs Mohar Singh, ; ; Reliance Jute Mills Co. Ltd. vs Commissioner of Income tax, ; Helen Rubber Industries Ltd. vs Commissioner of Income Tax, Mysore Travancore Cochin and Coorg., and Karimtharuvi Tea Estate Ltd. vs State of Kerala, ; , referred to.
T.S. Baliah vs
T.S. Rangachari, Income tax Officer, Central Circle VI.
Madras, and Commissioner of Income tax (Central), Calcutta vs
B.P. (India) Ltd., , followed.
| The question for determination in these two appeals was whether the appellant firms were entitled to registration under section 26A of the Indian Income tax Act and the common point of law involved was the interpretation of the words " constituted under an instrument of partnership " occurring in that section.
In Appeal No. 85 the assessee firm was said to have been constituted by a verbal agreement in April, 1948, and the deed of partnership was drawn up in September, 1949.
The application for registration under section 26A of the Act for the assessment year 1949 1950 was made thereafter to the Income tax Officer.
In Appeal NO. 389 the assessee firm was verbally constituted in 81 642 June, 1944, and a memorandum of partnership was executed in June 1948.
The application for registration under section 26A for the assessment years 1945 46 and 1946 47 was made on August 24, 1949.
The applications were rejected by the Income tax Officer and the appeals preferred by the assessees were also dismissed by the Income tax Appellate Tribunal.
The High Court took the view that section 26A of the Indian Income tax Act contemplated a firm created or brought into existence by an instrument of partnership and answered the questions against the assessees.
It was contended on their behalf that solong as the assessment was not made, they were entitled to registration irrespective of the year in which the instrument of partnership came into existence.
This was controverted on behalf of the Revenue and their case was that a firm seeking registration under section 26A of the Act should be created by an instrument of partnership, or at any rate, such instrument should be in existence during the relevant accounting year, i. e. the year previous to the year of assessment in respect of which the application for registration was made.
Held, that the words " Constituted under an instrument of partnership occurring in section 26A of the Indian Income tax Act included not only firms that were created by instruments of partnership but also those that were subsequent to their creation, clothed in legal form by reducing the terms and conditions of the partnership in writing.
Dwarkadas Khetan & Co. vs Commissioner of Income tax, Bombay City, Bombay, , approved.
Kalsi Mechanical Woyks, Nandpur vs Commissioner of Income tax, Simla, , Padam Parshad Rattan Chand vs Commissioner of Income tax, Delhi, , Bery Engineering Co., Delhi vs Commissioner of Income tax, Delhi, , Income tax Commissioner, Delhi vs Messrs. Birdhi Chand Girdhari Lal, and Khimji Walji & Co. vs Commissioner of Income tax, Bihar and Orissa, , dissented from.
Section 26A, read with SS. 26, 28 and Rules 2 to 6B, laid down the following essential conditions that a firm must fulfil before it could claim registration under section 26A of the Act (1) that it must be constituted under an Instrument of Partnership, specifying the individual shares of the partners; (2) that an application on behalf of and signed by, all the partners, containing all the particulars as set out in the Rules, must be made; (3) that the application must be made before the assessment of the income of the firm was made under section 23 Of the Act for that particular year; (4) that the profits (or loss, if any) of the business relating 643 to the previous year, i. e., the relevant accounting year, must be divided or credited, as the case may be, in accordance with the terms of the Instrument ; and lastly, (5) that the partnership must be genuine and in actual existence in conformity with the terms and conditions of the Instrument.
Where, therefore, as in the instant cases, the partnership did not admittedly function in terms of an instrument of partnership which was operative during the accounting year, it could not be registered during the following assessment year.
Commissioner of Income tax, Bombay North vs Shantilal Vrajlal & Chandulal Dayalal & CO. , dis approved.
Per M. HIDAYATULLAH, J. While it was clearly not possible to read " constituted by " for the words " constituted under " occurring in section 26A of the Act, it was doubtful whether the instrument of partnership sought to be registered must be in existence in the accounting year in order to entitle it to registration.
Dwarkadas Khetan & Co. vs Commissioner of Income tax, Bombay City, Bombay, , referred to.
|
section 82 of 1960 and 148, 168 to 174 and 357 to 361 of 1961.
Petition under article 32 of the Constitution of India for the enforcement of Fundamental Rights.
WITH Civil Appeals Nos. 453 to 474 of 1961.
Appeals from the,, judgment and order dated May 25.
1959, of the Punjab High Court in Civil Writ Nos.
428, 303, 398, 402, 459 to 462, 421, 472, 473, 475, 490, 503, 509, 519, 520, 555, 590, 710 and 712 of 1958.
AND Civil Appeal No. 50 of 1962.
Appeal by special leave from the judgment and order date(] May 25, 1959, of the Punjab High Court in Civil Writ No. 347 of 1958.
Achhru Ram and Naunit Lal,for the petitioner (in Potn.
No. 82 of 60) and the appellant (in C. A. No. 50 of 62).
348 I. N. Shroff, for the petitioners (in Petn.
No. 148 of 61) and the appellants (in C. As.
457 to 474.
of 61).
Hardev Singh and Y. Kumar, for the petitioers (in Petns.
168 to 174 and 357 to 361 of 61).
C. K. Daphtary, Solicitor General of India, K. L. Gosain, B. R. L. Iyengar, Lakshmi Chand and I. N. Shroff, for the appellants (in C.As.
Nos 453 and 456 of 1961).
K. L. Gosain, B. R. L. Iyengar, Lakshmi Chand and I. N. Shroff, for the appellants I in C. A. No. 454 of 196 I).
B. R. L. Iyengar, Lakshmi, Chand and I.N.Shroff, for the appellants (in C. A. No. 455 of 1961).
S.M. Sikri, Advocate General, for the State of Punjab N. section Bindra and P. D. Menon, for the respondents (in all petitions and Civil Appeals).
M. C. Setalvad, Attorney General of India, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for Intervener No.1 (Satinder Singh).
K. L. Mehta, for Intervener No. 2 (Raghuvinder Singh and others).
February 20.
The Judgment of the Court was delivered by VENKATARAMA AIYAR, J.
The question that rises for our decision in the above writ petitions and appeals is whether certain jagirs in the State of Punjab known as the "Cis Sutlej" jagir are liable to be resumed under the provisions of the Punjab Resumption of Jagirs Act, 1957 (Punjab Act No. 39 of 1957), hereinafter referred to as "the Act".
This Act came into force on November 14, 1957, and the respondent State then proceeded to take action thereunder for resuming the jagirs.
A number of petitions were thereupon filed in the 349 High Court of Punjab under article 226 of the Constitution challenging the validity of the Act and of the proceedings taken by the respondent State thereunder on the ground, firstly, that the Act was ultra vires the powers of the State Legislature and that its provisions were unconstitutional and void ; and, secondly, that even if the Act was intra vires the jagirs held by the petitioners were not "jagirs" as defined in the Act, and were therefore not liable to be resumed under its provisons.
By their judgment dated May 25, 1959, the learned Judges held that the legislation was within the competence of the State, and that it did not contravence any of the constitutional provisions.
They further held that the jagirs held by the petitioners fell within the definition of "jagir" under the Act, and were liable to be resumed thereunder, and that accordingly no writ could be issued against the State for proceeding under the provisions of the Act.
By their Order dated January 27, 1960, the learned Judges granted leave to appeal to this Court under article 133 (1) (a), and pursuant to the same, Civil Appeals Nos. 453 to 474 of 1961 have been preferred to this Court.
Appeal No. 50 of 1962 by special leave is also directed against the judgment of the Punjab High Court in a Writ Petition tinder article 226.
Some of the jagirdars have also filed petitions in this Court under article 32) of the Constitution, impugning the Act and the action of the State thereunder on the same grounds as those raised in the appeals.
We have accordingly heard arguments of learned Counsel both in the writ petitions and in the appeals, and this Judgment will govern all of them.
Though a number of grounds have been taken in the pleadings, impugning the Act as ultra vires and its provisions as unconstitutional, in the argument before us, the only contention that was pressed was that the Cis Sutlej jagirs do not fall 350 within the definition of jagirs contained in the Act and that accordingly the State had no authority to resume them under the provisions of the Act.
And this contention is sought to be sustained on two ground: (i) that there was at no time any grant of the Cis Sutlej jagirs to their holders, much less any assignment of land revenue to them; and (ii) that even if there was such a grant, it was not one made by or on behalf of the State Government as required by section 2 (1).
It is argued that if either of these contentions succeeds, the jagirs in question would fall outside the purview of the Act, and the State would have no right under its provisions to resume them.
It will be convenient at this stage to set out the relevant provisions of the Act.
Section 2 (1) defines "jagir" as follows: " "jagir" means (a) any assignment of land revenue made by or on behalf of the State Government; or (b) any estate in land created or affirmed by or on behalf of the State Government carrying with it the right of collecting land revenue or receiving any portion of the land revenue; or (c)any grant of money made or continued by or on behalf of the State Government which purports to be or is expressed to be payable out of the land revenue; or (d) any grant of money including anything payable on the part of the State Government in respect of any right, privilege, perquisite or office; and includes any such grant or assignment existing in favour of Cis Sutlej jagirdars.
" 351 "Jagirdar" is defined in section 2 (2) as meaning the holder of a jagir.
Section 2 (5) defines State Government as follows: "State Government" (a) as respects any period before the 1st November 1956, shall mean: (i) the Government of the Patiala and East Punjab State Union or any of the Indian States which formed into the Patiala and East Punjab States Union on the 20th August, 1948 and (ii) the Government of the State of Punjab and all predecessor Governments thereof by whatever name called, the Governor General or the Governor General in Council, as the case may be, and the Sikh Rulers, but shall not include the Central Government as defined in the , after the period commencing on the 15th August, 1947.
(b) as respects any period after the 1st November, 1956 shall mean the Government of the State of Punjab.
" Section 3 enacts that "Notwithstanding anything to the contrary contained in any law or usage any grant settlement, sanad or other instrument, or any decree or order of any Court or authority, all jagirs shall, on and from the commencement of this Act, be extinguished and stand resumed in the name of the State Government.
It is common ground that the jagirs which are concerned in the present writ petitions and appeals consist of a right to the revenue payable, on lands, and not of any estate such as will fall under section 2 (1) (b) of the Act and that they must fall, if at all within section 2 (1) (a).
Therefore the discussion narrows 352 itself to the question whether there was, as required by section 2 (1) (a) of the Act, any assignment of the revenue of these jagirs and whether such assignment was by the State Government.
On the first question, as to whether there was assignment of land revenue, the contention of the petitioners and of the appellants and they will hereafter be referred to compendiously as jagirdars is that the so called jagirs are not jagirs as ordinarily understood, that they were not the subject matters of any grant by any State that they were in fact originally independent States held by rulers with sovereign rights, that in course of time the British Government imposed their sovereignty over them, and finally took over the administration of the State and paid the revenue collected therefrom to the rulers, not as person to whom the land revenue had been assigned, because there was no such assignment but as sovereigns of the States.
Therefore, it is contended, the co called jagirs are not within the definition of section 2 (1).
That brings us on to the question of the true status of the Cis Sutlej jagirdars.
The origin of these jagirs goes back to 1763.
The collapse of the Moghul Empire had created a void in the political ,stage of this country, and many were the powers which stepped in with the ambition of establish ing their sovereignty.
The British had established their rule and bad extended their dominion up to the Jumna.
The Sikhs had also developed during this period from being a purely religious sect into a military Organisation, and established several States beyond the Sutlej.
The tract of territory between the Jumna and the Sutlej was at this time under the administration of a weak Afghan Governor called Zain Khan.
The policy of the British during this period was to hold the Jumna as the frontier, and so they were indifferent to the fate of this Cis Sutlej area.
But the Sikh Chiefs 353 beyond the Sutlej could not resist the temptation of overthrowing the Afghan Governor, seizing his territory and establishing themselves as its rulers.
In 1763 the storm burst when a number of them crossed the Sutlej, overwhelmed the Afghan Governor and occupied the whole country upto Jumna.
"Tradition still describes", says Cunningham in his History of the Sikhs, P. I 10, I 'how the Sikhs dispersed as soon as the battle was won and how riding day and night each horseman would throw his be It and scabbard, his articles of dress and acooutrement, until he was almost naked into successive villages to mark them as his.
" when the conquest was over each Chief declared himself the ruler of the territory which he was able to occupy, and constituted himself its sovereign.
This state of affairs continued until 1806.
By this time, Ranjit Singh the ', 'Lion of the Punjab", had built up a powerful State across the Sutlej.
He had already subdued the petty rulers within that area and was turning his attention to the territories 'south of the Sutlej and had occupied some of them.
The Cis Sutlej rulers became alarmed about their future and appealed for protection to the British, who had, by this time, changed their policy of non intervention.
The appeal was welcome, and met with prompt response.
The result was that in 1809 the British entered into a treaty with Ranjit Singh whereby he surrendered his acquisitions south of Sutlej and agreed not to interfere with the Cis Sutlej States.
And this was followed by a proclamation by Colonel Ochterlony in May 1809 whereby the Cis Sutlej Chiefs were assured of their rights as sole owners of their possessions and exempted from payment of tribute, but were required to furnish supplies to the British Government and assist them against their enemies.
The British Government also promulgated a rule that whenever any of the rulers died without issues, his State would lapse to the British Government.
354 This was the position until 1846 when a drastic change in the situation took place.
In 1845, there was war between the British and the Sikhs, and in that war the Cis Sutlej rulers far from helping the British against the Trans Sutlej Sikhs, were either unsympathetically neutral or actively hostile to them, and that brought about a change in the policy of the British Government towards them.
The position is thus stated by Kensington in the Ambala Gazetteer at p. 26: "Having thus already lost the confidence of the Government the Sikh Chiefs in the Sutlej campaign forfieted all claim to consideration.
It was seen that the time had arrived for the introduction of sweeping measures of reform and the Government unhesitatingly resolved upon a reduction of their privileges.
Several important measures were at once adopted.
The police jurisdiction of most of the chiefs was abolished, the existing system being most unfavourable to the detection and punishment of crime.
All transit and customs duties were also abolished; and thirdly, a commutation was accepted for the personal service of the chief and his contingent.
The despatch of the Governor General embodying this resolution was dated November 7th, 1846.
" While the sweeping changes aforesaid were being introduced, the second Sikh War broke out and that ended in the annexation of the Punjab.
And with that the Deed for maintaining appearances and for recognizing the Cis Sutlej Chiefs as rulers came to an end.
The British Government then proceeded to act swiftly and firmly, and in June, 1849, they made a declaration that the Chiefs should "cease to hold sovereign powers, should lose all criminal, civil and fiscal jurisdiction, and should be considered as no more than ordinary subjects of the British Government in the possession of certain exceptional 355 privileges" (1).
Pursuant to this declaration, the Chiefs were stripped of all their governmental functions and the final denouement took place in 1852 when the British took over the collection of revenue for the jagir lands.
The rules for settlement of revenue were made by them, and the actual settlement and collection of revenue were made under their authority, and out of the collections the jagirdars were paid their share.
On these facts, the question is whether it can be said that their was an assignment of the land revenue to the jagirdars.
Express grants to them, there were none.
The point in debate before us is whether grants of the land revenue could be implied from the facts stated above.
A somewhat similar question came up for decision before this Court in Thakar Amar Singhji vs State of Rajasthan (2) with reference to a class of jagirdars in the State of Rajasthan known as Bhomicharas.
They were once the rulers of the territories which were claimed to be jagirs, and later on the State of Jodhpur imposed its suzerainty over them and exacted an annual payment called "Foujbal".
The Bhomioharas contended that they had come into possession of the territories as rulers and held them as rulers and not as jagirdars under grants made by any ruler.
In repelling this contention, this Court held that a grant may be implied as well as express, and that on the facts which were Proved, the Bhomicharas, though they held originally as rulers, must be held to have been reduced to the status of subjects, and that their position was that of jagirdars under an implied grant.
The position of the Cis Sutlej jagirdars bears a close analogy to that of the Bhomicharas in Thakur Amar Singji 's case (2).
They became rulers of the territories when they took possession of them by conquest in 1763.
The first inroads into their (1 ) Griffin 's "Rajas of that Punjab", P. 199.
(2) ; 356 sovereignty were made in 1809 when the British established their suzerainty over them and further declared that the territories of the rulers who died without heirs would escheat to them.
Then in 1846 the British Government deprived them of police jurisdiction, and the power to levy customs, and in 1849, of all their sovereign functions.
It is not disputed that as a result of all these acts they were reduced to the position of ordinary subjects, that indeed being the objective of the British Government as avowed in their declaration of June, 1849.
It is with reference to this background that we must examine the true character of the revenue settlement made in 1852.
If the jagirdars had sunk to the position of subjects on that date the payment of revenues to them by the British Government can only be on the basis of an implied grant to them.
Learned Counsel for the jagirdars however demur to this conclusion.
They contend that the position of the Cis Sutlej jagirdars differs fundamentally from that of the Bhomicharas in Thakur Amar Singhji 's case (1), that the latter were conquered by the rulers of Jodhpur and compelled to pay to them a tribute called "Foujbal", but that the Cis Sutlej Chiefs were never conquered by the British, and never paid any tribute to them, that they were receiving revenue from the lands as rulers before the British came on the scene, and that they continued to receive the same without a break even after the British had established themselves, and that there was nothing which the British Government did from which a resumption and a re grant could be inferred.
Under the circumstances, it is said, the, payment of land revenue to them must be related to their status as sovereigns, and if the British Government took upon themselves the work of settlement and collection of land revenue, it was (1) [ ; 357 oh their behalf and under their authority and under an implied arrangement with them.
The assumption underlying this argument is that, as the cis Sutlej Chiefs ;are not conqaered by the British, their status must necessarily be that of sovereigns, and that in consequence the payment of land revenue to them could not be as jagirdars holding under an implied grant from the Govern ment.
That, however, is not correct.
It is settled law that conquest is not the only mode by which one State can acquire sovereignty over the territories belonging to another State, and that the same result can be achieved in any other mode which has the effect of establishing its sovereignty.
Thus, discussing what is an , 'act of State", the Judicial Committee observed in Cook vs Sir James Gordon Sprigg (1) : "The taking possession by Her Majesty, whether by cession or by any other means by which sovereignty can be acquired, was an act of State ' " To the same effect are the 'following observations of Lord Danedin in Vajesing Jaravarsingji vs Secretary of State for India in Council (2) : "When a territory is acquired by a sovereign State for the first time, that is an act of State.
It matters not how the acquisition has been brought about.
It may be by conquest, it may be by cession following on treaty, it may be by occupation of territory hitherto unoccupied by a recognised ruler." Laying down the law in similar terms, this Court observed in M/s. Dalmia Dadri Cement Co. Ltd.v.
The Commissioner of Income tax (3) : "The expression act of State ' is, it is scarcely necessary to say not limited to hostile (1) (2) (1923 24) L. R. 51 I. A. 357, (3) [1959] R. 729, 739.
358 action between rulers resulting in the occupa tion of territories.
It includes all acquisitions of torritory by a sovereign State for the first time, whether it be by conquest or cession.
Vide Vajesingji Joravar Singji V. Secretary of State and Thakur Amar Singji vs State of Rajasthan .
" And, more recently, this question has been considered by this Court in Promod Chandra Deb vs The State of Orissa (1), and the result was thus stated : " 'Act of State ' is the taking over of sovereign powers by a State in respect of territory which was not till then a part of its territory, either by conquest; treaty or cession, or otherwise.
" The fact, therefore, that the Cis Sutlej jagirdars were not conquered by the British does not conclude the question as to whether they arc to be regarded as sovereigns or not.
That must depend on who were in fact exercising sovereign powers over the territories in the States the Chiefs or the British.
If the latter, then it must be held that the sove reignty over the area had passed to them, otherwise than by conquest, and that the true status of the Chiefs was that of subjects.
Viewed in this light, the case does not present much of a problem.
It has been already seen that from 1809 onwards, the Chiefs had been gradually stripped of their powers as sovereigns and that the process of disintegration was completed in 1849.
It is indeed conceded on behalf of the jagirdars that after that date it was the British Government which was exercising sovereign powers over the territories and that the Chiefs had been rodaced to the status of its subjects.
But the contention that is urged is that even when every thing else had been (1) Writ Petitions Nos. 79 of 1957, 167 and 168 of 1958 and 4 of 1959 decided on November, 16, 1961.
359 lost, there was still one relie of sovereignty left with them and that was the right to receive the land revenue.
If this were the true position, the status of the jagirdars would be that of subjects of the British in respect of all matters except as to the right to receive revenue, in respect of which alone they would have to be regarded as sovereigns.
This is clearly untenable, because a person cannot be both a sovereign and a subject at the same time.
Dealing with this identical contention, this Court observed in Thakur Amar Singhji 's case (1) : "The status of a person must be either that of a sovereign or a subject.
There is no tertium quid.
The law does not recognise an intermediate status of a person being partly a sovereign and partly a subject, and when once it is admitted that the Bhomicharas had ack nowledged the sovereignty of Jodhpur their status can only be that of a subject.
A subject might occupy an exalted position and enjoy special privileges, but he is none the less a subject ; and even if the status of Bhomicharas might be considered superior to that of ordinary jagirdars, they were also subjects." (pp. 336 337) If the status of the Cis Sutlej jagirdars is in all other respects that of subjects, the right to receive the revenue collections must also be ascribed to their character as subjects, and that can only be under an implied grant.
But it is contended that the implication of a grant in favour of the jagirdars could not be made here as in the case of Bhomicharas in Thakur Amar Singhji 's case (1), because a proposal for resumption and re grant of the territories of the Cis Sutlej Chiefs was actually put forward in 1846 but was negatived.
Reference was made to the following (1) [19551 2 section C. R. S03.
360 account thereof given in J. M. Douie 's "Punjab Land Administration Manual", 1931, p. 45 para 102: "It was indeed proposed in 1846 after the first Sikh War to declare all the estates forfeit on account of the laches of their holders, and to re grant them under sanads from the British Government.
But Lord Hardinge deemed it impolitic to proclaim to all India the misconduct of the Cis Sutlej Chiefs and negatived proposal.
In a, sense then the Cis Sutlej jagirdars, great and small, are mediatized rulers, and little though they have as a body deserved at our hands, this fact should not be lost sight of in our dealings with them.
" The argument is that though a grant could be implied in certain circumstances where no express grant was forthcoming, that could not be done when a proposal for grant is shown to have been actively considered and rejected.
This contention sounds plausible but breaks down when the reason for the rejection of the proposal is examined.
That was, as stated in the despatch of Lord Hardinge dated November 17, 1846, that "a general measure of resumption would create alarm and must be preceded by a public declaration of the disloyalty of the largest portion of the Sikh protected States explaining the grounds of forfeiture," and this was considered inexpedient.
Consistently with this reason it is impossible to hold that the British Government, in declining to make a resumption and re grant, intended to continue the recognition of the Chiefs a,, sovereigns.
On the other hand, the true inference to be drawn is that the British wanted to give the chieftains only the status of jagirdars but for reasons of policy they sought to do it in such manner as to avoid publicity, and that is why the proposal for making resumption and regrant was not adopted.
In the very despatch of 361 Lord Hardinge dated November 17, 1346, wherein the proposal for resumption and re grant was dropped, it was stated that there was no need for it as the same ends could be obtained by adopting certain measures such as the taking over of the police administration and customs and the like.
The reason, therefore, for not making a resumption and an express grant is one which would support an inference of implied grant.
An argument is also sought to be built on the description given of the Cis Sutlej jagirdars as "mediatized rulers" in the extract from J. M. Douie 's "Punjab Land Administration Manual" already given, that their status is that of sovereigns.
This expression was originally used with reference to German Princes in Holy Roman Empire who, having been at one time vassals of the Emperor, were subsequently subjugated by other Princes who were also vassals of the Emperor.
The meaning of the word "mediatise" in modern usage is given in The Oxford English Dictionary, Vol.
VI, P. 292, as "annex (Principality) to another State, leaving former sovereign his title and (usually) more or less of Ilia rights of Government".
It might be 'correct to speak of the Chiefs as mediatized rulers in 1846, when, though deprived of their powers in matters of police and customs, they continued to exercise civil and fiscal powers.
But when they were divested in 1849 of all their Governmental powers they (, eased to be rulers, "mediatized" or otherwise, and when the revenue settlements were made in 1852, they had no vestige of sovereignty left in them, and had become ordinary subjects of the British with some privileges.
The true character of the revenue settlements made with the Cis Sutlej jagirdars is brought out correctly, in our opinion, in the following observations in Baden Powell 's "Land Systems of British India", Vol. 11 at p. 701: 362 "Under our Settlement arrangements, the jagirdar now receives the revenue, the original land holding communities or individuals being settled with and retaining full proprietary rights.
He in fact is a mere assignee of the revenue, taking.part of what otherwise would go to the State.
" Even more explicit is the statement of the position by Kensington in the Ambala Gazetteer, pp.27 28: "The final step necessitated by the march of events was taken in 1852 when the revenue settlement begun for British villages in 1847 was extended to the villages of the chiefs.
Thereafter the chiefs have ceased to retain any relies of their former power except that they are still permitted to collect their revenues direct from their villages, the cash assignment of revenue.
They have sunk to the position of jagirdare but as such retain a right to the revenue assigned to them in per petuity.
" It was argued by the learned Advocate General who appeared for the respondent that subsequent to 1852 there has been a course of legislation relating to the jagirs which proceeds on the basis that their holders were subjects.
The preamble to the Punjab Land Revenue Act, 1871 (Act 33 of 1871), under which land revenue was settled is as follows: "Whereas the Government of India is by law entitled to a proportion of the produce of the land of the Punjab to be from time to time fixed by itself and whereas it is expedient to consolidate and define the law relating to the settlement and collection thereof, and to the duties of the Revenue Officers in the Punjab.
" It is under this Act that the revenue settlements for the jagir lands are also made.
This shows that in exercising fiscal jurisdiction, the British Government 363 considered itself as acting in its sovereign capacity.
Then there is Punjab Descent of Jagirs Act,, 1900 (Punjab Act IV of 1900), which introduced in the , as. 8 to 8C enacting rules of descent "in respect of succession to any assignment of land revenue" and providing for the recognition of successors to the deceased jagirdars by the Provincial Government on certain conditions specified therein.
We have then the Punjab Jagire Act V of 1911 dealing with the same topic.
The preamble to the Act states that "it is expedient to consolidate the law governing the assignments of land revenue and other grants hitherto known as jagirs, and to make more precise provisions regarding the manner in which such assignments are to be made or continued in the future.
" Jagir is defined in section 2 in torms substantially the same as under the present Act.
This Act repeals as.
8 to 80 of the , which were inserted by the Punjab Descent of Jagirs Act IV of 1900, and reproduces them in as. 7 to 10.
Section 7(1)(b) provides for the acceptance by the jagirdars of the rules of descent framed by the Government by executing a written instrument, and it has been stated before us that the jagirdars have accepted the rules in the manner provided in the section.
By way of sample, the copy of the acceptance executed by the petitioner in Writ Petition No. 82 of 1960 has been marked as part of the record.
Oa these materials, the conclusion would appear to be irresistible that the right of the Jagirdars to raceive land revenue rests on implied grants by the British Government.
It must be mentioned that in Abdul Ghafoor Khan vs Amar arji Singh, Regular Second Appeal No. 561 of 1946 in the Punjab High Court there are ob.
servations of the learned Judges.
Mahajan and Teja Singh, JJ., that there was no gift of the jagir lands or assignment of the land revenue by the British Government to the Cis Sutlej jagirdars, and they are relied on as authority for the contention that 364 there was no grant to them express or implied.
But the point for decision in that case was whether these jagirdars could alienate their interests beyond their lifetime.
It was held that they could not and the reason therefor was thus stated: "After the annexation of the Punjab they (Cis Sutlej jagirdars) were deprived of vestiges of sovereignty that still remained in them and they were transformed and given the status of jagirdars, but their possessions, holding and dominions whether in land or other properties like forts and buildings were not in any way disturbed or taken away.
They held them in the same status and position as before.
" The dispute in that appeal related to properties of the kind mentioned above and not to land revenue, and we are unable to regard the observations relied on for the jagirdars as authority for the position that no grant in respect of the assignments of the land revenue could be implied in their favour.
In the resultwa must hold that the jagirs which are subject matter of these proceedings fall within section 2(1)(a) of the Act.
It is next contended that even if an assignment of land revenue could be.
implied in favour of the jagirdars, that could only be held to hive, been made by the British Government and not by the State Government as required by section 2(1)(a), and that, in consequence, the respondent had no right to resume the jagirs in question under the provisions of the Act.
Whateverforce there might have been in this contention, if I hequestion had to to be decided only on the.
terms of s.2(1)(a), we have in section 2(5) a definition or ' State Government which 365 is decisive of the question.
According to that definition, "State Government" includes "the Government of the State of Punjab, and all predecessor Gevernments thereof, by what ever name called, the Governor General or the Governor Generalin Council as the case may be.
" It is not disputed that these words are wide enough to include the British Government which made the grant, but it is contended that this definition was not in the Act as originally enacted and was inserted by the Punjab Resumption of Jagirs (Amendment) Act, 1959, and that the rights of the parties should be determined in accordance with the law as it stood prior to the amendment.
There is no force in this contention, because under section 1(2) of the Amendment Act, retrospective operation is given to it as from November 14, 1957.
But then it is urged that the amendment was not within the legislative competence of the Legislature of the State of Punjab and is null and void.
The grounds therefor are thus stated in Petition No. 82 of 1960 : "This is nothing but a colourable legislation.
The State legislature has no authority to convert Central Government into State Government and legislate on Central subject.
The so called jagir being not a grant by the State Government, the impugned Act has no application and the amended definition of State Government is a fraud on the Constitu tion." (para 17).
There is no substance in the contention that the Amendment Act is colourable and incompetent.
The subject matter of the legislation is resumption of jagirs.
Though the contention was raised.
in the petitions that this was not a topic within the competence of the State Legislature, as there was no such entry in List II to the Seventh Schedule,no 366 argument was advanced in support, of it.
And clearly it could not be, as legislation on resumption of jagirs in one relating to lands, and land revenue and would clearly fall under entries 18 and 45 of List II, which are as follows : Entry 18 , , 'Land, that is to say, rights in or over land, land tenure including the relation of landlord and tenant, and the collection of rents transfer and alienation of agricultural lands; land improvement and agri cultural loans; colonization.
" Entry 45 : "Land revenue., including the assessment and collection of revenue,the maintenance of lands records, survey for revenue purposes and records of rights, and alienation of revenue.
" If the principal legislation is intra vires, it is difficult to see how an amendment thereof with respect to matters properly pertaining to the subject matter covered by it could be ultra vires.
It is immaterial for the purpose of resumption, whether the lands sought to be resumed were granted by the State of Punjab as it is now constituted or by any Government which preceded it.
So long as the lands are within the, State of Punjab, the legislature has full competence to enact a law providing for their resumption under entries 18 and 45.
Indeed if the words "made by or on behalf of the State Government" in 3. 2 (1)(a) had been omitted in the, principal Act and jagir defined simply as "any assignment of land revenue" the legislation would have been intra vires, and in that case the State could have resumed the jagirs by whomsoever they might have been granted.
But it chose to add the words "made by or on behalf of the State Government", and that gave occasion for the contention that the legislation did not in fact reach jagirs granted by the British Government.
Then, with a view to clarify the position, 367 and set the controversy at rest,, the legislature intervened and enacted the Amendment Act of 1959, inserting the impugned definition of "State Government".
We are unable to see what the lack of vires is under which this amendment suffers.
We must reject this contention also.
This disposes of all the points raised on the merits in the Writ Petitions and Civil Appeals.
In Civil Appeal No. 453 of 1961 preferred by one of the jagirdars, Umrao Singh, his son Satinder Singh intervened, and he asks that suitable directions might be given for protecting his interests in.
the compensation amount which is payable to the appellant Under the Act.
He states that under the law the Cis Sutlej jagirdar is not an absolute owner of the jagir, that he has only a right to enjoy it without any power of alienation and that after his life time the next lineal descendant would take it free from all encumbrances created by the previous owner, that the rights of the jagirdar over the compensation amount due on resumption under the Act could only be the same as over the jagir, and that if that is paid to him, his reversionary rights would be Jeopardised and that therefore adequate provision should be made for protecting them.
Our attention has been invited to the decision of this Courtin Satinder Singh vs Umrao Singh(1), where compensation awarded on the acquisition of jagir lands was apportioned equally between the jagirdar and his son.
But there the lands had been acquired under the Land Acquisition Act, 1894, which contains provisions for deciding who is entitled to the compensation amount.
But here we are hearing an appeal against an order dismissing a Writ retition under article 226, challenging ire vires and applicability of the Punjab Resumption of Jagirs Act, 1957, and adjudication of rival claims to the compensation amount will be wholly foreign to its scope.
(1) A. I. R. 961) section C. 908 368 But it is pointed out for the intervener that on his application this Court has ordered stay of payment of a part of the compensation amount to the appellant pending the disposal of the, appeal, and that a similar direction might now be made in the Judgment, staying payment of a part of the amount for a specified period, so as to enable him to take steps to protect his rights.
But that was an interim order made pending the appeal, and no such order could be passed in the appeal unless it follows on a decision of the rights of the parties, which is, an already stated, outside the scope of the present proceedings, vide the state of Orissa vs Madan Gopal Rungta 0).
We do not therefore propose to say anything on the rights of the intervener or give any directions with reference to the payment of the compensation amount.
It is open to the intervener to take other and appropriate proceedings to vindicate his rights.
Before concluding, it has to be noted that in Writ Petition No. 148 of 1961 there, are as many as 72 Petitioners.
some of whom are stated not to belong to the category of Cis Sutlej jagirdars.
Their joinder is clearly improper. 'It is also said that three of them, Petitioners Nos. 66, 68 and 69, had filed Writ Petitions under article 226 of the Cons tituation in the Punjab High Court, raising the same contentions as in the present, that the said petitions had been dismissed on the merits, and no appeal had been preferred against the Orders of dismissal, and in consequence, the concerned petitioners cannot, on the decisions of this Court, maintain this petition.
But as we are dismissing these petitions on the merits, no further notice need be taken of these points.
In the result, the petitions are dismissed with costs, one hearing fee, and the appeals are dismissed with costs one set.
Petitions and appeals dismissed.
(1) [1952] S.C.R. 28.
| The Punjab Resumption of jagirs Act, 1957, came into force on November 14, 1957, and the State of Punjab proceeded to take action thereunder for resuming the jagirs.
The petitioners who were holders of certain jagirs in that State known as the Cis Sutlej jagirs claimed that they could not be resumed under the provisions of the Act because they did not fall within the definition of jagir contained in section 2(1) of the Act on tile grounds that there was at no time any grant of the Cis Sutlej jagirs to their holders much less any assignment of land revenue to them, and that even if there was such a grant, it was not one made by or on behalf of the State Government as required by section 2(1) (a) of the Act.
The history or these jagirs showed that the jagirdars were originally rulers of the territories when they took possession of them by conquest in 1763, but in course of time after the British came on the scene, they were gradually stripped of all their powers as sovereigns, and in 1852 the British took over the collection of revenue of the jagir land , and out of the collections the jagirdars were paid their share.
Subsequent to 1852 there was a course of legislation relating to the jagirs.
The question was whether the assignment of land revenue to the Cis Sutlej jagirdars was made on the basis of an implied grant.
The petitioners case was that as the Cis Sutlej Chiefs were never conquered, the payment of land revenue to them must be related to their status as sovereigns and that the collection of the land revenue was made only under all im plied arrangement with them.
Held, that the status of the Cis Sutlej jagirdars was only that of subjects and that the payment of revenue to them by 347 the British Government was only on the basis of an implied grant to them.
Though the Cis Sutlej Chief were not conquered by the British, since the latter were in fact exercising sovereign powers over the area it must be held that sovereignty had passed to them otherwise than by conquest.
M/s. Dalmia Dadri Cement Co. Ltd. vs The Commissioner of Income tax, [1959] section C. R. 729, Thakur Amar Singji vs State of Rajasthan, and Vajesingji Jorawar Singji vs Secretary of State, [1924] L.R. 51 I.A. 357, relied on.
Held, further that the British Government which had made the grant was the "State Government" within the meaning of section 2(5) of the Punjab Resumption of jagirs Act 1957, and that the jagirs in question were within the definition of "jagir" in s.2(1) of the Act.
Held, also, that the Act was within the legislative com petence of the State of Punjab under entries 18 and 45 of List 11 of the Seventh Schedule to the Constitution of India.
| The petitioners challenged the validity of the orders issued by the State of Mysore under article 13(4) of the Constitution on July 10, 1961, and July 31, 1962.
The petitioners contended that they had applied for admission to the Pre Professional Class in Medicine in the Karnatak Medical College, Hubli and they would have secured admission to the said medical college but for the reservation directed to be made by the orders mentioned above.
They contended that the above mentioned orders were ultra vires.
They prayed for an appropriate writ or order restraining the respondents from giving effect to those orders and requiring them to deal with their applications for admission on merits.
Held, that the petitioners were entitled to an appropriate writ or order as claimed by them and the respondents were restrained from giving effect to the above mentioned orders.
M. R. Balaji vs State of Mysore [1963] Supp. 1 S.C.R. 439, followed.
The impugned orders we quashed only with reference to the additional reservation made in favour of the socially and 476 educationally backward classes and so the respondents were at liberty to give effect to the reservation made in favour of the ' Scheduled Castes and Scheduled Tribes, which was not challenged at all.
The said reservation continues to be operative.
| On the strength of a Will dated 25th May 1959, executed in her favour by one Purohit Mani Ram, the respondent Smt.
Ishroo Devi filed a suit for recovery of the schedule property in the plaint.
It was alleged in the plaint that the appellants (A 1, son; A 2, Wife; and A 3, grand daughter of Purohit Mani Ram) after the death of Purohit Mani Ram wrongfully disposed her after getting the name of appellant No. 1 mutated in the records and that the three items of the schedule property were the separate properties of the testa tor and that he was entitled to dispose them under the Will.
The appellants averred in their written statement that the properties belonged to the joint family of which the first appellant and his father Purohit Mani Ram were members and as the properties were joint family properties, they cannot he disposed of by Will.
It was further alleged that the Will was a forged one and is fictitious.
The trial court, accepting the evidence of PW1, an advocate, who advised in the preparation of the Will and also an attest ing witness, PW2 the scribe and PW3 who deposed the fact that the properties were self acquired ones of late Purohit Mani Ram, decreed the suit as regards item No. 1 (a) of the plaint schedule but dismissed the claim as regards items l(b) and 2 holding that they were ancestral ones.
On ap peal, the High Court accepted the findings of the trial court and confirmed the decree as regards item l(a) of the property but modified the order as regards item l(b) and 2 by allowing the claim of the respondent to the extent of 1/2 share since under section 27 of the Jammu & Kashmir Hindu Succession Act Mani Ram was entitled to dispose of his interest in the joint family property by Will.
In appeal by certificate to this Court, the appellant contended: (i) The Will was not a valid one for the reasons, namely, (a) it was ante dated in order to escape the prohi bition against alienation introduced by Ordinance which came into force in July 1959; (b) the signature on the Will was forged; (c) the Will is a most unnatural one as it had not provided for the son or the wife or any near relative but has provided to a distant relative and (d) in a suit for partition filed by the son against Mani Ram, the latter gave an undertaking in the court not to alienate his properties which would improbalise the execution of the Will; (ii) The hereditary profession of Mani Ram being that of a priest whatever he earned while practising that profession and all his acquisitions should be held to be joint family property.
(iii) In view of the Mitakshara law applicable to the estate when partition of the joint family property takes place during the father 's life time at the instance of the son, the mother also has a share equal to him.
The Court confirmed the decree in respect of item 1 (a) of the property in favour of the respondent, modified the decretal order of the High Court in respect of items 1(b) and 2 of the schedule property as 1/3rd in favour of appel lant No. 1, 1/3rd in favour of appellant No. 2 and 1/3rd in favour of respondent as entitled by the Will.
The Court, HELD: (1) The plea that the Will was executed after July 1959 when there was a prohibition against the alienation and that it was pre dated and not executed 401 on the day on which it purports to be is without any sub stance and against the evidence on record.
[403 H, 404 A] (2) The contention that the Will is an unnatural one is also without substance.
The non disclosure of the execu tion of the Will is understandable because Mani Ram did not want anyone, particularly his son, to know about his pos sessing of the property by Will.
[404 B, D] (3) The findings of the two lower courts that the Will is a genuine one and was executed by Mani Ram by his own free will cannot be assailed.
In fact, there was no chal lenge to the gist of the Will noted by PW2, the scribe, in one of his regularly kept record; there was no denial by the first appellant, the son of Mani Ram that the signature found in the Will was not that of his father and there is no reason why the cogent evidence of PW 1, a respectable advocate who spoke of his advising in the preparation of the Will having seen the executant sign the Will in his presence be not accepted.
[405 A C] (4) The income from the practice of a hereditary profes sion will not be a joint family property.
Item 1 (a) of the Property is the self acquisition of Mani Ram and the decree of the appellate court so far as item No. 1 (a) is concerned must be confirmed.
[406 A, D] Hanso Pathak vs Harmandil Pathak and Anr., AIR 1934 Allahabad 851, approved.
Chalabhai Gaurishankar vs Hargowan Ramji & Ors.
I.L.R. 36 Born.
94, over ruled.
(5) Under the Mitakshara law excepting Madras, in the other states referred to in the decisions cited when there is a partition between the son and his father the mother is entitled to a share equal to that of the son.
In the in stant case the case of the first appellant was that the joint family consisted of himself and his father alone, though in the earlier partition suit filed by him he claimed 1/3rd share conceding that his father and mother are entitled to the other 2/3rd share.
As no decision in re spect of the interest of the male Hindu in Jammu & Kashmir was cited the question is remitted to the High Court for decision as to what is the extent of the interest as regards items I(b) & 2 of the plaint Schedule properties.
[406 E F, 407 B E] Dular Koeri vs Dwarkanath Misser ILR ; Sumrun Thakoor vs Chunder Mun Misser & Ors., ILR ; Hos banna Devanna Naik vs Devanna Sannappa Naik and Ors.
ILR and Pratap Singh vs Dalip Singh ILR 52 All.
596, approved.
(6) In view of section 27 of the Jammu & Kashmir which provides that any Hindu male may dispose of by Will any property which capable of being disposed of by him in law and also explanation to that section which makes it clear that the interest of a male Hindu in a Mitakahara coparcenary property be deemed to be property capable of being disposed of by him within the meaning of the sub section, in the instant case Mani Ram can dispose of his share under a Will.
Admittedly the respondent, will be entitled to 1/3rd share in respect of item l(b) and 2 of the plaint schedule in addition to the decree in her favour in respect of item 1 (a).
[406 D E, 407 E F] [The Court remitted the case back for the determination of the interest which Mani Ram had in the joint family property at the time of his death which he could dispose of by his Will and grant a decree accordingly.]
| A common question of law having arisen for determination in these petitions filed under Article 32 of the Constitu tion, they are disposed of by a Common Judgment, though the petitioners dealers are different and carry on their busi ness in different states and have challenged the respective provisions of law by which their cases are governed.
The petitioners in WP 803/88 carry on the business of selling cinematographic Idms and other equipments like projector, sound recording and reproducing equipments, X Ray films etc.
in the State of U.P. and in Delhi.
The petition ers receive these goods from their manufacturers outside the State of U.P.
In U.P. there is a single point levy of Sales Tax.
The State of Uttar Pradesh issued two notifications under section 4A of the Uttar Pradesh Sales Tax Act and under Section 8(5) of the Central Sales Tax Act exempting new units of manufacturers as defined in the Act in respect of the various goods for different periods ranging from 3 to 7 years, from payment of Sales Tax.
The petitioners by these petitions challenge the constitutional validity of these Notifications.
They have also challenged the constitutional validity of section 4A of the Uttar Pradesh Sales Tax Act and sections 8(5) of the Central Sales Tax Act, and the proceedings taken by the Respondent under section 5A of 732 the said Act.
The case of the petitioners is that they are discriminated on account of these notifications as the manufacturers covered by these Notifications are entitled to sell the articles manufactured by them without liability to pay sales tax while the manufacturers in other states and non manufacturers of the same article selling the same goods in the State are liable to pay sales tax under the local Sales Tax Act as well as under the Central Sales Tax Act.
Their contention, therefore, is that they became subject to gross discrimination and their business was crippled.
In these premises the petitioners challenge the provisions as ultra vires the constitution being violative of the provi sions of Articles 301 to 305 of part III of the Constitution as also Articles 14 and 19 of the Constitution.
The Respondents counter the assertion of the petition ers.
According to them the contention put forward by the petitioners ignores the basic features of the Constitution and also the fact that the concept of economic unity may not necessarily be the same as it was at the time of the Consti tution making; the state which was technically and economi cally weak in 1950 cannot be allowed to remain in the same state of affairs.
The state has to give subsidy and grant exemptions/concessions for the economic development of the state to new industries.
It was urged that if all the states are economically strong or developed then only can economic unity as a whole be assured or strengthened.
Dismissing the petitions, this Court, HELD: Sales Tax Laws in all the States provide for exemp tion.
Power to grant exemption is inherent in all taxing Legislations.
Economic unity is a desired goal.
Development on parity is one of the commitments of the Constitution.
Directive Principles enshrined in Articles 38 and 39 must be harmonised with economic unity as well as economic develop ment of developed and under developed area.
[756H; 757A B] Taxes may sometime amount to restrictions but it is only such taxes as directly and immediately restrict trade that would fail within the mischief of article 301.
[740E] See Atiabari Tea Co. Ltd. vs The State of Assam & Ors., ; and Automobile Transport (Rajasthan) Ltd. vs The State of Rajasthan & Ors., [1963] 1 SCR 491.
The taxes which do not directly and immediately restrict or 733 interfere with trade, commerce and intercourse throughout the territory of India would therefore be excluded from the ambit of article 30 1 of the Constitution.
It has to be borne in mind that sales tax has only an indirect effect on trade and commerce.
[747F] In the instant case, the general rate applicable to locally made goods is the same as that on imported goods.
Even supposing without admitting that Sales Tax is covered by article 301 as a tax directly and immediately, hampering the free flow of trade, it does not follow that it fails within the exemption of article 304 and it would be hit by article 30 1.
Still the general rate of tax which is to be compared under article 304(a) is at par, and the same qua the locally made goods and the imported goods.
[751G H] Concept of economic barrier must be adopted in a dynamic sense with changing conditions.
What constitutes an economic barrier at one point of time often ceased to be so at anoth er point of time.
It will be wrong to denude the people of the state of the right to grant exemptions which flow from the plenary powers of legislative heads in List III of the 7th Schedule of the Constitution.
[752A B] Basically the concept of equality embodied in Articles 304(a) and 16 are the same.
Article 14 enjoins upon the state to treat every person equal before the law while Article 304(a) enjoins upon the state not to discriminate with respect to imposition of tax on imported goods and the locally made goods.
[753C] It is not that with changing times the meaning changes but changing times illustrate and illuminate the meaning of the expressions used.
The connotation of the expressions used takes its shape and colour in evolving dynamic situa tions.
[757B C] James vs Commonwealth of Australia, at 613; Firm A.T.B. Mehtab Majid & Co. vs State of Madras & Anr., ; ; A. Hajee Abdul Shakoor & Co. vs State of Madras; , at 225; State of Madras vs N.K. Nataraja Mudaliar, ; at 847; Andhra Sugars Ltd. & Anr. etc vs State of Andhra Pradesh & Ors., ; ; Bengal Immunity Co. Ltd. vs State of Bihar, at 754; State of Madhya Pradesh vs Bhailal Bhai & Ors., ; at 268 9; Rattan Lal & Co. & Anr.
vs The Assessing Authority & Anr., ; at 557; India Cement & Ors.
vs State of Andhra Pradesh & Ors.
, ; ; Weston Electroniks & Anr.
vs State of Gujarat & Ors., 568 at 571; C.A.F. Seeling Inc. vs Charles H. Baldwin, at 1038; Smt.
Ujjam Bai vs State of U.P., [1963] 1 SCR 778 at 851; Coffee Board, Bangalore vs Joint Commercial Tax Officer, Madras & Anr.
, ; at 156; V. Guruviah Naidu & Sons vs State of Tamil Nadu & Anr., ; at 1070; Kathi Raning Rawat vs The State of Saurashtra, ; ; Kalyani Stores vs The State of Orissa & Ors., ; ; Bharat General & Tex tiles Industries Ltd. vs State of Maharashtra, 72 STC 354; H. Anraj vs Government of Tamil Nadu, ; West Bengal Hosiery Assn.
& Ors.
vs State of Bihar & Anr.
, ; ; State of U. P. & Ors.
vs Babu Ram Upadhya, ; at 702; State of Tamil Nadu, vs Hind Stone etc.; , at 757; State of Mysore vs H. Sanjeeviah, ; ; Kailash Nath & Anr.
vs State of U.P. & Ors.
, AIR 1957 SC 790 at 791; State of U.P. & Ors.
vs Renu sagar Power Co. & Ors., ; at 100; M/s Narinder Chand Hem Raj & Ors.
vs Lt. Governor, Administrator, U.T., Himachal Pradesh & Ors., at 751 and Associ ated Tanners Vizianagram A.P.v.
C.T.O., Vizianagram, Andhra Pradesh & Ors., ; , reffered to.
| Under section 72 Of the 9th Sch.
of the Government of India Act, 1935: " The Governor General may, in cases of emergency, make and promulgate ordinances . and any ordinance so made shall, for the space of not more than six months from its promulgation, have the like force of law as an Act passed by the Indian Legislature . " ; section I (3) of the India and Burma (Emergency Provisions) Act, 1940, provided that section 72 Of the Government of India Act, 1935, shall as respects Ordinances made during the period beginning with June 27, 1940, the date of the passing of that Act, and ending with such date as His Majesty may by Order in Council declare to be the end of the emergency, have effect as if 635 the words " for the space of not more than six months from its promulgation " were omitted.
The appellant was prosecuted for having on July 11, 1953, contravened the provisions of section 4 of the High Denomination Bank Notes (Demonetisation) Ordinance, 1946.
The Ordinance was promulgated by the Governor General of India on January 12, 1946, but on April 1, 1946, an Order in Council was published in the Gazette of India Extraordinary whereby the period of emergency referred to in the India and Burma (Emergency Provisions) Act, 1940, was declared to have ended on April 1, 1946.
It was contended for the appellant that the Ordinance in question was not in operation on the date when the offence was alleged to have been committed and that therefore the prosecution was not maintainable, because (1) the Ordinance had been promulgated in exercise of the emergency powers and that it lapsed ipso facto on April 1, 1946, when the declaration was made that the emergency was at an end; and (2) section 72 of the 9th Sch.
of the Government of India Act, 1935, having been restored with effect from April 1, 1946, one must look to its terms as they originally stood, to justify the continuance of the Ordinance after April I, 1946.
Held, that the deletion of the words " for the space of not more than six months from its promulgation " from section 72 of the 9th Sch.
of the Government of India Act, 1935, by section 1 (3) of the India and Burma (Emergency Provisions) Act, 1940, had the effect of equating Ordinances which were promulgated between June 27, 1940, and April I, 1946, with Acts passed by the Indian Legislature without any limitation of time as regards their duration, and therefore continuing in force until they were repealed.
Though after April I, 1946, section 72 Of the 9th Sch.
of the Government of India Act, 1935, was restored in its original form, the continuance of the Ordinance in question after that date had to be determined having regard to the terms of the section as they stood on the date of such promulgation, as there was nothing to justify retrospective operation of the section so restored.
J. K. Gas Plant Manufacturing Co. (Rampur) Ltd. and others vs King Emperor, , relied on.
| N owned agricultural lands in Bahawalpur State now forming part of Pakistan and also owned some property in Punjab in India.
He died in June 1947 while on a visit to India in the normal course of business, leaving behind three sons, the respondents in the appeal.
On the partition of India, the land in Pakistan originally owned by N and after his death by his sons, had to be abandoned.
After migrating to India, the three respondents filed separate claims as displaced persons and were allotted an area of land in Punjab.
Thereafter a complaint was filed before the Managing Officer that these respondents had received double allotments.
The Managing Officer, held this allegation was not substantiated but came to the conclusion that N, although he had died before the partition, must be treated as a displaced land holder for the purpose of allotment of land as his name continued to be shown in the Jamabandi as the owner of the abandoned land in Pakistan.
In consequence of this finding a large portion of the land allotted to the three respondents was cancelled by an order of the Managing Officer dated September 18, 1961.
Appeals made by the respondents to the Assistant Settlement Commissioner as well as revision petitions before the Chief Settlement Commissioner Punjab, were dismissed.
In dismissing the revision petitions, the Chief Settlement Commissioner relied on para.
17 of "Tarlok Singh 's Land Resettlement Manual" 1952 edition Page 180, to the effect that "Even where a displaced land holder in whose name the land stands in the records received from West Punjab has died, the allotment is made in the name of the deceased".
He therefore upheld the view 4 at the land could only be allotted in the name of N.
The respondents then filed a writ petition against the orders of the Chief Settlement Commissioner which was allowed.
On appeal to this Court, HELD:Dismissing the appeal, The definition of a "displaced person" in para 2(e) of the Notification of July 8, 1949, issued by the Custodian in accordance with provisions of the East Punjab Evacuees (Administration of Property) Act 1947, and the Rules made thereunder, or of a "Refugee" in Section 2(d) of the East Punjab Refugees (Registration of Land Claims) Act 12 of 656 1948, show that these expressions have been used in the relevant enactments with reference to a person who has migrated to India as a result of disturbances or fear of disturbances or the partition of the country.
Therefore if a person had died before the disturbances took place or he had never migrated to India as a result of the disturbances and he died before such migration, he could not come within the meaning of the expression "displaced person" or the word "refugee" under the relevant statutory enactments.
N died in June, 1947, long before the partition of the country and he did not abandon or was not made to abandon his land in Bahawalpur on account of the civil disturbances or the fear of such disturbances or the partition of the country.
[660 A D] There was no force in the contention that even though N never became a refugee or a displaced land holder, the allotment had to be made in his name because he was shown in the revenue records received from West Punjab as the owner of the land and there had been no mutation of the names of the respondents in the revenue records.
The rule in para 17 of "Tarlok Singh 's Manual" consistently with the statutory enactments, would be applicable only to such persons who were land holders 'it the time of their becoming displaced persons or refugees and who died afterwards before allotment could be made in their favour.
It does not apply to a person like N who was not a displaced land holder at the time of his death.
[661 D F]
| During the pendency of a civil writ petition in the Allahabad High Court, one N moved an application under section 476, Code of criminal Procedure, for making a complaint under section 93, Indian Penal Code, against T. A single judge who was seized of the case rejected the application.
Thereupon N presented an appeal against the order of rejection of his application before the Supreme Court under section 476 B, Code of Criminal Procedure.
Held, that the appeal did not lie to the Supreme Court but that it lay to the Appellate Bench of the High Court.
The decrees of a single judge of the High Court exercising civil jurisdiction were ordinarily appealable to the High Court under cl.
1o of the Letters Patent of the Allahabad High Court read with cl. 13 of the U. P. High Courts (Amalgamation) Order, 1948, and as such the Court constituted by the single judge was a court subordinate to the Appellate Bench of the High Court within the meaning of section 195(3) of the Code.
M. section Sheriff vs The State of Madras, [1954] S.C.R. 1144, distinguished.
| The respondents in all these appeals are "extra depart mental agents" within the meaning of Rule 2(b) of the Posts and Telegraphs Extra Departmental Agents (Conduct of Service) Rules, 1964 issued under the authority of the Government of India.
They were either dismissed or removed from service during the period between January 1, 1966 and June 18, 1974, admittedly without complying with the provi sions of article 311(2) of the Constitution.
The question in each case is whether the respondent held a "civil post" as contemplated in article 311(2) of the Constitution.
The High Court of Kerala, Andhra Pradesh & Orissa held that the respondents held a civil post under the Union of India and the orders terminating their services in violation of article 31.1(2) of the Constitution were invalid.
Dismissing the appeals the Court, HELD: (1) An "extra departmental agent" held a "civil post" and his dismissal or removal would be invalid, if there was non compliance with article 311 (2) of the Constitu tion.
[680 B C. 682 E] (2) An extra departmental agent is not a casual worker, but he holds a post under the administrative control of the State.
It is apparent from the 1964 Rules that the em ployment of an extra departmental agent is in a post which exists "apart from" the person who happens to fill it at any particular time.
Though such a post is outside the regular civil service, there is no doubt it is a post under the State.
[681 E F] State of Assam & Ors.
vs Kanak Chandra Dutta ; @ 682 applied.
(3) The 1964 rules make it clear that these extra departmental agents work under the direct control and super vision of the authority who obviously have the right to control the manner in which they must carry out their du ties.
There can be no doubt, therefore, that the relation ship between the Postal Authorities and the extra departmen tal agents are of master and servant.
[662 C E] Venkataswamy vs Superintendent, Post Offices, AIR 1957 Orissa 112; V. Subbaravalu vs Superintendent of Post Offices, AIR 1961 Madras 166, held inapplicable.
|
Appeal No. 130 of 61.
Appeal by special leave from the judgment and decree dated April 25, 1959 of the Madhya Pradesh High Court in First Appeal No. 139 of 1955.
M.C. Setalvad, Attorney General of India, section T. Desai, J. B. Dadachanji, 0.
C. Mathur and Ravinder Narain, for the appellants.
Sarjoo Prasad and G. C. Mathur, for respondents No. 1 and 2.
Ganpat Rai, for respondent No. 3. 1962.
February 23.
The Judgment of the Court was delivered by SHAH, J.
This appeal with special leave is against the decree of the Madhya Pradesh High Court confirming the decree of the 1st Additional District Judge, Jabalpur in Civil Suit No. 12 A of 1952.
The dispute between the parties arose in a suit for partition of joint family property.
The parties are Digambar Jains of the Porwal Sect and are residents of Jabalpur which at the material time 421 was in Madhya Pradesh.
The following pedigree explains the relationship between the parties Garibdas=Mst.
Khilonabai d. 24.7.34 (Def. 3) d.3.7.56 Gulzarilal d. 13.4.39 Munnalal Padamchand d.10.1.36 Ramchand (Def 1) (Def 2) Pyaribabu widow Bhuribai Chandrani bahu (Def. 4) (Def. 11) (Def. 8) Adupted son Rajkumar (Def. 12) adopted 26.7.52 Saheblal Ballu Nand Hiralal Ishwari Kumar Prasad (Plaintiff) (dead) (Def. 5) (Def. 6) (Def.7) Rajendra Kumar Abhay Kumar (Def 9) (Def. 10) Saheblal son of Munnalal filed Suit No. 12A of 1952 in the Court of the 1st Additional Subordinate Judge, Jabalpur on June 21, 1952, for a decree of partition and separate possession of his 1/12th share in the joint family property.
He claimed that in the property his father 's branch was entitled to have a half share and the remaining half was owned by 422 Ram Chand and his branch.
The Additional District Judge ordered that Khilonabai grandmother of Munnalal and Ram chand the wives of Munnalal and Ramchand and their sons and Bhuribai (widow of Padamchand) and Rajkumar who claimed to be a son of Padam Chand by adoption by Bhuribai on July 26, 1952, be impleaded as defendants to the suit.
At the trial of the suit the right of Saheblal to a share in the property was Dot questioned .
the dispute principally turned upon the claim made by Bhuribai and her adopted son Rajkumar to a share in the property.
Padamchand had died before the enactment of the Hindu Womens ' Rigbt to Property Act, 1937, and his widow could not claim by virtue of that Act a share in the property of the family.
But Bhuribai and Rajkumar pleaded that the parties were governed in the matter of adoption by the customary law prevalent amongst the Jains of Central India, Madhya Pradesh, Vindhya Pradesh.
North and Western India, and Rajkumar as a son adopted by Bhuribai to Padam Chand became a coparcener in the joint family and entitled to a share in the property and accretions thereto.
The validity of the adoption of Rajkumar was challenged on many grounds, one only of which is material in this appeal.
It was submitted by the contesting defendants and Bhuribai had no authority express or implied from her husband Padam Chand to adopt a son and that the adoption of Rajkumar as a son without such authority was invalid. '.the
Additional District Judge rejected this plea and ordered a preliminary decree for partition and declared that the share of the plaintiff was 1/24th, of Munnalal, his wife and 3 sons collectively was 5/24th, of Ramchand and his sons 1/4th, of Khilonabai 1/4th and the remaining 1/4th share belonged to Rajkumar.
423 Against them decree, Munnalal, Ramchand, Khilonabai, wife and sons of Munnalal and the wife and sons of Ramchand who were defendants 1 to 10 preferred an appeal to the High Court of Madhya Pradesh.
During the pendency of this appeal Khilonabai died on July 3, 1956 and Ramchand and Munnalal applied to be impleaded as her legal representatives in respect of the interest in the property awarded to Khilonabai by the preliminary decree.
By order dated December 12, 1957, the District Judge held that the interest of Khilonabai devolved upon the applicants by virtue of sections 15 and 16 of the which was brought into operation on June 14, 1956, and that the sons of Munnalal, Ramchand and Padam Chand could not take a share in Khilonabai 's interest.
Before the High Court two questions were canvassed: (1) as to the factum and validity of the adoption of Rajkumar, and (2) devolution of the share of Khilonabai declared by the preliminary decree on her death.
The High Court upheld the finding of the trial Court that Rajkumar was in fact adopted by Bhuribai as a son to her husband on July 26, 1952, and that amongst the Jains residing in the North West Province, Central India, Northern India and in Bombay a widow could adopt a son to her deceased husband without any express authority in that behalf In so holding the High Court relied upon the judgments of the Privy Council in Pemraj vs Mst.
Chand Kanwar and Mangibai Gulabchand vs Suganchand Baikamcand (1).
But the High Court diclined to accept the view of the trial Court that the right of Khilonabai declared by the preliminary decree devolved upon Munnalal and Ramchand alone.
In their view, Khilonabai 's interest under the decree being incohate was not "Possessed" by her within.
the meaning of section 14 (1) (1947) L.R. 74 I.A. 254.
(2) A.I.R. (1948) P.C. 177.
424 of the , and on her death it merged into the estate, The High Court observed : "The result is that the interest of Smt.
Khilonabai remained incohate and fluctuating so that after her death, the interest declared by the preliminary decree is available for partition as joint family property and consequently ss.15 and 16 of the are inapplicable to the interest.
As the property never became her absolute property by virtue of s.14 of the Act, the same remained joint family property.
" Accordingly the decree of the trial Court was modified and 1/3rd Share in the joint family property was awarded to Rajkumar, 1/3rd to the branch of Munnalal and the remaining 1/3rd to the branch.
of Ramchand and adjustments were made on that footing in the shares of the plaintiff and other members of the family.
In this appeal by defendant No. 1 (Munnalal) 2 (Ramchand) and 4 to 10, three contentions were raised : (1) in the absence of express authority from her husband, Bhuribai could not adopt a son, (2) that the 'interest of Khilonabai under the preliminary decree became her absolute property by virtue of s.14 of the and on her death it devolved upon her grandsons Munnalal and Ramchand defendants 1 and 2 and (3) the trial Court was in error in delegating to a Commissioner judicial function, such as, ascertainment of property to be divided and effecting parti tion.
The third question is easily answered.
The trial court appointed a commissioner to propose a partition of joint family property, and for that purpose the court authorised him to ascertain the property, the debts which the family owed and also the individual liability of the parties for the debts.
For deciding those questions the Commissioner was empowered to record statements of the parties, frame 425 issues and to record evidence as might be necessary.
The commissioner was also directed to submit his proposals relating to the right of Bhuribai to be maintained out of the joint family property.
This order, it appears, was passed with the consent of all the parties.
It is true that the decree drawn up by the trial Court is not strictly in accordance with the directions given in the judgment.
But it is manifest that the trial Judge only directed the Commissioner to submit his proposals for partition of the property, and for that purpose authorised him to ascertain the property which was available for partition and to ascertain the liability of the joint family.
By so authorising the Commissioner, the trial Court did not abdicate its functions to the comissioner : the commissioner was merely called upon to make proposals for partition, on which the parties would be heard, and the Court would adjudicate upon such proposals in the light of the decree, and the contentions of the parties.
The proposals of the commissioner cannot from their very nature be binding upon the parties nor the reasons in support thereof.
The order it may be, remembered was made with the consent of the parties and no objection to the order was, it appears, pressed before the High Court.
We do not think that any case is made out for modifying that part of the order.
The parties to this dispute are Digamber Jains of the Porwal sect and are resident of Jabalpur.
Jains have generally been regarded as heterodox Hindus and in the absence of special custom they are governed by the rules applicable to Hindus.
As observed by the Privy Council in Sheokuarbai vs Jeoraff.(1) The Jains are of Hindu origin; they are Hindu dissenters, and although as was pointed out by Mr. Mayne in paragraph 46 of his Hindu Law and Usages "Generally adhering to ordinary Hindu law, that is, the law of the three (1) 426 superior castes, they recognise, no divine authority in the Vedas and do not practise the Shradhs, or ceremony for the dead." "The due performance of the Shradhs, or religious ceremonies for the dead, is at the base of the religious theory of adoption, but the Jains; have so generally adopted the Hindu law that the Hindu rules of adoption are applied to them in the absence of some contrary usage x x x." But amongst the Jainsa custom enabling a widow to adopt a son to her husband without express authority has been reco.
gnised by judicial decisions spread over a period longer than a century.
In Pemraj vs Musammad Chand Kanwar(1), the Judicial Committee of the Privy Council after a review of the case law observed : " x x x x, in many other parts of India" (parts other than the Provinces of Madras and the Punjab) "it has now been established by decisions based on evidence from widely separated districts and from different sects that the Jains observe the custom by which a widow may adopt to her husband without his authority.
This custom is based on religious tenants common to all sects of Jains, and particularly their disbelief of the doctrine that the spiritual welfare of the deceased husband may be affected by the adoption, and though it cannot be shown that in any of the decided cases the parties were of the Khandelwal sect, yet in none of the cases has a distinction been drawn between one sect and another.
It is now in their Lordship,% ' opinion no longer premature to hold that the custom prevails generally among all Jains except in those areas in which there are special reasons, not operative in the rest of India, which explains why the custom has not established itself.
Mayne, in his treaties on Hindu Law and Usage, at page 209, has lent the weight of his authority to the proposition that among the Jains, except in the Madras Presidency a sonless widow can adopt a son to her (1) (1947) L.K. 74 I.A. 254.
427 husband without his authority or the consent of his sapindas".
This view was reiterated by the Privy Council in a case reported in Mangibai Gulabchand vs
Suganchand Bhikamchand (1).
The Attorney General for the appellants, however, contends that there is no evidence of a custom authorising the widow of a Porwal Digamber Jain residing in Jabalpur to adopt a son to her husband without express authority.
Counsel sub mitted that the observations in the two cases relating to the custom of adoption must be restricted to the sects to which the parties to these cases belonged, and in so far as they purport to extend the custom to all Jain residents in India outside Madras and the Punjab they are mere dicta and not binding upon this Court.
In Pemraj 's case the parties belonged to the Khandelwal sect domiciled and resident in Ajmer and in Mangibai 's case the parties were Marwari Jains of the Vis Oswal sect who having migrated from Jodhpur had settled down in the Thana District of the Bombay Province, but the opinion of the Judicial Committee expressly proceeded upon a well recognised custom applicable to all Jains in the territory of India (excepting Madras and the Punjab) and not upon proof of a restricted custom governing the sects of Jains to which the parties belonged.
Undoubtedly, as observed by this Court in Saraswathi ' Ammal vs Jagadamhal (2) in dealing with the quantum of proof required to prove a family or loca I custom, " it is incumbent on a party getting up a custom to allege and prove the custom on which he relies and it is not any theory of custom or deductions from other customs which can be made a rule of decision but only any customs applicable to the parties concerned that can be the rule of decision in particular case.
x x x (1).
A.I.R. (1948) P.C. 177.
(2) ; 428 Theory and custom are antitheses, custom cannot be a matter mere of theory but must always be a matter of fact and one custom cannot be deducted from another.
A community living in one particular district may have evolved a particular custom but from that it does not follow that the community living in another district is necessarily following the same custom.
" But the application of the custom to the parties to this appeal does not appear to proceed upon analogies or deductions.
It governs the parties, because the custom has become a part of the law applicable to Jains in India (except in Madras and the Punjab) by a long and uninterrupted course of acceptance.
A review of the cases decided by different Courts clearlyshows that the custom is generally applicable to Jains all over India, except the Jain domiciled in Madras and the Punjab.
The earliest case of which a report is available is Maharaja Govindnath Bay vs Ray Chand (1) decided by the Saddar Court Calcutta in 1933. 'in that case the validity of an adoption by a Jain 'Widow of a son without express authority from her husband was questioned.
The Court after consulting the Pandits held that by Jain law a sonless widow could adopt a son just as her husband for the performance of religious rites and that the section of the vitis or priests to the adoption is not essential.
In Bhagwandas Tejmal V. Rajmal alias Hiralal Lachmidas(2) the Bombay High Court opined that the widow of a Jain was a delegate either by express or implied authority to adopt a son, but she could not delegate to another person that authority to adopt a son to her husband after her death.
In Sheo Singh Rai vs Mussumut Dakho and Moorari Lal, (3) decided in 1878, the Privy 'Council affirmed the view of the North West Provinces High Court that a sonless widow of a Jain had the right of adoption without the permission of her husband or the consent (1) (2) (1873) 10 Bom.
H.C. Rep. 241.
(3) (1878) L.R. 5 I.& 87 429 of his heirs.
In that case before the Subordinate Judge and before the High Court evidence was recorded of the custom applicable to Jains generally, in different place such as Delhi, Jaipur, Mathura, Banaras and it was held that ' the custom was established by evidence.
The parties to the suit were Agarwal Jains of Meerut District, but decision of the Board proceeded upon a custom found on evidence to be common to all Jains.
In Lakhmi Chand vs Catto Bai.
(1) decided in 1886, again the power of a Jain widow to adopt a son to her deceased husband was held proved.
In Manik Chand Golecha vs Jagat Settani, (2) decided in 1889, the High Court of Bengal upheld a custom in respect of adoption by a widow of an.
Oswal Jain.
The decision of the Court did not proceed upon any custom peculiar to the Oswal sect.
In Harnabh Pershad alias Rajajee vs Mangil Das(3) decided in 1899, it was held upon the evidence consisting partly of judicial decisions and partly of oral evidence that the custom that a sonless Jain widow was competent to adopt a son to her husband without his permission or the consent of his kinsmen, was sufficiently established and that in this respect there was no material difference in the custom of the Aggarwal, Choreewal (Porwal), Khandwal and Oswal sects of the Jaim ; and that there was nothing to differentiate the Jains at Arrab from the Jains elsewhere.
The judgment of the case proceeded upon an elaborate examination of numerous instances in which the custom was held established.
In Manohar Lal vs Banarsi Das(4) and in Asharfi Kumar vs Rupchand(5) a similar custom was hold established.
In the latter case a large number of witnesses were examined at different places and on a review of the decisions and the evidence the Court held the custom proved.
The judgment of the Allahabad (1) All. 319.
(2) Cal.
5 1 8.
(3) Cal.
(4) (1907) 1.L.R. 29 All.
(5) All.197 430 High Court in Asharfi 's case was affirmed by the Privy Council in RupChand vs Jambu Prasad.
(1) It may be stated that the right of a Jain widow to adopt without authority of her husband was not questioned before the Privy Council.
In Jiwraj vs Mt. Sheokuwarbai the Court of the Judicial Commissioner ' Nagpur held that the permission of the husband was not necessary in the case of a Jain widow to adopt a son.
This case was also carried to the Privy Council and the judgment was affirmed in Sheokuarbat vs Jeoraj (3).
In Banarsi Das vs Samat Prasad (4) a similar custom was held established.
The decisions in all these cases proceeded not upon any custom peculiar to the locali ty, or to the sect of Jains to which they belonged, but upon the view that being Jains, they were governed by the custom which had by long acceptance become part of the law applicable to them.
It is well settled that where a custom is repeatedly brought to the notice of the Courts of a country, the courts may hold that custom introduced into the law without the necessity of proof in each.
individual case.
(Rama Rao vs Raja of Pittapur) (5).
The plea about the invalidity of the adoption of Rajkumar by Bburibai must therefore fail.
Khilonabai died after the was brought into operation on June 14, 1956.
This Act by section 2(1)(b) applies to Hindus and also to persons who are Jains by religion.
The preliminary decree was passed on July 29, 1955, and thereby Khilonabai was declared entitled to a fourth share in the property of the family.
Section 14 of the provides: "14(1) Any property possessed by a female Hindu, whether acquired before or after the commencement of this Act, shall be (1) All. 217.
(3) (2) A.I.R. (1920) Nag. 162.
(4) All.
1019, (5) (1918) L.R. 4 5 1.A. 148.
431 held by her as full owner thereof and not as a limited owner.
EXPLANATION.
In this sub section ,property" includes both movable 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 not, 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 by such property held by her as stridhana immediately before the commencement of this Act.
(2) Nothing contained 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 court 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.
" Section 15 provides: "115 (1) The property of a female Hindu dying intestate shall devolve according to the rules set out in section 16, (a) firstly, upon the sons and daughters (including the children of any predeceased son or daughter) and the husband; (b) secondly, upon the heirs of the husband; (c) thirdly ' upon the mother and father; 432 (d) fourthly, upon the heirs of the father; (e) lastly, upon, the heirs of the mother; (2) Notwithstanding anything contained in sub section (1), (a) any property inherited by a female Hindu from her father or mother shall devolve, in the absence of any son or daughter of the deceased (including the children of any predeceased son or daughter) not upon the other heirs referred to in sub section (1) in the order specified therein but upon the heirs of the father: and (b) any property inherited by a female Hindu from her husband or from her father in law shall devolve, in the absence of any son or daughter of the deceased (including the children of any predeceased son or daughter) not upon the other heirs referred to in sub section (1) in the order specified therein, but upon the heirs of the husband." Section 16 which prescribes the order of succession and manner of distribution among, the heirs of a Hindu female provides by Rule ,,Among the heirs specified in sub section (1) of section 15, those in one entry shall be preferred to those in any succeeding entry, and those included in the same entry shall take simultaneously." 433 Counsel for Rajkumar concedes, and in our judgment he is right in so conceding that if the share declared by the preliminary decree in favour of Khilonabai is property possessed by her at the date of her death, it should devolve upon her grandsons Munnalal and Ramchand, to the exclusion of Rajkumar adopted son of Padam Chand.
This Court in Gumalapara Taggina Matada Kotturuswami vs Setra Veeravva (1) held that "The word "possessed" in section 14 is used in a broad sense and in the context means the state of owning or having in one 's power".
The preliminary decree declared that Khilonabai was entitled to a share in the family 'estate and the estate being with the family of which she was a member and in joint enjoyment, would be possessed by her.
But counsel for Rajkumar submitted that under the preliminary decree passed in the suit for partition the interest of Khilonabai in the estate was merely inchoate, for she had a mere right to be maintained out of the estate and that her right continued to retain that character till actual division was made and the share declared by the preliminary decree was separated to her: on her death before actual division the inchoate interest again reverted to the estate out of which it was carved.
Counsel relied upon the judgment of the judicial committee in Pratpamull Agarwalla vs Dhanabati Bibi (2) in support of his plea that under the Mitakshara law, when the family estate is divided a wife or mother is entitled to a share. but is not recognised as the owner of such share until the division of the, property is actually made,as she has no preexisting right in the estate except a right of maintenance.
Counsel submitted that this rule of Hindu law was not affected by anything contained in section 14 of the .
By section 14 (1) the Legislature sought to convert the interest of a Hindu female which under the (1) [1959] 1 Supp.
S.C.R. 968.
(2) (1935) L.R. 63 I.A 33. 434 Sastric Hindu law would have been regarded as a limited interest into an absolute interest and by the explanation thereto gave to the expression property" the widest connotation.
The expression includes property acquired by a Hindu female 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 not, 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.
By section 14(1) manifestly it is intended to convert the interest which a Hindu female has in property however restricted the nature of that interest under the Sastric Hindu law may be into absolute estate.
Pratap mull 's case undoubtedly laid down that till actual division of the share declared in her favour by a preliminary decree for partition of the joint family estate a Hindu wife or mother, was not recognized as owner, but that rule cannot in our judgment apply after the enactment of the .
The Act is a codifying enactment, and has made far reaching changes in the structure of the Hindu law of inheritance, and succession.
The Act confers upon Hindu females full rights of inheritance, and sweeps away the traditional limitations on her powers of dispositions which were regarded under the Hindu law as inherent in her estate.
She it; under the Act regarded as a fresh stock of descent in respect of property possessed by her at the time of her death.
It is true that under the Sastric Hindu, law, the share given to a Hindu widow on partition between her sons or her grandsons was in lieu of her right to maintenance.
She was not entitled to claim partition.
But the Legislature by enacting the Hindu Women 's ' Right to Property Act, 1937 made a significant departure in that branch of the law: the Act gave a Hindu widow the same interest in the property 435 which her husband had at the time of his death, and if the estate was partitioned she became owner in severally of her share, subject of course, to the restrictions on disposition and the peculiar rule of extinction of the estate on death actual or civil.
It cannot be amused having regard to this development that in enacting 8. 14 of the , the Legislature merely intended to declare the rule enunciated by the Privy Council in Pratapmulls case.
Section 4 of the Act gives an overriding effect to the provisions of the Act.
It enacts"Save as otherwise expressly provided in this Act, (a) any text rule or interpretation of Hindi law or any custom or usage as part of that law in force immediately before the commencement of this Act shall cease to have ;effect with respect to 'any matter for which provision is made in this Act : (b) x x x x X" Manifestly, the legislature intended to supersede the rules of Hindu law on all matters in respect of which there was an express provision made in the Act.
Normally a rights declared in an estate by a preliminary decree would be regarded as property, and there is nothing in the context in which section 14 occurs or in the phraseology used by the Legislature to warrant the view that such a right declared in relation to the estate of a joint family in favour of a Hindu widow is not property within the meaning of section 14.
In the light of the scheme of the Act and its avowed purpose it. would be difficult, without doing violence to the language used in the enactment, to assume that a right declared in property in favour of a person under a decree for partition is not a right to property.
, If under a preliminary decree the right in favour of a Hindu male be regarded as property the right declared in favour of a Hindu female must also be regarded 436 as property.
The High Court was therefore, in our judgment, in error in holding that the right declared in favour of Khilonabai was not possessed by her, nor are we able to agree with the submission of the learned counsel for Raj Kumar that it was not property within the meaning of section 14 of the Act.
On that view of the case, by virtue of so. 15 and 16 of the Act, the interest declared in favour of Khilonabai devolved upon her sons Munnalal and Ramohand to the exclusion of her grandson Rajkumar.
The decree passed by the High Court is therefore modified in this respect and the decree passed by the trial Court restored.
Having regard to the partial success of the parties, there will be no order as to costs in this appeal and in the High Court.
| G, a Digamber Jain of the, Porwal sect, died in 1934 leaving behind his widow Smt.
K, his son G who died in 1939 and three grandsons M, P and R.
In 1952 M 's son S filed a suit for partition of the joint family properties.
Rajkumar, claiming to be a son of P adopted by his widow, claimed a 1/4th share in the joint family property.
The adoption was challenged on the ground that no express authority had been given by P to his widow to adopt.
The trial court held that no express authority was required by a sinless Jain widow to adopt a son and that the adoption was duly and properly made.
Accordingly, a preliminary decree declaring the shares of Smt.
K, the branch of M, the branch of R and of Rajkumar to be 1/4th each was passed.
M and others pre ferred an appeal to the High Court mainly against the findings on the question of adoption.
During the pendency of the appeal, the , came into force.
Shortly thereafter Smt.
K died.
The High Court upheld '.he decision of the trial court on the question of the adoption of Rajkumar.
With respect to the share of Smt.
K the High Court held that her interest declared by the preliminary decree was inchoate, that she never became "possessed", 419 of any share within the meaning of s 14 of the Act and that it remained joint family property which became divisible amongst the parties proportionately to their shares.
The appellants contended that the adoption of Rajkumar was invalid as no custom applicable to the Porwal sect of the jains had been established empowering a widow to adopt without the authority of her husband and that the 1/4th share of Smt.
K declared by the preliminary decree had become her absolute property by virtue of section 14 of the Act and upon her death it descended to her grandsons M and R to the exclusion of other parties.
Held, that the adoption of Rajkumar was valid.
A sonless Jain widow could adopt a son without the express authority of her husband.
Such a custom among the Jains not domiciled in the States of Madras and the Punjab) has been recognised by judicial decisions spread over a period longer than a century.
Though none of these decisions related to the Porwal sect of Jabalpur to which the parties belonged.
They laid down a general custom of the jains which were applicable to the parties.
The decisions proceeded not upon.
any custom peculiar to any locality or to any sect of the jains but.
upon general custom which had by long acceptance become part of the law applicable to them.
Where a custom is repeatedly brought to the notice of the Courts, the courts may held that custom introduced into the law without the necessity of proof in each individual case.
Pemraj vs Mst.
Chand Kanwar, (1947) L. R. 74 1.
A. 224 and Mangibai Gulabchand vs Suganchand Bhikamchand, A.I.R. (1948) P. C. 177, relied on.
Sheokuarbai vs
Jeoraj, , Saraswathi Ammal vs ,Jagadambal, , Maharajah Govind nath Ray vs Gulal Chand, (1833) 5 Sel.
Rep. 276, Bhagwandas Tejmal vs Rajmal Alias Hiralal Lachmindas, (1873) 10 Bom.
H.C. Rep. 241, Sheo Singh Rai vs Mst.
Dakho and Morari Lal (1878) L.R. 5 1.
A. 87, Lakhmi Chand vs Gatto Bai, All. 319, Manik Cha nd Golecha vs Jagit Settani, Cal.
518, Harar nabh Parshad alias Rajajee vs Mangil Das, Cal. 379, ManoharLal vs Banarsi Das All.
495, Asharfi Kumar vs Rupchand, All. 197, Rup Chand vs Jambu, Prasad All, 2 47, Jiwaraj vs Mst.
Sheokuwarbai, A.I.R. (1920) Nag. 162, Banarsi Das vs Sumat Prasad, All.
1019 and Rama Rao vs Raja of Pittapur, (1918) L. R. 43 1.
A. 148, referred to.
Held, further that the 1/4th share of Smt.
K declared by the preliminury decree was "possessed" by her and on her 420 death it descended to her grandsons in accordance with provisions of sections 15 and 16 of the Act.
The word "possessed" in section 14 was used in a broad sense meaning the state of owing or having in one 's power.
The rule laid down by the Privy Council that till actual division of the share declared in her favour by a preliminary decree for partition of the,joint family prop" a Hindu wife or mother was not recognised as owner of that share cannot apply after the enactment of the .
Section 4 of the Act made it clear that the Legislature intended to supersede the rules of Hindu law on all rs in respect of which there was an express provision made in the Act.
Gumalapura Taggina Matada Kotturuswami vs Setra Veerayya, (1959) 1 Supp.
S.C.R. 968 and Pratapmull Agarwalla vs Dhanabati Bibi, (1935) L.R. 63 I.A. 33, referred to.
| section 7 of the Punjab Customs (Power to Contest) Act, 1920 provided that no person shall contest any alienation of non ancestral immovable property on the ground that such alienation is contrary to custom.
section 3 of the Amendment Act 12 of 1973 amended section 7 with the .result that no challenge could be made to the alienation of any immovable property, whether ancestral or non ancestral, on the ground that it is contrary to custom.
A gift deed was executed by one Mula, in favour of appellant No. 13 Bhagwati Deyi, on December 3, 1964.
Appel lants 1 to 12 claiming to be potential reversioners obtained a decree on May 31, 1966 in a suit flied against the donor and the donee for a declaration that under the Punjab Cus toms (Power to Contest) Act Z of 1920 the gift deed was not binding on them and that decree was confirmed in appeal on October 16, 1967.
On July 10, 1966, Mula adopted the re spondent.
On March 11, 1970 appellant No. 13 executed in favour of appellants 1 to 12,, a lease in respect of the property which was the subject matter of the gift.
Mula died on August 23, 1971.
On December 13, 1971, respondent filed a suit for possession of certain properties including the property which Mula had gifted to appellant No. 13.
The suit was decreed on January 20, 1971 and that decree was confirmed in appeal by the District Court and the High Court.
In appeal by special leave.
, the appellants contended (i) In decreeing the suit the Courts below had over looked the relevant provisions of the Punjab Customs (Power to Contest) Amendment Act, 1973 by virtue of which the legali ty of the gift made by Mula to appellant No. 13 could not be contested and (ii) since the respondent was not entitled to impeach the gift in favour of Bhagwati Devi, having been adopted after the date of the gift, the decree obtained by appellants 1 to 12 cannot enure for his benefit, under section 8 of the Punjab Limitation (Custom) Act, of 1920.
Dismissing the appeal, the Court HELD: (1 ) That a declaratory decree obtained under the Punjab Customs (Power to Contest) Act by a reversioner to the effect that an alienation would not bind them after the.
alienor 's death, had the effect of restoring the property alienated to the estate of the alienor and therefore, all persons who are heirs to the deceased were entitled to obtain possession of the alienated property.
[367 E F] (ii) The decree obtained by appellants 1 to 12 on May 31, 1966 would enure for the benefit of all persons who are entitled to a share in the property of the.
deceased as it existed at the moment of his death.
Since Mula 's property stood freed from the encumbrance of the, gift at the moment of his death, respondent as the adopted son would be en tiled to the possession of the gifted property.
[367 H, 368 A] Giani Ram vs Ramji Lal ; , relied on to; Chand Singh vs bid Kaur approved.
(iii) It is true that, if it became necessary after the amending Act of 1973 to contest the gift executed by Mula in favour of Bhagwati Devi, section 7 of the Act of 1920 would operate as a bar to such a contest.
But in the instant case, the basis on which the respondent has asked for the relief is that upon the death of Mula in 1971, the gift ceased to be operative by reason of the decree passed in suit No. 143/1965.
He has not and indeed he need not have contested the validity of the gift deed since the question was decided finally in the aforesaid suit.
[367 B D] 366
| % A piece of land had been purchased for the construction of a five star hotel.
In the sanctioned development plan the said land was shown in the residential zone and a contiguous parcel of land was shown as green belt.
When the plan was submitted to the Municipal Corporation for the construction of a five star hotel, the Commissioner rejected the plan on the ground that it was proposed to earmark the said land as a recreational ground with suitable internal network of roads during the revision of the development plan which was in the offing.
Aggrieved by the rejection, an appeal was preferred to the State Government under sec.
47 of the Maharashtra Regional and Town Planning Act, 1966.
The appeal was heard by the Minister of State for Urban Development.
The appellants herein, members of various ecological groups and rate payers of the Municipal Corporation, appeared and opposed saying that the land should be kept reserved for a green belt or recreational ground in the interest of the general public.
However, the Minister set aside the order of the Municipal Commissioner and directed the sanctioning of the plan on certain conditions.
The Municipal Corporation accepted the appellate order and did not challenge it.
But the appellants filed a Writ Petition challenging the legality of the order.
The writ petition was dismissed by the High Court.
The present appeal by special leave is against this dismissal.
Meanwhile the Municipal Corporation passed a resolution extending the park reservation by including the remaining area of the land in question.
By another resolution the first resolution was modified limiting the reservation for the park to 7,000 sq.
yards out of the dis 920 puted land.
Thereafter the State Government exempted the disputed land under section 20 of the Urban Land (Ceiling and Regulation) Act, 1976.
The resolutions and the order were challenged in the High Court.
The petitions were dismissed by a Single Judge of the High Court and later by the Division Bench on appeal.
The Review Petitions also met the same fate.
The petitioners have not challenged the judgment of the High Court passed on the review applications, but filed before this Court the two special leave petitions challenging the legality and validity of the two resolutions and the order of Government giving exemption under section 20 of the Urban Land (Ceiling and Regulation) Act.
Dismissing the appeal, and the special leave petitions, this Court, ^ HELD: 1.1 In allowing the appeal and directing sanction of the development plan, the Minister observed that in view of the clear provisions of sections 46 and 31(6) of the Act and having regard to the position that in the sanctioned plan of 1966, the said land was included in the residential zone and no proposal to exclude it therefrom in the draft revised development plan had been published, the Municipal Commissioner was not justified in rejecting the application for approval of the plan on the ground that the Bombay Municipal Corporation had decided to revise the 1966 Development Plan.
The Minister was of the view that the Planning Authority could only take into consideration any draft or final plan or proposal which had been published by means of notice, or sanctioned under the Act.
When Municipal Commissioner rejected the plan, there was no draft revised development plan in existence.
It was in contemplation.
If there had been such a plan, the Municipal Commissioner would be entitled to rely upon the same in rejecting the plan.
The Commissioner was not justified in merely relying upon a proposal for the preparation of a draft revised plan.
An order rejecting a development plan submitted by the owner of the land should be supported by some concrete material.
In the absence of any such material, it will be improper to reject the plan on the ground that there is a proposal for revision of the draft plan or that such a revision is under contemplation.
Therefore, the ground for rejecting the plan was not tenable and the appellate authority was justified in allowing the appeal.
[923H; 924A B, H; 925A C] 1.2 The Municipal Corporation has, subsequent to the judgment of the High Court, prepared and published a draft revised development plan.
The plan is not inconsistent with the draft revised development plan.
There is no material on record to show that the Municipal Corporation which is the Planning Authority, had prepared the draft revised 921 plan in accordance with the direction of the Minister.
The Minister has acted in public interest by imposing the conditions.
The conditions would show that considerable area out of the disputed land has been reserved for recreational ground or green belt.
The plan, as sanctioned with the conditions imposed, has been shown in the draft revised plan.
It was open to the Municipal Corporation to accept the verdict of the appellate authority and it has done so by not challenging it in the High Court or before this Court.
[926E H] 2.
The contention of the petitioners against the validity of the resolution is no longer tenable, regard being had to the fact that the draft revised development plan has since been published and the plan submitted and conditioned by the Minister is not inconsistent with the draft revised plan.
The petitioners have also not seriously pressed the validity of the said resolution.
[928C D] 3.
This Court is not called upon to decide the legality or otherwise of the order granting exemption.
These have been considered by the High Court in its judgment disposing of the review applications.
The petitioners have not challenged the judgment on review applications.
The petitioners are only interested in seeing that sufficient area is kept reserved for a park or recreation ground for the benefit of the members of the public, and are not concerned with the question as to the legality or otherwise of the exemption granted by the Government.
The question whether or not sufficient quantity of land has been kept reserved for park and recreation ground has been adequately considered and taken into account by the High Court.
[928G H; 929A]
| The appellant was a tenant of the respondent in respect of a shop in Agra, Uttar Pradesh.
The respondent applied to the District Magistrate under section 3(1) of the U.P. (Temporary) Control of Rent and Eviction Act, 1947 for permission to institute a suit against the appellant for evicting him from the shop.
The application was rejected by the District Magistrate, but the Commissioner, by order under section 3(3 ), granted the permission.
The appellant thereupon moved the State Government under section, 7(F) of the Act, but it was only after the respondent had flied a suit and ,obtained a decree that the State Government passed an order revoking the permission granted by the Commissioner.
The first Appellate Court, in view of the order under 7(F) act aside the decree of the trial Court.
However in second appeal the High Court, relying upon a Full Bench decision of that Court in Bashi Ram vs Mantri Lal (1965) 1 All 545, decided in favour of the respondent.
In appeal before this Court by.
special leave, the question for consideration was whether a decree for eviction obtained in a suit instituted after obtaining the permission of the Commissioner under section 3(3) of the Act becomes unenforceable if the State Government acting under section 7(F) of the Act revokes the permission granted by the Commissioner after the decree is passed.
HELD: The order of the District Magistrate is by section 3(1) specifically made subject to the order of the Commissioner in revision under section 3(3 ), but the Commissioner 's order according to section 3 (4 ) is final though subject to the order of the State Government under section 7(F).
There is no provision in the Act providing that a suit validly instituted after getting the required permission under section 3 (1 ) ceases to be maintainable because of any order made by the State Government under section 7(F).
[305 G H] Similarly there is no provision in the Act invalidating a decree passed after the Act came into force in a validly instituted suit.
The finality or the force of a decree can be taken away by a statute, .but the Court will not readily infer that a decree passed by a competent Court has become unenforceable unless it is shown that a provision of law has specifically or by necessary implication made that decree unenforceable.
[305 H 306 C D] On an examination of the relevant provisions of the Act the conclusion must be that when the Commissioner sets aside the order passed by the District Magistrate granting permission to file a suit for ejecting a tenant, the order of the Commissioner prevails.
If he cancels the permission granted by the District Magistrate, there is no effective permission left and the suit instituted by.
the plaintiff without awaiting his decision must be treated as one filed without any valid permission by the District Magistrate.
To this extent the decision in Munshi Lal and ant.
Shambhu Nath Ramkishan, was correct.
[305 D F] Sup.
C1/69 2 298 It follows that the Full Bench decision in Bashi Ram 's case to the extent it held that a suit filed by the landlord after obtaining the permission of the District Magistrate cannot become infructuous even if the Commissioner revokes the permission, was incorrect.
[306 F] Bashi Ram 's case was however correctly decided in so far as it held that a suit validly instituted after obtaining a permission as required by section 3(1) does not cease to be maintainable even if the State Government revokes, after the institution of the suit, the permission granted.
if the State Government revokes the permission granted before the institution of the suit, then there would be no valid permission to sue.
In other words the State Government 's power to revoke the permission granted under section 3(1) gets exhausted once the suit is validity instituted.
[306 G] Bashi Ram vs Mantri Lal, (1965) 1, All. 545 and Munshi Lal and ant.
vs Shambhu Nath Ram Kishan, (1958) A.L.J., p. 584; considered.
Dr. S.L. Khoparji vs State Government, (1958) A.LJ., p. 724; Basant Lal Sah vs Bhagwan Prasad Sah, A.I.R. 1964 All.
p. 210 and Shri Bhagwan and ant.
vs Ram Chand and anr.
; , ; referred
| Allowing the appeal by special leave, the Court, ^ HELD: (1) A finding of existence of breach of the peace is not necessary at the time when a final order is passed nor is there any provision in the Code of Criminal Procedure requiring such a finding in the final order.
Once a preliminary order drawn up by the Magistrate sets out the reasons for holding that a breach of the peace exists, it is not necessary that the breach of peace should continue at every stage of the proceeding unless there is clear evidence to show that the dispute has ceased to exist so as to bring the case within the ambit of sub section (5) of section 145 of the Code of Criminal Procedure.
Unless such a contingency arises the proceedings have to be carried to their logical end culminating in the final order under sub section
(6) of section 145.
Further, it is well settled that under section 145 it is for the Magistrate to be satisfied regarding the existence of a breach of the peace and once he records his satisfaction in the preliminary order, the High Court in revision cannot go into the sufficiency or otherwise of the materials on the basis of which the satisfaction of the Magistrate is based.
[94C F] R. H. Bhutani vs Miss Mani J. Desai & Ors., ; , followed.
Hari Ram & Ors.
vs Banwari Lal & Ors., A.I.R. 1967 Punjab 378; Ramarao vs Shivram & Ors., A.I.R. 1954 Hyderabad p. 93, approved.
(2) Mere absence of a finding of the existence of breach of the peace by the Magistrate in the final order in the circumstances of the case cannot be such a manifest defect so as to attract the extraordinary jurisdiction of the High Court under Section 482 of the Criminal Procedure Code.
[94B] (3) At the worst the omission on the part of the Magistrate to mention in his final order that there was breach of the peace could be said to be an error of procedure clearly falling within the domain of a curable irregularity which is not sufficient to vitiate the order passed by the Magistrate, particularly when there is nothing to show, in the instant case, that any prejudice was caused to any of the parties who had the full opportunity to produce their evidence before the Court.
[95B C]
| By an order passed under section 4 A of the Central Provinces and Berar Goondas Act, 1946 (X of 1946), as amended by the Madhya Pradesh Act XLIX of 950, the State of Madhya Pradesh directed the respondent to leave the district of Chhindwara, which had been specified as a proclaimed area under the Act, and the District Magistrate by another order communicated the same to the respondent.
The respondent challenged the said orders under article 226 of the Constitution on the ground that the Act violated his fundamental rights under article i9(i)(d) and (e) of the Constitution and was, therefore, invalidated by article 13 Of the Constitution.
The High Court held that sections 4 and 4 A of the impugned Act were invalid and since they were the 971 main operative provisions of the Act, the whole Act was in valid.
Held, that when a statute authorises preventive action against the citizens, it is essential that it must expressly provide that the specified authorities should satisfy themselves that the conditions precedent laid down by the statute existed before they acted thereunder.
If the statute fails to do so in respect of any such condition precedent, that is an infirmity sufficient to take the statute out of article 19(5) Of the Constitution.
Although there can be no doubt that sections 4 and 4 A of the impugned Act clearly contemplated as the primary condition precedent to any action thereunder that the person sought to be proceeded against must be a goonda, they fail to provide that the District Magistrate should first find that the person sought to be proceeded against was a goonda or provide any guidance whatsoever in that regard or afford any opportunity to the person proceeded against to show that he was not a goonda.
The definition of a goonda laid down by the Act, which is of an inclusive character, indicated no tests for deciding whether the person fell within the first part of the definition.
Gurbachan Singh vs The State of Bombay, ; , Bhagubhai Dullabhabhai Bhandari vs The District ' Magistrate, Thana, ; and Hari Khenu Gawali vs The Deputy Commissioner of Police, Bombay, ; , referred to.
Although the object of the impugned Act was beyond reproach and might well attract article 19(5) of the Constitution, since the Act itself failed to provide sufficient safeguards for the protection of the fundamental rights and the operative sections were thus rendered invalid, the entire Act must fail.
| Elections to the Madhya Pradesh Vidhan Sabha were held in the months of February/March 1985.
The appellant and Respondent No. 1 were the contesting candidates from Niwadi Legislative Assembly constituency No. 34.
Respondent No. 1 having secured majority of votes, was declared elected on 6.3.1985 to the Madhya Pradesh Vidhan Sabha.
The appellant challenged the election of the respondent No. 1 in the High Court of Madhya Pradesh Jabalpur alleging that the first respondent was guilty of adopting corrupt practices within the meaning of sub sections (2), (3) and (3A) of Section 123 of the Representation of Peoples Act, 1951.
Respondent No. 1 denied the allegations made in the election petition.
The High Court dismissed the Election Petition holding that the appellant had not substantiated all the charges levered by him against respondent No. 1.
Hence this appeal by the appellant.
Before this Court the appellant pressed only issues 3, 4 and 5 and gave up the rest.
Dismissing the appeal, this Court, HELD: An election petition where corrupt practices are imputed must be regarding as proceedings of a quasi criminal nature wherein strict proof is necessary.
Since, a charge of corrupt practice, the consequence of which is not only to render the election of the returned candidate void, but in some cases to impose on him a disqualification it must be proved on appraisal of the evidence adduced by both the parties particularly by the election petitioner who assails the election of a returned candidate.
[591B C] The element of bargaining is completely absent in the present case.
Needless to say that it is necessary for the purpose of proving the corrupt practice of bribery to estab lish that there was an element of bargaining.
[592C] 582 Dhartipakar Madan Lal Agarwal vs Rajiv Gandhi, [1987] Supp.
SCC 93; Kona Prabhakara Rao vs M. Seshagiri Rao & Anr., ; Manphul Singh vs Surinder Singh, [1974] 1 SCR 52; Jamuna Prasad Mukheriya & Ors.
vs Lachi Ram & Ors., ; ; Rahim Khan vs Khurshid Ahmed & Ors., ; ; Ram Sharan Yadav vs Thakur Muneshwar Nath Singh & Ors., ; ; Rahim Khan vs Khurshid Ahmed & Ors.; , ; Lakshmi Raman Acharya vs Chandan Singh & Ors., [1977] 2 SCR 412 and Ramji Prasad Singh vs Ram Bilas Jha & Ors., ; ; Mohan Singh vs Bhanwar Lal & Ors., ; ; Harjit Singh Mann vs section Umraon Singh & Ors., ; ; lqbal Singh vs section Gurdas Singh & Ors., ; ; Lalroukung vs Haokholal Thangam & Anr., ELR Vol , referred to.
| In a suit instituted by the respondent for the enforcement of the right of pre emption against the appellant, the trial court dismissed the suit but on appeal a decree was passed on March 24, 1952 under which upon the respondent paying the amount found payable as purchase money into court within four months, his title to the property would be deemed to have accrued from the date of the payment into court.
The appellant applied for special leave to appeal to the Supreme Court and leave was granted on May 20, 1953, confining the appeal to the constitutional point raised therein, that the Rewa State Pre emption Act, 1949, was unconstitutional on the ground that it placed an unreasonable restriction upon the right to acquire property enumerated in article 19(1)(f) of the Constitution of India.
In the meantime, the respondent deposited the price of pre emption into court within the time fixed in the decree and on November 14, 1953, the appellant withdrew the money from court.
The appeal to the Supreme Court came on for hearing in due course and the question arose on a preliminary objection raised by the respondent whetber the appellant was precluded from proceeding with the appeal on the ground that by withdrawing the pre emption price he must be deemed to have accepted the decree and that he could not, therefore, be heard to say that the decree was erroneous.
The respondent relied upon the doctrine that a person cannot be allowed to approbate and reprobate.
Held (Sarkar, J., dissenting), that the act of the appellant in withdrawing the pre emption price did not amount to an adoption by him of the decree which he had specifically challenged in his appeal and, in the absence of some statutory provision or of a well recognised principle of equity, he could not be deprived of his statutory right of appeal.
Accordingly, the appellant was not precluded from proceeding ;with the appeal.
The principle that a person who takes benefit under an order cannot repudiate that part of the order which is detrimental to him, on the ground that he cannot be allowed to approbate and reprobate, is applicable only to cases where the 359 benefit conferred by the order is something apart from the merits of the claim involved.
A vendee in a pre emption suit against whom a decree is passed has a right to be paid the pre emption price before the decree becomes effective, but the price cannot be characterised as a benefit under the decree; it is only in the nature of compensation to the vendee for the loss of his property.
Tinkler vs Hilder, ; , VerschuYes Creameries vs Hull and Netherlands Steamship CO., , Lissenden vs C. A. V. Bosch Ltd., , Venkatarayudu vs Chinna, and Sundra Das vs Dhanpat Rai, 1907 P.R. No. 16, considered.
Per Sarkar, J. The decree was one and indivisible and the appellant had no right to the money whatsoever independent of the decree and he could have drawn out the money only on the basis that the decree had been properly passed.
By withdrawing the money he adopted its correctness and cannot now say it is incorrect.
The prosecution of the appeal will result in the conduct of the appellant becoming inconsistent and he cannot, therefore, be allowed to proceed with the appeal.
Case law reviewed.
|
Appeal No. 188 of 1961.
Appeal by special leave from the judgment and order dated September 11,1959, of the Industrial Tribunal, Punjab, Patiala in Reference No. 30 of 1957.
G.S. Pathak, J. B. Dadachanji, O. C. Mathur and Ravinder Narain, for the appellants.
Bawa Shivcharan Singh and Janardan Slwrma for the respondents.
February 8.
The Judgment of the Court was delivered by VENKITARAMA AIYAR, J.
This is an appeal by special leave against the Order of the Industrial Tribunal, Punjab, dated September 11, 1959, in Reference No. 30 of 1957, overruling certain preliminary objections raised by the appellant to the 91 jurisdiction of the Tribunal to hear the reference.
The facts are that on February 14,,1955, the Government of Punjab referred under section 10(1)(c) of the , hereinafter referred to as "the Act", certain disputes between the appellant and the respondents to the Industrial Tribunal Punjab, Jullundur, for adjudication. ' That was numbered as Reference No. 3 of 1955.
This Tribunal had been constituted on August 29, 1953, by a Notification issued by the Government of Punjab, which is as follows "In exercise of the powers conferred under section 7 of the (Act XIV of 1947), the Governor of Punjab, in consultation with the Punjab High Court, is pleased to appoint Shri Avtar Narain Gujral 'Advocate, as Industrial Tribunal 'for Punjab.
" The main contention pressed before us on %behalf of the appellant is that Shri A.N. Gujral was 'not qualified under section 7(3)(c) of the Act under which the Notification was issued to be appointed as Tribunal on August 29, 1953, as he was very sixty years of age on that date, having been born on June 4, 1 892, and that there was therefore no Tribunal validly constituted in existence, and that in consequence the reference, to that so called Tribunal on February 14, 55, was wholly inoperative.
While Reference No. 3 of 1955 was pending before the Tribunal, the provisions of the , were amended by the Industrial Dispute (Amendment and Miscellaneous Provisions) Act, 1956 (Act No. 36 of 1956), which came into force on March 10, 1957.
This Amendment Act repealed section 7 of the principal Act, and replace it by sections 7A, 7B and 7C. Section 30 of the Amendment Act contains a saving as regards proceedings in relation to any industrial dispute which had been pending before a Tribunal constituted under the principal Act.
Acting under this section, the 92 Punjab Government issued on April 19, 1957, the following Notification : "No. 4194 0.
Lab 57/652 RA In continuation of Punjab Government Memorandum No. 3078 C Lab 57/4224, dated the 1st/llth March, 1957, and in exercise of the powers conferred by section 7 of the , as in force before the commencement of the Industrial Disputes (Amendment and Miscellaneous Provisions) Act, 1956, read with Section 30 of the latter Act and all other powers enabling him in this behalf the Governor of Punjab is pleased to extend (a)the period for which the Industrial Tribunal, Punjab, Jullundur, is constituted, and (b)the term of appointment of the Role Member thereof.
up to the last day of October, 1957, or such date as the proceedings in relation to industrial disputes pending in the said Tribunal immediately before the 10th March, 1957, are disposed of, whichever is earlier." To put it briefly, this Notification extended the life of the Tribunal constituted under the repealed section 7, for the period specified therein, and it also continued the term of Shri A,N. Gujral, as a Member thereof, for the said period.
The contention of the appellant with reference to this Notification is that section 30 of Act 36 of 1956 does not authorise the appointment of a Member to the Tribunal constituted under section 7, and that the Notification in so far as it continued Sbri A.N. Gujral.
as a Member of the Tribunal after his term of office had expired on Mach 10, 1957, was unauthorised and void.
93 On the same date on which the above Notification was issued, that is on April 19, 1957, the Government of Punjab issued a Notification under section 7A of the Act of which the relevant portion is as follows : "No. 4194 C Lab 57/66t RA In exercise of the powers conferred by Section 7A of the Industrial Disputes Act, 1917, as inserted by section 4 of the Industrial Disputes (Amendment and Miscellaneous Provisions) Act , 1956, (No. 36 of 1956), and all other powers enabling him in this behalf, the Governor of Punjab is pleased to constitute an Industrial Tribunal with Headquarters at Jullundur and to appoint Shri Avtar Narain Gujral, B.A., LL.B., as its Presiding Officer with effect from the date of the publication of this notification in the Official Gazette up to 3rd June, 1957.
" It will be noticed that this Notification firstly constituted a now Tribunal being the Industrial Tribunal, Jullundur, and secondly it appointed Shri A. N. Gujral as its Presiding Officer 'up to June 3, 1957.
The significance of that date is that, under section 7C (b) enacted by the Amendment Act, 1956, the age of retirement for members was fixed at sixty five, and under that provision, Shri A.N. Gujral would have to retire on June 3, 1957.
The Punjab Legislature intervened at this stage and enacted two statutes which are material for the present dispute.
One of them was the Industrial Disputes (Punjab Amendment) Act 8 of.
Section 3 of this Act amended section 7C (b) of the principal Act by substituting for the words "he has attained the age of sixty five years", the words "he has attained the the age of sixty seven years".
Thus the age of retirement was raised to sixty seven years.
By the operation of this Act, the tenure of Shri A. N. Gujral could be extended from 94 June 3, 1957 to June 3, 1959, and that in fact was done by a number of Notifications issued from time to time.
The appellant contends that this legislation was intended to benefit a single individual Shri A.N. Gujral, and is therefore void as offending article 14 of the Constitution.
The result, according to the appellant, is that after June 3, 1957, there was no one validly holding the office of Member of the Industrial Tribunal.
The second statute enacted by the Punjab Government is the Industrial Disputes (Amendment and Miscellaneous Provisions) (Punjab Amendment) Act 9 of 1957.
It introduced in section 30 of the Amendment Act, 1956, a new sub section (2) conferring on the ,State Government authority to re constitute Tribunal established under the , where those Tribunals had come to an end and there were matters pending before them for adjudication.
Going back to the Tribunal which was constituted under the repealed section 7 of the Act it will be remembered that a Notification had been issued on April 19, 1957, under section 30 of the Amendment Act, 1956, keeping it alive until the pending matters were dis posed of or until October 31, 1957, whichever was earlier.
The expectation that the proceedings before that Tribunal would be completed by that date was however, not realised and therefore acting under section, 33B (1) of the Act, and section 30 of the Amendment Act 1956, as further amended by Punjab Act, 9 of 1957.
the Government of Punjab issued on October 31, 1957 a Notification transferring the matters pending before the old Tribunal constituted under section 7 to the new Tribunal constituted on April 19, 1957, under section 7A.
In accordance with this Notification, Reference No. 3 of 1955 was transferred to the new Tribunal and was renumbered as 30 of 1957.
The contentions urged by the appellant against this order of transfer are, firstly, that the Tribunal to which the transfer had been made was not, for the reasons already given, validly constituted and had no legal existence, and, 95 secondly, that the new provision introduced by the Punjab Act 9 of 1957 has no retrospective operation and that, in consequence, the proceedings which had been pending before the old Tribunal on March 10, 1957, could not be transferred to the new Tribunal under this section.
The present reference 30 of 1957 was pending till June 3, 1959, when Sbri A.N. Gujral retired.
The Punjab Government then issued a Notification appointing Sri Kesho Ram Passey, retired Judge of the Punjab High Court as the Presiding Officer of the Industrial Tribunal, Jullundur.
Before him, the present appellant filed an application on September 4, 1959, raising a number of preliminary objections to the hearing of the reference.
By its Order dated September 11, 1959, the Tribunal overruled these objections and posted the. matter for hearing on the merits.
It is the correctness of this Order that is DOW challenged before us in this Appeal.
Though a number of objections were raised to the bearing of the rieference be,.fore the Tribunal, the contentions advanced before us for the appellant are the following : (1) Shri A. N. Gujral was riot qualified to be appointedto the Tribunal under section 7(3)(c) of the Act that, in consequence, the reference to him dated February 14, 1955, was incompetent; (2)that the Notification.
of the Punjab Government dated April 19, 1957 appointing Shri A. N. Gujral as a Member of the Industrial Tribunal, Juilundur, and the subsequent Notifications extending bis tenures of office are unauthorised and inoperative; (3)that the Notification of the Punjab Government dated Ootober 31, 1957, transferring the proccedings.
pending before the old Tribunal to the new Tribunal was inoperative, because (i) the Punjab Act 8 of 1957 is void being repugnant to article 14 of the, Constitution and the appointment of Shri A. N. Gujral as Member under that Act is also void; 96 and (ii) section 30(2) enacted by Punjab Act 9 of 1957 under which the transfer was made, did not authorise transfer of proceedings, which had been pending on or before March 10, 1957.
(1) Taking up first the, contention that Shri A. N. Gujral was not qualified to be appointed to the Tribunal on August 29, 1953, by reason of the fact that he was over sixty years of age, the question is one of interpretation of the language of section 7(3)(c) of the Act.
Section 7, in so far As it is material for the present purpose, is as follows: "7.
Industrial Tribunals. (1) The appropriate Government may constitute, one or more Industrial Tribunals for the, adjudication o f industrial disputes in accordance with the provisions of this Act.
(2)A Tribunal shall consist of such number of independent members as the appropriate Government may think fit to appoint,, and where the Tribunal consists of two or more members, one of them shall be appointed as the Chairman thereof.
(3)Where a Tribunal consists of one member only, that member, and where it consists of two or more members, the Chairman of the Tribunal, shall be a person who (a)is or has been a Judge of a High Court; or (b) is or has been a District Judge or (c) is qualified for appointment as a Judge of a High Court: Provided that no appointment under this subsection to a Tribunal shall be made of any person Dot qualified under clause (a) or (b) except with the approval of the High Court of 97 the State in which the Tribunal has, or is intended to have its usual seat." Shri A. N. Gujral was appointed under section 7(3)(c) being an Advocate.
The question is, whether he was then qualified for appointment as a Judge of a High Court under that clause.
The Constitutional provision hearing on this point is article 217, which in so far as it is material is as follows : "217.
(1) Every Judge of a High Court shall be appointed by the President by warrant under his hand and seal after consultation with the Chief Justice of India, the Governor of the State, and, in the case of appointment of a Judge other than the Chief Justice, the Chief Justice of the High Court, and shall hold office in the case of an additional or acting Judge, as provided in article 224, and in any other case until he attains the age of sixty years; Provided that. . . (2)A person shall not be qualified for appointment as a Judge of a High Court unless he is citizen of India and (a) has for at least ten years held an Judicialoffice in the territory of India, or (b) has for at least ten years been a advocate of a High Court or of two or more such Courts in succession.
Explanation. .
While article 217 (2) prescribes the qualifications for appointment as a Judge, article 217(1) lays down that the Judge shall hold office until he attains the age of sixty years.
The whole of the controversy before us is as to the inter relation between these two clauses.
The contention of Mr. Pathak, learned counsel for the appellant, is that though article 217 (1) refers, in terms, to the termination of the office of Judge, in substance, it lays down a 98 qualification for appointment, because the appointment of a person over sixty as a Judge would clearly be repugnant to article 217(1) even though he might satisfy all the requirements of article 217(2).
It is accordingly argued that it is an implied qualification for appointment as a Judge under article 217 that the person should not have attained the age of sixty at the time of the appointment.
We agree that there is implicit in article 217(1) a prohibition against appointment as a Judge of a person who has attained the age of sixty years.
But in our view, that is in the nature of a condition governing the appointment to the office not a qualification with reference to a person who is to be appointed thereto.
There is manifest on the terms and on the scheme of the article a clear distinction between requirements as to the age of a person who could be appointed as a Judge and his fitness based on experience and ability to fill the office.
article 217(1) deals with the former, and, in form, it has reference to the termination of the office and can therefore be properly read only as imposing, by implication a restriction on making the appointment.
In strong contrast to this is article 217(2) which expressly refers to the qualifications of the person to be appointed such as his having held a judicial post or having been an Advocate for a period of not less than ten years.
We think that on a true construction of the article the prescription as to age is a condition attached to the duration of the office and not a qualification for appointment to it.
Mr. Pathak also relied on articles 224 and 376 as lending support to his contention that age is to be regarded as an implied qualification under article 217.
article 224 relates to the appointment of additional and acting Judges and it is provided in els.
(1) and (2) that the person to be appointed as additional or acting Judge by the President should be a duly qualified person.
There is nothing about the age of the person to be appointed in these clauses.
99 That is provided in article 224(3) when enacts that no person appointed as an additional or acting Judge of a High Court shall hold office after attaining the age of sixty years.
" This article is also framed on the same lines as article 217 and does not carry the matter further.
Nor is there anything in article 376 which throws any further light on this point.
It has reference to persons who were Judges in the High Courts of the States specified in part of the First Schedule at the time when the Constitution came into force, and provides that they shall become Judges of the High Courts in those States under the Constitution, and then enacts a special provision that they "shall notwithstanding anything in clauses (1) and (2) of article 217 but subject to the proviso to clause (1) of, that article, continue to hold office until the expiration of such period as the President may by order determine.
" We see nothing in the terms of this article which lends any support to the contention that age is to be regarded as a qualification.
More to the point under consideration is article 165 (1) that the ",Governor of each State shall appoint a person who is qualified to be appointed as a Judge of a High Court to be Advocate General for the State.
" The question has been discussed whether on the terms of this article" a person who has attained the age of sixty could be appointed as an Advocate General.
If the age of a person is to be regarded as one of his qualifications, then he could not be.
The point arose for decision in G. D. Karkare vs T. L. Shevde (1), where a Judge who had retired at the age of sixty had been appointed as Advocate General.
The validity of the appointment was challenged on the ground that he was disqualified by reason of his age.
The learned Judges of the Nagpur High Court held that cl.
(1) of article 217 of the Constitution prescribed only the duration of the appointment of a Judge of the High Court and could not be construed (1) I. L.R. [1952] Nas.
409. 100 as prescribing a qualification for his appointment.
It is argued for the appellant that the appointment of an Advocate General under article 165 might stand on a different footing from that of a Judge under article 217.
because of the special provision in article 165(3) that the Advocate General is to hold office, at pleasure, whereas a Judge holds office during good behavior.
But this difference bears only on the power of the appropriate authority to terminate the appointment and not on the qualification of the person to be appointed to the office.
In our view, the interpretation put upon article 217 in G. D. Karkare 's case (1) is correct.
Though the true meaning of article 217 has figured largely in the argument before us, it is to be noted that we are primarily concerned in this appeal with the interpretation of section 7(3)(c) of the Act, and that must ultimately turn on its own context.
Section 7(3)(a) provides for the appoint ment of a High Court Judge, sitting or retired, as a Member of the Tribunal.
Age is clearly not a qualification under this sub clause, as the age for retirement for a Judge of the High Court is sixty.
Likewise, el.
(b) provides for the appointment of a District Judge, setting or retired, as a Member.
A retired District Judge who is aged over sixty will be eligible for appointment under this subclause.
Thus the age of a person does not enter into his qualifications under sub cls.
(a) and (b).
It would therefore be legitimate to construe sub el.
(c) as not importing any qualification on the ground of age.
But it is said that sub cls.
(a) and (b) form a distinct group having reference to judicial officers, whereas, cl.
(c) is confined to Advocates, who form a distinct category by themselves, and that in view of this difference, considerations as to age applicable to cl.
(a) and (b) need not be applicable to el.
There is undoubtedly a distinction (1) I. L. R.[1952] Nag. 409. 101 between cls.
(a) and (b) on the one hand and c1.
(c) on the other.
But the question is whether this has any reasonable relation to the difference which is sought to be made between the two classes with reference to the age of appointment.
If a retired Judge of the age of sixty can fittingly fill the office of a Member of the Tribunal under section 7, an Advocate of that age can likewise do so.
In our view, there is no ground for importing in section 7(3)(c) an implied qualification as to age, which is not applicable to el.
7(3)(a) and (b).
This question was considered by a Bench of the Punjab High Court in Prabhudayal vs State of Punjab (1).
There the validity of the appointment of Shri A. N. Gujral under the notification dated August 29, 1953, which is the very point now under debate, was challenged on the ground that as he was over sixty on that date, he was not qualified to be appointed under section 1 (3)(c).
The Court held approving of the decision in G. D. Karkare 's case (2), that the prescription as to age in article 217 (1) was not a qualification to the office of a Judge under article 217(2), and that a person who was more than sixty was qualified for appointment under section 7(3)(c).
Reliance is placed for the appellant on the terms of section 7C which was substituted by the Amendment Act 36 of 1956 in the place of section 7 as supporting the contention that age is a qualification for appointment under section 7(3) (c).
Section 7C is as follows : "No person shall be appointed to, or continue in, the office of the presiding officer of a Labour Court, Tribunal or National Tribunal, if (a) he is not an independent pet son or (1) A. 1.
R (2) 1.1 R.[1952] Nag.
409. 102 (b) he has attained the age of sixty five years ' " The marginal note to that section which was also relied on is as follows : " Disqualifications for the presiding officers of Labour Courts, Tribunals and National Tribunals.
" The argument of the appellant is that, in prescribing the age as a qualification under section 7C, the Legislature only made explicit what was implicit in a. 7(3)(c), and that therefore the qualification on the basis of age should also be imported in section 7(3)(c).
This inference does not, in our opinion, follow.
The insertion of age qualification in section 7C is more consistent with an intention on the part of the Legislature to add, in the light of the working of the repealed section 7, a new provision prescribing the age of retirement for Members.
We agree with the decision of the Punjab High Court in Prabhudayals case (1) and hold that section 7 (3) (c) does not import any qualification based on the age of the person to be appointed, and that the appointment of Shri A. N. Gujral on August 29, 1953, was valid under a. 7(3)(c).
(2)The next contention advanced for the appellant is that the Notification dated April 19, 1957, appointing Shri A. N. Gujral as a Member of the Tribunal issued under section 30 of the Amendment Act 36 of 1956 was not authorised by the terms of that section and that therefore there was no validly constituted Tribunal from that date.
Section 30 is as follows : "Savings as to proceedings pending before Tribunals : If immediately before the commencement of this Act there is pending any proceeding in relation to an Industrial dispute before a Tribunal constituted (1) A. I. R. [1959] Punj 460.
103 under the (14 of 1947), as in force before such commencement, the dispute may be adjudicated and the proceeding disposed of by that Tribunal after such commencement, as if this Act had not been passed.
" The contention urged before us is that section 7 under ,Which Shri A. N. Gujral had been constituted Tribunal was repealed on March 10, 1957, the notification dated April 19, 1957, appointing him as a Member of the Tribunal is void.
There is no substance in this contention.
Section 30 expressly provides for the life of the Tribunal being extended for the period specified therein, and that necessarily implies a power to continue Shri A. N. Gujral as the Tribunal, and we should add that in view of our decision on point No. 3 this objection is practically of no importance.
(3)Lastly, it is contended that the transfer of the proceedings pending before the old Tribunal to the new Tribunal under the Notification dated October 31, 1957, was invalid and inoperative.
Two grounds were urged in support of this contention.
One is that Shri A.N. Gujral attained the age of sixty five on June 4, 1957, and his term of office would have then expired under s.7C.
Then the Punjab Legislature enacted Act 8 of 1957 raising the age of retirement under s.70(b) from sixty five to sixty seven.
That was with a, view to continue Shri A.N. Gujral in office.
And this legislation came into force only on June 3, 1957.
This Act, it is said offends article 14 as its object was to benefit a particular individual, Shri A.N. Gujral, and reference was made to a decision of this Court in Ameeroonissa vs Mehboob (1) as supporting this contention.
There is no force in this contention.
There the legislation related to the estate of one (1) ; 104 Nawab Waliuddoula, and it provided that the claims of Mahboob Begum and Kadiran Begum, who claimed as heirs stood dismissed thereby and could not be called in question in any court of law.
And this Court held that it was repugnant to article 14, as it singled out individuals and denied them the right which other citizens have of resort to a court of law.
But the impugned Act, 8 of 1957 is of general application, the age being raised to sixty seven with reference to all persons holding the office under that section.
The occasion which inspired the enactment of the statute might be the impending retirement of Shri A. N. Gujral.
But that is not a ground for holding that it is discriminatory and contravenes article 14, when it is, on its terms, of general application.
The second ground of attack against the order of transfer is that it is not competent under s.30(2) of the Amendment Act 36 of 1956 as further amended by the Punjab Act 9 of 1957.
Section 30(2) is as follows : "If immediately before the commencement of this Act there was pending any proceeding in relation to an industrial dispute before a Tribunal constituted under the , as in force before such commencement and such proceeding could riot be disposed of by that Tribunal due to the Tribunal having come to an end on the expiry of the period for which it was constituted, the State Government may reconstitute that Tribunal for adjudicating that dispute and disposing of that proceeding after such commencement as if this Act had not bee n passed, and the proceeding may be continued by that Tribunal from the, stage at which it was left.
" 105 The contention urged before us is that this provision has no retrospective operation and that in consequence the proceedings which had been pending before the old Tribunal on March 10, 1957, could not be transferred to the new Tribunal under this section.
This contention is clearly untenable, because the whole object of s.30(2) is to provide for the hearing of disputes which were pending before the old Tribunal, and its operation is entirely retrospective.
This contention must there.
fore be rejected.
In the result, the repeal fails and is dismissed with costs.
Appeal dismissed.
| On February 14, 1953, the Government of Punjab referred certain disputes between the appellant company and its workmen to the Industrial Tribunal which had been consti tuted on August 29, 1953, by a notification issued under section 7 of the industrial Disputes Act, 1947, by which G, an Advo cate, was appointed as the Industrial Tribunal for Punjab.
When the reference was pending the Act was amended.
The Amendment Act inter alia repealed section 7 of the principal Act and replaced it by sections 7A, 7B and 7C, and by section 30 provided for a saving clause in respect of the proceedings pending before the Tribunal constituted under the principal Act.
On April 19, 1957, the Punjab Government issued a notification under section 7 of the Act and section 30 of the Amendment Act extending the life of the Tribunal constituted under the repealed section 7 and also extending the term of G as the member.
On the same date another Notification was issued under section 7A of the Act constituting a new Tribunal and appointing G as the Presiding Officer up to June 3, 1957.
Under section 70 (b) the age of retirement for members was fixed at sixty five and under that provision G would have to retire by June 3, 1957.
The Punjab Government intervened and passed the Industrial Disputes (Punjab Amendment) Act, 1957, raising the age of retirement of members to sixty seven years.
After G had retired on June 3, 1959, the Punjab Government issued a notification appointing another person as the Presiding Officer of the Industrial Tribunal.
The appellant challenged the legality of the reference on the grounds, inter alia, (1) that G was not qualified to be appointed to the Tribunal under section 7 (3) (c) of the Act, as he was over sixty years and, therefore, the reference to him dated 90 February 14, 1955, was incompetent, and (2) that the Indus trial Disputes (Punjab Amendment) Act, 1937, was passed with a view to benefit a single individual, G, and, therefore, was void as offending article 14 of the Constitution of India.
Held, (1) section 7(3)(c) of the , did not import any qualification based on the age of the person to be appointed, and that the appointment of G on August 29, 1953, was valid under that section.
On the true Construction of article 217 of the Constitution of India, the prescription of age therein is a condition attached to the duration of the office and not a "qualifica tion" for appointment to it.
G.D. Karkare vs T.L. Shevde, I.L.R. and Prabhudayal vs State of Punjab, A. I. R. 1959 Punj.
460, approved.
(2) the Industrial Disputes (Punjab Amendment) Act,1957,not contravene article 14 of the Constitution, because thoughthe occasion which inspired the enactment of the statutemight be to benefit an individual, it was of general application and could not therefore be held to be discriminatory.
Ameerunissa vs Mehboob; , , distinguished.
| Under sections 3 and 8 of the U. P. the Governor issued an Order dated March 10, 1948, making dletailed provisions for the settlement of Industrial Disputes.
Clause 5(a) of the Government Order empowered, among others, a recognised association of employers to refer an industrial dispute for adjudication to the Conciliation Board.
Clause 23 provided that no employer shall discharge or dismiss any workman during the pendency of an inquiry except with the written permission of the Regional Conciliation Officer, and Cl. 26 provided for penalties for contravention of Cl. 23.
The appellant proposed to dismiss certain workmen.
Though at the time there was a dispute pending inquiry, the appellant did not seek permission under cl. 23 to dismiss the workmen; but the Employers ' Associa tion of Northern India made an application under cl.
5(a) to the Board to adjudicate and give an award that the appellant was entitled to dismiss the workmen.
The workmen contended that the reference under cl.
5(a) was incompetent as the appellant had ,not first taken proceedings under Cl.
Held, that the application under cl.
5(a) of the G. O. was not 24 186 maintainable, as the employer could not take advantage of cl.
5(a) during the pendency of an inquiry when Cl. 23 was applicable.
If cls.
5(a) and 23 were held to ' apply at the same time there would be disharmony as by resorting to cl.
5(a) when Cl. 23 was applicable, the employers would be contravening cl. 23 and rendering themselves liable to the penalties under section 26.
But there was complete harmony if it was held that cl.
5(a) applied in all other cases of dismissal or discharge except where an inquiry was pending within the meaning of Cl. 23.
Besides Cl. 23 was a special provision which prevailed over the general provisions in cl.
Kanpur Mill Mazdoor Union vs Employers ' Association of Northern India, , approved.
De Winton vs Brecon, , Churchill vs Crease, (182S) 5 Bing.
177 and United States vs Chase, ; , referred to.
| Clause (b) Of section 22 of the Industrial Disputes (Appellate Tribunal) Act, 1950 provides that during the pendency of any appeal under the Act no employer shall discharge any workmen concerned in such appeal, save with the express permission in writing of the Appellate Tribunal, and section 23 enables any employee to make a complaint in writing to such Appellate Tribunal, if the employer contravenes the provisions Of section 22 during the pendency of proceedings before the said Tribunal.
144 During the pendency of an appeal filed before the Labour, Appellate Tribunal the appellant company finding it difficult to run the factory decided to close it down and gave notice to all the workmen that their services would be terminated upon the expiry of thirty days from July 16, 1952.
On August 31, 1952, a complaint was made on behalf of the workmen to the Tribunal under section 23 Of the Act that the appellant had discharged them without the permission in writing of the Tribunal and had thereby contravened the provisions of section 22 of the Act.
It was found that the closure of the appellant 's business was bona fide.
Held, that section 22 of the Act is applicable only to an existing or running industry and that the termination of the services of all workmen, on a real and bona fide closure of business, is not 'discharge ' within the meaning of section 22(b) of the Act.
J. K. Hosiery Factory vs Labour Appellate Tribunal of India (A.I.R. 1956 All. 498), approved on the point of construction of section 22 of the Act.
Pipraich Sugar Mills Ltd. vs The Pipraich Sugar Mills Mazdoor Union followed.
| Respondents No. 2 to 4, regular employees of the appel lant Delhi Transport Corporation, were served with termina tion notices under Regulation 9(b) of the Delhi Road Trans port Authority (Conditions of Appointment & Service) Regula tions, 1952 by the appellant Corporation on the ground that they became inefficient in their work and started inciting other members not to perform their duties.
The three respondents and their Union, respondent No. 1 filed writ petition in High Court, challenging the constitu tional validity of Regulation 9(b), which gave the manage ment right to terminate the services of an employee by giving one month 's notice or pay in lieu thereof.
The Divi sion Bench of the High Court struck down the Regulation, holding that the Regulation gave absolute, unbridled and arbitrary powers to the management to terminate the services of any permanent or temporary employee, and such power was violative of Article 14 of the Constitution.
Hence, the Corporation filed the appeal before this Court, by special leave.
The validity of similar provisions in Para 522 of the Shastri Award, rule 1(i) of the District Board Rules 1926, Part V, Regulation 13 of Indian Airlines Employees ' Service Regulations, Regulation 48 of Air India Employees ' Service Regulations and also the clause in the contract of appoint ment in respect of employees of Zilla Parishad and the New India Assurance Company, also came up for consideration in the connected appeals and applications filed before this Court.
It was contended on behalf of the Delhi Transport Corpo ration that there was sufficient guideline in Regulation 9(b) and the power of termination, properly read, would not be arbitrary or violative of Article 14 of the Constitution, that the Court would be entitled to obtain guidance from the preamble, the policy and the purpose of the Act and the power conferred under it and to see that the power was exercised only for that purpose, that even a term like 'public interest ' could be sufficient guidance in the matter of retirement of a government employee, and such a provision could be read into a statute even when it was not otherwise expressly there, that it was well settled that the Court would sustain the presumption of constitutionality by con sidering matters of common knowledge and to assume every state of facts which could be conceived and could even read down the section, if it became necessary to uphold the validity of the provision, that the underlying 144 rationale of this rule of interpretation, or the doctrine of reading down of a statute being that when a legislature, whose powers were not unlimited, enacted a statute, it was aware of its limitations, and in the absence of express intention or clear language to the contrary, it must be presumed to have implied into the statute the requisite limitations and conditions to immunise it from the virus of unconstitutionality, that since every legislature intended to act within its powers, in a limited Government, the legislature would attempt to function within its limited powers and it would not be expected to have intended to transgress its limits, that the guidelines for the exercise of the power of termination simpliciter under Regulation 9(b) could be found in the statutory provisions of the 1950 Act under which the regulations had been framed, the pream ble; Sections 19, 20 and 53, the context of Regulation 9(b) read with Regulations 9(a) and 15, that even for the exer cise of this power, reasons could be recorded although they need not be communicated which would ensure a check on the arbitrary exercise of power and effective judicial review in a given case, ensuring efficient running of services and in public interest and the regulations in question were paral lel to, but not identical with, the exceptions carved out under proviso to Article 311(2), that even the power of termination simipliciter under Regulation 9(b) could only be exercised in circumstances other than those in Regulation 9(a), i.e. not where the foundation of the order was 'mis conduct ', the exercise of such power could only be for purposes germane and relevant to the statute, that the principles of natural justice or holding of an enquiry is neither a universal principle of justice nor inflexible dogma and the principles of natural justice were not incapa ble of exclusion in a given situation, if importing the right to be heard has the effect of paralysing the adminis trative process or the need for promptitude or the urgency of the situation so demands, natural justice could be avoided; that the words "where it is not reasonably prac ticable to hold an enquiry" may be imported into the regula tion, that where termination took place by the exclusion of audi alteram partem rule in circumstances which were circum scribed and coupled with the safeguard of recording of reasons which were germane and relevant, then the termina tion would not render the regulation unreasonable or arbi trary, and if the regulation was read in this manner it could not be said that the power was uncanalised or unguid ed, that under ordinary law of "master and servant" the Corporation was empowered by the Contract of Service to terminate the services of its employees in terms thereof; the Declaration in Brojo Nath 's case that such a contract was void under section 23 of the Indian Contract Act or opposed to public policy offending the Fundamental Rights and the Directive Principles was not sound in law; as a master, the Corporation had unbridled right 145 to terminate the contract in the interests of efficient functioning of the Corporation or to maintain discipline among its employees, and if the termination, was found to be wrongful, the only remedy available to the employees was to claim damages for wrongful termination but not a declaration as was granted in Brojo Nath 's case.
On behalf of the workmen/intervenors, it was submitted that provision of any rule that service would be liable to termination on notice for the period prescribed therein contravened Article 14 of the Constitution, as arbitrary and uncontrolled power was left in the authority to select at its will any person against whom action would be taken; that Articles 14, 19 and 21 were inter related and Article 21 did not exclude Article 19 and even if there was a law providing a procedure for depriving a person of personal liberty and there was, consequently no infringement of fundamental right conferred by Article 21, such law in so far as it abridged or took away any fundamental right under Article 19 would have to meet the challenge of that Article, that violation of principle of natural justice by State action was viola tion of Article 14 which could be excluded only in excep tional circumstances, and, therefore, a clause which autho rised the employer to terminate the services of an employee, whose contract of service was for indefinite period or till the age of retirement, by serving notice, and which did not contain any guidance for the exercise of the power and without recording reasons for such termination, violated the fundamental rights guaranteed under Articles 14, 19(1)(g) and 21 and principles of natural justice and was void under Section 2(g) of the , and unforce able under Section 2(hi; that since audi alteram partem was a requirement of Article 14.
and conferment of arbitrary power itself was contrary to Article 14, the rule in ques tion could not be sustained as valid; that the Constitution al guarantees under Articles 14 and 21 were for all persons and there could be no basis for making a distinction between 'workmen ' to whom the Industrial Disputes Act and other industrial laws applied and those who were outside their purview, and the law applicable to the former could only add to and not detract from the rights guaranteed by Part 111 of the Constitution; that the power to terminate the services of a person employed to serve indefinitely or till the age of retirement could be exercised only in cases of proved misconduct or exceptional circumstances having regard to the Constitutional guarantee available under Article 14, 19(1)(g) and 21 and unless the exceptional circumstances were spelt out, the power to terminate the services would cover both permissible and impermissible grounds rendering it wholly invalid, particularly because, the requirement of audi alteram partem which was a part of the guarantee of 146 Article 14 was sought to be excluded, and there could be no guidance available in the body of the law itself, since the purpose for which an undertaking was established and the provisions dealing with the same in the law could provide no guidance regarding exceptional circumstances under which alone the power could be exercised, that the question in volved, in the instant cases was not the exercise of power which an employer possessed to terminate the services of his employee, but the extent of that power; that provisions of Regulation 9(b) of the Delhi Road Transport Authority (Conditions of Appointment and Service) Regulations, 1952, could not be rendered constitutional by reading the require ment of recording reasons and confining it to cases where it was not reasonably practicable to hold an enquiry and read ing it down further as being applicable to only exceptional cases would not be permissible construction and proper; that the Regulation conferred arbitrary power of leaving it to the DTC Management to pick and choose, either to hold an enquiry or terminate the services for the same misconduct and there was nothing in the provisions of the Act or the regulations from which the Management could find any guid ance and, therefore, in order to conform to the constitu tional guarantees contained in Articles 14, 19(1)(g) and 21, the regulation would have to make a distinction between cases where services were sought to be terminated for mis conduct and cases of termination on grounds other than what would constitute misconduct; that regulation 9(b) deliber ately conferred wide power of termination of service without giving reasonable opportunity to an employee even if he was regular or permanent employee, in addition to regulation 15 which provided for dismissal or removal after a disciplinary enquiry, thus, the intention of the regulation making au thority was clear and unambiguous; the provision was not capable of two interpretations, and consequently, the ques tion of reading down did not arise, and reading down in the instant cases involved not interpretation of any single word in regulation 9(b) but adding a whole clause to it, which amounted to rewriting the provisions, which courts had refused to make up for the omission of the legislature, and would inevitably drain out Article 14 of its vitality, and the right to equality which was regarded as a basic feature of the Constitution, and subject permanent employees of the DTC to a tremendous sense of insecurity which is against the philosophy and scheme of the Constitution, that unless the provision of the Constitution itself excluded the principles of natural justice, they continued to be applicable as an integral part of the right to equality guaranteed by the Constitution, that as the employees of the DTC were not Government employees, Article 311(2) was not applicable, and Article 14 fully applied to them, including the principles of natural justice.
147 On behalf of the Indian Airlines Corporation and the Air India, which filed intervention applications, it was submit ted that there had been distinction between the discharge simpliciter and dismissal from service by way of punishment, that the effect of the judgments of this Court in the Cen tral Inland Water 's case and West Bengal 's case was to take away the right of the employer to terminate the services of an employee by way of discharge simpliciter, that this Court had recognised the existence of the inherent right of an employer to terminate the services of an employee in terms of the contract of employment and also under the various labour enactments, that a plain reading of the amended Regulation 13 of the Indian Airlines Employees ' Regulations and a cumulative reading of the amended regulations 48 and 44 of the Air India Employees Service Regulations clearly established that the vice, if any, of arbitrariness had been completely removed and that the power to terminate had been vested with the Board of Directors, and not with any indi vidual, and sufficient guidelines made available to the Board to exercise the restricted and limited power available to the employer under these regulations.
On behalf of another intervenor, New India Assurance Co., it was submitted that the Central Inland Water 's case was erroneous, insofar as it made complete negation of power of the employer to terminate and rendered the termination illegal even where the employer had made all the necessary investigation and had given hearing to the employee con cerned before making the order, and took in even private employment; therefore, the judgment of this Court should be read down and made applicable prospectively.
In Civil Appeal No. 4073 of 1986 it was contended on behalf of the Bank employee whose services were terminated under para 522 of the Shastri Award, that mere failure of the employee to mention the loan taken by him from another branch of the Bank, which was repaid subsequently, had deprived him of his livelihood, and his services were termi nated without charge of 'misconduct ' and without an enquiry, and paragraph 522 of the Shastri Award gave no indication as to on what conditions this arbitrary uncontrolled power could be used to get rid of one or more permanent employees for "efficient management of Banks" on subjective opinions or suspicion not tested in enquiry into facts, and that this provision provided for "insecurity of tenure" for lakhs of permanent employees; Articles 14, 19(1)(g) and 21 and the integrated protection of these Fundamental Rights excluded the "doctrine of pleasure" and insisted on security of tenure "during good behaviour", and the right to livelihood could not be rendered precari 148 ous or reduced to a "glorious 'uncertainty", that no princi ple of interpretation permitted reading down a provision so as to make it into a different provision altogether differ ent from what was intended by the legislature or its dele gate, and there could not be any reading down which was contrary to the principles of interpretation; that if two provisions existed, firstly to remove from service after holding an enquiry on a charge of 'misconduct ' and secondly, without serving a charge sheet or holding an enquiry, all provisions for holding enquiry would be rendered otiose and would be reduced to a mere redundancy, that the Court had a duty to correct wrongs even if orders had been made which were later found to be violative of any fundamental right and to recall its orders to avoid injustice; that substan tive provision of para 522 could not be controlled or cur tailed effectively so as to confine its operation within narrow constitutional limits; that it was not the duty of the court to condone the constitutional delinquencies of those limited by the Constitution if they arrogated uncon trolled unconstitutional powers, which were neither neces sary nor germane for supposed efficiency of services in the Banks as a business enterprise, and that in a system gov erned by rule of law, discretion when conferred upon execu tive authorities must be confined within clearly defined limits.
In Civil Appeal No. I 115 of 1976, the appellant employ ee of the Zila Parishad contended that his services were terminated on account of the vindictiveness of some of the employees of the respondent, and without enquiry.
The em ployer submitted that the termination order was passed on the basis of the condition in the mutually agreed terms of contract of appointment, and resolution passed by the Board, and that Rule 1(i) of District Board Rules, 1926, Part V gave right to both the parties to terminate the employment on one month 's notice.
On the questions (i) whether Regulation 9(b) of the Delhi Road Transport Authority (Conditions of Appointment and Service) Regulations, 1952, was arbitrary, illegal, discriminatory and violative of audi alteram partem and so constitutionally invalid and void; and (ii) whether the Regulation could be interpreted and read down in such a manner as to hold that it was not discriminatory, or arbi trary and did not confer unbriddled and uncanalised power on the authority to terminate the service of an employee, including a permanent employee, without any reason whatsoev er.
Dismissing Civil Appeal No. 2876 of 1986 (appeal by the Delhi Transport Corporation), allowing Civil Appeal No. 1115 of 1976, and directing other matters to be placed before a Division Bench, in ac 149 cordance with the majority decision (per Ray, Sharma, Sawant and K. Ramaswamy, JJ.) this Court, HELD: Per Ray, J.: 1.
I Regulation 9(b) of the Delhi Road Transport Author ity (Conditions of Appointment and Service) Regulations, 1952 which confers powers on the authority to terminate the services of a permanent and confirmed employee by issuing a notice terminating the services or by making payment in lieu of notice without assigning any reasons in the order and without giving any opportunity of hearing to the employee before passing the orders is wholly arbitrary, uncanalised and unrestricted violating principles of natural justice as well as Article 14 of the Constitution.
There is no guide line in the Regulations or in the Delhi Road Transport Authority Act, 1950 as to when or in which cases and circum stances this power of termination by giving notice or pay in lieu thereof can be exercised.
[264G, 285C] 1.2 Government Companies or Public Corporations which carry on trade and business activity of State being State instrumentalities, are State within the meaning of Article 12 of the Constitution and as such they are subject to the observance of fundamental rights embodied in Part 111 as well as to conform to the directive principles in Part IV of the Constitution.
In other words, the Service Regulations or Rules framed by them are to be tested by the touchstone of Article 14 of the Constitution.
Furthermore, the procedure prescribed by their Rules or Regulations must be reasonable, fair and just and not arbitrary, fanciful and unjust.
[264H, 265A B] 1.3 The 'audi alteram partem ' rule which, in essence, enforces the equality clause in Article 14 of the Constitu tion is applicable not only to quasi judicial orders but to administrative orders affecting prejudicially the party in question unless the application of the rule has been ex pressly excluded by the Act or Regulation or Rule which is not the case here.
Rules of natural justice do no supplant but supplement the Rules and Regulations.
Moreover, the Rule of Law, which permeates the Constitution of India, demands that it has to be observed both substantially and procedurally.
Rule of law posits that the power to be exercised in a manner which is just, fair and reasonable and not in an unreasonable, capricious or arbitrary manner leaving room for discrimination.
[265D E] Regulation 9(b) does not expressly exclude the application of the 150 'audi alteram parterm ' rule and as such the order of termi nation of service of a permanent employee cannot be passed by simply issuing a month 's notice or pay in lieu thereof without recording any reason in the order and without giving any hearing to the employee to controvert the allegation on the basis of which the purported order is made.
[265F] 1.4 Considering from all these aspects Regulation 9(b) is illegal and void, as it is arbitrary, discriminatory and without any guidelines for exercise of the power.
It confers unbridled, uncanalised and arbitrary power on the authority to terminate the services of a permanent employee without recording any reasons and without conforming to the princi ples of natural justice.
It is also void under Section 23 of the Contract Act, as being opposed to public policy and also ultra vires of Article 14 of the Constitution.
[265E, 265B C, 266G] Moti Ram Deka Etc.
vs General Manager, NEF Railways, Maligaon.
Pandu, Etc., ; ; Parshotam Lal Dhingra vs Union of India, ; ; Shyam Lal vs The State of Uttar Pradesh and Anr., ; ; Shri Ram Krishna Dalmia vs Shri Justice S.R. Tendolkar & Ors., ; ; Jyoti Pershad vs The Administrator for the Union Territory of Delhi, ; ; State of Orissa vs Dr. (Miss) Binapani Devi & Ors., ; ; A.K. Kraipak of India vs Col. J.N. Sinha and Anr., [1971] 1 SCR 791; Air India Corporation vs V.A. Rebello & Ant., AIR 1972 S.C. 1343; The Workmen of Sudder Office Cinnamara vs The Manage ment, ; Tata Oil Mills Co. Ltd. vs Work men & Anr.; , ; Maneka Gandhi vs Union of India, [1978] 2 SCR 621; E.P. Royappa vs State of Tamil Nadu and Anr. ; ; Municipal Corporation of Greater Bombay vs Malvenkar & Ors., ; ; Manohar P. Kharkher and Anr.
vs Raghuraj & Anr., ; 1.
Michael & Anr.
vs Johnaton Pumps India Ltd., ; ; Sukhdev Singh & Ors.
vs Bhagat Ram Sardar Singh Raghu vanshi & Anr.; , ; S.S. Muley vs J.R.D. Tata & Ors., ; West Bengal State Electricity Board & Ors.
vs Desh Bandhu Ghosh and Ors., [1985] 3 SCC 116; Workmen Of Hindustan Steel Ltd. and Anr.
vs Hindustan Steel Ltd. and Ors., ; ; O.P. Bhandari vs Indian Tourism Development Corporation Ltd. & Ors.
, ; ; Central Inland Water Transport Corporation Ltd. & Anr.
vs Brojo Nath Ganguly & Anr., and Delhi Transport Undertaking vs Balbir Saran Goel, ; , referred to.
2.1 An Act can be declared to be valid wherein any term has been 151 used which per se seems to be without jurisdiction, but can be read ' down in order to make it constitutionally valid by separating and excluding the part which is invalid or by interpreting the word in such a fashion as to make it con stitutionally valid and within jurisdiction of the legisla ture which passed the said enactment, by reading down the provisions of the Act.
This however, does not under any circumstances, mean that where the plain and literal meaning that follows from a bare reading of the provisions of the Act, Rule or Regulations that it confers arbitrary uncana lised, unbridled unrestricted power to terminate the serv ices of a permanent employee without recording any reasons for the same and without adhering to the principles of natural justice and equality before the law as envisaged in Article 14 of the Constitution, it can be read down to save the said provision from constitutional invalidity, by bring ing or adding words in the said legislation, such as saying that it implies that reasons for the order of termination have to be recorded.
[271C F] 2.2 In interpreting the provisions of an Act, it is not permissible where the plain language of the provision gives a clear and unambiguous meaning that it can be interpreted by reading down and presuming certain expressions in order to save it from constitutional invalidity.
Therefore, it is impossible to hold by reading down the provisions of Regula tion 9(b) framed under section 53 of the Delhi Road Trans port Act, 1950 read with Delhi Road Transport (Amendment) Act, 1971 that the said provision does not confer arbitrary, unguided, unrestricted and uncanalised power without any guidelines on the authority to terminate the services of an employee without conforming to the principles of natural justice and equality as envisaged in Article 14 of the Constitution of India.
[271F H, 272A] Union of India & Anr.
vs Tulsiram Patel & Ors., [1985] Supp. 2 SCR 131; Roshan Lal Tandon vs Union of India, ; ; Commissioner of Sales Tax, Madhya Pradesh, Indore & Ors.
vs Radhakrishan & Ors.
, ; ; In Re The Hindu Women 's Rights to Property Act, 1937, and the Hindu Women 's Rights to Property (Amendment) Act, 1938 and in Re a Special Reference under Section 213 of the Government of India Act, 1935, ; R.M.D. Chamarbaugwalla vs The Union of India; , ; R.L. Arora vs State of Uttar Pradesh & Ors.
, ; and The Mysore State Electricity Board vs Bangalore Woollen, Cotton and Silk Mills Ltd. & Ors., [1963] Supp.
2 SCR 127, Jagaish Pandey vs The Chancellor of Bihar & Anr.
, ; , referred to.
H.N. Seervai: Constitutional Law of India, Third Edi tion, p. 119, referred to.
152 Per Sharma, J. 1.1 The rights of the parties in the present cases cannot be governed by the general principle of master and servant, and the management cannot have unrestricted and unqualified power of terminating the services of the employ ees.
In the interest of efficiency of the public bodies, however, they should have the authority to terminate the employment of undesirable, inefficient, corrupt, indolent and disobedient employees, but it must be exercised fairly, objectively and independently; and the occasion for the exercise must be delimited with precision and clarity.
Further, there should be adequate reason for the use of such a power, and a decision in this regard has to be taken in a manner which should show fairness, avoid arbitrariness and evoke credibility.
And this is possible only when the law lays down detailed guidelines in unambiguous and precise terms so as to avoid the danger of misinterpretation of the situation.
An element of uncertainty is likely to lead to grave and undesirable consequences.
Clarity and precision are.
therefore, essential for the guidelines.
[272D F] 1.2 Regulation 9(b) of the Delhi Road Transport Authori ty (Condition of Appointment and Service) Regulation, 1952 cannot, therefore.
be upheld for lack of adequate and appro priate guidelines.
[272G] Per Saw,ant, J. 1.1.
There is need to minimise the scope of the arbi trary use of power in all walks of life.
It is inadvisable to depend on the good sense of the individuals.
however high placed they may be.
It is all the more improper and undesirable to expose the precious rights like the rights of life.
liberty and property to the vagaries of the individual whims and fancies.
It is trite to say that individuals are not and do not become wise because they occupy high seats of power, and good sense, circumspection and fairness do not go with the posts, however high they may be.
There is only a complaisant presumption that those who occupy high posts have a high sense of responsibility.
The presumption is neither legal nor rational.
History does not support it and reality does not warrant it.
In particular, in a society pledged to uphold the rule of law, it would be both unwise and impolitic to leave any aspect of its life to be governed by discretion when it can conveniently and easily be covered by the rule of law.
[276E F] 1.2 Beyond the self deluding and self asserting right eous presumption, there is nothing to support the 'high authority ' theory.
This 153 theory undoubtedly weighed with some authorities for some time in the past.
But its unrealistic pretensions were soon noticed and it was buried without even so much as an ode to it.
[278A B] 1.3 The employment under the public undertakings is a public employment and a public property.
It is not only the undertakings but also the society which has a stake in their proper and efficient working.
Both discipline and devotion are necessary for efficiency.
To ensure both, the service conditions of those who work for them must be encouraging, certain and secured, and not vague and whimiscal.
With capricious service conditions, both discipline and devotion are endangered, and efficiency is impaired.
[276G H, 277A] 1.4 The right to life includes right to livelihood.
The right to livelihood, therefore, cannot hang on to the fan cies of individuals in authority.
The employment is not a bounty from them nor can its survival be at their mercy.
Income is the foundation of many fundamental rights and when work is the sole source of income, the right to work becomes as much fundamental.
Fundamental rights can ill afford to be consigned to the limb of undefined premises and uncertain applications.
That will be a mockery of them.
[277B] 1.5 Both the society and the individual employed, there fore, have an anxious interest in service conditions being well defined and explicit to the extent possible.
The arbi trary rules which are also sometimes described as Henry VIII Rules, can have no place in any service conditions.
[277C] Sukhdev Singh & Ors.
vs Bhagatram Sardar Singh Raghu vanshi & Anr.
; , ; Maneka Gandhi vs Union of India, ; The Manager, Government Branch Press & Ant.
vs D.R. Belliappa, ; ; The Manag ing Director, Uttar Pradesh Warehousing Corporation & Anr.
vs Vinay Narayan Vajpayee; , ; A.L. Kalra vs The Project & Equipment Corporation of India Ltd., ; ; Workmen of Hindustan Steel Ltd. & Anr.
vs Hindustan Steel Ltd. & Ors.
, ; ; West Bengal State Electricity Board & Ors.
vs Desh Bandhu Ghosh & Ors., [1985] 2 SCR 1014; Olga Tellis & Ors.
vs Bombay Municipal Corpora tion & Ors.
, [1985] Supp. 2 SCR 51; Union of India & Anr.
vs Tulsiram Patel& Ors., [1985] Supp. 2 SCR 131; Cen tral Inland Water Transport Corporation Ltd. & Anr.
vs Brojo Nath Ganguly & Anr.
, ; O.P. Bhandari vs Indian Tourism Development Corporation Ltd. & Ors. ; ; N.C. Dalwadi vs State of Gujarat, [1987] 3 154 SCC 611; M.K. Agarwal vs Gurgaon Gramin Bank & Ors., [1987] Supp.
SCC 643 and Daily Rated Casual Labour employed under P & T Department through Bhartiya Dak Tar Mazdoor Manch etc.
vs Union of India & Ors., , referred to.
2.1 The doctrine of reading down or of recasting the statute can be applied in limited situations.
It is essen tially used, firstly, for saving a statute from being struck down on account of its unconstitutionality.
It is an exten sion of the principle that when two interpretations are possible one rendering it constitutional and the other making it constitutional the former should be preferred.
The unconstitutionality may spring from either the incompetence of the legislature to enact the statute or from its viola tion of any of the provisions of the Constitution.
The second situation which summons its aid is where the provi sions of the statute are vague and ambiguous and it is possible to gather the intention of the legislature from the object of the statute, the context in which the provision occurs and the purpose for which it is made.
However, when the provision is cast in a definite and unambiguous language and its intention is clear, it is not permissible either to mend or bend it even if such recasting is in accord with good reason and conscience.
In such circumstances, it is not possible for the Court to remake the statute.
Its only duty is to strike it down and leave it to the legislature if it so desires, to amend it.
If the remaking of the statute by the courts is to lead to its distortion that course is to be scrupulously avoided.
The doctrine can never be called into play where the statute requires extensive additions and deletions.
Not only it is no part of the court 's duty to undertake such exercise, but it is beyond its jurisdiction to do so.
[288F H, 289A B] Re Hindu Women 's Rights to Property Act, 1937, and the Hindu Women 's Rights to Property (Amendment) Act, 1938 etc., ; Nalinakhya Bysack vs Shyam Sunder Halder & Ors.
, ; ; R.M.D. Chamarbaugwalla vs The Union of India, ; ; Kedar Nath Singh vs State of Bihar, [1962] Supp.
2 SCR 769; R.L Arora vs State of Uttar Pradesh & Ors., ; ; Jagdish Pandey vs The Chancellor, University of Bihar & Anr., [1968] I SCR 231; Shri Umed vs Raj Singh & Ors., [1975] I SCR 918; Mohd. Yunus Salim 's case; , ; Sunil Batra etc.
vs Delhi Adminis tration & Ors.; , ; Excel Wear etc.
vs Union of India & Ors.
, ; ; Minerva Mills Ltd. & Ors.
vs Union of India & Ors.
, ; ; Union of India & Anr. etc.
vs Tulsiram Patel etc.
; , and Elliott Ashton Welsh, 11 vs United States; , ; 308, referred to.
155 2.2 Therefore, the doctrine of reading down cannot be availed of for saving the regulation in the instant case.
In the first instance, the regulation is a part of the service regulations of the employees made by the Delhi Road Trans port Authority in exercise of the powers conferred by sub section (1) read with clause (c) of sub section (2) of Section 53 of the Delhi Road Transport Act, 1950, whose object is to provide for the establishment and the regula tion of Road Transport Authority for the promotion of a co ordinated system of road transport in the State of Delhi.
There is nothing either in the object of the service regula tions or in the object of the Act which has a bearing on Regulation 9(b).
If anything the object of the Act would require framing of such service regulations as would ensure dedicated and diligent employees to run the undertaking.
The dedication of the employees would pre suppose security of employment and not a constant hanging of the Democle 's sword over their head, and hence would in any case not bear the existence of such regulation.
Secondly, the language of regulation is so crystal clear that no two interpretations are possible to be placed on it and hence it is not permis sible to read in it any meaning other than what is clearly sought to be conveyed by it.
Thirdly, the context of the regulation makes it abundantly clear that it is meant to be a naked hire and fire rule and the authority has been vested with unguided and arbitrary power to dispense with the services of any category of the employees.
Sub clause (a) of the Regulation mentions elaborately the circumstances in which the services of an employee can be terminated without any notice or pay in lieu of such notice.
Sub clause (b) follows closely on its heel and states in clear language that when the termination is made due to reduction of estab lishment or in circumstances other than those mentioned in sub clause (a), one month 's notice or pay in lieu thereof is all that is necessary to be given for terminating an employ ee 's services.
The intention of the rule making authority, therefore, is more than clear.
It was to give an absolute free hand without any limitations whatsoever to terminate the services of any employee.
Both the language of the regulation as well as the context in which it is cast leave no scope for reading into it any further provision.
[289C H, 290A] 2.3 Moreover, reading in the rule circumstances under which alone the rule can be used, and reading it down to read in it words or expressions or provisions in order to save the legislation would not only distort the intention of the rule making authority but would also require extensive amendment of a very vague nature to it.
The reading in the regulation of a provision that the concerned employees should be given a hearing with regard to his mis conduct will require that be should first be intimated of the mis conduct of which he is guilty.
But 156 that kind of a situation is taken care of by sub clause (a) of the said regulation.
There is.
therefore.
no need of a separate prevision for the same.
on the other hand.
the services of an employee are to be terminated on grounds other than those mentioned in sub clause (a), then those grounds being unknown to the employee, cannot be met by him even if he is given a hearing.
The Court cannot read in the rule all circumstances where it is not possible or necessary to hold an enquiry.
Such situations are capable of being formulated easily and conveniently at least in general terms as is done by the Constitution makers in the second proviso to Article 311( 2).
The reading of such circumstances in the existing regulation would require its extensive recasting which is impermissible for the Court to do.
There is no authority which supports such wide reading down of any provision of the statute or rule/regulation.
Therefore the doctrine of reading down is singularly inapplicable to the present case.
[281B, 290B, 291A F] 3.
Clause (b) of Regulation 9 contains the much hated and abused rule of hire and fire reminiscent of the days of laissez faire and unrestrained freedom of contract.
[274E] Per Ramaswamy.
J 1. 1.1 The question of security of work is of most impor tance.
If a person does not have the feeling that he belongs to an organisation engaged in promotion.
he will not put forward his best effort to produce more.
That sense of belonging arises only when he feels that he will not be turned out of employment the next day at the whim of the management.
Therefore, as far as possible security of work should be assured the employees so that they may contribute to the maximisation of production.
[300D E] Daily Rated Casual Labour vs Union of India, at 130 131, referred to.
1.2 A permanent employee of a statutory authority, corporation or instrumentality under Article 12 has a lien on the post till he attained superannuation or compulsorily retired or service is duly terminated in accordance with the procedure established by law.
Security of tenure enures the benefit of pension on retirement.
Dismissal, removal or termination of his/her service for inefficiency, corruption or other misconduct is by way of penalty.
He/She has a right to security of tenure which is essential to inculcate a sense of belonging to the service or organisation and in volvement for maximum production or efficient 157 service.
It is also a valuable right which is to be duly put an end to only as per valid law.
[300A G] Roshan Lal Tandon vs Union of India, ; at 195 196; Calcutta Dock Labour Board vs Jarfar Imam, and Sirsi Municipality vs Cecelia Kom Francis Tal lis; , , referred to.
1.3 The right to life, a basic human right, assured by Article 21 of the Constitution comprehends some thing more than mere animal existence; it does not only mean physical existence, but includes basic human dignity.
The right to public employment and its concomitant right to livelihood receive their succour and nourishment under the canopy of the protective umbrella of Articles 14, 16(1), 19(1)(g) and 21.
[296A, 297B] Munn vs Illinois, ; and 154, referred to.
Kharak Singh vs State of U.P., [1964] 1 SCR 332; Olga Tellis vs Bombay Municipal Corporation, [1985] 2 Suppl.
SCR page 51 at 79; Menaka Gandhi vs Union of India, [1978] 2 SCR 621; State of Maharashtra vs Chander Bhan, and Board of Trustees, Port of Bombay vs Dilip Kumar; , , referred to.
1.4 The arbitrary, unbridled and naked power of wide discretion to dismiss a permanent employee without any guidelines or procedure would tend to defeat the constitu tional purpose of equality and allied purposes.
Therefore, when the Constitution assures dignity of the individual and the right to livelihood, the exercise of power by the execu tive should be combined with adequate safeguards for the rights of the employees against any arbitrary and capricious use of those powers.
Workmen of Hindustan Steels Ltd. vs Hindustan Steel Ltd. & Ors.; , and Francis Corallie vs
U.T. of Delhi; , = ; , referred to.
1.5 It is well settled constitutional law that different Articles the Chapter on Fundamental Rights and the Directive Principles in Part IV of the Constitution must be read as an integral and incorporeal whole with possible overlapping with the subject matter of what is to be protected by its various provisions, particularly the Fundamental Rights.
The fundamental rights, protected by Part III of the constitu tion, out of which Articles 14.
19 and 21 are the most frequently 158 invoked to test the validity of executive as well as legis lative actions when these actions are subjected to judicial scrutiny, are necessary means to develop one 's own person ality and to carve out one 's own life in the manner one likes best subject to reasonable restrictions imposed in the paramount interest of the society and to a just.
fair and reasonable procedure.
The effect of restriction or deprivation and not of the form adopted to deprive the right is the conclusive test.
Thus, the right to a public employ ment is a constitutional right under Article 16(1).
All matters relating to employment include the right to continue in service till the employee reaches superannuation or his service is duly terminated in accordance with just, fair and reasonable procedure prescribed under the provisions of the Constitution or the Rules made under proviso to Article 309 of the Constitution or the statutory provision or the Rules.
regulations or instructions having statutory flavour made thereunder.
But the relevant provisions must be conformable to the rights guaranteed in Parts III & IV of the Constitu tion.
Article 21 guarantees the right to live which includes right to livelihood.
to many.
assured tenure of service is the source.
[311G; 312G H, 313A B] R.C. Cooper vs Union of India, ; ; Minerva Mills Ltd. vs Union of India, and Union of India & Ant.
vs Tulsiram Patel & 0rs. [1985] Suppl.
2 SCR 131 at 233 referred to.
1.6 Article 14 is the general principle while article 311(2) is a special provision applicable to all civil serv ices under the State.
Article 311(2) embodies the principles of natural justice but proviso to clause (2) of article 311 excludes the operation of principles of natural justice engrafted in article 311(2) as an exception in the given cir cumstances enumerated in these clauses of the proviso to article 311(2) of the Constitution.
Article 14 read with Arti cles 16(1) and 311 are to be harmoniously interpreted that the proviso to article 311(2) excludes the application of the principles of natural justice as an exception; and the applicability of Article 311(2) must, therefore, be circum scribed to the civil services and to be construed according ly.
In respect of all other employees covered by Article 12 of the Constitution the dynamic role of Article 14 and other relevant Articles like 21 must be allowed to have full play without any inhibition.
unless the statutory rules them selves, consistent with the mandate of Articles 14.16.19 and 21 provide, expressly, such an exception.
[317F H, 315A] Union of India & Ant.
vs Tulsiram Patel & Ors., [1985] Suppl.
2 SCR 131 at 233; A.K. Kraipak & Ors. etc.
vs Union of India & Ors., and Union of India vs Col J.N. Sinha & Ors., [1971] 1 SCR 791, referred to.
159 1.7 Article 19(1)(g) empowers every citizen right to avocation or profession etc., which includes right to be continued in employment under the State unless the tenure is validly terminated and consistent with the scheme enshrined in the fundamental rights of the Constitution.
Whenever there is arbitrariness in State action whether it be of the Legislature or of the Executive or of an authority under Article 12.
Articles 14 and 21 spring into action and strike down such an action.
The concept of reasonableness and non arbitrariness pervades the entire constitutional spectrum and is a golden thread which runs through the whole fabric of the Constitution.
[315B D] 1.8 Thus, Article 14 read with 16(1) accords right to an equality or an equal treatment consistent with principles of natural justice.
Any law made or action taken by the employ er, corporate statutory or instrumentality under Article 12 must act fairly and reasonably.
Right.
to fair treatment is an essential inbuilt of natural justice.
Exercise of unbri dled and uncanalised discretionary power impinges upon the right of the citizen; vesting of discretion is no wrong provided it is exercised purposively, judiciously and with out prejudice.
Wider the discretion, the greater the chances of abuse.
Absolute discretion is destructive of freedom than of man 's inventions.
Absolute discretion marks the beginning of the end of the liberty.
The conferment of absolute power to dismiss a permanent employee is antithesis to justness or fair treatment.
The exercise of discretionary power wide of mark would bread arbitrary, unreasonable or unfair actions and would not be consistent with reason and justice.
[320B D] 1.9 The right to public employment which includes right to continued public employment till the employee is superan nuated as per rules or compulsorily retired or duly termi nated in accordance with the procedure established by law is an integral part of right to livelihood which in turn is an integral part of right to life assured by article 21 of the Constitution.
Any procedure prescribed to deprive such a right to livelihood or continued employment must be just, fair and reasonable procedure and conformable to the mandate of Articles 14 and 21.
In other words, an employee in a public employment also must not be arbitrarily, unjustly or unreasonably deprived of his/her livelihood which is ensured in continued employment till it is terminated in accordance with just, fair and reasonable procedure.
Otherwise any law or rule in violation thereof is void.
[320E F] A.K. Kraipak & Ors. etc.
vs Union of India & Ors.
, ; Union of India vs Col. J.N. Sinha and Anr., [1971] 1 SCR 791; 160 Fertilizer Corporation Kamgar Union (Regd.), Sindri & Ors.
vs Union of India & Ors.
, ; at 60 61; S.S. Muley vs J.R.D. Tata, ; Superin tendent of Post Office vs K. Vasayya, [1984] 3 Andhra Pra desh law Journal 9; West Bengal Electricity Board & Ors. vs D.B. Ghosh & Orb '., [1985] 2 SCR 1014; Workmen of Hindustan Steel Ltd. & Anr.
vs Hindustan Steel Ltd. & Ors.
, ; ; O.P. Bhandari vs Indian Tourism Development Corp. Ltd. & Ors.
, ; ; A.P.S.R.T. Corp. vs Labour Court, AIR 1980 A.P. 132; R.M.D. Chamarbaugwalla vs State of Punjab, ; ; Kanhialal vs District Judge & Ors., ; M.K. Agarwal vs Gurgaon Gramin Bank & Ors., ; All Saints High School vs Government of A.P., ; & 938 e to f; Frank Anthoney Public School vs Union of India, ; & 269 b to e; Christian Medical College Hospital Employees ' Union & Anr.
vs Christian Medical College Veilore Association & Ors., ; & 562; Kameshwar Prasad vs State of Bihar, [1962] Suppl.
3 SCR 369 and O.K. Ghosh vs EZX Joseph, [1963] Supp. 1 SCR 789, referred to.
United States vs Samuel D. singleton; , , referred 1.10 Undoubtedly, efficiency of the administration and the discipline among the employees is very vital to the successful functioning of an institution or maximum produc tion of goods or proper maintenance of the services.
Disci pline in that regard amongst the employees is its essential facet and bas to be maintained.
The society is vitally interested in the due discharge of the duties by the govern ment employees or employees of corporate bodies or statutory authorities or instrumentalities under article 12 of the Con stitution.
The government or corporate employees are, after all, paid from the public exchequer to which everyone contributes either by way of direct or indirect taxes.
The employees are charged with public duty and they should perform their public duties with deep sense of responsibili ty.
The collective responsibility of all the officers from top most to the lowest maximises the efficient public admin istration.
They must, therefore, be held to have individual as well as collective responsibility in discharge of their duties faithfully honestly with full dedication and utmost devotion to duty.
Equally the employees must also have a feeling that they have security of tenure.
They should also have an involvement on their part in the organisation or institution, corporation, etc.
They need assurance of serv ice and protection.
The public interest and the public good demands that those who discharge their duties honestly, efficiently and 161 with a sense of devotion and dedication to duty should receive adequate protection and security of tenure.
There fore, before depriving an employee of the means of liveli hood to himself and his dependents, i.e. job, the procedure prescribed for such deprivation must be just, fair and reasonable under articles 21 and 14 and when infringes article 19(1)(g) must be subject to imposing reasonable restrictions under article 19(5).
[320G H, 321A D, 322D] 1.11 Conferment of power on a high rank officer is not always an assurance, in particular, when the moral standards are generally degenerated, that the power would be exercised objectively, reasonably, conscientiously, fairly and justly without inbuilt protection to an employee.
Even officers who do their duty honestly and conscientiously are subject to great pressures and pulls.
Therefore, the competing claims of the "public interest" as against "individual interest" of the employees are to be harmoniously blended so as to serve the societal need consistent with the constitutional scheme.
[322D E] 1.12 Regulation 9(b) of the Delhi Road Transport (Condi tions of Appointment and Service) Regulations, 1952, is arbitrary, unjust, unfair and unreasonable offending Arti cles 14, 16(1), 19(1)(g) and 21 of the Constitution.
It is also opposite to the public policy and thereby is void under Section 23 of the .
[330G] 1.13 Under ordinary law of master and servant, whether the contract of service is for a fixed period or not, if it contains a provision for termination of service by notice, in terms thereof, it can be so determined and if the con tract finds no provision to give notice and the contract of service is not for a fixed period, law implies giving of a reasonable notice.
Where no notice or a reasonable notice was issued.
before terminating the contract.
the termination of the contract of service is wrongful and the aggrieved employee is entitled at law to sue for damages.
It is not disputed that the Delhi Road Transport Corporation is a statutory Corporation under the Delhi Road Transport Act and the Regulations are statutory and its employees are entitled to the fundamental rights enshrined in Part 111 of the Constitution.
The Corporation or an instrumentality or other authority under Article 12 is not free, like an ordinary master (a private employer) to terminate the services of its employees at its whim or caprices or vagary.
It is bound by the Act and the Regulation and paramount law of the land, the Constitution.
[292G H; 293A B] 1.14 Any law, much less the provisions of Contract Act, which are inconsistent with the fundamental rights guaran teed in Part III of 162 the Constitution, are void by operation of Article 13 of the Constitution.
The law of contract, like the legal system itself, involves a balance between competing sets of values.
Freedom of contract emphasises the need for stability.
certainty and predictability.
But, important as values are.
they are not absolute, and there comes a point when they face a serious challenge. 'This Court, as a court of consti tutional conscience enjoined and is jealously to project and uphold new values in establishing the egalitarian social order.
As a court of constitutional functionary exercising equity jurisdiction, this Court would relieve the weaker parties from unconstitutional contractual obligations, unjust, unfair, oppressive and unconscionable rules or conditions when the citizen is really unable to meet on equal terms with the State.
It is to find whether the citi zen, when entered into contracts of service, was in distress need or compelling circumstances to enter into contract on dotted lines or whether the citizen was in a position of either to "take it or leave it" and if it finds to be so, this Court would not shirk to avoid the contract by appro priate declaration.
[302G, 303B, 304H, 305A B] Central Inland Water Transport Company Limited vs Brojo nath Ganguly, 1986 SC 1571, affirmed.
Ramdas Vithaldas Durbar vs section Amarchand & 60., 43 Indian Appeals.
164 and V. Raghunadha Rao vs State of Andhra Pra desh, , referred to.
Anson 's Law of Contract, p. 6 and 7 and Professor Guido Calabresi of Yale University Law School "Refractivity, Paramount power and Contractual Changes", 1961 62 71 Yale Law Journal, P 1191, referred to.
2.1 The golden rule of statutory construction is that the words and phrases or sentences should be interpreted according to the intent of the legislature that passed the Act.
All the provisions should be read together.
If the words of the statutes are in themselves precise and unambig uous, the words, or phrases or sentences themselves alone do, then no more can be necessary than to expound those words or phrases or sentences in their natural and ordinary sense.
But if any doubt arises from the terms employed by the legislature, it is always safe means of collecting the intention, to call in aid the ground and cause of making the statute, and have recourse to the preamble, which is a key to open the minds of the makers of the statute and the mischiefs which the Act intends to redress.
In determining the meaning of statute the first question to ask always is what is the natural or ordinary meaning of that 163 word or phrase in its context.
It is only when that meaning leads to some result which cannot reasonably be supposed to have been the intent of the legislature, then it is proper to look for some other possible meaning and the court cannot go further.
[323D G] 2.2 The Doctrine of Reading Down is, therefore, an internal aid to construe the word or phrase in a statute to give reasonable meaning, but not to detract, disort or emasculate the language so as to give the supposed purpose to avoid unconstitutionality.
Thus, the object of reading down is to keep the operation of the statute within the purpose of the Act and constitutionally valid.
[324E, 325B] 2.3 It cannot be accepted that the Courts, in the proc ess of interpretation of the Statute, would not make law but leave it to the legislature for necessary amendments.
In an appropriate case, Judges would articulate the inarticulate major premise and would give life and force to a Statute by reading harmoniously all the provisions ironing out the creezes.
The object is to elongate the purpose of the Act.
[323B] 2.4 The Courts, though, have no power to amend the law by process of interpretation, but do have power to mend it so as to be in conformity with the intendment of the legis lature.
Doctrine of reading down is one of the principles of interpretation of statute in that process.
But when the offending language used by the legislature is clear, precise and unambiguous, violating the relevant provisions in the constitution, resort cannot be had to the doctrine of read ing down to blow life into the void law to save it from unconstitutionality or to confer jurisdiction on the legis lature.
Similarly it cannot be taken aid of to emasculate the precise, explicit, clear and unambiguous language to confer arbitrary, unbridled and uncanalised power on an employer which is a negation to just, fair and reasonable procedure envisaged under Articles 14 and 21 of the Consti tution and to direct the authorities to record reasons, unknown or unintended procedure.
[326H, 327A B] Elliott Ashton Walsh, H vs United States, ; ; Nalinakhya Bysack vs Shyam Sunder Haldar & Ors., ; at 544 45; United States vs Wunderlick, ; S.C. Jaisinghani vs Union of India, ; ; In re Hindu Women 's Right to Property Act, ; K.N. Singh vs State of Bihar, [1962] Suppl. 2 SCR 769; R.L. Arora vs State of U.P., ; ; Jagdish Pandev vs Chan cellor of the Bihar, ; Amritsar Municipality vs State of Punjab, ; ;Sunil Batra vs Delhi Admn., ; ; N.C. Dalwadi vs State of Gujarat, [1987] 3 164 SCC 611; Charanlal Sahu vs Union of India, [1989] Suppl.
Scale 1 at p. 61; Delhi Transport Undertaking vs Balbir Saran Goel, ; Air India Corporation vs Rebellow; , and Municipal Corporation of Greater Bombay vs P.S. Malvankar, ; , re ferred to.
Federal Steam Navigation Co. vs Department of Trade and Industry, at p. 100 and Saints High School, Hyderabad vs Govt.
of A. P., ; , re ferred to.
Craies Statute Law, 7th Ed.
V, P. 64.
2.5 The language of Regulation 9(b) is not capable of two interpretations.
This power is in addition to the normal power in Regulation 15 to conduct an enquiry into misconduct after giving reasonable opportunity.
Thereby the legislative intention is manifest that it intended to confer such draco nian power couched in language of width which hangs like Damocles sword on the neck of the employee, keeping every employee on tenter hook under constant pressure of uncer tainty, precarious tenure at all times right from the date of appointment till date of superannuation.
It equally enables the employer to pick and choose an employee at whim or vagary to terminate the service arbitrarily and capri ciously.
Regulation 9(b), thereby deliberately conferred wide power of termination of services of the employee with out following the principles of audi alteram partem or even modicum of procedure of representation before terminating the services of permanent employee.
[327E G] 2.6 No doubt, the power to take appropriate and expedi tious action to meet the exigencies of weeding out ineffi cient, corrupt, indolent officers or employees from service should be provided and preserved to the competent authority but any action taken without any modicum of reasonable procedure and prior opportunity always generates an un quenchable feeling that unfair treatment was meted out to the aggrieved employee.
To prevent miscarriage of justice or to arrest a nursing grievance that arbitrary whimsical or capricious action was taken behind the back of an employee without opportunity, the law must provide a fair, just and reasonable procedure as is exigible in a given circumstance as adumbrated in proviso to article 311(2) of the Constitution.
If an individual action is taken as per the procedure on its own facts its legality may be tested.
But it would be no justification to confer power with wide discretion on any authority without any procedure which would not meet the test of justness, fairness and reasonable 165 ness envisaged under articles 14 and 21 of the Constitution.
Therefore, conferment of power with wide discretion without any guidelines, without any just, fair or reasonable proce dure is constitutionally anathema to articles 14, 16(1), 19(1)(g) and 21 of the Constitution.
Doctrine of reading down cannot be extended to such a situation.
[328A C, 329B C] 2.7 In view of the march of law, made by Article 14 it is too late in the day to contend that the competent author ity would be vested with wide discretionary power without any proper guidelines or the procedure.
When it is found that the legislative intention is unmistakably clear, unam biguous and specific, the preamble, the other rules and the circumstances could not be taken aid of in reading down the provisions of the rules or the regulations of the constitu tional scheme.
[330F G] 3.1 The phrases "public policy", opposed to public policy, or "contrary to public policy" are incapable of precise definition.
It is valued to meet the public good or the public interest.
What is public good or in the public interest or what would be injurious or harmful to the public good or the public interest vary from time to time with the change of the circumstances.
Therefore, in the absence of specific head of public policy which covers a case, then the court must in consonance with public conscience and in keeping with public good and public interest invent new public policy and declare such practice or rules that are derogatory to the constitution to be opposed to public policy.
The rules which stem from the public policy must of necessity be laid to further the progress of the society, in particular when social change is to bring about an egalitar ian social order through rule of law.
In deciding a case which may not be covered by authority, courts have before them the beacon light of the trinity of the Constitution viz., the preamble, Part III and Part IV and the play of legal light and shade must lead on the path of justice social, economic and political.
Lacking precedent, the court can always be guided by that light and the guidance thus shed by the trinity of our Constitution.
[308C D, 309G H, 310A] 3.2 Since Constitutions are the superior law of the land, and because one of their outstanding features is flexibility and capacity to meet changing conditions, con stitutional policy provides a valuable aid in determining the legitimate boundaries of statutory meaning.
Thus public policy having its inception in Constitutions may accomplish either a restricted or extended interpretation of the liter al expression of a statute.
A statute is always presumed to be constitutional and where necessary, a constitutional meaning will be inferred to preserve validity.
Likewise, where a statute tends to extend or preserve a constitutional 166 principle, reference to analogous constitutional provisions may be of great value in shaping the statute to accord with the statutory aim or objective.
Therefore, when the provi sions of an Act or Regulations or Rules are assailed as arbitrary, unjust, unreasonable, unconstitutional, public law element makes it incumbent to consider the validity thereof on the anvil of inter play of articles 14, 16(1), 19(1)(g) and 21 and of the inevitable effect of the provi sion challenged on the rights of a citizen and to find whether they are constitutionally valid.
[310C D, 311E] 4.
The absence of arbitrary power is the first essential of the rule of law upon which our whole constitutional system is based.
In a system governed by rule of law, dis cretion, when conferred upon executive authorities, must be confined within defined limits.
The rule of law from this point of view means that decisions should be made by the application of known principles and rules and, in general, such decisions should be predictable and the citizen should know where he is.
If a decision is taken without any princi ple or without any rule it is unpredictable and such a decision is the antithesis of a decision taken in accordance with the rule of law.
[328D E] 5.
No doubt, it is open to the authorities to terminate the services of a temporary employee without holding an enquiry.
But in view of the march of law made, viz., that it is not the form of the action but the substance of the order which is to be looked into, it is open to the Court to lift the veil and pierce the action challenged to find whether the said action is the foundation to impose punishment or is only a motive.
The play of fair play is to secure justice procedural as well as substantive.
The substance of the order, the effect thereof is to be looked into.
[330C D] Shamsher Singh vs State of Punjab, , re ferred to.
It is for concerned authorities to make appropriate rules or regulations and to take appropriate action even without resorting to elaborate enquiry needed consistent with the constitutional scheme.
[331A] Workmen of Hindustan Steel Ltd. vs Hindustan Steel Ltd. & Ors.
; , , referred to.
Ram Chander vs Union of India, , referred to.
The ratio in Brojonath 's case was correctly laid down and requires no reconsideration.
[331D] 167 Central Inland Water Transport Company Limited vs Brojo nath Ganguly, , affirmed.
Per Mukharji, CJ., (Contra) 1.
The constitutionality of the conferment of power to terminate services of a permanent employee without holding an enquiry is sustained by reading that the power must be exercised on reasons relevant for the efficient running of the services or performing of the job by the societies or the bodies.
It should be done objectively, the reasons should be recorded, and the basis that it is not feasible or possible reasonably to hold any enquiry without disclosing the evidence which in the circumstances of the case would be hampering the running of the institution.
The reasons though recorded, need not be communicated, it is only for the purpose of running of the institution.
There should be factors which hamper running of the institution without the termination of the employment of the employee concerned at the particular time, either because he is a surplus or inefficient, disobedient and dangerous.
[235C E] 2.1 The philosophy of the Indian Constitution, as it has evolved, from precedent to precedent, has broadened the horizons of the right of the employees and they have been assured security of tenures and ensured protection against arbitrariness and discrimination in discharge or termination of his employment.
This is the basic concept of the evolu tion from the different angles of law of master and servant or in the evolution of employer and employee relationship.
It is true that the law has traveled in different channels, government servants or servants or employees having status have to be differentiated from those whose relationships are guided by contractual obligations.
However, the basic and fundamental question to be judged is, in what manner and to what extent, the employees of either of semi Government or statutory corporations or public undertakings who enjoy the rights, privileges, limitations and inhibitions of institu tions who come within the ambit of Article 12 of the Consti tution could be affected in their security of tenure by the employers consistent with the rights evolved over the years and rights emanating from the philosophy of the Constitution as at present understood and accepted.
[229D G] 2.2 Efficiency of the administration of these undertak ings is very vital and relevant consideration.
Production must continue, services must be maintained and run.
Efficacy of the services can be manned only by the disciplined em ployees or workers.
Discipline. decency and 168 order will have to be maintained.
Employees should have sense of participation and involvement and necessarily sense of security in semipermanent or quasi permanent or permanent employment.
There must be scope for encouragement for good work.
In what manner and in what measure, this should be planned and ensured within the framework of the Constitution and, power mingled with obligations, and duties enjoined with rights, are matters of constitutional adjustment at any particular evolved stage of the philosophy of our Constitu tion.
[230A C] 2.3 Arbitrary, whimsical or discriminatory action can flow or follow in some cases by the preponderance of these powers to terminate.
The tact that the power is entrusted with a high ranking authority or body is not always a safe or sound insurance against misuse.
At least, it does not always ensure against erosion of credibility in the exercise of the power in particular contingency.
Yet discipline has to be maintained, efficiency of the institution has to be ensured.
It has to be recognised that quick actions are very often necessary in running of an institution or public service or public utility and public concern.
It is not always possible to have enquiry because disclosure is diffi cult; evidence is hesitant and difficult, often impossible.
In those circumstances, the approach to the location of power, possession and exercise of which is essential for efficient running of the industries or services, has to be a matter both of balancing and adjustment, on which one can wager the salivation of rights and liberties of the employ ees concerned and the future of the industries or the serv ices involved.
[330D F] 2.4 The power to terminate the employment of permanent employment must be there.
Efficiency and expediency and the necessity of running an industry or service make it impera tive to have these powers.
Power must, therefore, be with authorities to take decision quickly, objectively and inde pendently.
Power must be assumed with certain conditions of duty.
The preamble, the policy, purpose of the enacting provision delimit the occasions or the contingencies for the need for the exercise of the power and these should limit the occasions of exercise of such powers.
The manner in which such exercise of power should be made should ensure fairness, avoid arbitrariness and mala fide and create credibility in the decisions arrived at or by exercise of the power.
All these are essential to ensure that power is fairly exercised and there is fair play in action.
Reasons good and sound, must control the exercise of power.
[230G H, 231A] Thus, for the running of the industry or the service, effi ciently, 169 quickly and in a better manner or to avoid dead locks or inefficiency or friction, the vesting of the power in cir cumstances must be such that it will evoke credibility and confidence.
Notice of hearing and opportunity in the form of an enquiry may or may not be given, yet arbitrariness and discrimination and acting whimsically must be avoided.
These powers must, therefore, be so read that the powers can be exercised on reasons, which should be recorded, though need not always be communicated, and must be by authorities who are high ranking or senior enough and competent and are expected to act fairly, objectively and independently.
The occasion for the use of power must be clearly circumscribed in the above limits.
These must also circumscribe that the need for exercise of those powers without holding a detailed or prolonged enquiry is there.
[231E, F G] Workmen of Hindustan Steel Ltd. & Anr.
vs Hindustan Steel Ltd. & Ors.
, ; ; West Bengal State Electricity Board and Others vs Desh Bandhu Ghosh and Oth ers, [1985] 3 SCC 116; Moti Ram Deka vs North East Frontier Railway, ; S.S. Muley vs J.R.D. Tata, ; Manohar P. Kharkhar vs Raghuraj, ; Central Inland Water Transport Corporation Limited and Anr.
vs Brojo Nath Ganguly and Anr., ; Sukhdev Singh vs Bhagatram Sardar Singh Raghuvanshi, ; ; Union of India & Anr.
vs Tulsi Ram PateI, [1985] Suppl.
2 SCR 131 at p. 166; Tata Oil Mills Co. Ltd. vs Workmen & Anr., ; at 130; L. Michael & Anr.
vs M/s Johnston Pumps India Ltd.; , at 498; Delhi Transport Corporation Undertaking vs Balbir Saran Goel, ; at 764; Air India Corporation, Bombay vs V.A. Rebellow & Anr., ; ; Municipal Corpo ration of Greater Bombay vs P.S. Malvenkar & Ors., ; at page 1006; Roshan Lal Tandon vs Union of India, ; at 195 D E; Champak Lal Chiman Lal Shah vs The Union of India, at 204; Ram Gopal Chaturvedi vs State of M.P., ; at 475; Gheru Lal Parekh vs Mahadeodas Maiva & Others, [1959] Supp. 2 SCR 406 at 440; O.P. Bhandari vs I.T.D.C. & Ors., ; ; The Hindu Women 's Rights to Property Act, ; Fertilizer Corporation Kamgar Union (Regd.) Sindri and Others vs Union of India and Others, [1981] 2 SCR at 60 61; Ajay Hasia etc.
vs Khalid Mujib Sehravardi & Ors. etc.; , at 100 102; A.V. Nachane & Anr.
vs Union of India & Anr.
, ; ; India Tobacco Co. Ltd. vs The Commercial Tax Officer, Bhavanipore & Ors., at 657; A.L. Kalra vs The Project and Equipment Corpora tion of India Ltd.; , at 664; Bandhua Mukti Morcha vs Union of India & Ors., [1984] 2 170 SCR 79 at 101; Hindustan Antibiotics Ltd. vs The Workmen & Ors.
, ; at 669; The Collector of Customs, Madras vs Nathella Sampathu Chetty, ; at 825; Commissioner of Sales Tax, Madhya Pradesh vs Radhakrishan & Ors., (supra); Gurdev Singh Sidhu vs State of Punjab & Anr., ; at 592 593; U.P. State Electricity Board vs Hari Shankar Jain, ; A.R. Antulay vs R.S. Nayak and Anr., ; ; S.G. Jaisinghani vs Union of India and Ors., ; at p. 718 19 and Kesavananda Bharati vs State of Kerala, [1973] Supp. 1 SCR 1, referred to.
A. Schroeder Music Publishing Co. Ltd. vs Macaulay, (formerly Instone), , referred to.
Chitty on Contract, 46th Edition Vol.
II, p. 808 or 25th Edition Vol.
II p. 712 paragraph and Halsbury 's Law of England, 4th Edition Vol.
No. 16 paras 607 and 608, referred to.
3.1 Courts have been tempted to read down in the path of judicial law making on the plea that legislature could not have intended to give powers to the authorities or employers which would be violative of fundamental rights of the per sons involved in the exercise of those powers and, there fore, should be attributed those powers on conditions which will only make these legal or valid.
Our law making bodies are not law unto themselves and cannot create or make all laws.
They can only confer powers or make laws for the conferment of powers on authorities which are legal and valid.
Such powers conferred must conform to the constitu tional inhibitions.
[232C D] 3.2 Legislation, both statutory and constitutional, is enacted from experience of evils.
But its general language should not necessarily be confined to the form that the evil had taken place.
Time works changes, brings into existence new conditions and purposes and new awareness of limita tions.
Therefore, a principle to be valid must be capable of wider application than the mischief which gave it birth.
This is particularly true of the constitutional construc tions.
Constitutions are not ephemeral enactments designed to meet passing occasions, but designed to approach immor tality as nearly as human institutions can approach it.
In the application of a Constitutional limitation or inhibi tion, the interpretation cannot be only of 'what has been ' but of 'what may be '.
Therefore.
in the interpretation of the provisions of an Act, where two constructions are possi ble, the one which leads towards constitutionality of the legislation would be preferred to that which has the effect of 171 destroying it.
If the Courts do not read the conferment of power in the aforesaid manner, the power is liable to be struck down as bad.
[233B D] 3.3 The Court must proceed on the premise that the law making authority intended to make a valid law to confer power validly or which will be valid.
The freedom therefore, to search the spirit of the enactment or what is intended to obtain or to find the intention of parliament gives the Court the power to supplant and supplement the expressions used to say what was left unsaid.
This is an important branch of judicial power, the concession of which if taken to the extreme is dangerous, but denial of that power would be ruinous and this is not contrary to the expressed inten tion of the legislature or the implied purpose of the legis lation.
[234G H; 235A] 3.4 It has been said that if the legislature has mani fested a clear intention to exercise an unlimited power, it is impermissible to read down the amplitude of that power so as to make it limited.
This cannot be agreed to.
Our legis latures are limited by the constitutional inhibitions and it is made, that the Court should read their Acts and enact ments with the attribute that they know their limits and could not have intended to violate the Constitution.
It is true that the Court should be loath to read down where there are clear, unambiguous and positive terms in a legislation and should proceed with a straight forward method of strik ing down such legislations.
But where the statute is silent or not expressive or inarticulate, the Court must read down in the silence of the statute and in the inarticulation of its provisions, the Constitutional inhibitions and transmute the major inarticulate premise into a reality and read down the statute accordingly.
[236H, 237A B] 3.5 The plain thrust of legislative enactment has to be found out in the inarticulate expressions and in the silence of the legislation.
In doing so, to say what the legislature did not specifically say is not distortion to avert any constitutional collision.
[237E] In the language of the relevant provisions of the instant cases, there is no intention of the legislature to flout the constitutional limitations.
[237E] Elliot Ashto Welsh 11 vs United States; , , 26 Ed.
308, referred to.
3.6 It is not that the reading down is used for a purpose which is just the opposite which the legislature had intended.
Legislature had not 172 intended arbitrary or uncontrolled or whimsical power.
Indeed it considered.
This is not the proper way to read that power in the Regulation 9(b).
Para 522 of the Shastri Award, read properly, must be circumscribed with the condi tions indicated above as a necessary corollary or conse quence of that power.
It is also not reading to the legisla ture conditions which were not there in the second proviso to Article 311(2) of the Constitution.
[237H, 238A B] Union of India & Anr.
vs Tulsiram Patel, [1985] Supp.
2 SCR 131, relied on.
No doubt, absolute powers cannot be regulated without essential legislative policy, but in the instant cases properly read, absolute power was not there.
Power that was only constitutionally valid, that power can be presumed to have been given and if that presumption is made, conditions indicated above inevitably attach.
But these conditions are necessary corollary flowing from the conferment of the power of termination in a constitutional manner for the smooth, proper and efficient running of the industry.
[238C, E] 3.7 In the circumstances power must be there, the power must be read down in the manner and to the extent indicated above, of terminating the services of permanent employees without holding any enquiry in the stated contingencies and this would be either by virtue of the silence of the provi sion indicating the contingencies of termination or by virtue of constitutional inhibitions.
That reading would not violate the theory that judges should not make laws.
[238F G] Shri Ram Krishna Dalmia vs Justice Tandolkar, ; at 299; Jyoti Prasad vs The Administrator for the Union Territory of Delhi, ; at 139; Union of India vs Col. J.N. Sinha & Anr., ; at 461; N.C. Dalwadi vs State of Gujarat, paragraphs 9 and 10 at page 619; Commissioner of Sales Tax, M.P., Indore & Ors.
vs Radhakrishan & Ors.
, ; at 257; Olga Tellis & Ors. etc.
vs Bombay Municipal Corporation & Ors., [1985] Suppl.
2 SCR 51 at 89; R.M.D. Chamarbaugwalla vs Union of India; , at p. 935 and 938; Kedar Nath Singh vs State of Bihar, [1962] Supp. 2 SCR 769; R.L. Arora vs State of Uttar Pradesh, ; ; Jagdish Pandev vs The Chancellor, University of Bihar & Anr., ; , at pages 236 237; Sunil Batra vs Delhi Administration & Ors., ; ; Tinsukhia Electric Supply Co. Ltd. vs State of Assam & Ors., ; ; Charan Lal Sahu & Ors.
vs Union of India, , at 173 pages 53 and 54, paras 101 as well as p. 61 para 114; Shah & Co. vs State of Maharashtra, ; at 477 78; M. Pentiah and Ors.
vs Veera Mallappa and Ors., ; ; Bangalore Water Supply and Sewerage Board etc.
vs A. Rajappa & Ors., ; ; Minerva Mills Ltd.& Ors., vs Union of India & Ors.
, ; , at p. 239 and 259; Elliott Ashton Welsh, 11 vs United States, 26 Lawyers ' Edition 2nd, 308 at 327; Malinakhva Bysack vs Shyam Sunder Haldar & Ors., ; , at p. 544 545 and Municipal Committee, Amritsar & Anr.
vs State of Punjab & ors.
; , , referred to.
United States of America vs Edward A.
Rumely, 97 Law yers Edition 770 at 775; Reg.
vs Sadiers Co., ; , 460 and 463; Framamus vs Film Artists Association, at 542 and Seaford Court Estates, , referred to.
H.M. Seervaid 'Constitutional Law of India ', 3rd Edn.
1 pages 119 120 and Lord Denning: "The discipline of Law", at p. 12, referred to.
3.8 Termination simpliciter under Regulation 9(b) of the Regulation 1952, Delhi Road Transport Authority (Conditions of Appointment and Services) or similar powers can be exer cised only in circumstances other than those in Regulation 9(a).
The exercise of such powers can only be for purposes germane and relevant to the statute, viz., the employee is incompetent or unsuitable so as to make his continuance in the employment detrimental to the interest of the institu tion, or where the continuance of the employee is a grave security risk making his continuance detrimental to the interest of the Corporation and where because of the conduct of the employee, or there is lack of confidence in the employee which makes it necessary in the interest of the Corporation to immediately terminate the services of the employee etc., etc.
Therefore, each case of conferment of power involved should be judged on the aforesaid basis.
[236E G] 3.9 Having regard to the finality of the position of law and having regard to the theory that parties have ad justed their rights on the understanding of the law as it was, justice of the situation would be met if pending liti gations are examined and disposed of in the light of afore said principles.
Where issues of damages or consequences of termination by virtue of exercise of the power are still pending adjudication in any forum and have been finally adjudicated, these should be re examined by the appropriate authorities before whom these issues 174 are pending, but previous terminations, where no lis is pending, will not be reopened.
To that extent, the law will be prospective.
[239D F] 4.
This Court.
under Article 141 of the Constitution, is enjoined to declare law.
The expression 'declared ' is wider than the words 'found or made '.
To declare is to announce opinion.
Indeed, the latter involves the process.
while the former expresses result.
Interpretation, ascertainment and evolution are parts of the process, while that interpreted, ascertained or evolved is declared as a law.
The law de clared by this Court is the law of the land.
To deny this power to this Court on the basis of some outmoded theory that the Court only finds law but does not make it, is to make ineffective the powerful instrument of justice placed in the hands of the highest judiciary of this country.
Therefore.
there should be a more active and creative role for the courts in declaring what the law is.
[240E G] 1.
C. Golaknath & Ors.
vs State of Punjab & Anr.
, ; @ 811,813/84, referred to.
| The appellant, R.S. Nayak, filed a complaint against the respondent, A.R. Antualy, a public servant being the Chief Minister of Maharashtra State under sections 161, 165 I.P.C. and section 5 of the Prevention of Corruption Act, 1947 (1947 Act) alleging abuse of office of Chief Minister.
The complaint was rejected on account of absence of necessary sanction of the Governor of Maharashtra State under section 6 of the 1947 Act to prosecute the respondent.
After the Governor issued necessary sanction, the appellant filed a fresh complaint in the Court of Special Judge against the respondent on the same grounds.
However, on the date of filing fresh complaint the respondent had already resigned as Chief Minister.
The respondent contended that the Special Judge had no jurisdiction to try him under section 7 of the Criminal Law Amendment Act, 1952 and that no cognizance could be taken on private complaint.
The Special Judge rejected both the contentions.
In the meantime the State Government issued a notification under section 7(2) of the Criminal Law Amendment Act, 1752 under which the case was transferred to another Special Judge.
In a criminal revision application filed by the respondent against the order of earlier 496 Special Judge, a Division Bench of the High Court held that the Social Judge had jurisdiction to try the respondent and that the private complaint was maintainable.
When the latter Special Judge proceeded with the case the respondent filed an application for his discharge on the grounds that the charge against him was baseless and that he being a Member of legislative Assembly (M.L.A) requisite sanction under section 6 of the 1947 Act was necessary.
The Special Judge discharged the respondent holding that the respondent being M.L.A was a public servant within section 21 (12)(a) of I.P.C. and hl the absence of the sanction of the Legislative Assembly he could not take cognizance of offence.
The Special Judge also held that.
the material date for deciding the applicability of section 6 of the 1947 Act was the date on which the Court was asked to take cognizance of the offence.
The appellant challenged the order of the Special Judge in this Appeal.
The questions which arose for consideration were: (a) That is the relevant date with reference to which a valid sanction is a pre requisite for the prosecution of a public servant for offences enumerated in section 6 of the 1947 Act ? (b) If the accuse holds several offices occupying each of which makes him a public servant, is sanction of each one of the competent authorities entitled to remove him from each one of the offices held by him necessary and if anyone of the competent authorities fails or declines to grant sanction, is the Court precluded or prohibited from taking cognizance of the offence with which the public servant is charged, or is it implicit in section 6 of the 1947 Act that sanction of that competent authority alone is necessary which is entitled to remove the public servant from the office which is alleged to have been abused or misused for corrupt motives ? (c) Is M.L.A. a public.
servant within the meaning of the expression in clauses 12(a), 3 and 7 of section 21 I.P.C. ? (d) Is sanction as contemplated by section 6 of the 1947 Act necessary for prosecution of M.L.A. and if so, which is the sanctioning authority competent to remove M.L.A. from the office of Member or the Legislative Assembly ? Allowing the appeal.
^ HELD: The provisions of the Act must receive such construction at the hands of the court as would advance the object and purpose underlying the Act and at any rate not defeat it.
If the words of the statute are clear and unambiguous, it is the plainest duty of the court to give effect to the natural meaning of the words used in the provisions.
In the event of an ambiguity of the plain meaning of the words used in the statute being self defeating, the court is entitled to ascertain the intention of the legislature to remove the ambiguity by construing the provision of the statute as a whole keeping in view what was the mischief when the statute was enacted and to remove which the legislature enacted the statute.
Whenever a question of construction arises upon ambiguity or where two views are possible of a Provision, it would be the duty of the court to adopt that construction which would advance the object underlying the Act.
[521 A C] The basic purpose underlying all canons of construction is the ascertainment 497 with reasonable certainty of the intention of Parliament in enacting the legislation.
A For this purpose why should the aids which Parliament availed of such as report of a special committee preceding the enactment, existing state of law, the environment necessitating enactment of legislation, and the object sought to be achieved, be denied to court whose function is primarily to give effect to the real intention of the Parliament in enacting the legislation.
Such denial would deprive the court of a substantial and illuminating aid to construction.
Therefore, departing from the earlier English decisions, the reports of the committee which preceded the enactment of a legislation, reports of Joint Parliamentary Committee report of a commission set up for collecting information leading to the enactment are permissible external aids to construction.
[527 A; D E] In construing a statute more especially the ancient statute, the court may look at the surrounding circumstances when the statute was enacted.
The construction of ancient statutes may be eludicated by what in the language of the courts is called contemporanea expositio, that is, by seeing how they were understood at the time when they were passed.
[528F G] Standard dictionaries as a rule give in respect of each word as many meanings in which the word has either been used or it is likely to be used in different contexts and connections.
While it may be permissible to refer to dictionaries to find out the meaning in which a word is capable of being used or understood in common parlance, the well known cannon of construction should not even for a minute be overlooked that the meaning to the words and expressions used in a statute ordinarily take their colour from the context in which they appear.
[539F G] Deputy Chief Controller of Imports & Exports New Delhi vs K.T. Kosalram Ors., ; at 517; and State Bank of India vs N. Sundara Money, ; , referred to.
Section 6 of the Prevention of Corruption Act, 1947 bars the courts from taking cognizance of the offences therein enumerated alleged to have been committed by a public servant except with the previous sanction of the competent authority empowered to grant the requisite sanction.
Therefore, when the court is called upon to take cognizance of such offences, it. must enquire whether there is a valid sanction to prosecute the public servant for the offence alleged to have been committed by him as public servant.
Undoubtedly the accused must be a public servant when he is alleged to have committed the offence of which he is accused because sections 161, 164, 165 I.P.C. and section 5(2) of.
the 1947 Act clearly spell out that the offences there in defined can be committed by a public servant.
A trial without a valid sanction where one is necessary under section 6 would be a trial without jurisdiction by the court.
It is well settled that the relevant date with reference to valid which a valid sanction is sine qua non for taking cognizance of an offence committed by a public servant as required by section 6 is the date when the court is called upon to take cognizance of the offence of which he is accused.
If, therefore, when the offence is alleged to have been committed, the accused was a public servant but by the time the court is called upon to take cognizance of the offence committed by him as public servant, he has cased to be a public servant, section 6 will not be attracted and no sanction would be necessary for taking cognizance of the offence against him.
This approach is in accord with the policy underlying s.6 in that a public servant is not to be exposed to harassment of a frivolous or speculative prosecution.
If he has ceased to be a public 498 servant in the meantime, this vital consideration ceases to exist.
[512D; H; 513 A E].
C.R. Bansi vs State of Maharashtra, [1971] 3 S.C.R. 236; R.R. Chari vs State of U.P., ; ; S.N. Bose vs State of Bihar, [1968] 3 S.C.R. Venkataraman vs The State. ; at 1052; K.S. Dharmaatan vs Central Government & Ors., ; , referred to.
In the instant case, long before the date on which the cognizance was taken by the Special Judge, the accused had ceased to hold the office of the Chief Minister and as such had ceased to be a public servant in his capacity as Chief Minister.
A fortiori no sanction as contemplated by section 6 was necessary before cognizance of the offence could be taken against the accused for offences alleged to have been committed in his former capacity as public servant.
[514 D E] The submission that if the accused has held or holds a plurality of offices occupying each one of which makes him a public servant, under section 6 sanction of each one of the competent authorities entitled to remove him from each one of the offices held by him, would be necessary and if anyone of the competent authorities fails or declines to grant sanction, the court is precluded or prohibited from taking cognizance of the offence with which the public servant is charged is not acceptable.
Such an interpretation of s.6 would render it as a shield to an unscrupulous public servant.
Someone interested in protecting may shift him from one office of public servant to another and there by defeat the process of law.
Such an interpretation is contrary to all cannons of construction and leads to an absurd end product which of necessity must be avoided.
[520G; 518F C] The State (S.P.E. Hyderabad) vs Anr Commodore Kailash Chand, ; , referred to and partly dissented from.
The expression 'office ' in the three sub clauses of s 6(1) clearly denotes that office which the public servant misused or abused for corrupt motives for which he is to be prosecuted and in respect of which a sanction lo prosecute him is necessary by the competent authority entitled to remove him from that office which he has abused.
The sanction to prosecute a public servant can be given by an authority competent to remove him from the office which he has misused or abused because that authority alone would be able to know whether there has been a misuse or abuse of the office by the public servant and not some rank outsider.
The authority entitled to grant sanction must apply its mind to the facts of the case, evidence collected and other incidental facts before according sanction.
A grant of sanction is not an idle formality but a solemn and sacrosanct act which removes the umbrella of protection of government servants against frivolous prosecutions and the aforesaid requirements must therefore, be strictly complied with before any prosecution could be launched against public servants.
Therefore, it is implicit in s.6 that sanction of that competent authority alone would be necessary which is competent to remove the public servant from the office which he is alleged to have misused or abused for corrupt motive and for which a prosecution is intended to be launched against him.
[516H; 517A D] Mohd. Iqbal Ahmed vs State of A. P., [1979] 2 S.C.R. 1007, referred to.
499 The finding of the Special Judge that the respondent being M.L.A. was a public servant within clauses (12)(a) (3) and (7) of s.21 I.P.C. and sanction of the Legislative Assembly to prosecute him was necessary, is not correct.
A person would be a public servant under clause (12)(a) of section 21 I.P.C. if he falls under any of the following three categories: (i) if he is in the service of the Government; or (ii) if he is hl the pay of the Government; or (iii) if he is remunerated by fees or commission for the performance of any public duty, by the Government.
Looking into the history and evolution of s.21 I.P.C. as traced and adopted as an external aid to construction, it is clear that M.L.A. was not and is not a 'public servant ' within the meaning of expression in any of the clauses of section 21 I.P.C. Assuming that it would not be legally sound or correct according to well accepted cannon of construction of a statue of construe section 21(12)(a) by mere historical evolution of the section, the constitutionally valid approach would be to look at the language employed in the section to ascertain whether M.L.A. is a public servant within the meaning of the expression in that section.
Depending upon the context, 'or '.
The use of the expression 'or ' in the context in which it is used in cl.(12) (a) does appear to be a disjunctive.
Therefore, those would be a public servant.
The question is whether M.L.A. falls in under any of the above three categories? It was concerned that M.L.A. is not the service of the Government but it was contended that M.L.A. is in the pay of the Government.
Undoubtedly, M.L.A. receives a salary and allowances his capacity as M.L.A. under the relevant statute.
But does it make him a person 'in the pay of the Government '? The word 'pay ' standing by itself is open to various shades of meaning and when the word is used in a phrase in the pay of ' it is more likely to have a different connotation than when standing by itself.
The phrase "in the pay of ' would ordinarily import the element of employment or paid employment or employed and paid by the employer.
The phrase does not import of necessity a master servant relationship between the person receiving the pay and the Government as payer.
Next what does the expression 'Government ' in cl.
(12)(a) of section 21 I.P.C. connote ? Section 17 I.P.C. provides that the word "Government ' denotes the Central Government or the Government of a State.
71 I.P.C. provides that 'every expression which is explained in any part of the Code, is used in every part of the Code in conformity with the explanation '.
Let it be noted that unlike the modern statute s.7 does not provide unless the context otherwise indicate ', a phrase that prefaces the dictionary clauses of a modern statute.
Therefore, the expression "Government ' in section 21(12)(a) must either mean the Central Government or the Government of a State.
The Central Government being out of considering the question is whether M.L.A. is the pay of the Government of a State or is remunerated by fees for the performance of any public duty by the Government of a State.
Even though M.L.A. receives pay and allowances, he is not in the pay of he state Government because legislature of a State cannot be comprehended in the expression 'State Government '.
This conclusion would govern also the third part of c. (12)(a) i.e. 'remunerated by fees for performance of any public duty by the Government.
Therefore, if M.L.A. is not in the pay of the Government in the sense of executive government or is not remunerated by fees for performance of any public duty by the exe 500 cutive government, certainly, he would not be comprehended in the expression 'public servant ' within the meaning sf the expression in cl.
(12)(a).
He is thus not a public servant within the meaning of the expression in cl.
(12)(a).
This conclusion rein forces the earlier conclusion reached after examining the historical evolution of cl.
(12)(a): [537 A B; 536G; E; H; 537 H;E; 539 E; 541 A; D F; 543 E; 551 A B] Evolution of Parliamentary Privileges by section K. Nag ; Legislative Bodies Corrupt Practices Act, 1925; Prevention of Corruption Act 1947 by Sethi and Anand P.60; Santhanam Committee Report dt. 31 3 1964; Lok Sabha Debates (Third Series Vol. 35, Cls. 729 and 731; The Anti Corruption Laws (Amendment) Bill, 1964 (enacted as Act 40 of 1964); G.A. Monerop vs The State of Ajmer, ; The State of Ajmer vs Shivji Lal [1959] supp.
2 S.C.R. 739; Prabhashanker Dwivedi and Anr.
vs The State of Gujarat, AIR 1970 Gujart, AIR 1970 Gujarat 97; State of Gujart vs Manshanker Prabhashanker Dwivedi, ; Green vs Premier Glynrohonwy State Co. Ltd, at 568; Babi Manmohan Das Shah & Ors.
vs Bishnu Das, ; at 839; Kamta Prasad Aggarwal etc.
Executive Engineer, Ballabgarh & Anr., ; ; M. Karunanidhi vs Union of India, ; ; Costituent Assembly debates, Vol.
VII p. 984; Rai Shib Ram jawaya Kapur & Ors.
vs The State of Punjab [1975] 1 S.C.R. 225 at p. 236; Shamsher Singh & Anr.
vs State of Punjab, ; Sardari Lalv.
Union of India & Ors. ; ; His Majesty the King vs Boston 7 Ors., [1923 24] 33 Commonwealth Law Report 386. .82; Earskine May Parhamentary Practice 20 edition, p. 149, referred to The Submission that the accused would be a public servant within the meaning of the expression any person empowered by law to discharge any adjudicatory functions, in cl.
(3) of s.21 I.P.C. must be rejected.
Participation in a debate on a motion of breach of privilege or for taking action for contempt of the House and voting thereon in a constitutional function discharged by the members and therefore, it cannot be said that such adjudicatory functions if it can be so styled, constitutes adjudicatory function undertaken by M.L.A. as empowered by law.
[554 E F] Special Ref.
No. 1 of 1966; , at pages 490, 491 and 472; I.C. Golaknath vs State of Punajab, ; Sripadangalavaru vs State of Kerala and Anr.; [1973] Supp.
S.C.R 1 referred to.
The submission that M.L.A. would be a public servant within cl.
(7) of s.21 I.P.C. must be rejected.
(7) takes within its ambit 'every person who holds any office by virtue of which he is empowered to place or keep any person in confinement.
Broadly stated the expression comprehends police and prison authorities or those under an obligation by law or by virtue of office to take into custody and keep in confinement any person.
To say that M.L.A. by virtue of his office is performing 'policing or prison officers ' duties would be apart from doing violence to language lowering him in status.
Additionally cl.(7) does not speak of any adjudicatory function.
lt appears to comprehend situations where as preliminary to or an end product of an adjudicatory function in a criminal case, which may lead to imposition of a prison sentence, and a Person in exercise of the duty to be discharged by him by virtue of his office places or keeps any person in confinement.
[554G, 555 F H] In view of the finding that M.L.A. is not a public servant under clauses (12)(a), (3) and (7) of s.21 I.P.C. and no sanction under s.6 of the Prevention of Corruption is necessary to prosecute him.
it is not necessary to ascertain which would be the authority competent to sanction prosecution of M.L.A. [557 C] In the instant case, the allegations in the complaint are all to the effect that the accused misused or abused his office as Chief Minister for corrupt motives.
By the time the Court was called upon to take cognizance of those offences, the accused had ceased to hold the office of Chief Minister.
The sanction to prosecute him was granted by the Governor of Maharashtra but this aspect is irrelevant for concluding that no sanction was necessary to prosecute him under s.6 on the offences alleged to have been committed by the accused.
Assuming that as M.L.A. the accused would be a public servant under s.21, in the absence of any allegation that he misused or abused his office as M.L.A. that aspect becomes immaterial.
Further s.6 postulates existence of a valid sanction for prosecution of a public servant for offences punishable under section 161, 164, 165 I.P.C. and s.5 of the 1947 Act, if they are alleged to have been committed by a public servant.
In view of the finding that M.L.A. is not a public servant within the meaning of the expression in s.21 I.P.C., no sanction under s.6 is necessary to prosecute him for the offences alleged to have been committed by him.
[556 G; 557 A B]
| The appellants, in execution of a decree passed in a suit filed by them under section 180 of the U.P. Tenancy Act, 1939, on December 2, 1948 took back possession of the land in dispute from the respondent Nos. 4 and 5 (respondents for short).
On the advent of the U.P. Zamindari Abolition and Land Reforms Act, 1950 ( '1950 Act ' for short) the respondents moved an application under section 232 of the 1950 Act to regain possession of the land on the ground that they hand acquired the status of adhivasis udder that Act.
The Assistant Collector dismissed the application.
The respondents appealed to the Additional Commissioner.
The appellants contended that since the village in which the land in dispute was situated was put into consolidation under the U.P. Consolidation of Holdings Act, 1953 ( '1953 Act ' for short), the Additional Commissioner had no jurisdiction to hear the appeal.
The appellants also submitted that a statement under section 8 and 8A of the 1953 Act was published in which they were shown as bhumidars of the land in question and the respondents had not objected to the entries.
The Additional Commissioner, by his order dated June 15, 1956, allowed the appeal.
Pursuant to that order the entries in the said statement were corrected and the respondents acquired possession of the land.
The Board of Revenue, before whom the Additional Commissioner 's order was challenged, held that the Additional Commissioner had no jurisdiction to hear the appeal on merits.
On September 11, 1958 the appellants moved an application under section 144 of the Code of Civil Procedure before the Sub Divisional officer praying for restitution of possession.
This application and the subsequent appeals were rejected by the authorities.
Dismissing a writ petition filed by the appellants the High Court held that the proceedings under section 144 of the Code of Civil Procedure could not succeed, but since the decision recorded by the authorities under the 1953 Act had become final, it was always open 288 to the petitioners to move the first appellate court to decide the appeal in terms of the decision of the consolidation authorities.
Thereupon, in August 1966, the appellants filed a suit under sections 209 and 229 (b) of the 1950 Act against the respondents for a decree for possession on the ground that they were bhumidhars of the land in question under the 1950 Act.
The Assistant Collector decreed the suit.
The Additional Commissioner allowed the appeal filed by the respondents.
The Board of Revenue dismissed the appellants ' second appeal.
The appellants filed a writ petition in the High Court.
A single Judge of the High Court dismissed the writ petition.
A Division Bench of the High Court dismissed the special appeal filed by the appellants.
Hence this appeal.
The respondents contended: (i) that the suit was barred by limitation and the appellants were not entitled to the benefit of section 14(1) of the ; and (ii) that the suit was barred by section 49 of the 1953 Act.
Dismissing the appeal, ^ HELD. 1.
The party seeking benefit of section 14 (1) of the must satisfy the three conditions laid down in the section, namely, (i) that the Party as the plaintiff was prosecuting another civil proceeding with due diligence (ii) that the former proceeding and the later proceeding relate to the same matter in issue; and (iii) that the former proceeding was being prosecuted in good faith in a court which, from defect of jurisdiction or other cause of a like nature, is unable to entertain it.[297G H] 2.
The expression 'other cause of a like nature ' will have to be read ejusdem generis with the expression 'defect of jurisdiction '.
So construed the expression other cause of a like nature must be so interpreted as to convey something analogous to the preceding words from defect of jurisdiction '.
The defect of jurisdiction goes to the root of the matter as the court is incompetent to entertain the proceeding.
The proceeding may as well fail for some other defect.
Not all such defects can be said to be analogous to defect of jurisdiction.
Therefore, the expression other cause of a like nature on which some light is shed by the Explanation (C) to section 14 which provides "misjoinder of parties or causes of action shall be deemed to be a cause of like nature with defect of jurisdiction", must take its colour and content from the just preceding expression, defect of jurisdiction '.
Prima facie it appears that there must be something taking to a preliminary objection which if it succeeds, the court would be incompetent to entertain the proceeding on merits.
Such defect could be said to be of the like nature ' as defect of jurisdiction.
Coversely if the party seeking benefit of the provision of section 14 failed to get the relief in earlier proceeding not with regard to anything connected with the jurisdiction of the court or some other defect of a like nature, it would not be entitled to the benefit of s 14.
[300C G] India Electric Works Ltd. vs James Mantosh & Anr., ; , referred to.
In a proceeding under section 144 of the Code of Civil Procedure, the party applying for restitution has to satisfy the court of first instance that a decree under which it was made to part with the property is varied or reversed or modified in appeal or revision or other proceeding or is set aside or modified in any suit instituted for the purpose and therefore, restitution 289 must be ordered.
In such a proceeding, the party seeking restitution is not required to satisfy the court about its title or right to the property save and except showing its deprivation under a decree and the reversal or variation of the decree.
[298C D; E] 4.
In the instant case, the High Court rightly declined to grant benefit of the provision of sec 14 of the to the appellants because the second and third condition laid down in section 14 (1) were not satisfied.
It may be assumed that the earlier proceeding under section 144 of Civil Procedure Code was a civil proceeding for the purpose of section 14 (1) and that the appellants were prosecuting the same with due diligence.
But it is difficult to accept that the subsequent proceeding relates to same matter in issue as was involved in the earlier proceeding.
The appellants merely claimed in their application under section 144 that in view of the reversal of the order by the Board of Revenue the respondents are not entitled to retain possession and that restitution should be evicted because the appellants lost possession under the order of the Additional Commissioner which was reversed by the Board of Revenue.
The cause of action was the reversal of the order of the Additional Commissioner.
When they failed to obtain restitution, the appellants filed a substantive suit under sections 209 and 229 (b) of the 1950 Act.
It was a suit on title as bhumidars for possession against respondents alleging unauthorised retention of possession.
It had nothing to do with the order of the Additional Commissioner.
Moreover, the appellants failed in the earlier proceeding not on the ground that the authority had no jurisdiction to entertain the application nor on the ground that there was any other defect of a like nature, but on merits inasmuch as the authorities and the High Court held that in view of the decision of the authorities under 1953 Act, the appellants are not entitled to restitution.
[301B; 299A; 298G H; 299A] 5.
Once an allotment under section 49 of the U.P. Consolidation of Holdings Act, 1953 became final, a suit would not lie before a civil or revenue court with respect to rights in lands or with respect to any other matter for which a proceeding could or ought to have been taken under that Act.
[301G] 6.
In the instant case, once the village was denotified, as found by the authorities and the High Court the allotment made under the 1953 ACI became final and it could not be questioned in a suit before civil or revenue Court in view of the bar enacted in section 49.
[302A B] 7.
The appellants ' submission that after reversal of the Additional Commissioner 's order dated June 15, 1956 the respondents had neither a legal nor equatable right to be in possession, has no force.
Assuming that the appellants had acquired the status of bhumidars the same was subject to the provision contained in section 20 (b) read with Explanation I of the U.P. Zamindari Abolition and Land Reforms Act, 1950 according to which, as correctly found by single Judge of the High Court, the respondents would become adhivasis of the land.
Such adhivasis if they had lost possession were entitled to regain the same by making an appropriate application under section 232 of that Act.
The respondents did move such an application which ultimately was accepted by the Additional Commissioner.
Therefore, primarily, legally and additionally in equity, respondents have an iron clad case to be in possession against appellants.
[294H; 296D G] 290
| The disputes regarding bonus to be paid to the ' workmen of the appellant mill and other cotton textile mills in Greater Bombay for the year 1952 and 1953 were referred to the Industrial Court under the provisions of the Bombay Industrial Relations Act, 1946, and while the references were pending, an agreement was arrived at between the Mill owners ' Association, Bombay, and the Rashtriya Mills Mazdoor Sangh, a Representative Union of workmen in the cotton textile industry with respect, to payment of bonus for the years 1952 to 1957, providing inter alia for payment of bonus even where a mill made actual loss, the minimum bonus being 4.8 per cent.
, of the basic wages earned during the year, subject to such mill being entitled to adjust the amount thus paid by it as the minimum bonus against any available surplus in any subsequent year or years.
This agreement was registered and was made enforceable as an award (1) L.L.R. (2) A.I.R. 1937 Mad.
763. 106 against those mills which were parties thereto.
The appellant; however, did not sign, the agreement, and its case before the Industrial Court was that it had been continuously making losses from 1950 to 1955.
On July 31, 1956, the Government of Bombay issued a notification under section 114(2) Of the Act directing that the award made by the Industrial Court aforesaid, for payment of bonus for the years 1952 and 1953 and also for the years 1954 to 1957 be enforced against the appellant.
The appellant challenged the validity of section 114 on the grounds (1) that it offended article 14 Of the Constitution inasmuch as it gave an unguided and arbitrary power to the State Government to discriminate between various sets of employers and employees and make an order on any one set at its pleasure leaving out others, (2) that it offended article 19(i)(g) in that it put an unrea sonable restriction on a person 's right to carry on business, and (3) that it prevented a party from having an industrial dispute decided by an Industrial Court under the Act.
In any event, the appellant contended that the notification was bad, because (a) it was made while a reference was pending in an Industrial Court and, therefore, took away the jurisdiction of, that Court to decide the pending references and (b) the notification went beyond the powers conferred on the State Government by section 114 since under that section the Government was bound by the decisions of the Full Bench in view of section 95A, but in the present case it ignored a decision of the Full Bench which provided that no bonus would be payable by an employer where it had made no profits.
Held (Sarkar, j., dissenting), that the notification dated July 31, 1956, was beyond the powers conferred on the State Government under section 114(2) Of the Bombay Industrial Relations Act, 1946, and must, therefore, be struck down, There are three limitations on.
the power of the State Government when acting under section 114(2): (1) that it is limited by the subject matter of the agreements, or settlement, submission or award sought to be extended, (2) that it has to be in conformity with the industrial law laid down by the Full Bench of the Industrial Court and also by any decision of the Supreme Court, and (3) that the State Government 's power to make a direction under that section is co terminus with the power of an adjudicator and the State cannot do 'what an 'adjudicator cannot do under the Act.
Action taken by the State Government under section 114(2) is a proceeding under the Act within the meaning Of section 95A of the Act.
The New Maneckchowk Spining Co. Ltd. and others vs The Textile Labouy Association, [1961] 3 S.C.R. I, relied on.
Per Sarkar, J. (1) Section 114 of the Bombay Industrial Relations Act, 1946, does not offend article 14 Of the Constitution.
The object of the Act is the settlement of industrial disputes and 107 attainment of industrial peace and the section does not confer absolute and arbitrary power.
(2) The restrictions imposed by section 114(2) are reasonable and have been put in the interest of the general public.
Consequently, the section does not contravene article 19(i)(g).
Bijay Cotton Mills Ltd. vs The State of Ajmer, ; , referred to.
(3) The provisions of the Act must be read together and in cases in which power under section 114(2): has been exercised, the right to ask for an adjudication by an Industrial Court must be considered either as taken away or unavailing.
(4) The issue of a notification under section 114(2) is not a proceeding as contemplated by section 95A and, therefore, any question of complying with any Full Bench decision does not arise.
(5) Section 114 directly permits and contemplates a notification which would produce a result in variance with a decision of the Supreme Court and, therefore, a notification duly issued under that section cannot be said to have been issued, mala fide.
Muir Mills Co. Ltd. vs Suti Mills Mazdoor Union, Kanpur, ; , referred to.
(6) The Act is not invalid and the notification of July 31, 1956, is unobjectionable and cannot be set aside.
| The respondent No. 1, a Central Board constituted under the United Provinces Muslims Waqf Act, 1936, by a notification under section 5(1) Of the Act dated February 26, 1944, took into ' management the properties of a Darga Sharif and on October 18, 1946, the appellants, three of the five members of the Managing Committee of the said Darga Sharif, brought the suit, out of which the present appeal arises, for a declaration that the Darga properties did not constitute a waqf within the meaning of the Act and that the respondent No. 1 had no lawful authority to, issue the notification and assume management of the said properties.
It was urged on behalf of respondent No. 1 that the suit had not been brought within one year as prescribed by section 5(2) of the Act, and was as such barred by limitation; and, that since the notice prescribed by section 53 Of the Act had admittedly not been served on the respondent, the suit was incompetent.
It was found that in an earlier suit, brought with the sanction of the Advocate General, against the Managing Committee for their removal and the framing of a fresh scheme, a decree had been passed against the appellants on October 16 1941, and it directed them not to interfere with the affairs of the Darga as members of the said Committee and to comply with the direction removing them from office.
On appeal the said decree was set aside by the Chief Court on March 7, 1946.
It was contended on behalf of the appellants that section 5(2) Of the Act had no application and even if it had, the suit was within time by virtue of the provisions of section 15 of the Limitation Act.
Held, that the contentions raised on behalf of the appellants must be negatived.
The expression " any person interested in a waqf " used in section 5(2) Of the United Provinces Muslims Waqf Act, 1936, pro perly construed, means any person interested in a transaction that is held to be waqf by the Commissioner of Waqfs appointed under the Act and as such the appellants fell within that category.
Where a literal construction defeats the object of the statute and makes part of it meaningless, it is legitimate to adopt a liberal construction that gives a meaning to the entire provision and makes it effective.
Chaturbhuj Mohanlal vs Bhicam Chand Choroyia & Sons, , Mathu Kutty vs Varoe Kutty, A.I.R. 1950 Mad.
4 and Lal Chand vs Messrs. Basanta Mal Devi Dayal & Ors., , referred to.
Rules of limitation are arbitrary in nature and in construing hem it is not permissible to import equitable considerations, and effect must be given to tile strict grammatical meaning of he words used.
Section 15 of the Limitation Act can be attracted only where a suit has been stayed by an injunction or order and the test would be whether its institution would or would not be an act in contempt of the court 's order.
Nagendra Nath Dey V. Suresh Chandra Dey, (1932) 34 Bom.
R. 1065, Narayan Jivangouda vs Puttabai, (1944) 47 Bom.
L.R. Beti Maharani vs The Collector of Etawah, All. 198 and Sundaramma vs Abdul Khader, Mad. 490, relied on.
Musammat Basso Kaur vs Lala Dhua Singh, (1888) 15 I.A. 211, held inapplicable.
The order of the court in the earlier suit was neither an injunction nor an order of the nature contemplated by section 15 Of the Limitation Act and so that section was inapplicable.
Offerings made from time to time by the devotees visiting the Darga Sharif were by their very nature an income of the Darga, and failure to mention them in the notification under section 5(1) Of the Act, did not render the notification defective.
The provision as to notice under section 53 Of the Act was applicable to suits in respect of acts of the Central Board as well as suits for any relief in respect of the waqf.
|
Appeals Nos. 4 and 5 of 1962.
Appeals by special leave from the award dated January 25, 1960, of the Industrial Tribunal, Delhi in I.D. No. 40 of 1957.
A.V. Viswanatha Sastri, A. N. Sinha, and section Venkatakri,shnan for the appellant (in C.A. No. 4 of 62) and the respondent (in C.A. No. 5 of 1962).
518 A.S. B. Chari.
R. K. Garg, D. P. Singh, section C. Agarwala and M.K. , Ramamurthi for the respondents (in C.A. No. 4 of 62) and the appellants (in C.A. No. 5 of 62).
March 1.
The Judgment of the Court was delivered by WANCHOO, J.
These two appeals by special leave arise out of the same award of the Industrial Tribunal, Delhi, and will be dealt with together.
Appeal No. 4 is by the management of the D.C.M. Chemical Works while appeal No. 5 is by the workmen.
The management hereinafter will be referred to as the appellant for the purposes of both appeals and the workmen will be referred to as respondents.
A dispute arose between the parties with respect to various matters including wage scales, dearness allowance and gratuity.
As the parties could not come to terms it was referred to the industrial tribunal for adjudication and there were as many as eleven issues which were the subject matter of reference.
The main point however on which the parties differed was whether in determining the wage structure etc.
of the chemical works which is a constituent unit of the Delhi Cloth and General Mills Limited (hereinafter called the Company), the over all position of the Company should be taken into account or only the position of this one unit, namely, the chemical works.
The respondents contended that the chemical works was an integral part of the Company and therefore the over all position of the Company should be taken into account and the wage structure etc.
fixed accordingly; in particular it was pointed out that there were differences in wage structure etc.
between the various units which were controlled and owned by the Company and which were all situate in the same area in Delhi and that those differences should be eliminated and all the enterprises in Delhi controlled by the Company should be treated on the same footing.
On the other band the contention of the 519 appellant was that though the chemical works was one unit of a large number of industries controlled by the Company, some of which were situate in the same area in Delhi, the various units were independent industries and each unit had to be considered on its own, and the wage structure etc.
fixed on the basis of the financial position of each unit ;in particular, it was urged that two of the main units in Delhi were the textile mills run by the Company and the claim of the respondents that the chemical works should in all matters be treated on a par with the textile units was untenable, on the ground, among others, that it would be against the principle of industry cum region.
Before there fore we take up the particular matters raised in the two appeals before us, we shall first have to consider whether the claim of the respondents that the overall position of the Company should be taken into account in fixing the wage structure etc.
of the chemical works is sound ; for if that position is accepted, the award may have to be set aside as the tribunal has held that in the circumstances of this case the chemical works should be treated as an independent unit and that the wage structure etc.
therein cannot be fixed on the basis of the over all position of the Company.
In order to appreciate the various contentions put forward by the parties on this question it may be useful to look into the history of the Company and how it has grown.
The Company came into existence in 1889 with a modest capital of about Rs. 10 lacs.
It seems that the policy of those in control of the Company was to slough back a substantial part of the profits into the industry itself and to create a reserve for that purpose.
Originally the Company started with a textile mill but in course of time with the help of sloughed back profits and also with the aid of further capital, the Com.
pany set up a large number of other industrial 520 concerns in Delhi and elsewhere.
In Delhi itself, the Company now has the Delhi Cloth Mills, the Swatantra Bharat Mills which are both textile concerns, the D.C.M. Tent Factory established in 1940, and the chemical works with which we are concerned in the present appeals.
Besides, there are other industrial concerns owned and controlled by the Company outside Delhi, as for example, the Daurala Sugar Works established in 1932, the Lyallpur Cotton Mills in ' 1934 and the Mawans Sugar Works in 1940.
The chemical works were started in 1942 and the only line of production at that time was sulphuric acid.
In 1943, an alum plant was set up, in 1944 a soap plant, in 1945 a superphosphate plant and in 1946 a contact sulphuric acid plant.
In 1. 947 a vanaspati plant was established and also a power house was erected in order to meet the requirements of the vanaspati plant.
In 1948 49 a caustic soda plant was added so that what began as modest subsidiary to the textile mills has now expanded into a full fledged unit for production of chemicals and vanaspati.
The total capital which was originally about Rs. 10 lacs when the Company started in 1889 has now grown to Rs. 4 crores.
so the capital employed in the chemical works has always been found from the reserves of the Company and is now of the order of over a crore.
It is also not in dispute that very little out of the production of the chemical works is used in the textile mills of the Company and that by far most of the production is sold in the open market.
Further even the small part of the production that is used by other units is charged at market rates and not at cost price, so that for all practical purposes the chemical works is being run as an independent unit.
Certain features have however been pointed out by the respondents to show that the over all 521 position of the Company should be taken into account in determining the wage structure etc.
of the chemical works which should be treated as an integral part of the entire industry of all kinds carried on by the Company.
These features are : no unit has any separate paid up capital and there is no separate depreciation fund or reserve fund for each unit ; the Company publishes one balance sheet showing the total profits of all the undertakings after taking into account losses incurred in any undertaking ; the shareholders of the Company are the shareholders in all the unit,% ; the Company has got one board of directors and a common managing agency and the policy of the various units is determine on the basis of the Company as one integrated unit; the profits of the Company are all pooled together and the profits in any undertaking are not earmarked for expenditure in that undertaking; the dividends are paid from to profits of the Company as a whole; the Company has a single provident fund for all its employees in all its units and the Company has established various units from the profits earned by the Company as a whole in the past and incometax is paid on the entire profits of the Company made by all the units after taking into account the losses, if any, incurred by a particular unit.
It is urged therefore on behalf of the respondents that these features are sufficient to establish that all the different industries carried on by the Company are one integrated whole and therefore in fixing the wage structure etc.
for the chemical works this overall position should be taken into account.
There is however in our opinion a 'very cogent reply to these features pointed out on behalf of the respondents, and that is that the Company is a single limited concern owning and controlling various industrial units of different kinds under it and therefore under the Company Law as the Company is on* legal entity these features are bound to be common and may not to enough to lead to the conclusion ,that 522 the various undertakings carried on by the Company are one integrated whole and therefore when wagestructure etc.
has to be fixed in any particular.
unit the over all position of ' the Company as a whole must be taken into account.
On the other hand there are certain features which have been pointed, out by the tribunal and which are not in dispute which go to show that the Company has been treating its various units as independent concerns in actual practice.
Each unit has separate books of account and separate profit and loss account showing how each particular business is faring.
Each unit has separate muster rolls for its employees and transfers from one unit to the other, even where such transfers are possible considering the utterly different kinds of business that the Company is carrying on, usually take place with the consent of the employees concerned.
Further each unit has got its own separate wages and separate dearness allowance and other different allowances and bonus is also paid differently in each concern.
Further even where sales take place from one unit to another they take place at market rate and not at cost price and are adjusted on this basis in the books of account.
Lastly though there is a common board of directors and a common managing agency of the Company.
each unit has its own separate management as it is bound to be for the business carried on by different units is in many cases utterly different.
It is on these facts that we have to see whether the chemical works can be said to be so integrated with the other units of the Company as to justify the conclusion that it is part of the same business, and the entire business carried on the Company is one establishment, and therefore it would not be right to have different wage structure, dear_ ness allowance, etc., in the same establishment.
523 This matter was considered by this Court in connection with Jay off in The Associated Cement Companies Limited, Chaibasa Cement Works, Jhinkpani vs Their Workmen(1), where tests were laid down for determining whether a particular unit is part of a bigger establishment.
These tests included geographical proximity, unity of ownership,.
management and control, unity of employment and conditions of service, functional integrality and general unity of purpose.
But it was pointed out that it is was impossible to lay down any one test as an absolute and invariable test for all cases and the real purpose of these tests was to find out the true relation between the parts, branches, units.
If in their true relation they constitute one integrated whole, then the establishment is one ; if on the contrary they do not constitute one integrated whole, each unit is then a separate unit.
How the relation between the units will be judged must depend on the facts proved.
Thus in one case the unity of ownership, management and control may be the important test, in another case, functional integrality, or general unity may be the important test; and in still another case, the important test may be the unity of employment.
It was pointed out that in a large number of cases several tests may fall for consideration atthe same time and the difficulty of applying these tests arises because of the complexities of modern industrial organization.
The matter was considered again by this Court in Pratap Press etc.
vs Workmen (2), Pakshiraj Studios vs Workmen(3) Hony.
Secretary, South India Millowners ' Association ' vs Secretary, District Coimbatore District Textile Workmen Union (4) and Fine Knitting Co. Ltd. vs Industrial Court, Bombay(4).
In the case of Fine Knitting Co., this Court was considering one limited company but it was held in the circumstances that even though there was unity of ownership, management and control the two parts of the same concern (1) ; (3) (2) (4) C. A. 4 IQ of 1960, decided on 1 2 62.
(5) C.A. 306 of 1961.
decided on 15 2 1962.
524 different units as there was no functional integrality between them.
It is on the basis of these tests that we have to consider whether the tribunal was right in its conclusion that the chemical works has to be treated as an independent unit.
The common features which have been emphasized on behalf of the respondents are in our opinion clearly capable of explanation on the ground that the Company is a limited concern and carries on different kinds of business.
But as in law under the Companies Act, the Company being a limited concern is one legal entity, the Common features on which the respondents rely follow from that one single circumstance, namely, that the Company is a limited concern governed by the Company Law.
It would therefore in our opinion be not right to emphasis these common features and to hold on their basis only that the various businesses carried on by the Company have to be treated as one integrated whole for the purposes of wage structure etc. ' The outstanding fact in the present case is that though a large number of businesses is being carried on by the Company their nature in many cases is utterly different and one has generally speaking nothing to do with the other.
The three main lines of business which the Company is carrying on are sugar, textiles and chemicals.
It .is obvious that there is nothing common between these three different lines of business and there can be no question of one depending upon the other and there cannot be functional integrality generally speaking between these three lines of business.
There might be some connection speaking between the chemical works and the textile mills of the Company inasmuch as some of the chemicals might be used in the textile mills; but the evidence shows that a very small proportion of the chemicals produced in the chemical works is used in the textile mills and that most of the production is sold in the open market.
It cannot ' therefore be said that the chemical works as it now 525 exists is therefor the purposes of the textile mills and is thus integrated with the textile mills.
Even in the matter of employment the evidence is that there is separate recruitment of labour for the different units and each unit has separate muster rolls of employees and this is quite natural considering that different skill is required for the three lines of business carried on by the Company.
It cannot also be said that there is any essential dependence of the chemical works on the textile units or that one cannot be operated without the other.
Further the way in which the Company has been dealing with different units in the past also shows that they have been treated as independent units.
Each unit has its own separate labour union and separate agreements are entered into between the Company and its unions with respect to the conditions of service which are also different for different Units.
Even in the matter of bonus there are differences between the different units and these differences sometimes arose out of different agreements between the various units and their unions.
It appears that even in the case of units carrying on the same business, as for example, textile, the workmen themselves contended in an earlier adjudication that the Delhi Cloth Mills and the Swats Bharat Mills were two distinct and separate units of the Company.
In any case whatever may be said as to the units in the same line of business it is in our opinion perfectly clear that there is no nexus of integration between different lines of business carried on by the Company on the facts which have been proved in this case.
We are of opinion therefore that the ratio of the decision in the Fine Knitting Co. 's case(5) applies to the facts of this case and it must be held that the chemical works is an independent unit and therefore in fixing the wage structure etc.
we have to look to the position of the chemical works only and cannot (5) C.A. 306 of 1961, decided on 15 2 1962.
526 integrate it with other units and consider its wage structure etc.
on the basis of such integration.
It is in the background of the above finding, namely, that the chemical works is an independent unit that we now come to the specific points raised in the two appeals.
We shall first take the appeal by the workmen.
The following four contentions only were pressed before us on their behalf : (i)Even considering the chemical works as an independent unit, the tribunal should have fixed a wage structure including incremental scales ; (ii)The tribunal should have given the same minimum scales to the workmen employed in the canteen as are being given to the other workmen in this concern; (iii)The tribunal should have made those members of the civil engineering 'department who had been working for more than one year permanent and should have given them the same terms and conditions of service as are enjoyed by other workmen of the concern ; (iv)The tribunal should have awarded further bonus to the workmen.
(i) The contention on behalf of this respect is that there are no incremental scales in this concern and the tribunal, should have at any rate made a beginning by fixing some incremental scales for the workmen.
The tribunal however has refused to fix incremental scales on the ground that the concern has neither financial ability nor stability to justify the fixing of incremental scales at the present time.
It is not in dispute that throughout 527 the course of its existence the chemical works has made profits only in two years and that for the rest of the time it has been making losses which had to be met by the Company out of the profits of other units.
Reliance in this connection has been placed on behalf of the respondents on certain observations in the Tariff Commission Report and on a book called "Fertilizers Statistics in India" to show that the chemical industry has a very prosperous future in front of it.
Reliance has also been placed on a communication addressed by the appellant to the respondents in which it has been said that judging from sound business principles the chemical works had not yet turned the corner of losses, but the position appeared brighter, and it was hoped that with the co operation of labour the chemical works would be an asset to the D. C. M. family.
Our attention has also been drawn to various annual reports in which an optimistic picture has been painted by the directors for the benefit of the shareholders.
We agree however with the tribunal that in spite of the possibility that in time to come the chemical works might acquire stability and prove a source of increasing profit to the Company, the fact remains that upto now the.
chemical works has been running at a loss except for two years and one cannot be certain that it will start earning profits soon.
In these circumstances it seems to us that the tribunal was justified in not framing an incremental scale of wages at the present juncture as that would put a heavy strain on the finances on the chemical works which has yet to attain financial stability.
At the present moment the losses incurred in this unit have to be met froth the profits earned in other units of the Company and in this situation we do not think that the tribunal was wrong in refusing, to frame incremental scales.
It is however urged on behalf of the respondents that if in the course of the last twenty years the capital invested in the chemical works has increased 528 tremendously as compared to the modest amount with which it was started in 1942 and if the Company can find capital for the purpose of expansion, it should be able to pay incremental scales of wages by dipping into the same source from which it has been able to find capital.
In effect this argument means that even though the concern may be making losses year after year it should find money for paying the labour force higher wages in spite of the circumstance that that may lead it into incurring further losses.
The argument seems to be that even though there may be losses the concern must pay higher wages to the workmen and if necessary pay them out of what may be called capital.
Now this argument would in our opinion be unanswerable if the claim was for what is called minimum wage: (See Messrs Crown Aluminium Works vs Their Workmen (1).
If the wages paid by the appellant in the present case were below the minimum wage that the tribunal would certainly be justified in ordering it to pay the minimum wage, for no industry can have a right to exist if it cannot pay wages at the bare subsistence level.
Where it is a case of payment of minimum wage, the tribunal can insist on the same being found, if necessary, even out of capital.
But this is not a case of bare minimum wage and we are dealing with a case of fair wage which is above the bare minimum wage.
It is not even the case of the respondents that they are not getting the bare minimum wage.
Their case is that they should be given a fair wage, and that the present wages, though above the bare minimum wage, are still not fair enough and therefore should be increased and an incremental scale should be fixed.
In such a situation we are of opinion that the present financial condition of the concern and its stability are both necessary to be considered before an increased fair wage can be given.
Both the present capacity of (1) ; 529 of the employer to pay the increased rates of incremental wages and its future capacity have to be taken into account in determining an increased level of fair wages based on an incremental scale.
Thus both financial ability at present and financial stability in the near future must be there to justify fixation of an increased fair wage on an incremental scale.
We do not think it will be right to insist on an increased fair wage on an incremental scale in a case where the financial capacity and the financial stability as judged by business principles are both lacking.
Nor would it in our opinion be right to compel the employer to bear the burden of an increased fair wage on an incremental scale and tell him to find money from what may in effect be capital, for such a 'situation in ordinary cases can lead only to one result, namely, the closure of the business concern, which may be more detrimental to the workmen.
Therefore carrying on with the present scale of fair wages and hoping that the financial ability and stability of the concern will improve, with the result that increased fair wage on an incremental basis may be fixed in future is the only alternative at present even in the interest of the workmen employed in this ' concern.
We therefore agree with the tribunal that in the circum,stances no case has been made for fixing an incremental scale of wages at the present juncture.
The contention this head must therefore be rejected.
As to the canteen workmen, it appears that the canteen is run by the appellant departmentally on a no profit no loss basis.
The workmen employed in the canteen are the workmen of the appellant and their number is sixteen or seventeen.
The minimum basic wage for unskilled workmen in this concern at the relevant time was Rs. 38 plus Rs. 55 i. e. Rs. 93 ; but the workmen in the canteen get consolidated wages and all of them (except one) get 530 much less than the minimum, the figures varying from Rs. 50 to Rs. 78.
The tribunal has held that there is no reason why the conditions of service of the workmen in the canteen should not be brought on a par with the conditions of service of the rest of the workmen.
It therefore ordered that the workmen in the canteen would be entitled to the same facilities relating to leave, provident fund, bonus, and gratuity etc.
as are available to the other workmen in the chemical works ; but so far as wages and dearness allowance are concerned, it has not given them even the minimum as indicated above.
The case of the the appellant was that even if ' the minimum was paid to the workmen in the canteen the price of the various food stuffs supplied by the canteen to the workmen would go up substantially and it was on that ground that the appellant resisted the increase in the wages of those workmen in the canteen who are getting less than the minimum of Rs. 93.
The tribunal has held and we think rightly that the fact that the bettering of the conditions of service of the workmen in the canteen may lead to a rise in the price of things sold ' there is no reason for refusing the demand of the workmen ; but it has not carried into effect fully the implications of this observation.
It has ordered that same conditions as to leave facilities etc.
should be extended to the canteen workmen but has stopped short of giving them the same wages and dearness allowance.
The reason why the tribunal did not give the workmen the same wages and dearness allowance is that there was no satisfactory material before it to permit it to fix wages and dearness allowance for the workmen in the canteen.
We are of opinion that there is no reason why the tribunal should not have at least granted the minimum which is paid to the other workmen in the concern to those workmen in the canteen who are getting less than the minimum.
We can see no reason for not giving them also the 531 minimum wages as indicated above.
This will certainly result in bringing the fifteen workmen who are getting between Its. 50 and Rs. 78 per mensem as consolidated wages into an equal position, for each will then get the minimum, namely,.
Rs. 38 plus Rs. 55 and may remove part of the discontent.
In the circumstances that is all that can be done in the absence of the material to which the tribunal has referred.
Therefore the wages of those fifteen workmen who are getting less than the minimum should be brought to the same level.
There is no reason why they should not get such benefits as may be due to them, by their wages being brought to the same minimum as the wages of the other workmen in the concern.
We therefore disagree with the tribunal with respect to the workmen employed in the canteen and order that the wages of those workmen who are getting less than the minimum paid to the other workmen in the concern should be brought to the same minimum level.
The rest of the award on this head will stand.
The minimum wages as above will be paid from the date the tribunal has ordered its award to come into force.
(iii) The claim of the workmen in this connection was that there were 300 workmen employed in the civil engineering department and that they should be made permanent.
The ' tribunal however rejected this contention and pointed out that most of the workmen were temporarily engaged to carry on construction work which was of a temporary nature and therefore.
they could not be made permanent simply because the construction had lasted for more than a year.
This view of the tribunal is in our view correct in so far as the claim put forward with respect to all the three hundred workmen was concerned.
It appears however that at the time when the tribunal recorded 532 evidence the large majority of these 300 workmen had been discharged because they were no longer required and only about 65 remained in service.
It appears from the evidence 'of the Joint Works Manager that a skeleton staff on the civil engineering side is kept for maintenance of buildings and this skeleton staff is of a more or less permanent nature.
The argument therefore before us is that at any rate this skeleton staff should be made permanent.
It was however urged on behalf of the appellant that this was not the way in which the matter was put before the tribunal.
The position now is however clear that a skeleton staff is kept on a permanent basis for the civil engineering department and it seems to us fair that the appellant should be directed to make this skeleton staff permanent and give them the same facilities and wages etc., as are given to the other workmen.
We therefore direct that the appellant shall make such of the skeleton staff as is maintained for civil engineering purpose permanent and give them the same conditions of service including the same minimum wages etc.
as to the rest of the workmen.
It is however left to the discretion of the appellant to determine what should be the strength of this staff and which persons should be retained as permanent employees.
We say this because the matter was not gone into from this point of view before the tribunal and we have no material on which we ourselves can determine the strength of the skeleton staff and the persons who should ' be made permanent on that account.
The direction will be given effect to within three months of this judgement.
The workmen have been given 2 1/2 months basic wages as bonus for the years in dispute, namely, 1953 54 and 1954 55.
They have claimed additional bonus.
It is however conceded fairly 533 on behalf of the respondent that if the chemical works is treated as an independent unit their case for additional bonus on the basis of the Full Bench formula cannot succeed.
The demand for additional bonus was rightly rejected by the tribunal, considering the chemical works as an independent unit.
We may add that this case is distinguishable from the case of Hony.
Secretary, South India Mill owners Association, (1) for here the two lines of business are distinct and have nothing to do with each other.
This brings us to the appeal by the appellant.
Five points have been urged on behalf of the appellant.
They are: (i) dearness allowance; (ii) uniforms, (iii) acid and gas allowance.
(iv) leave facilities, and (v) gratuity.
We shall deal with them one by one.
So fag as dearness allowance is concerned, the tribunal has ordered that the dearness allowance in the chemical works shall be fixed at the same rate as it is in the power house which is a part of the chemical works.
It may be mentioned that dearness allowance at the relevant time in the chemical works was Rs. 55 per mensem while in the power house it was Rs. 66 per mensem.
The contention on behalf of the appellant in this connection is that the reason why there was this difference 'between the dearness allowance in the power house and in the rest of the chemical works is historical.
It is further pointed out that though the difference in the two dearness allowances is Rs. 11 the actual difference in the total wage packet was only Rs. 3 inasmuch as the minimum basic wage in the power house was Rs. 30 while in the chemical works it was Rs. 38 at the relevant time.
Thus the minimum that an employee was getting in the power house was Rs. 96 while the minimum for the rest of the workmen was Rs. 93, and it is (1) C.A. 419 of 1960.
decided on 1 2 1962.
534 urged that the difference is not serious.
The reason that the tribunal gave for increasing the dearness allowance for the other workmen in the concern was that there was no ground for discriminating between the workmen in the power house and the rest of the workmen.
In increasing the dearness allowance on this sole ground the tribunal ignored firstly the historical reason why there was this difference between the dearness allowance for the power house staff and for the rest of the workmen and also ignored the difference in the basic minimum wages in the power house and for the rest of the workmen.
It further seems to have ignored its own earlier finding that the chemical works was running at a loss and did not have the financial capacity to bear further burden.
As a matter of fact it appears that but for this discrimination which the tribunal found between the rate of dearness allowance for the power house employees and the rest of the workmen it may not have made any change in the dearness allowance payable to the rest of the workmen.
It may be mentioned that the system of dearness allowance in the concern is to allow neutralization at the rate of 2 1/2 annas (now 17 nP.) for each point rise over the working class cost of living index treating the base as 100 for the year 1939.
It may also be mentioned that since the reference was made there has been a voluntary increase in the dearness allowance for the rest of the workmen at the rate of Rs. 6 per mensem.
The reason why this difference is existing between the rate of dearness allowance for the power house employees and rest of the workmen is that for sometime the power house was integrated with the Swatantra Bharat Mills.
Therefore as an integral part of the cotton textile industry the rates of basic wages and dearness allowance 535 in the power house were the same as in the cotton textile business of the company.
Thus the rates there at the relevant time were, as we have already said, Rs. 30 basic wage and Rs. 66 dearness allowance.
At that time the minimum wage in the chemical works was Rs. 38 basic plus Its.
55 dearness allowance i.e. Rs. 93 in all.
It appears however that there was some objection by the Excise Department of the Government as there was a gate between the Swatantra Mills and the chemical works.
The Excise Department wanted this gate to be blocked in order to have better control over the excisable articles produced in the chemical works.
The appellant therefore had to block up this gate in 1950 and therefore the power house which existed on the chemical works side of this gate was transferred from the Swatantra This to the chemical works.
However as the power house workmen were getting the textile rates, the Company assured them that trough they would thereafter be under the control of the chemical works they will be governed for the purposes of pay scales and dearness allowance of I c. by the rule of the Swatantra Mills.
It is this circumstance which has resulted in different scales for the power house staff and the rest of the workmen of the chemical works.
It further appears that there was some retrenchment in the power in 1957 and the retrenched workmen were absorbed as far as possible in others units.
At that time there was an agreement between the Company and the power house workmen and it was agreed that these workmen would be absorbed in other units but they would accept the conditions of service etc.
of those units where they were absorbed, with the result that only those who are left in the power house continue on the textile scales of the Swatantra Bharat Mills.
These circumstances however were not taken into account by the tribunal at all when it ordered that the power house scale of 536 dearness allowance should be introduced for the rest of the workmen also.
The power house scale is really the textile scale and the appellant contended that it would lead to a good deal of complication if the textile scale of dearness allowance is ordered to be introduced for the chemical works.
We are of opinion that there is force in this contention raised on behalf of the appellant and the tribunal was not justified in increasing the dearness allowance for the chemical works merely because of this fortuitous circumstance arising out of historical reasons.
In any case the number of the power house workmen is very small, say about 30140, who who are getting a different rate of dearness allowance: Further it appears that there was not much difference between the total wage packet for the power house workmen and for the rest and that was another reason why the tribunal should not have introduced the power house scale for the rest of the workmen.
It has however been urged on behalf of the respondents that the difference in the basic minimum wages between the power house workmen and the rest of the workmen in the chemical works has disappeared after the recommendations of the Textile Wage Board by which the minimum basic wage for textile workers has been increased by Rs. 8 and it became Rs. 38 from January 1, 1960.
Therefore, it is urged that there .is no reason why the tribunal 's award with respect to making the dearness allowance for the rest of the workmen the same as the workmen of the power .house should not be allowed to stand.
Superficially, this argument looks attractive ; but if one examines it in the light of the Textile Wage Board 's recommendations it will be found that the linking of the dearness allowance.
for the chemical work 's workmen with the power house workmen would lead to endless complications, for the power house workmen would be entitled to the same dearness allowance etc, as would govern the textile workmen in the 537 Swatantra Bharat Mills.
The Textile Wage Board report shows that it recommended not only that the basic wage should be increased but also that a large part of the dearness allowance should be merged with basic wage, the remainder alone remaining as dearness allowance.
It is submitted on behalf of the appellant that it has carried out the recommendations of the Textile Wage Board and the result of the same has been that the basic wages of the textile workmen which would apply to the power house workmen would be fixed at about Rs. 88 or Rs. 89 and the dearness allowance would be reduced to about Rs. 15.
It is urged that the practical linking of the dearness allowance for the rest of the workmen with the dearness allowance in the power house which has been ordered by the tribunal on the ground that there should be no discrimination., would result in endless trouble, apart from the question whether in view of the earlier finding of the tribunal as to the financial.
capacity of the appellant it would be possible for the appellant to bear the extra burden of the increased dearness allowance.
The operative order of the tribunal is that the workmen of the chemical works, excluding the workmen who are governed by exhibit W/2, should be paid dearness allowance at the rate at which it is being given to the workmen of the power house, and this undoubtedly in our opinion would lead to endless trouble now that the recommendations of the Textile Wage Board will for historical reasons apply to the workmen in the power house.
Which are therefore of opinion that the ground on which the tribunal ordered the rate of dearness allowance for the other workmen of the chemical works to be paid on a par with the rate for the power house is not sustainable and the tribunal went wrong in not giving due weight to the histori cal reasons for the rates prevailing in the power house.
Further we are of opinion that the increase is not sustainable on its own merits on the ground 538 of the financial capacity of the concern, which the tribunal itself found was not sound, as the concern bad been running at loss practically since it came into existence except for two years.
The contention therefore on behalf of the appellant on this head must be accepted and the order of the tribunal increasing the dearness allowance set aside.
As to uniforms, we see Do reason to differ from the view taken by the tribunal.
The reasons given by the tribunal for ordering that uniforms should be given to certain category of workmen Are in our opinion sound.
But the tribunal bat; trade a mistake when it went on to order that protective equipment should also be given in addition to uniforms, to the persons found entitled to uniforms according to the directions of the tribunal.
The tribunal seems to have overlooked the difference between uniforms and protective equipment; which is provided in the Delhi Factory Rules.
So far as protective equipment is concerned, it is given for certain specific purposes to be found in the Rules and has no connection with uniforms which employers are ordered to supply to their workmen, for reasons entirely different.
We are therefore of opinion that the direction of the tribunal that protective equipment should also be supplied to persons found entitled to uniforms under its order, is not correct and should be set aside.
So far as protective equipment is concerned, it will only be supplied to those who are entitled to it under the Delhi Factory Rules and not necessarily to all to whom uniforms may have to resupplied under the orders of the tribunal.
We order accordingly.
(iii).
At; to acid and gas allowance, the tribunal has ordered the payment of Rs. 3 per month to certain categories of workmen.
It appears that originally 539 the appellant used to pay Rs. 5 as acid and gas allowance in the Nitric acid gas plant and Rs. 3 in the contact plant.
Later, however, this gas allowance was merged in pay.
But it appears that gas allowance, is still being paid to the workmen in the pity trie acid gas plant.
It 'is contended on behalf of the appellant that this was because the gas allow ance in the case of these workman was not merged in pay.
There is, however, nothing on the record to prove this.
As the record 'stands we have no reason to hold that the gas allowance which was originally paid to the workmen of the nitric acid gas plant was riot merged in their pay.
On the whole therefore the reasons given by the tribunal for making the allowance (1) Rs. 3 to those workmen who are engaged in the manufacture of chlorine, sulphuric acid, caustic soda and hydrochloric acid Appear to us to be sound and we see no reason to interfere with that part of the award.
So far as leave facilities are concerned, the tribunal has awarded that privilege should be granted as provided under the Factories Act.
It has further provided that casual cum sick leave should be granted,for twelve days in the year.
We do not think that this award is in any way, unreasonable.
The"tribunal has however gone on to deal with festival holidays, and that in our opinion the tribunal had no jurisdiction to do.
The reference was in these terms : "Whether leave facilities should be increased and if so, to what extent".
There was no with respect, to holidays.
The tribunal has however taken the view that holidays are covered within the words "leave facilities" used in the order of reference.
We are of opinion that this view is incorrect.
Holidays are entirely different in leave facilities.
On a, 540 holiday the entire business is closed and no one works while leave facilities deal with leave for individual workers while the business as a whole is running.
We may in this connection refer to item 4 of the Third Schedule to the Industrial Disputes Act (No. 14 of 1947), which is in these terms : ""Leave with wages and holidays".
This shows that holidays stand on a different footing altogether from leave with wages and a reference with respect to leave facilities cannot include a consideration of holidays.
The tribunal 's order with respect to holidays is set aside.
Lastly we come to the gratuity scheme sanctioned by the tribunal.
It is true that in this concern there is already a provident fund scheme in force.
But it is now well settled that both gratuity as well as provident fund schemes can be framed in the same concern if its financial position allows it.
It is true that the financial position of the chemical works has not been found to be good and stable enough to warrant an incremental wage structure ; but gratuity is a long term provision and there is no reason to suppose that in the long, run the appellant will not be in a flourishing condition.
As to the burden of the scheme, we do not think that, looking at it from a practical point of view and taking into account the fact that there are about 800 work men in all in the concern, the burden per year would be very high, considering that the number of retirements is between three to four per centum of the total strength.
Further we find that in this very concern there is a gratuity scheme for clerks who number between 100 and 200 and are part of the labour force.
We can see under the circumstances no reason why a similar gratuity scheme should not be framed for the rest of the 541 workmen.
We therefore see no reason to interfere with the order of the tribunal in this respect.
We therefore allow the appeals in part and dismiss them in part in the manner indicated in the course of this judgment.
In the circumstances parties will bear their own costs in both the appeals.
Appeals allowed in part.
| The disputes between the appellant, the management of the D.C.M. Chemical Works which was a constituent unit of the Delhi Cloth and General Mills Limited (the Company), and its workmen related, inter alia, to wage scales and gratuity.
The workmen claimed that the chemical works was an integral part of the Company and, therefore, the over all position of the Company should be taken into account in fixing the wage structure.
The Industrial Tribunal to which the matter was referred held that in the circumstances of the case the chemical works should be treated as an independent unit and that the wage structure etc. could not be fixed on the basis of the over.
all position of the Company.
The facts showed that the high the Company was a single limited concern owning and controlling various industrial units of different kinds under it.
There were certain features which went to show that the various undertakings carried on by the Company had been treated as independent concerns and could not lead to the conclusion that they were one integrated whole.
It was found that (i) each unit had separate books of account and separate profit and loss account, (ii) each unit had separate muster rolls for its employees, and transfers from one unit to the other usually took place with the consent of the employees concerned, (iii) each unit had its own separate wages and dearness allowance and bonus was also paid differently in each concern,(iv) where sales took place from one unit to another they were at market price and not at cost price, and (v) each unit had its own separate management.
The evidence showed that throughout the course of its existence since 1942 the chemical works had made profits only in two years and that for the rest of the time it had been making losses which had to be met by the Com pany out of the profits of other units.
Held, that on the facts found in the present case, there was no nexus of integration between different lines of business carried on by the Company and that the Tribunal was right in 517 its conclusion that the chemical works was ' an independent unit and that, therefore, in fixing the wage structure etc.
, one had to look to the position of the chemical works only and could not integrate it with other units.
The Associated Cement Companies Limited, Chaibassa Cement Works,Jhinkpani vs Their Workmen, (1960) 1 S.C.R. T, 703, Pratap Press etc.
vs Workmen, , Pakshi raja Studios V. Workmen, and Hony.
Secretary, South India Milloumers 'Association vs Secretary, District Coimbatore District Textile Workmen Union, (1962) (2) S.C.R. (Supp.) p. 926 relied on.
Fine Knitting Co. Ltd. vs Industrial Court, Bombay, (1962) (3) S.C.R. (Supp.) p. 196, applied.
Held, further, that in making a direction for the fixation of an increased fair wage on an incremental scale, the present financial condition of the concern and its stability are both necessary to be considered.
There is a difference between a minimum wage and fair wage which is above the bare minimum wage.
In the former case the tribunal could insist that the employer paid minimum wages even out of capital.
Messrs Crown Aluminium Works vs Their Workmen, (1958) S.C.R. 651, referred to.
Held, also, that it is well settled that both gratuity As well as provident fund schemes can be framed in the same concern if its financial position allows it, and that though the financial position of the chemical works had not been found to be good and stable enough to warrant an incremental wage structure, the direction given by the Tribunal for the framing of a gratuity scheme was not erroneous, as it was a long term provision and there was no reason to suppose that in the long run the appellant would not be in a flourishing condition.
| The respondent, a clerk in the appellant Bank, was promoted as Accountant and his pay was fixed in the new post.
The respondent filed an application under section 33C(2) of the Industrial Disputes Act claiming that he was entitled from the date of his joining as accountant (a) to the basic pay of his old grade with annual increments due on December 1, every year, (b) special allowance of Rs. 40 per month for the additional supervisory duties under para 164 of the Sastry Award, and (c) dearness allowance in terms of the award, and prayed to the Labour Court for recovery of the amount due to him.
In resisting this application the appellant contended (1) that such an application under section 33C(2) was incompetent, (2) that in any case the matter would be one within the jurisdiction of an industrial tribunal and not the Labour Court, (3) that the Sastry Award had ceased to be operative long before the date of the respondent 's appointment as an Accountant and so no benefits accrued to him under that Award, and (4) that by his appointment as accountant, the respondent had ceased to be a workman and therefore not entitled to the benefit of the Sastry Award.
The Labour Court rejected all these ob jections and allowed the application.
In appeal by special leave.
Held: (i) Such an application by workmen lies under s.33C(2) of the Industrial Disputes Act.
Central Bank of India vs P.S. Rajagopalan, [1964] 3 S.C.R. 140, followed.
(ii) In view of the provisions of section 7 and section 33C(2), the Labour Court as specified by the Government and not the Industrial Tribunal has jurisdiction to deal with this matter.
(iii) The objection that no benefit as claimed could accrue to the respondent after the Sastry Award had ceased to be operative, must be rejected.
The provision in section 19(6) as regards the period for which the award shall continue to be binding is not in any way affected by section 4 of the Industrial Disputes (Banking Companies) Decision Act.
The different provisions made by the legislature in section 19(3) and section 19(6) illustrate the distinction between an award being in operation and an award being binding on the parties.
Section 19(6) makes clear that after the period of operation of an award has expired, the award does not cease to be effective.
Though in consequence of section 4 of the Industrial Disputes (Banking companies) Decision Act, the Award remained in force only until March 31, 1959, it continued to have effect as a contract between the parties that had been made by industrial adjudication in place of the old contract.
(iv) On consideration of the evidence in the present case, the respondent was merely a senior clerk, doing mainly clerical duties 627 and going by the designation of accountant and was in reality a workman as defined in the Industrial Disputes Act doing an element of supervisory work.
The Labour Court has taken proper note of the distinction between accountants who are really officers and accountants who are merely senior clerks with supervisory duties as envisaged by the Sastry Award.
| This appeal by special leave was directed against the order of the High Court asking the Income tax Appellate Tribunal under section 66(4) Of the Income tax Act to submit a supplementary ' statement of case on points, which were never raised by the parties nor decided by the Income tax Authorities or the Tribunal.
The only question canvassed before them was whether certain cheques, which were received by the assessee at Bhavnagar having been cashed in British India, the monies in respect of them could be said to have been received in British India.
The Tribunal held that the monies related back to the receipt of the cleques and were as such received at Bhavnagar.
The question was whether the receipt of the cheques at Bhavnagar amounted to receipt of the sale proceeds at Bhavnagar. ' The High Court held that the mere receipt of the cheques by post at Bhavnagar was not conclusive in absence of a further finding as to whether the cheques were sent by post without any request, express or implied, having been made by the assessee and observed as follows " But we cannot shut out the necessary inquiry which even from our own point of view is necessary to be made in order that we should satisfactorily answer the question raised in the Reference.
It must not be forgotten that under sec.
66(4) of the Income tax Act we have a right independently of the conduct of the parties to direct the Tribunal to state further facts so that we may properly exercise our advisory jurisdiction.
" Held, that the High Court had misconceived its powers under section 66(4) of the Act and its decision must be set aside.
Section 66(4) of the Indian Income tax Act, which must be read with sections 66(1) and 66(2) Of the Act, did not empower the High Court to raise a new question of law which did not arise out of the Tribunal 's order or direct the Tribunal to investigate new and further facts necessary to determine the new question which had not been referred to it under s 66(1) or section 66(2) of the Act and direct the Tribunal to submit supplementary statement of case.
Such additions and alterations in the statement of case as section 66(4) of the Act empowered the High Court to direct, could 250 relate only to such facts as already formed part of the record but were not included by the Tribunal in the statement of the case.
Craddock (H. M. Inspector of Taxes) vs Zevo Finance Co. Ltd., ; Commissioner of Income tax, West Bengal vs State Bank of India, ; Industrial Development and Investments Co., Ltd. vs Commissioner of Excess Profits Tax, Bombay, [1957] 31 I.T.R. 688; Vadilal Ichhachand vs Commissioner of Income tax, Bombay North, Kutch and Saurashtra, Ahmedabad, and Commissioner of Income tax vs Bhurangya Coal Co. [195S] , referred to.
Commissioner of Income tax, Bihar & Orissa vs Visweshwar Singh, and Sir Sunder Singh Majithia vs Commissioner of Income tax, C. P. and U. P. [1942] 10 I.T.R. 457, considered.
| The appellant company could not work its Mills to full capa city owing to short supply of sugar cane and got the permission of the Government to sell its machinery but continued crushing cane under a lease from the purchaser.
The workmen 's Union in order to frustrate the transaction resolved to go on strike and communicated its resolution to the company.
There wag correspondence between the parties in course of which the company offered to pay to the workmen 25 per cent.
of the profits of the sale on condition that the strike notice must immediately be withdrawn.
The workmen did not fulfill the condition and made certain counter proposals.
The company insisted that the condition must first be fulfilled before the counter proposals could be considered and renewed its offer.
Although the workmen did not actually go on strike, they did not withdraw the strike notice, and did not co operate with the management in the dismantling and delivery of the machinery to the pur chaser, with the result that the company lost heavily.
On the expiry of the lease and closure of the industry, the services of the workmen were duty terminated by the company on March 21, 1951.
The workmen thereafter, claimed the share of profits on the basis of the offer made by the company in the correspondence and the dispute was referred to the Industrial Tribunal for adjudication by the U.P. Government by a notification under section 3 of the U.P. Industrial Disputes Act of 1947.
The Tribunal held that the company was bound by the offer it had made and awarded a sum of Rs. 45,000 to the workmen as representing their share of the profits.
On appeal the award of the Industrial Tribunal was affirmed by the Labour Appellate Tribunal.
It was contended on behalf of the appellant company that the notification was ultra vires, and the reference and the award void in consequence and that there having been no concluded agreement between the parties, it was not bound to pay.
Held, that the definition of an industrial dispute contained in section 2(k) of the Industrial Disputes Act XIV of 1947 and adopted by the U.P. Industrial Disputes Act XXVIII of 1947 contemplated the 873 existence of an industry and a subsisting relationship of employer and employee between the parties and, therefore, there could be no industrial dispute within the meaning of those Acts where the industry had been closed, and the closure was real and bona fide, if the dispute arose on such closure, or thereafter, if that could be conceived.
Section 3 of the U.P. Industrial Disputes Act of 1947 only required that there must be an industrial dispute before the Government could make a reference under that section arid, consequently, in the instant ease where the claim in dispute had arisen, if at all, prior to the closing of the industry, the Government was fully competent to issue the notification.
Indian Metal and Metallurgical Corporation vs Industrial Tribunal, Madras (A.I.R. and E. N. Padmanabha Ayyar vs The State of Madras ([1954] , approved.
Messrs Burn and Co. Ltd., Calcutta vs Their Workmen, (Civil Appeal No. 325 of 1955, decided on October 11, 1956), referred to.
In the instant case, however, as the findings of the Tribunal were inconsistent and conflicting, the court examined the correspondence and held that it did not establish that there was a concluded agreement between the parties whereby the workmen could be entitled to any share of the profits and, consequently, the award made by the Labour Appellate Tribunal must be sot aside.
Nor was the award sustainable as one for compensation for termination of the services of workmen on closure of the industry as such discharge was different from discharge on retrenchment, which implied the continuance of the industry and discharge only of the surplusage, and the workmen were not entitled either under the law as it stood on the day of their discharge or even on merits to any compensation.
Employees of Messrs India Reconstruction Corporation Limited, Calcutta vs Messrs India Reconstruction Corporation Limited, Calcutta ([1953] L.A.C. 563) and Messrs Benett Coleman & Company Ltd. vs Their Employees, ([1954] L.A.C. 24), distinguished and disapproved.
| The respondents were the employees of the appellant and while a strike was going on in the concern of the appellant they physically obstructed the loyal and willing trammers from working in the colliery and insisted on other workmen to join them in the obstruction.
A charge sheet was served on the respondents and they were asked to show cause why disciplinary action should not be taken against them.
The respondents submitted their explanation and on an inquiry held by the welfare officer they were found guilty and the welfare officer recommended their dismissal.
The appellant filed an application before the Industrial Tribunal under section 33 (2) (b) of the Industrial Disputes Act and the tribunal approved of the dismissal.
Thereafter reference was made under section 10 of the Act and the present appeal is by way of special leave against the order of the Industrial Tribunal made in that reference.
The Tribunal has held that the enquiry by the management was proper but it further held that the dismissal amounted to victimisation.
The main question in the appeal was whether there was victimisation.
Hold, where a domestic inquiry is held properly the tribunal cannot sit in appeal on the findings of the domestic tribunal and it can only interfere with the punishment inflicted as a result of the domestic inquiry where there is want of good faith or basic error or the violation of the principles of natural justice or where the findings are perverse or baseless or the case is one of victimisation.
710 Though in a case of proved misconduct normally the imposition of a penalty may be within the discretion of the management there may by cases where the punishment of dismissal for misconduct proved may be unconscionable or so grossly out of proportion to the nature of the offence that the tribunal may be able to draw an inference of victimisation merely from the punishment inflicted.
Such was not the case here.
National Tobacco Co. of India Ltd. vs Fourth Industrial Tribunal, , referred to.
| The respondent No. 1 in this appeal was manufacturing Spun yarn.
In the manufacture of the said product, the respondents used as raw material cellulosic fibres and non cellulosic fibres.
Prior to 7th July, 1983, the respondents had filed a classification list in respect of the spun yarn manufactured by them showing the same as covered by Item No. 18 (III) (i) in the first schedule to the Central Excises and Salts Act, 1944 ("Central Excises Act").
This classification was on the basis that the spun yarn was manufactured by them out of non collulosic synthetic waste.
The said classification list was approved by the excise authorities on 7th July, 1983.
A supplementary classification list was approved on 15th October, 1983.
Samples were drawn out of the spun yarn manufactured by the respondents and sent for chemical analysis.
Reports were submitted by the Chemical Analyser.
On 7th February, 1984, the Superintendent of Central Excises issued a demand notice against the respondent No. 1 on the footing that there was short payment of excise duty as the goods manufactured by the respondents were liable to be classified under Central Excises Tariff Item No. 18(III) (ii).
The respondents filed a writ petition in the High Court, challenging the notice of demand.
On 9th February, 1984, the Assistant Collector of Central Excises passed an order modifying the approval granted to the classification lists submitted by the respondents and classifying the aforesaid product of the respondents under Item No. 18(III) (ii) of Schedule I of the Central Excises Act, on the basis of which the Superintendent, Central Excises, issued on the 10th February, 1984, a notice to the respondent No. 1, calling upon them to show cause why duty short levied should not be recovered from them under the provisions of section 11 A of the Central Excises Act.
A second similar show cause notice was also issued.
The Assistant Collector passed orders of adjudication dated 5th 839 March, 1984, modifying the classification lists and confirming the demand made under the aforesaid notice of demand.
The respondents petitioners thereupon amended their aforesaid writ petition to challenge the two show cause notices and the orders of adjudication.
The petitioners also filed an appeal before the Collector of Central Excises against the said orders of adjudication.
The High Court allowed the writ petition in part, quashing the notice of demand for the period 15th August, 1983 to 6th February, 1984, and the orders modifying the classification lists, and directing the Collector, Central Excises to hear the appeal of the petitioners on merits considering their evidence in respect of the period from 7th February, 1984 onwards.
The High Court took the view that the show cause notice served on the petitioner could be treated as valid only in respect of the period from 7th February, 1984, onwards and not retrospectively from 15th August, 1983 to 6th February, 1984.
The Union of India, the Collector of Central Excises and other Excise officers then moved this Court by this appeal against the decision of the High Court.
Dismissing the appeal, the Court, ^ HELD: If the Cellulosic spun yarn made by a manufacturer with the aid of power contains man made fibre of non cellulosic origin, it will fall under Item No, 18(III) (ii), but if it does not contain any man made fibre of non cellulosic origin, it will fall under Item No. 18(III) (i) and duty would be leviable there at a lower rate.
[843B C] Under the provisions of Section 11 A of the Central Excises Act, before any demand is made on any person chargeable in respect of non levy or short levy or under payment of duty, a notice requiring him to show cause why he should not pay the amounts specified in the notice must be served on him.
In this case, no such notice was served.
The aforesaid notice of demand dated 7th February, 1984, was in violation of the provisions of Section 11 A and is bad in law, and the High Court was fully justified in quashing the same.
[843G H;844G H] The appellants contended that although the notice of demand might be set aside, the notice to show cause dated 9th/10th February, 1984, should be treated as a valid notice in respect of the period from 15th August, 1983 to 6th February, 1984 and the period from 7th February, 1984, onwards.
The notice referred to the service of notice of demand dated 7th February, 1984 on the respondent No. 1.
The notice set out as an established fact that the classification lists submitted by the 840 respondents had been modified by the Assistant Collector, and the only matter with respect to which the respondents were asked to show cause was with regard to the quantification of the amount of short levy which was liable to be recovered from the respondent No. 1.
The Notice could not be regarded as a show cause notice against the modification of the classification lists in respect of the aforesaid period.
The show cause notice was bad in law and of no legal effect as far as the earlier period was concerned.
Under Section 11 A of the Central Excises Act, the notice can relate only to a period of six months period to the issue of that notice except in cases where it is alleged that the short levy or payment has occurred by reason of fraud, collusion or wilful misrepresentation or suppression of facts or contravention of the provisions of the said Act or rules, as contemplated in the proviso to sub section (1) of Section 11 A.
No such case was made out in the said show cause notice.
The said show cause notice must be struck down in so far as the period upto 6th February, 1984, was concerned and could be regarded as a proper show cause notice only in respect of the subsequent period from 7th February, 1984 onwards.
Under the said show cause notice, the question of short levy or non levy of excise duty prior to 6th February, 1984, could not be gone into by the Collector and the High Court was right in the view it took.
[845B C;846A E] Gokak Patel Vokkart Ltd. vs Collector of Central Excise, Belgaum, ; , referred to.
| The Industrial Tribunal, in the process of ascertaining the available surplus, disallowed a claim of the appellant employer for interest on a certain sum of money standing in the depreciation fund and alleged to have been used as working capital.
If this claim was allowed and the amount claimed deducted as a prior charge, the employees would not be entitled to any bonus as there would be no surplus.
The Industrial Tribunal was of opinion that even if the depreciation reserve was utilised as working capital no return thereon was allowable in deciding what amount was to be deducted as prior charge.
On appeal the appellant contended, inter alia, that the balance sheet of the employer company placed before the Industrial Tribunal itself showed that.
,the entire sum of depreciation fund was used as working capital.
Held, that any portion of the reserve fund actually utilised as working capital in the year under consideration should be treated as entitled to a reasonable rate of return and the amount thus ascertained deducted as a prior charge in ascertaining the available surplus.
The balance sheet did not by itself prove the fact of utilisation of any reserve as working capital and the law required that such an important fact as the utilisation of the reserve as working capital had to be proved by the employer by evidence on affidavit or otherwise after giving opportunity to the workmen to contest the correctness of such evidence by cross examination.
Management of Trichinopoly Mills Ltd. vs National Cotton Textile Mills Workers Union, C.A. NO.
309 Of 1957, and Khandesh Spg.
& Weaving Mills Co. Ltd. vs The Rashtriya Girni Kamgar Sangh, jalgaon, C.A. No. 257 Of 1958, followed.
Indian Hume Pipe Co. Ltd. vs Their Workmen.
(1959) 11 L.L.J. 357, explained.
| The Central Wage Board was constituted for devising a wage structure, based on the principle of fair wages payable in the Jute industry.
In determining the financial capacity of the industry the Board selected 20 mills from West Bengal and 9 mills from the rest of the region as representing a cross section of the Industry.
The respondent, a fairly small mill in Andhra Pradesh.
was considered 'as a comparable unit with two larger mills in the State as also with some of the very big and prosperous mills in West Bengal.
The Management of the mill refused to accede to the demand of the workmen to pay wages in accordance with the recommendations of the Board fixing a uniform scale for the entire industry, on the plea that the mill had no financial capacity to bear the burden of the wage scale.
The dispute was referred to the Industrial Tribunal.
The Tribunal upheld the claim of the management.
In appeal to this Court it was contended that the Wage Board recommendations did follow the principles laid down by this Court in the matter of fixation of wages and as such the Tribunal should have implemented its recommendations.
HELD: Dismissing the appeal.
The essential pre requisite of deciding the wage structure viz., consider the capacity of the industry to pay on the principles laid down by this Court was absent in the recommendation of the Wage Board.
This Court has laid down that the capacity of the industry to pay should be gauged on an industry cum region basis after taking a fair cross section of the industry and that the cross section to be truly representative and capable of giving a true picture of the conditions of both industry and labour must be one from each region where establishments of the industry in question are situate.
[608 E F] In the present case taking 20 mills from West Bengal and 9 mills from outside as forming a representative.
cross section was manifestly incorrect as the West Bengal mills could not be said to be comparable units with the rest of the mills.
These mills so clubbed together could not reflect the economic and other conditions prevailing in the mills in different regions with their peculiar problems and differing conditions.
The Board ought to have considered the units in each area separately and determined the wage scales for each such area by taking from that area a representative cross section of the industry where possible or where that was not possible by taking comparable units from other industries within that area.
[608 G H] Express Newspapers Ltd. vs Union of India, [1959] S.C.R. 12, French Motor Car Co. vs Workmen, [1963] Supp. 2 S.C.R. 16 and Greaves Cotton & Co. vs Workmen, [1964] 5 S.C.R. 362, followed.
594 If the wage scale had been determined by the Board in the mam aforesaid, even though the Board was not a statutory body and decisions were only of a recommendatory character, it would be possi for Industrial Tribunal to give due weight to its recommendations such recommendations would have been in conformity with the princil of industry cum region, a principle binding on the ' tribunals.
[609 H] [The difficulty felt by the Tribunal faced with the dilemma whether not to follow the recommendations of the Wage Board arrived at principles different from those consistently followed in industrial adjucation should have been realised by the Government before accepti the recommendations of the Wage Board.] [609 F G]
|
Appeal No. 121 of 1951.
Appeal from the Judgment and Decree dated 15th December, 1948, of the High Court of Judicature at Madras (Subba Rao and Pancha,Pakesa Ayyar JJ.) in Appeal No. 474 of 1945 arising out of the Judgment and Decree dated 3 1 st July, 1945,, of the Court of the Subordinate Judge of Tenali in Original Suit No, 24 of 1944.
130 1002 M. C. Setalvad, Attorney General for India, (N. Subrahmanyam and K. R. Chowdhury, with him) for the appellants.
K. section Krishnaswamy Aiyangar (M. Seshachalapathi, with him) for the respondents.
February 26.
The Judgment of the Court was delivered by DAS J.
This appeal arises out of a suit for recovery of possession of certain immovable properties measuring about 93 acres and 33 cents which are more fully and particularly set out and described in Schedule A to the plaint.
That suit was instituted by Konduru Venkatapayya, respondent No. 1, in his capacity as the Executive Officer appointed by the Government on the 15th July, 1942, in respect of Sri Somasekharaswami Temple at Kotipalle, hamlet of Donepudi, a temple notified on the 26th October, 1939, under the provisions of Chapter VIA of the Madras Hindu Religious Endowments Act (Act 11 of 1927).
The suit was instituted in forma pauperis.
The claim for ejectment of the defendants was founded on the allegation that the properties belonged to the temple, having been given to it by an Inam grant made in 1770 A.D. by Janganna Rao, the then Zamindar of Rachur, that the defendants I to 16 and their predecessors were Archakas rendering Nitya Naivedya Deeparadhana services and as such were in possession of the properties for and on behalf of the temple and that defendants 17 to 43 were the lessees under the Archakas and that the defendants I to 16 were wrongfully claiming the properties as their own and the other defendants claimed to be in possession of portions of the properties as their lessees.
The plaintiff instituted this suit after having given registered notice to the defendants to make over possession of the suit properties to the plaintiff as the Executive Officer of the temple but the defendants were still continuing in such possession in spite of such notice.
The defendants filed written statements raising various contentions 1003 and issues to which it is not necessary now to refer.
The learned Subordinate Judge by his judgment dated the 31st July, 1945, decreed the plaintiff 's suit.
Some of the defendants preferred an appeal to the High Court but the High Court dismissed the same.
Those defendants obtained leave of the High Court to appeal to the Federal Court and that appeal has now come up for hearing before us.
The only two points which were raised before us, as before the High Court, are (1) whether the Inam grant was made in favour of the temple or whether the grant was made in favour of the Archakas burdened with the duties of service, and (2) what right did the grant confer on the grantee whether it was a grant of the land itself or only of the melvaram interest in the properties.
It is urged by the learned Attorney General that as the defendants and their predecessors have been in possession of the properties from ancient times it should be presumed that their possession originated in some lawful title conferred on them.
In short, the contention, founded on several judicial decisions, is that the principle of a lost grant should be applied in this case in favour of the Archakas who have been in quiet possession for over a century and a half.
There is no doubt, on the authorities, that a presumption of an origin in some lawful title may in certain circumstances be made to support possessory rights long and quietly enjoyed where no actual proof of title is forthcoming but it is equally well established that that presumption cannot be made where there is sufficient evidence and convincing proof of the nature of the grant and the persons to whom it was made.
It is true that the original grant is not forthcoming but turning to the evidence we find two documents which appear to us to be decisive on the question of title.
The first one is Exhibit P/3, a copy of the relevant entries in the Inam Register of 1860.
This Inam Register was prepared after enquiries made by the Inam Deputy Collector and the statements furnished at that time by the then Archakas were taken into consideration for 1004 preparing the register.
The copy of the statement filed by the then Archakas before the Inam Deputy Collector was exhibited in this case as Exhibit D/3.
In the Inam Register (exhibit P/3) under the several columns grouped under the general heading " Class extent and value of Inam " this Inam is classified in column 2 as Devadayam.
In column 3 are set out the survey numbers together with the word ' Dry ' indicating the nature of the land comprised within the survey numbers.
The areas are set out in column 5.
The heading of column 7 is " where no survey has been made and no assessment fixed by Government, the cess paid by the ryot to the Inamdar, or the average assessment of similar Government land should be entered in column (7) ".
Under this heading are set out the amounts of respective assessments against the three survey numbers totalling Rs. 198139.
We then pass on the next group of columns under the general heading " Description, tenure and documents in support of the Inam ".
Under column 8 'description of Inam 'is entered the remark " For the support of a Pagoda.
Now kept up ".
The entry in column 9 shows that the Inam was free of tax, i.e., sarvadumbala.
Under column 10 headed "Hereditary, unconditional for life only or for two or more lives " is mentioned ' Permanent '.
The name of the grantor as stated in column 1 1 is Janganna Rao and the year of grant is fasli 1179, A.D. 1770.
In column 13 the name of the temple is set out as the original grantee.
The name of the temple and the location of the temple are also set out under columns 16 and 17.
Turning now to the statement exhibit D/3 caused to be written and filed by the then Archakas during the Inam Inquiry held in 1859 60 Sree Somasekharaswami Varu is given as the name of the Inamdar and the present enjoyer.
The name of the temple is also set out under columns 3,5,6 and 12.
Under the heading " Income derived from the Inam whether it is sarvadumbala or jodi.
lf jodi the amount" in column 13 is stated " sarvadumbala Inam Cist according to the rate prevailing in the neighbouring fields Rs. 26631.
" This statement (exhibit D/3) bears 1005 the signature of the Karnams and the witnesses.
it will be noticed that neither in the Inam Register exhibit P/3 nor in the statement exhibit D/3 is there any mention of the Archakas as the grantee or for the matter of that, having any the least interest, personal or otherwise, in the subject matter of the Inam grant.
The two exhibits quite clearly indicate that the Inam grant was made in favour of the temple by the gurant or and that in the face of this definite evidence and proof of the nature of the grant, no presumption of a lost grant can be made in favour of the Archakas.
We, therefore, in agreement with the High Court, hold that the deity was the grantee and the first question raised before us must be answered against the appellants.
The learned Attorney General next contends that, assuming that the Inam grant was made in favour of the temple, it was only a grant of melvaram interest and that the Archakas who have the kudivaram rights cannot be ejected.
He relies strongly on an unreported judgment of the Madras High Court in Appeal No. 213 of 1942 (The Board of Commissioners for the Hindu Religious Endowments, Madras vs Parasaram Veeraraghavacharyulu and others) where it was held: "The records of the Inam settlement really contain only one clear indication as to the precise extent of this grant.
The statement at the Inam Inquiry, Exhibit V, upon which the decision of the Inam Commissioner was presumably based contains a column headed " Income realised from the Inam sarvadumbala " and in that column we find the entry "Rs. 14 sarvadumbala".
On its face this entry seems to show that the income of the Inam was Rs. 14 free from all charges.
We find, however, from the Inam Register, Exhibit IV, that the assessment of the Inam on the basis of the enjoyment of 16 97 acres is also Rs. 14.
This seems to indicate that the extent of the Inam was the amount of the assessment.
* * * * * It seems, therefore, that the decision must rest on the recital in Exhibit V that the income of the Inam 1006 consists of Rs. 14, read along with the recital in Exhibit TV that the assessment on the land also comes to Rs. 14.
On these materials we confirm the findings of the learned District Judge, although we do not accept his reasoning, and hold that the grant is a grant of melvaram only.
" The facts of that case appear to us to be different from those in the present case.
The Archakas in.
that case were found to have the kudivaram rights from before the Inam grant was made.
In the copies of the Inam Register and Inam Statement filed in that case the Archakas were shown as the grantees and the present enjoyers of the Inam grant and the amount shown under the heading in column 2 of the Inam register as the assessment was the same as the amount shown under column 3 of the Inam Statement under the heading "Income derived from Inam".
In the case before us the Archakas are nowhere mentioned in either Exhibit P/3 or in Exhibit D/3, there is no evidence that they had any title to kudivaram rights and finally the amount of assessment shown under column 7 of the Inam register, Exhibit P/3, is Rs. 198139, whereas the amount shown as income derived from the Inam as shown in column 13 of the Inam Statement, Exhibit D/3, is Rs. 26631.
Apart from these points of distinction the decision relied on by the learned Attorney General appears to us to be of doubtful authority.
As will appear from the passages quoted above, the decision rested mainly, if not entirely, on the fact that the amount of assessment and the amount of income were the same and the conclusion was drawn that the Inam grant comprised only of the revenue assessment, i.e., of melvaram rights.
We are unable to follow the reasoning.
Whether the Inam comprised the land itself, that is to say, both melvaram and kudivaram rights or only the melvaram rights, the entries had to be made in the Inam Register in the same form and even in the case of the grant of the land itself comprising both the rights the amount of assessment had to be set out under column 7 of the Inam Register for it is not 1007 suggested that a different form had to be used where the grant comprised both the rights.
It follows, therefore, that no inference that the Inam grant comprised only melvaram rights can be inferred from the fact that under column 7 only the amount of assessment is set out, and, therefore, the reasoning on which the decision relied on by the learned Attorney General was founded cannot be supported as correct.
Indeed, that decision has been dissented from by another Bench of the Madras High Court in Yelamanchili Venkatadri & another vs Vedantam Seshacharyulu and others (1).
In the present case the High Court was, in our opinion, clearly right in preferring the last mentioned decision to the unreported decision mentioned above.
Having regard to the different entries under the different columns in Exhibit P/3 and Exhibit D/3 there is no escape from the position that this Inam grant in favour of the temple comprised both the interests in the land.
An argument was sought to be raised by the learned Attorney General that the grantor Janganna Rao was only the Collector of the revenue and as such could not grant more than what he had got.
Reference was made to the Kistna District Manual by Gordon Mackenzie but it appeared that the person therein mentioned was not the same grantor as we are concerned with in this case and the point was not pursued and nothing further need be said about it.
Finally, the learned Attorney General submits that these Archakas who were rendering services faithfully from generation to generation from ancient times should not, in equity, be ejected from the entire lands and that they should be allowed to remain in possession of the lands and be permitted to appropriate to themselves the expenses of the services and a reasonable remuneration and the rest of the income should be made over to the temple as its property.
Reference was made to two unreported decisions of the Madras High Court in Appeal No. 218 of 1946 (1) A.I.R. 1948 Mad. 72, 1008 Dandibhotla Kutumba Sastrulu vs Kontharapu Venkatalingam, and in Appeal No. 709 of 1944, Buddu Satyanarayana vs Dasari Butchayya, Executive Officer of the Temple of Sri Malleswaraswami Varu, China Pulivaram.
In a proceeding for the framing of a scheme relating to a temple it may be permissible to take into account the claims, moral if not legal, of the Archakas and to make some provision for protecting their rights, but those considerations appear to us to be entirely out of place in a suit for ejectment on proof of title.
If the two decisions lay down, as it is contended they do, that the principles which may have a bearing on a proceeding for framing of a scheme or for enforcing the scheme that is framed may be applied to a case of the kind we have now before us it will be difficult for us to uphold them either on authority or on principle.
Further what is the conduct of the Archakas defendants appearing on the record of this case ? Although they are Archakas they actually asserted an adverse right in the face of the honest admission of their predecessors in title, made in the Inam statement Exhibit D 3.
Such conduct cannot but be regarded as disentitling them from any claim founded on equity.
The explanation put forward for the first time in paragraph 7 of their present statement of case filed in this Court explaining the absence of a claim to the property by their predecessors at the time of the Inam Inquiry namely, respect for the deity enjoined by Agama Shastra is not at all convincing.
Further, the giving of such equitable relief must depend on questions of fact, namely, the income of the property, the reasonable expenses and remuneration for the services, the amounts appropriated by them all this time and so forth which have not been investigated into in this case, because, no doubt, this question of equitable relief has been put forward as a last resort after having lost their battle.
We do not think in the circumstances of the case any indulgence should be shown to the Archakas even if it were permissible for the Court in a suit of this description to give such relief.
1009 The result, therefore, is that this appeal must fail and is accordingly dismissed with costs.
Appeal dismissed.
Agent for appellant: section Subramaniam.
Agent for respondent: M.S.K. Aiyangar.
| Though a presumption of an origin in some lawful title may in certain circumstances be made to support possessory rights long and quietly enjoyed where no actual proof of title is forthcoming, that presumption cannot be made where there is sufficient evidence and convincing proof of the nature of the grant and of the persons to whom it was made.
In the case of an inam grant, the mere fact that the amount shown in the In am Register as the assessment was the same as the amount shown in the Inam Statement under the heading "income from the inam" does not lead to an inference that the grant comprised only the melvaram rights and not the land itself.
Though in a proceeding for framing a scheme relating to a temple it may be permissible to take into account the claims, moral though not legal, of the archakas and to make some provision to protect their interest, such considerations are out of place in a suit for ejectment of the archakas on proof of title, especially when they set up an adverse title and deny the title of the temple.
[On the facts their Lordships held (i) that there was clear evidence that the inam grant in question was made by the grantor in favour of the temple and that in the face of this definite evidence as to the nature of the grant no presumption of a lost grant can be made in favour of the archakas of the temple; and (ii) that the grant was of the land itself and not of melvaram rights only.]
| The question for determination in this appeal, arising out of a suit filed by the appellant under section 5(3) of the Charitable and Religious Trusts, Act, 1920, was whether the ancient temple of Shri Balaji Venkatesh at Nasik and its Sansthan constituted a charitable and religious trust within the meaning of the Act.
The deity was Swayambhu and revealed itself in a dream to one Ganapati Maharaj who, at its behest, brought the deity from the river Tambraparni and installed it in his house.
Ganapati 's son Timmaya, who removed the deity to Nasik, took the idol to the courts of Rulers and acquired the properties in suit consisting of lands and cash.
Timmaya 's eldest son obtained an extensive plot of land as a gift from the Peshwa and thereon built a vast temple with a Sabha Mandap which could accommodate no less than 600 persons and installed the deity in the first floor with a staircase leading straight to it.
The Hindu public has been worshipping at the temple for more than 200 years and there was no evidence to show that they had ever been excluded from it and any gift had ever been refused.
The ceremonies performed in the temple were appropriate to a public deity.
It was admitted by the sons of Timmaya in Tahanama, executed by them in 1774, that the Inam villages were granted for the worship of the deity and the temple belonged to the Sansthan, none of them having any share in it.
In the Tharav Yadi of 1800, the maintenance allowance provided by the said Tahanama for the different branches of the family was described as 'Vetan '.
The Inam Commissioner, functioning under Act 11 of 1852, recorded the Inam villages as permanently held Debasthan inams at the instance of the then Sthanic and on the basis of original sanads filed by him, reversing the decision of the Assistant Inam Commissioner who had recorded them as personal inams.
Those sanads were not filed in the suit.
In 1931 the appellant published a history of the Sansthan wherein it was clearly stated that the Sansthan was not a private or family property but was the property of the deity, the members of the family being merely the managers.
The deity was not made a party to the suit although representatives of the Hindu public were joined as 98 774 parties under section 1, r. 8 of the Code of Civil Procedure.
The High Court, while it concurred with the trial judge in holding that the deity was a public deity and that its Sansthan constituted a public trust, was, however, inclined to hold that some of the properties might be personal properties of the appellant but refused to grant any such declaration on the ground that no effective decree could be passed against the deity in its absence, It was contended on behalf of the appellant in this court that the courts below had misconstrued the document and were wrong in drawing the inferences they did and that the burden of proof had been wrongly placed on the appellant to prove by positive evidence that the deity was a family deity and the properties his private properties.
Held, that the courts below were right in coming to the conclusion they reached, and the appeal must fail.
A mistaken inference drawn from documents is no less a finding of fact, if there is no misconstruction of the documents and no misconstruction of documents having been proved, the appellant could not succeed.
An admission is the best evidence that an opposing party can rely upon, and, although it is not conclusive, is often decisive of the matter unless it can be successfully withdrawn or proved to be erroneous.
The expression " burden of proof " means one of two things (1) that a party has to prove an allegation before it is entitled to a judgment in its favour, or (2) that the one or the other of the two contending parties has to introduce evidence on a contested issue.
The question of onus is material only where the party on which it is placed would eventually lose if it failed to discharge the same.
Where issues are, however, joined, evidence is led and such evidence can be weighed in order to determine the issues, the question of burden becomes academic.
In the present case, if the onus lay on any party, it was clearly on the appellant to prove by cogent evidence that the admissions made by his predecessors in title and by him were either erroneous or unavailable and this he had failed to do.
The earlier sanads, admittedly in his possession, not having been produced and those produced not being in any way inconsistent with the said admissions or the revenue records, no question of any misconstruction of documents could arise.
Babu Bhagwan Din vs Gir Nar Saroon, (1939) L.R. 67 I.A. 1, held inapplicable.
Srinivasa Chariar vs Evalappa Mudaliar, (1922) L.R. 49 I.A. 237, applied.
The entries made in the Inam Register prepared under Act 11 of 1852, were entitled to great weight and although they could not displace actual and authentic evidence in an individual case, it was well settled that, in absence of such evidence, they must prevail, 775 Arunachalam Chetty vs Venkatachalapathi Guru Swamigal, (1919) L.R. 46 I.A. 204, referred to.
Held, further, that the vastness of the temple, the mode of its construction, the long user by the public as of right, grant of land and cash by the Rulers, taken along with other relevant factors were consistent only with the public nature of the endowment.
Narayanan vs Hindu Religious Endowments Board, A.I.R. 1938 Mad. 209, relied on.
The absence of a dome or Kalas on the temple was not by itself a decisive factor as to its public character, nor was consecration imperative of a deity that was Swayambhu.
Nor is the temporary movement of the idol from place to place inconsistent with its public character.
Ram Soondur Thakoor vs Taruk Chunder Turkoruttum, (1873) 19 Weekly Reporter 28; Hari Raghunath vs Apantii Bhikajii, Bom.
466; Prematha Nath Mullick vs Pradyumna Kumar Mullick, (1925) L.R. 52 I.A. 245 and Venkatachala vs Sambasiva, A.I.R. (1927) Mad. 465; 52 M.L.J. 288, considered.
The defect in the frame of such a suit resulting from the omission of the deity as a party to it, cannot be remedied by the subsequent addition of the representatives of the Hindu Public as parties to it, and no effective decree could be passed against the deity in such a suit.
| The Bombay City Civil Court Act of 1948, an Act passed by the Provincial Legislature of Bombay, provided by section 3 that the Provincial Government may, by notification in the official Gazette, establish for the Greater Bombay a court to be called the Bombay City Civil Court, and that this court shall, notwithstanding anything contained in any law, have jurisdiction to receive, try ' and dispose of all suits and other proceedings of a civil nature nob exceeding Rs. 10,000 in value arising within Greater Bombay except certain kinds of suits which were specified in the section.
Section 4 of the Act provided that subject to the exceptions speci fied in 8. 3 the Provincial Government may, by notification in the official Gazette, invest the City Civil Court with jurisdiction to 52 receive, try and dispose of all suits and other proceedings of civil nature arising within the Greater Bombay and of such value not exceeding Rs. 25,000 as may be specified in the notification.
Section 12 barred the jurisdiction of the Bombay High Court to try suits and proceedings cognizable by the City Civil Court.
In exercise of the powers conferred by section 4 the Provincial Government invested the City Civil Court with jurisdiction to receive, try and dispose of all suits and proceedings of a civil nature not exceeding Rs. 25,000 in value.
The first respondent instituted a suit in the High Court of Bombay for recovery of Rs. 11,704 on the basis of a promissory note, contending that the Provincial Legislature had no power to make laws with respect to juris diction of courts in regard to suits on promissory notes which was a matter covered by item 53 of List I, and the Bombay City Civil Court Act of 1948 was therefore ultra vires.
It was further contended on his behalf that in any event section 4 of the Act was invalid as it involved a delega tion of legislative powers to the Provincial Government and that the suit was therefore cognisable by the High Court.
Held by the Full Court. (i) that the impugned Act was a law with respect to a matter enumerated in List II and was not ultra vires; (ii)that, as the legislature had exercised its judgment and determined that the City Civil Court should be invested with pecuniary jurisdiction up to Rs. 9,5,000 and all that was left to the discretion of the Provincial Government was the determination of the conditions under which the court should be invested with the enhanced juris diction, section 4 did not involve any delegation of legislative powers but was only an instance of conditional legislation and was not ultra vires or invalid on this ground; (iii) inasmuch as the impugned Act was in pith and substance a law with respect to a matter covered by List II, the fact that it incidentally affected suits relating to promissory notes (a subject falling within items 28 and 53 of List I) would not affect its validity and the suit was accordingly not cognisable by the High.
Court.
Per FAZL ALI, MEHR CHAND MAHAJAN and MUKHERJEA JJ.
The power of the Provincial Legislature to make laws with re spect to "administration of justice" and "constitution and organisation of all courts" under item 1 of List II is wide enough to include the power to make laws with regard to the jurisdiction of courts established by the Provincial Legis lature; the object of item 53 of List I, item 9, of List II and item 15 of List III is to confer special powers on the Central and the Provincial Legislatures to make laws relat ing to the jurisdiction of courts with respect the particu lar matters that are referred to in Lists I and II respec tively and the Concurrent List, and these provisions do not in any way curtail the power of Provincial Legislature under Item I of List II to make laws with regard to juris diction of courts and to confer jurisdiction on courts established by it to try all causes of a civil nature sub ject to the power of the Central and 53 Provincial Legislatures to make special provisions relating to particular subjects referred to in the Lists.
Per PATANJALI SASTRI and DAS JJ.
The words" adminis tration of justice" and "constitution and organisation of all courts" in item 1 of List II must be understood in a restricted sense excluding from their scope "jurisdiction and powers of courts" as the latter subject is specifically dealt with in item 2 List II.
Item 1 of List II does not therefore by itself authorise legislation with respect to jurisdiction and powers of courts, and the legisltive power under item 9.
in regard to "jurisdiction 'and powers of courts ", which can legitimately be exercised with respect to any of the matters in List II, can be exercised with respect to administration of justice as this is one of the matters enumerated in that List, with the result that the subject of general jurisdiction of courts is brought within the authorised area of provincial legislation; and as the Provincial Legislature is thus competant to make a law with respect to the general jurisdiction of the court, the apparent conflict with the central legislative power under item 53 of List I can be resolved by invoking the doctrine of pith and substance and incidental encroachment.
[The legislative practice which prevailed in India before 1935 was relied on in this case in support of the view that the Provincial Legislatures had power under the constitution of 1935 to invest courts constituted by them with general pecuniary jurisdiction].
Quaere: Whether it was not open to the Legislatures of India under the Government of India Act of 1935 to delegate their legislative powers to other agencies.
Queen vs Burah (59.
A 178).applied.
Jatindra Nath Gupta vs Province of Bihar distinguished.
Mulchand Kundanmmal Jagtiani vs Raman (51 Born.
L.R. 86 :, United Provinces vs Atiqa Begum Prafulla Kumar Mukherjea and Others vs Bank of Commerce, Khulna referred
| In 1945 one R who was the thekadar of the proprietary rights of a village, sued the appellants and the respondents, other than the first respondent Board of Revenue, for their ejectment under section 171 of the U.P. Tenancy Act.
alleging that the appellants had illegally sub let the lands to the respondents.
The appellants and the respondents made a on cm denying the alleged 'sub letting and stating that the entries in the village records about the respondents being sub tenants were erroneous.
The suit was dismissed in March, 1946, I.e., towards the end of 1353 F on the ground that there was no sub letting and the entries were not correct No attempt was made by anyone to bring the village records in harmony with this decision and the respondents continued to figure as sub tenants in these records.
On his attention being drawn to this, the Lekhpal, on his own authority, removed the entries in favour of the respondents from the records for the year ending 1358 F but the entries for the year 1356 F were left undisturbed as it was not within the Lekhpal 's jurisdiction to alter these.
After the U.P. Zamindari Abolition and Land Reforms Act came into force in 1952 i.e., at the beginning of 1360 F, on the strength of the Khasra and Khatauni of 1356F, the respondents claimed Adhivasi rights under section 20(b)(i) of the Act and.
file six suits praying for the recovery of possession of the lands under 'section 232 of the Act.
They lost the suits before the sub Divisional Officer and Additional Commissioner of Varanasi but succeeded in appeals to the Board of Revenue.
The appellants thereafter filed writ petitions for quashing the orders of the Board; and the High Court although of the view that the impugmed orders of the Board of Revenue were wrong, held that the Board had jurisdiction to interpret section 20(b) as it thought proper; and as the orders passed by it were final without being subject to any appeal.
they could not be quashed by certiorari as being mere errors of law.
In appeal to this Court, it was contended, inter alia, on behalf of the appellants that (i) the correctness of the entry in the record of rights of 1356 F could be gone into and was capable of challenge in a court of law exercising jurisdiction under article 226; (ii) in the present case there was an adjudication in March 1946 that the 'respondents were not subtenants; consequently, unless they showed that they had thereafter become sub tenants, the benefit of the entry in their favor in 1356 F could not be availed of by them; (iii) in the Khasra of 1356 F the respondents were only recorded as sub tenants but not as occupants and could not therefore get the benefit of section 20 (b) (i) of the Act.
HELD: Dismissing the appeals.
The record of rights for the year 1356F had not been corrected afterwards.
The court had to go by the entry in the record of rights and 499 no enquiry need be made as to when the respondents became sub tenants after the decision in the suit filed by R. As between the tenant and the sub tenant, the entry in the record of rights in favour of the sub tenant made him the occupant entitled to the adhivasi rights under section 20 of the Act.
[5O4 G H] The Upper Ganges Sugar Mills Ltd. vs Khalil ul Rahman and others; , ; Amba Prasad vs Abdul Noor Khan Sukh Ram & Ors.
, ; and Nanakchand vs Board of Revenue U.P. ; applied.
| The respondent field a suit against the appellant for recovery of possession of a building on the ground of wilful deflault in payment of rent which was Rs. 900 per ;month.
The appellant denied the relationship of landlord and tenant, claiming himself as one of the "associates" or "co sharers" or "co owners" of the building.
The Munsif decreed the suit; and the decree was affirmed in appeal by the first appellate court as also by the High Court.
Hence the present appeal.
During the pendency of the present appeal, cl.
(ii) of section 30 of Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, which exempted from application of the Act premises the monthly rent in respect of which exceeded Rs. 400, and on the basis of which the suit giving rise to the present appeal emanated, was struck down in a judgment by this Court.
** The appellant contended that as a result of the declaration by this Court of the constitutional invalidity of clause (ii) of section 30, of the Act, 311 which excluded from the purview of the Act any building or part thereof let out on a monthly rent of Rs. 400, the decree of the civil court became null and void and of no effect.
On behalf of the respondent it was submitted that the decree passed by the civil court was not a nullity for the Act did ;not bar the jurisdiction of the civil court but only prohibited execution of a decree of eviction otherwise than in accordance with the relevant statutory provision; and that such a decree was not void, but was merely under an eclipse, and would become executable as and when the bar is removed.
Allowing the appeal, this Court, HELD; 1.1 Section 10 of Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 prohibits jurisdiction of the civil court in respect of eviction of a tenant whether in execution of a decree or otherwise except in accordance with the provisions of that section and sections 14 to 16.
The sole circumstance and the condition precedent to the exercise of jurisdiction by a civil court as stated in second proviso to section 10(1) is that the tenant should have denied the title of the landlord or claimed right of permanent tenancy and the Controller, on such denial or claim by the tenant, reaches a decision and duly records a finding that such denial or claim was bona fide and only when these conditions are satisfied jurisdiction of the civil court can be invoked to pass a decree for eviciton on any of the grounds mentioned in section 10 or sections 14 to 16.
Except to this limited extend the jurisdiction of the civil court is completely barred and the same is vested in the tribunals set up under the Act.
Any suit instituted by a landlord for eviction of a tenant from a building falling within the ambit of the Act,otherwise than as stipulated by the section is, therefor, incompetent for lack of jurisdiction of the court and any decree of the court in such a suit is null and void and of no effect.
[317D E, G H; 318 D,G H] Sushil Kumar Mehta vs Gobind Ram Bohra, [1990] 1 SCC page 193, referred to.
1.2 The decision of the Controller is concerned solely with the bona fides, and not the correctness or validity, of the denial or claim, for these difficult questions of title are by the statute reserved for decision by the appropriate civil court which is the more competent forum in such matters.
[318D E] Magiti Sasamal vs Pandab Bissoi,[1962] 3 SCR 673, referred to.
1.3 If the decision of the Controller is that tenant 's denial or 312 claim is not bona fide, the jurisdiction of the civil court cannot be invoked by the landlord and the Controller will then be the competent authority to order eviction, after affording the parties a reasonable opportunity of being heard, on any one of the grounds specified under the statute, including the ground that the tenant has, without bona fide denied landlord 's title or claimed right of permanent tenancy.[318E F] 1.4 Although the Act contains no express bar of jurisdiction of the civil court, its provisions explicitly show that, subject to the extraordinary powers of the High Court, and this Court, such jurisdiction is statute for eviction of tenants "in execution or otherwise".
The provision of the Act are clear and complete in regard to the finality of the orders passed by the special tribunals set up under it, and their competence to administer the same remedy as the civil courts render in civil suits.
Such tribunals having been so constituted as to act in conformity with the fundamental principles of judicial procedure, the clear and explicit intendment of the legislature is that all questions relating to the special rights and liabilities created by the statute should be decided by the tribunals constituted under it.
[317A C] Dhulabhai &Ors.
vs The State of Madhya Pradesh & Anr.
, ; ; Secretary of State vs Mask & Co., [1939 40] IA 222 (PC, Raleigh Investment Co. Ltd. vs Governor General in Council, [1946] 47 IA 50 (PC and Barraclough vs Brown & Ors., , referred to.
In the instant case, the procedure stipulated in the second proviso to section 10 had not been complied with.
At the time of institution of the suite, the building in question did not come within the ambit of the Act, owing to the exclusionary provision contained in cl.
(ii) of section 30, but after leave to appeal was granted, the applicability of the Act was extended to the building by reason of the decision of this Court, declaring the invalidity of cl.
(ii) of section 30 on account of its inconsistency with Article 14 of the Constitution.
Whatever be the consequences of that declaration whether it has rendered the statutory provision null and void and of no effect, or, merely inoperative, unenforceable and dormant to be revitalised on subsequent removal of the constitutional ban in either event, the civil court acting without the aid of the exclusionary provision in cl.
(ii) of section 30, during the period of invalidity,had become coram non judice and its proceedings resulting in the decree a nullity.
[319A D] 313 Ratan Arya & Ors.
vs State of Tamil Nadu & Anr.
, ; , referred to.
Kiran Singh & Ors.
vs Chaman Paswan & Ors., ; relied on.
V.B. Patankar & Ors.v.
C.G. Sastry, ; , held inapplicable.
Behram Khurshed Pesikaka vs State of Bombay, ; Saghir Ahmad vs State of U.P. and Ors. ; ; Bhikaji Narain Dhakras & Ors.
vs The State of M.P.
The State of A.P. & Anr., ; , referred to.
| This appeal is directed against the order of the Gujarat High Court upholding the order dated the 15th November, 1977 passed by the State of Gujarat whereby the amounts of gratu ity and pension payable to the appellant on superannuation were reduced by 50 per cent.
The appellant was born on January 15, 1909 and after obtaining a Degree in Bachelor of Engineering (Civil) joined the service in the former State of Junagarh and as such was governed by the Junagadh State Pension and Parwashi Allow ances Rules of 1932 which were duly codified and published in the Junagadh State Account Code, State of Junagadh was integrated into the State of Saurashtra on 20.1.1949 and the services of the appellant were absorbed in the State of Saurashtra.
The conditions of service of the absorbed serv ants were duly protected and a proclamation providing a guarantee that the service conditions of absorbed servants could not be varied to their disadvantage was issued on 20.1.49 that being the date of merger of the State.
The State of Saurashtra made the Saurashtra Covenanting State Servants (Superannuation Age) Rules, 1955.
Rule 3(i) thereof provided that a Government servant shall, unless for special reasons otherwise directed by Government retire from service on his completing 55 years of age.
After the merger of the State of Saurashtra with State of Bombay the old Bombay Civil Service Rules, 1959 were made applicable to Saurashtra area and on 1.7.59 the Bombay Civil Service Rules, 1959 were promulgated.
As per clause (c)(2)(ii)(1) of Rule 161, Government servants in the Bombay Service of Engineers Class I were to retire on reaching the age of 55 years.
215 The appellant was compulsorily retired by the State on 12.10.1961 with effect from 12.1.1962 when he had completed the age of 53 years.
The appellant challenged that order by means of writ before the High Court and having remained unsuccessful he took up the matter before this Court and this Court by its judgment dated 9.4.69 allowed the appeal and declared that the appellant was entitled to remain in service until he attained the age of 55 years and that the impugned order compulsorily retiring him at the age of 53 years was invalid and ineffective.
In order to give effect to this Court 's order mentioned above, the Government of Gujarat on 4.8.69 intimated the appellant that he will be deemed to have remained in service uptil 14.1.64, when he attained the age of 55 years.
as he had attained that age prior to the decision of this Court.
In the meantime the age of superannuation of the employ ees of the State of Gujarat had been raised from 55 years to 58 years.
The appellant in order to take benefit of the change moved a writ petition before the High Court of Guja rat but remained unsuccessful.
Thereupon he filed a special leave petition before this Court.
This Court by its order dated 21.7.1975 declined to interfere.
Thus the appellant was not entitled to continue in service beyond 55 years of age.
It may be mentioned that prior to his compulsory retire ment there were three departmental inquiries pending against the appellant, on grounds of slackness in supervision.
overpayment to contractors and loss to the Government and payment in advance of the receipt of goods.
The first in quiry was initiated on 6.2.61.
second on 11.4.1963 and the third on 17.8.63.
These inquiries remained pending against the appellant till 1971.
The appellant filed yet another Special Civil Applica tion No. 504 of 1971 before the High Court praying for issue of a writ of mandamus directing the State to pay to the appellant all his outstanding salary.
allowances.
including due increments after the efficiency bar from 12.1.
1902 to 14.1.
1964 together with 6% interest.
An application for interim relief was also filed but was withdrawn later on the representation perhaps made by the State that the enquiries had become infructuous consequent to appellant 's retirement.
In the meanwhile the State of Gujarat issued a show cause notice dated 17.7.1971 to the appellant intimating him that the Government 216 considered his service record and did not find the same thoroughly satisfactory for the reasons mentioned in the said notice and accordingly the Government proposed to make 50% reduction both in the payment of Gratuity and Pension admissible to him.
The appellant submitted his reply and these proceedings due to laches on the part of the appellant went on for a considerable time and the Government passed the final order on 15.11.1977 reducing the Pension and Gratuity by 50 per cent.
To challenge this Order the appellant again filed Spe cial Civil Application before the High Court for quashing the order reducing his Pension and gratuity.
The High Court dismissed the application in limine on 8.3.1978 observing that in the present case the Government recorded reasons why it came to the conclusion that the petitioner 's Service was unsatisfactory and therefore, put a proportionate cut in the Pension.
as no case of discrimination was made out.
The appellant, preferred Letters Patent Appeal.
against the order passed by the Single Judge.
His contention before the Division Bench was that he continued to be governed by the Junagadh Rules in spite of the fact that the Bombay Rules were sought to be made applicable to him.
His alternative contention was that even if the Bombay Rules were to be made applicable, so far as the question of payment was concerned, inasmuch as they were not less advantageous on compulsory retirement.
proportionate pension was payable to the appel lant under the Bombay Rules of 1959.
The Division Bench held that under either set of Rules, it was open to the State Government to reduce the amount of pension payable to the petitioner as his service had not been found satisfactory by the State under Junagadh Rules as also under Bombay Civil Service Rules.
The High Court accordingly dismissed the Letter Patent Appeal.
Hence this appeal.
It was contended on behalf of the appellant that the High Court went wrong in upholding the impugned order reduc ing the amounts of pension & gratuity in exercise of its power under Rules 188 and 189 of the Bombay Rules, as it had already been ruled by this Court in its judgment in Civil Appeal No. 409 of 1966, that Bombay Rules could not be made applicable to the appellant.
It was urged that the appellant was not governed by Saurashtra Rules either, and it was asserted that either in the show cause notice or in the impugned order.
it Is nowhere specifically stated as to under what set of Rules, the impugned order Imposing a cut in the Pension or Gratuity has been passed.
A contention was also raised based on clauses 3, 13 & 15 of Rule 241 A of Junagadh Rules stating that they operate in different fields.
It was added that no inquiry as contemplated under Rule 189 had been made and admittedly the State had stated before the High Court that 217 the departmental inquiries had become infructuous consequent upon the retirement of the appellant.
According to the counsel for the State the appellant having been retired in pursuance of a judicial order passed by this Court, he cannot now be heard that his retirement at the age of 55 years should be construed as compulsory re tirement the superannuation age having been increased to 60 years under Junagadh Rules, that the retirement of the appellant is normal one; he was entitled to pension under Rule 241 of the Junagadh Rules and the State has passed the impugned order after complying with the provisions of Rules or gratuity be not reduced.
Dismissing the appeal.
this Court, HELD: Rules 188 and 189 have expressly preserved the State Government 's power to reduce or withhold pension by taking proceedings against a Government Servant even after his retirement.
[229H; 230A] In the instant case, in accordance with the procedure specified in Note I to Rule 33 of the Bombay Civil Services Conduct, Discipline and Appeal Rules a show cause notice had been issued to the appellant on 17.7.71 calling upon him to show cause within 30 days from the date of the receipt of the notice as to why the proposed reduction should not be made in the Pension and death cum retirement gratuity.
The appellant failed to avail that opportunity to disprove the allegations and satisfy his appointing authority that he rendered satisfactory service throughout.
It was in those circumstances the appointing authority thought fit to impose reduction on the Pension and gratuity in accordance with Rules 188 and 189 of the Bombay Rules on the ground that the appellant had not rendered satisfactory service.
The appel lant is not entitled to take advantage of clause (b)(ii) of the proviso to Rule 189 A since the proceedings had been instituted long before his retirement.
Further as per clause (a) of the said proviso the proceedings were already insti tuted long before his retirement.
Further as per clause (a) of the said proviso, the proceedings already instituted while the Government servant was in service could be contin ued and concluded even after his retirement.
Therefore the order dated 15.11.1977 reducing the pension and gratuity cannot be said to contravene the Bombay Rules.
[231A E] A combined reading of clauses 3, 13 and 15 of Rule 241 A of 218 Junagadh Rules shows that clause 3 is an exception to the general scheme laid down in clauses 13 and 15.
[228C] Bholanath J. Thakar vs State of Saurashtra, AIR 1954 SC 680; Dalip Singh vs State of Punjab, ; Moti Ram Deka etc.
vs General Manager NEF Railways, Maligaon, Pandu etc.
; , ; State of Maharashtra vs M.H. Mazumdar; , and M. Narasimhachar vs State of Mysore, [1960] 1 SCR 981, referred to.
State of U.P.v.
Brahm Datt Sharma, [1987] 2 SCC 179, fol lowed.
| The plaintiff 's (respondent 's) father and the defendants (appellants) were entitled to receive a defined share in the offerings made at a holy shrine.
On her father 's death the plaintiff claimed his share in the offerings alleging that both under the law of inheritance and by virtue of her father 's will executed in her favour, she was entitled to his share; but the defendants interfered with her right to collect that share.
In the plaintiff 's suit the defendants contended that only members belonging to four specified sub castes were entitled to receive the offerings and the plaintiff having lost her sub caste by reason of her marriage outside those sub castes she was not entitled to her father 's share.
But this argument was rejected by the trial court which held that on the death of the baridar (turnholder) his heirs inherited his right to receive offerings just as they inherited his other property and that therefore, the plaintiff was entitled to the offerings both under the Hindu Succession Act and the will executed by her father.
On appeal a Division Bench of the High Court held that where offerings were received by persons independently of any obligation to render services, they were alienable and attachable and that the custom which restricted the right to a share in the offerings only to members of the four specified subcastes, could not be given effect to in view of the provisions of the Hindu Succession Act and that therefore, the plaintiff was entitled to succeed to the right though she did not belong to any of the sub castes.
On further appeal to this Court it was contended on behalf of the appellant that (1) the right of the baridar was not a transferable right and (2) the right to a share in the offerings and the duties attached to it must be regarded as an office like that of a shebait and cannot be regarded as heritable property.
Dismissing the appeal, ^ HELD: The right of the baridar was a transferable right.
To begin with, the right to a share in the offerings, according to the settlement record prepared for the village and a resolution passed by the Dharmarth Committee, was restricted to the four sub castes, and similarly the baridars did not perform any duties in return.
Sometime later, however, certain obligations, such as to provide permanent servants, to look after visitors and the like, were superimposed on that right.
Though the right to receive a share in the offerings was subject to the performance of those duties none of them 210 was in nature priestly or required a personal qualification.
All of them were of a non religious or secular character which could be performed by the baridar 's agents or servants incurring expense on his account.
When the right to receive the offerings made at a temple is independent of an obligation to render services involving qualifications of personal nature, (such as officiating the worship) such a right is heritable as well as alienable.
[217 B H] Balmukand & ors.
vs Tula Ram & ors., AIR 1928 All. 721 approved.
(a) The right of the baridars cannot be equated with the right and duties of a shebait.
The baridars were not managers of the shrine in the sense that a shebait is in relation to a temple in his charge.
The overall management of the temple vested in the Board of Trustees known as Dharmarth Committee.
[218 E] (b) It is not correct to say that shebaitship is neither more nor less than an office and is not heritable property.
Shebaitship cannot be described as a mere office.
In addition to certain responsibilities it carries with it a definite right to property.
It is well established that in the concept of Shebait, both the elements of office and property, duties and personal interest are mixed up and one element cannot be detached from the other.
Old texts as courts have recognised heriditary office of shebaitship as immovable property.
A B] Angurbala Mullick vs Debabrata Mullick, ; Ram Rattan vs Bajrang Lal & ors. ; followed.
The right to share the offerings being a right coupled with duties other than those involving personal qualifications and being heritable property, it will descend in accordance with the dictates of the Hindu Succession Act in supersession of all customs to the contrary in view of section 4 of that Act.
[220 H] In the instant case, in the light of section 4 of the Hindu Succession Act the requirement that the right could not be exercised by a person not belonging to any of the four sub castes becomes ineffective.
[220 H]
| The respondent plaintiffs instituted a suit in 1961 in accordance with the Portuguese law then in force in those territories for ejectment of the defendant appellants from the suit property.
It was alleged in the plaint that on the death of father of the plaintiff No. 1.
Sadashiva the suit land was assigned to Sitabai mother of plaintiff No. 1 and that on the death of Sitabai the property devolved on the respondent No. 1 and his 6 sisters.
It was also contended that the house built on a portion of the land in dispute and occupied by the defendants should be removed by the defendants and the defendants should be directed to hand over vacant possession of the plot to the respondents.
The appellants in their written statement pleaded that the suit property was given on perpetual lease to the ancestors of the appellants and that no rent was paid for over 40 years.
The appellants further contended that the suit property was in their open peaceful and continuous possession including that of their predecessors in interest as owners for a period of more than 50 years and that the have acquired a title by prescription.
The trial court decreed the suit.
An appeal filed by the appellants before the learned Additional Judicial Commissioner was dismissed.
When the matter came up before this Court by special leave this Court remanded the matter to the court of the Judicial Commissioner for a finding on the plea of prescription raised by the appellants.
The learned Judicial Commissioner after remand came to the conclusion that the appellants have failed to prove the acquisition of full title to the suit property by prescription under the law in force at the relevant time.
The learned Judicial Commissioner also held that the appellants failed to establish their plea of perpetual lease.
Partly allowing the appeal.
^ HELD: (1) In view of the earlier decision of this, Court this Court would be justified in deciding the appeal only on the question of plea of prescription.
The appellants had been in continuous possession of the entire plot of land described in para 1 of the plaint which has a larger area including the portion where the house of the appellant stands.
In the year 1920, the respondents sought to make their construction on the vacant portion of the land close to the appellants ' house which led to opposition and obstruction from the appellants.
Later on, the appellants agreed to the construction by the respondents.
However, so far as the land on which the appellants had their house is concerned there was no proof nor any evidence of any change on the part of the appellants to their open hostility to the respondents ' title to the same.
The respondents did not give any evidence of any such amicable solution.
On the other hand, it is admitted that they had reported to the Administrator without even caring to know the result of such action against the appellants.
The further fact that the respondents annexed to the plaint a certified copy of the partition deed of 1920 which was obtained as early as in 1920 goes to show that they were fully cognizant of the public assertion by the appellants of their own title, to the land on which their house stands repudiating that of the respondents.
The learned Judicial Commissioner has erred in holding that the appellants have not been able to prove an overt act of possession to the knowledge of the respondents.
According to article 474 of the Portuguese Civil Code possession is defined as holding or fruition of anything or right.
The acts done by licence or permission do not constitute possession.
According to Article 505 things and rights are acquired by virtue of possession, just as obligations are extinguished by reason of not demanding their fulfillment.
The law lays down conditions and the period of time 1068 that are necessary for one as well as for the other thing and that is called prescription.
Under Article 528 of the Portuguese Code in the absence of registration of possession or title of acquisition prescription with respect to immovable property or rights to immovable will operate by virtue of possession for 15 years.
Under article 529 when the possession of immovable property or rights to immovable property has lasted for a period of 30 years prescription will operate.
Under the Portuguese law what appears to be clear is that permissive possession is not sufficient to prescribe title of the owner of the land.
There is no evidence whatsoever for the conclusion of the Judicial Commissioner that the possession of the appellants was permissible under the respondents.
On the other hand, evidence is against recognition by the appellants of any title in the respondents.
We are, therefore, left with the long continuous and peaceful, possession by the appellants of the land with the residential house thereon since the time of their ancestors after a clear repudiation of the title of the respondents to the land in 1920.
The fact that the appellants set up title in Vishnu Narcornim describing him as respondents ' ancestor does not affect the position in view of the respondents ' denial that Vishnu had anything to do with the land.
The Judicial Commissioner fell into an error by not keeping the distinction between Vishnu 's title and the respondents ' title.
The origin of ownership of land being dipped in the misty past what emerges from the evidence in the absence of proof of lease or permission by the respondents ' own ancestors is that the appellants have been in long and open possession of the land over which they have constructed their house for a period long enough for that possession to ripen into ownership.
The appellants have acquired title to the said land by prescription.
Since there is no proof of permissive possession under the respondents or their ancestors there is no question of application of Article 510.
The learned counsel for the appellants has confined his claim in this case only to the land on which appellants have their house.
The suit of the respondents so far as it relates to the portion of the land on which the appellants have their house is dismissed and in respect of the remaining portion of land is decreed.
[1070G, 1072A D, 1073A H, 1074A C, 1075D E]
|
Appeal No. 379 of 1958.
Appeal from the judgment and decree dated January 17, 1956 of the Patna High Court in Appeal from Original Decree No. 169 of 1947.
L. K. Jha, D. P. Singh, R. K. Garg, M. K. Ramamurthi and section C. Agarwal, for the appellant.
R. C. Prasad, for the respondent.
September 15.
The Judgment of the Court was delivered by DAS GUPTA, J.
Can a wife 's sister 's daughter 's son be validly adopted to a person governed by the Benaras School of the Mitakshara Hindu Law ? That is the main question raised in this appeal brought on a certificate granted by the High Court at Patna.
The plaintiffs who would succeed to the properties left by Babu Ram Singh on the death 629 of his widow but for the adoption of Devendra Singh which this widow made on June 9, 1935, brought the present suit for a declaration that Devendra Singh was not adopted by the second defendant, Babu Ram Singh 's widow and that in any case, the adoption is invalid in law and so Devendra Singh acquired no right in the properties left by Babu Ram Singh.
The main ground on which the adoption is attacked as invalid is based on the fact that Devendra Singh is Babu Ram Singh 's widow 's sister 's daughter 's son.
The other ground raised in the plaint based on the plaintiff 's allegation that Babu Ram Singh was governed by Mithila School of Hindu Law was negatived by the courts below and has been abandoned before us.
No dispute is also raised now as regards the factum of adoption.
The only question that arises in this appeal therefore is whether the adoption of a wife 's sister 's daughters son is valid in law.
The High Court answered this question in the affirmative and dismissed the suit.
It is against that decision that the present appeal has been preferred.
In support of his contention that such an adoption is invalid in Hindu Law reliance is placed by the learned counsel on the following passage of Nanda Pandit 's Dattak Mimansa : (see Whitley Stokes 's Hindu Law Books at pp.
590 and 591).
Accordingly, the brother, paternal and maternal uncles, the daughter 's son, and that of the sister, are excluded : for they bear no resemblance to a son.
Intending this very position, it is declared in the sequel, by the same author: "The daughter 's son, and the sister 's son, are declared to be the sons of Cudras.
For the three superior tribes, a sister 's son, is No. where mentioned as a son.
Here even the 630 term "sister 's son" is illustrative of the whole not resembling a son, for prohibited connection is common to them all.
Now, prohibited connection is the unfitness of the son proposed to be adopted to have been begotten by the individual himself through appointment to raise issue on the wife of another.
The mutual relation between a couple, being analogous to the one, being the father or mother of the other, connection is forbiden: as for instance the daughter of the wife 's sister, and the sister of the paternal uncle 's wife".
The meaning of the text is this.
Where, the relation of the couple, that is of the bride and bridegroom, bears analogy to that of father or mother ; if the bridegroom be, as it were, father of the bride, or the bride stand in the light of mother, to the bridegroom, such a marriage is a prohibited connection.
The two examples illustrate these cases in their order.
In the same manner as in the above text, of the Grihaparisistha, on marriage, prohibited connection, in the case of marriage, is excepted and so in the case in question, one who if begotten by the adopter, would have been the son of a prohibited connection, must be excepted; in other words, such person in to be adopted, as with the mother of whom, the adopter might have carnal knowledge.
It is urged that in view of this specific exclusion of a wife 's sister 's daughter 's son from the list of those who are fit for adoption there is no escape from the conclusion that such an adoption would be invalid in law.
Learned Counsel has emphasised that great authority attaches to all statements of law as regards adoption that are contained in Dattak Mimansa.
There is no doubt that for many years now the Dattak Chandrika of Kuvera and Dattak Mimansa of Nanda Pandit have been recognised to 631 be of great authority on all questions of adoption.
It is true that Prof. Jolly in his Tagore Law Lectures had in no uncertain terms characterised the latter to be of little value; and eminent scholars like Dr. Mandlik and Golap Chandra Sarkar while writing in the latter part of the last century subjected many of Nanda Pandit 's views to unfavorable criticism.
In spite of all this the Privy Council in Bhagwan Singh vs Bhagwan Singh(1) did recognise that both the Dattak Mimansa and Dattak Chandrika had been received in courts of law including the Privy Council as high authorities and after drawing attention to Lord Kingsdown 's statements as regards these in Rungama vs Atchama (2) and Sir James Colvile 's statement in Collector of Madura vs Moottoo Ramlinga Sathupathy(3), stated thus : ",To call it (i.e., Dattak Mimansa), infallible is too strong an expression, and the estimates of Sutherland and of West and Buhler, seem nearer the true mark; but it is clear that both works must be accepted as bearing high authority for so long a time that they have become embedded in the general law.
" While saying this mention must also be made of the observations of the Privy Council in Sri Balusu Gurulingaswami vs Sri Balasu Ramalakshmamma(4) decided on the same date (March 11, 1899) but immediately before Bhagwan Singh 's Case, was decided, expressing their concurrence with the view that caution was required in accepting the glosses in Dattaka Mimansa and Dattak Chandrika where they deviate from or added to the Smirities.
There can be no doubt that in laying down the rule that the adoption of the son of a woman who could not have been married by the adoptive father because of incongruous relationship (Viruddha Sambandha) Nanda Pandit was adding to the existing state of law.
It 'is interesting to notice here that commenting on what Saunaka had said in describing the ' ritual of adoption that a (1) (1899) L.R. 26 I.A. 153, 161.
(2) (1846) T.A. 1, 97.
(3) (1863) 12 M.I.A. 397, 437.
(4) (1899) L.R. 26 I.A. 113,136.
632 son should be adopted the Dattaka Chandrika observed at p. 14 : (Reflection of a son The resemblance of a son,or in other words the capability to have been begotten, by the adopter, through appointment, and so forth).
(Sutherland 's translation).
The Dattak Mimansa adopts this view, and introduces the further doctrine of (Viruddha Sambandha) relationship as a bar to adoption.
It is unnecessary for us to examine what authority should be attached to this serious addition to the texts for determining who can be adopted, as for reasons to be presently mentioned we are of opinion that assuming that this rule should be accepted as of authority Nanda Pandit has stated this merely as a recommendation and not as a mandatory prohibition.
For many years now courts have recognised the position that not only the Dharma Sutras and Grihya Sutras but also the commentaries thereon and digests mingle without hesitation statements of law which are intended to be recommendations merely with statements which are intended to be mandatory.
In Balu Gurulingaswami 's case to which reference has just been made the Privy Council pointed out that recent extension of the study of Sanskrit had strengthened the view of Sir William Macnaughten that "it by no means follows that because an act has been prohibited it should therefore be considered illegal.
The distinction between the vinculum juris and the vinculum pudoris is not always discernible," and adding to the previous statement of the Board in Rao Balwant Singh vs Rani Kishori(1) decided in the previous year the Privy Council observed these ,words of caution in Balusu Gurulingaswami 's case : .lm15 "They now add that the further study of the subject necessary for the decision of these (1) (1898) L.R. 25 I.A. 69.
633 appeals has still more impressed them with the necessity of great caution in interpreting books of mixed religion, morality and law, lest foreign lawyers, accustomed to treat as law what they find in authoritative books and to administer a fixed legal system, should too hastily take for strict law precepts which are meant to appeal to the moral sense, and ,should thus fetter individual judgments in private affairs, should introduce restrictions into Hindu society, and impart to it an inflexible rigidity never contemplated by the original law givers.
" The importance of this caution has by no means decreased in the years that have gone by.
It is therefore necessary to examine the words used by Nanda Pandit himself in laying down this rule against Viruddha Sambandha adoption.
It has to be noticed that while he says (One who if begotten by the adopter would have been the son of a prohibited connection must be excepted Sutherland 's translation), he does not say anything about what would happen if Viruddha Sambandha Putra was adopted.
If the rule was intended to be mandatory it is reasonable to expect that the author who as the treatise itself shows was a master of logic and well acquainted with the rules of logic and other rules which deal with the question of mandatory injunctions would give clear indication of that view.
This was all the more reasonable to expect as he was introducing a new rule.
But he contents himself with saying that We do not think this language that adoption of a son of a Viruddha Sambandha girl should be avoided, can properly be taken as mandatory so that the rule must be obeyed on pain of the adoption being otherwise invalid in law.
Notice has necessarily to be taken in this connection of the fact that the only authority mentioned by Nanda Pandit himself against 634 Viruddha Sambandha marriage from which he deduces his rule of Viruddha Sambandha in matters of adoption is to be found in the text of Ashvalayana (The bridegroom duly qualified should marry a duly qualified maiden who is younger in years, is not a sapinda, is not of the same gotra, and whose marriage does not involve a viruddha sambandha) (contrary relationship).
It is followed a little later by this comment: (Viruddha Sambandha is that Sambandha (relation) which is viruddha (contrary or im proper) owing to the relationship (existing) between the bride and the bridegroom (before their marriage) being similar to that of a father or mother.
As for instance the daughter of the wife 's sister (and) the sister of the maternal uncle 's wife).
Is this rule mandatory? In other words, would a marriage of a girl standing in the Viruddha Sambandha relationship to the bridegroom be invalid.
We are not satisfied that this is the position in law.
It is striking that though the numerous Dharma Sutras and Grihya Sutras, deal at great length with the question of the girl who can be taken in marriage not one of them with the solitary exception of Ashvalayana has anything to say about Viruddha Sambandha.
Coming to more recent times the only Digest in which any reference to this Virudha Sambandha of Ashvalayana can be traced is in Nirnaya Sindbu (late 16th century).
There is no reference to this however in Raghunandana 's exhaustive treatise on marriage udhvahatattva which was written in the early 16th century.
In Nirnaya Sindhu there is only bald reference to this in these words 635 (There is also the bar to marriage by sayings (of sages).
As in the Grihyaparishistha should not marry a girl of Viruddha Sambandha (incongruous relationship)" Viruddha Sambandha was illustrated thus : "As in the case of wife ',% sister 's daughter; father 's brother 's wife 's sister." without any comments whatsoever.
It is reasonable to think that the numerous Smritikars and commentators who have dealt with the subject of marriage were acquainted with Ashvalayana 's text but (lid not think it necessary to refer to it as it was a recommendatory rule not considered to be of much importance.
Mr. Jha argues that when a positive statement is followed by a negative statement, the negative statement should always be held to contain a prohibitory mandate.
Thus he says that as after saying says next the rules contained in this latter portion should be held to be mandatory.
We can find no justification either in the modern rules of interpretation or in the rules of interpretation of the old Hindu Shastras for such a view.
One instance where a negative rule following a positive direction on this very subject of marriage cannot possibly be I considered to be mandatory can be found in Yajnavalkaya 's text : (Let him, whose life as bachelor is unsullied marry a wife who possesses good qualities, who has not been enjoyed by another, who is beautiful, who is not his sapinda, who is younger than himself, who is not suffering 636 from any complaints, who has brothers, and who does not belong to the family descended from the same primitive guide." Quite clearly the rule that a girl suffering from disease should not be married is not a mandatory rule even though it follows some positive rules about marriage.
That this is the position has been pointed by Vigyaneshwar.
It is interesting to notice in this connection Ashvalayana 's own statement about marriage rules in the fourth section of the first Chapter of his Grihaya Sutra.
After saying (a daughter should be given to a man of understanding) he says in the next text (that one should marry a girl of understanding, good looks, good conduct and good qualities) and one who is not suffering from any disease.
This also is a case of a positive statement that a person should marry a girl of understanding, good looks, good conduct and good qualities, followed by a rule that a person should not marry a girl suffering from disease.
Even so, it cannot be imagined for a moment that this rule that one should not marry a girl suffering from disease is a mandatory rule, implying that marriage with such a girl would be invalid.
In any case, argues the learned counsel, when we find the three rules against marriage to a sapinda girl and sagotra girl and Viruddha Sambandha girl in the same text as here and admittedly the first two are mandatory and marriage to a sapinda girl or a sagotra girl would be invalid there is no reason why the same result should not follow on breach of the third rule against marrying a Viruddha Sambandha girl.
The reasons why marriage to a sapinda girl or a sagotra girl has always been held to be invalid are succinctly stated by Raghunandana in his Udhvahatattva in a passage which has been translated thus by Dr. Jogendra Nath Bhattacharyya in his Commentaries on Hindu Law; Third Edition, Vol.
I at P. 188: 637 "The negative ordinances, prohibiting marriage with girls of the same gotra, pravara etc., are parudasa (exceptional clauses) having reference to a vidhi; they are also prohibitions proper, like the prohibitory rule about the sexual union on parva days, because they forbid such marriages by the accompaniment of condemnatory and penance clauses, (See Texts of Apastamba.
and Sumantu), (cited on p. 187) and in view also of the fact that such marriages may spring from natural inclination.
The term wife is like the terms yupa (sacrificial post) ahavaniya (sacrificial fire), and denotes a female taken in marriage with occult ceremonies.
Therefore, where a sapinda or a sagotra girl is taken in marriage, she does not become a wife.
" It is a clear that none of the reasons which justify the view that a breach of the first two rules in Ashvalayana 's text viz., the rules against marriage of a sapinda girl, or a sagotra girl, should have the consequence that the marriage should be invalid are present in the case of a breach of the third rule, which is against marrying a Viruddha Sambandha girl.
It appears clear to us that Ashvalayana himself did not intend the rule against marrying a Viruddha Sambandha girl as a mandatory prohibition.
This must have been even more clear to Nanda Pandit and so when extending Viruddha Sambandha to adoption on the % cry basis of Ashvalayanas rule against Viruddha Sambandha marriage, Nanda Pandit could not have but intended his rule against Viruddha Sambandha adoption as a mere recommendation and not a mandatory prohibition.
Our attention was drawn to a decision of the Madras High Court in Minakshi vs Ramanada where the learned judges observed: (1) Mad. 49. 638 "In the case of marriage.
, there are three prohibitions, viz., (1) The couple between whom marriage is proposed should not be sapindas; (2) They should not be sagotras; and (3) There should be no Viruddha Sambandha or contrary relationship as would render sexual connection between them incestuous." The real question which was before the Full Bench 'Was whether there can be valid adoption under the Hindu law if a legal marriage is not possible between the person for whom the adoption is made and the mother of the boy who is adopted, in her maiden state.
In the case before the Full Bench, the adoptee 's mother was a sagotra of the adoptive father, and so, there could be no legal marriage between them.
It was not necessary there "ore for the learned judges in the Minakshi 's case to consider whether the Viruddha Sambandha rule against marriage was mandatory or not.
We are not aware of any decision in any of the High Courts where Nanda Pandit 's rule against Viruddha Sambandha adoption has been considered to be a mandatory, prohibition.
For the reasons discussed above we are of opinion that this rule introduced by Wanda Pandit is only a recommendation and consequently it is of no avail to the appellant to show that the adoption of wife 's sister 's daughter 's son is invalid.
Mr. Jha then tried to take advantage of the rule which has been accepted by almost all the High Courts except Bombay that there can be no valid legal adoption unless a legal marriage is possible between the person for whom the adoption is made and the mother of the boy who is adopted, in her maiden state, by urging that there can be no legal marriage between a person and, his wife 's sister 's daughter.
Assuming for the present that it is no 630 longer open to challenge the correctness of this rule at least so far as the Banaras School is concerned, we are still of the opinion that this argument is of no avail, for the simple reason that we see no reason to think that there can be no legally valid marriage between a person and his wife 's mister 's daughter.
For,the only argument in support of the contention, that there can be no such legal marriage between persons thus related, the learned counsel had to fall back upon Asvalayana 's Viruddha Sambandha rule.
That however as we have already shown, is in our opinion only a recommendation and cannot support a proposition that a marriage in breach of the Viruddha Sambandha rule is invalid.
An early as 1878 Dr. Gooroodas Banerjee (whose erudition equalled his orthodoxy) dealing with this question in his Tagore Law Lectures on the Hindu Law of Marriage and Stridhan observed thus (p. 64). "The prohibition by reason of affinity, which exsts in other systems, has no place in Hindu Law.
But the prohibition of marriage with sapindas to some extent supplies its place and so did the prohibition of widow marriage.
The Hindu Law, however, does not prohibit marriage with the wife 's sister, or even with her niece or her aunt." Dr. Jogendra Nath Bhattacharya in his Commentaries on Hindu Law (Third Edition) Vol.
I, also stated after referring to what has been mentioned in Nirnaya Sindhu against marriage with the wife 's sister 's daughter (already quoted above): " 'Instances of marriage with wife 's sister 's daughter, and wife 's brother 's daughter, are also not unknown in Bengal though, Hindu sentiment is strong against such marriages.
" The question was directly raised in Ragavendra Rau vs Jayaram Rau (1).
Mr. Justice Subramania Ayyar and Mr. Justice Benson relying on Dr. Gooroodas Banerjee 's statement of the law (1) Mad.
640 and also on Syama Charan Sarkar 's VyavasthaDarpan, Dr. Bbattacharyya 's commentaries on Hindu Law and certain other text books held that marriage between a man and his wife 's sister 's daughter is valid.
The learned judges pointed out that in South India at least there was little to 'indicate that such marriages are disapproved of "by the members of any section of the community." In our opinion a marriage of a Hindu with his wife 's sister 's daughter is not invalid in law even though it may not be liked by certain people.
Mr. Jha 's second argument based on the rule which we have assumed to be not open to challenge for the purpose of this case that there can be no valid adoption unless a legal marriage is possible between the person for whom the adoption is made and the mother of the boy who is adopted in her maiden state, must therefore fail.
We therefore hold that the High Court was right in its conclusion that the adoption of a wife 's sister 's daughter 's son is valid in law.
The appeal is accordingly dismissed with costs.
Appeal dismissed.
| The appellant as reversioner sued for a declaration that the adoption of respondent 1 by respondent 2 to her deceased husband was invalid in law and respondent 1 acquired no right to the properties left by the husband of respondent 2.
The parties were governed by the Banaras School of Mitakshal a Hindu law and respondent 1 was the sister 's daughter 's son of respondent 2.
The question was whether a wife 's sister 's daughter 's son could 'be validly adopted to a person governed by the Banaras School of Mitakshara Hindu Law.
The High Court answered it in the affirmative and dismissed the suit.
Reliance wag placed on behalf of the appellant in this Court on Nanda Pandit 's Dattak Mimansa which specifically ,excluded a wife 's sister 's daughter 's son for the purpose of adoption on the ground of incongruous relationship (Viruddha Sambandha) as also on the text of Ashvalayana interdicting marriage with a sapinda, sagotra and viruddha sambandha girl such as a wife 's sister 's daughter on which the author of Dattak Mimansa had relied.
It was contended that when a positive statement in the text was followed by a negative one, the latter 628 containing the prohibition must be held to be mandatory and that in any case since the prohibition against marriage to a sapinda or sagotra girl was mandatory, the prohibition against marriage to a Viruddha Sambandha girl must also be equally go.
Held, that the contentions were without substance and must fail.
Adoption of a wife 's sister 's daughter 's son is legally valid under the Banaras School of Mitakshara Hindu law.
None of the reasons which rendered marriage to a sapinda or sagotra girl invalid were present in the case of a marriage to a Viruddha Sambandha girl and the rule against marrying a Viruddha Sambandha girl was not intended by its author to be mandatory.
The extension of the rule of Viruddha Sambandha to adoption made by Nanda Pandit was not meant by him to be mandatory.
Minakshi vs Ramanada, Mad. 49, distin guished.
Held, further, that the marriage of a Hindu with his wife 's sister 's daughter is not invalid in Hindu law.
Ragavendra Rau vs
Jayaram Rau, Mad. 283, referred to.
Case law reviewed.
| Sixty five persons claiming to be members of the Sikh community moved an application before the State Government under Section 7(1) of the Sikh Gurudwara Act, 1925 to have a religious institution in village Ramgarh (also known as Bhagtuana of Faridkot tehsil, declared to be a Sikh Gurudwara.
The State Government notified the said application in the Punjab Government Gazette in terms of Section 7(3) of the Act on 18th October, 1963.
Upon this the appellant made an application under Section 8 and 10 of the Act claiming that the institution was not a Sikh Gurudwara but an Udasi institution known as Dera Bhai Bhagtu.
The application was referred to the Sikh Gurudwara Tribunal for adjudication.
The petition was resisted by the respondent Shiromani Gurudwara Prabandhak Committee on three grounds: (i) that the appellant was not competent to move the petition under section 7 of the Act as he was not a hereditary office holder, (ii) that the provisions of the Act are not ultravires the Constitution; and (iii) that the institution in dispute was a Sikh Gurudwara.
The Tribunal held against the respondent and in favour of the appellant on contention(1).
Since the second contention was not pressed and the third question was the only issue, the Tribunal held that the institution was a Sikh Gurudwara.
In appeal, the Punjab and Haryana High Court confirmed the Tribunal 's findings.
Hence the appeal by Special Leave of the Court.
Allowing the appeal, the Court ^ HELD: 1.1.
The religious institution, Dera Bhai Bhagtu is not Sikh Gurudwara.
On the materials on record, the findings recorded by the Tribunal as well as the High Court are wholly unsupportable to satisfy the tests indicated in law for determining the character of the institution.
[581D] 1.2.
The findings of the High Court clearly show that the four important and most relevant aspects of the case as disclosed in the evidence were completely overlooked or side tracked by the High Court.
They are: (i) there are Samadhs on the premises of the institution; (ii) there are idols and photos of Hindu deities; (iii) Bhai Bhagtu was a Udasi Saint; and (iv) succession was from Guru to Chela.
565 The petition filed by the appellant under s.8 of the Act contained a clear averment that the institution had been set up by Bhai Bhagtu who was a Udasi Saint and the presence of three Samadhs of (1) Bhai Bhagtu, (2) Baba Paras Ram Ji, and (3) Mahant Sahib Dass Ji, was also asserted.
In the written statement the respondent, after a vague denial, had admitted the institution to have been founded by Bhai Bhagtu.
Pritam Dass, the appellant did support his case.
Ordinarily his evidence would have been treated as interested as he happens to be the party but his assertions have been well corroborated.
The same is strengthened by the evidence of all respondent 's witnesses.
The evidence of witnesses clearly indicates: (i) that there are atleast two samadhs in the premises of the institution one being of Bhai Bhagtu and the other of his mother; (ii) the existence of the idol of Baba Srichand, the founder of the Udasi Sect in the premises.
Clearly the Sikhs would not permit the idol of Baba Srichand in a Gurudwara while Udasis would ordinarily install such an idol to perpetuate the memory of the founder of their sect; (iii) the succession was from Guru to Chela; and (iv) there are photos of Hindu deities in the institution.
These facts without anything more would be sufficient to reject the case of the respondent that the institution is a Sikh Gurudwara.
[579A C; G; 580G H] 1.4.
From the very fact that Guru Granth Sahib was recited in the institution no support can be drawn for the claim that the institution was a Sikh Gurudwara.
It is well established that Udasis are midway between Sikhs on the one hand and the Hindus on the other.
Srichand son of Guru Nanak, the founder of Sikhism, had broken away and set up the Udasi sect.
[581B C] 2.1.
Although for the purpose of historical research and analysis on the subject like Sikhs and Sikh temples, the forum of a court of law is not ideal, yet, if the statute enjoins the court to decide such questions, the court has got to discharge the responsibility.
[569D] 2.2.
The court has been called upon to decide whether the institution in question is a Sikh Gurudwara.
While considering this question the Court has to take into consideration all the circumstances which favour or militate against the institution being a Sikh Gurudwara.
In the very nature of things and in view of the requirements of sub s.(2) of section 16 it becomes necessary to consider whether the institution being in charge of a Udasi saint, the existence of samadhs of Udasi saints and worship thereof, or the existence of the idols and absence of a granthi and succession to the institution from guru to chela are all relevant considerations and the Court has to consider them if there is evidence on the record.
In the instant case evidence has been adduced on behalf of the appellant about the existence of samadhs and the various idols, the absence of a granthi and succession to the institution from guru to chela.
The appellant cannot, therefore, be prevented from urging the aforesaid circumstances.
[573F H; 574A] 2.3.
Courts cannot discard the evidence of witnesses of one side by simply saying that the oral testimony is interested and hardly any credible, when witnesses on either side have come to depose on oath.
Here, the grounds on which the evidence adduced on behalf of the appellant has been discarded may equally apply to the evidence adduced on behalf of the respondent.
The Court should have considered the worth of the evidence of each witness and should have given reasons for disbelieving the same on merit.
A bald observation that the witnesses produced on behalf for the appellant are interested must be deprecated.
The courts had to decide the 566 question in view of the provisions of sub s.(2) of s.16 of the Act and they had to record a positive finding in the light of sub s.(2) of s.16.
Unless the claim falls within one or the other of the categories enumerated in sub section(2) of s.16, the institution cannot be declared to be a Sikh Gurudwara [577B D; 578C] 3.1.
One of the most fascinating aspects of Sikhism is the process which began with human Gurus, continued during the period of duality in which there were human Gurus and a collection of sacred writings and ended with the present situation in which full authority is enjoined by the scripture.
In every respect the scripture is what the Gurus were.
[569G] Both the Gurus and the Book deserve respect, which they are accorded because of the Bani which they express, the word of divine truth.
Therefore, it was possible for Guru Arjan, the fifth in the human line, to bow before the collection which he had complied and installed in the newly built Darbar Sahib in 1604 for he was acknowledged the higher authority of the Bani due to the personal importance and significance which he possessed as Guru.
[569H; 570A] The Sikh Gurus have much in common with other preceptors in Indian tradition but their history and contribution is distinctive.
They were not Brahmins, they did not see their calling to be that of expounding Vedas, they taught in vernacular not Sanskrit and their message was for everyone.
They were ten in number each remaining faithful to the teachings of Guru Nanak, the first Guru and when their line was ended by a conscious decision of Guru Gobind Singh, the last Guru, succession was invested in a collection of teachings which was given the title of Guru Granth Sahib.
This is now the Guru of the Sikhs.
[570B C] An important characteristic of the teachings of the Sikh Gurus is their emphasis upon the message, the Bani.
It is this stress which made possible the transfer of Guruship to the scripture.
The human Gurus were the instruments through whom the voice of the God became audible.
[570D] The holiest book of the Sikhs is Guru Granth Sahib complied by the Fifth Master, Guru Arjun.
It is the Bible of Sikhs After giving his followers a central place of worship, Hari Mandir, he wanted to give them a holy book.
So he collected the hymns of the first four Gurus and to these he added his own.
Now this Sri Guru Granth Sahib is a living Guru of the Sikhs.
Guru means the guide.
Guru Granth Sahib gives light and shows the path to the suffering humanity.
Wherever a believer in Sikhism is in trouble or is depressed he reads hymns from the Granth.
Whenever the Sikhs needed guidance or counsel, they should assemble before the Granth in all sincerity and decide their further line of action in the light of teachings of the Master, as embodied in the Granth.
The noble ideas embodied in the Granth would live for ever and show people the path to blisss and happiness.
[570E F; 571B] 3.2.
Temples are found almost in every religion but there are some differences between the Sikh temples and those of other religions.
The Sikh Gurudwaras have the following distinctive features: [571C] 1.
Sikh temples are not the place of idol worship as the Hindu temples are.
There is no place for idol worship in a Gurudwara.
The central object of worship 567 in a Gurudwara is Sri Guru Granth Sakib, the holy book.
The pattern of worship consists of two main items: reading of the holy hymns followed by their explanation by some learned man, not necessarily a particular Granthi and then singing of some passages from the Holy Granth.
The former is called Katha and the second is called Kirtan.
A Sikh thus worships the Holy Words that are written in the Granth Sahib, the words or Shabada about the Eternal Truth or God.
No idol or painting of any Guru can be worshipped.
[571C D] 2.
Sikh worship in the Gurudwara is a congregational worship, whereas Hindu temples are meant for individual worship.
A Sikh does the individual worship at home when he recites Gurbani daily.
Some scriptures meant for this purpose are Japji, Jaap, Rehras, Kirtan Sohila.
Sangat is the collective body of Sikhs who meet every day in the Gurudwara.
[571E F] 3.
Gurudwara is a place where a copy of Guru Granth Sahib is installed.
The unique and distinguishing feature would always be the Nishan Sahib, a flagstaff with a yellow flag of Sikhism flying from it.
This serves as a symbol of the Sikh presence.
It enables the travellers, whether they be Sikhs or not, to know where hospitality is available.
There may be complexity of rooms in a Gurudwara for the building may also serve as a school, or where children are taught the rudiments of Sikhism as well as a rest centre for travellers.
Often there will be a kitchen where food can be prepared though langar itself might take place in the yawning.
Sometimes the Gurudwara will also be used as a clinic.
But its pivotal point is the place of worship and the main room will be that in which the Guru Granth Sahib is installed where the community gathers for diwan.
The focal point in this room will be the book itself.
[571G H; 572A] 3.3.
The sine qua non for an institution being a Sikh Gurudwara is that there should be established Guru Granth Sahib and the worship of the same by the congregation, and a Nishan Sahib as indicated in the earlier part of the Judgment.
There may be other rooms of the institution meant for other purposes but the crucial test is the existence of Guru Granth Sahib and the worship thereof by the congregation and Nishan Sahib.
It is not necessary that there must be a granthi in a Gurudwara.
Any learned person can read Guru Granth Sahib and explain to the congregation.
[572B C] Hem Singh and Others vs Basant Das & Anr.
(1935 36) L.R. 631 IA 180; Bawa Ishar Dass & Others vs Dr. Mohan Singh and Others, Arjan Singh vs Inder Das ; Harnam Singh vs Gurdial Singh ; Mahant Dharam Das etc.
vs State of Punjab & Ors.
; Sohan Das vs Bela Singh & Ors.
AIR 1934 Lah.
180 referred to,
| The petitioner, the Editor of the Searchlight, an English daily newspaper published from Patna, was called upon to show cause before the Committee of Privileges of the Bihar Legislative Assembly why he should not be proceeded against for the breach of privilege of the Speaker and the Assembly for publishing an inaccurate account of the proceedings of the Legislative Assembly.
He moved this Court under article 32 of the Constitution for quashing the said proceeding and the question for decision in substance was whether the said privilege conferred by article 194(3) of the Constitution was subject to the fundamental 97 rights of a citizen under article 19(1)(a) of the Constitution.
This Court by a majority found against the petitioner.
Thereafter the Assembly was prorogued several times, the Committee of Privileges reconstituted and a fresh notice was issued to the petitioner.
By the present petition the petitioner in substance sought to reopen the decision, raise the same controversy once again and contend that the majority decision was wrong.
The question was whether he could be allowed to do so.
Held, that the general principles of res judicata applied and the judgment of this Court could not be allowed to be reopened and must bind the petitioner and the Legislative Assembly of Bihar and the reconstitution of the Committee of Privileges in the meantime could make no difference.
Raj Lakshmi Dasi vs Banamali Sen, ; , applied.
Since this Court had held that the Legislature bad the power to control the publication of its proceedings and punish any breach of its privilege, there could be no doubt that it had complete jurisdiction to carry on its proceedings in accordance with its rules of business and a mere non compliance with rules of procedure could be no ground for interference by this Court under article 32 of the Constitution.
Janardan Reddy vs The State of Hyderabad, ; , referred to.
Prorogation of the Assembly does not mean its dissolution and the only effect it has is to interrupt its proceedings which can be revived on a fresh motion to carry on or renew them.
It was, therefore, not correct to contend that since the Assembly was prorogued several times since after the alleged breach of privilege, the proceeding must be deemed to be dead.
| Kachnar Kuer, on whom the property of her late husband devolved, executed two registered deeds.
By one of these she adopted a son to her deceased husband and by the other, a deed of Arpan nama she created a religious endowment in the name of Shri Gopalji, appointing her mother in law Sheo Kuer, the appellant as the shebait.
The respondents claiming to be the reversioners filed a suit for declaration that the two deeds were void, illegal and not binding on their reversionary interest.
That suit was dismissed on the ground that the late husband of Kachnar Kuer had given authority to her to make an adoption and to create an endowment.
On appeal, the High Court reversed the findings of the trial court and decreed the Suit.
The High Court however, granted a certificate of fitness ' under article 133(1)(b) of the Constitution and since after obtaining the certificate, Kachner Kuer purported to compromise the suit with the reversioners, Sheo Kuer, the shebait came up in appeal by special leave.
Allowing the appeal, ^ HELD.
(i) It is well settled that a Hindu widow possessing a widow 's estate cannot alienate tho property which has devolved on her except for special purposes.
The powers of a Hindu female to alienate property are wider in respect of acts which conduce to the spiritual benefit of her deceased husband.
The widow is entitled to sell the property, even the whole of it, if the income of the property is not sufficient to cover the expenses for such acts.
In regard to alienations for pious observations, which are not essential or obligatory, her powers are limited to alienations of only a small portion of her property.
[1004 F, H, 1005 A] (ii) Whether the alienation for a pious purpose is of a reasonable portion of the property must necessarily depend upon the total extent of the property t which has devolved upon the widow.
[1005 D] (iii) The reasonability of the alienation of a portion of the property depends on the facts and circumstances of each case, but an alienation of 1/5th portion cannot be said to be unreasonable or excessive.
[1005 F] Collector of Masulipatam vs Cavaly Vencata 8 M.I.A. 529, Sadar Singh vs Kunj Behari 491 I.A. referred to Kamala Devi vs Bachu Lal Gupta, [1957] S.C.R. P. 452 applied.
| The appellant challenged the constitutional validity of the pension scheme of the respondent State by which the anti Hindi agitators were to be paid pension from the Consolidated Fund of the State.
The High Court dismissed the writ holding that (1) the spirit and letter of article 351 was not violated and (2) in view of the Appropriation Act 38 of 1974, the payment was not illegal.
Allowing the appeal by special leave, the Court ^ HELD: (1) The pension scheme formulated by the Tamil Nadu Government contains the vice of disintegration and fomenting fissiparour tendencies.
If any State will be engaged in exicting emotion against Hindi or any other language, such provocation has to be nipped in the bud because these are anti national and anti democratic tendencies.
[602C D] (2) There is no legislative sanction in the instant case for such pension scheme.
The Government by an executive order could not authorise payment of pension scheme.
The pension scheme is unconstitutional and the Budget sanction is equally unconstitutional.
| In the election to the Bihar Legislative Assembly held in 1985, the appellant was declared elected from the 286 Chandan Kyari (S.C.) Constituency.
The respondent, a sitting M.L.A., who secured 430 votes less than the appellant, filed an election petition in the Patna High Court (Ranchi Bench) calling in question the election of the appellant.
The respondent 's main grievance was that the Returning Officer re allocated his 'bow and arrow ' symbol to another candidate Murura Dasi, and instead allotted the symbol of 'ladder ' to him, and this sudden change of symbol left him with less than 20 days time for campaign which resulted in confusion amongst his supporters as a result of which his election was materially affected.
On this premise the respondent contend ed that the election was liable to be declared void on the ground of (i) violation of section 30(d) of the Representa tion of People Act, 1951, which according to him prescribed atleast 20 days time for election campaign, which he did not have after change of the symbol; and (ii) violation of Rule 10(5) of the Conduct of Election Rules, 1961 under which, according to him, the election symbol could not be changed without permission of the Election Commission.
The respond ent election petitioner examined himself.
Evidence of no other witness appears on record.
The High Court allowed the petition and declared the appellant 's election to be void holding that the result of the election in so Tar as it concerned the returned candi date was materially affected by violation of Rule 10(5) of the Conduct of Election Rules, 1961.
Before this Court, it was contended on behalf of the appel lant that 922 (i) the appellant did not receive any notice of the election petition against her and the trial had proceeded ex parte; (ii) there was no breach of section 30(d) of the Representa tion of the People Act Inasmuch as the minimum 20 days time was available after the date of withdrawal of nomination paper to the date of poll; (iii) there was no violation of Rule 10(5) of the Conduct of Election Rules; and (iv) even assuming that there was violation of this rule, the election petitioner dismally failed to prove by evidence that the result of the election was materially affected thereby, inasmuch as no sufficient evidence was adduced in proof of his claim, and he himself could not have proved his aver ments.
Allowing the appeal, this Court, HELD: (1) Under s.30 of the Representation of the People Act, 1951, as soon as the notification calling upon a con stituency to elect the member or members is issued, the Election Commission shall, by notification in the Official Gazette appoint, amongst others, under clause (d), the date or dates on which a poll shall, if necessary, be taken, which or the first of which shall be a date not earlier than the twentieth day after the last date for the withdrawal of candidature.
[928F] (2) In the instant case, the last date for the withdraw al of nomination was 9.2.1985 and the date of poll was 5.3.1985.
There was, therefore, clear compliance with the requirement of section 30(d).
The respondent himself stated that on 14.2.1985 he received notice of intention of the Return ing Officer to change his election symbol and the symbol was actually changed on 15.2.1985.
This Court agrees with the High Court that only the spirit of section 30(d) was not complied with.
In terms, this provision was clearly complied with.
[928G 929A] (3) The violation of sub rule (5) of Rule 10 per se will not invalidate the election.
The election petitioner has also to prove that the result of the election, in so far as it concerns the returned candidate, was materially affected.
[934A B] (4) The party who wishes to get an election declared void has to establish by satisfactory evidence that the result of the poll had in fact been materially affected by the violation of Rule 10(5) of the Rules.
For doing this, it has to be demonstrated that the votes would have been di verted in such a way that the returned candidate would have been unsuccessfull.
[931B] 923 Vashist Narain Sharma vs Dev Chandra & Ors., ; ; lnayatullah Khan vs Diwanchand Mahajan & Ors., ; S.N. Balakrishna vs Fernandes, ; , ; Shiv Charan Singh vs Chandra Bhan Singh, ; and Chhedi Ram vs Jhilmit Ram & Ors., , referred to.
(5) A decision in an election petition can be given only on positive and affirmative evidence and not on mere specu lation and suspicion, however, strong they are.
In the instant case, there is no such positive and affirmative evidence.
Mere assertions by the election petitioner were not enough.
[932D] (6) There could be no proposition or contention that a candidate with a particular symbol would always be success ful at the hustings or that a particular voter or a number of voters would always vote for a symbol irrespective of the candidate to whom it is allotted.
[932E] (7) There is no dispute about the importance of the symbol in a backward constituency.
This will however, not absolve the election petitioner of his burden of proving that the result of the election has been materially affect ed.
[933B] All Party Hill Leaders ' Conference, Shillong vs Captain W.A. Sangama, ; and Roop Lal Sathi vs Nach hattar Singh Gill; , , referred to.
(8) The election petitioner has not stated and proved that more than 430 voters would have voted for him, had the symbol of 'bow and arrow ' not been changed, and that they voted for Murura Dasi only for her having the symbol of 'bow and arrow '.
How could that be proved would.
of course, depends on the facts and circumstances of the case.
[929F] (9) In the instant case, the election petitioner dismal ly failed to discharge the burden of proving that the result of the election, in so far as it concerned the appellant, who has been the returned candidate, was materially affect ed.
The High Court was in error in holding, without suffi cient evidence, that it was materially affected.
[934C]
| The father of respondent No. 1, who was the Zamindar, filed a suit for the eviction of Ramprasad, the father of appell ants, from certain plots of land.
The suit was decreed and the Zamindar took possession of the land.
Ramprasad filed an appeal before the Additional Commissioner but the same was dismissed .
He preferred a second appeal before the Board of Revenue during the pendency of which the matter was compromised whereunder he was recognised as tenant of the land in dispute and the order of eviction was; thus nullified.
He applied for restitution of possession under section 144 of the Code of Civil Procedure.
The application was resisted by Dataram and others who had been inducted as tenants on these plots of land during the pendency of the appeals.
The trial court allowed the application but its order was reversed by the Additional Commissioner who held that the newly inducted tenants could not be dispossessed.
Its order was affirmed by the Board of Revenue in revision.
Thereafter fie filed a petition under article 226 of the Constitution in the High Court challenging the decision of the Board of Revenue, but that petition was dismissed on merits.
No appeal was attempted to be filed against the order of the High Court either by applying for a certificate or moving this Court for special leave under article 136.
The appellants have instead come to this Court in appeal by special leave against the order of the Board of Revenue.
A preliminary objection was raised on behalf of of the respondent that the appeal was not maintainable as it was barred by res judicata.
Held, that the appeal was barred by res judicata as the decision of the High Court was on merits and would bind the parties unless it was modified or reversed in appeal or by other appropriate proceedings. 829 Daryao vs State of U. P., [19621 1 section C. R. 574 and Indian Aluminium Co. Ltd. V. The Commissioner of Income tax, West Bengal, (1961) 43 , relied on.
Chandi Prasad Chokhani vs State of Bihar, [1962] 2 section C. R. 276, explained.
| In respect of his assessment to wealth tax for the assessment years 1957 58, 1958 59 and 1959 60, the appellant filed returns in the status of a Hindu Undivided Family.
His family at the material time consisted of himself, his wife and two minor daughters.
The appellant claimed to be assessed in the status of a Hindu Undivided Family inasmuch as the wealth returned consisted of ancestral property received or deemed to have been received by him on partition with his father and brothers.
The Wealth Tax Officer did not accept the contention of.
the appellant and assessed him as an individual.
The Appellate Assistant Commissioner confirmed this view.
However the Appellate Tribunal held that the appellant should be assessed in the status of Hindu Undivided Family but the High Court, upon a reference, disagreed with the view of the Appellate Tribunal and held that as the appellant family did not have any other male coparcener, all the assets forming the 'subject matter of the returns filed by the appellant belonged to him as an individual and not to a Hindu Undivided Family.
On appeal to this Court, HELD:Allowing the appeal: The status of the appellant was rightly determined as that of a Hindu ,Undivided Family by the Appellate Tribunal.
The expression "Hindu Undivided Family" in the Wealth Tax Act is used in the sense in which a Hindu joint family is understood in the personal law of Hindus.
Under the Hindu system of law a joint family may consist of a single male member and his wife and daughters and there is nothing in the scheme of the Wealth Tax Act to suggest that a Hindu Undivided Family as an assessable unit must consist of at least two male members.
[886 C] Under section 3 of the Wealth Tax Act not a Hindu coparcenary but a Hindu Undivided Family is one of the assessable legal entities.
A Hindu joint family consists of all persons lineally descended from a common ancestor, and includes their wives and unmarried daughters.
A Hindu coparcenary is a much narrower body than the Hindu joint family; it in cludes only those persons who acquire by birth an interest in the joint or coparcenary property, these being the sons, grand sons and great grand sons of the holder of the joint property for the time being.
[885 F H] Kalyanji Vithaldas vs Commissioner of Income Tax, 5 I.T.R. 90, Commissioner of Income Tax vs Gomedalli Lakshminarayan considered.
88 3 Commissioner of Income Tax vs A. P. Swamy Gomedalli, , Attorney General of Ceylon vs A.R. Arunachallam Chettiar , Gowali Buddanna 's [1960] 6 I.T.R. 203 referred to.
T.S. Srinivasan vs Commissioner of Income Tax 60, I.T.R. 36 distinguished.
|
Appeal No. 155 of 1961.
Appeal by the special leave from the judgment and order dated January 5, 1959, of the Punjab High Court in Civil Writ Application No. 460 of 1957.
I. M. Lal, and M. L. Aggarwal, for the appellant.
section M. Sikri, Advocate General for the State of Punjab, N. section Bindra and P. D. Menon, for the respondents.
March 7.
The Judgment of the Court was delivered by MUDHOLKAR, J.
This is an appeal by special leave against the judgment of the Punjab High Court dismissing the appellants petition under article 226 of the Constitution.
715 The appellant was appointed a qanungo in the former State of PEPSU in the year 1950.
On December 1, 1953 he was appointed Assistant Consolidation Officer.
Certain complaints having been received regarding tampering with official records he was suspended and an enquiry was held against him by the Revenue Secretary of PEPSU Government.
As a result of that enquiry the Revenue Secretary dismissed him by order dated August 30, 1956, on the ground that the appellant was not above board and was not fit to be retained in service. ""his order was duly communicated to the appellant.
Thereupon the appellant preferred an appeal before the State Government.
It would appear that he had submitted an advance copy of his appeal to the Revenue Minister of PEPSU who called for the records of the case immediately.
After perusing them he wrote on the file that the charges against the appellant were serious and that they were proved.
He also observed that it was necessary to stop the evil with a strong band.
He, however , expressed the opinion that as the appellant was a refugee and bad a family to support, his dismissal would be too hard and that instead of dismissing him outright he should be reverted to his original post of qanungo and warned that if be does not behave properly in future he will be dealt with severely.
On the next day the State of PEPSU merged in the State of Punjab.
According to the appellant the aforesaid remarks amount to an order of the State Government and that they were orally communicated to him by the Revenue Minister.
This is denied on behalf of the State.
It is, however, common ground that the aforesaid remarks or order, whatever they be, were never communicated officially to the appellant.
After the merger of PEPSU with the State of 716 Punjab the file was put up before the Revenue Minister of Punjab, Mr.
Darbara Singh.
On December 1/4, 1956, Mr. Darbara Singh remarked on the file "Serious charges have been proved by the Revenue Secretary and Shri Bachhittar Singh was dismissed.
I would like the Secretary i/c to discuss the case personally on 5th December, 1956.
" Then on April 2/8, 1957 the Minister noted on the file "C.M. may kindly advise." With this remark the file went up before the Chief Minister, Punjab, who on April 16/18, 1957, passed an order, the concluding portion of which reads thus : "Having regard to the gravity of the charges proved against this official, I am definitely of the opinion that his dismissal from service is a correct punishment and no leniency should be shown to him merely on the ground of his being a displaced person or having a ' large family to support.
In the circumstances, the order of dismissal should stand.
" This order was communicated to the appellant on May 1, 1957.
Thereafter he preferred petition under article 226 of the Constitution which, as already stated, was dismissed by the Punjab High Court.
The validity of the order of the Revenue Secretary dismissing the appellant was not challenged before us.
The point urged before us is that the order of the Revenue Minister of the PEPSU having reduced the punishment from dismissal to reversion, the Chief Minister of Punjab could not sit in review over that order and set it aside.
Two grounds are urged in support of this point.
The first is that the order of the Revenue Minister of PEPSU was the order of the State Government and was not open to review.
The second ground is that in any case it was not within the competence of the Chief Minister of Punjab to deal with the matter 717 inasmuch as it pertained to the portfolio of the Revenue Minister.
Before we ' deal with the grounds we may state that the High Court was of the opinion that proceedings taken against the appellant were made up of two parts : (a) the enquiry (which involved a decision of the question whether the allegations made against the appellant were true or not) and (b) taking action (i.e., in case the allegations were found to be true, whether the appellant should be punished or not and if so in what manner.) According to the High Court the first point involved a decision on the evidence and may in its nature be described as judicial while the latter was purely an administrative decision and that in so far as this was concerned there was no reason why the State Government was incompetent to change its decision "if it thought administratively advisable to do so".
We cannot accept the view taken by the High Court regarding the nature of what it calls the second part of the proceedings.
Departmental proceedings taken against a Government servant are not divisible in the sense in which the High Court understands them to be.
There is just one continuous proceeding though there are two stages in it.
The first is coming to a conclusion on the evidence as to whether the charges alleged against the Government servant are established or not and the second is reached only if it is found that they are so established.
That stage deals with the action to be taken against the Government servant concerned.
The High Court accepts that the first stage is a judicial proceeding and indeed it must be so because charges have to be framed, notice has to be given and the person concerned has to be given an opportunity of being heard.
Even so far as the second stage is concerned article 311(2) of the Constitution requires a notice to be given to the person concerned ' as also an opportunity of being heard.
718 Therefore, this stage of the proceeding is no less judicial than the earlier one.
Consequently any action decided to be taken against a Government servant found guilty of misconduct, is a judicial order and as such it cannot be varied at the will of the authority who is empowered to impose the punishment.
Indeed, the very object with which notice is required to be given on the question of punishment is to ensure that it will be such as would be justified upon the charges established and upon the other attendant circumstances of the case.
It is thus wholly erroneous to characterise the taking of action against a person found guilty of any chargo at a departmental enquiry as an administrative order.
What we have now to consider is the effect of the note recorded by the Revenue Minister of PEPSU upon the file.
We will assume for the purpose of this case that it is an order.
Even so the question is whether it can be regarded as the order of the State Government which alone, as admitted by the appellant, was competent to hear and decide an appeal from the order of the Revenue Secretary.
article 166(1) of the Constitution requires that all executive action of the Government of a State shall be expressed in the name of the Governor.
Clause (2) of article 166 provides for the authentication of orders and other instruments made and executed in the name of the Governor.
Clause (3) of that Article enables the Governor to make rules for the more convenient transaction of the business of the Government and for the allocation among the Ministers of the said business.
What the appellant calls an order of the State Government is admittedly not expressed to be in the name of the Governor.
But with that point we shall deal later.
What we must first ascertain is whether the order of the Revenue Minister is an order of the State Government i.e., of the Governor.
In this 719 connection we may refer to r. 25 of the Rules of Business of the Government of PEPSU which reads thus : "Except as otherwise provided by any other Rule, cases shall ordinarily be disposed of by or under the authority of the Minister incharge who may by means of standing orders give such directions as he thinks fit for the disposal of cases in the Department.
Copies of such standing orders shall be sent to the Rajpramukh and the Chief Minister.
" According to learned counsel for the appellant his appeal pertains to the department which was in charge of the Revenue Minister and, therefore, he could deal with it.
His decision and order would according to him, be the decision and order of the State Government.
On behalf of the State reliance was, however, placed on r. 34 which required cer tain classes of cases to be submitted to the Rajpramukh and the Chief Minister before the issue of orders.
But it was conceded during the course of the argument that a case of the kind before us does not fall within that rule.
No other provision bearing on the point having been brought to our notice we would, therefore, hold that the Revenue Minister could make an order on behalf ' of the State Government.
The question, therefore, is whether he did in fact make such an order.
Merely writing something on the file does not amount to an order.
Before something amounts to an order of the State Government two things are necessary.
The order has to be expressed in the name of the Governor as required by cl.
(1) of article 166 and then it has to be communicated.
As already indicated, no formal order modifying the decision of the Revenue Secretary was ever made.
Until such an order is drawn up the State Government cannot, in our opinion, be 720 regarded as bound by what was stated in the file.
As along as the matter rested with him the Revenue Minister could well score out his remarks or minutes on the file and write fresh ones.
The business of State is a complicated one and has necessarily to be conducted through the agency of a large number of officials and authorities.
The constitution, therefore, requires and so did the Rules of Business framed by the Rajpramukh of PEPSU provide, that the action must be taken by the authority concerned in the name of the Raj pramukh.
It is not till this formality is observed that the action can be regarded as that of the State or here, by the Rajpramukh.
We may further observe that, constitutionally speaking, the Minister is no more than an adviser and that the head of the State, the Governor or Rajpramukh,* is to act with the aid and advice of his Council of Ministers.
Therefore, until such advice is accepted by the Governor whatever the Minister or the Council of Ministers may say in regard to a particular matter does not become the action of the State until the advice of the Council of Ministers is accepted or deemed to be accepted by the Head of the State.
Indeed, it is possible that after expressing one opinion about a particular matter at a particular stage a Minister or the Council of Ministers may express quite a different opinion, one which may be completely opposed to the earlier opinion.
Which of them can be regarded as the "order ' of the State Government? Therefore to make the opinion amount to a decision of the Government it must be communicated to the person concerned.
In this connection we may quote the following from the judgment of this Court in the State of Punjab vs Sodhi Sukhdev Singh (1). "Mr. Gopal Singh attempted to argue that before the final order was passed the Council *Till the abolition of that office by the Amendment of the Constitution in 1956.
(1) ; 409.
721 of Ministers had decided to accept the respon dent 's representation and to reinstate him, and that, according to him, the respondent seeks to prove by calling the two original orders.
We are unable to understand this argument.
Even if the Council of Ministers had provisionally decided to reinstate the respondent that would not prevent the Council from reconsidering the matter and coming to a contrary conclusion later on, until a final decision is reached by them and is communica ted to the Rajpramukh in the form of advice and acted upon by him by issuing an order in that behalf to the respondent.
" Thus it is of the essence that the order has to be communicated to the person who would be affected by that order before the State and that person can be bound by that order.
For, until the order is communicated to the person affected by it, it would be open to the Council of Ministers to consider the matter over and over again and, therefore, till its communication the order cannot be regarded as anything more than provisional in character.
We are, therefore, of the opinion that the remarks or the order of the Revenue Minister, PEPSU are of no avail to the appellant.
Now as regards the next contention, Learned counsel for the appellant contends that since his appeal was not decided by the Revenue Minister of Punjab, Mr. Darbara Singh but by the Chief Minister Mr. Pratap Singh Kairon, who bad no jurisdiction to deal with it, the appeal must be deemed to be still pending.
In this connection he relied upon r. 18 of the Rules of Business framed by the Governor of Punjab which corresponds to r. 25 of the PEPSU rules, which reads thus: " 'Except as otherwise provided by any other Rule., cases shall ordinarily be disposed 722 of by or under the authority of the Minister in charge who may, by means of standing orders give such directions as he thinks fit for the disposal of cases in the Department.
Copies of such standing orders shall be sent to the Chief Minister and the Governor.
" Now, unquestionably the matter here did pertain to the portfolio of the Revenue Minister.
But it was he himself who, after seeing the file submitted it to the Chief Minister for advice.
Learned counsel, however, contends that the Chief Minister could, therefore, only give him advice and not asurp the jurisdiction of the Revenue Minister and decide the case himself.
But this argument ignores r.28 (1) of the Punjab Rules of Business, the relevant portions of which run thus: "28 (1) The following classes of cases shall be submitted to the Chief Minister before the issue of orders : x x x (ii) Cases raising questions of policy and Cases of administrative importance not already covered by the Schedule.
x x x (vii) Proposals, for the prosecutions, dis missal, removal or compulsory retirement of any gazetted officer.
x x x (xix) Such other cases or classes of cases as the chief Minister may consider necessary.
The learned Advocate General contends that the case would be covered by every one of these clauses.
In our opinion, cl.(vii) cannot assist him because it is not the contention of the State that the appellant is a gazetted officer.
We, however, think that 723 cl.
(ii) would certainly entitle the Chief Minister to paw an order of the kind which he has made here.
The question to be considered was whether though grave charges had been proved against an official he should be removed from service forthwith or merely reduced in rank.
That unquestionably raises a question of policy which would affect many cases all and the departments of the State The Chief Minister would, therefore, have been within his rights to call up the file of his own accord and pass orders thereon.
Of course, the rule does not say that the Chief Minister would be entitled to pass orders but when it says that he is entitled to call for the file before the issue of orders it clearly implies that he has a right to interfere and make such order as he thinks appropriate.
Finally there is cl.
(xix) which confers a wide discretion upon the Chief Minister to call for any file and deal with it himself.
Apart from that we may refer to r. 4 of the Rules of Business of the Punjab Government, which reads thus : "The Council shall be collectively responsible for all executive orders issued in the name of the Governor in accordance with these Rules whether such orders are authorised by an individual Minister on a matter pertaining to his portfolio or as the result of discussion it a meeting of the Council, or howsoever otherwise." Thus the order passed by the Chief Minister even though it is on a matter pertaining to the portfolio of the Revenue Minister, will be deemed to be an order of the Council of Ministers.
So deemed its contents would be the Chief Minister 's advice to the Governor, for which the Council of Ministers would be collectively responsible.
The action taken thereon in pursuance of r. 8 of the Rules of Business made by the Governor under article 166(3) of the Constitution 724 would then be the action of the Government.
Here one (if the Under Secretaries to the Government of Punjab informed the appellant by his letter dated May, 1, 1957 that his representation "had been considered and rejected", evidently by the State Government.
This would show that appropriate action had been taken under the relevant rule.
The appeal is thus without substance and is dismissed.
In view of the fact that the appellant is a displaced person with heavy responsibilities and with limited or possibly hardly any means we direct that the costs shall be borne by the parties concerned.
Appeal dismissed.
| The appellant was appointed a qanungo in Pepsu and latter as Assistant Consolidation Officer.
Complaints having been received against him, an enquiry was held as a result of which he was dismissed by the Revenue Secretary.
Against this order he preferred an appeal to the State Government.
The Revenue Minister Pepsu wrote on the file 'chat dismissal would be too hard and instead he should be reverted as qanungo but no written order to that effect was served upon the appellant.
After merger of Pepsu with Punjab, the Revenue Minister Punjab sent up the file to the Chief Minister with the remarks "C.M. may kindly advise".
The Chief Minister passed the order confirming the dismissal.
and the order was duly communicated to the appellant.
The appellant challenged the order of the Chief Minister Punjab on the ground that the Chief Minister Punjab could not sit in review on the order of the Revenue Minister Pepsu and that the Chief Minister was not competent to deal with the matter as it pertained to the portfolio of the Revenue Minister.
Held, that the order of the Revenue Minister Pepsu could not amount to an order by the State Government unless it was expressed in the name of Rajpramukh as required by article 166(1) of the Constitution and was then communicated to the appellant.
Until the order was so communicated it was only of a provisional character and could be reconsidered over and ever again.
Before communication the order was binding neither on the appellant nor on the State Government.
State of Punjab vs Sodhi Sukdev Singh A.I.R. (1961) 2 S.C.R. 3 71 referred to.
714 Held, further, that the Chief Minister Punjab was competent to deal with the appeal and to pass the order which he did.
Under r. 25 of the Rules of Business of the Punjab Government the matter undoubtedly related to the portfolio of the Revenue Minister.
But since tinder r. 28(1)(ii) and (xix) which provide that cases involving questions of policy and cases of administrative importance and such other cases or classes of cases as the Chief Minister may consider necessary shall be referred to the Chief Minister, the case was properly referred to the Chief Minister.
Under r. 4 the order passed by the Chief Minister, even though it pertained to the portfolio of the Revenue Minister, would be deemed to be an order of the Council of Ministers.
It would be the Chief Ministers advice to the Governor, for which the Council of Ministers Would be collectively responsible and action taken thereon would be the action of the Government.
Departmental proceedings cannot be divided into two parts : (i) enquiry and (ii) taking of action ; there is one conti nuous proceeding though there are two stages.
Any action decided to be taken against a public servant found guilty misconduct is a judicial order and as such it cannot be varied at the will of the authority.
| On the strength of a Will dated 25th May 1959, executed in her favour by one Purohit Mani Ram, the respondent Smt.
Ishroo Devi filed a suit for recovery of the schedule property in the plaint.
It was alleged in the plaint that the appellants (A 1, son; A 2, Wife; and A 3, grand daughter of Purohit Mani Ram) after the death of Purohit Mani Ram wrongfully disposed her after getting the name of appellant No. 1 mutated in the records and that the three items of the schedule property were the separate properties of the testa tor and that he was entitled to dispose them under the Will.
The appellants averred in their written statement that the properties belonged to the joint family of which the first appellant and his father Purohit Mani Ram were members and as the properties were joint family properties, they cannot he disposed of by Will.
It was further alleged that the Will was a forged one and is fictitious.
The trial court, accepting the evidence of PW1, an advocate, who advised in the preparation of the Will and also an attest ing witness, PW2 the scribe and PW3 who deposed the fact that the properties were self acquired ones of late Purohit Mani Ram, decreed the suit as regards item No. 1 (a) of the plaint schedule but dismissed the claim as regards items l(b) and 2 holding that they were ancestral ones.
On ap peal, the High Court accepted the findings of the trial court and confirmed the decree as regards item l(a) of the property but modified the order as regards item l(b) and 2 by allowing the claim of the respondent to the extent of 1/2 share since under section 27 of the Jammu & Kashmir Hindu Succession Act Mani Ram was entitled to dispose of his interest in the joint family property by Will.
In appeal by certificate to this Court, the appellant contended: (i) The Will was not a valid one for the reasons, namely, (a) it was ante dated in order to escape the prohi bition against alienation introduced by Ordinance which came into force in July 1959; (b) the signature on the Will was forged; (c) the Will is a most unnatural one as it had not provided for the son or the wife or any near relative but has provided to a distant relative and (d) in a suit for partition filed by the son against Mani Ram, the latter gave an undertaking in the court not to alienate his properties which would improbalise the execution of the Will; (ii) The hereditary profession of Mani Ram being that of a priest whatever he earned while practising that profession and all his acquisitions should be held to be joint family property.
(iii) In view of the Mitakshara law applicable to the estate when partition of the joint family property takes place during the father 's life time at the instance of the son, the mother also has a share equal to him.
The Court confirmed the decree in respect of item 1 (a) of the property in favour of the respondent, modified the decretal order of the High Court in respect of items 1(b) and 2 of the schedule property as 1/3rd in favour of appel lant No. 1, 1/3rd in favour of appellant No. 2 and 1/3rd in favour of respondent as entitled by the Will.
The Court, HELD: (1) The plea that the Will was executed after July 1959 when there was a prohibition against the alienation and that it was pre dated and not executed 401 on the day on which it purports to be is without any sub stance and against the evidence on record.
[403 H, 404 A] (2) The contention that the Will is an unnatural one is also without substance.
The non disclosure of the execu tion of the Will is understandable because Mani Ram did not want anyone, particularly his son, to know about his pos sessing of the property by Will.
[404 B, D] (3) The findings of the two lower courts that the Will is a genuine one and was executed by Mani Ram by his own free will cannot be assailed.
In fact, there was no chal lenge to the gist of the Will noted by PW2, the scribe, in one of his regularly kept record; there was no denial by the first appellant, the son of Mani Ram that the signature found in the Will was not that of his father and there is no reason why the cogent evidence of PW 1, a respectable advocate who spoke of his advising in the preparation of the Will having seen the executant sign the Will in his presence be not accepted.
[405 A C] (4) The income from the practice of a hereditary profes sion will not be a joint family property.
Item 1 (a) of the Property is the self acquisition of Mani Ram and the decree of the appellate court so far as item No. 1 (a) is concerned must be confirmed.
[406 A, D] Hanso Pathak vs Harmandil Pathak and Anr., AIR 1934 Allahabad 851, approved.
Chalabhai Gaurishankar vs Hargowan Ramji & Ors.
I.L.R. 36 Born.
94, over ruled.
(5) Under the Mitakshara law excepting Madras, in the other states referred to in the decisions cited when there is a partition between the son and his father the mother is entitled to a share equal to that of the son.
In the in stant case the case of the first appellant was that the joint family consisted of himself and his father alone, though in the earlier partition suit filed by him he claimed 1/3rd share conceding that his father and mother are entitled to the other 2/3rd share.
As no decision in re spect of the interest of the male Hindu in Jammu & Kashmir was cited the question is remitted to the High Court for decision as to what is the extent of the interest as regards items I(b) & 2 of the plaint Schedule properties.
[406 E F, 407 B E] Dular Koeri vs Dwarkanath Misser ILR ; Sumrun Thakoor vs Chunder Mun Misser & Ors., ILR ; Hos banna Devanna Naik vs Devanna Sannappa Naik and Ors.
ILR and Pratap Singh vs Dalip Singh ILR 52 All.
596, approved.
(6) In view of section 27 of the Jammu & Kashmir which provides that any Hindu male may dispose of by Will any property which capable of being disposed of by him in law and also explanation to that section which makes it clear that the interest of a male Hindu in a Mitakahara coparcenary property be deemed to be property capable of being disposed of by him within the meaning of the sub section, in the instant case Mani Ram can dispose of his share under a Will.
Admittedly the respondent, will be entitled to 1/3rd share in respect of item l(b) and 2 of the plaint schedule in addition to the decree in her favour in respect of item 1 (a).
[406 D E, 407 E F] [The Court remitted the case back for the determination of the interest which Mani Ram had in the joint family property at the time of his death which he could dispose of by his Will and grant a decree accordingly.]
| The appellant was appointed as overseer by the Municipal Board, Kanpur, on March 5, 1937, and continued in its service up to March 19, 1951, when a copy of the resolution passed by the Board on March 5, 1951, purporting to dismiss him from service was handed over to him.
On April 7, 1951, he filed an appeal to the Government against the order of dismissal from service, but he was informed on April 8, 1952, that his appeal was rejected.
Thereafter on December 8, 1952, the appellant instituted a suit challenging the legality of the order of dismissal on various grounds, and the question arose whether the suit was within time.
Sub section (I) Of section 326 of the U. P. Municipalities Act, 1916, provided that no suit shall be instituted against a Municipal Board " until the expiration of the two months next after notice in writing has been left at the office of the Board. explicitly stating the cause of action " ; and sub section
(3) stated that " no action such as is described in sub section
(1) shall. be commenced otherwise than within six months next after the accrual of the cause of action ".
The appellant contended that the cause of action accrued to him on April 8, 1952, when the order of dismissal of his appeal to the Government was communicated to him and the suit, filed within eight months of that date, was within time, and relied on the provisions of section 58 (1) and (2), read with section 69, of the Act, which gave an officer dismissed by the Board a right of appeal to the Government within 30 days of the communication to him of the order dismissal : Held, that though the order passed by the Board on March 5, 1951, was subject to a right of appeal to the Government, the operation of the order was not suspended by the mere filing of the appeal, and the order became effective from March 19, 1951, when it was communicated to the appellant.
The cause of action, therefore, accrued to him on that date, and the suit filed by him on December 8, 1952, was barred by limitation under section 326 of the U. P. Municipalities Act, 1916.
| The State Government respondent No. 1 issued a notification for auctioning a minor mineral quarry situated in the State.
The appellant offered the highest bid in the amount of Rs. 3.87 lakhs per annum as rent/royalty.
The Presiding Officer accepted the bid of the appellant.
The State Government however under the belief that the highest bid did not represent the adequate lease rent, exercised powers under clause (4) of sub rule 2 of Rule 130 or the Punjab Minor Mineral Concession Rules 1964 and declined to confirm the same.
Respondent No. 4 wrote a letter to the Chief Minister casting serious aspersions on those who participated in the auction, and made an offer that if the contract for a period of 5 years is given he was willing to pay Rs. 4.5 lakhs per year.
The Chief Minister accepted this offer.
Being aggrieved, the appellant challenged the order of the Chief Minister, in a writ petition before the High Court, contending that respondent No. 4 had participated in the auction and made false allegations against the appellant, and without giving him any opportunity, the offer of respondent No. 4 was accepted which has denied equality of opportunity to the appellant in the matter of distribution of the State largesse.
The High Court following the decision of this Court in Assistant Collector of Central Excise vs Jainson Hosiery Industries, ; , dismissed the writ petition on the ground that the appellant had an alternative remedy and that he must have exhausted the normal statutory remedies before invoking the extraordinary jurisdiction under Article 226.
542 Being aggrieved, the appellant filed an appeal to this Court and during is hearing filed an affidavit, that if the Court orders re auction, and if the highest bid falls short of Rs. 4.5 lakhs then he would undertake to accept the contract at the value of Rs. 5.5 lakhs per annum.
The Court held are auction and both the appellant and respondent No. 4 participated there in and the appellant offered the highest bid at the value of Rs. 25 lakhs.
Allowing the Appeal, ^ HELD: 1.
(i) The Court has imposed a restraint in its own wisdom on its exercise of jurisdiction under Article 226 where the party invoking the jurisdiction has an effective adequate alternative remedy.
It has been expressly stated that the rule which requires the exhaustion of alternative remedies is a rule of convenience and discretion rather than a rule of law.
It does not oust the jurisdiction of the Court It is made specifically clear where the order complained against is alleged to be illegal or invalid as being contrary to law, a petition at the instance of a person adversely affected would lie to the High Court under Article 226 and such a petition cannot be rejected on the ground that an appeal lies to the higher officer or the State Government.
An appeal in all cases cannot be said to provide in all situations an alternative effective remedy.
[550 C F] In the instant case, power was exercised by the authority set up under the rules to grant contract.
The High Court did not pose to itself the question who would grant the relief when the impugned order is passed at the instance of a Chief Minister of the State.
This is therefore a case in which the High Court was justified in throwing out the petition on the untenable ground that the appellant had an effective alternative remedy.
[550 G H] Assistant Collector of Central Excise v Jainson Hosiery Industries, ; and The State of Uttar Pradesh v Mohammad Nooh, ; , referred to.
(2) (i) There is a clear distinction between the use and disposal of private property and socialist property.
Owner of private property may deal with it in any manner he likes without causing injury to any one else.
But the socialist or if that word is jarring to some, the community or further the public property has to be dealt with for public purpose and in public interest.
Tho marked difference lies in this that while the owner of private property may have a number of considerations which may permit him to dispose of his property for a song.
On the other hand, dispose at of public property partakes the character of a trust in that in its disposal their should be nothing hanky panky and that it must be done at the best price so that large revenue coming into the offers of the State administration would serve public purpose viz. the welfare state may be able to expand its beneficient activities by the availability of larger funds.
This is subject to one important limitation that socialist property may be disposed at a price lower than the market price or oven for a token price to achieve some defined constitutionally recognised Public purpose, one such being to achieve the goals set out in Part IV of the 543 Constitution.
But where disposal is for augmentation of revenue and nothing else, the State is under an obligation to secure the best market price available in a market economy.
[552 G H; 553 A] (ii) The Government is not free like an ordinary individual, in selecting recipient for its largesse and it cannot chose to deal with any person it please a in its absolute and unfettered discretion.
The law is now well settled that the Government need not deal with anyone, but if it does so, it must do so fairly and without discretion and without unfair procedure.
Even though the State is not bound to accept the highest bid, this proposition of law has to be read subject to the observation that it can be rejected on relevant and valid considerations, one such being that the concession is to be given to a weaker section of the society who could not outbid the highest bidder.
In the absence of it, the approach must be as clearly laid down by the Constitution Bench of this Court in K. N. Guruswamy vs The State of Mysore and Ors.
[19551 SCR 305.
Before giving up the auction process and accepting a private bid secretly offered, the authority must be satisfied that such an offer if given in open would not be outmatched by the highest bidder.
In the absence of such satisfaction, acceptance of an offer secretly made and sought to be substantiated on the allegations without the verification of their truth, which was not undertaken would certainly amount to arbitrary action in the matter of distribution of State largesse which by the decisions of this Court is impermissible.
1554 G H; 556 A B; 555 G H] Trilochan Mishra etc vs State of Orissa and Ors.
, State of Uttar Pradesh and Ors vs Vijay Bahadur Singh and Ors.
and State of Orissa and Ors.
vs Harinarayan Jaiswal and Ors.
; held inapplicable.
Raman Dayaram Shetty v The International Airport Authority of India and Ors. ; and Kasturi Lal Lakshmi Reddy vs State of Jammu and Kashmir and Anr. ; relied upon.
Rule 28 of Punjab Minor and Mineral Concession Rules, 1964 permits contract for winning mineral to be granted by the Government by auction or tender.
It is open to the State to dispose of the contract by tender.
Even here the expression 'tender ' does not mean a private secret deal between the Chief Minister and the offerer.
Tender in the context in which the expression is used in rule 28, means 'tenders to be invited from intending contractors. ' If it was intended by the use of the expression 'tender ' in Rule 28 that contract can be disposed of by private negotiations with select individual, its validity will be open to serious question.
The language ordinarily used in such rules is by public auction or private negotiations.
The meaning of the expression 'private negotiations ' must take its colour and prescribe its content by the words which precede them.
And at any rate disposal of the State property in public interest must be by such method as would grant an opportunity to the public at large to participate in it, the State reserving to itself the right to dispose it of as best subserve the public weal.
[559 F H; 560 A B 544 Nand Kishore Saraf vs State of Rajasthan and Anr. ; and Fertilizer Corporation Kamgar Union (Regd).
Sindri and Ors.
vs Union of India and Ors.
; relied upon.
State of Uttar Pradesh vs Shiv Charan Sharma and Ors. etc.
[1981] Supp.
SCC 85 referred to.
In the instant case, it is clear that respondent No. 4 was not selected for any special purpose or to satisfy any Directive Principles of State Policy.
He surreptitiously ingratiated himself by a back door entry giving a minor raise in the bid and in the process usurped the most undeserved benefit which was exposed to the hilt in the court.
A unilateral offer, secretly made, not correlated to any reserved price made by the fourth respondent after making false statement in the letter was accepted without giving any opportunity to the appellant either to raise the bid or to point out the falsity of the allegations made by the fourth respondent in the letter as also the inadequacy of his bid.
The appellant suffered an unfair treatment by the State in discharging its administrative functions thereby violating the fundamental principle of fair play in action.
When he gave the highest bid, he could not have been expected to raise his own bid in the absence of a competitor.
Any expectation to the contrary betrays a woeful lack of knowledge of auction process.
And then some one surreptitiously by a secret offer scored a march over him.
No opportunity was given to him either to raise the bid.
Application of the minimum principles of natural justice in such a situation must be read in the Statute and held to be obligatory.
When it is said that even in administrative action, the authority must act fairly, it ordinarily means in accordance with the principles of natural justice variously described as fair play in action.
That having not been done, the grant in favour of the fourth respondent must be quashed.
[554 H; 555 A E; 560 D E]
| The appellant and V, father of respondents, were brothers.
They, together with their cousin, formed a joint Hindu family.
In a partition in 1929 between the two branches, certain properties were given to V for discharging some family debts.
V took over the management of his branch of the family and after discharging the debts, filed in 1956 a suit for partition against the appellant claiming, inter alia, that one of the items earmarked for the discharge of the debts which remained undisposed of, was his exclusive property as it was given to him absolutely; and also for accounts on the ground that the appellant took over the management from 1938.
The trial court negatived the claim in respect of the property, but directed the appellant to give accounts from 1947 when admittedly he took over management.
On appeal, the High Court upheld V 's claim with respect to the property and gave modified directions for accounts by the parties.
Dismissing the appeal to this Court, ^ HELD: (1) The properties given to V became his separate properties from the date of the partition deed of 1929 and were not liable to partition.
[643A] (a) The salient features of the deed are, (i) the sole responsibility for discharge of the debts was placed on V; (ii) V 's liability was not to the extent of the properties but was irrespective of the sufficiency or otherwise of the properties and any deficit or surplus was to be met or enjoyed by him exclusively; (iii) the cousin was no longer liable for the debts; (iv) in case there was a default on V 's part, and if, any loss was caused to the cousin he was to be indemnified by V; and (v) exclusive dominion and control over, and enjoyment of, the properties was vested in V in consideration of the obligation undertaken by him to discharge the debts.
The properties were thus given to V in view of his personal undertaking to discharge the debts, and, the conveyance was in the nature of remuneration for services to be rendered by him.
[642 C G] Raj Kumar Singh Kukam Chandji vs Commissioner of Income tax Madhya Pradesh referred to.
(b) The arrangement was valid because it was bona fide and its terms were fair.
[643E] Sahu Madho Das vs Pandit Mukand Ram ; , Maturi Pullaiah vs Maturi Narasimham AIR 1966 SC 1836 and section Shanmugam Pillai & Ors.
vs K. Shanmugam Pillai & Ors. ; referred to.
(c) There was no blending of the properties by V with other joint family properties.
There was no evidence of any intention on V 's part to abandon his separate rights over the properties.
The mere fact that they were not separately entered by him in the account books or that no separate account of the earnings from them was maintained by him cannot rob them of their separate character.
[644B C] Lakkireddi Chinna Venkata Reddi & Ors.
vs Lakkireddi Lakshmama ; and G. Narayana Ram vs C. Chamaraju & Ors. ; referred to.
638 (d) If any amount of the joint family funds was used by V for the discharge of the debts, the respondents (legal representatives of V) would be liable for them, but that would not affect the character of the properties.
[644 C D] (2) It is well settled that in the absence of proof of misappropriation or fraudulent or improper conversion by the manager, a coparcener, seeking partition, cannot call upon the manager to account for his past dealings with the family property.
Since there was no evidence of any misappropriation by V, he was not liable for accounts during his period of management.
[644E F]
| Respondent 1, a conductor of the Mysore Government Road Transport Department was dismissed.
for misconduct on 25 1 1961.
The legality of the said dismissal order was questioned in the High Court under article 226 with a further prayer to declare that he had continued in service since the date of his suspension and commencement of disciplinary proceedings.
The High Court allowed the writ petition on 11 9 1964 and quashed the dismissal order with an observa tion viz. "It is further ordered that this is without preju dice to the holding of fresh enquiry if they consider the same necessary".
On 1 8 1961.
the Road Transport Corpora tion was constituted and the Government Road Transport Department was abolished.
Such of the employees who had exercised their option as per the notice dated 23 6 1961, were taken over by the appellant corporation.
The re spondent No. 1 was not given the option as he was dismissed by that date.
On a complaint under the.
Contempt of Courts Act against respondent 2 and the appellant, that there was disobedience to the order of the High Court dated 12 9 1964, the respondent 1 was paid ,,he salary by the State Govern ment for the period 25 1 1961 to 31 7 1971.
Since he was not paid back salary and allowances and also the salary due from 1 8 1961, the respondent filed a writ petition No. 1579/66 which was again allowed.
On a concession made by the counsel for the State Government that the State Govern ment was willing to make available to the petitioner an option to become an employee of the appellant corporation, the High Court held: "Notice shall be in the same form in which it was served on other employees and with a month 's time to exercise his option.
If he exercises his option to become an employee of the corporation the petitioner will have all.
the benefits.
such as continuity in service, seniority, the benefit of the old conditions of service applicable in Mysore Government Road Transport Department.
The petitioner will also be entitled to the salary for the period ' between August 1, 1961 and the date of his appoint ment as an employee of the corporation".
On appeal by special leave by the corporation, the Court, HELD: (1) The order of the High Court dated 11 9 1964 could not possibly amount to a declaration that the first respondent had continued in the service of either the Mysore Government or had become the servant of the appellant corpo ration, a separate legal entity which came into existence by means of a Notification under section 3 of the Road Transport Corporation Act, 1950.
As a separate legal entity the corpo ration could not be said to have stepped automatically into the shoes of the Mysore Road Transport Department, there being no provision of the Act or Rules made thereunder to that effect.
[927 A D] (2) The declaratory relief asked for not having been granted, that relief would be deemed to have been refused.
Failure to go in appeal against that decision operates as a bar for claiming such a relief in the subsequent writ petition.
[931 B] (3) The effect of the High Courts ' order setting aside the dismissal was that the stigma of dismissal was removed from the record of the first respondent.
The winding of the department on the facts of the case, operates as the discharge of the respondent.
The respondent cannot be deemed to be the corporation 's employee inasmuch as he has not exercised any option nor did be ask for a notice of option in the original writ petition filed by him.
[931 D E] 926 Mysore State Road Transport Corporation vs A. Krishna Rao & Anr., C.A. No. 1720 of 1967 S.C. decided on 6 8 1969, followed.
(4) Neither the Act nor the two notifications under section 34(1) of the Act contain any provision.
which could entitle an employee of the Mysore Government Road Transport Depart ment to get a notice automatically.
The notifications could apply only to those persons who, on 1 8 1961 had already exercised an option to serve under the corporation in pursu ance of notice issued to them.
It makes no provision for persons to whom for any considerable reason, no notice has been issued.
[928 D F] (5) When the first respondent applied in the High Court for another writ or direction under article 226 in 1966, the High Court over stepped the limits of mere interpretation or application of the law and indulged in what is nothing short of legislation by directing the State Government to serve a notice calling upon the first respondent to exercise his option on the question whether he wanted to become an employee of the Mysore State Road Transport Corporation in the same way in which other employees of the Transport Department had been asked to exercise their option.
[929 C E] (6) The State Government owed no duty to the first respondent to pay him after transport department was wound up in the absence of any contract 10 show what duty the Government could have to employ the first respondent after its transport department was wound up or to direct the corporation to do so.
[929 G H] (7) In order to compel the corporation to do anything only a general direction u/s 34 of the Act could be given by the Government.
There neither could be a special direction with regard to a particular case nor was any special direction given by the Government for any such case.
The High Court could not take upon itself the power to fill any gap in the provision of the.
Act, even if there be one, and compel the Government to perform a function which the Gov ernment was not under any kind of obligation to discharge.
The High Court could not give a specific direction to make a provision to meet what it thought was required in a particular or individual case if such a case fell outside the provisions made by the Act and the rules.
There is no justification at for such assumption of powers by the High Court.
[929 H, 930 A B]
| The appellants migrated to India in 1947 from West Pakistan.
To begin with, they were given temporary allotment of land in two villages.
In 1949, land was allotted to them on quasi permanent basis, and they have remained in possession of the same eversince.
Originally, land was classified into two kinds: urban and agricultural land.
Later on, a third classification was introduced, known as sub urban land.
The two villages in which land was allotted to the appellants were not included in the notification with respect to sub urban land.
In February, 1952, the Director of Rehabilitation passed and order declaring those villages as 734 sub urban land.
The result of the order was that the allotment made to the appellants was to be reduced.
The appellants went in revision to the Custodian General, and their revision petitions were dismissed on the ground that the view of Rule 14(6)(iii)(d) of the Rule it was open to the Central Government by a special order to direct cancellation or variation of the allotment made in favour of the appellants, and the Central Government has on the representation of the Punjab Government agreed to declare the two villages in question as sub urban by its order dated October 11, 1955.
The appellants filed a writ petition in the High Court but that was dismissed summarily.
The have come in appeal to this Court by special leave.
^ Held, that when the notification of March 24, 1955, was made under section 12 of the placed Persons (Compensation and Rehabilitation) Act, 1954, the evacuee property in those villages ceased to be evacuee property and became a part of the compensation pool.
That property could only be dealt with under the Act of 1954.
If any variation or cancellation of allotment was to he made that could be done only under the provisions of section 19 of Act of 1954.
There was no power left in the Central Government to act under Rule 14(6)(iii)(d) of the Rules framed under the with respect to that land after the notification of March 24, 1955.
Balmukand vs The State of Punjab, I.L.R. 1957 Punjab 712 and Major Gopal Singh vs Custodian of Evacuee Property, ; , followed.
| On a complaint being filed under section 120(b) read with ss.467 and 471 of the Indian Penal Code, the Metropolitan Magistrate summoned the appellant and thereafter rejected his objection about the maintainability of his prosecution for want of sanction under section 197 of the Criminal Procedure Code, holding that section 197 does not apply because the appel lant is an officer who is removable from his office by a competent authority and no sanction of the Government is necessary.
This view was affirmed by the High Court.
In the appeal to this Court, on behalf of the appellant it was contended: (i) that after the nationalisation of the Department of the appellant he will fall within the defini tion of public servant and, therefore, section 197 will be at tracted and (ii) that although the competent authority who can remove the appellant from service is not the Government, but it has been empowered under the regulations framed under the Act of Parliament with the approval and sanction of the Central Government and, therefore, the view taken by the Courts below is not correct.
Dismissing the Appeal, HELD: It is clear that section 197 of the Criminal Procedure Code is attracted only in cases where the public servant is such who is not removable from his office save by or with the sanction of the Government.
[219B] In the instant case, it is not disputed that the appellant is not 217 holding a post where he could not be removed from service except by or with the sanction of the Government.
In this view of the matter even if it is held that appellant is a public servant still provisions of section 197 are not attracted at all.
Therefore, the view taken by the Courts below could not be said to be erroneous.
[219D]
|
minal Appeal No. 2244 of 1959.
Appeal by special leave from the judgment and order dated 1959, May 5 of the Allahabad High Court in Criminal Appeal No. 1049 of 1958 and Government Appeal No. 1766 of 1958.
Jai Gopal Sethi, O. L. Sareen and B. L. Kohli for the Appellants.
G. C. Mathur and C. P. Lal fur the Respondent.
March 9.
The Judgment of Kapur and Das Gupta, JJ. was delivered by Kapur, J. Dayal, J., delivered a separate Judgment.
KAPUR, J.
The appellants and Prithviraj Singh were tried by the Sessions Judge, Hamirpur, the former for offences under section 302, read with section 149 and section 201 read with section 149 and of them some under 8. 147 and others under section 148 and the latter under section 201 read with section 149 of the Indian Penal Code.
From amongst the accused persons Nathu Singh was acquitted and so was Prithviraj Singh but ten others were convicted under section 302 read with section 149 and section 201 read with section 149 and two of them were convicted under section 147 and others under 9. 148.
The Sessions Judge sentenced the convicted persons to imprisonment for life under section 302 read with section 149, to three years ' rigorous imprisonment under section 201 read with section 149, two of them to two years ' rigorous imprisonment under section 141 and others to three years ' rigorous imprisonment under section 148 but all the sentences were concurrent.
Against that order the convicted persons took an appeal to the High Court at Allahabad and the State appealed against the acquittal of Nathu Singh and also applied for enhancement of sentences against the con victed persons.
The High Court dismissed the appeal of the convicted persons and allowed the appeal against Nathu Singh.
Thus 11 persons were convicted and sentenced to imprisonment for life 771 and to other concurrent sentences and they have appealed to this court by special leave.
The appellants and Prithviraj Singh are residents of village Kharela and they were on terms of enmity with the deceased Raja Ram Singh.
On July 28, 1957, at about 3 30 p.m. the appellants collected in front of the house of Kali Charan appellant, two of them armed with lathis, two with pharsas and seven of them had spears.
Dharam Singh appellant asked RajaRam Singh as to why he, had been abusing him to which the reply given by Rajaram Singh was that he was not in the habit of abusing any body at his back and if he felt like abusing any body he would do so to his face and he fixed his spear in the ground and stood there.
Appellant Dharam Singh threw away the spear, rushed towards Rajaram Singh, caught hold of him by the waist and asked his ten companions to beat the enemy.
Rajaram Singh was thereupon attacked with various weapons as a result or which he, fell down severely injured.
He was still alive when appellants Sheo Rattan Singh and Gulab Singh struck on his neck with pharsas and partially severed it.
At the instance of Dharam Singh, his cart was brought by others and Prithviraj Singh also arrived at the spot.
Dharam Singh asked him to go home and bring his Dharam Singh 's) gun which Prithviraj Singh did and handed, over the gull and the bandolier of cartridges to Dharam Singh who loaded the gun, put the dead body of the deceased on the bullock cart and the ten persons then took away the dead body from the village and it is alleged that they left it in a nullah near village Jataura.
There is a police post in the village of which Head Constable ' Shivsewak Singh is incharge and there is also is an armed guard there.
At 3 45 p.m. Shyam Lal who is the brother in law (wife 's brother) of Rajaram Singh made a report at the police 772 post and at 7 30 p.m. he made a report at the police station Muskara which is 8 miles away from village Kharela.
This occurrence was witnessed by five persons P. W. Babu Singh.
P. W. Shivnath Singh, P. W. Ram Narain, P. W. Mulain Singh and P. W. Brij Rani.
While the corpse was being taken in the bullock cart three witnesses deposed to having seen it being carried in the cart.
They are Ram Nath P. W. 21, Tijiwa P. W. 22 and Jurkhan P. W. 23.
In the High Court the appeal was heared in the first instance by Cak and Verms JJ.
There was a difference of opinion between the learned judges and the matter was referred under section 429, Criminal Procedure Code to Desai J., who agreeing with Cak J., upheld the conviction of the ten appellants who were convicted by the Sessions Judge and set aside the acquittal of Nathu Singh.
Thus 11 persons were convicted and they have appealed to this court by Special Leave.
It was contended on behalf of the appellants that under section 429, Criminal procedure Code where there is difference of opinion between the judges constituting a Division Bench and the matter is referred to a third judge the opinion of the Judge acquiting the accused has to be treated in the same manner as the judgment of acquittal by the trial court and even though it may not be necessary 'to find compelling reasons for disagreeing with the opinion of the acquiting judge it is necessary that the judgment should show that all the findings and the reasons given in the opinion of the acquitting judge are mentioned in the opinion of the third judge and the judgment should indicate the reasons for disagreeing with the opinion of the acquitting Judge.
We can see no warrant for this contention, Section 429 of the Criminal Procedure Code Provides: 773 " When the Judges composing the Court of appeal are equally divided in opinion, the case, with their opinions thereon shall be laid before another judge of the same Court, and such Judge, after such hearing (if any) as he thinks fit, shall deliver his opinion, and the judgment or order shall follow such opinion".
All it says is that the opinion of the two judges who disagree shall be laid before another judge who after giving such hearing, if any, as he thinks fit, shall deliver his opinion and the judgment or order should be in accordance with such opinion.
Now it is obvious that when the opinions of the two Judges are placed before a third Judge be would consider those two opinions and give his own opinion and the judgment has to follow the opinion of the third judge.
Consequently on that opinion is based the judgment of the court.
For all practical purposes the third Judge must consider the opinions of his two colleagues and then give his own opinion but to equate the requirements with appeals against acquittals is not justified by provisions of section 429 or by principle or precedent.
Desai J., was of the opinion that the eye witnesses had seen the occurrence and their evidence must be accepted but there are certain circumstances proved by the evidence on the record which when considered materially affect the force of the finding in regard to oral evidence and which have to be considered in order to adjudicate on the correctness or otherwise of the prosecution case.
The first point is whether the murder was committed in the village as is submitted by the prosecution? According to the prosecution the murder was committed in the village at 3.30 p.m. in the mouth of July in broad daylight on a public road and the number of injuries caused to Rajaram Singh are such that there must 774 have been a fair amount of blood spilt at the place.
According to the prosecution evidence after the murder was committed Dharam Singh sent for his bullock cart which must necessarily have taken a little time.
Meanwhile Babu Singh P.W. went and informed Shyam Lal who went to make a report at the police post in the village.
It is stated to be about 4 furlongs away.
It is contended by the appellants that if the murder had taken place as stated and there was an armed guard in the village, it would have been difficult for the appellants to have sent for the cart, to put the dead body on it and take it out of the village and that within the time between the commission of the murder and the time of the making of Report at the police post; that there is a considerable doubt about the occurrence having taken place in the village because no blood was found at the place of the murder; at least no evidence has been produced to show that there was any blood there.
On behalf of the prosecution it was submitted that the evidence discloses that after the murder the blood was washed away by throwing a, good deal of water and plastering the place and thus no blood was found when the place was visited by the investiga ting Sub Inspector.
It was also submitted that some blood was found on the wall of the chabutra in front of the house of the appellant Kali Charan which was collected in a small tin and was sent to the Chemical Examiner.
It may here be pointed out that when the dead body was to the place where it was found 6 1/2 miles away from the place of occurrence the neck was cut and taken away and only the headless body was 'found there.
That place was in the dry bed of a nullah.
According to the prosecution; witness Ram Avtar there plenty of blood there but P. W. Raziuddin stated that blood was found in drops lying in adjacent places but it was not found in heavy quantities at one place.
Blood stained earth was taken from the 775 wall of the chabutra of Kali Charan.
Unstained earth was also taken from the same place which was also put in a small tin.
Blood stained earth was also taken from the place in the bed of the nullah where the dead body was found.
All these tins were sent to the Chemical Examiner.
It is not quite clear what exactly was his finding but he found that the earth in two tins was blood stained but blood has not been shown to be of human origin.
It is not clearly shown as to what was the extent of the blood on the wall of the chabutra of Kali Charan.
Desai J., was of the opinion that a lot of blood must have been spilt at the place where the murder was stated to have been committed but Kali Charan poured water over the spot, therefore no blood was visible at the spot and the Investigating Officer found the place wet when he examined it at night and that no explanation was given by the appellants as to bow blood came to be on the wall of the chabutra.
It does not appear from the examination of the appellants under section 342 that any question was put to Kali Charan in ragard to the finding of the blood on the wall of his chabutra nor was any of the other appellants asked this question.
The High Court should not have used this fact against the appellants.
Another circumstance which has been pressed at great length on behalf of the appellants is that no attempt was made to take any earth from the place and no investigation was made as to whether there was any blood at the spot or not.
If at man 's neck is cut and he is caused the number of injuries that the deceased had, the amount of blood spilt there must have been in a fairly large quantity and it is difficult to imagine that just by pouring water over the spot and plastering it no blood was visible and even if it was not visible no blood could be found if any effort was made.
No attempt seems to have been made to take the earth from there and send it.
to the Chemical Examiner for the purpose 776 of examination.
Desai J., has observed that the Investigating Officer found the ground to be wet.
The Investigating Officer came there at II p.m. on the night of occurrence which was a dark night and if he found the place to be wet it is not clear whether it was wet because of water or because of blood.
It was the month of July when any water poured at 3 30 p.m. should have dried up by 11 p.m. Anotier point which has been pressed on behalf of the appellants is that no trail of blood was discovered from the place where the murder is alleged to have been com.
mitted to the place where the dead body was ultimately found in the dry bed of the nullah.
Although the evidence is conflicting there was some amount of blood at the place where the dead body was found.
The head had been completely severed and taken away.
In the cart also there was some blood and a blood stained axe was also found there.
Therefore if the head was out at the place where the dead body was found and there was blood oozing out at that time it is difficult to imagine that there would not be any blood oozing all the time and there would be no trail of blood.
But none has been found.
It may be pointed out that there was blood on the planks of the cart on which the dead body is alleged to have been taken.
According to the books on Medical Jurisprudence blood does not coagulate till after four hours.
Therefore the submission of the appellants that there should have been some trail of blood from the place where the murder was committed to the place where the dead body was taken has considerable force.
The judgement of Desai, J., seems to indicate that the onus of certain matters was placed on the appellants which is unwarranted by law.
For instance, the learned Judge said that the appellants were asked in the Magistrate 's court about the 777 evidence that they had killed Rajaram Singh at 3 30 p.m. in the abadi and had then carried away his dead body in the cart of Dharam Singh.
and they contented themselves by denying all the allegations and none of them had said that the deceased was not murdered in the abadi and in the day time.
The learned Judge then observed: "If he was not murdered in the adadi and in day time they must have heard when and where he was murdered.
Their statements were not evidence governed by the Evidence Act and they could say that they had heard.
Yet when they refrained from saying anything about it, it just shows that they had not heard that Raja Ram Singh was murdered elsewhere and at another time".
This, in our opinion, was an erroneous approach to the question.
At another place in his judgment the learned Judge again seems to have placed the onus on the appellants and that was concerning the ownership of the cart in which the dead body was taken.
The finding of the bloodstained bullock cart was relied upon by the prosecution in support of their case.
That evidence was attacked on the ground that there was no identification parade of the cart and the bullocks.
The learned Judge said in regard to this matter that there was no necessity for any identification proceedings because if the Investigating Officer believed the witness who stated that the cart belonged to Dharam Singh then he was not required to cross examine the prosecution witnesses by asking them to identify the cart and the bullocks.
He then observed: "Dharain Singh, Babu Singh and Prithviraj Singh appellants denied that the cart and the bullock produced were theirs but did not say to whom they belonged and how they were obtained by the police.
They also did 778 not produce any evidence to rebut the evidence of the prosecution witnesses about their ownership".
In that very connection the learned Judge has also relied on the fact that the bullock cart was brought from the bara of Ram Adhin Singh and the site plan prepared by S.H.O. showed that there, were signs of fresh removal of the bullock cart from the bara.
Now this again is not admissible evidence because nothing shown on the plan unless deposed to by witnesses is evidence against the appellants.
It was so held in Santa Singh vs State of Punjab (1) and Tori Singh vs State of Uttar Pradesh (2).
There is another significant fact in regard to this cart According to prosecution witness Babu Singh, the bullock which were yoked in the cart belonged to Ram Adhin Singh when he was asked to identify he said one of them was the same but the second one was not the same which was yoked in the cart at the time when the dead body was being taken.
It is an extraordinary circumstance that the bullocks which are alleged to have belonged to Ram Adhin Singh, and which were yoked to the cart carrying the dead body, which all the time remained in police custody got changed so that one of the bullocks is not the same.
Another circumstance which is equally significant is the finding of the yoke of prosecution witness Tijiwa with the cart.
It is stated that Tijiwa met the appellants when they were driving the cart away from the village.
At the time Tijiwa was returning home bringing his employers cart.
Tijiwa 's yoke was borrowed because the yoke of the cart driven by the appellants got broken and Tijiwa 's yoke was found at the place where the cart was subsequently dis covered.
What happened to the broken yoke is not shown, how Tijiwa took his own cart back without the yoke to the village is not shown.
This circum (1) A.I. (2) [1962] 3S.C.R. 779 stance does not seem to have received the attention of the High Court which it deserved.
The appellants have vigorously pressed before us another argument which deals with the First Information Report and investigation by the police.
According to the prosecution the occurrence was at about 3 30 p.m. and an information was given at the police post at 3 45 p.m. and according to the evidence of the prosecution witness Raziuddin, the Head Constable and two constables of the armed guard proceeded to recover the dead body and follow the murderers by following the track of the cart.
They left the police post of Kharela at 3 45 p.m., and from there they went to the house of the appellant Kali Charan and then they followed the track of the bullock cart.
At a distance of four or five paces from the place of occurrence they met Pancham Singh who does not seem to be a witness; so what he stated to the constable is not evidence.
They then followed the track of the bullock cart and found the dead body lying in the nullah about three furlongs away from the ' abadi of village Jataura.
The dead body was headless.
They left the two armed guards at the place and proceeding a little further they found the bullock cart with the two bullocks and there was no one near the bullock cart.
Head Constable Shivsewak Singh bad gone at 12 noon to Balatal for appearing as a witness.
There are no entries in the Police Duty Register at the Police Post as to his return nor as to his going with Raziuddin and others following the track of the cart.
Leaving the armed guard at the place where the dead body was found Head Constable Shivsewak Singh went to Jataura and called Chowkidar Sumera.
At about 10 or 11 in the night he sent Chowkidar Sumera to Thana Charkhari to give information and it is stated that as a result of the 780 information given by Chowkidar Sumera the Sub Inspector in charge of Charkhari Police Station came to the place where the dead body was found and he started the investigation on the morning of July 29, 1957.
He took the dead body into possession, held the inquest report and took bloodstained earth and the cart into possession.
There is no reason why the Head Constable should have sent Sumera to the police station Charkhari when the offence was committed in the village in the jurisdiction of police station Muskara.
It is next stated that the Officer in Charge of Muskara Police Station, Sub Inspector Basu Deo came to village Kharela at 11 p.m.
There is no entry in the Register at the Police Post showing his coming to the place of the occurrence.
He has deposed that he went to the place of occurrence and noticed that outside the house " 'Some water appeared to be lying and at places it appeared that the ground had been washed with hand and water".
How in the middle of a dark night he could have seen all that has been explained and the appellants rightly challenge his very coming to the village at that time.
From these circumstances the appellants submit that there is a great deal of doubt as to the time of the making of the First 'Information Report and the time and place of murder.
We have these facts which cast a good deal of doubt as to the authenticity of the report or the investigation by the police of Muskara into the alleged occurrence.
(1) if the information was given at the police post soon after the occurrence, as is alleged, there is no reason why the police should not have reached the place and prevented the removal of the dead body which was after all being carried on a bullock cart.
(2) It is not shown by the entries of the Duty Register that the Head Constable returned from Balatal at 4 O 'Clock and came back to the village 781 (Kharela) and then proceeded to follow the track of the bullock cart in which the dead body was alleged to have been carried.
(3) There is no reason why when the dead body was found near the nullah at about 6 30 p.m. the Head Constable should have sent the Chowkidar of Jataurs to Police Station Charkhari to make a report at that place and why the investigation should have.been carried on by the police of that police station and not by the police of Muskara Police Station when the latter had come to know of it about 6 30 p.m. that murder had been committed in their jurisdiction.
(4) There is no reason why the Police Sub Inspector Kharela Police Post should go at 11 p.m. and in a most casual manner to the place of occurrence, see water lying at the place and that in the hot mouth of July.
Why the next day he did not take any earth from that place is also a very significant question.
(5) There is total absence of blood at the place of the occurrence.
It is stated that there was some blood on the wall of chabutra of Kali Charan what was the extent and nature of the blood is not shown.
How far the chabutra was from the exact place of murder is not shown.
(6) There is no evidence at all that any earth was opened with human blood.
(7) There is total absence of entries in the Duty Register.
Therefore the coming of Sub Inspector Basu Deo is also doubtful.
There is no indication that there was any trail of blood even for a short distance from the place of occurrence.
(8) The evidence in regard to the borrowing of the yoke from prosecution witness Tijiwa is highly suspicious in the circumstances of this case.
782 (9) Lastly we find that the approach of the learned Judge to the case is not in accordance with law in that as to two or three matters he has approached the question as if it is for the defence to disprove certain facts.
For instance the failure of the defence to produce reliable evidence to contradict eye witnesses there failure to state that the murder was not committed in the village ; there failure to say as to whom the cart belonged if it did not belong to Dharam Singh.
Desai J., was of the opinion that no blood was found by Raziuddin on the way from the abadi to the nullah and no trail of blood could be expected because the bleeding must have stopped before the cart left the abadi.
On what evidence he found that bleeding must have stopped is not clear.
The learned Judge also relied upon the fact that Chowkidar Sumera made a report at the police station Charkhari about certain facts which are mentioned there.
Sumera is not a witness.
Therefore what he stated cannot be evidence in this case.
It appears that the learned Judge also took into consideration the fact that the appellants were absconding and that they gave no explanation as to their absconding but they do pot seem to have been asked any question in regard to it.
In regard to the witnesses Ram Nath, Tijiwa and Jurkhan who saw the dead body being carried in the cart, the learned Judge said that he found no reason to disbelieve their testimony.
At another place in the judgement the learned Judge observed that when witnesses talked about the neck of Rajaram Singh being out they must have been tutored about it.
In this view of the matter and taking other material improbabilities in the testimony of these witnesses which the learned Judge does not seem to have considered it is difficult to place any reliance on their evidence.
783 The whore case is full so many inconsistencies and improbabilities and peculiarities that it must be said that the case has not been established against the appellants beyond reasonable doubt.
We are opinion that the High Court 's failure to consider the important circumstances disclosed by the evidence, and the error in wrongly placing onus on the accused has resulted in miscarriage of justice.
The case therefore falls within the rule laid down in Pritam Singh vs State (1) and calls for our interference.
In these circumstances the conviction of the appellants must be set aside and the appeal must be allowed.
The appellants are acquited & must be released forthwith unless required in some other case.
RAGHUBAR DAYAL, J.
I have bad the advantage of perusing the judgment prepared by my learned brother Kapur, J. I agree with the interpretation of section 429, Cr.
P.C. I am, however, of opinion that the circumstances urged for the appellants do not justify interference with the verdict of the High Court on questions of fact.
They have all been considered by Desai J., in forming his opinion.
He has relied on the statements of the eye witnesses.
It is argued for the appellants that the circumstances tend to throw doubt on the correctness of the prosecution story that the incident took place inside the village abadi and that therefore the appellants ' conviction should be set aside.
The first circumstance is that the incident took place at 3.30 p. m., information about it reached the police outpost four furlongs away at 3.45 p.m., the armed guard at the outpost then proceeded to the spot and yet it is said that the (1) ; 784 accused could remove the dead body from the spot prior to the arrival of the armed guard.
The getting of the bullock cart and the loading of the corpse would have taken sufficient time and the arrival of the armed guard could have been within that time.
In this connection, it is to be noticed that Babu Singh, P. W. 1, an eye witness, left the spot after the body had been removed on the cart.
It was he who informed Shyam Lal about the incident.
Thereafter, Shyam Lal left for the police outpost.
Babu Singh states : "After the cart left I rain to the house of Raja Ram Singh.
There we met Shyam Lal.
I told Shyam Lal all what I witnessed.
He went to the police outpost to make a report and I went home.
" The first information report was lodged at the thana at 7.30 p.m.
It mentions the fact of the dead body being taken away on the cart.
In view of this fact it is clear that the armed guard could not have reached the spot in time to prevent the removal of the corpse.
Another fact against the circumstance urged is that the incident did not take place at 3.30 p. m., which was really the time when Babu Singh informed Shyam Lal Shyam Lal dictated in the first information report : "At about 3.30 p.m., Babu Singh. came to my house and informed me as follows. ".
The incident therefore must have started much earlier, say at about 3 O ' clock and the body must have been removed by about 3.25 p.m.
The other circumstance urged.
is that no bloodstained earth was found at the spot and that therefore this throws doubt on the incident having taken place at the spot alleged.
It is in the prosecution evidence that some of the accused washed the 785 ground where blood had fallen and plastered it.
According to the Sub Inspector, P. W. 27, bloodstained earth was taken in possession from the door of the accused Kalicharan Singh, which really means, from the front of his house.
Siya Ram, P.W. 26, stated that a few places in the Chabutra where blood stains were detected were scraped and that the stains were on the walls of the Chabutra.
The recovery list exhibit K 29 mentions : "blood stained earth was scraped from in front of the house of Sri Kali Charan, son of Bhan Singh, Thakur, ;and from the 'Chabutra ' (platform), whereon there appeared to be some stains of blood.
" Blood stained earth from the place where the dead body was recovered was also taken in possession.
The two samples of earth so taken in possession were sent in different packets to the Chemical Examiner who found them stained with blood.
The Serologist could not determine the nature of the blood due to disintegration.
In vie* of this evidence, it cannot be said that no blood stained earth was found at the alleged spot.
Further, Raziuddin, P.W. 17, who went with the armed guard to the spot stated; ",When at first I visited the house of Kali Charan I had noted that in front of his house there were indications of the washing of the ground at places.
It appeared that somebody had removed things from that place with hands and legs by spreading water at different places.
" This supports the statement of the other witnesses about the washing and plastering of the spot.
Sub Inspector Basudeo, P.W. 27, stated that when he reached the house of Kali Charn at about 11 p.m., he noticed that outside it some water 786 appeared to be lying and at places it appeared that the ground had been washed with hand and water.
It is true that the night was dark and he did not carry out the local inspection due to want of a suitable light.
But these facts can hardily affect his testimony.
He could not have mistaken the nature of the witness and should have been able to distinguish whether it was from water or from blood.
The witness of the ground is not to be doubted even though about 8 hours had elapsed since the washing took place.
Raziuddin has deposed that there had been rain fall two days earlier.
The incident had taken place on the 28th of July.
The ground could have been went from before and fresh washing could have wetted it more.
In fact, the more the spilling of blood, the more would have been the water used to wash it away.
Another circumstance urged is that no trail of blood was noticed between the village and the actual place where the dead body was recovered, a distance of over six miles.
The corpse was laid on the planks of the cart.
They got blood stained.
Any dropping of the blood from the cart on the track would have depended on the extent of the flow of blood and on the openings between the planks.
It is not expected that blood would have fallen in a continuous stream.
Some drops could have fallen down at places.
They could ' be easily pressed upon by the accused 's feet, some of whom would have been walking behind the cart.
The armed guard and others who followed the cart in pursuit were more.
concerned with the following of the marks left by the art than with noticing some minute drops of blood which might have fallen here and there on the track.
Absence of blood on the passage, therefore cannot discredit the prosecution case.
787 When the cart was produced in Court, it had one of the bullocks used at the time when the corpse was removed and another bullock substituted for the other one.
Much has been made of this change in the other bullock.
The Sub Inspector has stated in his evidence.
" I had entrusted the recovered bullocks and carts to the custody of Binda Lodhi of village Kharedi.
One bullock which is white in colour could not be brought here as it is suffering from small pox.
" The questions put to the accused mentioned the allegation about the other bullock suffering from small pox and in their replies this fact was not denied.
The police was not, in charge of the cart and the bullock and explanation has been given for not producing the other bullock in Court.
This circumstance too cannot therefore affect the correct ness of the prosecution case.
It has also been urged that the carts and bullocks found near the dead body were not put up for identification by witnesses.
Desai, J., has rightly observed that when witnesses could recognize the cart and bullocks there could be no point in having the cart and bullocks formally identified before a Magistrate.
Only such articles and accused are put up for a test identification as are not known to the witnesses.
Those known are never put up for identification.
The statements of the witnesses who re cognized them are judged from other circumstances.
Further, the evidence about the ownership of the cart was only by way of corroborating the statements of the prosecution witnesses.
Any cart which could be available to the accused could be used for the purpose of transporting the dead body.
Tijwa, P. W. 22, stated that Arjun Singh, accused, stopped the cart about a mile from the village abadi when he was returning home from his 788 fields and replaced the yoke of the cart with that of Tijwa 's as the former bad broken.
It is urged that the absence of evidence with respect to what happened to the broken yoke and how the cart of Tijwa reached the village, important circumstances, had not been noticed by the High Court in its judgment.
These circumstances cannot be said to be important.
In fact, they were very remotely relevant to test the veracity of Tijwa.
Tijwa was not cross examined about it.
He stated that the broken yoke was also taken away in the cart of Arjun Singh.
It should follow that Tijwa 's cart remained on the passage till its owner Mahadev Brahmin could have brought it back.
It may be mentioned that the recovery memo, exhibit K. 22, did not mention about the finding of the broken yoke in the cart.
The broken yoke is said to have been tied with a towel.
It might have been that the accused had removed the towel and thrown away the broken pieces.
The police party had no knowledge about the broken yoke when the cart was recovered and could not therefore have looked for the broken parts.
It may equally be that the broken yoke was used by Tijwa.
His cart had to go 'a much smaller distance that the cart which took the dead body to the nala.
When the accused started with the cart they expected the broken yoke to serve the purpose of driving the cart to the nala and back.
It was just accident that they happened to meet Tijwa on the way and borrowed his yoke.
However, I consider these matters very insignificant in assessing the correctness of the prosecution case.
Another matter severely commented upon for the appellants is the conduct of Sheo ' Sewak Singh, P. W. 20, Head Constable, Kharela Police Outpost, and the Investigating Officer, Basudeo, P. W. 27, mainly on account of the absence of entries in the duty register of the outpost about 789 Sheo Sewak Singh 's return there at about 4p.m., and about the Sub Inspector 's visit to it at about 11 p.m., on 28th July.
The Sub Inspector has stated : "It is not necessary to make any arrival and departure (entry) at police out post Kharela, when I visit that post in the record, of that outpost." The statement is with reference to making an entry about his arrival and departure.
He further stated: "I did not make any entry of my activities in the night between the 28th and 29th July 1957, in the record of police out post at Kharela nor it was necessary to note them there." And again: "Entries are made in the record at Kharela outpost about the duties allotted to the staff during duty hours." Sheo Sewak Singh, P.W.20, deposed: "I do make entries in the records at the police out post Kharela about my arrival there and also about my departure from that post.
These entries are made in the general diary by way of allotment of duty." Sheo Nandan Singh, P.W.19, Constable at that outpost, stated: "This (Ex.K.5) is not a general diary in which cases are registered and entered.
It is a register in which duties that are allotted and the Amad and Rawangi of the police staff are noted.
When the Sub Inspector attached so Muskara comes to the police out post at Kharela 790 he notes his arrival and departure in the register kept at police outpost Kharela.
No entry of his arrival and departure is made in the register in the night between the 28th and 29th of July 1957.
" Police officers do write their arrivals and departures in the general diary at the police station and may also be doing so at the out post duty registers, if Sheo Nandan Singh 's statement is to be preferred to the statements of the Sub Inspector and the Head Constable.
But even then such entries are usually made when the arrival of an outside police officer is in connection with some work at the out post.
A casual visit on his way to another spot may not be required to be noted.
Similarly, the return of a member of the police force at the out.post would be noted when he finally returns to duty.
His mere return to his quarters at the out,post may not be noted.
Any way, any omission to make an entry the duty register at the out post is not to discredit the entire prosecution evidence about the incident and the course of the investigation.
After the recovery of the dead body, Sumera, Chowkidar, was sent to Police Station Charkhari, in whose jurisdiction the dead body was found.
He lodged a report there at 3 a.m., and stated in it what had taken place earlier.
Ram Autar Dixit, P.W.14, the then second officer at Thana Charkhari, went to the spot, took in possession the dead body and the cart, prepared the inquest report and took other necessary steps.
Criticism.
is made of Sumera 's being sent to Charkhari police station and of ' this Sub Inspector making an investigation in connection with an offence said to have been committed in the jurisdiction of police station Muskara.
The criticism is unjustified.
The recovery of the corpse had to be 791 reported to the nearest police station and was properly made at Charkhari Police Station in whose jurisdiction also the dead body was found.
It was the duty of the Sub Inspector to proceed to the spot to prepare the inquest report and to take such other action as was necessary in the circumstances with respect to the recovery of the various articles (section 174 Cr.
P.C.).
He was not questioned about his bona fides or about his jurisdiction to do what he stated to have done.
The fact that Sumera was sent to report the recovery of the dead body to police station Charkhari can hardly lead to the conclusion that this was done as no incident had taken place in village Kharela as alleged by the prosecution.
Lastly, grievance is made of certain observations of Desai, J., generally to the effect that the accused had not stated something or had not led evidence to rebut the prosecution evidence on certain points.
It is urged that be therefore wrongly placed on the accused the onus of proving the defence version negativing the prosecution version.
I am of opinion that he made references to this as a factor supporting the conclusions hi) had already arrived at on the consideration of the evidence and circumstances.
He did not base his findings on such conduct of the accused.
He based his conclusion on more solid grounds.
Some of such observa tions are : (1) 'That the accused gave no explanation as to how the blood came to be on the wall of the Chabutra '.
The accused were not, questioned about it and therefore their omission to explain it could not go against them.
However, the fact that blood was found on the wall of the platform or in the earth in front of Kali Charan 's house was proved from the positive evidence on record.
792 (2) After Desai, J. had expressed his opinion about the reliability of the eye witnesses, he stated : "Kharela is a large village and if the murder did not take place inside the abadi and at 3.30 p.m. it would not have been difficult for the appellants to produce reliable evidence to contradict the eye witnesses, but they did not produce any evidence .
None of them said that Raja Ram Singh was not murdered in the abadi and in day time.
If he was not murdered in the abadi and in day time they must have heard when and where he was murdered.
Their statements were not evidence governed by the Evidence Act and they could say that what they bad heard.
" I am of opinion that there is nothing wrong in this observation when the incident is alleged to have taken place in broad daylight in the village abadi and yet the accused did not examine any witness to establish that no such incident took place in the village.
of course, a finding that the incident did take place in the village as alleged by the prosecution could not have been based on such consideration alone and the finding to that effect has not been so based.
(3) Similarly, Desai, J., made reference to certain accused not stating as to whom the bullock.
, ; .belonged and how they were obtained by the police.
A finding about the ownership of the cart and bullocks is based on the evidence of Tijwa and other witnesses and not on the omission of the accused to state as to whom they belonged.
Desai, J., was certainly wrong in using a note in the site plan when the subject matter of that note was not deposed to by any witness in Court, but this error with respect to the note that there were fresh marks of a cart in the cart enclosure of Dharam Singh had no significant bearing on the 793 In connection with Sumera 's Report at Police Station Charkhari, Desai, J., observed in his judgment : "Neither H.C. Sheo Sewak nor P.C. Raziuddin nor the armed guard had any interest in concocting a false case against the appellants on their own.
Therefore, when the information was conveyed through Sumera Chaukidar that Kharela police had gone in search of the murderers, it must be accepted that information was received at the out post at about 3 45 p.m. about the murder in the Abadi and that the outpost police went at once in search of the murderers.
In other words the murder must have been committed in the Abadi and in day time as deposed by the prosecution witnesses.
" Earlier, Desai J., had said what Sumera had informed at the Police Station.
He said: 'Sumera reached the police station at 3 a.m., met the second officer and informed him that constables of police circle Muskara went to his house in Jataura and told him that Raja Ram Singh was murdered, in Kharela, that the murderers carried away his corpse in a bullock cart and they and.
the head constable of the out post followed them, that the murderers ran away after throwing the corpse into the nala of Jataura, that the head of the corpse was missing but the bullock cart had been recovered and that he was sent to convey the information at the police station.
" I do Dot consider the evidence about Sumera 's making the report and stating certain things there to be inadmissible in evidence.
These are matters of record.
What he dictated cannot be considered to be substantive evidence of the facts stated, when 794 Sumera was not examined as a witness to prove them.
But what he actually dictated and the time when he dictated are facts which 'have been duly proved.
They can be considered to determine the probability of what the direct evidence tended to establish.
This is what Desai J., did when he used these facts of his making the report and making certain statements in considering that they tend to support the prosecution version.
It may be noted that he had earlier considered at length the suggestion that the entire prosecution case was concocted by the police and the villagers and bad given his reasons for repelling the suggestion.
Desai J., was in error to refer to the absconding of the accused as a circumstance against them as that had not been put to them when examined under section 342, Cr.
But as it did not basically affect the finding with respect to the correctness of the prosecution case, that would not justify interference with the findings of fact.
I would therefore dismiss this appeal.
By COURT.
In View of the opinion of the majority, the appeal is allowed.
The appellants are acquitted and must be released forthwith unless required in some other case.
| The appellants were convicted of offences under section 302 read with section 34 and section 201 read with section 34 Indian Penal Code by the Sessions judge.
On appeal to the High Court there was a difference of opinion between the two judges who heard it and the case was referred under section 429 Code of Criminal Procedure to a third judge.
The third judge upheld the con victions.
The appellants contended that where a case was referred under section 429, the opinion of the judge acquitting the accused had to be treated as a judgment of acquittal and that the third judge must consider all the reasons given by the acquitting judge and his judgment should indicate the reasons for disagreeing with the opinion of the acquitting judge.
The appellants further contended that there were certain circumstances proved by the evidence on the record which showed that the eye witnesses could not be relied upon.
Held, that there was nothing in section 429 which required the third judge to whom the reference was made to act as though he was sitting in appeal against acquittal.
He had to consider the opinion of the two differing judges and to give his own opinion.
Held, further (per Kapur and Das Gupta JJ.
Dayal.
J. contra) that the judgment of the High Court suffered from such infirmities as placing the onus of proof of certain facts on the appellants and using of inadmissible evidence.
The case was full of so many inconsistencies and improbilities and peculiarities that it made it difficult to rely upon the testimony of the eye witnesses and to hold that the case against the appellants was established beyond reasonable doubt.
Per Dayal J.
The circumstances urged by the appellant did not make out a case for interference with the findings of facts of the High Court.
| The Supreme Court dismissed an appeal by special leave filed by Kehar Singh, against his conviction and sentence of death awarded under section 120 B read with section 302 of the Indian Penal Code in connection with the assassination of the then Minister of India.
Indira Gandhi.
A Review Petition filed thereafter by Kehar Singh was dismissed on 7th September, 1988 and later a writ petition was also dismissed by this Court.
On 14th October, 1988 Kehar Singh 's son presented a petition to the President of lndia for the grant of pardon to Kehar Singh under Article 72 of the Constitution on the ground that the evidence on record of the criminal case established that Kehar Singh was innocent and the verdict of the courts that Kehar Singh was guilty, was erroneous.
In the petition, he also urged that it was a fit case of clemency and prayed that Kehar Singh 's representative may be allowed to see the President in person in order to explain the case concerning him.
His request for hearing was not accepted on the ground that it was not in accordance with "the well established practice in respect of consideration of mercy petitions".
Thereafter, in response to a further letter written by counsel for Kehar Singh to the President of India refuting the existence of any practice not to accord a hearing on a petition under Article 72, the Secretary to the President wrote to counsel that the President is of the opinion that he cannot go into the merits of a case finally decided by the highest Court of the land and that the petition for grant of pardon on behalf of Kehar Singh will be dealt with in accordance with the provisions of the Constitution of lndia.
The President of India thereafter rejected the said petition.
Hence these writ petitions and the special leave petition to this Court.
PG NO 1102 PG NO 1103 The main issues involved in the writ petitions and the S.L.P. were: (a) whether there is justification for the view that when exercising his powers under article 72, the President is precluded from entering into the merits of a case decided finally by the Supreme Court; (b) to what areas does the power of the President to scrutinise extend; and (c) whether the petitioner is entitled to an oral hearing from the President in his petition invoking the powers under article 72.
Disposing of the petitions, HELD: 1(i) The power to pardon is a part of the constitutional scheme and it should be so treated also in the Indian Republic.
It has been reposed by the people through the Constitution in the Head of the State, and enjoys high status.
It is a constitutional responsibility of great significance, to be exercised when occasion arises in accordance with the discretion contemplated by the context.
[1109H; 1110A B] W. I. Biddle vs Vuco Perovich, ; referred to. 1 (ii) The power to pardon rests on the advice tendered by the Executive to the President, who subject to the provisions of article 74(1) of the Constitution.
must act in accordance with such advice.
[1110B] Maru Ram vs Union of lndia; , followed.
2[i] It is open to the President in the exercise of the power vested in him by article 72 of the Constitution of scrutinise the evidence on the record of the criminal case and come to a different conclusion from that recorded by the court in regard to the guilt of, and sentence imposed on, the accused.
In doing so, the President does not amend or modify or supersede the judicial record.
The judicial record remains intact.
and undisturbed.
The President acts in a wholly different plane from that in which the court acted.
He acts under a constitutional power, the nature of which is entirely different from the judicial power and cannot be regarded as an extension of it.
And this is so, notwithstanding that the practical effect of the Presidential act is to remove the stigma of guilt from the accused or to remit the sentence imposed on him.
[111lC D] 2(ii) The legal of a effect of a pardon is wholly different from a judicial supersession of the original sentence.
It is the nature of the power which is determinative.
[1111G] Kuljit Singh vs Lt. Governor of Delhi, [1982] 3 S.C.R. 58; Nar A Singh vs State of Uttar Pradesh, [19S5] I S.C.R. PG NO 1104 238 and Sarat Chandra Rabha and Others vs Khagendranath Nath and Others, ; , followed.
Ex Parte William Wells, ; , Ex Parte Garland, ; at 370; Ex Parte Philip Grossman, ; ; B and U.S. vs Benz, ; at 358 referred to.
3(i) There is no right in the condemned person to insist on an oral hearing before the President.
The proceeding before the President is of an executive character, and when the petitioner files his petition, it is for him to submit with it all the requisite information necessary for the disposal of the petition.
He has no right to insist on presenting on oral argument.
[1116A B] 3(ii) The manner of consideration of the petition lies within the discretion of the President, and it is for him to decide how best he can acquaint himself with all the information that is necessary for its proper and effective disposal.
The President may consider sufficient the information furnished before him in the first instance or he may send for further material relevant to the issues which he considers pertinent, and he may, if he considers it will assist him in treating with the petition, give an 'oral hearing to the parties.
The matter lies entirely within his discretion.
[1116B C] 3(iii) As regards the considerations to he applied by the President to the petition, the law in this behalf has already been laid down by this Court in Maru Ram etc.
vs Union of India [1981] I S.C.R. 1196.
[1116D] 4.
There is sufficient indication in the terms of article 72 and in the history of the power enshrined in that provision as well as existing case law, and specific guidelines need not be spelled out for regulating the exercise of the power by the President.
Indeed, it may not be possible to lay down any precise, clearly defined and sufficiently channelised guidelines, since the power under Article 72 is of the widest amplitude, can contemplate a myriad kinds and categories of cases with facts and situations varying from case to case, in which the merits and reasons of State may be profoundly assisted by prevailing occasion and passing time.
[1116F F] 5.
The question as to the area of the President 's power under Article 72 falls squarely within the judicial domain and can be examined by the court by way of judicial review.
However, the order of the President cannot be subjected to PG NO 1105 judicial review on its merits except within the strict limitations defined in Maru Ram etc.
vs Union of India ; at 1249.
The function of determining whether the act of a constitutional or statutory functionary falls within the constitutional or legislative conferment of power, or is vitiated by self denial on an erroneous appreciation of the full amplitude of the scope of the power is a matter for the court.
[1115G; 1113B C] Special Reference No. I of 1964, [1965j I S.C.R. 413 at 446; State Rajasthan and Ors.
vs Union of India, ; at 80 82; Minerva Mills Ltd. vs Union of India, ; at 286 287; S.P. Sampath Kumar vs Union of India, [1987] I S.C.C. 124; A.k.
Roy, etc.
vs Union of India and Anr., ; and K.M. Nanavati vs The State of Bombay, [1961] I S.C.R. 497, referred to.
Gopal Vinayak Godse vs The State of Maharashtra and Ors., ; ; Mohinder Singh vs State of Punjab, A.I.R. , Joseph Peter vs State of Goa, Daman and Diu, ; ; Riley and Others vs Attorney General of Jamaica and Another, ; Council of Civil Service Unions and Others vs Minister for the Civil Service, ; ; Attorney General vs Times Newspapers Ltd. ; Horwitz vs Connor Inspector General of Penal Establishments of Victoria, [1908] 6 C.I.R. 38; Michael De Feritas also called Michael Abdul Malik y. Ceorge Ramoutar and Ors., , 394, Bandhua Mukti Morcha vs Union of India, ; , 161 and Rai Sahib Ram Jawaya Kapur and Ors.
vs The State of Punjab, , 235 6, distinguished.
In the instant case, having regard to the view taken on the question concerning the area and scope of the President 's power under article 72 of the Constitution, the Court directed that the petition invoking that power shall be deemed to be pending before the President to be dealt with and disposed of afresh.
The sentence of death imposed on Kehar Singh shall remain in abeyance meanwhile.
[1117C D] The Constitution of India, in keeping with modern constitutional practice, is a constitutive document, fundamental to the governance of the country, whereby, according to accepted political theory, the people of India have provided a constitutional polity consisting of certain primary organs, institutions and functionaries to exercise the powers provided in the Constitution.
[1108H; 1109A] PG NO 1106 All power belongs to the people, and it is entrusted by them to specified institutions and functionaries with the intention of working out, maintaining and operating a constitutional order.
[1109B ] To any civilised society, there can be no attributes more important than the life and personal liberty of its members.
That is evident from the paramount position given by the Courts to article 21 of the Constitution.
[1109C] The Courts are the constitutional instrumentalities to go into the scope of Article 72.
[1115B]
| On the death of his father which took place on September 29, 1964 the respondent filed a statement of account under the of the estate passing on the death of the deceased.
The estate duty payable in respect of the estate in question was determined at Rs. 3,37,543.40 by the Assistant Controller of Estate Duty, Allahabad, by his order dated November 30, 1970.
When the appeal filed against the said order was still pending, the respondent made an application under section 52(1) of the Act on February 16, 1971 to the Central Board of Direct Taxes offering one of the items of property passing on the death of the deceased, namely, premises No. 1, Phaphamau Road, Allahabad, whose principal value had been determined at Rs. 2,53,625 in part payment of the balance of estate duty which was still payable by him under the order of assessment.
The said offer was not accepted by the Central Board of Direct Taxes but the appellant herein wrote to the respondent stating that the respondent could pay the arrears of estate duty payable by him in monthly instalments of Rs. 10,000 each beginning from October 29, 1971 subject to payment of interest @ 9% per annum on the arrears outstanding.
Thereupon the respondent filed a writ petition before the High Court of Allahabad requesting the High Court to issue a writ in the nature of mandamus to the Union of India to consider the application made by him under section 52(1) on its merits, to negotiate and settle the price of the property offered by him in settlement of part of duty payable by him and to give credit to the extent of the price so determined under the Act.
The High Court held that if the accountable person exercised the option to pay the estate duty by transferring property, the Central Government could not refuse to accept the offer and insist upon payment by another mode when there was agreement about the price between it and the accountable person.
The High Court, however, held that it was not necessary to decide the question whether it was open to the Central Government to refuse the offer of property on a ground other than the price as the impugned order had not disclosed any reason at all for rejecting the offer.
Accordingly, the High Court directed the respondents before it to dispose of the application afresh in accordance with law.
Hence the appeal after obtaining special leave of the Court.
Affirming the High Court directions, the Court 577 ^ HELD :1:1.
What section 52(1) of the does is to set forth one more mode in which estate duty may be recovered.
It is a provision made specially for the recovery of estate duty.
It enables the Government to recover the duty in accordance with that mode.
The other statutory modes prescribed under section 51 and specified in the Rules are those where recourse by the accountable obliges the Revenue to accept the payment made in any of those modes and to treat it, by compulsion of statute, as satisfaction of the dues.
The peculiarity of the mode provided under section 52(1) is that while recourse to it by the accountable person does not automatically imply satisfaction of the dues, there is the duty cast on the Revenue to consider the application by the accountable person offering an item of property as a mode for satisfying the dues.
The Government must consider the application on its merits and in the exercise of sound administrative judgment.
[587 F H, 588 A] 1:2.
Ordinarily in every contract for the purchase of property there are two stages.
(i) In the first stage, there is complete freedom to the parties to decide whether one should enter into negotiations with the other at all and in that regard the law takes no account of the reason of any party for not choosing to entertain the proposal for sale made by the other however arbitrary, illogical or irrelevant the reason may be.
(ii) The second stage follows the entertaining of the proposal and the actual negotiations between the parties which may or may not fructify in a contract.
Section 52(1) is concerned with the first stage, and differs in this from the complete freedom to entertain the proposal in that the proposal made under section 52(1) by the accountable person must be considered by the Central Government and any decision taken by it on that question must proceed on considerations which are relevant and bonafide.
The price of the property is, however, left to be determined by agreement in the event of the Government deciding to accept the offer made by the accountable person.
This forms part of the second stage.
[588 A D] 1:3.
The is a fiscal statute principally intended to levy and collect estate duty which when collected has to be disbursed in accordance with of the Constitution.
It is not a law providing for acquisition of a property forming part of the estate of the deceased.
Section 52 is in the nature of an enabling provision which authorises the Central Government to accept a property in lieu of estate duty payable subject to the conditions mentioned in it.
It is true that even enabling words in a statute which confer a discretionary power may have to be interpreted as compulsory where they amount to words clearly intended to effectuate a legal right.
But ordinarily such words are permissive only.
C D] In the instant case, the very fact that there is a need for an agreement upon the price of the property between the Central Government and the accountable person makes the power of the Central Government under section 52(1) of the Act discretionary and permissive.
Any other meaning may lead to impractical and incongruous result.
[586 D E] 1:4.
On a plain construction of section 52 of the Act the Central Government may at its discretion either accept the property offered under section 52 or may not if the circumstances so warrant.
The accountable person cannot claim 578 that the Central Government is bound to accept such property.
The power of the Central Government under section 52 is purely administrative and discretionary.
Therefore, the said power should be exercised subject to the same limitations which govern all such administrative and discretionary powers.
The Central Government or the authority which is competent to take a decision should exercise its discretion bonafide and in good faith by addressing itself to the matter before it and should not allow itself to be influenced by extraneous and irrelevant considerations.
The question should not be disposed of in an arbitrary or capricious way.
In this case, the Court can only ask the authority concerned to exercise the discretion vested in it but it cannot be asked to exercise it in a particular way.
[587 A B, D F] Chella Rama Bhupal Reddy vs Central Board of Direct Taxes and Anr., Andhra Pradesh, approved.
In the instant case, the High Court was right in holding that it had not been shown that the competent authority had properly exercised its discretion.
The Board proceeded on the assumption that its discretion was unfettered even by considerations relevant to administrative law and did not probe into the question of the availability of liquid cash in the hands of the respondent to pay tee estate duty and the averment of the respondent that the entire liquid cash had been invested in business.
[588 E, H, 589 A]
| Nineteen persons were tried by the Additional District and Session Judge, Khetri in S.T. No. 264 of 1973 for offences under section 302/149, 201/149, 379/149, 147 and 148 for the incident that took place on 25.4.1972 in village Padaria Tula (UP) on the day of filing of the nomination papers for election for the post of Pradhan Gaon Sabha, Tikhra in which fire arms were used by the party led by Bhupendra Singh accused no.l, who was also a candidate for the office of Pradhan of Gaon Sabha resulting in the death on the spot of Gajendra Singh, one of the supporters of the rival candidate Ram Sewak, P.W. 2.
The prosecution case is that both the rival candidates with their supporters had come to village Padaria Tula on the morning of 25.4.1972 where nomination papers had to be filed.
On seeing the party of the deceased arriving, Bhupendra Singh enquired from Ram Sewak (P.W.2) if he had come to file his nomination papers against him.
Gajendra Singh (deceased) intervened and challengingly told the accused No. 1 that he should ask him.
Following the altercation that ensued, it is alleged that Bhupendra Singh fired the first shot on the deceased followed by shooting by his other associates and the deceased fell dead.
The party of Ram Sewak fled from the scene to escape the 857 attack.
It is further alleged that the body of the deceased was dragged by Gajendra Singh and his companions and carried by them on a tractor trolly belonging to A1 on which they had come, burnt it and ashes thrown in the river causing disappearance of the entire evidence.
The first Additional Judge acquitted all the charges on the ground that there are many infirmities in the prosecution case rendering its evidence unworthy of belief.
The state of Uttar Pradesh preferred appeal before the Lucknow Bench of the Allahabad High Court.
The High Court set aside the acquittal of Bhupendra Singh (A1) and convicted him for offence under section 302 I.P.C and awarded sentence of Rigorous Imprisonment for life , set aside the acquittal of A 4, 7, 8 in part, convicted them under section 201 of I.P.C. and sentenced each of them to seven years Rigorous Imprisonment thereunder.
Their acquittal under other charges was confirmed.
Appeal as against rest of the accused was dismissed altogether.
A1, 4, 7 and 8 have thus come in appeal against the judgement of the High Court.
In party allowing the appeal setting aside the conviction of appellants 2 to 4 (A1, 7, 8) under section 201 I.P. C. , and altering the conviction of appellant No. 1 (A1) from one under section 302 I.P. C. to one under section 307 I.P.C. and sentencing him to a term of 10 years rigorous imprisonment thereunder, this Court.
HELD: The evidence only established that the first appellant shot at the deceased but it is not known where the bullet hit and whether that injury caused by the said bullet shot caused the death.
Even in the case of shooting by a rifle unless the evidence shows the particular injury caused by the same and that injury is sufficient to cause death, the offence under section 302 I.P.C. could not be said to have been made out.
In the circumstances, therefore, we are unable to agree with the High Court that the first appellant is guilty of offence under section 302 IPC of causing the death of Gajendra Singh.
However we are of the view that while the first appellant shot at the deceased there could be no doubt that either he had the intention to kill him or at least he had the knowledge that the act could cause the death.
[863D E] We consider that the offence would come under the second limb or second part of section 307, IPC.
Though imprisonment for life also could be awarded as sentence for such an offence, on the facts and circumstances we impose a sentence of 10 years rigorous imprisonment.
We alter the conviction under section 302, IPC to one under section 307 IPC and sentence him to a term of 10 years rigorous imprisonment.
[863G].
858 So far as the offence under section 201 IPC is concerned we have read the entire evidence carefully and the same does not impress as to bring home the offence of screening the evidence.
[863H,865H]
| Appellants along with three others were tried by the Additional Sessions Judge, Ferozepore for offences under Section 302 I.P.C. read with sections 120 B and 149 on the charge that, in pursuance of a conspiracy, they caused the death of five persons and injuries to three others on the night between the 29th and 30th September, 1978 in the village of Kaila.
The background of the incident leading to the crime and furnishing its motive was that certain members of the family of those who were murdered in the instant case were tried for the murder in June 1977, of Buta Singh, the son of accused No. 1 but acquitted.
In order to prove the charges against the accused, the prosecution examined as many as 53 witnesses while the accused examined 16 witnesses in their defence.
The case of the prosecution rested mainly on three categories of evidence : (1) the evidence of the three eye witnesses, Mohinder Singh (PW 15), Naval Singh (PW 16) and Sant Kaur (PW) 247 ; (2) the dying declaration (Exh. PV) made by Sohan Singh ; and (3) the recovery of fire arms and cartidges from the possession of Accused Nos.
3,4,5,6.
and 7.
The Additional Sessions Judge convicted nine out of the ten accused for the offences of conspiracy and murder, sentenced accused nos.
1, 3, 4, 5, 6 and 7 to death and accused nos.
2, 8 and 9 to life imprisonment.
Accused No. 10, Harbans Kaur, wife of accused No. 2 Darshan Singh alias Bhasuri, was acquitted.
The High Court of Punjab and Haryana confirmed the death sentence imposed upon accused nos.
1, 3, 5, 6 and 7, but reduced the sentence of accused No. 4 to lift imprisonment.
Hence the appeals by five persons who are sentenced to death and two who are sentenced to life imprisonment.
Accepting the appeals of accused 1 and 2 and acquitting them, and, while maintaining the convictions of the rest, but altering the sentence of death imposed on accused nos.
3, 5, 6 and 7 to one of life imprisonment, the court 606 ^ HELD: 1 : 1 No rule of law stipulates that an accused whose name is not mentioned in the First Information Report is entitled to an acquittal.
The fact that the names of other accused are not mentioned in the First Information Report was at least a circumstance which the prosecution had to explain [609 D E] In the instant case, the High Court, instead of considering the circumstances in which, and the reasons for which, Mohinder Singh did not mention the names of the other accused in the First Information Report, erroneously took the view that the omission in the F.I.R. was a matter of little consequence since it was made good by the fact that Sohan Singh had mentioned the names of all the accused in his dying declaration, further overlooking the fact that the dying declaration itself was open to grave exception.
[609 E F, 610A] 1 : 2 When it is said that a conviction can rest on a dying declaration, it is implied that it must inspire confidence so as to make it safe to act upon it.
[610 E] Here, if the vital organs of Sohan Singh, according to Dr. Birinder Pal (PW 2) who conducted the postmortem examination on his body, were "completely smashed", it is impossible to believe that he was in a fit state of mind and body to make any kind of coherent or credible statement relating to the circumstances which resulted in his death.
True, he was quite near his creator on the morning of the 30th, dangerously so indeed, so that one may accept that his mind was then free from failings which afflict the generality of human beings, like involving enemies in false charges.
But, Sohan Singh was too ill to entertain any thoughts, good or bad, and he could not possibly have been in a position to make any kind of intelligible statement so as to implicate accused 3 to 9.
His dying declaration cannot therefore, be relied upon.
[610 B D] 2.
Liquor is no lie detector.
The evidence regarding conspiracy, let in through the mouth of Surat Singh (PW 27) an utter stranger, to implicate Accused nos.
1 and 2 to the effect that the conspirators discussed their plans to commit the murders, throwing all caution to winds and in an intoxicated condition cannot be believe.
It cannot be assumed that accused nos.
1 and 2 were so drunk as to overlook the presence of a stranger in their midst and yet not so drunk so as to be unable to discuss the execution of their criminal design.
Once Surat Singh is disbelieved and the story of conspiracy is discounted, the resultant conclusion obviously is the absence of Accused nos.
1 and 2 at the scene of occurrence entitling them to an acquittal [610 F, H, 611 A B] 3.
If age was a circumstance in favour of one of the accused, the same criterion must be applied to all.
More so in a case like this, when a large group of persons took part in the murders and untrue evidence has been mixed up with the true evidence, it becomes difficult to hold any particular accused guilty of any particular act.
[612 E, F] 607
| Allowing the appeal, the Court.
^ HELD: 1.
The trial of a chid under the provisions of the Haryana Children Act, 1974 for the offence of murder was not barred.
The appellant here was a child within the meaning of that term under clause (d) of section 2 of the Act.
[689 A, C] 2.
A perusal of section 22 of the Central (Act LX of 1960) which is in pari materia with section 21 of the Haryana and other provisions of the State and Central Children Acts shows that the procedure for trial, conviction and sentence under the Children Acts are simple humane and by Courts manned with persons with knowledge of child psychology and child welfare; but not so under the Criminal Procedure Codes of 1898 and 1973.
The intention of the State Legislature of Haryana and of the Parliament in enacting the Children Acts was to make provisions for trial of delinquent children and dealing with them in accordance with such procedure so that the delinquent children do not come in contact with accused persons who are not children and but are hardened criminals.
The purpose undoubtedly was to reclaim delinquent children and rehabilitate them in such a way that they become useful citizens later in life.
[691 G H, 692 A B] 3:1.
The purpose of the Haryana Legislature as well as of the Parliament in enacting the Haryana and the Central respectively was to give separate treatment to delinquent children in trial, conviction and punishment for offences including offences punishable with death or imprisonment for life [693 C D] 3:2.
Section 27 of the Criminal Procedure Code, 1973 is not 'a specific provision to the contrary ' within the meaning of section S of the Code the intention of the Parliament was not to exclude the trial of delinquent children for offences punishable with death or imprisonment for life, inasmuch as section 27 does not contain any expression to the effect "notwithstanding anything contained in any passed by any State Legislature".
Parliament 687 certainly was not unaware of the existence of the Haryana coming into force a month earlier or the Central coming into force nearly fourteen years earlier.
What section 27 contemplates is that a child under the age of 16 years may be tried by a Chief Judicial Magistrate or any court specially empowered under the .
It is an enabling provision and has not affected the Haryana in the trial of delinquent children for offences punishable with death or imprisonment for life.
[693 C, D G] 4:1.
If there be any conflict between any provisions of the Act and the Criminal Procedure Act, in view of Article 254(1) of the Constitution, the provision of the Haryana repugnant to any provision of the Criminal Procedure Code will be void to the extent of repugnancy [692 B C] 4:2.
Criminal Procedure appears in Item 2 of the Concurrent List of the Seventh Schedule of the Constitution.
One of the circumstances under 'which repugnancy between the law made by the State and the law made by the Parliament may result is whether the provisions of a Central Act and a State Act in the Concurrent List are fully inconsistent and are absolutely irreconcilable.
In the case in hand the relevant provisions of the Criminal Procedure Code and the Haryana can co exist.
Their spheres of operation are different.
[693 G H, 694 A] Dev Singh and 2 Ors.
vs State of Madhya Pradesh, Madhya Pradesh, overruled.
| The appellant was convicted under section 302/34, Indian Penal Code and sentenced.
Statements of two witnesses recorded in the committing court were transferred to the record during trial under section 288 Cr.
P.C. and the trial court treated the evidence of these witnesses as substantive evidence.
The High Court accepted the testimony of the witnesses before the committing Court.
In appeal it was contended that the statements of wit nesses in the committing court transferred under section 288 were inadmissible in evidence and should not be acted upon, since no specific portion of their contradictory statements had been put to them in cross examination.
Dismissing the appeal, HELD: There is no legal infirmity about the transfer of deposition of the witnesses to the record of the Sessions Court under section 288 Cr.
It was a legitimate use of discretion by the Sessions Judge.
Evidence recorded in the committing court is substantive evidence in this case and is admissible.
[147 E F] Section 288 Cr.
P.C. which provides for transfer of evidence recorded in the committing court under certain circumstances is subject inter alia to the provisions of section 145 of the Evidence Act.
Provisions of the latter section have been substantially complied with in this case.
[147 E] In the instant case after drawing the attention of the witnesses to their contradictory statements recorded by the police, the statements recorded by the committing Magistrate were read out to the witnesses who did not deny have made them but only explained that they had deposed in that manner under threat and pressure from the police.
[147 D]
| The appellant and nine others were tried before the Sessions Judge for offences of rioting and being members of an unlaw ful assembly and causing in furtherance of their common object death of one person and serious injuries to four others.
The appellant was also charged for the substantive offence of causing the death by gun shot injuries.
All the accused persons were acquitted at the trial.
In appeal against acquittal by the State, the High Court set aside the acquittal of the appellant and sentenced him to imprisonment for life under section 302 Indian Penal Code and confirmed the order in respect of the rest.
The appellant 's main con tention in this Court was that under section 161 of the Code of Criminal Procedure it was obligatory upon an investigating officer to record the statements of witnesses examined by him and if those statements were not made available to the accused at the trial, a valuable right was lost to the accused, and the trial must on that account alone be regarded as vitiated.
34 2 section C. India/64 522 Held : (i) Where the circumstances are such that the court may reasonable infer that prejudice has resulted to the accused from the failure to supply the statements recorded under section 161, the court would be justified in directing that the convict on be set aside and a proper case to direct that the defect be rectified in such manner as the circumstances, may warrant.
It is only where the court is satisfied, having regard to the manner in which the case has been conducted and the attitude adopted by the accused in relation to the defect, that no prejudice has resulted to the accused that the court would, notwithstanding the breach of the statutory provisions, be justified in maintaining the conviction.
On the facts of the present case no prejudice was caused to the accused and the plea of prejudice was neither raised in the High Court, nor any substantial argument in support of the same was advanced in this Court.
Narayan Rao vs State of Andhra Pradesh, A. I. R. 1957 section C. 737 and Pulukuri Kotyya vs Emperor, L. R. 74 I. A. 65, relied on.
Baliram vs Emperor, I.L.R. , Maganlal vs Em peror, I.L.R. and Maroti Mahagoo vs Emperor, I.L.R. , disapproved.
(ii) In the present case the Sessions Judge did not found his conclusion upon the demeanour of the witnesses and the High Court rightly observed that the presence of the four injured persons at the scene of offence was assured by the evidence of injuries, and must be regarded as established beyond reasonable doubt.
Sheo Swarup vs King Emperor, L. R. 61 I. A. 398, referred to.
|
y of the view that the almost unanimous opinion of experts is that after the age of 15, bulls.
bullocks and buffaloes are no longer useful for breeding, draught and other purposes and whatever little use they may have then is greatly offset by the economic disadvantages of feeding and maintaining unserviceable cattle disadvantages to which we had referred in much greater detail in Md. Hanif Quareshi 's case (1).
Section 3 of the Bihar Act in so far as it has increased the age limit to 25 in respect of bulls, bullocks and she buffaloes, imposes an unreasonable restriction on the fundamental right of the petitioners, a restriction moreover which cannot be said to be in (1) ; 623 the interests of the general public, and to that extent it is void.
We may here repeat what we said in Chintaman Rao vs The State of Madhya Pradesh (1): "The phrase 'reasonable restriction ' connotes that the limitation imposed on a person in enjoyment of the right should not be arbitrary or of an excessive nature, beyond what is required in the interests of the public.
The word 'reasonable ' implies intelligent care and deliberation, that is, the choice of a course which reason dictates.
Legislation which arbitrarily or excessively invades the right cannot be said to contain the quality of reasonableness and unless it strikes a proper balance between the freedom guaranteed in article 19(1)(g) and the social control permitted by clause (6) of article 19, it must be held to be wanting in that quality.
" As to r. 3 the grievances of the petitioners are these.
Under the rule the prescribed authority for the purpose of section 3 of the Act consists of the Veterinary Officer and the Chairman or Chief Officer of a District Board, Municipality etc.
Unless both of them concur, no certificate for slaughter can be granted.
It is pointed out that the Chairman or Chief Officer would be a layman not in a position to judge the age or usefulness of cattle.
The result would be that the animal in respect of which a certificate is required may have to be shown to the Veterinary Officer as also the Chairman or Chief Officer, who may not be staying at the same place as the Veterinary Officer.
If the two differ, the matter has to be referred to the Sub divisional Animal Husbandry Officer.
This procedure, it is contended, will involve the expenditure of so much money and time that it will not be worthwhile for the petitioners to ask for a certificate, or having got a certificate, to slaughter the animal.
An animal which is above 15 or which has become useless generally costs much less than a young, serviceable animal.
If the petitioners have to incur all the expenditure which the procedure laid down by r. 3 must necessarily cost them, then they must close down their trade.
As to the right of appeal from an order refusing to grant a (1) ; ,763.
624 certificate, it is contended that that right is also illusory for all practical purposes.
To take the animal to the Deputy Director of Animal Husbandry or the District Animal Husbandry Officer or the Sub divi sional Animal Husbandry Officer, as the case may be, and to keep and feed the animal for the period of the appeal and its hearing will cost more than the price of the animal itself.
We consider that these grievances of the petitioners have substance, and judged from the practical point of view, the provisions of r. 3 impose disproportionate restrictions on their right.
It is difficult to understand why the Veterinary Officer, who has the necessary technical knowledge, cannot be trusted to give the certificate and why it should be necessary to resort to a complicated procedure to resolve a possible difference of opinion between two officers, later followed by a still more expensive appeal.
We, therefore, hold r. 3 also to be bad in so far as it imposes disproportionate restrictions indicated above, on the right of the petitioners.
(2) We now proceed to consider the Uttar Pradesh Prevention of Cow Slaughter (Amendment) Act, 1958.
After the decision of this Court in Md. Hanif Quareshi vs The State of Bihar (1) an Ordinance was passed called the Uttar Pradesh Prevention of Cow Slaughter (Amendment) Ordinance, 1958.
This Ordinance was later repealed and replaced by the Act.
The petitioners say that in the Bill as originally drafted the age limit below which slaughter was not permissible was put at 15 years; but the Select Committee increased it to 20 years.
It will probably be best, for clearness sake, to set forth not the whole provisions of the Act, for that would be too lengthy, but those which form most directly the subject matter on which the controversy turns.
Section 3 of the Act reads (omitting portions not relevant for our purpose) "section 3(1) Except as hereinafter provided, no person shall slaughter or cause to be slaughtered or offer or cause to be offered for slaughter (a). . . . . . . (1) ; 625 (b) a bull or bullock, unless he has obtained in respect thereof a certificate in writing, from the competent authority of the area in which the bull or bullock is to be slaughtered, certifying that it is fit for slaughter. (2) No bull or bullock, in respect of which a certificate has been issued under sub section (1)(b) shall be ' slaughtered at any place other than the place indicated in the certificate or within twenty days of the date of issue of the certificate.
(3) A certificate under sub section (1)(b) shall be issued by the competent authority, only after it has, for reasons to be recorded in writing, certified that(a) the bull or bullock is over the age of twenty years; and (b) in the case of a bull, it has become permanently unfit and unserviceable for the purpose of breeding and, in the case of a bullock, it has become permanently unfit and unserviceable for the purposes of draught and any kind of agricultural operation: Provided that the permanent unfitness or unserviceability has not been caused deliberately.
(4) The competent authority shall, before issuing the certificate under sub section (3) or refusing to issue the same, record its order in writing.
Any person aggrieved by the order of the competent authority, under this section, may, within twenty days of the date of the order, appeal against it to the State Government, which may pass such orders thereon as it may deem fit.
(5) The State Government may, at any time, for the purposes of satisfying itself as to the legality or propriety of the action taken under this section, call for and examine the record of any case and may pass such orders thereon as it may deem fit.
(6) Subject to the provisions herein contained any action taken under this section, shall be final and conclusive and shall not be called in question.
" On behalf of the petitioners it has been argued that section 3 imposes a number of unreasonable restrictions.
Firstly, it is urged that the age limit with regard to bulls or bullocks is put too high, viz. at 20 years.
This is an 626 aspect which we have already considered in relation to the Bihar Act.
What we have said about the age s limit in that connexion applies equally to the Uttar Pradesh Act.
The 8th Live stock Census, 1956 shows that in Uttar Pradesh bulls and bullocks over 3 years of age, not in use for breeding or work, numbered as many as 126,201 in 1956 as compared to 162,746 in 1951.
The Municipal Manual, Uttar Pradesh, Vol. 1, contains a direction that for slaughter of animals, bullocks and male buffaloes in good state of health below ten years of age should be included.
Secondly, it is pointed out that not being content with fixing an unreasonably high age limit, the impugned provision imposes a double restriction.
It says that the animal must be over twenty years in age and must also be permanently unfit and unserviceable; and in the case of a bullock, the unfitness must be for "any kind of agricultural operation" and not merely for draught purposes.
The result of this double restriction, it is stated, is that even if the animal is permanently unserviceable and unfit at an earlier age, it cannot be slaughtered unless it is over twenty years in age.
Before a certificate can be given, the animal must fulfil two conditions as to (1) age and (2) permanent unfitness.
We consider this to be a demonstrably unreasonable restriction.
In Md. Hanif Quareshi 's case (1) this Court had said that a total ban on the slaughter of bulls and bullocks after they had ceased to be capable of breeding or working as draught animals was not in the interests of the general public.
Yet this is exactly what the impugned provision does by imposing a double restriction.
It lays down that even if the animal is permanently unserviceable, no certificate can be given unless it is more than 20 years in age.
The restriction will in effect put an end to the trade of the petitioners.
Thirdly, the impugned provision provides (1) that the animal shall not be slaughtered within 20 days of the date of the issue of the certificate and (2) that any person aggrieved by the order of the competent authority may appeal to the State Government within 20 days.
It is to be noted that the right of appeal is not (1) 627 confined to a refusal to grant a certificate as in the Bihar Act, but the right is given to any person aggrieved by the order of the competent authority.
In other words, even when a certificate is given, any person, even a member of the public, who feels aggrieved by it may prefer an appeal and hold up the slaughter of the animal for a long time.
From the practical point of view these restrictions really put a total ban on the slaughter of bulls and bullocks even after they have ceased to be useful, and we must hold, following our decision in Md. Hanif Quareshi 's case (1) that section 3 of the Uttar Pradesh Act in so far as it imposes unreasonable restrictions on the right of the petitioners as to slaughter of bulls and bullocks infringes the fundamental right of the petitioners and is to that extent void.
(3) Now, we come to the Madhya Pradesh Act.
Several provisions of this Act have been challenged before us as imposing unreasonable restrictions on the fundamental right of the petitioners.
Section 4 deals with prohibition of slaughter of agricultural cattle.
The expression 'agricultural cattle ' means an animal specified in the schedule: it means cows of all ages; calves of cows and of she buffaloes; bulls; bullocks; and male and female buffaloes.
As we have stated earlier, we are concerned in these cases with the validity of the restrictions placed on the slaughter of bulls, bullocks and buffaloes.
Now, section 4 is in these terms: "section 4(1) Notwithstanding anything contained in any other law for the time being in force or in any usage or custom to the contrary, no person shall slaughter or cause to be slaughtered or offer or cause to be offered, for slaughter (a) cows, calves of cows, or calves of she buffaloes, or (b) any other agricultural cattle unless he has obtained in respect of such cattle a certificate in writing issued by the Competent Authority for the area in which the cattle is to be slaughtered that the cattle is fit for slaughter.
(1) [1959] S.C.R.29.
628 (2) No certificate under clause (b) of sub section (1) shall be issued by the Competent Authority .unless the Veterinary Officer after examining the cattle certifies that (a) the cattle is over twenty years of age and is unfit for work or breeding or has become permanently incapacitated from work or breeding due to age, injury, deformity or an incurable disease; and (b) the cattle is not suffering from any disease which makes its meat unwholesome for human consumption.
(3) The Competent Authority shall, before issuing or refusing to issue a certificate under this section, record its order in writing.
Any person aggrieved by the order of the Competent Authority under this section, may, within ten days of the date of the order, prefer an appeal against such order to the Collector of the district or such other officer as may, by notification, be authorised in this behalf by the State Government, and the Collector or such other officer may pass such orders thereon as he thinks fit.
(4) Subject to the orders passed in appeal, if any, under sub section (3), the order of the Competent Authority shall be final and shall not be called in question in any Court.
" Section 5 places a restriction as to the place and time for slaughter and the objection taken before us relates to the time rather than to the place of slaughter.
It says in effect that no cattle in respect of which a certificate has been issued under section 4 shall be slaughtered within ten days of the date of issue of the certificate and where an appeal is preferred against the grant of such certificate, till the time such appeal is disposed of.
The provision of appeal is contained in sub section
(3) of section 4 of the Act which we have quoted earlier.
That sub section lays down that any person aggrieved by the order of the Competent Authority, may, within ten days of the date of the order, prefer an appeal against the order to the Collector of the district or such other officer as may, by notification, be authorised in this behalf by the State Government.
629 Section 6 imposes a restriction on the transport of agricultural cattle for slaughter and reads: "section 6.
No person shall transport or offer for transport or cause to be transported any agricultural cattle from any place within the State to any place outside the State, for the purpose of its slaughter in contravention of the provisions of this Act or with the knowledge that it will be or is likely to be, so slaughtered.
" Section 7 prohibits the sale, purchase or disposal otherwise of certain kinds of animals.
It reads .
"section 7.
No person shall purchase, sell or otherwise dispose of or offer to purchase, sell or otherwise dispose of or cause to be purchased, sold or otherwise disposed of cows, calves of cows or calves of shebuffaloes for slaughter or knowing or having reason to believe that such cattle shall be slaughtered.
" Section 8 relates to possession of flesh of agricultural cattle and is in these terms: "section 8.
Notwithstanding anything contained in any other law for the time being in force, no person shall have in his possession flesh of any agricultural cattle slaughtered in contravention of the provisions of this Act.
" Section 10 imposes a penalty for a contravention of section 4(1)(a) and section 11 imposes penalty for a contravention of any of the other provisions of the Act.
On behalf of the petitioners it has been pointed out, and rightly in our opinion, that cl.
(a) of sub section
(2) of section 4 of the Act imposes an unreasonable restriction on the right of the petitioners.
That clause in its first part lays down that the cattle (other than cows and calves) must be over 20 years of age and must also be unfit for work or breeding; and in the second part it says, "or has become permanently incapacitated from work or breeding due to age, injury, deformity or an incurable disease.
" It is a little difficult to understand why the two parts are juxtaposed in the section.
In any view the restriction that the animal must be over 20 years of age and also unfit for work or breeding is an excessive or unreasonable restriction as we have 80 630 pointed out with regard to a similar provision in the Uttar Pradesh Act.
The second part of the clause would not be open to any objection, if it stood by itself.
If, however, it has to be combined with the agelimit mentioned in the first part of the clause, it will again be open to the same objection; if the animal is to be over 20 years of age and also permanently incapacitated from work or breeding etc.
,then the agelimit is really meaningless.
Then, the expression 'due to age ' in the second part of the clause also loses its meaning.
It seems to us that cl.
(a) of sub section (2) of section 4 of the Act as drafted is bad because it imposes a disproportionate restriction on the slaughter of bulls, bullocks and buffaloes it is a restriction excessive in nature and not in the interests of the general public.
The test laid down is not merely permanent incapacity or unfitness for work or breeding but the test is something more than that, a combination of age and unfitness ' Learned Counsel for the petitioners has placed before us an observation contained in a reply made by the Deputy Minister in the course of the debate on the Bill in the Madhya Pradesh Assembly (see Madhya Pradesh Assembly Proceedings, Vol.
5 Serial No. 34 dated April 14, 1959, page 3201).
He said that the age fixed was very much higher than the one to which any animal survived.
This observation has been placed before us not with a view to an interpretation of the section, but to show what opinion was held by the Deputy Minister as to the proper agelimit.
On behalf of the respondent State our attention has been drawn to a book called The Miracle of Life (Home Library Club) in which there is a statement that oxen, given good conditions, live about 40 years.
Our attention has also been drawn to certain extracts from a Hindi book called Godhan by Girish Chandra Chakravarti in which there are statements to the effect that cows and bullocks may live up to 20 or 25 years.
This is an aspect of the case with which we have already dealt.
The question before us is not the maximum age upto which bulls, bullocks and buffaloes may live in rare cases.
The question before us is what is their average longevity and at what age 631 they become useless.
On this question we think that the opinion is almost unanimous, and the opinion which the Deputy Minister expressed was not wrong.
Section 5 in so far as it imposes a restriction as to the time for slaughter is again open to the same objection as has been discussed by us with regard to a similar provision in the Uttar Pradesh Act.
A right of appeal is given to any person aggrieved by the order.
In other words, a member of the public, if he feels aggrieved by the order granting a certificate for slaughter, may prefer an appeal and hold up for a long time the slaughter of the animal.
We have pointed out that for all practical purposes such a restriction will really put an end to the trade of the petitioners and we are unable to accept a restriction of this kind as a reasonable restriction within the meaning of cl.
(6) of article 19 of the Constitution.
Section 6 standing by itself, we think, is not open to any serious objection.
It is ancillary in nature and tries to give effect to the provision of the Act prohibiting slaughter of cattle in contravention of the Act.
Section 7 relates to the prohibition of sale, purchase etc., of cows and calves and inasmuch as a total ban on the slaughter of cows and calves is valid, no objection can be taken to section 7 of the Act.
It merely seeks to effectuate the total ban on the slaughter of cows and calves (both of cows and she buffaloes).
Section 8 is also ancillary in character and if the other provisions are valid no objection can be taken to the provisions of section 8.
Sections 10 and 11 impose penalties and their validity cannot be seriously disputed.
However, we must say a few words about section 12 of the Act which has also been challenged before us.
Section 12 is in these terms: "section 12.
In any trial for an offence punishable under section 11 for contravention of the provision of sections 5, 6 or 7 of this Act the burden of proving that the slaughter, transport or sale of agricultural cattle was not in contravention of the provisions of this Act shall be on the accused.
" The argument is that section 12 infringes the fundamental 632 right of the petitioners inasmuch as it puts the burden of proof on an accused person not only for his own knowledge or intention but for the knowledge or intention of other persons.
We do not think that this contention is correct.
The accused person, so far as sections 5 and 7 are concerned, must be the person who has slaughtered the animal or who has purchased, sold or otherwise disposed of the animal etc.
Therefore, the only question will be his knowledge and the legislature was competent to place the burden of proof on him.
So far as section 6 is concerned, it specifically refers to the knowledge of the person who has transported or offered for transport or caused to be transported any agricultural cattles from any place within the State to any place outside the State.
Therefore, when the section talks of knowledge, it talks of the knowledge of that person who has transported or offered for transport etc.
The knowledge of no other person comes into the purview of section 6.
We are, therefore, ' of the view that section 12 is not invalid on the ground sug gested by the petitioners.
Therefore, the result of our examination of the various provisions of the Act is that the impugned provisions in cl.
(a) of sub section
(2) of section 4, in sub section
(3) of section 4 relating to the right of appeal by any person aggrieved by the order, and in section 5 relating to the time of slaughter, impose unreasonable and disproportionate restrictions which must be held to be unconstitutional.
As to the Madhya Pradesh Agricultural Cattle Preservation Rules, r. 3 says "that an application for a certificate under section 4 shall be made to the competent authority," and r. 4 says that on receipt of the application, the competent authority shall by an order direct the person keeping the animal to submit it for examination by the Veterinary Officer Rule 5 reproduces the provisions of cls.
(a) and (b) of sub section
(2) of section 4 and in so far as we have held that the provision in el.
(a) of sub section
(2) of section 4 is unconstitutional, the rule must also fall with it.
There is one other aspect of these cases which has been emphasized before us, to which a reference must 633 now be made.
It is open to the legislature to enact ancillary provisions to give effect to the main object of the Act, namely, the prevention of slaughter of animals like bulls, bullocks or buffaloes which are still useful for the purposes for which they are generally used.
It is pointed out that acts innocent in themselves may be prohibited and the restrictions in that regard would be reasonable, if the same were necessary to secure efficient enforcement of valid provisions.
For example, it is open to the legislature, if it feels it necessary, in order to reduce the possibilities of evasion to a minimum, to enact provisions which would give effect to the main object of the legislation.
We have not ignored this aspect and have kept in mind the undisputed right of the legislature to decide what provisions are necessary to give effect to the main object of the legislation.
In these cases the petitioners have complained that the main object of the impugned provisions is not the prohibition of slaughter of animals which are still useful; the impugned provisions as they are worded really put a total ban on the slaughter of bulls, bullocks and buffaloes and for all practical purposes they put a stop to the profession and trade of the petitioners.
We have held that this complaint is justified in respect of the main provisions in the three Acts.
We, therefore, allow the three writ petitions and direct, as we directed in Md. Hanif Quareshi 's case (1) the respondent States not to enforce the Acts or the rules made thereunder in so far as they have been declared void by us.
The petitioners will be entitled to their costs of the hearing in this Court.
Petitions allowed.
| In order to put the sugar industry on a stable footing, for which it was necessary to develop the cane area, the Ruler of the erstwhile Gwalior State by an order dated 27 7 1946 sanctioned the levy of cess of one anna per maund on all sugar cane purchased by the respondent company.
When the Government of Madhya Bharat, which was the successor state of the former Gwalior State, made a demand for payment of the cess, the respondent filed a petition before the High Court of Madhya ,Bharat challenging the legality of the levy on the grounds (1) that the order dated 27 7 1946 was only an executive order and not a law under article 265 of the Constitution of India and that, therefore, there was no authority for the imposition of the cess after January 26, 1950, and (2) that the levy was discriminatory and violated article 14 inasmuch as while the respondent was made liable to pay the cess the other sugar factories in the State were exempt.
It was found that at the time when cess was first levied there was no sugar factory in existence in the Gwalior State other than that of the respondent.
Held, that (i) the Ruler of an Indian State was an absolute monarch in which there was no constitutional limitation to act in any manner he liked, he being the supreme legislature, the supreme judiciary and the supreme head of the executive.
I Consequently, the order dated 27 7 1946 issued by the Ruler of Gwalior State amounted to a law enacted by him and became an existing law under article 372 of the Constitution of India.
The levy of cess was therefore by authority of law within the meaning of article 265; Madhaorao Phalke vs The State of Madhya Bharat, ; , followed.
(2) the levy of cess did not contravene article 14 because (a) the object was cane development in the particular area and a geographical classification based upon historical factors was a permissible mode of classification, and (b) a tax could not be struck down as discriminatory unless it was found that it was imposed with a deliberate intention of differentiating between 620 (ii) where the order is passed by the Sub divisional Animal Husbandry Officer, under sub rule (5), to the District Animal Husbandry Officer and (iii) where the order is passed by the authority prescribed under sub rule (1) to the Sub divisional Animal Husbandry Officer, if there is one; if not, to the District Animal Husbandry Officer; (b) The appeal shall not be decided against the appellant unless he has been given a reasonable opportunity of being heard.
" The argument on behalf of the petitioners is that they are "Kassais" by profession and they earn their living by slaughtering cattle only (not goats or sheep which are slaughtered by "Chiks"); that they have the fundamental right to carry on their profession and trade; and that section 3 of the Act read with r. 3 imposes unreasonable restrictions restrictions not in the interests of the general public on their fundamental right and therefore they are not saved by cl.
(6) of article 19 of the Constitution.
Some of these arguments were considered by this Court in Md. Hanif Quareshi vs The State of Bihar (1) and it was pointed out that the test of reasonableness should be applied to each individual statute impugned and no abstract standard, or general pattern, of reasonableness can be laid down as applicable to all cases.
It referred to the decision in State of Madras vs V. G. Row (2) and repeated what was said therein that "the nature of the right alleged to have been infringed, the underlying purpose of the restrictions imposed, the extent and urgency of the evil sought to be remedied thereby, the disproportion of the imposition, the prevailing conditions at the time, should all enter into the judicial verdict." 'Another consideration which has to be kept in mind is that "the legislature is the best judge of what is good for the community,.
by whose suffrage it comes into existence. . . . (See The State of Bihar vs Maharajadhiraja Sir Kameshwar Singh of Darbhanga (3)).
But the ultimate responsibility for determining the validity of the law must rest with the (1) (2) ; (3) 621 Court and the Court must not shirk that solemn duty cast on it by the Constitution.
We must, therefore, approach the problem before us in the light of the principles laid down by this Court.
The most pertinent question is having regard to all the relevant circumstances, is the age of 25 years laid down in section 3 a reasonable restriction on the right of the petitioners in the interests of the general public ? We are unable to say that it is.
Apart from the affidavits made on behalf of the petitioners and the respondent State, a large volume of authoritative and expert opinion has been placed before us which shows beyond any doubt that a bull, bullock or she buffalo does not remain useful after 14 or 15 years and only a few of them live up to the age of 25.
In the Report of the Cattle Preservation and Development Committee, published by the Ministry of Agriculture, it is recommended by the Committee that the slaughter of animals over 14 years of age and unfit for work as also animals of any age permanently unable to work owing to injury or deformity, should be allowed.
In the Report on the Marketing of Meat in India (published by the Ministry of Food and Agriculture) there is a reference to a draft Bill circulated by the Ministry of Agriculture (page 112 of the Report) which contains a clause that animals over 14 years of age and unfit for work may be slaughtered on a certificate from a Veterinary Officer.
In the Report on the Marketing of Cattle in India, again published by the Ministry of Food and Agriculture, occurs the following passage as to the price of animals with reference to their age: "Young draught animals up to the age of 4 years being raw and untrained fetch comparatively low prices.
Between 4 and 8 years of age, the animals are in the prime of their youth and tender best service, and fetch maximum prices.
From the 8th year onwards old age sets in, and a graded decline is observed in their capacity to work and consequently prices depreciate considerably." .
In a Food and Agricultural Organisation study of cattle in India and Pakistan (Zebu Cattle of India and 79 622 Pakistan, page 94) it is stated that the active breeding life of a bull is estimated to be about 10 years.
In Black 's Veterinary Dictionary (edited by W. C. Miller and G. P. West, fifth edition) it is stated that pedigree ,bulls may reach 12 or 14 years of age before being discarded; and cattle seldom live longer than 15 or 16 years, and when they do, their age is usually of no immediate importance.
In another publication of the Ministry of Agriculture called 'Problems of Cattle Insurance ' under Indian conditions, it is stated that the life of cattle is comparatively much shorter, the maximum age being only about 15 years.
There is an interesting chart relating to the determination of age in cattle in a publication called 'Cattle Development in Uttar Pradesh ' by R. L. Kaura, Director of Animal Husbandry; that chart shows that at II years incisors appear smaller due to wearing out; at 12 years space appears between the teeth, and after 12 teeth wear out constantly and roots remain far apart from one another.
As against all this expert opinion the respondent State has relied on the chart embodying some useful data about domestic animals, prepared by Major A. C. Aggarwala, Director of Veterinary Services, Punjab, and R. R. Gulati, Superintendent, Veterinary Department, Jullandur, which shows the sterility age of a buffalo at 15 and average age at 25, and of a cow sterility at 15 and 16 years and average life 22 years.
| Andhra Pradesh Animal Husbandry Service Rules, 1961, governed the conditions of service of the Andhra Pradesh Animal Husbandry Department and under those Rules Veterinary Assistant Surgeons were eligible for promotion to three categories of Class IV posts.
Rule 6 of the said Rules provided special eligibility qualifications for those posts and only those Veterinary Assistant Surgeons were considered for promotion to Class IV posts who fulfilled the qualifica tions/specialised training prescribed under Rule 6 of the 1961 Rules.
Some of the Veterinary Assistant Surgeons chal lenged the vires of Rule 6 of 1961 Rules on the ground that it was violative of Article 14 of the Constitution inasmuch as it conferred arbitrary powers on the Government to pick and choose any person for the specialised training and may deny such an opportunity to another person who may be equal ly or better suited for such training, there being no guide lines prescribed for selection of persons for specialised training.
The main contention was that at the time of re cruitment all the Veterinary Assistant Surgeons possessed Bachelor Degree in Veterinary Science and the special quali fication and training prescribed under Rule 6 could only be acquired after joining as Veterinary Assistant Surgeon by only those Assistant Surgeons whom the Government selected for the purpose.
The High Court held Rule 6 of the 1961 Rules as intra vires but made certain observations advising the Animal Husbandry Department to frame a rule for the said Department and see that as far as possible the area of discretion on the part of the authorities concerned is reduced if not eliminated altogether, so far as the question of imparting specialised training as provided under Rule 6 was concerned.
Thereupon the State Government amended Rule 6 of the 1961 Rules as a result whereof the 1961 Rules were superseded by the Andhra Pradesh Animal Husbandry Service Special Rules, 1977, Rule 1 whereof pro 419 vided for the constitution of the service.
Class IV posts, which were re designated as Assistant Directors, were divid ed into eight categories and Rule 2 provided method of promotion from Class V to Class IV.
Under those Rules Veter inary Assistant Surgeons who were Class V were only eligible for promotion to Class IV in their respective categories.
That is to say category I Class V was only eligible for promotion to category I Class IV and similarly category 2 of Class V was eligible for category 2 of Class IV and so on, and in this way common seniority of class V officers became irrelevant, promotion being category wise.
Being dissatis fied some officers belonging to Class IV filed Representa tion Petition before the Andhra Pradesh Administrative Tribunal seeking a direction that the special rules be amended or modified in terms of the observations made by the Andhra Pradesh High Court in Civil Writ No. 4532 of 1971, referred to above whereby the said High Court had declared Rule 6 of 1961 Rules as intra vires.
The contention raised by the petitioner was that promotions from Class V to Class IV be made on the basis of seniority alone irrespective of the categories contemplated by 1977 Rules.
The Tribunal by its judgment allowed the petition and issued the directions asked for by the petitioners.
The Tribunal observed that not to speak of direction, even an observation from the High Court was binding on the State Government when the State Government had not chosen to get the said observation set aside by the Supreme Court.
Accordingly the Tribunal direct ed the State to evolve a proper and rational method of determination of seniority among the Veterinary Assistant Surgeons in the matter of promotions to the next higher rank of Assistant Director of Veterinary Surgeons.
Being aggrieved, the State of Andhra Pradesh and some of the officers who have been affected by the High Court 's judgment and who were not parties before the High Court have filed these appeals.
The following questions arose for determination: (1) can the High Court/Administrative Tribunal direct the State Government to frame or amend the existing statutory Rules to alter the conditions of service of the Civil servants in terms of the directions, and (2) when there are specialized posts in a feeder cadre and also in the higher cadre, can the Government restrict the promotions from feeder cadre to the higher cadre only speciality wise irrespective of sen iority.
Allowing the Appeals and remanding the matter to the Tribunal for decision on other points: this Court, 420 HELD: The observations of the High Court which have been made as the basis for its judgment by the Tribunal were only of advisory nature.
The High Court was aware of its limita tions under Article 226 of the Constitution of India and as such the learned Judge deliberately used the words 'advisa ble ' while making the observations.
It is neither legal nor proper for the High Courts or the Administrative Tribunals to issue directions or advisory sermons to the executive in respect of the sphere which is exclusively within the domain of the executive under the Constitution.
[428E F] The power under Article 309 of the Constitution of India to frame rules is legislative power.
This power under the Constitution has to be exercised by the President or the Governor of a State as the case may be.
[429C] The High Court or the Administrative Tribunals cannot issue a mandate to the State Government to legislate under Article 309 of the Constitution of India.
The Courts cannot usurp the functions assigned to the executive under the Constitution and cannot even indirectly require the execu tive to exercise its rule making power in any manner.
The Courts cannot assume to itself a supervisory role over the rule making power of the executive under Article 309.
[429D E] The Administrative Tribunal in the judgment under appeal transgressed its limits in issuing the impugned directions.
[429F] Narender Chand Hem Raj & Ors.
vs Lt. Governor, Union Territory, Himachal Pradesh & Ors., ; ; State of Himachal Pradesh vs A parent of a student of medical college, Simla & Ors., [1985] 3 S.C.C. 169 and Asif Hameed & Ors.
vs State of Jammu & Kashmir & Ors.
, [1989] Supp. 2 S.C.C. 364, referred to.
| The appellant, a research institution established for the purpose of improving the quality of tea, was managed by the India Tea Assciation.
The employees made claims, inter 558 alia, for (1) free housing accommodation or adequate allowance in lieu thereof, and (2) grant of bonus.
The tribunal, to which the matter was referred by the Government considered the financial position of the appellant and came to the conclusion that the demand for housing accommodation was not justified and that the ends of justice would be met if a flat rate of enhancement of Rs. 20/ was awarded.
As regards the demand for bonus the tribunal felt that it would be inexpedient to apply the formula which governed the decision of industrial claims for the payment of bonus, but made an award directing the appellant to pay puja bonus to its employees on the ground that what was described as puja bonus was being given to workmen who were similarly situated as also to the clarical staff working at the Indian Tea Association at Calcutta and that refusing the workmen 's claim for bonus against the appellant would amount to discrimination.
^ Held, that a demand for the provision of housing accommodation can be reasonably entertained where it appeared that the financial position of the employer can bear the burden involved, that under the present economic conditions prevailing in the industry the responsibility for providing housing accommodation cannot be placed solely on the shoulders of the employer, and that in due course the problem would have to be tackled by the industry in cooperation with the State, which would have to bear a part of that responsibility.
The Patna Electric Supply Co., Ltd. Patna vs The Patna Electric Supply Workers ' Union, [1959] Supp.
S.C. R. 761, relied on.
Held, further, that before a claim for the grant of puja bonus could be sustained it must be shown (1) that it was consistently paid by the employer to his employees from year to year at the same rate, and (2) that it had been paid even in years of loss and that it had no relation to the profit made by the employer during the relevant year.
A claim for puja bonus could also be made on the ground that the payment of such bonus was an implied term in the contract of employment.
The Graham Trading Co. (Indian) Ltd. vs Its Workmen, ; and M/s. Ispahani Ltd., Calcatta vs Ispahani Employees ' Union, [1960] 1 S.C.R. 24, followed.
Industrial profit bonus which is governed by the application of the well known formula, cannot be awarded unless a specific year for which the claim is made is indicated and it is alleged that there is available surplus in the hands of the employer for that year.
| The first respondent, the then Commissioner of the Corpora tion of Calcutta, was after a protracted trial for an alleged offence under section 497 of the Indian Penal Code discharged by the Magistrate under section 253(1) of the Code of Criminal Procedure.
The Sessions judge, on a petition in revision filed by the complainant, holding that the said respondent had suborned the complainants witnesses, set aside the order of discharge and directed further enquiry by another Magistrate who permitted the complainant to tender further evidence.
The respondent moved the High Court in revision and a Division Bench issued a Rule and stayed further proceedings.
While the matter was thus pending before the High Court, the Corporation of Calcutta by a resolution appointed the three appellants members of a Special Committee which ran as follows : " That a Special Committee consisting of Councillors Shri section K. Gupta, Shri R. N. Majumdar and Shri section K. Roy be set up to enquire into the allegations levelled against certain officials of the, Corporation who are alleged to have been taking advantage of, their high offices in carrying on business in their own names, The Committee will take up only those matters that relate to the Corporation.
" Subsequent to the passing of the said resolution, the Mayor handed over to the Committee certain papers from a Councillor containing certain allegations against the Commissioner.
It was the case of the said respondent that the Special Committee there, upon examined the complainant and another and issued to him a notice along with a questionnaire, the relevant portions of which were as follows: "As you probably know, we have been appointed to make an enquiry into certain allegations relating to the administration of the Corporation of Calcutta and specially into certain steps taken by you in the matter of assessment and appointments and few order matters, we are giving you a synopsis of the cases in which the enquiry is being held and we shall Se glad if you kindly give us some time between 10 a. m. and 11 a. m. tomorrow (the 16th instant) so that we can get the facts from you." * * * 461 " III (a).
It is alleged that between 4th January, 1956, and 20th September, 1957, i.e., at or about the time when the case under section 497, I.P.C., was being tried, you gave appointments to the following persons: (1) Anil Koyal (2) jogendra Nath Mondal (3) Ahi Kanta Choudhury (4) Govinda Banerjee (5) Narendra Nath Naskar, who are related respectively to Palan Koyal, Haradhan (alias Haridhan) Mondal, Tripti Choudhury, Thakur Raj Smriti Tirtha and Upendra Naskar, who were cited as witnesses in the case.
(b)It is alleged that about the same time you gave appoint ments to Tarak Nath Day, Hardhan Day, Pradip Bhaduri, Ardharigsu Mondal etc.
and condoned the punishment previously inflicted on Dhiren Mondal as they were helping you in conducting your defence in the case.
(c) It is alleged that you were instrumental in securing the appointment of another probable prosecution witness Kamakshya Chatterjee through one M. L. Ghose against whom a demolition case was pending.
" Thereupon the first respondent filed a complaint in the High Court charging the appellants with contempt of the High Court as well as the trial court.
The High Court found the appellants guilty and convicted them for contempt of Court.
Hence this appeal.
Held (per Imam and Raghubar Dayal, JJ., Subba Rao, J. dissenting), that the appellants were not guilty of contempt of Court and the appeal must succeed.
It could not be said that the Special Committee had consti tuted itself a court of parallel enquiry with regard to matters in issue either before the trial Magistrate or the High Court.
There can be no comparison between the present case and a trial conducted by a newspaper.
The Special Committee was directed by the Corporation to enquire into malpractices on the part of its employees, necessarily including unworthy appointments, and the ascertainment of the motive could only be incidental to the main purpose of the enquiry and could not lead to the conclusion that the Special Committee was holding a parallel enquiry on matters pending before the Court and thereby intended to interfere with the course of justice.
The record clearly showed that the appellants had at no time intended to interfere with the course of justice, nor had their conduct tended to do so.
They had taken care not to comment on any proceedings pending in I court or the issues arising out of them.
Per Subba Rao, J. The appellants obviously initiated an enquiry which went beyond the scope of the resolution passed by the Corporation.
With the knowledge that criminal proceedings were pending, they examined witnesses and served the 462 questionnaire.
They permitted councillors and others to attend the enquiry which was in no sense confidential.
It is settled law that a person is guilty of contempt of court if the act done by him is intended or calculated or likely to interfere with the course of justice.
Re Read & Huggonson, ; , The Queen V. Payne, , The Queen vs Gray, , R. V. Odham 's Press Ltd., , R. vs Duffy Mohapatra, I.L.R. [1955] Cuttack 305 and Ganesh Shankay Vidyarthi 's case, A.I.R. 1929 All.81, referred to.
It could not be said in the instant case that the enquiry, initiated by the committee to ascertain whether the first respondent had suborned witnesses cited or examined against him, could not have serious repercussions on the proceedings pending in the Magistrate 's court or in the High Court.
Although a strong willed ' Magistrate might not be influenced by the enquiry, it might unconsciously affect a weaker mind and thug obstruct the even course of justice.
Even though a judge of the High Court might withstand the effect of such an enquiry, that would not prevent the public and the parties, especially in a criminal case, from reasonably apprehending that the enquiry or the findings made by the committee might affect a fair hearing of the matter.
The contempt, in the instant case, was not merely of a technical nature but of a serious character calculated to interfere with and obstruct the due course of justice and as such was preeminently one against which the court must take action.
| Section 6(1) of the Bombay Tenancy and Agricultural Lands Act, 1948 (Bom.
LXVII of 1948), provided that the maximum rent payable by a tenant shall not in the case of irrigated land exceed one fourth and in the case of any other land exceed one third of the crop of such land or its value as determined by the prescribed manner.
Section 6(2) of the Act read as follows, " The Provincial Government may, by notification in the Official Gazette, fix a lower rate of the maximum rent payable by the tenants of lands situate in any particular area or may fix such rate on any other suitable basis as it thinks fit." By a notification under that section the Government of Bombay, in supersession of all other notifications prescribed a rate of maximum rent which was very much lower than the one previously fixed.
The petitioners challenged the vires of the said section and the validity of the notification under article 226 of the Constitution, but the High Court found against them.
The question for determination in these appeals was whether section 6(2) conferred unguided power on the Government and was void by reason of excessive delegation of legislative power.
342 Held (per Sinha, C. J., Kapur, Gajendragadkar and Wanchoo, jj.) that although the power of delegation is a constituent element of the legislative power, it is well settled that a legislature cannot delegate its essential legislative function in any case and before it can delegate any subsidiary or ancillary powers to a delegate of its choice, it must lay down the legislative policy and principle so as to afford the delegate proper guidance in implementing the same.
A statute challenged on the ground of excessive delegation must, therefore, be subjected to two tests, (1) whether it delegates essential legislative function or power and (2) whether the legislature has enunciated its policy and principle for the guidance of the delegate.
It is in that light that the preamble of the statute and its provisions relating to delegation should be considered.
Harishankay Bagla vs The State of Madhya Pradesh, and The Edward Mills Co. Ltd., Beawar vs State of Ajmer ; , referred to.
The preamble and the material provisions of the Act show that it seeks to improve the economic and social condition of the peasants and with that end in view fixes maximum rent payable by the tenants and provides a speedy machinery for fixation of reasonable rent.
This being the legislative policy and regard being had to the specific provisions laid down by section 12(3) of the Act for determining reasonable rent, it is impossible to hold that the power delegated to the Provincial Government by section 6(2) was vitiated by excessive delegation.
The fact that no minimum was prescribed by the section could not alter the position.
Held, further, that since the Act itself is within the protection of article 31 B of the Constitution and there can be no question as to the validity of section 6(2), the notification issued in exercise of the power conferred by that section cannot be challenged as infringing article 31 of the Constitution.
Nor was it correct to say that the power delegated by section 6(2) could be used only once and no more.
Per Subba Rao, J. The essential legislative function is the determination of the legislative policy and its formulation as a rule of conduct.
Obviously the legislature cannot abdicate its functions in favour of another.
But in view of the multifarious activities of a welfare State, it cannot presumably work out all the details to suit the varying aspects of a complex situation.
It must necessarily delegate the working out of details to the executive or any other agency.
But there is a danger inherent in such a process of delegation.
It may not lay down any policy at all; it may declare its policy in vague and general terms; it may not set down any standard for the guidance of the executive, it may confer an arbitrary power on the executive to change or modify the policy laid down by it without reserving for itself any control over subordinate legislation.
This self effacement of legislative power in favour of another agency 343 either in whole or in part is beyond the permissible limits of delegation.
It is for a Court to hold on a fair, generous and liberal construction of an impugned statute whether the legislature exceeded such limits.
But the said liberal construction should not be carried by the courts to the extent of always trying to discover a dormant or latent legislative policy to sustain an arbitrary power conferred on executive authorities.
In re The ; , , Rajnarain, Singh vs The Chairman, Patna Administration Committee, Patna, ; , Harishankay Bagla vs The State of Madhya Pradesh, , The Edward Mills Co., Ltd., Beaway vs The State of Ajmer, ; and Hamdard Dawakhana vs Union of India, ; , referred to.
The whole scheme of the Bombay Tenancy and Agricultural Lands Act, 1948 (LXVII of 1948), excluding section 6(2), is a self contained and integrated one.
The legislature fixes the maximum rent linked with crop having regard to the nature of the land, and the other provisions enable the appropriate authorities to fix reasonable rent subject to that maximum.
But under section 6(2) the legislature in clearest terms abdicated its essential functions in favour of the executive authority without laying down any standard for its guidance.
In effect it permitted the Government to amend section 6(1) of the Act.
While section 6(1) overrides other provisions of the Act, section 6(2) derogates from section 6(1) itself.
Section 6(2) is capable of being exercised in such a way that the object of section 6(1) is itself frustrated.
Section 6(1) in effect is made subject to section 6(2).
This is clearly an abdication by the legislature of its essential legislative function and the delegation must be held void.
It was not correct to say that the factors specified by section 12(3) afforded a standard 'for fixing the maximum rent.
It was not permissible to read them into section 6(2) of the Act.
No legislature can be legally permitted to lay down a broad policy in general terms and confer arbitrary powers on the executive for carrying it out.
Such a law must obviously be contrary to the decisions of this Court and cannot be valid.
| A letter petition in regard to the Mental Hospital at Ranchi was considered as a public interest application under Article 32 of the Constitution, and the Court called upon the State of Bihar to file its counter affidavit.
At the same time, the Court directed the Chief Judicial Magistrate to visit the hospital and submit a report about the conditions prevailing there.
The hospital was in the sole management of the Health Department of the State of Bihar.
The State of Bihar received financial contributions from the States of West Bengal and Orissa on the basis of the number of beds reserved for each State.
The report submitted by the Chief Judicial Magistrate made a painful reading.
In the affidavit submitted by the State of Bihar it was stated that the Government was aware of the conditions and had since taken some steps to improve the working of the hospital, and had also drawn up a scheme to develop the hospital on the lines of NIMHANS in Bangalore.
From time to time, the Court had issued directions and made specific orders regarding provision of better food.
clothing, medical treatment, housing and improvement of sanitation, etc.
While keeping the matter pending, the Court, HELD: (1) In a welfare State it is the obligation of the State to provide medical attention to every citizen.
The State has to realise its obligation and the Government of the day has got to perform its duties by running the hospital in a perfect standard and serving the patients in an appropriate way.
[318D E] (2) It is clear that inspite of several orders made by this Court and assurances held out by the State Government of Bihar.
the defects were not being remedied.
The awareness PG NO 307 of the governmental authorities of the sordid situation prevailing in the hospital, as admitted in the scheme furnished to the Court, the non compliance in an effective way with the directions made from time to time by the Court and the general lethargy shown in rising from slumber leaves a clear impression that the institution cannot be run as a mental hospital of that magnitude unless there be change in the administrative set up, the control is altered and a new service to patient oriented thrust given to the institution.
[3I8 C] (3) The scheme which was furnished to the Court was a halfhearted one and no attempt therein was made to bring about any improvement except attending to certain obvious deficiencies and short falls.
The Court had looked forward to a scheme of re orientation which the scheme did not even remotely touch.
[318F G] (4) The State Government authorities have not been able to assess the priorities.
There does not seem to be the slightest interest on the part of the persons handling the matter, to improve the environment.
In these circumstances, it is difficult to leave the management exclusively to the Health Department of the State of Bihar if the institution has to run as a good and useful hospital.
Association of the States of West Bengal and Orissa in the management is likely to bring about some positive result.
It would, therefore, be much better if a Committee of Management is appointed with full powers to look after all aspects of the institution.
[319A; B D] (5) The Court accordingly constituted a Committee of Management for the Mental Hospital and gave directions regarding the financial contribution from the participating States, and also laid down guidelines regarding the functioning and management of the hospital.
The Court further directed that the Committee shall take expeditious steps to explore the possibility of transforming the hospital into the pattern obtaining in the hospital run by NIMHANS at Bangalore.
[321C D]
| The respondent challenged the appellant selection to the Madras Legislative, Council from the Madras District Graduates ' Constituency on the grounds, (1) that, the purpose of article 171 of the Constitution was to confer a right of functional representation upon persons possessing certain educational or other qualifications so that the appellant who was not a graduate could not be elected to the Legislative Council from the Graduates ' Constituency; (2) that, it would be absurd and destructive of the concept of representation that an individual, who did not possess the essential or basic qualification of the electors, should be their representative, and (3), that, the Constitution, being an organic instrument, must be interpreted in a broad and liberal manner so as to give effect to the underlying principles and purposes of the system of representation sought to be embodied in it.
The High Court set aside the election.
Allowing the appeal to this Court, HELD: (1) (a) Graduates are not an occupational or vocational group, but merely a body of persons with particular educational qualifications.
It would, therefore, not be correct to describe the additional representation sought to be given to them in the Legislative Council as an attempt to introduce functional or vocational representation.
[181B] (b) The qualifications of the elector constituting the electorate, and of those who can represent each electorate, contemplated by the Constitution and supplemented by Parliament, are separately set out for each House.
As regards the Legislative Council, the qualifications for the four electorates are indicated in article 171 (3) (a), (b), (c) and (d).
The plain and ordinary meaning of the term "electorate is that it is the body of persons who elect.
It does not take in the extended notion of a body of persons electing representatives from amongst themselves.
It does not impose a requirement that the person to be chosen must also be a member of the electorate.
[177D F] (c) The qualifications of candidates for seats in the Council are given in section 6 of the Representation of the People Act, 1951.
While a member of the Legislative Assembly should also be an elector in the constituency from which he stands, the member of the Legislative Council is not so required to be a member of the electorate.
All that is required is that the person to be chosen as a member of the Legislative Council should be an elector for an Assembly constituency in the State to whose Legislative Council he is chosen.
[179E] (d) Whatever may have been the opinions of the Constitution makes or their advisors it is not possible to say, on a perusal of article 171, that the Second Chamber found here were meant to provide for functional 173 or vocational representation.
AR that can be inferred is that additional representation or weightage was given to persons possessing special types of knowledge and experience by enabling them to elect their special representatives.
The concept of such representation does not carry with it the further notion that, the representative must also possess the very qualifications of those he represents.
The High Court erroneously travelled outside the four corners of the statutory provisions when there was no ambiguity at all in the language, and by resorting to a presumed legislative intent, it added a qualification to those expressly laid down in the Constitution and other statutory provisions.
[1 80F] Davies Jankins & Co. vs Davies, 1967 (2) W.L.R. p. 1139 (a_) 1156, inferred to.
2(a) Article 171 is designed only to give a right to choose their representatives to those who have certain types of presumably valuable knowledge and education.
If the presumption of their better competence to elect a suitable representative is there, it would be for the members of such a constituency themselves to decide whether a person who stands for election from their constituency possesses the right type of knowledge , experience and wisdom.
The Constitution makers, acting on such a presumption, may have intentionally left the educational qualifications of candidate for election from the Graduates Constituency unspecified.
[181C] (b) It could not possibly be said that the question to be dealt with was not known to the legislators.
The provisions of law show that the qualifications of the electors as well as of those to be elected were matters to which the attention of the law makers, both in the Constituent Assem bly and in Parliament, was specifically directed.
Hence, the omission must have been deliberate.
[181G] R. vs Cleworth, (1864) 4 BSS 927 and Craies on Statute Law6th Edn.
1963 72, referred to.
(c) The legislative history of the Article also shows that the omission by the Constitution makers or by Parliament, to prescribe graduation as a qualification of the candidate from the Graduates ' constituency, was deliberate.
The provisions of the Government of India (Provincial Legislative Assemblies) Order, 1936, prescribing the qualifications of persons to be chosen from special constituencies set up for representation in the Legislative Councils under the Government of India Act, 1935, indicate that it was invariably expressly provided where it was so intended, that a necessary qualification of a candidate for a seat was that he should be entitled to vote for the choice of a member to fill it.
Such a qualification was not left to mere implication.
[181H 182E] (3) It is true that a constitution should be interpreted in a broad and generous spirit, but the rule of "plain meaning" or "literal" interpretation could not altogether be abandoned.
The object of interpretation is to discover the intention of the law makers, and this object can obviously be best achieved by first looking at the language used in the relevant provisions.
A logical corollary of the rule of literal interpretation is that a statute may not be extended to meet a case for which provision has clearly and undoubtedly not been made; and an application of this rule necessarily involves that addition to, or modification of, words used in statutory provisions is not generally permissible.
Courts may depart from this rule only to avoid a patent absurdity.
[175D] Sri Ram Narain Medhi & Ors.
vs The State of Bombay, A.I.R. ; British India General Insurance Co. Ltd. vs
Captain 174 itbar Singh & Ors., ; R. C. Jacob vs Union of India; , ; State of Madhya Pradesh vs M/s. Azad Bharat Finance Co. & Anr.
A.I.R. 1967 S.C. 276; Hira Devi vs District Board, Shabiahanpur, ; & 365, referred to.
From the language as well as the legislative history of articles 171 and 173 of the Constitution and section 6 of the Representation of the People Act, 1951, it could be presumed that the omission of the qualification that the representative of graduate should also be a graduate was deliberate.
By presuming such an intention of the law makers, no absurdity results.
By adding 'deemed to be necessary ' or 'implied ' qualification of a representative of the graduates, which the Constitution makers or Parliament could easily have imposed, the Court would be invading the legislative sphere.
[183F]
| In compliance with the decision of the Supreme Court in Dr. Pradeep Jain etc.
vs Union of India B Ors.
; , and on the basis of the scheme approved by the Court, respondent No. 2 held an All India Entrance Examination for filling up 25 per cent seats in different Post Graduate Medical Colleges in the States and Union Territories and those run by public authorities.
The scheme provided that cut off base should be 50 per cent marks.
Out of about 2100 seats, only 500 could be filled.
In the Writ Petition filed before this Court, the petitioner, an unsuccessful candidate at the aforesaid examination sought (1) a direction that clauses 11 and 15(g) of the Bulletin of Information, published by respondent No. 2 in this regard were illegal, unconstitutional and incompetent, (2) a writ of certiorari to quash the list of successful candidates for admission within 25% reserved quota, and (3) a writ of mandamus to the respondents to admit the petitioner and similarly placed other candidates against the 1500 odd seats left out due to the arbitrary decision/action of the respondents, contending that no seat should go unfilled.
Disposing of the Writ Petition and a pending CMP in other disposed of Writ Petitions, HELD: 1.1 It is well settled that judicial determination is not to be tested by the touchstone of Article 14 of the Constitution.
[388B] In the instant case since the bulletin is in accordance with the scheme approved by this Court, and the examination PG NO 385 PG NO 386 has been held following the terms thereof, the petitioner is not entitled to ask for quashing a part of the bulletin and the list of selected candidates.
There is no tenable challenge against the examination.
[387H, 388A] 1.2 Since in the very first year of implementing the scheme, a stalemate has arisen, it is appropriate to give certain directions, which may in the facts and circumstances, be appropriate and adequate to meet the situation to the extent possible.
Sufficient number of qualified doctors are not available.
Every step should, therefore, be taken to turn out as many doctors with Post Graduate qualification as possible.
Since about 1600 seats have reverted to the States and medical colleges located within them, and have to be filled up, it is in the interest of the parties that this should be done as quickly as possible so that the academic time schedule may be stuck to.
[388B C, F, 389D] 1.3 Respondent No. 2 is directed to supply to each State and/or Union Territory from where candidates had appeared at the entrance test, candidate wise particulars confined to such State.
Once these particulars are available, the Selection Committee operating in the State and/or Union Territory or in the respective medical colleges covered by the scheme, as the case may be, shall draw up a list of the remaining candidates seeking admission as against the 75 per cent of the seats and the candidates who had taken the All India Entrance examination, but have not been found fit on the basis of the marks secured in their respective selection tests or at the MBBS examination, in States where there is no such selection test relating 75 per cent seats.
This shall be on the footing that marks in the respective selection tests or the test and the examination are at par and admission would be on the basis of merit.
No doubt, the All India Selection test had been a stricter one, but it would not be possible for this Court now to direct what weightage is to be added on that score.
Once the common list is drawn up on the basis of performance, admission to remaining seats can be taken up.
[389F G] [The admissions already effected inclusive of seats in the reserved quota shall continue.
But further admissions in respect of unfilled seats as against the 25 per cent quota shall be deferred now and again taken up after the list of eligible candidates is drawn up as per the time schedule now indicated.] [389H, 390B] Dr. Pradeep Jain etc.
vs Union of India & Ors. etc.
; , , referred to.
PG NO 387
|
minal Appeal No. 126 of 1959.
Appeal by special leave from the judgment and order dated June 19, 1959, of the Punjab High Court in Criminal Revision No. 144 of 1959.
R. L. Kohli, for the appellant.
G. C. Mathur and P. D. Menon, for the respondent.
March 6.
The Judgment of the Court was delivered by KAPUR, J.
This is an appeal by special leave against the judgment and order of the High Court of the Punjab and raises the constitutionality of s.178A of the (Act 8 of 1878), which has been held by this Court to be constitutional in the Collector of Castoms, Madras vs Nathella Sampathu Chetty(1).
At the time, of arguments before us a further point was raised that in order that s.178A of the may become applicable, the prosecution must further prove that the goods which were sought to be affected by the order of the Customs Officer were goods of foreign origin and there must be evidence in support of the reasonableness of the belief of the Customs Officer that the goods were smuggled goods.
The question now sought to be raised was not agitated in any of the courts below.
The appellant on February 11, 1958, when he was sitting in a third class compartment of the Amritsa Kalka train standing on Platform No. 5 of the Amrsar Railway Station, was searched by a Customs Official and some bars of gold were found tied round his waist.
These gold bars were seized and a recovery memo wits prepared, Out of these gold (1) ; 615 bars four were of base metal and the rest were of pure gold some bearing the stamp of Johmon Mathey & Co. Ltd., 999 10 tolas and 2 1/4 bars bore marks of N.M. Rothschild & Sons 10 tolas (990 0).
No permit from the the Reserve Bank to import this gold was produced by the appellant.
Under the Foreign Exchange Regulation Act, 1917, the importation of gold without such permit is prohibited and such contravention is punishable under s.23 A of the said Act read with s.167(81) of the .
The appellant was prosecuted under s.23A of the Foreign Exchange Regulation Act and 167(81) of the and his defence was that he was not in possession of the gold bars which were taken from an attache case left by a stranger under the seat where he (the appellant) was sitting.
The Additional District Magistrate held the offence to be proved and convicted the appellant of the offence and sentenced him to one year 's rigorous imprison ment.
An appeal to the Sessions Judge resulted in the reduction of the sentence to 8 months ' rigorous imprisonment.
On revision to the High Court the sentence was reduced to six months ' rigorous imprisonment.
The appellant has come in appeal by special leave.
The trial court accepted the testimony of the Customs Officials and held that the defence of the appellant was false and that gold worth Rs. 14,000/ was found in his possession.
The learned Sessions Judge in appeal also accepted the testimony of the Customs Officials and held the defence to be false and came to the conclusion that the gold was found in possession of the appellant.
In the High Court the same plea was taken and was rejected.
For the first time in this Court it is contended that before the presumption under s.178A can be made applicable, it must be proved by the prosecution that the goods were of foreign origin, i.e. had beep 616 imported from abroad and only then does the presumption under section 178A arise which relates only to the question of Customs duty having been paid.
In other words the contention comes to this that the prosecution must first prove that the goods in dispute in a particular case have been imported from a foreign country and once that is proved the onus then will be on the person in whose possession the goods are found that he had paid the Customs duty.
Apart from the fact that this question has never been raised, that is not the effect of s.178A of the which provides: "178A. (1) Where any goods to which this section applies are seized under this Act in the reasonable belief that they are smuggled goods, the burden of proving that they are not smuggled goods shall be on the person from whose possession the goods were seized.
(2) This section shall apply to gold, gold manufactures, diamonds and other precious stones, cigaretters and cosmetics and any other goods which the Central Government may, by notification in the Official Gazette, specify in this behalf.
(3) Every notification issued under sub section (2) shall be laid before both Houses of Parliament as soon as may be after it is issued".
Two Customs officers appeared as witnesses, Inspector Satnam Singh and Deputy Superintendent A.N. Kapur, the former is an Inspector of Land Customs and the latter a Deputy Superintendent of Customs.
There is nothing to indicate in their cross examination that the officers did not have a reasonable belief that the goods were smuggled goods and the question that the officers did not have reasonable belief is not suggested either from the cross examination of these witnesses of from the findings 617 of the courts below.
Even in his statement of case it is contended that the mere existence of stamp of foreign companies on gold does not necessarily prove that the gold is of foreign origin.
It might be put on spurious gold which may be of Indian origin.
In our opinion apart from the fact that this question has not been raised, it is quite clear that what s.178A of the provides is that when the goods are seized in the reasonable belief that they are smuggled goods then the burden of proving that they are not smuggled goods is on the person from whose possession the goods are seized.
The onus is on him to show that the goods are not smuggled, that is, not of foreign origin on which duty is not paid.
The onus is not on the prosecution to show that the goods are not, of Indian origin.
That appears to be the view taken in the Collector of Customs, Madras vs Nathella Sampathu Chetty (1) where at the learned Judges observed : "We are therefore of opinion (1) that section 178A was constitutionally valid, (2) that the rule as to the burden of proof enacted by that section applies to a contravention of a notification under section 8(1) of the Foreign Exchanges Regulation Act 1947 by virtue of its being deemed to be a contravention of a notification on under section 19 of the , (3) that the preliminary require ment of section 178A that the officer seizing should entertain , 'a reasonable belief ' that the goods seized were smuggled" was satisfied in the present case.
" In our opinion there is no merit in this appeal and it is dismissed.
The appellant will surrender to his bail bonds.
Appeal dismissed.
| The appellant was searched by a Customs Official and some bars of gold were found tied round his waist.
Out of those bars some were of base metal and the rest of pure gold which borne foreign markes.
The appellant had no permit from the Reserve Bank of India to import the gold.
He was prosecuted and convicted under section 167(81) of the .
He brought an appeal to the Supreme Court by Special leave.
Held, that section 178A of the , is constitutional.
The contension that before the presumption under s.178A of the could be raised the prosecution had to prove that the gold was of foreign origin was rejected and held that section 178A provides that when the goods are seized in the reasonable belief that they are smuggled goods the onus is on the accused to show that they are not smuggled.
Collector of Customs, Madras vs Nathella Sampathu Chetty (1962) 3 S.C.R. p.786 followed.
| The appellant imported Top Line Tube Winder Endless Belts which were assessed to duty under heading 40.05/16(3) at 40% plus countervailing duty at the rate of 25% under Item 16 A(4) of the .
Thereafter, the appellant made an application for refund of the excess of duty so charged contending that the goods were in fact liable to be classified under heading 59.16/17, and without countervailing duty.
The Assistant Collector rejected the claim by his order dated October 12, 1979 and against it the appellant pre ferred an appeal under Section 128 of the to the Appellate Collector who allowed the appeal holding that the goods were classifiable under heading 59.16/17.
The Government, however, issued a suo motu show cause notice dated November 21, 1981 to the appellant under Sec tion 131(3), asking the appellant to show cause as to why the goods should not be classified under heading 39.07 which attracted duty at 100% ad valorem, and also as to why the order dated May 2, 1981 passed by the Appellate Collector should not be annulled.
Against the aforesaid show cause, the appellant pre ferred an appeal to the Customs Excise and Gold Control (Appellate) Tribunal, contending that the show cause notice was barred by limitation under sub section (5) of Section 131 read with Section 28 of the Act, which was six months from the date of short levy, and in any case six months from the date of the Appellate order.
97 The Tribunal dismissed the appeal holding that the notice was in time, and that the assessment proposed to be made under heading 39.07 was proper and set aside the order of the Appellate Collector allowing the revision.
In the appeal to this Court, the question for considera tion was: whether the Central Government violated the bar of limitation while exercising suo motu revisional powers under Section 13: of the .
Dismissing the appeal by a 2:1 Majority, this Court, HELD: (Sabyasachi Mukharji, CJ.
and P.B. Sawant, J. Per Sawant, J.) 1.
The provisions of Section 131(5) and therefore the limitation laid down in section 28 of the Act do not apply to the action taken by the government under section 131(3).
[103D] Geep Flashlight Industries Ltd. vs Union of India, ; , followed.
Even if it was held that the limitation as laid down in Section 28 would apply to the initiation of action under Section 131(3), since the appellate order in the instant case, has only allowed the appeal of the appellant declaring him as being entitled to the refund, and no refund has yet been made the action of the Government under section 131(3) is clearly not barred by limitation [102G H] 3.
In the case of erroneous refund, the notice under section 28 of the Act has to be given within six months from the date of 'actual ' refund.
If no refund has in fact been made, limitation cannot be said to arise inasmuch as the 'relevant date ' under section 28 in the case of erroneous refund speaks of the date of refund The Order granting refund is not actual refund.
Admittedly, in the instant case no refund has been made to the appellant under the appellate customs order dated May 2, 1981.
Hence even if it is held that the provisions of subsection (3) of Section 131 are governed by sub section (5) thereof and, therefore, the limitation laid down under section 28 of the Act applied to the action of the Government under section 131(3), the present show cause notice is not barred by limitation [103C D] 4.
It is clear from the provisions of sub section (3) of Section 131 that it does not give power to the Central Government to act suo motu 98 to annul or modify an order passed by the original assessing authority.
On the other hand, the provisions of sub section (5) of Section 131 contemplate proceedings against actions of the original assessing authority which have resulted in either not levying or short levying the goods.
That sub section by implication also covers cases of refunds, when goods are cleared initially under a provisional assessment, and the final assessment shows that the assessee is entitled to a refund of duty charged in excess earlier.
But all the cases whether of non levy, short levy or of refund which are contemplated in sub section (5) are cases arising out of the acts of omissions and commissions of the original assessing authority, and it is when such orders passed by the original assessing authority which are sought to be annulled or modified, that the provision of limitation contained in Section 28 applies.
[103G H; 104A B] 5.
Thus, the situations contemplated by sub section (3) and by sub section (5) of Section 131 are mutually exclusive in that whereas sub section(3) speaks of the annulment or modification of the appellate or revisional orders, sub section (5) speaks of the orders passed by the original assessing authority.
[104B] 6.
Hence, the limitation applies when the Government seeks to annul or modify orders of the original assessing authority under subsection (5) and not when the Government takes action to annul or modify the appellate or revisional orders under sub section (3) [104C] 7.
The above interpretation is also consistent with the provisions of sub sections (1) and (4) of Section 131.
[104D] 8.
The conclusion is inescapable that the limitation prescribed by Section 28 is applicable when under sub sec tion (5) of Section 131 the Government seeks to annul or modify orders other than those passed under Sections 128 and 130.
It is not applicable to the action taken under sub section (3) for annulling or modifying orders passed under Sections 128 and 130.
[104G H] 9.
In the instant case, since the impugned show cause notice is issued to annul/modify the order passed by the Appellate Collector of Customs under Section 128, it is not barred by limitation.
[105A] (Per M.M. Punchhi, J. dissenting) 1(a) Section 28 envisages three kinds of errors in regard to custom duties.
One is non levy.
This means that the goods were not 99 classified to duty whereas they could be.
The second is short levy.
In this could be included a case in which the goods could be classified in one Entry but were erroneously classified under another Entry resulting in short levy of custom duty, or the like.
The third is the case of erroneous refund.
This category springs up in the process of assess ment only where two kinds of error, i.e. non levy or short levy may occur and lead to an erroneous refund.
[108H; 109A] (b) It is clear from section 28 that in case of duty not levied or short levied, the 'relevant date ' is the date on which the concerned officer makes some orders for the clear ance of the goods on payment of duty on framing the final assessment as the case may be.
[109E] Geep Flashlight Industries Ltd. vs Union of India & Ors., ; , referred to.
Since levy is linked to assessment, a case for refund may arise which may be erroneous.
[109A] In the instant case, the Tribunal seems to take the view that sub section (3) of Section 131, if employed, eclipses sub section (5) of Section 131.
It was of the view that when the Central Government on its own motion proposes to annul or modify any order passed under Section 128 or Section 130 then it is not lettered by the time limit specified in Section 28 even though it entertains the opinion that any duty of customs has either not been levied or has been short levied.
This approach appears to wholly erroneous.
[108D E] 3.
There is nothing in the language of sub section (3) to suggest that it over powers or renders otiose sub section (5).
Both the sub sections need not militate against each other, components as they are of the singular power con ferred by the legislature on the Central Government for revision.
[108E] 4.
The harmonious way is, therefore, to read these sub sections would be that the Central Government is empow ered on its own motion to annul or modify any order passed under Section 128 or Section 130, but if it is an order whereby any duty of customs has either not been levied or has been short levied, the Central Government can levy or enhance the duty by giving the person affected by the pro posed order a notice to show cause against it but within the time limit specified in Section 28, which is six months from the date of the order.
[100F G] 100 5.
Merely because the Central Government had the power to suo motu revise the orders of refund passed by the Appel late Collector it does not follow a fortiori that it had the power to revise the orders of short levy at that stage.
[110D] 6.
The orders of levy of duty in the instant case, had two facets.
The duty from the point of view of the appellant had been excessively levied necessitating him to challenge the same and seek refund.
On the other hand, from the point of view of the Revenue, the duty had been short levied giving rise cause to have it levied under proper heading.
It was incumbent on the Central Government to exercise its suo motu power under sub section (3) read with sub section (5) of Section 131 within six months from 6.8.79, the date when the duty was short levied and undeniably the Central Govern ment did not take such timely step even though it had a cause to do so.
The appellant, however, made claim for the refund of the excess duty levied taking shelter under anoth er heading and on its refusal by the Assistant Collector on 12.10.79 had its appeal accepted on 2.5.81 from the Appel late Collector who ordered refund.
The Central Government then got a cause to take suo motu action under Section 131(3) of the to annul or modify the order of the Appellate Collector or the actual refund itself under that order.
It being a case of erroneous refund sub section (3) of Section 131 was attracted and not sub section (5) of Section 131 as at that point of time it was not a case of non levy or short levy, and these two categories of errors could not be equated with the error of erroneous refund inasmuch as these three categories of errors are treated separately in the scheme of things.
[109H; 100A B] 7.
The error committed by the Tribunal, in the instant case, is so patent that it cannot be allowed to go uncor rected as a tolerable error.
The appeal has, therefore, to be allowed The orders of the Tribunal passed in appeal have to be modified so as to revive the order of the original assessment dated 6.8.79 and the order of the Assistant Collector of Customs dated 12.10.79, keeping upset the orders dated 2.5.81 of the Appellate Collector of Customs.
[ 110G H]
| The appellant imported wolfram ore.
The Customs Authorities classified the said ore under the residuary Item 87 of the Indian Customs Tariff and charged duty at the rate of 60% ad valorem.
Metallic ores (Item 26) and cobalt, chromium, tungsten magnesium etc.
[Item No. 70(7)] are allowed to be imported free of duty.
The aforesaid classification was upheld by the Assistant Collector of Customs and the appeal to the Commissioner of Customs was dismissed.
The appellant 's revision petition under section 131 of the Customs Act to the Government was also dismissed.
n In the appeal to this Court it was contended on behalf of the appellant that the imported ore contained a concentrate of 74% of tungsten from wolfram and the rest were impurities, that the concentration was the result of 'selective mining ' process which involves crushing, washing and magnetic separation that in better quality ore the content may be as high as 79% and that even after being subjected to such process, the ore concentrate does not cease to be tungsten 'ore ' within the contemplation of Item 70(7) of the Indian Customs Tariff.
Allowing the appeal, ^ HELD: 1.
The goods imported had to be classified as imported ore, falling either under Item 26 or Item 70(7) of the Import Tariff, and no duty was leviable on them.
The appellants are entitled to refund of duty paid by them.
[475 E] 2.
The mere fact that the percentage of tungsten in the ore concentrate in the instant case is about 75% does not take the case out of the ratio of this Court 's decision in Minerals & Metal Trading Corporation of India Ltd. vs Union of India & Ors., [471 H] 3.
There is ample authority for the view that the tungsten content in the wolfram ore of marketable quality may vary from 60 to 79%, and a concentration within these limits of the metal in the ore can be attained simply by a process of a "selective mining", that is by physical process not involving any chemical change in the metal.
Wolframite of ordinary merchantable quality contains 60 to 70% of tungsten, while wolframite ore of better commercial quality contains 75 to 79% of the metal.
[473 C, 475D] "Tungsten" by C.J. Smithells Chapman Hall Introduction.
referred 4.
The finding of the appellate Collector of Customs that such a high degree (75% ) of the tungsten metal virtually free from impurities in the material, could be attained only by some chemical manufacturing process and not merely by 470 crushing, washing or magnetic separation, is not based on any evidence whatever.
It is contrary to the opinion of experts and authorities on the subject, which were brought on the record.
[475B]
| The respondent imported goods of higher value than what was granted under his licence.
The Collector of Customs ordered the goods to be confiscated under section 167(8) of the and in lieu of confiscation gave an option to the respondent to a fine.
On appeal the Central Board of Revenue set aside the order of the Collector of Customs and instead of it imposed a penalty.
The respondent did not pay the penalty and the Collector of Customs took proceedings under section 193 of the Act for the recovery of the penalty in pursuance of which a Magistrate issued warrants of attachment against the respondent holding that the Collector of Customs could validly realise the penalty under section 193 of the Act.
The Sessions Judge dismissed the respondents application in revision but the High Court held that as the penalty was imposed by the Central Board of Revenue the Collector of Customs could not realise the amount of the penalty under section 193 of the Act and also held that the order of the Central Board of Revenue commuting the confiscation to penalty was not without jurisdiction.
On appeal by special leave, Held, that the Central Board of Revenue which is the "Chief Customs Authority" cannot be called an "officer of Customs", and the order of the Chief Customs Authority imposing a penalty for the first time cannot be treated to be an order of the Collector of Customs within the meaning of section 193 of the Sea Customs Act, 1873, and as such the Collector of Customs could not realise the penalty imposed by the Central Board of Revenue.
Rangaswamy vs Alagayammal, A.I.R. (1915) Mad.
1133, Kristnamachariar vs Mangammal, Mad. 91 and Lachmeshwar Prasad Shukul vs Keshwar Lal Chaudhuri, , held not applicable.
| This appeal to the Supreme Court was from a reversing decree of the Bombay High Court in a suit for possession of certain immovable properties.
The suit was dismissed by the trial court on 20 12 1946, the value of properties being found to be over Rs. 10,000.
The decree of the High Court allowing the plaintiff 's claim was passed on the 8th November 1949.
The defendants applied to the High Court for leave to appeal to the Federal Court on 6 1 1950 which was granted on 1 10 1951.
One of the questions for determination was whether article 133 of the Constitution applied to the case and the appeal was competent to the Supreme Court.
Held, that article 133 did not apply as it relates expressly to appeals against any judgment, decree or final order in a civil proceeding of a High Court in the "territory of India".
Held further that on the date of the decree of the High Court, the defendants had a vested right of appeal to the Federal Court as the properties were of the requisite value and on 6 1 1950 a certificate of leave to appeal was bound to be granted.
Held also that the appeal was competent to the Supreme Court by virtue of the provisions of article 135 of the Constitution as the jurisdiction and powers in relation to the matter in dispute were exercisable by the Federal Court immediately before the commencement of the Constitution under an existing law inasmuch as the Federal Court had jurisdiction to entertain and hear appeals from a decree of a High Court which reversed the lower court 's decree as regards properties of the value of more than Rs. 10,000.
The construction contended for by the respondent that the jurisdiction was exercisable under article 135 by the Federal Court only if the matter was actually pending before the Federal Court and that it could not be said to be pending until the appeal is declared admitted under Order XLV of the Civil Procedure Code is 873 too narrow and does not give full and proper scope to the meaning of the word 'exercisable ' in the Article.
| The respondent imported certain goods and claimed in its Bills of Entry that the imported goods fell under Tariff Item No. 84.60.
The Customs Authorities rejected the claim by holding that the goods were classifiable under Tariff Item No. 73.15(2).
The respondents preferred an appeal before the Collector of Customs which was also dismissed.
Thereafter, the respondent filed a second appeal before the Customs, Excise and Gold (Control) Appellate Tribunal con tending that in view of the earlier decision of a Bench of three members of the Tribunal in Bakelite Hylam Ltd. Bombay E.L.T. 240 an identical classification ought to have been adopted by the Customs authorities for identical goods.
By its order dated 22.10.1986 a Bench of two members of the Tribunal stated that they doubted the correctness of the earlier decision of a Bench of the three members of the Tribunal and they referred the case to the President of the Tribunal for constituting a larger Bench.
By its order dated 4.3.1987 the President of the Tribunal referred the case to a larger Bench of five members.
The respondent filed a writ petition in the High Court challenging the orders of the Bench of two members and that of the President of the Tribunal, which struck down both the orders by holding that the Bench of two members ought to have followed the earlier decision of the larger Bench of 3 judges and a reference of the case to a still larger Bench was contrary to judicial precedent and judicial discipline.
In appeal to this Court, it was contended on behalf of the Union of India that Section 129 C of the empowers the Presi 790 dent of the Tribunal to constitute larger Benches to resolve conflicts in opinion arising between members of a Bench or between Benches of the Tribunal.
The Tribunal has ample powers to regulate its own procedure, apart from the express provisions of the statute in that behalf.
On behalf of the respondent, it was contended that the Tribunal is a creature of the Statute.
Its jurisdiction is limited to the specific powers conferred by the statute.
It has no inherent jurisdiction and its powers are not plenary and are limited to the express provisions contained in the statute.
Allowing the appeal, this Court, HELD: 1.
There is no doubt that the Tribunal functions as a. Court within the limits of its jurisdiction.
It has all the powers conferred expressly by the statute.
Further more, being a judicial body, it has all those incidental and ancillary powers which are necessary to make fully effective the express grant of statutory powers.
Certain powers are recognised as incidental and ancillary, not because they are inherent in the Tribunal, nor because its jurisdiction is plenary, but because it is the legislative intent that the power which is expressly granted in the assigned field of jurisdiction is efficaciously and meaningfully exercised.
[794F G] 1.1 Where an Act confers a jurisdiction, it impliedly also grants the power of doing all such acts, or employing such means, as are essentially necessary to its execution.
[795A] Maxwell on Interpretation of Statutes, Eleventh edition and Income Tax Officer, Cannanote vs M.K. Mohammad Kunhi, 15, referred to. 2.
It is true that sub section (5) refers to difference of opinion arising amongst members of a Bench in a particu lar case, and not specifically where the members of a Bench doubt the correctness of an earlier decision.
However, section 129 C confers power of reference upon the President.
That power should be construed to be wide enough to enable the President to make a reference where members of a Bench find themselves unable to decide a case according to what they perceive to be the correct law and fact because of an impediment arising from an earlier decision with which they cannot honestly agree.
In such cases, it is necessary for the healthy functioning of the Tribunal that the President should have the requisite authority to refer the case to a larger 791 Bench.
That is a power which is implied in the express grant authorising the President to constitute Benches of the Tribunal for effective and expeditious discharge of its functions.
[795H; 796A B] 2.1 It is true that a Bench of two members must not lightly disregard the decision of another Bench of the same Tribunal on an identical question.
This is particularly true when the earlier decision is rendered by a larger Bench.
The rationale of this rule is the need for continuity, certainty and predictability in the administration of justice.
Persons affected by decisions of Tribunals or Courts have a right to expect that those exercising judicial functions will follow the reason or ground of the judicial decision in the earlier cases on identical matters.
Classification of particular goods adopted in earlier decisions must not be lightly disregarded in subsequent decisions, lest such judicial inconsistency should shake public confidence in the adminis tration of justice.
It is, however, equally true that it is vital to the administration of justice that those exercising judicial power must have the necessary freedom to doubt the correctness of an earlier decision if and when subsequent proceedings bring to light what is perceived by them as an erroneous decision in the earlier case.
In such circum stances, it is but natural and reasonable and indeed effica cious that the case is referred to a larger Bench.
[795B E]
| The appellant filed a suit for the recovery of money as price of goods supplied against the Ex Ruler of Jaipur.
Subsequently section 87 B was introduced in the Code of Civil Procedure making the provisions of section 86 in respect of suits against rulers of foreign States applicable to the rulers of former Indian States.
The Ex Ruler raised the plea that the suit was incompetent as the consent of the Central Government had not been obtained as required by section 87 B.
The appellant contended: (i) that section 87 B violated article 14 Of the Constitution and was void, (ii) that section 87 B did not apply to the continuation of a suit pending at the time when section 87 B was enacted but only to the filing of a suit after the enactment of that section.
Held, that section 87 B did not violate article 14 Of the Constitu tion and was not void.
Section 87 B of the Code of Civil Procedure merely continued the privilege which was formerly enjoyed by the Rulers of Indian States and in regard to which the covenants entered into by the Ex Rulers and the Government of India provided for their continuance.
This agreement about the privileges was further assured by article 362 Of the Constitution.
The Ex Rulers thus formed a class and the special legislation was based upon historical considerations applicable to them as a class.
The classification was based on a distinction which was real and substantial and it bore a just relation to the object sought to be attained.
Held, further, that the suit was incompetent against the Ex Ruler of Jaipur.
The protection of section 87 B read with section 86 applied both to the filing of a suit and to its, pursuit through the courts.
Section 86 provides that "No Ruler. . may be sued in any court. . .
A person is "sued" not only when the plaint is filed against him, but is "sued" also when the suit remained pending against him.
The word "sued" covers the entire proceedings in an action.
Consequently, the consent of the Central Government was necessary not only for the filing of the suit against the Ex Ruler but also for its continuation from the time consent was required.
703 Held, further, that section 87 B was on its terms applicable to pending suits and there was no saving in favour of pending actions.
K. C. Mukherjee vs Mst.
Rath Ratan Kuer, Pat. 268, applied.
| Where at the hearing of an appeal filed by special leave from a decision of the High Court in a Writ Petition filed there under article 226 of the Constitution of India against an order of the Payment of Wages Authority, the Court considered that there was some force in the contention relating to the jurisdiction of the Authority concerned but did not decide that question on the view that as there had been no failure of justice the Court would not interfere under its powers under article 136, and the appellant applied for a review of the judgment 15 114 Held, that wide as are the powers of the Supreme Court under article 136 of the Constitution, its powers are discretionary and though special leave had been granted the Court was not bound to decide the question of jurisdiction of the inferior tribunal or court where the decision of the inferior tribunal or court had been taken to a higher tribunal which undoubtedly had jurisdiction and from the decision of which the special leave was granted if on the facts and circumstances of the case it came to the conclusion in dealing with the appeal under that Article that there was no failure of justice.
A. M. Allison vs B. L. Sen, ; , relied on.
|
etition No. 19 of 1961.
Petition under article 32 of the Constitution of India for enforcement of Fundamental Rights.
A. V. Viswantha Sastri and D. N. Mukerjee, for the petitioners.
Bajrang Sahai and section P. Yarma, for the respondents.
833 1962.
March 14.
The Judgment of the Court was delivered by AYYANGAR J.
We consider that this petition under article 32 of the Constitution is entirely devoid of merits and deserves to be dismissed as misconceived as it does not involve any question of the infringement of any fundamental right.
The petition is substantially for the issue of a writ of prohibition directing the Collector of Hazaribagh not to proceed with an enquiry pending before him under section 4(h) of the, Bihar Land Act and a writ of cortical to quash the proceedings.
The property regarding which a tension is raised that the fundamental rights of the petitioner under Arts.19(1)(f) and 31(1) of the constitution are alleged to have been infringed, is a. plot of land within the municipal limits of Hazaribagh in Bihar together with certain buildings and structures thereon.
The property originally belonged to the Ramgarh Raj.
There is a dispute its to the manner in which this property was being enjoyed by the then proprietors and so we shall at this stage refrain from saying anything about it.
On January 16, 1948 the Raja of Ramgarh granted a lease of this property in favour of his younger brother Basant Narain for a term of 99 years.
On April 7, 1949 the Raja settled his reversionary interest in the property for the benefit of a, Trust under a registered deed of settlement The estate, of Ramgarh was notified under section 3 (1) of the, Bihar Land Reforms Act (Bihar I of 1950) for being taken over by the Government of Bihar and in consequence the estate statutorily vested in the State on and from November 3, 1951.
Section 4(h) of the Bihar Land Reforms Act enacts: "The collector shall have power to make inquiries in respect of any transfer including the settlement or lease of any land comprised in such estate or the transfer of any kind of 834 interest in any building used primarily as office or kutcbery for the collection of rent of such estate or tenure or part thereof, made at any time after the first (lay of January 1946 and if he is satisfied that such transfer was made with the object of defeating any provisions of this Act or causing loss to the State or obtaining higher compensation thereunder the Collector may, after giving reasonable notice to the parties concerned to appear and be heard and with the previous sanction of the State Government, annul such transfer, dispossess the person claiming under it and take possession of such.
property on such terms as may appear to the Collector.
to be fair and equitable.
" It will be noticed that the lease in favour of the Raja 's younger brother was dated January 16, 1948 and therefore was well within the period specified in the provision.
It was the contention of the State that the buildings on the property which were the subject of the lease dated January 16, 1948 were being used by the Raj primarily as an office or kutcheri for the collection of rent a fact which however was disputed and is a subject of contest in the proceedings now sought to be quashed.
On November 27, 1955 a notice was issued to Basant Narain to show cause why the lease executed in his favour on January 16, 1948 should not beset aside under the power conferred upon the Collector by section 4(h).
Basant Narain submitted his objections and stated that the leased properties were not covered by section 4(b).
Before however this enquiry was completed, Basant Narain surrendered his leasehold interest to the assignee of the reversion, viz., the Trust, by a registered deed dated January 1, 1957.
Subsequently on June 1, 1959 the Trust which thus became entitled to the entire interest in the property in its turn leased the property to one Bansidhar and about a month later, on July 3, 1959 835 Bansidhar assigned his leasehold interest in the property to the petitioner company and that is how the petitioner came upon the scene.
On November 13,1959 the Collector pawed an order cancelling the lease.
The petitioner who laid claim to a title to the property under the assignment in its favour dated July 3, 1959, applied to the Collector to set aside his order both on the merits and also on the ground that the order of November 13, 1959 had been passed to its prejudice without giving it an opportunity to make its objections even though by that date it had obtained title to the property and therefore a locus standi to be heard.
We are not now concerned with the correctness or otherwise of the contention raised by the petitioner, because the State of Bihar set aside the order of the Collector and directed a re enquiry and in this re enquiry the petitioner filed a petition before the Collector on August 9, 1960 setting out its case.
It was during the progress of this last enquiry that the petitioner moved this Court by the present petition for the reliefs which we have already set out.
Pausing here it is necessary to add that the constitutional validity of section 4(h) is not challenged and the case therefore turns on whether the property satisfies the conditions on which the section is attracted.
The relief sought in this petition is based on two allegations: (1) that the land on which the buildings stand is raiyati land and therefore could not be taken possession of by the State under the Bihar Land Reforms Act and (2) that the buildings standing thereon were previously used for the residential purpose of the ' Raja and his family and not as a kutcheri.
The enquiry has been proceeding before the Collector in regard to these two points and it may be mentioned that when the petitioner applied to this Court for a stay of proceedings before the Collector,, this Court passed an order permitting the enquiry to continue ' though it stayed the passing of 836 any order by the State Government.
It will thus be seen that if the contention of the State is correct as regards the tenure of the property and as regards the purpose for which the buildings were used, the title of the State to the property would be made out and the petitioner could have no legitimate grievance.
If, on the other hand, the petitioner establishes in the enquiry the case that it has put forward in the petition it is bound to succeed.
Thus the question whether petition has any right to the property which it claims depends wholly on questions of fact which are plainly within the jurisdiction of the authorities constituted under the Bihar Land Reforms Act.
Before a party can complain of an infringement of his fundamental right to hold property he must establish that he has title to that property and if his title itself is in dispute and is the subject of adjudication in proceedings legally constituted, he cannot obviously put forward any claim based on his title until as a result of that enquiry he is able to establish his title.
It is only thereafter that the question whether his rights in or to that property have been improperly or illegally infringed could arise.
In the circumstances we consider that the petitioner can complain of no infringement of its fundamental right, as to justify a petition under article 32.
The petition is dismissed with costs.
Petition dismissed.
| The property regarding which the contention is raised that the fundamental rights of the petitioners under articles 19(1) (f) and 31 ( 1) of the Constitution are alleged to 832 have been infringed is a plot of land within the Municipal limits of Hazaribagli with certain buildings and structures thereon,which originally belonged to the Raja of Ramgarh.
On January 16, 1948, the Raja leased this property to N for a term of 99 years and sometime thereafter settled his reversionary interest of the property for the benefit of a Trust.
The estate of Ramgarh was notified under section 3(1) of the Bihar Land Reforms Act for being taken over by the Government of Bihar and in consequence, the estate statu torily vested in the State of Bihar.
A notice was issued to N to show cause why the lease executed in his favour should not be set aside under s.4(h) of the act as the lease was executed well within the period specified under section 4(h).
N submitted objections standing that these properties were not covered by section 4(h).
During the pendency of the enquiry N surendered his leasehold to the trust.
The trust leased the property to one 1, who assigned his household interest in the property to the petitioner Company.
The present sought to quas the said proceedings under section 4(h) pending before the Collector wherein an enquiry was having held as to the manner in which the property in, question was being enjoyed by tile Raja of Ramgarh prior to the transfer, by lease for 99 years.
The question is whether any fundamental rights of the petitioner have been infringed by the enquiry being held.
Held, that before a party could complain of an infringement of his fundamental rights to hold property he must establish that be has title to that property and if that title itself is in dispute and is the subject of adjudication in proceedings legally constituted,the cannot obviously put forward any claim based on such title until as a result of that enquiry his title established.
It is only thereafter that the question whether his rights in or to that property have been improperly or illegally infringed could arise.
| The right to exploit a bamboo coup in the Hazaribagh district of Bihar was auctioned in August 1970.
The reserve price was Rs. 95,000/but the appellant 's bid of Rs. 92,001/ being the highest was accepted by the Divisional Forest Officer.
The petitioner deposited the security required and executed an agreement.
The Divisional Forest Officer about the auction sale to the Conservator of Forests, Hazaribagh Circle .
As the price for which the coup was provisionally settled exceeded Rs. 50,0001 the Conservator of Forests forwarded the papers regarding the auction sale to the Deputy Secretary to the Government of Bihar, Forest Department for confirmation of the acceptance, by the Go Since provisional settlement was made for an amount less than the reserve price the matter was also referred to the Finance Department.
When the matter was pending the appellant expressed his willingness to take the settlement at the reserve price of Rs., 95,000/ by his communication dated October 26, 1970.
The appellant thereafter filed an application on November 3, 1970 praying for settlement of the coup on the basis of the highest bid.
The Minister of Forest by his proceedings dated November 27, 1970 directed that the coup may be settled with the highest bidder viz. the appellant at the reserve price.
A telegram was sent by the Government to the Conservator of Forests, Hazaribagh Circle on November 28, 1970 with copy of the same to the Conservator of Forest, Bihar co the auction sale at the reserve price of Rs, 95,000/.
As no intimation was received by the Divisional Forest Officer he did not communicate the proceedings of the Minister to the appellant.
On December 24, respondent No. 6 filed a petition to the Government offering to take the settlement of the coup in question for Rs. 101125/ .
The Minister, by his proceedings dated December 13, 1970 cancelled the settlement of the coup with the appellant and settled the same with respondent No. 6 for Rs. 101125/ . 'The appellant filed a writ petition in the high Court contending that there was a concluded contract when the bid of the appellant was accepted by the Divisional Forest Officer though that was subject to the confirmation by the Government and when the Government confirmed acceptance by its proceedings dated number 27, 1970 it was no longer within the Dower of the Government to make the settl ement of the coup upon the 6th respondent.
It was also contended that the settlement of the coup in favour of the 6th respondent was invalid because (a) rule 10(1) of the Rules of Executive Business made under article 166(3) of the Constitution as relaxed by the letter of.
the Deputy Secretary to the Government dated November 27, 1967 pro hibited the grant of lease by private treaty and (b) the requirement of 12 L1031SupCI/72 630 prior consultation in r. 10(1) with the Finance Department was mandatory and had not been complied with.
The High Court rejected the appellant 's contentions.
In appeal to this Court by special leave.
HELD : (1) The acceptance of the appellant 's offer was subject to confirmation by the Government and in the absence of such confirmation them could be no concluded contract.
The appellant 's bid was for Rs;.
92001/ .
The acceptance of the bid by the Divisional Forest Officer was therefore, subject to confirmation by the Government.
The proceeding of the Minister dated November 27, 1970 would show that he did not confirm acceptance of the offer by the Divisional Forest Officer.
What the Minister did was not to confirm the acceptance made by the Division 31 Forest Officer but to accept the offer made by the appellant in his communication dated October 26, 1970 that he would take the coup for the reserved price of Rs. 95,000/.
There was, there for, no confirmation of the acceptance of the bid to take the coup in the settlement for the amount of Rs. 92,001/ .
[634 G 635B] If the offer that was accepted was the offer contained in the communication of the appellant dated October 26, 1970 it could not be said that there was any communication of the acceptance of that offer to the appellant.
The telegram sent to the Conservator of Forest, Hazaribagh by the Government on November 28, 1970 could not be considered as a communication of the acceptance of that offer to the appellant.
The acceptance , of the offer was not even put in course of transmission to the appellant; and so even assuming that acceptance need not come to the knowledge of the offer or, the appellant could not contend that there was a concluded contract on the basis of his offer contained in his communication dated October 26, 1970, as the acceptance of that offer was not put in the course of transmission.
Apart from that the appellant himself revoked the offer made by him on October 26, 1970 by his letter dated November 3, 1970 in which he stated.
that the coup may be settled upon him at the highest bid made by him in, the auction.
There was, thus no concluded contract between the appellant and the government.
[635B D] The Rajanagaram Village Cooperative Society, vs Veeraswami Mudaly, , distinguished.
Somasundaram Pillai vs Provincial Government of Madras, A.I.R. 1947 Madras, 366, applied.
(ii)Rule 10(1) in so far as it was relevant to the present case only says that no department shall without prior consultation with the Finance Department authorise by any order the lease of license of mineral or forests.
The rule read in the context of its relaxation as mentioned in the letter of the Deputy Secretary would only show that consultation with the Finance Department is not necessary for a lease if lease is of land of the value of more than Rs. 50,0001 and 'is granted in pursuance of public auction held in conformity with the conditions mentioned in the letter of the Deputy Secretary.
The rule where before or after relaxation did not prohibit the grant of leave by private treaty.
[637C] (iii)It was clear from records relating to the proceedings for the grant of the lease in favour of the 6th respondent that the Finance Department was not consulted before the Minister passed the order on December 13, 1970.
to grant lease.
It could not be said that rule 10(1) in so far Is it requires prior consultation with the Finance Department is only drirectory and therefore even if there was no, prior consultation the settlement 631 was valid.
The negative or prohibitive language of rule 10(1) is a strong indication of the intent to make the rule mandatory.
Further rule 10(2) makes it clear that where prior consultation with the Finance Department is required for a proposal and the department on consultation, does not agree to the proposal, the department originating the proposal can take no further action on the proposal.
The Cabinet alone would be competent to take a decision.
Prick consultation is, therefore, an essential prerequisite to the exercise of power.
The, order passed by the Minister of Forest, Government of Bihar on December 13, 1970 settling the coup in favour of the 6th respondent was, therefore bad and the order must be quashed.
[637EF; 638D F] Dattatreya Moreshwar Pangerkar vs The State of Bombay and Others.
applied.
| The Pepsu Tenancy and Agricultural Lands Act XIII of 1955 came into force on March 6, 1955, whereby it was provided that every land owner would be entitled to select any parcel or parcels of land not exceeding the permissible limit, which was fixed at 30 standard acres.
The principal Act was amended in 1956 by the inclusion of Chapter 4A which provided for the Government taking over the surplus lands in the hands of a land owner.
Another Amendment Act III of 1959 which was made operative from January 19, 1959 incorporated into the principal Act section 32(FF) which provided that except in certain specified cases no transfer or other disposition of land effected after 21st .August 1956 could affect the rights of the State Government under the Act.
In 1962 the Pepsu Tenancy and Agricultural Lands (Amendment and Validation) Act XVI of 1962 was passed.
Section 7 of this Act introduced a new section 32KK into the principal Act whereby it was provided that land owned by a Hindu undivided family would be deemed to be land of one land owner and, a partition of land owned by such a family shall be deemed to.
be a disposition of land for the purposes of section 32 FF.
Section 1(2) of 'the Amendment Act provided that Sections 2, 4, 5, 7 and 10 "shall be deemed to.
have come into force on the 30th day of October, 1956 and the remaining provisions of this Act shall come into force at once,".
The first Appellant together with his son the second Appellant and two other sons were members of a joint Hindu family which owned agricultural lands in Punjab.
The Appellant 's family divided their family property by a Registered Partition Deed on September 6, 1956 and necessary changes were thereafter made in the mutation register.
After Act III of 1959 ' came into force, the Collector of Sangrur started proceedings under Chapter 4A of the Act for determining the surplus lands in the hands of the appellant.
Despite the representations of the Appellants, the Collector ignored the partition effected in the family 'and held that about 18 standard acres were surplus in their hands.
Appeals filed by the Appellants before the Commissioner, Patiala Division and the State Government were rejected.
The Appellants then challenged the orders of these authorities by a writ petition under article 226 of the Constitution, but this was dismissed ' by a Single Judge of the High Court who took the view that as section 32 KK had become a part of the principal Act, the words "this Act" in that section must refer to the principal Act and not to Section 7 of the Amendment Act.
A Division Bench of the High Court dismissed an appeal following an earlier decision of the Court in Bir Singh and Ors.
vs The State of Punjab and Ors.
In the appeal to this Court there was no dispute that if the partition entered into in the family was.
taken into consideration, the lands held by the different sharers would ' be within the permissible limits.
348 HELD: The orders impugned in the writ petition must be quashed.
A reading of the various provisions of the 1962 Act show that the legislature intended that section 7 of that Act which introduced section 32 KK into the principal Act should be deemed to have come into force on the 30th October 1956.
The words "this Act" in section 7 of the Amendment Act (section 32 KK of the principal Act) were intended to refer to the Amendment Act 'and not to the principal Act.
It is true that ordinarily when a section is incorporated into the principal Act by 'means of an amendment, reference in that section to "this Act" means the principal Act.
But in view of sub section
(2) of section 1 of the Amendment Act of 1962 that construction had become impermissible.
Every statute has to be construed as a whole and the construction given should be 'a harmonious one.
It was not permissible for the Court to.
proceed on the basis that the legislature had enacted sub section
(2) of section 1 of the Amendment Act 1962, by oversight.
If any mistake had crept into that section it was for the legislature to correct the same.
[352 C F]
| No question of infringement of any fundamental right under article 21 arises where the detention complained of is by a private person and not by, a State or under the authority or orders of a State, and the Supreme Court will not, therefore, entertain an application for a writ of have a corpus, under article 32 of the Constitution.
Consequently a petition under article 32 of the Constitution for a writ of habeas corpus founded on article 21 and directed against a father for alleged detention of his daughter does not lie.
A. K. Gopalan vs The State of Madras ([1950] S.C.R. 88) and P. D Shamdasani vs Central Bank of India ([1952] S.C.R. 391), relied on.
| The petitioner, the editor of a newspaper, was detained under r. 30(1)(b) of the Defence of India Rules, 1962.
He filed a petition under article 32 of the Constitution for a writ of habeas corpus challenging the legality of the detention order on various grounds.
Dismissing the petition, HELD:Rule 30 (1) (b) cannot be said to be ultra vires of section 3 (2) (15)(i) of the Defence of India Act for the reason that it does not state that the satisfaction of the authority making the order of detention has to be on grounds appearing to it to be reasonable.
The rule requires only that the detaining authority must be satisfied that the detention is necessary for the purposes mentioned and that is what the latter part of the section under which it was made also says.
This part does not contain any requirement as to satisfaction on reasonable grounds.
The rule has clearly been made in terms of the section authorising it.
[211 F] Article 352 of the Constitution does not require the proclamation to state the satisfaction of the President about the Emergency.
The Article requires only a declaration of emergency threatening the security of India by one of the causes mentioned.
The words "to that effect" can have no other meaning.
A proclamation ceases to have effect only by one of the events mentioned in cl. 2 of article 352 of the Constitution.[212 C] Section 3(2)(15)(iv) of the Defence of India Act and r. 30 A of the Defence of India Rules, does not give a right to make a representation.
Their effect is to provide a review of the detention order by the authorities and in the manner mentioned.
Rule 23 of the Defence of India (Delhi Detenus) Rules, 1964, states that a detente will be allowed to interview a legal practitioner for the Purpose of drafting his representation against his detention.
[213 C D].
The fact that newspapers and men connected with them may be dealt with under other provisions of the Art and Rules does not prevent detention of such persons under r. 30(1)(b) of the Defence of India Rules.
[213 H] The order need not mention the part of India which was to be Prejudicially affected by the acts of the detenue.
| The petitioners (workers) challenged the legality of the sale of certain plants and equipment of the Sindri Fertilizer Factory, whereby the highest tender submitted by respondent No. 4 was accepted by the Tender Committee and approved by the Board of Directors.
The petitioners, amongst others, contended that (i) that the decision to sell the plants and equipment of the Factory was taken without calling for any report;(ii) the original tender of Rs. 7.6 crores was unaccountably reduced to Rs. 4.25 crores; (iii) the price of the plants and equipment, which was ultimately realised in the sale was manipulated with ulterior purposes; (iv) the decision to restrict fresh offers, in respect of the reduced equipment, to the tenderers who had submitted tenders for more than Rs. 4 crores was unfair and arbitrary; (v) the said decision resulted in a huge loss to the public exchequer and (vi) the sale had jeopardised the employment of 11000 odd workers who faced retrenchment as a result of the sale.
On behalf of petitioners 3 and 4 it was further contended that the sale will deprive them of their fundamental right under Article 19(1) (g) to carry on their occupation as industrial workers and that the sale is in violation of the provisions of Article 14 of the Constitution being arbitrary and unfair.
The respondents raised a preliminary objection to the maintainability of the writ petition on the ground that the petitioners have no locus standi and that the impugned sale did not violate any of the fundamental rights of the petitioners.
Dismissing the petition: ^ HELD (By the Court) The petitioners ' right under article 19(1)(g) to carry on their occupation as industrial workers was not affected by the sale, nor was their fundamental right, if any, under Article 14 of the Constitution violated.
[60 A] (Per Chandrachud, C.J., Fazal Ali & Koshal, JJ.) 1.
The violation of a fundamental right is the sine qua non of the exercise of the right conferred by Article 32.
53 The jurisdiction conferred on the Supreme Court by Article 32 is an important and integral part of the basic structure of the Constitution because it is meaningless to confer fundamental rights without providing an effective remedy for their enforcement, if and when they are violated.
A right without a remedy is a legal conundrum of a most grotesque kind.
[59 E F] 2.
Whereas the right guaranteed by Article 32 can be exercised for the enforcement of fundamental rights only, the right conferred by Article 226 can be exercised not only for the enforcement of fundamental rights but for any other purpose.
[59 E] 3(i).
There is no substance in the grievance that the petitioners ' right under Article 19(1)(g) is violated or is in the imminent danger of being violated by the impugned sale, since not only did the sale not affect the employment of the workers employed in the Factory, but those of them who were rendered surplus from time to time on account of the closure of the plants were absorbed in alternate employment in the same complex.
[60 C, F G] (ii) The right of petitioners 3 and 4 and of the other workers is not, in any manner, affected by the impugned sale.
The right to pursue a calling or to carry on an occupation is not the same thing as the right to work in a particular post under a contract of employment.
If the workers are retrenched consequent upon and on account of the sale, it will be open to them to pursue their rights and remedies under the Industrial Laws.
The closure of an establishment in which a workman is for the time being employed does not by itself infringe his fundamental right to carry on an occupation which is guaranteed by Article 19(1)(g) of the Constitution.
[60 G H, 61 A] 4.
Article 19(1)(g) confers a broad and general right which is available to all persons to do work of any particular kind and of their choice.
It does not confer the right to hold a particular job or to occupy a particular post of one 's choice.
Even under Article 311 of the Constitution, the right to continue in service falls with the abolition of the post in which the person is working.
The workers in the instant case can no more complain of the infringement of their fundamental right under Article 19(1)(g) than can a Government servant complain of the termination of his employment on the abolition of his post.
The choice and freedom of the workers to work as industrial workers is not affected by the sale.
The sale may at the highest affect their locum, but it does not affect their locus, to work as industrial workers.
[61 B D] 5.
In the instant case, it is quite difficult to hold that the decision to sell the plants and equipment of the Factory was arbitrary, unreasonable or mala fide.
The real drive of the petition is against the decision of the Board to sell the plants and equipment.
It is that decision which is stated to furnish the cause to complain of the violation of the right conferred by Article 14, fairness, justness and reasonableness being its implicit assumptions.
[64 D F] 6.
As far as possible, sales of public property, when the intention is to get the best price, ought to take place publicly.
The vendors are not necessarily bound to accept the highest or any other offer, but the public at least gets the satisfaction that the Government has put all its cards on the table.
One cannot exclude the possibility here that a better price might have been realised in a fresh public auction but such possibilities cannot vitiate the sale or justify the allegation of mala fides.
[64 G H, 65 A B] 54 7.
It cannot be held that the petitioners ' rights, if any, under Article 14 are violated, in view of the fact that neither the decision to sell nor the sale proceedings were unreasonable, unjust or unfair.
But if and when a sale of public property is found to be vitiated by arbitrariness of mala fides, it would be necessary to consider the larger question as to who has the right to complain of it.
[65C, D E] 8.(i) The maintainability of a writ petition which is correlated to the existence and violation of a fundamental right is not always to be confused with the locus to bring a proceeding under Article 32.
These two matters often mingle and coalesce with the result that it becomes difficult to consider them in water tight compartments.
The question whether a person has the locus to file a proceedings depends mostly and often on whether he possesses a legal right and that right is violated.
But, in an appropriate case, it may become necessary in the changing awareness of legal rights and social obligations to take a broader view of the question of locus to initiate a proceeding, be it under Article 226 or under Article 32 of the Constitution.
[65 E G] (ii) The Court might not have refused relief to the workers if it had found that the sale was unjust, unfair or mala fide.
If a public property is dissipated, it would require a strong argument to convince the Court that representative segments of the public or at least a section of the public which is directly interested and affected would have no right to complain of the infraction of public duties and obligations.
Public enterprises are owned by the people and those who run them are accountable to the people.
The accountability of the public sector to the Parliament is ineffective because the parliamentary control of public enterprises is "diffuse and haphazard".
[65 G H, 66 A] (Per Bhagwati and Krishna Iyer, JJ.
concurring) 1.
Public law, as part of the panorama of the developmental process, must possess the specific techniques of public sector control within well defined parameters which will anathematise administration by court writ and interdict public officials handling public resources in disregard of normatice essentials and constitutional fundamentals.
In a society in which the State had thrust upon it the imperative of effectuating massive transformation of economy and social structure the demands upon the legal order to inhibit administrative evils and engineer developmental progress are enormous, though novel.
[68 E & 69 A B] 2.
It is important to underscore the vital departure from the pattern of judicial review in the Anglo American legal environment because the demands of development obligated by Part IV compel creative extensions to control jurisprudence in many fields, including business administrative law, contract law, penal law, fiscal law and the like.
[69 C D] 3.
Judicial interference with the Administration cannot be meticulous.
The court cannot usurp or abdicate, and the parameters of judicial review must be clearly defined and never exceeded.
If the Directorate of a Government company has acted fairly, even if it has faltered in its wisdom, the court cannot, as a super auditor, take the Board of Directors to task.
This function is limited to testing whether the administrative action has been fair and free from the taint of unreasonableness and has substantially complied with the norms of procedure set for it by rules of public administration.
[71 A C] 55 4.
Locus Standi must be liberalized to meet the challenges of the time.
Ubi jus ibi remedium must be enlarged to embrace all interests of public minded citizens or organisations with serious concern for conservation of public resources and the direction and correction of public power so as to promote justice in its triune facets.
[71 D E] 5.
An officious busybody picking up a stray dispute or idle peddlar of blackmail litigation through abuse of the process of the court cannot be permitted to pollute the court instrumentality, for private objectives.
Public justice is always and only at the service of public good, never the servant or janitor of private interest or personal motive.
[72 B C] 6.
Public interest litigation is part of the process to participate justice and 'standing ' in civil litigation of that pattern must have liberal reception at the judicial door steps.
[74 E F] 7.
Certainly, it is not part of the judicial process to examine entrepreneurial activities to ferret out flaws.
The court is least equipped for such oversights, Nor, indeed, is it a function of the judges under the constitutional scheme.
The internal management, business activity or institutional operation of public bodies cannot be subjected to inspection by the Court.
To do so, is incompetent and improper and, therefore, out of bounds.
Nevertheless, the broad parameters of fairness in administration, bona fides in action, and the fundamental rules of reasonable management of public business, if breached will become justiciable.
[77 A C] 8.
Article 43A of the Constitution confers, in principle, partnership status to workers in industry and therefore technical considerations of corporate personality cannot keep out those who seek to remedy wrongs committed in the management of the public sector.
[76 G] Municipal Council, Ratlam vs Shri Vardhichand and Ors. ; Wisconsin Law Review, Vol.
1966: 999 at P. 1064 and M. Cappelletti, Rabels Z (1976) 669 at 672 referred to.
| The Government of Jammu and Kashmir on the basis of the report of the commission of enquiry set up by it demoted the respondent who had been suspended earlier.
The respondent moved the Jammu and Kashmir High Court under article 32(2A) of the Constitution of India as applied to the State of Jammu and Kashmir for a writ, inter alia, questioning the validity of the order suspending and demoting him, alleging violation of rules of natural justice by the commission of enquiry and breach of statutes and rules of service.
Articles 226 and 311(2) of the Constitution of India bad not been applied to the State of Jammu 970 and Kashmir.
The High Court acting under article 32(2A) set aside the orders suspending and demoting the respondent.
Held, that the High Court had no powers to act under article 32(2A) of the Constitution of India as the writ petition did not disclose a violation of any fundamental right.
Held, further, that the breach of a law by the ' Government, if any, did not amount to a denial of the equal protection of the laws, as it had not ever been alleged by the respondent that the benefit of that law had been designedly denied only to him.
| The petitioners are certain under trials in the State of Bihar.
In the Writ Petitions filed by them under Article 32 of the Constitution they complained that after their arrest, whilst under police custody they were blinded by the members of the police force, acting not in their private capacity but as police officials and their fundamental right to life guaranteed under Article 21 was therefore, violated and for this violation the State is liable to pay compensation to them.
On an application made by the petitioners, several documents including C.I.D. Reports submitted by Shri L.V. Singh, D.I.G., C.I.D, (Anti Dacoity) on December 9,1980 and other dates were called for by the Court.
The State raised an objection to the production of these documents on the ground that they are protected from disclosure under sections 162 to 172 of the Code of Criminal Procedure, 1973 and that the petitioners are not entitled to see them or to make any use of them in the present proceedings.
Overruling the State objection and directing the Registry to supply copies of these documents produced before the Court, to the petitioner 's advocate and the advocate appearing as amicus curiae, the Court ^ HELD: 1:1.
The reports submitted by Shri L.V. Singh setting forth the results of his investigation cannot be shut out from being produced and considered in evidence either under section 162 or 172 of the Criminal Procedure Code, even if they refer to any statements made before him and his associates during investigation, provided they are otherwise relevant under the provisions of the Indian Evidence Act.
In a writ petition against the State Government where the complaint is that the police officials of the State Government blinded the petitioners at the time of arrest or whilst in custody, the State Government cannot resist production of a report in regard to the truth or otherwise of the complaint, made by a highly placed officer pursuant to the direction issued by the State Government.
[163 B D] 1:2.
All the other reports covered by Items 2 to 5 of the Court 's order dated 16th February, 1981 are equally relevant and must, therefore, be produced and taken on record in the writ petition.
[164 B C] 146 2:1.
The procedure to be followed in a writ petition under Article 32 of the Constitution is prescribed under order XXXV of the Supreme Court Rules, 1966, and sub rule (9) of Rule 10 lays down that at the hearing of the rule nisi if the court is of the opinion that an opportunity be given to the parties to establish their respective cases by leading further evidence, the court may take such evidence or cause such evidence to be taken in such manner as it may deem fit and proper and obviously the reception of such evidence will be governed by the provisions of the Indian Evidence Act.
It is obvious, therefore, that even a statement made before a police officer during investigation can be produced and used in evidence in a writ petition under Article 32 of the Constitution provided it is relevant under the Indian Evidence Act and neither section 162 nor section 172 can be urged as a bar against its production or use.
[153 C E] 3:1.
When the Court trying the writ petition proceeds to inquire into the issue whether the petitioners were blinded by police officials at the time of arrest or whilst in police custody, it does so, not for the purpose of adjudicating upon the guilt of any particular officer with a view to punishing him but for the purpose of deciding whether the fundamental right of the petitioners under Article 21 has been violated and the State is liable to pay compensation to them for such violation.
The nature and object of the inquiry is altogether different from that in a criminal case and any decision arrived at in the writ petition on this issue cannot have any relevance much less any binding effect, in criminal proceeding which may be taken against a particular police officer.
[160 G H, 161 A B] 4.
The pendency of a criminal proceeding cannot be urged as a bar against the Court trying a civil proceeding or a writ petition where a similar issue is involved.
The two are entirely distinct and separate proceedings and neither is a bar against the other.
It may be that in a given case, if the investigation is still proceeding, the Court may defer the inquiry before it until the investigation is completed or if the Court considers it necessary in the interests of Justice, it may postpone its inquiry even after the prosecution following upon the investigation is terminated, but that is a matter entirely for the exercise of the discretion of the Court and there is no bar precluding the Court from proceeding with the inquiry before it merely because the investigation or prosecution is pending.
[161 D E] 5.
The fact in issue in the inquiry before the Court in the present writ petition is whether the petitioners were blinded by the members of the police force at the time of the arrest or whilst in police custody.
The several reports called for by the Court clearly relate to the issue as to how, in what manner and by whom the twenty four undertrial prisoners were blinded, for that is the matter which Shri L.V. Singh was directed by the State Government to investigate.
If that be so, the State cannot resist the production of these reports and their use as evidence in the present proceeding.
These reports are clearly relevant under section 35 of the Indian Evidence Act since they relate to a fact in issue and are made by a public servant in the discharge of his official duty.
A D] P.C.P. Reddiar vs section Perumal, ; ; Kanwar Lal Gupta vs Amar Nath Chawla, ; ; followed.
Jagdat vs Sheopal, A.I.R. 1927 Oudh 323; Chandulal vs Pushkar Rai, A.I.R. 1952 Nagpur 271; Lionell Edwards Limited vs State of West Bengal, A.I.R, , quoted with approval.
147 6.
Section 4 of the Criminal Procedure Code, 1973 makes it clear that the provisions of the Criminal Procedure Code are applicable where an offence under the Indian Penal Code or under any other law is being investigated, inquired into tried or otherwise dealt with.
[151 B C] 7.
Section 162 bars the use of any statement made before a police officer in the course of an investigation under Chapter XII, whether recorded in a police diary or otherwise, but, by the express terms of the Section, this bar is applicable only where such statement is sought to be used "at any inquiry or trial in respect of any offence under investigation at the time when such statement was made.
" If the statement made before the police officer in the course of an investigation under chapter XII is sought to be used in any proceeding other than an inquiry or trial or even at an inquiry or trial but in respect of an offence other than that which was under investigation at the time when such statement was made, the bar of section 162 would not be attracted.
[152 A C] 7:2.
Section 162 has been enacted for benefit of the accused and to protect him against overzealous police officers and untruthful witnesses.
But, this protection is unnecessary in any proceeding other than an inquiry or trial in respect of the offence under investigation and hence the bar created by the section is a limited bar.
It has no application in a civil proceeding or in a proceeding under Article 32 or 226 of the Constitution and a statement made before a police officer in the course of investigation can be used as evidence in such proceeding, provided it is otherwise relevant under the Indian Evidence Act.
[152 D, H, 153 A B] Tehsildar Singh and Another vs The State of Uttar Pradesh, [1959] Supp. 2 S.C.R. 875 at 890, applied.
Emperor vs Aftab Mohd. Khan, A.I.R. 1940 All. 291; Baliram Tikaram Maratha vs Emperor, A.I.R. 1945 Nagpur 1; Malakalaya Surya Rao vs Janakamma, A.I.R. 1964 A.P. 198; approved.
Sub section (2) of section 172 of the Criminal Procedure Code empowers the criminal court holding an inquiry or trial of a case to send for the police diary of the case and the criminal court can use such diary, not as evidence in the case, but to aid it in such inquiry or trial.
But, by reason of sub section (3) of section 172, merely because the case diary is referred to by the criminal court, neither the accused nor his agents are entitled to call for such diary nor are they entitled to see it.
If however the case diary is used by the police officer who has made it to refresh his memory or if the criminal court uses it for the purpose of contradicting such police officer in the inquiry or trial, the provisions of section 161 or section 145, as the case may be of the Indian Evidence Act would apply and the accused would be entitled to see the particular entry in the case diary which has been referred to for either of these purposes and so much of the diary as in the opinion of the Court is necessary to a full understanding of the particular entry so used.
[156 C D] Queen Empress vs Mannu, [1897] 19 All. 390, quoted with approval.
State of Bihar vs J.A.C. Saldhana, ; , referred to.
The bar against production and use of case diary enacted in section 172 is intended to operate only in an inquiry or trial for an offence and even this 148 bar is a limited bar, because in an inquiry or trial, the bar does not operate if the case diary is used by the police officer for refreshing his memory or the criminal court uses it for the purpose of contradicting such police officer.
This bar can obviously have no application where a case diary is sought to be produced and used in evidence in a civil proceeding or in a proceeding under Article 32 or 226 of the Constitution and particularly when the party calling for the case diary is neither an accused nor his agent in respect of the offence to which the case diary relates.
The present writ petition which has been filed under Article 32 of the Constitution to enforce the fundamental right guaranteed under Article 21 is neither an "inquiry" nor a "trial" for an offence nor is this court hearing the writ petition a criminal court nor are the petitioners, accused or their agents so far as the offences arising out of their blinding are concerned.
Therefore, even if the reports submitted by Shri L.V. Singh as a result of his investigation could be said to form part of "case diary" their production and use in the present writ petition under Article 32 of the Constitution cannot be said to be barred under section 172 of the Criminal Procedure Code.
[156 D G, 157 A B] 9:1.
It would not be right to extend the prohibition of section 172 to cases not falling strictly within the terms of the section, by appealing to what may be regarded as the principle or spirit of the section.
In fact to do so would be inconsistent with the constitutional commitment of the Supreme Court to the rule of law.
Either production and use of case diary in a proceeding is barred under the terms of section 172 or it is not, it cannot be said to be barred on an extended or analogical application of the principle supposed to be underlying that section, if it is not covered by its express terms.
In order that truth may emerge from the clash between contesting parties under the adversary system, it is necessary that all facts relevant to the inquiry must be brought before the Court and no relevant fact must be shut out, for otherwise the Court may get a distorted or incomplete picture of the facts and that might result in mis carriage of justice.
It is imperative to the proper functioning of the judicial process and satisfactory and certain ascertainment of truth that all relevant facts must be made available to the Court.
But the law may, in exceptional cases, in order to protect more weighty and compelling competing interests, provide that a particular piece of evidence, though relevant, shall not be liable to be produced or called in evidence.
Such exceptions are to be found, inter alia, in sections 122, 123 124, 126 and 129 of the Indian Evidence Act and sections 162 and 172 of the Criminal Procedure Code But being exceptions to the legitimate demand for reception of all relevant evidence in the interest of justice, they must be strictly interpreted and not expansively construed, "for they are in derogation of the search for truth".
[157 E H, 158 A C] United States vs Nixon, ; 41 Lawyers Edition (2nd series) 1039, quoted with approval.
The Court did not express any opinion regarding the two interesting questions, (i) whether an investigation carried out by a superior officer by virtue of a direction given to him by the State Government under section 3 of the Indian is an investigation under Chapter XII so as to attract the applicability of section 172 to a diary maintained by him in the course of such investigation and (ii) whether the report made by such officer as a result of the investigation carried out by him forms part of case diary within the meaning of section 172 of the Criminal Procedure Code.
[155 D G] 149
|
Appeal No. 407/61.
908 Appeal by special leave from the judgment and order dated August 23, 1960, of the Orissa High Court in O.J.C. No. 103 of 1959.
N.O. Chatterjee and P. K. Chatterjee, for the appellant, C. K. Daphtary, Solicitor General of India, B. R. L. Iyengar and P. D. Menon, for the respondents.
B.M. Patnaik, section N. Andley, Rameshwar Nath and P. L. Vohra, for the Intervener.
March 16.
The Judgment of the Court was delivered by WANCHOO, J.
This is an appeal by special leave against the judgment of the Orissa High Court.
The brief facts necessary for present purposes are these.
The appellant made an application to the State Government of Orissa in 1949 for grant of a mining lease for manganese ore over an area comprising 5400 acres situated in the district of Keonjhar.
The appellant was the first applicant for the lease of the aforesaid area, and subsequently other persons applied for lease of the same area including Messrs. Tata from and Steel Company Limited hereinafter referred to as Tatas), the intervener in the present appeal.
The Government of Orissa decided to grant the in favour of Tattas and in January 1956 referred the matter to the Central Government for its approval under r. 32 of the Mineral Concession Rules, 1949 hereinafter referred to as the Rules), which lays down that if more than one application regarding the same, land is received, preference shall be given to the application received first, unless the State Government, for any special reason, and with the prior approval of the Central Government decides to the contrary.
The appellant made a representation to the Central Government against the recommendation of the 909 State Government.
Eventually, on April 9, 1957, the Central Government turned down the recommendation of the State Government about the grant of the mining lease to Tatas.
It also directed that the applications received prior to the application of Tatas should be considered according to the Rules but added that in case the Government of Orissa desired to work the area on a departmental basis, the Central Government would have no objection to consider a proposal for that purpose.
Thereafter the State Government rejected the application of the appellant in December 1957 on the ground that the State Government proposed to arrange for the exploitation of the area in the public sector.
This was followed by an application for review to the 'Central Government under r. 57 of the Rules.
This application was rejected by the Central Government in June 1969.
Thereupon the appellant filed a petition under article 226 of the Constitution in the High Court in July 1959.
This petition was dismissed by the High Court on the ground that it had no jurisdiction to deal with the matter under article 226 as the final order in the case was passed by the Central Government which was located beyond the territorial jurisdiction of the High Court.
The appellant then applied to the High Court for a certificate to appeal to this Court, which was rejected.
He then asked for special leave from this Court, which was granted; and that how the matter has come up before us.
The main question raised before us is the limit of the jurisdiction of the High Court under article 226 in circumstances like those in the present case.
The contention on behalf of the appellant is that as the Central Government bad merely dismissed the review petition, the effective order rejecting the appellant 's application for the mining lease was that of the State Government and therefore the High Court would have jurisdiction to grant a writ 910 under article 226, and that the principle laid down in Election Commission India vs Saka Venkata Subba Rao(l) would not apply.
Reliance in this connection has been placed on the decision of this Court in The State of Uttar Pradesh vs Mohammed Nooh(2).
It is well settled by a series of decisions of this Court beginning with Saka Venkata Subba Rao 's case(1) that there is two fold limitation on the power of the High Court to grant a writ under article 226.
These limitation are firstly that the power is to be exercised throughout the territories in relation to which the High Court exercise jurisdiction, that is to say, the writs issued by the High Court cannot run beyond the territories subject to its jurisdiction, and secondly, that the person or authority to whom the High Court is empowered to issue such writs must be within those territories, which clearly implies that they must be amenable to its jurisdiction either by residence or location within those territories.
The view taken in this case has been recently reaffirmed by this Court in Lt. Col.
Khajoor Singh vs Union of India.
(3) Prima facie, therefore, as the final order in this case was passed by the Central Government which is not located within the territories over which the High Court has jurisdiction, the High Court will have no power to grant a writ in this case.
Learned counsel for the appellant however relies on the decision in Mohd. Nooh 's case (2) where it was held that it was not correct to say that an order of dismissal passed on April 20, 1948, merged in the order in appeal therefrom passed in May 1949, and the two orders in turn merged in the order passed in revision on April 22, 1,950, or that the original order of dismissal only became final on the passing of the order in revision.
It was further held that the order of dismissal was operative on its 1. ; 2. ; 3. ; 911 own strength and therefore no relief under article 226 could be granted against the order of dismissal passed in 1948 as article 226 was not retrospective in operation.
It is urged that if the order of dismissal in that case did not merge in the final order of revision which was passed in April 1950, after the Constitution came into force, there was no reason why the order of the State Government should be taken to have merged in the order of the Central Government in this case so as to deprive the appellant of his remedy in the High Court under article 226.
We are of opinion that the principle of Mohd. Nooh 's Case(1) cannot apply in the circumstances of the present case.
The question there was whether the High Court would have power to issue a writ under article 226 in respect of a dismissal which was effective from 1948, simply because the revision against the order of dismissal was dismissed by the State Government in April 1950 after the Constitution came into force.
It was in those circumstances that this Court held that the dismissal having taken place in 1948 could not be the subject matter of an application under article 226 of the Constitution for that would be giving retrospective effect to that Article.
The argument that the order of dismissal merged in the order passed in appeal therefrom and in the final order of revision was repelled by this Court on two grounds.
It was held (firstly) that the principle of merger applicable to decrees of courts would not apply to orders of departmental tribunals, and (secondly) that the original order of dismissal would be operative on its own strength and did not gain greater efficacy by the subsequent order of dismissal of the appeal or revision, and therefore the order of dismissal having been passed before the Constitution would not be open to attack under article 226 of the Constitution.
We are of opinion that the facts in Mohd. Nooh 's case (1) were of a special kind and (1) ; 912 the reasoning in that case would not apply to the facts of the present case.
Further, in A. Thangal Kunju Musaliar vs M. Venkitachalam Potti (1), though this Court was considering a matter in which the question which is before us was not directly in issue, it had occasion to consider certain decisions of certain High Courts which dealt with oases similar to the present case : (see p. 1213).
In those decisions orders had been passed by certain inferior authorities within the territories subject to the jurisdiction of the High Courts concerned, but they had been taken in appeal before superior authorities which were located out.
side the territories subject to the jurisdiction of the High Courts concerned.
In those circumstances the High Courts had held that the order of the inferior authorities had merged in the orders of the authorities.
This Court apparently approved of the view taken by the High Courts in those cases on the ground that a writ against the inferior authority within the territories could not be of any avail to the petitioners concerned in those oases and could give them no relief for the orders of the superior authority outside the jurisdiction would remain outstanding and operative against them.
Therefore, as no writs could be issued against the outside authorities, this Court was of the view that the High Courts were right in dismissing the petitions, as any writ against the inferior authority which is within the jurisdiction of the High Court, in view of the orders of the superior authority, would be infructuous.
The position in the present case is similar to that envisaged above.
The Orissa Government rejected the application of the appellant for grant of the mining lease.
The appellant being aggrieved by that order went in review to the Central Government under the Rules and that review petition was dismissed so that in effect the Central (1)[1955] 2 S.C.R. 1196, 913 Government also rejected the application of the ,appellant for grant of the mining lease to him.
It is not in dispute that if the Central Government was so minded it could have allowed the review and directed the Orissa Government to grant mining lease to the appellant.
Therefore when the Central Government rejected the review petition, it in effect rejected the application of the appellant for the grant of the mining lease to him.
This order of the Central Government in effect rejecting the application of the appellant for the grant of the mining lease to him and confirming the rejection of the application of the appellant by the Orissa Government is clearly not amenable to the jurisdiction of the High Court of Orissa under Art 226 in view of the fact that the Central Government is not located within the territories subject to the jurisdiction of the Orissa High Court.
It would therefore have been useless for the Orissa High Court to issue a writ against the Orissa Government for the Central Governments order rejecting the review petition and therefore in effect rejecting the application of the appellant for grant of the mining lease would still stand This is made clear by r. 60 of the Rules, which provides that "the order of the Central Government under Rule 59 and subject only to such order, any order of a State Government under these rules, shall be final".
Clearly therefore r. 60 provides that where there is a review petition against the order passed in the first instance by the State Government, the order of the Central Government passed in review would prevail and would be the final order dealing with an application for a mining lease under the Rules.
Therefore, quite apart from the theoretical question of the merger of the State Government 's order with the Central Government 's order, the terms of r.60 make it perfectly clear that whenever the matter is brought to the Central Government under r. 59, it is the order of the Central Government which is effective and final.
In these 914 circumstances we are of opinion that the High Court was right in holding that it had no jurisdiction to issue a writ under article 226 in the present case as the final order in this case was that of the Central Government which was not situate within the territories over which the High Court has jurisdiction.
Our attention in this connection was drawn to Shivji Nathubhai vs The Union of India (1).
In that case a mining lease had been granted by the State Government to a particular person and there was a review petition against the grant of that mining lease.
The order granting the mining lease was set aside on review without notice to the person to whom the lease had been granted.
In that connec tion a question arose whether the person to whom the State Government had granted the lease had any interest to enable him to make an application under article 226.
It was then pointed out by this Court that under the Rules the order of the State Government would be effective as there was no re quirement that it was not final until confirmation by the Central Government.
That case however is of no assistance to the appellant for where there is a review petition and the Central Government passes an order on such petition one way or the other it is the Central Government 's order that prevails and the State Government 's order must in those circumstances merge in the order of the Central Government.
The observations in that case on which the appellant relies were made in another connection and can have no bearing on the question before us, where an order has been passed by the Central Government on review and it is that order which is made final by r. 60 and which stands in the way of the appellant.
There is therefore no force in this appeal and it is hereby dismissed with costs.
Appeal dismissed.
| The State Government of Orissa rejected the application of the appellant who had applied for grant of a mining lease in December 1957 on the ground that the State Government proposed to arrange for the exploitation of the area in the public sector.
The appellant made an application for review to the Central Government under r. 57 of the rules of Mineral Concession Rules, 1949.
This application was rejected by the Central Government in June 1959.
Thereupon the appellant filed a petition under article 226 of the Constitution in the High Court of Orissa.
This petition was dismissed by the High Court on the ground that it had no jurisdiction to deal with the matter under article 226 as the final order in the case was passed by the Central Govern ment, which was located beyond the territorial jurisdiction of the High Court.
The appellant came up by special leave to appeal to the Supreme Court.
The main question is as to the limit of the jurisdiction of the High Court under article 226.
The appellant contended that as the Central Government had merely dismissed the review petition, the effective 907 order rejecting the, appellant 's application for the mining lease was that of the State Government and therefore the High Court would have jurisdiction to grant a writ under article 226.
that the High Court was right in holding that it had no Jurisdiction to issue a writ under article 226 in the present case as the final order in this case was that of the Central Government which was not situate within the terri tories over which the High Court had jurisdiction.
This order of the Central Government in effect rejecting the application of the appellant.
for the grant of the mining lease to him and confirming the rejection of the application of the appellant by the Orissa Government is clearly not amenable to the jurisdiction of the High Court of Orissa under article 226 in view of the fact that the Central Government is not located within the territories subject to the jurisdiction of the Orissa High Court.
It would therefore have been useless for the Orissa High Court to issue a writ against the Orissa Government for the Central Government 's Order rejecting the application of the appellant for the grant of the mining lease would still stand.
Held, further that quite apart from the theoretical question of the merger of the State Government 's Order with the Central Government 's Order, the terms of r. 60 of the Mineral Concession Rule 1949 make it perfectly clear that whenever the matter is brought to the Central Government under r. 59, it is the order of the Central Government which is effective and final.
So where there is a review petition and the Central Government passes an order on such petition one way or the other it is the Central Government 's Order that prevails and the State Government 's Order must in those circumstances merge in the order of the Central Government.
Election Commission India vs Saka Venkata Subba Rao, ; , Lt. Col. Khajoor Singh vs Union of India, ; , A. Thangal Kunju Musaliar vs M. Venkitachalam Potti ; relied on.
Shivji Nathubhai vs The Union of India, ; , referred to.
The State of Uttar Pradesh vs Mohammad Nooh (1958) S.C.R. 595, not applicable.
| FACTS
this appeal is by special leave against the judgment of the high court of punjab and haryana confirming the conviction of the accused.
the facts of the case in brief are that in view of the chinese invasion air field at sirsa required to be extended for which purpose the ministry of defence, govt. of india took steps to acquire some lands of agriculturists pursuant to which a notification dated november 27, 1962 was issued under section 4 of the land acquisition act 1894 for acquiring 51.79 acres of land situated in the state of ahmedpur.
on the next day another notification was issued under section 6 of the land acquisition act on november 28, 1962 and in view of the emergency action under section 17 was taken for obtaining possession of the land with a view to its development.
the lands which were acquired belonged to several land holders including moti ram and p.w. 12 kewal chand.
the collector gave his award on 26-2-63 in respect of these lands, which actually measured 49.47 acres, at rs. 1350 per acre amounting to rs. 66,784.50 np.
apart from this amount compensation was also awarded for standing crop amounting to rs. 11,073.13 np.
the case of the prosecution initially was that after the land so acquired with the standing crop was taken possession of by the appellant.
he sold the crop to moti ram and kewal chand for rs. 2500 and facilitated the cutting and taking away of the crop by postponing the handing over of the possession to the contractor.
a chargesheet was filed against the appellant under section 5 (1) (c) and 5 (1) (d) read with 5 (2) of the prevention of corruption act on 5-8-1966 after obtaining sanction from the govt. of india, ministry of home affairs.
ARGUMENT
the learned advocate for the appellant has meticulously taken us through the entire documentary and oral evidence and commented at length upon the various contradictions and incongruities in the case of the prosecution with a view to establishing that when the appellant took possession of the land there was no crop standing on it-that tile possession of the land 'was in fact delivered to telu ram, contractor on 10-1-1963; that the said contractor had admitted 'that possession of the entire land was received by him; that he carried on the construction work in extending the aerodrome; that 200/250 donkeys were also used for doing the work by reason of which the crop was damaged before tehsildar had put the appellant in possession of the land and as a matter of fact there was no crop thereon when he got the possession of the land.
it was also contended that the high court had not considered the contradictions in the earlier statement made by some of the witnesses to the military authorities and that it relied on many of the documents for affirming the conviction of the appellant without their actually being put to, him under section 342.
it is further contended that the stand taken by the prosecution was that 'the persons who we're permitted to cut the crops bad' not committed any offence.
ISSUE
whether the facts were sufficient to sustain the sanction under 5(1)(c) even if the charge under 5(1)(d) had failed. this question in turnwill depend upon what are the ingredients of the offences under 5(1)(c) and (d) read with section 5(2).
there was utter confusion in respect of the date on which possession of the acquired land was given to the appellant and the date on which it was given to the contractor for carrying on the work, as also in respect of the fact whether there was any crop standing when the appellant took possession of the land and at what period of time the crop was cut and the work commenced.
ANALYSIS
though it is desirable that the facts should be referred to in the sanction itself, nonetheless if they do not appear on the face of it, the prosecution must establish aliunde by evidence that those facts were placed before the sanctioning authorities.
it is therefore necessary to first examine the order of sanction to ascertain on what facts it has been accorded.
it is apparent that the facts which the central govt. considered for the purposes of according sanction were (a) that the appellant as a public servant was entrusted with crops situated on the land acquired for the extension of air field, sirsa ; (b) that by abusing his position as a public servant he allowed the standing crops to be cut from the said land. c. that by corrupt or illegal means and by abusing his position as a public servant he obtained pecuniary advantage of rs. 2500 as the value of the crops to be cut from the land and/or he dishonestly or fraudulently misappropriated that sum by converting it into his own use instead of depositing the said sale price in the govt. treasury.
it would be seen therefore that under section 5(1)(c) a public servant will be said to commit the offence of misconduct in hi&; duties if he dishonestly allows any other persons to convert to his own use property which is entrusted to the said public servant
the facts which have been set out in the order granting the sanction certainly are sufficient to indicate that the authorities granting the sanction had the offence under section 5(1)(c) also in their contemplation.
no work had in fact been undertaken on the land acquired and also that possession of the existing runway and track had already been given.
nothing is specifically mentioned about possession of the acquired land being given to him on that date. re no basis for sanction for a charge under section 5(1)(c.
a person could not be charged merely with the breach of a particular provision of the order; he must be charged with the commission of certain acts which constitute a breach, and it is to that prosecution that is for having done acts which constitution breach of the order-that the sanction 'is required.
in the present case -there is nothing on the face ,of the sanction, and no extraneous evidence, to show that the sanctioning authority knew the facts alleged to constitute a breach of the order, and the sanction is invalid.
the case of jaswant singh v. the state of puniab. 1957 indlaw sc 59 was also cited by the respondent's advocate in support of the contention that the trial of two offences requiring sanction was not valid.
STATUTE
the facts disclose the commission of the offence of criminal misconduct as defined in section 5(1)(d) read with section 5(2) of the prevention of corruption act 1947 by major som nath accused.
under 5(1)(c)-a public servant is said to commit the offence of misconduct in the discharge of his duty if he dishonestly or fraudulently misappropriates or otherwise converts for' his own use any property entrusted to him or under his control as a public servant or allows any other person so to do, and under (d) if he by corrupt or illegal means or by otherwise abusing his position as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage.
| The Ruler of Dhenkanal State granted a sanad by way of Khorposh allowance to his younger brother, the appellant giving certain lands and a maintenance allowance, under the customary law of the State.
After the merger of that State to the Dominion of India which became effective on January 1, 1948, the Government of Orissa took over the administration of the State and discontinued the cash allowance.
The appellant challenged the validity of the order of discontinuance by a suit in the Court of Subordinate Judge.
The suit was dismissed.
On appeal to this Court it was urged on behalf of the appellant that the sanad issued by an absolute monarch was law, and was continued by articles 366(10), 372(1) of the Constitution and cl.
4(b) of the Order 31 of 1948 issued by the Orissa Government in exercise of the power delegated to it by the Central Government under section 3(2) of the Extra .
Held: (i) It was not correct to say that in dealing with a grant made by an absolute monarch any enquiry as to whether the grant was the result of an executive or legislative act was altogether irrelevant.
This Court did not lay down any inflexible rule that the well recognised jurisprudential distinction between legislative and executive acts was wholly irrelevant or inapplicable to such a case.
Ameer un Nissa Begum vs Mahboob Begum, A.I.R. 1955 S.C. 352, Director of Endowments, Government of Hyderabad vs Akram Ali, A.T.R. , Madhaorao Phalke vs State of Madhya Bharat, ; , Promode Chandra Deb vs State of Orissa, [1962] Supp. 1 S.C.R. 405, Tilkayat Shri Govindlalji Maharaj vs State of Rajasthan, [1964] 1 S.C.R. 561, Maharaja Shree Umaid Mills Ltd. vs Union of India, ; and State of Gujarat vs Vora Fiddali Badruddin Nithibarwala, ; , considered.
In such an enquiry it was necessary to consider such rele vant factors as the nature of the order, its scope and effect, general setting and context and the method adopted by the Ruler in promulgating it.
So judged, the Sanad in question had no legislative element in any of its provisions and was a gift pure and simple made in pursuance of the custom of the family and customary law of the State.
The gift therefore, was an executive act of the Ruler and did not amount to law although the Ruler was discharging by it his obligation under personal or customary law.
113 The gift being an executive act of the Ruler could be modified or cancelled by an executive act of the successor to the Ruler.
The discontinuance of the cash allowance could not affect the continuance of the customary law under cl. 4(b) of the Order of 1948 and article 372 of the Constitution.
Nor could the plea of payment of such allowance even after the merger invalidate the discontinuance.
| The first respondent filed a writ petition in the High Court challenging the grant of a mining lease to the appellant on the ground of a direct.
infringement of his right to be granted a mining lease over an area for which he applied for a mining lease and which, according to him, formed part of the area for which the appellant was given the lease.
But in fact, the first respondent 's application was not in respect of any part of the area for which the appellant was granted a mining lease.
Though the appellant was made party to the proceeding, he did not appear as notices were not served on him.
The High Court allowed the petition in the view that there was a violation: of section 31 of the , and rr. 58 and 59 of the Mineral Concession Rules 1960.
Allowing the appeal to this Court, HELD : The first respondent had no interest in the subject matter of the lease, and the petition was not maintainable.
[618 G H] Though this contention was not urged before the High Court as the appellant did not appear in the High Court, this Court, in appeal, can not only determine the soundness of the decision, but has jurisdiction to determine any point raised before, it, such as, whether the appeal is competent, whether a party has a locus standi to present the petition and whether the petitioner was maintainable.
Ordinarily, the foundation for exercising the jurisdiction under Article 32 or Article 226, is the personal or individual right of the petitioner himself, though in cases of writs of habeas corpus or quo warranto, the rule may be relaxed.
In respect of persons who are not aggrieved and who seek to invoke the jurisdiction of the High Court or this Court, the matter rests ultimately on the discretion of the Court, and depends on the nature and extent of the right or interest said to have been infringed and whether the infringement affects the petitioner in some way.
[619 A B, D, G H] In the present case, the first respondent only alleged direct infringement of his right,but it was found that no right of his had been affected.
He was neither aparty nor a person aggrieved or affected and hence had no locus standi to file the petition.
[620 B C] Ebrahim Aboobakar and Another vs Custodian General of Evacuee Property, ; , Chiranjit Lal Chowdhuri, vs The , Union of India, ; , The State of Orissa vs Madan Gopal Rungta, [1952] S.C.R. 28, The Calcutta Gas Company (Proprietary) Ltd. vs The State of West Bengal and Others [1962] Supp.
3 S.C.R. 1, Godde Venkateswara Rao vs Government of Andhra Pradesh and Others ; and R. vs Thamples Magistrates ' Court ex.
p. Greenbaum, [19571 in Yardley Source Book of English Administrative Law, , referred to.
| The petitioner who was a, registered dealer under the Orissa Sales Tax Act, 1947, was carrying on the business of purchasing and reselling castor seeds, etc., in the State of Orissa.
Under a declaration given by him for the purpose of obtaining his registration certificate the goods purchased by him in Orissa were to be resold in that State.
He purchased certain commodities inside the State but in contravention of his declaration sold, the goods to dealers outside the State.
The Sales Tax Officer included in the taxable turnover of the petitioner the purchase made by him inside the State in accordance with section 5(2)(a)(II) of the Act.
The contention of the petitioner was that the purchase was in course of inter State trade and was exempted under article 286(2) of the Constitution of India.
Held, that the transaction of sale which has been taxed was wholly inside the State of Orissa and was distinct and sepa rate from the sale made by the purchaser to dealers outside the State.
The former transaction was taxable under section 5(2)(a)(II) of the Act while the latter was exempted under article 286(2) of the Constitution.
Messrs. Mohanlal Hargovind Das vs The State of Madhya Pradesh, ; , distinguished.
In order that a sale or purchase might be inter State, it is essential that there must be transport of goods from one State 315 to another under the contract of sale or purchase.
A purchase made inside a State, for sale outside the State cannot itself be held to be in the course of inter State trade and the imposition of tax thereon is not repugnant to article 286(2) of the Constitution.
Bengal Immunity Company Limited vs The State of Bihar, and State of Travancore Cochin vs Shanmugha Vilas Cashew Nut Factory; , , followed.
| Assessment orders were passed by the Sales Tax Officer allowing the deductions of two amounts claimed by the respondent dealer under section 5(2)(a)(ii) of the Orissa Sales Tax Act in respect of goods sold to a registered dealer.
The respondent dealer filed appeals to the Assistant Collector Sales Tax, challenging the assessment on grounds which were not relevant and against those decisions revisions were filed by the dealer.
While the revisions were pending the Orissa Sales Tax Act was amended by Orissa Sales Tax (Amendment) Act (Orissa Act, 10 of 1957) with the result that revisions were treated as appeals to the Sales Tax Tribunal, and it enabled the Government to file cross objections.
In pursuance, the State filed cross objections challenging the deductions on the ground that the dealer had not produced any declaration as required under r. 27(2) of the Orissa Sales Tax Rules, 1947.
The Tribunal upheld this objection and directed that fresh assessments be made.
On statement of the case, the High Court answered that the assessing officer was not wrong in allowing the deductions.
On appeal by special leave).
Held:(i) There is nothing in section 5 (2) (a) (ii) itself that disentitles a selling dealer to a deduction, but if the contingency provided in the proviso occurs, then the price of goods is included in the taxable turnover of the buying dealer.
(ii)The production of a declaration under r. 7(2) is not always obligatory on the part of a selling dealer when claiming the exemption.
It is open to him to claim exemption by adducing other evidence so as to bring the transaction within the scope of section 5(2)(a)(ii).
Rule 27(2) must be reconciled with the section and the rule can be reconciled by treating it as directory.
But the rule must be substantially complied with in every case.
It is for the Sales tax Officer to be satisfied that, in fact.
the certificate of registration of the buying dealer contains the requisite statement, and if he has any doubts about it, the selling dealer must satisfy his doubts.
But if he is satisfied from other facts on the record, it is not necessary that the selling dealer should produce a declaration in the form required in r. 27(2).
before being entitled to a deduction.
Member Sales tax Tribunal, Orissa vs Mls.
section Lai & Co. (1961) 12 S.T.C. 25, referred to.
| By an order dated August 20, 1943, the Appellate Tribunal directed that certain deductions claimed by the assessee should be allowed.
The matter came back to the Income tax Officer and he made an order on September 26, 1945, but did not issue any fresh notice of demand.
The assessee appealed to the Appellate Assistant Commissioner complaining that in his order of September 26, the Income tax Officer had wrongly included a sum of Rs. 13,000 60 464 as unassessed foreign income of earlier years.
The Appellate Assistant Commissioner held that the order of September 26 was not appealable.
The assessee, therefore, made a miscellaneous application to the Appellate Tribunal, which held that the Incometax Officer acted wrongly in including the sum of Rs. 13,000 at that stage and directed the Income tax Officer to revise his computation accordingly.
The Commissioner of Income tax, being of opinion that the Appellate Tribunal had no jurisdiction to entertain or make such order on a miscellaneous application applied for a reference to the High Court under section 66 (1) of the Income tax Act.
The Tribunal referred certain questions and the High Court directed the Tribunal to refer certain other questions also but when the references came on for bearing the High Court held that the references were incompetent.
The Commissioner of Incometax appealed to the Supreme Court with the leave of the High Court : Held, (i) that in carrying out the directions of the Tribunal and in passing the order of September 26, 1945, the Income tax Officer cannot be regarded as having acted under section 23 or section 27 of the Act and no appeal lay from his order under section 30 (1).
The order made by the Appellate Assistant Commissioner was not therefore an order under a. 31 (3) and no further appeal lay to the Appellate Tribunal under section 33 (1) so as to enable the Tribunal to make an order under section 33 (4) and us there was no order under a. 33 (4), no question of law can be said to arise out of an order under section 33 (4) and there can be no valid reference under section 66 (1) or section 66 (2); (ii) even assuming that the order of the Income tax Officer dated September 26, 1945, was an order under a. 23 or section 27 and as such appealable, the order made by the Appellate Assistant Commissioner declining to entertain the appeal was not an order under any of the sub sections of a. 31 and no appeal lay therefrom to the Appellate Tribunal under section 33 (1) and there could be no order of the Appellate Tribunal under section 34 (1).
The order of the Appellate Tribunal correcting the order of the Income tax Officer and directing that the sum of Rs. 13,541 should not be included cannot be regarded in any event as an order under section 33 (4) so as to attract the operation of section 66 (1) or (2).
| These appeals arose out of suits for ejectment instituted in the Revenue Court by the respondent Zamindar against the appellants under section 180 of the U. P. Tenancy Act, 1939 (U. P. I7 Of 1939).
His case was that the lands in suit were his sir lands and the appellants trespassed on the same on the basis of a wrong order of the Criminal Court.
The case of the appellants was that they were admitted as hereditary tenants by the respondents.
There was a previous proceeding under section I45 of the Code of Criminal Procedure between the parties and the Magistrate found possession with the appellants and directed that they should remain in possession till evicted by due process of law.
The Revenue Court which tried the suits found that the lands were sir lands of the respondent and the appellants were not hereditary tenants and did not take possession with the consent of the respondent.
The Additional Commissioner on appeal and the Board of Revenue on second appeal, agreed with these findings of the Revenue Court and dismissed the appeals.
The Board negatived the plea of the appellants that the suits were not triable by the Revenue Court.
Section 180 of the U. P. Tenancy Act, 1939, provides that a person taking or retaining possession of land without the consent of the person entitled to admit him into occupation and otherwise than in accordance with the provisions of law for the time being in force will be liable to enactment thereunder.
In view of the finding of the courts below that the appellants had not taken possession with the consent of the respondent, the question was whether they did so by virtue Of section I45 of the Code of Criminal Procedure.
Held, that the provisions of section I45 of the Code of Criminal Procedure authorised the Magistrate only to declare the actual possession of a party on a specified date and not to give possession or permit any party to take possession.
He had no power under that section to decide questions of title or right to possession which a civil court alone could decide.
The words " taking " and " retaining " were used by section 180 of the Act in an independent and exclusive sense.
The former referred to taking of possession illegally and the latter to taking of possession legally but subsequent retaining of it illegally.
Consequently, the appellants whose possession had been found 799 to be illegal from the very inception, could not be said to retain possession legally so as to be outside the scope of the section.
It was also clear that possession in accordance with law, such as was contemplated by section 180 of the Act, meant possession with lawful title.
The provisional Order of the Magistrate with regard to possession, irrespective of lawful rights of the parties, could not, therefore, enable the appellants to resist the suit under.
section 180 of the Act.
Dinomoni Chowdhrani vs Barojo Mohini Chowdhyani, (1901) L.R. 29 I.A. 24, referred to.
|
Appeal No. 286 of 1961.
Appeal from the judgment and order dated January 27, 1960, of the Kerala High Court in I. T. R. Case No. 14 of 1955.
K.N. Rajagopal Sastri and D. Gupta, for the Appellant.
S.P. Desai J. B. Dadachan , O. C. Mathur and Ravinder Narain, for the respondent.
March 20.
The Judgment of the Court was delivered by HIDAYATULLAH, J.
In this appeal by the Commissioner of Income Tax Kerala filed with 962 certificate of the High Court of Kerala, an important question of law was raised before the High Court, which was answered against the Department.
It arose in the following ,circumstances.
The respondent, the West Coast Chemicals and Industries, Ltd. (referred to as the assessee Company) was incorporated in 1937 primarily with the object of acquiring and working the rights, title and interest in a match factory belonging to one A. V. Thomas at Medical.
The Memorandum of Association of the asseesee Company, however, empowered the Company to manufacture and deal in acids, alkalis and other chemicals.
The assessee 'Company carried on its business of manufacturing matches till the account year ending, on April 30, 1941.
Thereafter, the profits from the business became less and less due to War conditions, and the assessee Company began to manufacture plywood chests for tea, paints and lemon grass oil.
These were contemplated by cl.
(3) of the ' Memorandum of Association.
On May, 9, 1943, the assessee Company entered into an agreement with one Rao Sahib Natesa Iyer for the sale of the lands, buildings, plant and machinery of its match factory for Rs. 5, 75,000.
It was agreed that the price would not include manufactured goods, chemicals and other raw materials or any other asset not shown in the agreement of sale.
The purchaser was allowed sixty days for the payment of the balance of the price, Rs. 57,500 having been already paid at the time the agreement was 'entered into.
The purchaser made a default in payment, and on August 9, 1943, a fresh agreement was entered .into by the parties, this time for a consideration of Rs. 7,35,000, and the sale included chemicals and paper for manufacture which had not been sold in the first instance.
In a confidential report made on August 1, 1944, to the shareholders, the 963 Directors stated that the price obtained had shown a capital appreciation of about six times the cost price, and the sale of chemicals had also resulted in a substantial profit.
Meanwhile, the assessment of the Company for the, account year ending April 30, 1944, bad been completed by the Deputy Commissioner of Income tax, and the assessee Company had been assessed on an income of Rs. 36,498 6 4.
The Deputy Commissioner of Income tax then issued a notice under section 25 of the Travancore Income tax Act to the Company 's Liquidator on the ground that the profits from the sale of the chemicals and paper for manufacture had escaped assessment.
The Official Liquidator took up the position that the match manufacturing had been stopped, and that business had been wound up, and there thus only an appreciation of the capital assets and not a business profit, which, was liable to assessment.
The Deputy Commissioner, however, relying, upon the Memorandum of Association, which allowed the assessee Company to manufacture and sell chemicals, and on the Directors report, held that the assessee Company was liable to income tax on a profit of Rs. 2 lakhs arising from this sale.
The Commissioner of Income tax on appeal, however, reduced the assessable profits to Rs. 1,15,259.
Before the Commissioner, the Liquidator admitted that the profit from the sale of the chemicals wits Rs. 1, 15,259.
An appeal was then filed before the Income tax Appellate Tribunal at Trivandrum, and the assessee Company contented that a stock in trade could only be that which was the subject of trade, and that the stock of raw material was not sold in the course of ordinary trading but in a reali sation sale after the Company had been wound up.
The Tribunal found that the business had not 964 completely ceased to exist, since the assessee Company was carrying on manufacturing, on behalf of the purchaser, and, the sale could not be regarded as a realisation sale after the Company was wound up, but had the characteristics of a trading sale.
At the request of the assessee Company, however, the Tribunal referred two questions to the High Court for its decision, and they were: "(1) whether the transaction of sale of the raw materials along with the business,including machinery, plant and premises is a revenue sale, and whether in the facts and circumstances of the case, the sum of Rs. 1,15,254has been rightly charged to income tax; and (2) whether the decision that the sale of match, machinery and premises, was distinct from the sale of chemicals is legally war ranted and whether there was legally a single, transaction of the entire match factory inclusive of raw materials?" It maybe pointed out that prior to the sale of chemicals to the purchaser, the only evidence of sale of chemicals by the assessee Company was of two transactions.
In the first transaction, there was a sale of chemicals on July 24, 1943,to an educational institution for Rs. 50 and another sale on October 30, 1943, to a stranger for Rs. 7 12 0.
The High Court held that by the sale no business was done, and that the amount obtained was only by way of realisation sale and was not, therefore, liable to tax. 'rho argument of the Department (also raised before the High Court) proceeds in this way.
The Department refers to the Memorandum of Association under which the assessee Company was to carry on the business of manufacturing and 965 selling chemicals, that in the past it bad sold chemicals, that in the first sale of its assets it had excluded chemicals and some other raw materials necessary for the manufacture of matches and had sold the concern for a lesser price, that later it included chemicals and raw materials and obtained a larger price, and that admittedly 'there was an identifiable profit of Rs. 1,15,259 on the sale of the chemicals and raw materials.
The Department, therefore, contends that the amount of Rs. 1, 15,259 was properly brought to tax as a trading profit.
The question, therefore, is whether there can be said to be a sale in the carrying on of the business in respect of the chemicals and other raw materials.
This question is not one easy to decide,specially with the assistance of rulings, in which the facts were different.
There is a great danger of extracting a principle from the reported cases, divorced from the facts.
In Halsbury 's; Laws of England, 3rd Edn., Vol. 20, pp. 115 117, there is a list in the footnotes of the cases which have been decided on one side or the other of the dividing line.
In the text, the law, as summarised from the cases, is stated as follows : "210.
Mere realisation of assets is not trading; but the completion of outstanding contracts after the dissolution of a firm, the commencement of liquidation of a company, or the winding up of the affairs of a trader, has been held to be trading. . 211 .
The cases illustrating the question arising in such circumstances can be divided into two categories, first, those where the sales formed part of trading activities, and, second, those where the realisation was not an act of trading".
This distinction, in our opinion, is a sound one.
The only difficulty is in deciding whether a particular 966 case belongs to one category or the other.
In this, much support cannot be derived from observations made by learned Judges pertaining to the facts of a case, but they do guide one in a true appraisement of the case in hand.
In the well known case of Californian Copper Syndicate vs Harris (1), the difference between the purchase price and the value of the shares for which the property was exchanged was considered as profit assessable to income tax.
There, the company was formed for the purpose of acquiring and reselling mining properties, and though what it had acquired had all been Bold or exchanged, the transaction was considered a business transaction failing within the avowed objects, of the Company.
The case has been accepted as decided on these narrow facts, in Tebrau (Johore) Rubber Syndicate Ltd. vs Farmer (2), in which a different conclusion was reached on slightly different facts.
There also, the Company was formed with the object of acquiring rubber estates and for developing them.
Under the Memo randum, the Company had the power to sell its properties.
Two properties having been acquired and the funds having run out, they were sold but at a profit.
This profit was considered as an appreciation of capital and not as assessable profit.
The difference between these two oases is that whereas in the former, though the whole of the property was sold, it was sold at; a part of trading, in the letter, the property was sold not as part of trading but on a winding up sale.
The Department relies upon Californian Copper Syndicate vs Harris (1),while the assesse Company relies upon Tebrau (Johore)Rubber Syndicate Ltd. vs Farmer (2) .
These cases were also considered and applied by the Privy Council in Doughty vs Commissioner of Taxes (3), which is relied upon by (1) (2) (3) 967 both sides, in view of certain observations of the Privy.
Council, to which we shall presently refer.
In that case, there were two partners carrying on business in New Zealand as general merchants.
They sold the partnership to a limited company, of which they were the only shareholders.
The sale was of the entire assets including the goodwill, and the price was payable in the shape of fully paid shares in the new company.
The nominal value of the shares was more then the capital account as shown in the last balance sheet, and the partners prepared a new balance sheet in which a larger value was placed upon the stock in trade.
The Income tax authorities in New Zealand treated the difference between the value placed on the stock in trade in the old balance sheet and that placed in the new balance sheet as a profit liable to tax.
The Privy Council held that this was wrong, pointing out that for profit to arise, there must be a trading, and that a mere alteration of a book keeping entry was not evidence that there was profit.
It also held that the sale was of the entire assets, and that the price represented a payment for the entire business without a separate sale or valuation of this stock in trade for purposes of sale.
It referred to two cases decided respectively by the Supreme Court of New Zealand and the, High Court of Australia, in which sales by pastora lists of their flock of sheep had taken place.
In the New Zealand case, the excess obtained over the book value was treated as assessable profit, but in the Australian case, it was not.
Both the sales were of the entire stock.
The Privy Council approved of the Australian case, and though it did not ex pressly dissent from the New Zealand case, it indicated that it found it difficult to appreciate the decision.
These two cases from New ' Zealand and Australia were, of course, relied upon by the rival parties before us, and we shall consider them.
968 The Australian case is Commissioner of Taxation (W. A.) vs Newman (II.
A person who carried on business in Western Australia as a pastoralist sold his property including all live stock and plant, as a going concern.
The Commissioner of Taxation for the State apportioned the purchase money in respect of the live stock, and assessed the amount which was received in excess, as income derived from carrying on a business.
The High Court held that the transaction was not during the carrying on of the business or even for the purpose of carrying on the business, but was for the purpose of putting an end to the business, and that thus the excess represented a capital appreciation and not a trading profit.
The Now Zealand case is Anson vs Commissioner of Taxes (2).
In that case also, a sheep farmer sold his entire stock of sheep.
He had the practice of placing on his sheep at the beginning and end of each year an arbitrary value without reference to the, actual market value.
When he sold his entire stock, a nominal profit of pound 5,000 odd appeared, and he was assessed on it.
The Supreme Court hold that it was not an accretion to capital but a profit on the sale of the appellant 's stock in trade.
Sir John Salmond, who delivered the judgment of Court, observed that the holding of a sheep farmer was not a capital holding, but his sheep represented a stock in trade, and since every appreciation of a stock in trade represented a profit assessable to income tax, it mattered not that the stock in trade was sold at once or from time to time.
Of this case, the Privy Council in Doughty 's case (3) did not say much, but enough to cast a doubt upon it.
This is what the Privy Council said at p. 335.
"It would be difficult to arrive at the profit in this way if it were the case of a (1) [1921] 2 (2) [1922] N.7.L.R. 330.
(3) [1927] A. C. 327.
969 farmer in England but the trade of a pastora list is one with which the New Zealand Courts would be familiar, and which it would be more easy for the New Zealand Judges than for their Lordships to appreciate.
" The Privy Council made a distinction between a sale of the entire stock as a part of trading and a sale of the same stock as a winding up sale.
It observed that if the business be one of purely buying and selling, "a profit made by the sale of the whole of the stock, if it stood by itself, might well be assessable to income tax".
It observed that in Dougherty 's case (1) the sale was a slump transaction, and was a winding up of the business rather than a trading.
The Privy Council further pointed out that there is a difficulty in deciding cases of a business, which involve breeding of sheep for the purpose of selling wool This is quite true, because the sheep may be regarded as the capital, with which the wool, which is sold, is produced, or the sheep with the wool on them may be regarded as the stock in trade.
Such a question, fortunately, does not arise in the present case, which can be decided on the narrow ground whether the business was being wound up and the sale, a realisation sale, or whether trading was going on in spite of the winding up, so as to attract tax on profits made.
Before we answer this question in relation to the facts of this case, we wish to refer to a ' few more cases, which were cited before us.
In J. & R. O 'Kane & Co. vs The Commissioners of Inland Revenue (2), the appellants carried on business as wine and spirit merchants.
They then wished to retire from the business and sent a circular letter to their customers.
During the year, they sold their *bole stock to diverse customers. , and the question was whether they were still carrying on their trade during that period, and whether the profits were thus made in the (1) [1927] A.C. 327.
(2) 970 ordinary course of trade.
It was held by the King 's Bench Division of the High Court of Justice in Ireland that the sales were not in the ordinary course of trade but were part of the realisation of the trading stock and winding up of the business, and thus not liable to tax.
The Court of Appeal in Ireland unanimously reversed the decision of the High Court.
Ronan, L. J., pointed out that though the taxpayer had retired from business and had decided not to purchase any more stock, he was still carrying on the business of trading in wines and spirits till his existing stocks were exhausted, and, therefore, the excess obtained by him represented profit.
On appeal to the House of Lords, it was held that there was evidence on which the Commissioners could arrive at their finding that trading was, in fact, being carried on.
Lord Buckmaster, speaking Of the facts in that case, observed as follows : "For in truth it is quite plain that right up to the en of 1917 they were engaged in trading which, so far as the external world is concerned, was the ordinary method of carrying on trade modified only by arrangements which were merely part of the machinery of business dealing adopted to effect their intention to retire.
It may well be accepted that they did so intend ; yet the intention of a man cannot be considered as determining what it is that his acts amount to; and the real thing that has to be decided here is what were the acts that were done in connection with this business and whether they amount to a trading which would 'cause the profits that accrued to be profits arising from a trade or business The case was, therefore, decided on the finding of the special Commissioners, for which there was enough material in evidence.
Similarly, the case 971 of The Commissioner of Inland Revenue vs "Old Bashmills" Distillery Co., Ltd. (in Liquidation) (1) was one decided on a finding, in support of which there was evidence.
The two cases relied upon by the Department and the assessee Company respectively do not shed any light upon the problem before us ' because the central decision in both of them was whether the Commissioners ' finding was justified or not.
In J. and M. Craig (Kilmarnock),Ltd.
vs Cowperthwaite(2), the question was how the opening .stock should have been valued, And whether any profit could be said to have resulted.
The Privy Council in Doughty 's case (3) remarked about this case as follows: "There, on a transference from one company to another, one third of the value of each item, other than stock in trade, as it stood in the books of the selling company, was treated as its value for transfer purpose, and the balance of a slump price, which, with an under taking to discharge liabilities, formed the consideration, was inferentially attributable to the stock.
It was held, however, in that case that no sum could be pitched upon as the actual price of the stock, and no claim to assess a profit could be based upon such a foundation.
" This case shows that where a slump price is paid and no portion is attributable to the stock iii trade, it may not be possible to hold that there is a profit other than what results from the appreciation of capital.
The essence of the matter however, is not that an extra amount has been gained by the selling out or the exchange but whether it can fairly (1) (2) (3) (1927) A.C. 327.
972 be said that there was a trading from which alone profits can arise in business.
If this test is applied to the present case, then the true answer would be the one given by the High Court in the judgment under appeal.
There is no doubt, in this case, that the assessee Company was wound up at least in so far as its match manufacture was concerned.
That the business of the Company was sold as a going concern, and was, in fact, worked by the assessee Company on behalf of the buyer till the entire consideration was paid, makes no difference, because the agreement clearly indicated that the, assessee Company was keeping the factory going, not on its own behalf but entirely on behalf of the buyer.
One cannot fairly say, therefore, that a sale of the chemicals and raw materials for match manufacture was anything more than a winding up sale, not with a view to trading in chemicals and raw material but to close down the business and to realise the assets.
There was, in fact, no identifiable price for the chemicals and raw materials except by comparing the two prices offered to be paid by the buyer, that is to say, the price without the chemicals and raw materials and the price with them.
From that alone, however, it is impossible to infer that the chemicals and raw materials were sold in the ordinary way of business or that the assessee Company was carrying on a trading busi ness.
The fact that the clause in the Memorandum gave power to the Company to Bell chemicals cannot be used in this connection, because the evidence clearly shows that that clause was never used and the two sales of chemicals through the years were too petty in themselves to afford evidence of a continued or sustained trading In chemicals.
In our judgment, this was a winding up sale with a view to realising the capital assets of the assessee 973 Company and not a sale in the course of business operations, which alone would had attracted tax, if profit resulted.
In the result, the appeal fails and is dismissed with costs.
Appeal dismissed.
| The respondent company was incorporated in 1937 primarily with the object of acquiring and working a match factory.
Under the memorandum of association the company was also empowered, inter alia, to manufacture and deal in chemicals.
The business of manufacturing matches was carried on by the company till 1941.
Thereafter the profits became less and less due to war conditions.
On May 9, 1943, the company entered into an agreement with a third party for the sale of the lands, buildings, plant and machinery of its match factory for Rs. 5,75,000.
It was agreed that this price would not include manufactured goods, chemicals and other jaw materials or any other asset not shown in the agreement of sale.
Later, a fresh agreement was entered into on August 9, 1943, under which the sale included chemicals and paper for manufacture which had not been sold in the first instance and the price was Rs. 7,35,000.
In a report to the shareholders dated August 1, 1944, the Directors stated that the price obtained had shown a capital appreciation of about six times the cost price and that the sale of chemicals had resulted in ' substantial profit.
In proceedings for assessing income which had escaped assessment the income tax authorities, relying upon the memorandum of association which allowed the 961 company to manufacture and sell chemicals and on the Directors ' report, held that the profit from the sale of the chemicals and other raw materials was liable to income tax on a profit of Rs. 2,00,000 which was reduced later to Rs. 1, 15,259.
The company claimed that the stock of raw materials was sold not in the course of ordinary trading but only in a realisation sale after the company had been wound up.
The evidence showed that the clause in the memorandum of association giving power to the company to sell chemicals was seldom used and that prior to the sale of chemicals to the purchaser, two transactions of sale of chemicals for small amounts in 1943 were too petty in themselves to afford evidence of trading in chemicals.
Held, that though under the second agreement dated August 9, 1943, more price was paid, the transaction was still a winding up sale and no part of this slump price was identifiable as the price of the chemicals and other raw materials.
There was no evidence that before the winding up the company had sold chemicals as part of its business, and the two instances cited were too petty in themselves to afford evidence of a continued or sustained trading in chemicals.
A winding up sale is not "trading or doing business" and the sale of the raw materials including the chemicals was not part of any business done.
Accordingly, the sum of Rs. 1,15,259 was not liable to tax.
Doughty v Commissioner of Taxes, (1927) A. C. 327, di. ',Cussed and relied on.
Case law reviewed.
| The assessee in these appeals is an Hindu Undivided Family The assessment years in question are ranged from 1942 43 to 1953 54.
The assessee filed its returns for these years in time.
The assessee 's account books showed considerable cash credits in the name of some relations of the second respondent, the Karta of the H.U.F.
The I.T.O. went into the genuineness of these cash credit entries.
The contention of the assessee was substantially accepted either by the Appellate Assistant Commissioner or by the Revenue Appellate Tribunal.
With regard to the, assessment for the assessment years 1943 44 to 1949 50, the final assessment was made in pursuance of an agreement or settlement arrived between the assessee and the Deputy Director of Inspection (Investiga tion).
Long after the assessments in question were finalised, the I.T.O. issued notices to the appellants under section 34(1) (a) of the Indian Income Tax Act 1922, seeking to reopen the assessments already finalised.
The assessee challenged the validity of these notices of the I.T.O.
The High Court allowed the writ petitions and quashed the impugned notices.
The assessee alleged that there was no relevant material before the I.T.O. before he issued the notices under s 31(a) on the basis of which he could have reason to believe that any income had escaped assessment.
In the writ petitions, the assessee called upon the I.T.O. to produce the report made by him to the Central Board of Revenue, as well as the order of the Central Board of Revenue thereon.
Despite this prayer, neither the Union of India, nor the I.T.O produced the report made by the I.T.O. to the Central Board of Revenue under s.34(1)(a) nor the order of the Central Board of Revenue.
Dismissing the appeal, HELD : (i) Before an I.T.O. can issue a statutory notice under s.34(1)(a), he must have reason to believe that by reason of omission ,or failure on the part of an assessee to disclose fully and truly all material facts necessary for his assessment for the years in question, income, profits or gains chargeable to Income Tax have escaped assessment during those years.
Further, before doing so, he must have recorded his reasons for acting under section 34(1) (a) and the Central Board of Revenue must have been satisfied on those reasons that it is a fit case for the issue of the notice.
The recording of the reasons in support of the belief formed by the I.T.O. and the satisfaction of the Central Board of Revenue on the basis of the reasons recorded by the I.T.O. that it is a fit case for issue of notice under section 34(1) (a) are extremely important circumstances to find out whether the I.T.O. has jurisdiction to proceed under s.34(1)(a).
[104D] 103 Calcutta Discount Co. Ltd. vs I.T.O. Company District 1 Calcutta and Others, ; Chhugamal Rajpat vs section P. Chalia & Ors.
79 I.T.P 603; Sheonath Singh vs Appellate Assistant Commissioner of Income Tax, Central, Calcutta & Ors., referred to.
(ii)In the present case, an affidavit was filed before the Court stating that the relevant records could not be traced from the file of the Central Board of Revenue.
Assuming that the concerned records were missing from the file of the Central Board of Revenue, the copy of the report made by the I.T.O. and the Order received by him, must have been in the file of the I.T.O. and reason was given for not producing those records.
These circumstances give rise to an adverse inference that the records in question were not produced because they did not assist the department 's case.
Under the circumstances, it is not possible to come to the conclusion that the facts necessary to confer jurisdiction on the I.T.O. to proceed under s.34(1)(a) had been established.
There is nothing to show on record that there was any relevant material before the I.T.O. before he issued the notices under s.34(1) (a).
[105F]
| The assesses, a registered firm, manufactured and sold agarbattis.
Clause (13) of the Instrument of Partnership executed on 28th of July, 1954 and subsequently extended by another instrument dated 31st March, 1964 showed that the goodwill of the firm had not been valued, and the valuation would be made on dissolution of the partnership.
The assesses firm was dissolved by a deed dated 31st December, 1965.
At the time of dissolution the goodwill of the firm was valued at Rs. 1,50,000/ .
A new partnership by the same name was constituted under an instrument subsequently and it took over all the assets including the goodwill and liabilities of the dissolved firm.
The Income Tax Officer made an assessment on the dissolved firm for the assessment year 1966 67 but did not include any amount on account of the gains arising on transfer of the goodwill.
The Commissioner, being of the view that the assessment order was prejudicial to the Revenue, decided to invoke his revisional jurisdiction and setting aside the assessment order directed the Income Tax Officer to make a fresh assessment after taking into account the capital gain arising on the sale of the goodwill.
The Income Tax Appellate Tribunal in appeal accepted the contention of the assesses that the sale did not attract tax on capital gains under section 45 of the Income Tax Act, 1961.
The High Court of Karnataka on a reference, at the instance of the Commissioner of Income Tax affirmed the Tribunal 's view and held that the value of the consideration receive ed by the assesses for the transfer of its goodwill was not liable to capital gains tax under section 45 of the Income Tax Act.
Hence the three appeals as to the taxability of the transfer of the goodwill to capital gain tax.
Dismissing the appeals, the Court ^ HELD: 1.
The goodwill generated in a newly commenced business cannot be described as an asset within the terms of section 45 of the Income Tax Act, 1961 and therefore its transfer is not subject to Income Tax under the head "capital gains".
[946 B C] 2.1.
Goodwill denotes the benefit arising from connection and reputation.
The benefit to the business varies with the nature of the business and also from one business to another.
No business commenced for the first time possesses goodwill from the start.
It is generated as the business is carried on and may be augmented with the passage of time.
A variety of elements goes into its making, and its composition varies in different trades and in different businesses in the same trade, and while one element may preponderate in one business, another may dominate in another business.
And yet because of its intangible 939 nature, it remains insubstantial in form and nebulous in character.
In a progressing business goodwill tends to show progressive increase.
And in a failing business it may begin to wane.
Its value may fluctuate from one moment to another depending on changes in the reputation of the business.
It is affected by everything relating to the business, the personality and business rectitude of the owners, the nature and character of the business, its name and reputation, its location, its impact on the contemporary market, the prevailing socioeconomic ecology, introduction to old customers and agreed absence of competition.
There can be no account in value of the factors producing it.
It is also Impossible to predicate the moment of its birth.
It comes silently into the world, unheralded and unproclaimed and its impact may not be visibly felt for an undefined period.
Imperceptible at birth it exists enwrapped in a concept, growing or fluctuating with the numerous imponderables pouring into, and affecting the business.
[942 F, H, 943 A, E H, 944 A] Cruttwell vs Lye, ; Churton vs Douglas, 1859 John 174; Trego vs Hunt, ; Commissioner of Inland Revenue vs Muller & Co 's Margarine Limited, quoted with approval.
Section 45 of the Income Tax Act operates if there is a transfer of a capital asset giving rise to & profit or gain.
The expression "capital asset" defined in section 2(14) to mean "property of any kind held by an assessee" is of the widest amplitude and covers all kinds of property except the property expressly excluded by clauses (i) to (iv) of the sub section which do nor include good will.
[942 D E] 3.2.
Section 45 is a charging section, charging the profits or gains arising from the transfer of a capital asset to income tax, according to the detailed provisions for computing the profits or gains under that head.
The charging section and the computation provisions together constitute an integrated code.
When there is a case to which the computation provisions cannot apply at all, it is evident that such a case was not intended to fall within the charging section.
[944 C, D E] 3.3.
The mode of computation and deductions set forth in section 48 provides the principal basis for quantifying the income chargeable under the head "capital gains".
Section 48 contemplates an asset in the acquisition of which it is possible to envisage a cost.
The intent goes to the nature and character of the asset, that it is an asset which possesses the inherent quality of being available on the expenditure of money to a person seeking to acquire it.
None of the provisions pertaining to the head "capital gains" suggests that they include an asset in the acquisition of which no cost at all can be conceived.
[945 A, C E] 3.4.
The date of acquisition of the asset is a material factor in applying the computation provisions pertaining to capital gains.
The "cost of acquisition mentioned in section 48 implies a date of acquisition, an inference as strengthened by the provision of sections 49, 50 and sub section (2) of section 55.
If the goodwill generated in a new business is regarded as acquired at a cost and subsequently passes to an assessee in any of the modes specified in sub section (1) of section 49, it will become necessary to determine the cost of acquisition to the previous owner.
Having regard to the nature of the asset, it will be impossible to determine such cost of acquisition.
Nor can sub section (3) of section 55 be invoked, because the date of acquisition by the previous owner will remain unknown.
[945 F G, H, 946 A] 940 Commissioner of Income tax vs K. Rathnam Nadar, ; Commissioner of Income tax vs Chunilal Prabhudas & Co., ; Jagdev Singh Mumick vs Commissioner of Income tax, ; commissioner of Income tax vs E. C. Jacob, Commissioner of Income tax vs Home Industries & Co., ; commissioner of Income tax vs Michel Postal, commissioner of Income tax vs Jaswant Lal Dayabhai, approved.
Commissioner of Income tax vs Mohanbhai Pamabhai, ; K. N. Daftary vs Commissioner of Income tax , overruled.
| The respondent company, which was incorporated in New York and carried on business in spices, brought a suit in the original side of the Bombay High Court against the appellant for recovery of a sum of Rs. 92,884 4 10 on the basis of a judgment of the Supreme Court of the State of New York affirming two awards obtained by it and also on the awards in the alternative.
20 The respondent was a partnership firm carrying on import and export business in Bombay.
By two letters exchanged between them, the appellant and the respondent agreed to do business in turmeric fingers on the terms and conditions of the American Spice Trade Association, one of which was an arbitration clause which ran as follows : "All questions and controversies and all claims arising under this contract shall be submitted to and settled by Arbitration under the Rules of the American Spice Trade Asso ciation printed on the reverse side thereof.
This contract is made as of in New York.
" The appellant failed to supply turmeric in terms of the two contracts it entered into with the respondent.
The respondent put the matter into arbitration in pursuance of the arbitration clause.
The appellant took no part in it.
The arbitrators gave the two awards in favour of the respondent for damages.
The appellant did not pay.
The respondent then took appropriate proceedings and got the awards confirmed by the judgment of the Supreme Court of the State of New York.
The single judge of the Bombay High Court who tried the suit held that it was not maintainable either on the foreign judgment or on the awards and (dismissed the suit.
The Division Bench on appeal held that the suit was maintainable on the awards, though not on the judgment, as part of the cause of action had arisen in Bombay and the relevant facts had been proved by the Public documents produced by the respondent and the admissions made by the appellant and decreed the suit.
Held, (per Dayal and Mudholkar JJ.) The decision of the Single judge of the High Court that the suit was not maintainable on the foreign judgment must be affirmed but on other grounds.
Apart from the provisions of the Arbitration Protocol and Conventions Act, 1937, foreign awards and foreign judgments based upon award arc enforceable in India on the same grounds and in the same circumstances in which they are enforceable in England under the Common Law on grounds of justice, equity and good conscience.
On the original side of the Bombay High Court English Common Law is also applicable under cl. 19 of the Letters Patent read with cl.
XLI of the Charter of that Court.
If the award is followed by a judgment which is rendered in a proceeding in which the person against whom judgment is sought can take objections as to the validity of the award, the judgement will be enforceable in England.
Even then the plaintiff will have the right to sue on the original course of action.
Secondly, even a foreign award will be enforced only if it satisfies mutate 's mutandis the tests applicable to the enforcement of foreign judgments on the ground that it creates a contractual obligation arising out of submission to arbitration.
But there is a difference of opinion in this connection on two matters, (1) whether an award which 21.
is followed by a judgment can be enforced as an award or whether the judgment alone can be enforced, and (2) whether an award which is not enforceable in the country in which it was made without an enforcement order or a judgement, can be enforced or in such a case the only remedy is to sue on the original cause of action.
Thirdly, both a foreign judgment and a foreign award may be sued upon provided certain conditions are fulfilled one of which is that it has become final.
Although, therefore, the respondent could sue on the original cause of action in the Bombay High Court that cause of action must be distinguished from the one furnished by the 'judgment of the New York Supreme Court which must be held to have arisen in New York and not in Bombay and was a cause of action independent of the one afforded by the contracts and the Bombay High Court would, consequently, have no jurisdiction to try the suit based on that judgment.
East India Trading Co. vs Carmel Exporters & Importers Ltd., , Schibsby vs Westenholz., and Re Davidson 's Settlement Trust, (1873) L. R. 15 Eq. 383, referred to.
In a suit based on a foreign award the plaintiff has to prove,.
(1) that the contract between the parties provided for arbitration by a tribunal in a foreign country, (2) that the award is in accordance with the agreement, (3) that the award is valid according to the law of that country (4) that it was final according to that law and, (5) that it was subsisting award at the date of the suit.
The essential difference between a foreign judgement and 2 foreign award is that while the former is a command of the foreign, sovereign and the coming of nations accords international recognition to it if it fulfill certain basic requirements, the latter is founded on the contract between the parties and is not given the status of a judgment in the country in which it is made 'and cannot claim the same international status as the act of a foreign sovereign.
Even though an award may not have obtained the status of judgment in the country in which it is made, if it possesses the essential attribute of a judgment, that is finality, it can be sued upon in in other country.
Union Nationaledes Cooperatives Agricoles de Careales vs Robert Catterall & Co. Ltd. ' , referred to.
But the finality that r. 15, cl.
(E) of the American Spice Trade Association gives to the awards in question is no more than a matter of contract between the parties and must be subject to the law of the State.
A reference to the laws of the State of New York makes it abundantly clear that the relevant provisions of the laws of the 22 State under which alone the awards could become final had not been complied with and they could not, therefore, provide a cause of action for the suit.
For an award to furnish a fresh cause of action, it must be final.
If the law of the country in which it was made gives finality to the judgment based on an award and not to the award itself, the award cannot furnish a cause of action in India.
Although the High Court of Bombay has jurisdiction to enforce a final award made in a foreign country in pursuance of a submission made within the limits of its original jurisdiction, the awards in question not being final the suit must fail.
Per Subba Rao J.
The doctrine of non merger of the original cause of action with the foreign judgment pronounced upon it is a well established doctrine.
Popat vs Damodar, , Oppenbeim and Co. vs Mohmed Haneef, Mad. 496 and Nil Ratan Mukhopahya vs Cooch Behar Loan Office, Ltd. I.L.R. , referred to.
If the contract does not merge in the judgment, by a parity of reasoning an award on which a foreign judgment is passed cannot also merge in the judgment.
There is no distinction between a foreign award which would require an enforcement order to be enforceable in law and an award which cannot be enforced except by a judgment.
An en forcement order as well as a judgment on an award serves the same purpose and they are two different procedures for enforcing, an award.
Meerifield Ziegler & Co. vs Liverpool Cotton Association Ltd., , referred to.
A suit would, therefore, lie on a foreign award completed according to the law of that country and before a decree can be passed on it three things must be proved, (1) arbitration agreement, (2) that the arbitration was conducted in accordance with the agreement, and (3) that the award was valid according to the law of the country when it was made.
Norske Atlas Insurance Co. Ltd. vs London General Insurance Company Limited. , referred to.
It was not correct to say that the High Court had gone wrong in holding that the three necessary conditions had been proved by the admission of the appellants in their pleadings.
Rules 3, 4 and 5 of the Order VIII of the Code of Civil Procedure form an integrated code dealing with the manner in ,which the allegations of fact made in a plaint has to be traversed :and the legal consequences that follow from its non compliance.
23 The written statement must deal specifically with each allegation of fact made in the plaint and if the defendant denies any such fact, such denial must not be evasive, he must answer the point of substance and if he fails to do so the said fact must be take to be admitted.
The discretion under the proviso to r. 5 has to be exercise by the court as justice demands and particularly according to the nature of the parties, standard of drafting prevailing in the locality and the practice of the court.
There can be no doubt that pleadings on the original side of the Bombay High Court have to be strictly construed in the light of the said provisions unless the court thinks fit to exercise it discretion under the proviso.
Tildesley vs Harper, and Laxmi narayan vs Chimniram Girdharilal, Bom. 89 referred to.
The said three conditions were also proved by the exhibited record of the proceedings of the Supreme Court of New York containing the certificate of the Consul General of India in New York and certified copies of the order and judgment of the Supreme Court.
While under section 78(6) of the Indian Evidence Act, proof of the character of the document according to the law of the foreign country, is condition precedent to its admission, such admission is not a condition precedent for drawing the requisite presumption under section 86 of the Act.
That presumption can be drawn before the document is admitted.
The judgment of the Supreme Court of New York, therefore, which satisfied the first two conditions laid down by section 78(6), could be legitimately admitted into evidence.
The contracts between the parties having been concluded within the local limits of the original jurisdiction of the Bombay High Court, a part of the cause of action must have arisen there.
and that court had jurisdiction to try the suit on the awards.
| For the assessment years 1956 57 and 1957 58, the appellant was, assessed to sales tax in respect of Vanaspati and oil under the U.P. Sales Tax Act, 1948.
By a notification issued on March 31, 1956 under section 3 A(2), the rate of tax on Vanaspati was fixed at one anna per rupee at the point of sale by the manufacturer.
The appellant and section P. Bhasin, a shareholder of the company, filed a writ petition in the High Court challenging the validity of the U.P. Sales Tax Validation Act, 1958 and also prayed for the quashing of the assessment order dated October 15, 1960 and the order dated February 1, 1961, of the Sales Tax Judge (Appeals), Meerut, in connection with the assessment of tax on the sale of Vanaspati and other articles both on the ground that the sale tax was assessed at a higher rate than was permissible under a valid law and that the tax had been assessed at the rate of one anna and not at 6 Naya Paisa per rupee.
The writ petition was dismissed by a single Judge of the High Court and the Letters Patent Appeal was also dismissed by High Court.
The appellant came to this Court by special leave.
The only point urged before this Court was that the tax should have been calculated at the rate of 6 Naya Paisa per rupee and not at the rate of one anna per rupee as laid down in the relevant provisions of the U.P. Sales Tax Act and the notice issued under its provisions.
Dismissing the appeal, Held (per P, B. Gajendragadkar, C.J., M. Hidayatullah, K. C. Das Gupta and Raghubar Dayal, JJ.): The High Court was right in construing the provisions of sub section
(3) of section 14 of Indian to mean that references to values in any enactment, notification, rule or order under any enactment or in any contract, deed or instrument, expressed in old coins should be construed to be references to values expressed in new coins by converting the old values at the rate of16 annas, 64 pice and 192 pies to 100 Naya Paisa.
The values expressed in new coins must be absolutely equivalent to the value of the, old coins.
Per Shah, J.
The liability for sales tax after the amendment of the will be at the rate of 6 new coins for every rupee of sale price and not one anna.
By the notification issued on March 31, 1956, the liability for payment of sales tax was to be computed at the rate of one anna in a rupee of the turnover.
By virtue of section 14(3), for an anna mentioned in the notification, 6 1/4 new coins are to be substituted.
As the substituted rate involves a fraction, by the process of rounding off at the rate specified in section 14(2), the fraction of new coins has to be omitted and the nearest new coins, i.e., 6 new coins are to be deemed to be substituted in the statute.
J. K. Jute Mills Co. Ltd. vs State of Uttar Pradesh, ; , Ram Kishan Sunder Lal vs State of Uttar Pradesh, 13 S.T.C. 923, 315 M/s. Mangalore Ganesh Beedi Works vs State of Mysore, [1963] Supp. 1 S.C.R. 275, referred to.
| The assessee respondent in the appeals was engaged in the repairing and refilling of cotton bowls on the shafts which are used as part of calendering machine in the textile industry.
The cotton bowl is a shaft made of steel on which a thick layer of cotton is pasted and affixed.
It is used in the textile finishing industries as an essential part of the calendering machine.
In the course of its use the cotton pasted on the shaft loses its thickness and shape and after sometime it requires repairing and refilling.
The assessee moved an application under section 35 of the U.P. Sales Tax Act, 1948 and the decision inter alia included the question whether the job of repairing and refilling of cotton bowl and the process involved therein amounted to "manufacture" or "sale" within the meaning of the Act.
The Commissioner of Sales Tax decided both these ques tions against the assessee, and the assessee preferred an appeal before the 422 Sales Tax Tribunal.
The Tribunal allowed the appeal in part.
It held that the process of repairing and refilling of cotton bowl of the customers did not amount to "manufacture" as defined under section 2(e i) of the Act.
It further held that such an activity of the assessee amounted to "sale" as defined under section 2(h) of the Act as amended by the U.P. Sales Tax Amendment and Validation Act, 1985.
The:Commissioner of Sales Tax preferred a revision to the High Court which went into the question whether a fur ther revision lay to the High Court.
It came to the conclu sion having regard to the scheme of the provisions contained in section 35 and the amendment made by the U.P. Act 12 of 1979, and the earlier Division Bench decision of the High Court in Indo Lube Refineries vs Sales Tax Officer, [1987] 66 S.T.C. 145 (All) that no further revision lay to the High Court from the order of the Tribunal.
The High Court accord ingly dismissed the revision.
The Commissioner appealed by special leave to this Court.
On the question: whether a revision shall lie to the High Court from the decision of the Commissioner under section 35 of the U.P. Sales Tax Act which has been the subject matter of an appeal before the Tribunal.
Dismissing the Appeals, the Court, HELD: 1.
The very language of section 35 of the U.P. Sales Tax Act, 1948 which enjoins a decision by the Commis sioner envisages that the decision is quasi judicial or judicial and cannot be characterised as administrative.
The question is whether on the language of the section a revi sion is entertainable from the decision of the Commissioner which has been subjected to an appeal to the Tribunal.
In view of the language used specifically in the absence of a provision that such a revision will be maintainable such revision will not be.
[435C E] 2.
Sub section (5) of section 35 after the amendment states that the decision of the Commissioner of Sales Tax under this section shall, subject to an appeal to the Tribu nal, be final.
In view of the language of that section, it cannot contemplate a further revision to the High Court against a decision of the Tribunal.
[435E F] Indo Lube Refineries vs Sales Tax Officer Sector l.
Gorakhpur, [1987] 66 STC 145, approved.
423 3.
In the instant case, the right of appeal has been given under the Act not to any ordinary Court of the country under the Code of Civil Procedure but to the courts enumer ated under the Sales Tax Act, and the revision is contem plated under the provisions of the Sales Tax Act.
[436B] 4.
"Final" in section 35 means that it is final and under the Act subject to the limited procedure contemplated under the Act.
The expression 'final ' prima facie means that an order passed under the Act was conclusive and no further appeal lay.
A right to revision under the Act is a right given by the Act.
[436C D] Kydd vs Vatch Committee of City of Liverpool, , 331 32; Maung Ba Thaw vs Ma Pin, [1933 34] 61 LR Indian Appeals 158; South Asia Industries Pvt. Ltd. vs S.B. Sarup Singh, and M/s. Jetha Bai and Sons Jew and others vs M/s. Sunderdas Ratheni and others; , , referred to.
Revision to the High Court in special cases under section 11 is contemplated on the ground that the case involved a question of law.
[437B] 6.
Having regard to the scheme of the U.P. Sales Tax Act, 1948 manifested from the amendment, to make the Commis sioner 's decision final, subject to an appeal to the Tribu nal where the Tribunal is enjoined to hear such as appeal by a Bench of three members and where revision is provided only in special cases, it would be improper to interpret the spirit and reason of that law in such a way as to enjoin that a further revision lay to the High Court under section 11 of the Act.
The High Court was, therefore, right that no further revision in such a situation would lie to the High Court.
[437F G] 7.
This, however, does not eliminate correction by the High Court.
In an appropriate case by exercise of a writ of certioraris under Article 226 of the Constitution it exer cises superintendence over all Courts and Tribunals through out the territory.
[437G H] Re Gilmore 's Application, [1957] 1 All England Reports 796, referred to.
The intention of the legislature is a slippery phrase.
It is better to find out the intention of the legis lature from the words used by the natural meaning of the words and the spirit and reason of the law.
[437E] 424 Aron Salomon vs A. Salomon and Company Ltd., ; ,38; Lord Howard De Walden vs Inland Revenue Commis sioners,[1948] 2 All England Reports page 825.
referred to.
Cross Statutory Interpretation (Second Edn.) p. 21.
referred to.
| The appellant a foreign company within the meaning of section 2(5A) of Income Tax Act, entered into an agreement with M/s. Carborandum Universal Ltd., having its registered office at Madras on June 22, 1955 and rendered certain technical and knowhow services.
In view of the said serv ices it was to 'receive from the Indian company an annual service fee equal to 3 per centum of the net sale proceeds of the products manufactured by the latter.
During the year of account relevant to the assessment year 1957 58 the appellant company received a sum of Rs. 95,762/ from the Indian company as its service fee.
A good slab of it was deducted at source on account of incometax and super tax.
The appellant company fried its return of income for the year in question with an application for refund of the entire tax deducted at source.
The income tax officer took the view in his assessment order that 5% of the technical fee paid to the American company was earned by it in India and only that small amount was assessable to in come tax and directed the refund of major portion of the tax deducted at source to the assessee company.
The Commission er of Income tax in exercise of his revisional powers under section 33B of the Act took the view that at least 75% of the technical fee earned by the assessing company during the year of account had accrued or .arisen in India even though the technical information was supplied by the assessee company from outside India and the technical personnel furnished by the assessee company to the Indian company although worked under the control of and was paid for by the latter inasmuch as the situs of the services so rendered was in India.
Treating the technical fee in the nature of royalty paid, it directed the Income tax Officer to revise the assessment on the basis that 75% of it should be taken as income accruing or arising in India to the assessee company.
On appeal, the Appellate Tribunal set aside the said order and restored that of the Income tax Officer even though it was of the view that even 5% of the technical fee could not be taken as income of the assessee.
company taxa ble under the Act.
The Tribunal held that the use of the technical assistance and know how given by the American Company and made use of by the Indian Company in the taxable territory could not make the former liable to payment of income tax on the amount of technical fee received by it nor was it any royalty.
It also rejected a new stand taken by the Revenue that the assessee company must be deemed to be working in conjunction with the Indian Company in the manu facture of its products.
On reference under section 66( 1 ).
of the Act the Revenue.
took another new plea that the agree ment clearly established a business connection between the two companies and as such technical fee received by the assessee company had accrued or arose from such business connection assessable to income tax under section 4(1)(c) read with section 42 of the Act.
The objection of the assessee.
company to the entertainment of the new point at the refer ence stage that it did not arise out of the Tribunal 's order was over ruled by the High Court on the ground that the question referred to was in general terms and comprehensive enough to embrace within its ambit the point of applicabili ty of section 42(1) of the Act to the transactions in question.
Upholding the stand taken on behalf of the Revenue the High Court answered the question referred to it in its favour against the assessee company.
On appeal by certificate the appellant contended: 476 (1) That the High Court could not go into the matter of business connection between the two companies when such a question was never raised or in issue at any earlier stage; (2) That the High Court was wrong in rounding the tax liability of the assessee company on the basis of the alleged business connection.
Its finding or view in that regard is wholly erroneous.
(3) That even assuming that the High Court was right in its view of basing the tax li ability of the assessee company on the alleged business connection, it failed to examine the question of apportionment under section 42(3) of the Act.
(4) That apportionment under section 42(3) and determination of the tax liability of the assessee company in pursuance thereof could not be more than the liability to pay tax on 5% of the total technical fee as found by the Income taxOfficer and upheld by the Tribunal, HELD: (1) The technical service fee received by the assessee company from the Indian company during the accounting year relevant to the assessment year 1957 58 did not accrue or arise in India.
Since 5% of the technical service fee was brought to tax by the I.T.O. and no appeal was filed against it on behalf of the assessee company, the technical fee in excess of 5% was not taxable.
[484 B D] (2) The High Court did not keep in view the distinction between the concept of actual accrual and the notion of deemed accrual evidenced from section 4(1) (c) & section 42 but mixed the one with the other while answering the reference in question.
The income assessable to income tax section 4(1)(c) is of two kinds viz. (1) accruing or arising in the taxable territories and (ii) deemed to accrue or arise to the non resident in the taxable territory.
The concept of actual accrual or arising of income in the taxable territories, although not depending upon the receipt of the income in the taxable territories is quite distinct and apart from the notion of deemed accrual or arising of the income.
[481 A B].
(3) The High Court was wrong in entertaining at the reference stage on the basis of the alleged general and compendious nature of the question referred to it by the Tribunal the new point based upon the theory of business connection, which was neither raised before the Tribunal nor considered by it; nor did it arise on the findings of fact recorded by it.
[481 F G] Commissioner of Income Tax, Bombay vs Scindia Steam Navigation Co. Ltd. ; , followed.
(4) The High Court went wrong in its approach to the question raised before it and did not quite correctly appre ciate the scope and applicability of section 42 of the Act.
On a plain reading of sub sections (1) and (3) of section 42, it would appear that income accruing or arising from any busi ness connection in the taxable territories even though the income may accrue or arise outside the taxable territories will be deemed to be income accruing or arising in such territory, provided operations in connection with such business, either all or a part, are carried out in the taxable territory.
If all such operations are carried out in the taxable territory, sub section (1.) would apply and the entire income accruing or arising outside the taxable territory but as a result of the operations in connection with the business giving rise to the income would be deemed to accrue or arise in the taxable territories.
If, however, all the operations are not carried out in the taxable terri tories, the profits and gains of the business deemed to accrue or arise in the taxable territories shall be only such 'profits and gains are reasonably attributable to that part of the operations carried out in the taxable territo ries.
Thus comes in the question of apportionment under subsection (3) of section 42.
[482 C F] Commissioner of Income Tax, Punjab vs R.D. Aggarwal & Co. and Anr.56 ITR 20, referred to.
(5) In the instant case the High Court was wrong in its view that activities of the foreign personnel lent or deput ed by the American company amounted to a business activity carried on by that company in the taxable territory.
The service rendered by the American company in that connection was wholly and 477 solely rendered in the foreign territory.
No part of the activity or operation could be said to have been carried on by the American company in India, even if there was any business connection between the earning of the income in the shape of the technical fee by the American company and the affairs of the Indian company.
In the absence of such a sustainable finding, the provisions of section 42 either of sub section (1) or of sub section (3):were not attracted at all.
In order to rope in the income of a non resident under the deeming provision it must be shown by the Department that some of the operations were carried out in India in respect of which the income is sought to be assessed.
[483 E H] Commissioner of Income Tax, Madras I vs Carborandum Co. overruled.
C.I.T. Bombay City IV.
Tata Chemicals Ltd. , approved.
| 'A ', a partner in a firm running a sugar factory, insti tuted a suit for its dissolution in 1948 and a Receiver was appointed by the Court.
The arrangement arrived at for the factory was that it would be leased out for a term of five years to the highest bidder from amongst the six partners.
In July, 1948, 'A ' transferred his 1/6th share to the appel lant for Rs.4,50,000.
The appellant had taken a loan against shares of that value held by him in another sugar mill for purchase of the share.
In May, 1950, another partner 'B ' leased out his 1/6th share to the appellant on an annual payment of Rs.50,000.
In July, 1950 yet another partner 'C ' leased out his 1/6th share to the appellant for a similar sum.
In 1951 'C ' sued for cancellation of the lease.
In April, 1954 the dispute was compromised and the lease termi nated. 'C ' undertook to pay the appellant at the rate of Rs. 16,000 for the first three years and at the rate of Rs. I0,000 for the subsequent two years. 'B 's 1/6th share was also returned on mutual arrangement and he agreed to pay the appellant a sum of Rs.39,000 and odd annually.
During the assessment proceedings for the year 1953 54 the nature of these receipts came to be considered.
The assessee appellant maintained that these were in the nature of capital receipts in lieu of the lease hold interest.
The assessee also claimed depreciation on the 1/6th share in the sugar mill that he had acquired from 'A '.
Similar questions also arose for the assessment years 1954 55 and 1955 56.
The assessee had suffered a loss in the sugar business in the assessment year 1953 54, a part of which remained unab sorbed, and claimed set off of that unabsorbed loss against the share of the rent received by him from the Receiver in the assessment year 1954 55.
Since the sugar mill was being assessed as an association of persons, for the assessment year 1960 61 102 the Receiver claimed that for the purpose of computing depreciation allowance, the written down value of the busi ness assets be enhanced so as to reflect the sum of Rs.4,50,000 in place of 16th share representing the share of 'A '.
The Revenue negatived the assessee 's contentions, which view was upheld by the High Court.
Dismissing the appeals by certificate, the Court, HELD: 1.
The amounts the assessee received under the compromise or by amicable arrangement from other partners were in the nature of profits to be received by the assessee for the interest held in the business and, therefore, con stituted taxable income.
[106B] 2.
The benefit of section 10(2)(vi) of the Income tax Act, 1922 would be admissible only where the assessee is the owner of the property.
It too is not admissible in respect of a fractional claim.
[106A] In the instant case, all that is claimed for the asses see is 1/6th share in the machinery.
Such a fractional share does not suffice for granting an allowance for depreciation under section 10(2)(vi) of the Act.
[105F] 3.
Two conditions had to be fulfilled under section 24 of the Incometax Act, 1922 before the claim for set off of carried forward loss could be admitted, firstly, the income against which the loss has to be set off should be income from business and secondly, the business should be same in which the loss was suffered.
[107C] In the instant case, the letting out of the sugar mill was not the business of the assessee.
The Receiver was appointed for dissolution of the firm and the main reason for allowing the sugar factory to work was to dispose it of as a running mill so that proper price could be fetched.
[107DE] 4.
Under the scheme of 1922 Act, it is the assessee who alone is entitled to maintain claim of depreciation.
Within the framework of that scheme it is difficult to maintain separate value of a part of the asset to work out deprecia tion.
The book value, as shown must in the instant case, therefore, be applicable to the entire assets of the firm including the 1/6th share which 'A ' had given to the appel lant.
The claim of the Receiver for depreciation cannot, therefore, be sustained.
[108B] 103
|
minal Appeal No. 171 of 1959.
Appeal by special leave from the judgment and order dated August 3, 1959, of the Allahabad High Court in Criminal Revision No. 1080 of 1959.
0. P. Rana and A. 0.
Ratanaparkhi, for the appellant.
G. C. Mathur and C. P. Lal, for The dent.
March 26.
The Judgment of the Court was delivered by RAGHUBAR DAYAL, J.
One Ram Narain was ' ordered by the High Court of Allahabad, on June 9, 1958, to furnish a personal bond for a lakh of rupees and three sureties, two in the sum of Rs. 40,000/ each and one in the sum of Rs. 20,0001in respect of the case against him for having committed.
criminal breach of trust with respect, to the funds of the Pikaura Co operative Society He 57 was to furnish the personal bond and the sureties within three weeks from the date of the order.
It was further ordered: "The applicant should furnish the personal bond and sureties as 'directed above within three weeks from today and during that period he will not be arrested.
If he does not furnish the bonds and sureties within this period he will be liable to be re arrested and detained till the necessary bonds and sureties are furnished.
" It may be mentioned that Ram Narain had previously furnished a personal bond and sureties in connection with the embezzlement alleged to have been committed by him and that the necessity for a fresh order for furnishing personal bond and sureties arose on account of the police submitting more than one charge sheet with respect to the amount embezzled and it was felt that the original security furnished might not be, effective.
On June 26, 1958, Ram Narain executed a personal bond for Rs. 1,00,000/ and offered,the required sureties.
Kashi stood surety for Rs. 40,000/ , Safir Hussain for Rs. 40,000/ and Smt.
Sona for Rs. 20,000/ respectively.
The surety bond by Safir Hussain was not duly verified as he was in hospital at that time, but when it was put up to Safir Hussain for verification on July 12, 1958 be refused to verify it.
Prior to this, on July 7, 1958, Safir Hussain filed an application before the Magistrate praying that his surety bonds in connection with the embezzlement of Rs. 40,000/ and Rs. 80,000/ be cancelled.
Ram Narain was present in Court that day.
No particular order was passed on this application of Safir Hussain.
On July 93 1958, an application on behalf of Ram Narain was filed stating that Bekaru 's surety 58 be accepted in place of Safir Hussain 's surety.
Bekaru filed the surety.
bond offering himself to stand surety for Re. 40,000/ for Ram Narain 's appearance in Court.
He was identified by Sri Ahmad Husain, Vakil, who certified that Bekaru Singh possessed sufficient property to stand surety for Rs. 40,000/ .
The Magistrate ordered for the verification from the Tehail and on receipt of the report from the Tehsil, accepted the bond on August 20, 1958.
The Tehsil report, however, indicated that the house mentioned in the surety bond and alleged to be worth Rim.
60,000/ was estimated to be worth Rs. 16,075/ .
The police charge.
,sheet in the case appears to have reached the Court on August 20, 1958, when summons for the appearance of Ram Narain was ordered to be issued for September 1, 1958.
The summons was not served.
When Ram Narain did not appear on September 1, 1958, September 9, and September 23, the Court, on September 24, ordered action under sections 87 and 88 Cr.
P.C. against him and the issue of notices to the sureties to produce him in Court.
When he did not appear in Court on October 29, the Court forfeited the personal bond executed by Ram Narain and the bail bonds executed by the sureties and ordered issue of notice to the sureties to pay the penalty or show cause a.,) to why the amount be not recovered from them.
Bekaru objected to the forfeiture of his surety bond.
On April 20, 1959, the objection was disallowed and the learned judicial officer ordered that the amount of Rs. 40,000/ be recovered from his movable.
property through attachment and sale.
Bekaru appealed but his appeal was dismissed by the learned Sessions Judge.
His revision application to the High Court was also dismissed.
He has preferred this appeal by special leave.
The main contention for the appellant is that the learned Magistrate should pot have accepted 59 Bekaru Singh 's surety bond without first taking action contemplated by sub sections (2) and (3) of section 502, Cr.
P.C. Section 502 reads: "(1) All or any sureties for the attendance and appearance of a person released on bail may at any time apply to a Magistrate e to discharge the bond, either wholly of so far as relates to the applicants.
(2) On such application being made, the Magistrate shall issue his warrant of arrest directing that the person so released be brought before him.
(3 ) On the appearance of such person pursuant to the Warrant, or on his voluntary surrender, the Magistrate shall direct the bond to be discharged either wholly or so far as relates to the applicant, and shall call upon such person to find other sufficient, sureties, and, if he fails to do so, may commit him to custody.
" It is urged that the Magistrate had to issue a warrant for the arrest of Ram Narain when Safir Hussain had presented his application for the discharge of his surety bond and that when Ram Narain would have appeared before the Court in execution of that warrant, the Magistrate had to first discharge Safir Hussain 's surety bond and only then could have called upon Ram Narain to furnish other surety.
The Magistrate took no such stop and therefore could not have legally accepted the surety bond offered by Bekaru on July 9,1958.
We do not agree with this contention.
These provisions Of section 502 are meant for the continuity of the surety bond on the basis of which an accused has been released on bail till such time that the accused is before the Court and for taking further action in case the accused desires to offer another security in place of the one who is to be discharged.
They are not conditions precedent for the acceptance of 60 a fresh surety in place of the earlier one.
In the circumstances of the present case, there was no occasion to issue a warrant for the arrest of Ram Narain on Safir Hussain 's applying for the discharge of his surety bond We do not Know in what circumstances no particular order was passed on July 7, 1958 on the application of Safir Hussain.
Ram Narain who was present in Court that day, may have intimated to the Court that he would offer a fresh surety on July 9.
Anyway a fresh surety was offered on that day viz; July 9.
Bekaru stood surety.
An application on behalf of Ram Narain was presented praying for the acceptance.
of Bekaru 's surety bond in place of Safir Hussain 'section In accepting Bekaru 's surety bond the Court committed no wrong.
It was interested in getting a fresh surety for letting Ram Narain continue on bail.
Bakaru offered the surety bond.
His competence to stand surety for Rs. 40,000/. was certified by a Vakil, Safir Hussain 's bond therefore stood cancelled and Bekaru 's took its place.
We do not therefore consider that there was any incompetency in the Magistrate 's accepting Bekaru 's surety bond in place of Safir Hussain 'section It is true that Bekaru 's surety bond was formally accepted on August 20, 1958, but that does not matter.
Sub section (1) of section 499, Cr. P. C. provides that before any person is released on bail bond must be executed by such person and bonds be also executed by sureties for the attendance of that person in Court.
Sub section (3) of s.499 is "(3) For the purpose of determining whether the sureties are sufficient, the Court way, if it so thinks fit, accept affidavits in proof of the facts contained therein relating to the sufficiency of the sureties or may make such further enquiry as it deems necessary.
" When Bekaru furnished the surety bond he also filed 61 an affidavit stating therein that the house mentioned in the surety bond was worth over Rs. 40,000/ Sri Ahmed Husain Vakil, certified that Bekaru possessed sufficient property to stand surety for its.
40,000/ In the circumstances, the Magistrate could accept Bekaru 's surety bond.
Of course the Magistrate could make further enquiry as well and it was for the purpose of further enquiry that he ordered verification from the Tehsil.
Bekaru 's bond, in our opinion, was accepted on July 9, subject to further orders on the receipt of the Tehsil report.
Further, Ram Narain 's continuing on bail is justified by the provisions of 8.
500 Cr. P. C., once Bekaru 's surety bond had been filed.
Its sub section
(1) provides that as soon as the bond has been executed, the person for whose appearance it has been executed shall be released.
This contemplates that the accused is to be released on the execution of the bonds which should be accepted on their face value in the first instance.
Section 501, Cr. P. C. provides for the issue of a warrant of arrest of the person so released on bail if it is subsequently found that through mistake, fraud or otherwise, insufficient sureties bad been accepted, or if they afterwards became insufficient.
We are therefore of opinion that formal acceptance of Bekaru 's surety bond on August 20, 1958 by the Magistrate does not in any way affect Bekaru 's liability on that bond from July 9, 1958.
Any way, he was liable on that bond for the non appearance of Ram Narain on a date subsequent to August 20, 1958.
It may be mentioned that it was urged up to the appeal stage that the surety bond was accepted on the 20th of August 1958 after the Magistrate had known of the absconding of Ram Narain.
The Courts found against this allegation as there was no evidence in support of it.
Another point urged is that the surety bond executed by Bekaru Singh did not have on the other 62 side the personal bond executed by Ram Narain and that in the absence of a personal bond by Ram Narain, the surety bond executed by Bekaru could not be legally accepted.
Reliance is placed on the case reported as Brahma Nand vs Emperor (1) and a few other cases expressing the same view.
These cases are distinguishable on facts.
In Brahma Nand 's case.
(1) the accused himself had not executed any bond and therefore it was held that the surety bonds could not be forfeited.
In the present case Ram Narain executed bond on June 26, 1958.
Kasbi, one of the sureties, executed the surety bond printed at the back of the bond executed by Ram Narain.
Ram Narain had already bond himself to pay Rs. 1,00,000/ in case he failed to appear in Court when required.
Other sureties bond themselves to pay the various amounts in case Ram Narain did not appear.
Their surety bond are good by themselves.
Bekaru 's surety bond is there fore as effective and legal as Kashi 's bond which is just on the back of Ram Narain 's bond.
It is not required by any provision of the Code of Criminal Procedure that all the sureties should execute the bond printed at the back of the form on which the accused execute the personal bond or that the accused must execute as many bonds in identical terms as there are surety bonds by individual sureties.
The mere fact that Form No. XLII, Schedule V. Criminal Procedure Code, prints the contents of the two bonds, one to be executed by the accused and the other by the surety, together, does not mean that both these bonds should be on the same sheet of paper.
We are, therefore, of opinion that Bekaru 's bond can be forfeited if Ram Narain does not comply with the terms of his bond executed on June 26, 1958 and that Ram Narain had not to execute a (1) A. 1.
R. 1939 All.
63 bond afresh when Bekaru furnished fresh surety in place of Safir Hussain 's surety bond.
We therefore hold that the appellant 's bond has been rightly forfeited on the non appearance of Ram Narain in 'Court.
We therefore dismiss the appeal.
| One R was granted bail on his furnishing a personal bond and three sureties which he did.
On July 7, one of the sureties S applied for the discharge of his bond.
On July 9, R made an application that the appellants surety bond be accepted in place of S, and the same day the appellant filed his surety bond.
The appellant also filed an affidavit that he had property enough to satisfy the bond and a vakil also certified to that effect.
The bond was sent for verification to the Tehsil and after verification was formally accepted on August 20.
Subsequently R absconded and the appellant 's bond was forfeited.
The appellant contended that the forfeiture was illegal and that his bond was not properly accepted as no warrant was issued for the arrest of R when S applied for the discharge of his bond, as the bond of S was not formally discharged and as R had not executed a personal bond on the reverse of the form on which the appellant bad executed his bond.
56 Held, that the surety bond of the appellant had been.
properly accepted and the forfeiture was legally made.
The provisions of section 502 of the Code of Criminal procedure were meant for the continuity of the surety bond and for enabling the accused to offer another surety bonds; they were not conditions precedent for the acceptance of a fresh surety in place of an earlier one.
There was no occasion to issue a warrant for the arrest of R as he was present, in Court on July 7, when S applied for the discharge of his bond and may have intimated to the Court that lie would offer fresh surety on July 9.
The Court was interested in getting a fresh surety for letting R continue on bail and it did no wrong in accepting the appellant 's surety bond which was offered.
The bond of S stood cancelled and appellant 's bond took its place.
The bond of the appellant was really accepted on July 9 when the appellant filed the affidavit as required by section 499 (3) of the Code and the Vakil also certified as to his solvancy.
It was immaterial that the bond was formally accepted on August 20.
Further, it was not necessary that each surety should execute the surety bond on the reverse of the personal bond of the accused.
| Respondent No. 1 acquired tenancy rights in five plots in the villages of Biknaur and Samahuta situated in the area known as Lower Murli Hill in District Shahabad, Bihar.
In 1949 he filed a plaint in the Court of the Subordinate Judge Sasaram, against the State of Bihar and others, claiming inter alia that as a tenant he had a customary right to quarry limestone for trade purposes from the Lower Murli Hill.
The claim was based mainly on certain entries in the Custom sheets prepared at the time of the Cadastral Survey in 1913 under section 102 of the Bihar Tenancy Act, 1885.
The trial court rejected the claim but the High Court held the custom to be established by the evidence of the Customs sheets.
The defendants appealed.
Held The High Court was in error in holding that the plain tiff had established the custom pleaded by him or that it was reasonable.
(i) There was nothing to show that the practices and privileges recorded in the Custom Sheets were exercised as a matter of right.
The record has presumptive value.
But the revenue authorities were concerned to ascertain the existing state of affairs and not to determine whether the practices and privileges were ancient, certain, reasonable and continuous.
As evidence of local custom, the custom sheets had therefore not much value.
On the other hand there were indications that the exercise of the privileges recorded therein was permissive.
Even on the most liberal interpretation they did not provide evidence of the exercise of the privilege of commercial exploitation of limestone from the area in question.
[317D; 319G] (ii) Even granting that the Custom sheets recorded a local custom that the tenants in the villages of Baknaur and Samahuta excavated stones from the hills near the villages for purposes of trade, a claim of right founded on that custom must be held unreasonable and incapable of enforcement by the sanction of a court 's verdict, [320B] A claim in the nature of a profit a prendre operating in favour of an indeterminate class of persons and arising out of a local custom may be held enforceable only if it satisfies the tests of a valid custom.
A custom is a usage by virtue of which a class of persons belonging to a defined section in a locality are entitled to exercise specific rights against certain other persons or property in the same locality.
To the extent to which it is inconsistent with the general law undoubtedly the custom prevails.
But to be valid a custom must be ancient, certain and reasonable, and being in derogation of the general rules of law must be construed strictly.
A right in the nature of a profit a prendre in the exercise of which the residents of a locality are entitled to excavate stone for trade purposes would ex facie 313 314 be unreasonable, because the exercise of such a right ordinarily tends to the complete destruction of the subject matter of the profit.
The custom, if exercised in its amplitude as claimed, may also lead to breaches of the peace, for it would be open to all tenants to work any quarry simultaneously for trade purposes.
[321B D; 324D] Lord Rivers vs Adams, L.R.3 exhibit Div. 361, Harris & Anr.
vs Earl of Chesterfield and Anr.
, , Alfred F. Beckett Ltd. vs Lyons , referred to Lutchhmeeput Singh vs Sadaulla Nushyo & Ors., I.L.R. 9 Cal.
698 and Arjun Kaibarta vs Manoranjan De Bhoumick, I.L.R. , approved.
Henry Goodman vs The Mayor and Free Burgesses of the Borough of Saltash.
7 A.C. 633 and Mercer vs Denne, , 557 distinguished.
| In this appeal by special leave brought by the auction purchaser against the Judgment of the Madras High Court the sole question for consideration is as regards the period of limitation for making a deposit to make an application under Rule 89 of Order XXI of the Civil Procedure Code, 1908 to set aside the sale of immovable property sold in execution of a decree.
Whether the deposit is to be made within 30 days from the date of the sale as required by sub rule (2) of Rule 92 of Order XXI or within 60 days from the date of sale as provided in Article 127 of the ? Following its earlier decision in Thangammal & Ors. vs V.K. Dhanalakshmi & Anr.
and the decision of this Court in Basavantappa vs Gangadhar Narayan Dharwadkar & Anr., the High Court had held that Article 127 governed the period of limitation to make a deposit in terms of Rule 89.
Setting aside the judgment of the High Court on the question of limitation, this Court in allowing the appeal, HELD: The correct construction of Rule 92(2) of Order XXI of the Civil Procedure Code, 1908 leads to the irresist ible conclusion that the time for making a deposit in terms of Rule 89 of Order XXI is 30 days, and Article 127 of the prescribing the period for making an application under Rule 89 has no relevance to the prescribed time for making the deposit.
Neither provision has any effect on the other as to time.
[489G H; 490A] Basavantappa vs Gandadhar Narayan Dharwadkar & Anr., ; , over ruled.
Nalinakaya Bysack vs Shyam Sunder Haldar & Ors.
, ; at 545; Mersey Docks vs Henderson, [1988] 13 App.
595,602; 484 SUPREME COURT REPORTS [1990] 1 S.C.R. Crawford vs Spooner, [1846] 6 Morre P.C. 1, 8, 9; Seaford Court Estates vs Asher, All E.R., [1949] 2.155 at 164 M. Pentiah & Ors.
vs Muddala Veeramallappa & Ors., ; at 314 Heydon 's case ; 76 ER 637; Dakshayini & Ors.
vs Madhavan, AIR 1982 Kerala 126, referred to.
| (1) The jurisdiction of the High Court to issue a writ of certiorari under article 226 is a supervisory jurisdiction, and not as an appellate court.
The findings of fact reached by an inferior court or tribunal as result of the appreciation of evidence are not reopened or questioned in these proceedings.
An error of law which is apparent on the face of record can be corrected but not an error of fact, however grave it may be.
In regard to a finding of fact recorded by a tribunal a writ can be issued if it is shown that the tribunal had erroneously refuged to admit admissible and material evidence or had erroneously admitted inadmissible evidence which has influenced the impugned finding.
Again, if a finding of fact is based on the evidence, that would be regarded as an error of law which can be corrected be a writ of ' certiorari, but if there is some evidence which may reasonably support the conclusion, its adequacy or sufficiency and the inference of ' fact drawn, are within the exclusive jurisdiction of the tribunal.
The Court is concerned to determine whether the inquiry is held by an authority competent in that behalf, and according to the procedure prescribed in that behalf, and whether the rules of natural justice are not violated.
Therefore, in departmental enquires relating to the guilt of delinquent officers, the High Court may interfere only where the departmental authorities have held tax proceedings against the delinquent officer in a manner inconsistent with the rules of natural justice or in violation of the statutory rules prescribing the mode of inquiry or where the authorities have disabled themselves from reaching a fair decision by some considerations extraneous to the evidence and the merits of the case, or by allowing themselves to be influenced by irrelevant considerations or where the conclusion, on the very face of it, is so wholly arbitrary and capricious that no reasonable person could ever have arrived at that conclusion.
[525 E 527B] State of Andhra Pradesh vs section Sree Rama Rao ; Railway Board, representing the Union of India New Delhi & Anr.
vs Niranjan Singh ; and Syed Yakoob vs K. section Radhakrishnan & Ors.
[1964] 5 S.C.R. 64, referred to.
(2) There is no warrant for the view that in considering whether a public officer is guilty of misconduct charged against him the rule followed in criminal trials, namely, that an offence is not established unless proved beyond reason able doubt, must be applied.
[525F G] In the present case, charges that the respondent fraudulently claimed travelling allowance were inquired into by the Disciplinary Proceedings Tribunal.
The Tribunal found him guilty and recommended dismissal.
The Government accept ed the recommendation and dismissed the respondent.
In a writ petition challenging the order of dismissal, the High Court equated the charge of mis conduct to a charge under s.5(1)(d) of the Prevention of Corruption Act, 1947 discussed the evidence and findings of the Tribunal on that basis and held that the prosecution did not adduce material and essential evidence namely; the conductor 's chart which would show whether the respondent travelled on a particular day, that a statement made by the respondent during investigation was not admissible in evidence, that it was not safe to rely on it and set aside the order of dismissal.
Allowing the appeal to this Court.
^ HELD .
(a) The High Court was not correct in holding that the domestic inquiry before the Tribunal was the same as prosecution is a criminal case.
[525C D] 3 L925SupCI/75 522 (b) The respondent was given full opportunity to explain the statement A made by him during investigation.
Further, the Tribunal did not base its findings only on that statement.
It had given its reasons for its conclusion and it is not possible for the High Court to say that no reasonable person could have arrived at that conclusion.
The High Court had accepted the explanation that the conductors ' charts were destroyed and therefore could not be Produced.
Moreover, the conductor 's chart would not show the names of the persons paying the money.
The High Court reviewed and re assessed the evidence and then rejected evidence as no evidence, and this is precisely what the High Court, in exercising jurisdiction under Art 226, should not do.
[525SC; 527B D] (c) The respondent 's contention that the Tribunal relied upon certain reports which were not available to the respondent is not correct.
A reference to the inquiry report of the Tribunal shows that the Tribunal had not relied upon those documents for finding the respondent guilty.
[527G 528B]
| The petitioners accused were arrested by the Security Police Patrol Party in the State of Bihar while attempting to cross Indo Nepal border.
One of them was identified Simranjit Singh Mann a dismissed Police Officer who had gone underground after an order of detention under the National Security Act was passed against him.
As a result of 803 the search, currency notes and a number of documents and other articles were seized from the petitioners.
It is alleged that one of the accused also offered a bribe to the police officers.
The police registered a first information report and commenced investigation.
A chargesheet was filed on 11th December, 1985 before judicial Magistrate First Class against the five accused petitioners for offences under sections 121 A, 123, 124 A, 153A, 165 A, 505 and 120 B of the Indian Penal Code.
However, before the chargesheet was filed, the accused petitioner, Simranjit Singh Mann was served with an order of detention under the National Security Act and sent to Bhagalpur jail.
The other four accused were also detained under the National Security Act at Bhagalpur.
All the petitioners moved the Judicial Magistrate for bail in the aforesaid criminal case claiming to be released under proviso (a) of section 167(2) of the Code of Criminal Procedure.
They were granted bail but, they could not be released because of their detention under the National Security Act.
While so, the surety for all the five accused filed a petition requesting the Magistrate to discharge him from suretyship as he did not want to continue to be the surety of the accused persons.
The Magistrate discharged the surety from suretyship and issued formal warrants of arrest under section 444(2) of the Code of Criminal Procedure.
At this stage, the High Court of Punjab and Haryana made an order quashing the detention of Simranjit Singh Mann.
The Magistrate took cognizance of the case under sections 121A, 123, 124A, 153A, 165A and 120B of the Indian Penal Code on December 18, 1985.
Thereafter the investigating Officer filed a petition requesting expeditious trial as the case was one of special importance.
All the petitioners except Simranjit Singh Mann filed fresh bail bonds.
The said bail bonds were rejected on December 20, 1985 as the surety could not name either the accused persons or their fathers.
The accused moved another petition for recalling the order dated December 20, 1985 and accepting the same person as surety.
This petition was rejected on the ground that the earlier order could not be reviewed.
The High Court also rejected the bail applications of these accused persons.
The case was thereafter, transferred to the Special Judge (Vigilance) North Bihar, Patna.
The accused Simranjit Singh Mann moved an application before the Special Judge offering cash security and asking for bail but it was rejected on the ground that the High Court had alread rejected the application of the other four accused.
The case was later transferred to the Court of Special Judge, Bhagalpur and was 804 finally adjourned to August 8, 1986 for arguments on the question of charges to be framed and on the question of jurisdiction.
At this stage, the Special Public Prosecutor filed a petition stating that the offences under section 165 and sections 165A read with section 34 were not committed in the course of the same transaction as the offences under sections 124 A etc., and therefore it was necessary that the offences under sections 165 and 165A read with section 34 should be tried separately from the offences under secs.
124A etc.
The accused also filed a petition to the same effect.
The Special Judge allowed the aforesaid petition holding that the offences were not committed in the course of the same transaction and therefore the trial for the offences under sections 165 and 165A read with section 34 should be separated from the other offences.
It was further held that he was not competent to try the accused for the offences under secs.
121A, 124A etc.
as the case had not been committed to the court of Sessions by the Trial Magistrate and directed that in regard to those offences the record be sent back to the District and Sessions Judge, Purnea for proceeding further in accordance with law.
Alleging that the Special Public Prosecutor had never been instructed to file such a petition before the Special Judge, the respondent State of Bihar filed a writ petition in the High Court and obtained a stay of further proceedings before the Special Judge.
The accused petitioners filed special leave petitions and writ petitions before the Supreme Court against the rejection of their bail applications and for quashing the proceedings before the Special Judge.
It was contended on behalf of the petitioners (a) that the fundamental right of the petitioners under article 21 of the Constitution had been frustrated by the tactics of the State whose only object was to somehow keep the petitioners in prison; (b) that there was no material whatever to substantiate the offences of waging war etc.
and that the proceedings deserved to be quashed on that ground also; (c) that the proceedings before the Special Judge, Purnea were without jurisdiction both for the reason that he was not competent to try the offences under section 121A and section 124A etc.
and also for the reason that he came to be seised of the case at the instance of the Executive Government, who had no authority to transfer the case from the court of the Special Judge, Patna to the Court of the Special Judge, Purnea, since the rule of law would be defeated if the Executive Government were to be permitted to have cases decided by Judges of their choice; (d) that the High Court and the Special Judge were wrong in not permitting the accused to offer fresh sureties or cash security; (e) that the High Court and the Special 805 Judge were wrong in holding that the order of the Magistrate directing them to be released on bail under section 167(2) had come to an end by the passage of time, particularly after cognizance had been taken of the case; (f) that there was no material whatsoever to warrant the framing of charges for any of the offences mentioned in the charge sheet other than sec.
165A; (g) that in the case of the accused persons other than Simranjit Singh Mann, there was nothing whatever to connect them with the offences under sections 121A and 124A. On behalf of the respondent State it was argued that the order for release on bail stood extinguished on the remand of the accused to custody under section 309(2) of the Code of Criminal Procedure.
Dismissing the petitions, ^ HELD: 1.1 The delay in the investigation and in the trial of the case is not so unfair as to warrant quashing the proceedings on the ground of infringement of the right of the accused to a speedy trial, a part of their fundamental right under article 21 of the Constitution.
Having regard to the entirety of the circumstances, the long lapse of time since the original order for bail was made, the consequent change in circumstances and situation, and the directions that were now given for the expeditious disposal of the case, there would be no justification for exercising the court 's discretion to interfere under article 136 of the Constitution at this stage.
[818G H; 827A B] 1.2 The High Court is directed to dispose of the criminal revision petition before it as expeditiously as possible preferably within three or four weeks.
Whatever be its outcome the High Court should also direct the Special Judge or other Judge who may have to try the case, or the cases as the case may be, to try the cases expeditiously setting a near date for the trial and to proceed with the trial from day to day.
[820D ] 2.
The right to a speedy trial is one of the dimensions of the fundamental right to life and liberty guaranteed by article 21 of the Constitution.
The question whether this right has been infringed is ultimately a question of fairness in the administration of criminal justice even as "acting fairly" is of the essence of the principles of natural justice.
A "fair and reasonable procedure" is what is contemplated by the expression "procedure established by law" in article 21.[815F G] Hussainara Khatoon (I) vs State of Bihar, [1979] 3 SCR 169, Kadra Pehadiya (I) vs State of Bihar, AIR 1981 SC 939, Kadra Pehdiya(II) vs State of Bihar, AIR 1982 SC 1167, State of Maharashtra 806 vs Champa Lal Punjaji Shah; , and Menaka Gandhi 's case followed.
Strunk vs United States, 56, Barkar vs Wingo; , and Boll vs Director of Public Prosecutions, Jamaica, [1985] (II) All ER 585, referred to.
3.1 The question whether there was any material whatsoever to warrant the framing of charges for any of the offences mentioned in the charge sheet other than sec.
165A is not a matter to be investigated by the Supreme Court in a petition under article 32 of the Constitution.
This Court cannot convert itself into the court of a Magistrate or a Special Judge to consider whether there is evidence or not justifying the framing of charges.
[819A B] 3.2 The questions relating to the jurisdiction of the Special Judge to try the accused for the offences under secs.
121, 121A, etc.
and the link between the offences under secs.
165A and 165A read with sec.
34 on the one hand and the offences under secs.
121 and 121A etc.
on the other are questions which are awaiting the decision of the High Court.
These questions are left to be decided by the High Court.
[819C] 4.
There was no evil design in the creation of a Special Judge 's court for Purnea Division at Bhagalpur under the Criminal Law Amendment Act and the designation of a Judge to preside over that court.
All that has, in fact happened is that a Special Judge 's court was created for Purnea Division under section 6 of the Criminal Law Amendment Act and Shri Bindeshwari Prasad Verma, Additional District Judge West Champaran, who was under orders of transfer as Additional District Judge Bhagalpur was designated as the Special Judge.
The case Jogbani P.S. No. 110/84, was mentioned within brackets as that was apparently the only case awaiting trial in Purnea Division under the Criminal Law Amendment Act.
The Special Judge 's court was created for Purnea Division as it was thought that it would be more convenient for the accused and also in the interests of security if the case was tried at Bhagalpur where the accused were imprisoned rather than to have the trial of the case at Patna to which place the accused would have to be taken from Bhagalpur for every hearing.
[819E ] 5.
The authorship of seditious material alone is not the gist of any of the offences.
Distribution or circulation of seditious material may also be sufficient on the facts and circumstances of a case.
To act as a courier is sometimes enough in a case of conspiracy.
It is also not 807 necessary that a person should be a participant in a conspiracy from start to finish.
Conspirators may appear and disappear from stage to stage in the course of a conspiracy.
[820B C] In the instant case, whether such evidence as may now be available in the record to justify the framing of charges is a matter for the trial court and not for the Supreme Court.[820C] 6.1 The effect of the proviso to section 167(2) of the Code of Criminal Procedure, 1973, is to entitle an accused person to be released on bail if the investigating agency fails to complete the investigation within 60 days.
A person released on bail under the proviso to section 167(2) for the default of the investigating agency is statutorily deemed to be released under the provisions of Chapter 33 of the Code for the purposes of that Chapter.
That is provided by the proviso to section 167(2) itself.
This means, first, the provisions relating to bonds and sureties are attracted.
Section 441 provides for the execution of bonds, with or without sureties, by persons ordered to be released on bail.
One of the provisions relating to bonds is section 445 which enables the court to accept the deposit of a sum of money in lieu of execution of a bond by the person required to execute it with or without sureties.
If the bond is executed (or the deposit of cash is accepted), the court admitting an accused person to bail is required by section 442(1) to issue an order of release to the officer in charge of the jail in which such accused person is incarcerated.
Sections 441 and 442 are in the nature of provisions for the execution of orders for the release on bail of accused persons.
[821D G] 6.2 There is no limit of time within which the bond may be executed after the order for release on bail is made.
Very often accused persons find it difficult to furnish bail soon after the making of an order for release on bail.
This frequently happens because of the poverty of the accused persons.
It also happens frequently that for various reasons the sureties produced on behalf of accused persons may not be acceptable to the court and fresh sureties will have to be produced in such an event.
The accused persons are not to be deprived of the benefit of the order for release on bail in their favour because of their inability to furnish bail straight away.
[821G H; 822A] 6.3 Orders for release on bail are effective until an order is made under section 437(5) or section 439(2).
These two provisions enable the Magistrate who has released an accused on bail or the court of Session or the High Court to direct the arrest of the person released on bail and to commit him to custody.
The two provisions deal with what is known as cancella 808 tion of bail.
Since release on bail under the proviso to section 167(2) is deemed to be release on bail under the provisions of Chapter XXXIII, an order for release under the proviso to section 167(2) is also subject to the provisions of section 437(3) and 439(2) and may be extinguished by an order under either of these provisions.
[822A C] 6.4 The order for release on bail is not extinguished and is not to be defeated by the discharge of the surety and the inability of the accused to straight away produce a fresh surety.
The accused person may yet take advantage of the order for release on bail by producing a fresh, acceptable surety.
[822E F] 6.5 Section 309(2) merely enables the court to "remand the accused if in custody".
It does not empower the court to remand the accused if he is on bail.
It does not enable the court to "cancel bail" as it were.
That can only be done under section 437(5) and section 439(2).
When an accused person is granted bail, whether under the proviso to section 167(2) or under the provision of Chapter XXXIII the only way the bail may be cancelled is to proceed under section 437(5) or section 439(2).
[822F H] 7.1 An order for release on bail made under the proviso to section 167(2) is not defeated by lapse of time, the filing of the chargesheet or by remand to custody under section 309(2).
The order for release on bail may however be cancelled under section 437(5) or section 439(2).
Generally the grounds for cancellation of bail, broadly, are interference or attempt to interfere with the due course of administration of justice, or evasion or attempt to evade the course of justice, or abuse of the liberty granted to him.
[826B C] 7.2 Where bail has been granted under the proviso to section 167(2) for the default of the prosecution is not completing the investigation in sixty days, after the defect is cured by the filing of a chargesheet, the prosecution may seek to have the bail cancelled on the ground that there are reasonable grounds to believe that the accused has committed a non bailable offence and that it is necessary to arrest him and commit him to custody.
In the last mentioned case, one would expect very strong grounds indeed.
[826D E] In the instant case, the High Court and following the High Court, the Special Judge have held that the order for release on bail came to an end with the passage of time on the filing of the chargesheet.
That is not a correct view.
The order for release on bail was not an order on merits but was, what one may call an order on default, an order that could be 809 rectified for special reasons after the defect was cured.
The order was made long ago but for one reason or the other, the accused failed to take advantage of the order for several months.
Probably for that reason, the prosecuting agency did not move in the matter and seems to have proceeded on the assumption that the order had lapsed with the filing of the chargesheet.
Having regard to the entirety of circumstances the Court did not exercise its discretion under article 136 of the Constitution.
[826F H] Natabar Parida vs State of Orissa, ; , Bashir vs State of Haryana, ; and Talab Hazi Hussain vs Mondkar, ; , referred to.
| These appeals were preferred by tenants against the judgment of the High Court in civil revisions.
Respondent Mahabir Prasad had executed a registered deed dated 8th December, 1966 with regard to premises in question, giving the benefits arising out of the said properties to his grandsons and their mother Smt.
Sulochana Devi.
He informed the tenants to make payment of rent to Smt.
Sulochana Devi in terms of the said deed.
Later, Mahabir Prasad executed a registered deed of cancellation dated 3rd November, 1970, cancelling the aforesaid deed dated 8th December, 1966 and debarring the grandsons and their mother from the right to realise rent and informed the tenants about the said deed of cancellation.
Subsequently, Mahabir Prasad instituted suits in the Court of the Judge, Small Causes against the appellant tenants for recovery of arrears of rent and their eviction on the ground that in spite of their being informed of the deed of cancellation, they had not paid rent to him.
The appellants contended that the deed dated 8th December, 1966, could not be unilaterally cancelled by Mahabir Prasad, and the rent claimed by him had already been paid by them to Smt.
Sulochana Devi.
The title of Mahabir Prasad to realise rent was disputed by the appellants who had contended that the suit involving a question of title was not cognizable by a Court of Small Causes.
The Judge, Small Causes, decreed the suits.
The appellants filed revisions before the District Judge who dismissed the same.
Further revisions filed by the appellants in the High Court were also dismissed.
The appellants moved this Court for relief by special leave against the Judgments of the High Court.
PG NO 238 PG NO 239 Allowing the appeals, the Court, HELD: The provisions of section 23 of the Provincial Small Cause Courts Act (the Act) were clearly attracted in these cases and the plaints in the cases ought to have been returned for presentation to a Court having jurisdiction to determine the title.
It is true that Section 23 does not make it obligatory on the Court of Small Causes to invariably return the plaint once a question of title is raised by the tenant, and that in a suit instituted by the landlord against his tenant on the basis of contract of tenancy, a question of title could also incidentally be gone into and that any finding recorded by a Judge, Small Causes, in this behalf could not be res judicata in a suit based on title, but it cannot be gainsaid that in enacting section 23 the Legislature must have had in contemplation some cases in which the discretion to return the plaint ought to be exercised in order to do complete justice between the parties.
On facts, these are cases in which~ in order to do ' complete justice between the parties the plaints ought to have been returned for presentation to a court having jurisdiction to determine the title so that none of the parties was prejudiced.
[242E, H, 243A C, F] Judgments and decrees of the courts below were set aside and the Judge, Small Causes was directed to return the plaints of the cases for presentation to the appropriate Court as contemplated by section 23 of the Act.
[243F G]
| These appeals arose as a sequel to certain directions of this Court in the famous Sanchaita Investment Company case, which by dint of tremendous advertisement campaign collected deposits amounting to several crores of rupees from thou sands of depositors spread all over India.
The firm pros pered and thereafter tied up and siphoned away a sizeable portion of its funds from its coffers for the benefit of the management personnel by acquiring movable and immovable properties in the names of the firm, relatives and benami dars.
Then they started making defaults in its obligations to the depositors.
The depositors approached the High Court and eventually the matter came up to this Court in 1983.
With a view to safeguard the interests of the depositors and ensure that the properties of the firm be duly identified and full and due benefit of the funds be diverted to its coffers, this Court by its order appointed a Commissioner to take charge of all the assets, documents, papers of the firm, agents, sub agents, transferees and benamidars.
Further to enable the Commissioner to gather all the assets of the firm, he was given powers to attach all assets and properties which in his prima facie opinion are of the ownership of the firm or any of its partners.
Such assets were to be put to sale if no objections are received there to within one month from the date of attachment.
All objections thus received in respect of such properties were to be forwarded to the Prothonotary of Calcutta High Court, and a Division Bench of the High Court was to dispose of the objections on merits.
By a further order dated 23rd September, 1985 this Court empowered the Commissioner to remove all unauthorised 283 persons or trespassers from possession of the property proposed to be sold, and the Commissioner to hand over vacant possession to the rightful purchasers.
One of the properties thus attached by the Commissioner by a public notice was house N. 52/1/1B Surendra Nath Baner jee Road, Calcutta.
It was subsequently brought to sale on "as is and where is basis".
Asit Kumar Mandal and two others purchased this property and requested the Commissioner to give them vacant possession.
Since the sale was on "as is and where is basis", the Mandais moved an application before the High Court Division Bench praying for the vacant posses sion of the said property and the same was granted.
Hence the appellants i.e. Paul Bros and Others, moved two Special Leave Petitions in this Court and claimed that they were bona fide tenants in the property even under the predecessors in interest of Mahamaya Devi in whose name the property was purchased by Sanchaita firm and therefore could be evicted only in accordance with due process of law after full contest, and could not be thrown out in summary pro ceedings just as if they were persons in unauthorised pos session of the property, or as if they were mere trespass ers.
On the other hand the Mandais contended that in terms of the orders of this Court, and of the Calcutta Division Bench they purchased the property only on the basis that they would get a perfect title and speedy possession.
Allowing the Special Leave Petitions, this Court, HELl): That the contention of the Mandais is not main tainable either in principle or on the terms of the direc tions of this Court.
The attachment and sale in pursuance of this Court 's order of the present property in question did not have the legal effect of invalidating any interests created or subsisting in the property by sale, transfer encumbrance or alienation prior to the attachment.
Even the sale was on "as is and where is basis".
The Courts order of 27th September, 1983 only empowered the Commissioner to remove all unauthorised persons and trespassers but persons who are in lawful possession of the 284 property could not be evicted forcibly or summarily.
The said order could not be interpreted to mean that the pur chasers would be entitled to vacant possession through the commissioner even by evicting bona fide tenants or other encumbrancer or independent out siders who had acquired interest for consideration in the property.
The object of the directions was to cut short the proliferation of litiga tion and to gather in expeditiously the assets of Sanchaita.
[292D E; 295H; 296B] Having regard to the large scale dealings, the special circumstances and the desperate situation, the Court made an exception and made it possible for the Commissioner to get false and frivolous claimants out of the way by a quick procedure because even normally the trespassers and unautho rised persons cannot be thrown out except by recourse to legal proceedings.
So this order could not be availed of to ride rough shod over the rights and interests of others in the properties which had been created bona fide.
Even third parties who have acquired real interests in the property either independent of, or even through Sanchaita could not be called upon to give up their rights which would mean to do more than merely realise what rightfully belongs to Sanchaita that is by conferring a better title than it had in fact acquired while purchasing those properties, [297B, G] So in the instant case, considering the materials and evidence and the records placed before the Court by the claimants/objectors, to prove that they are not stooges or false claimants but have bona fide right to possession, it was held that the auction purchaser could not evict Paul Brothers and Phani Bhushan Ghose except eviction proceedings in the normal course and in accordance with law as may be available to them against the claimants/objectors.
The claim 's of the other appellant was rejected.
[297C D]
| Entries in record of rights Presumptive value of Presumption if applies to forged or fraudulent entries Effect of fraud or forgery on a document.
Mahant Bharati of temple of Shankarji Maharaj gave lands belonging to the temple on Theka to one Sukai for a period of 10 years.
The Mahant obtained a decree for eviction against Sukai but it could not be executed because of the objections raised by the respondents on the ground that they have been cultivating the lands for several years and they were entitled to continue in possession as Sirdars in spite of the decree against Sukai.
The lessor, therefore, instituted two separate suits under order 21 Rule 103, C.P.C. Respondents contended inter alia, that they had become hereditary tenants and they must be deemed to have become Adhivasis of the land.
The trial court dismissed the suit.
The district court reversed the finding of the trial court in appeal and held that the appellant being the Bhumidar of the lands was entitled to recover possession thereof from the respondents.
The district Judge held that the entries in the record of rights showing the occupation of the respondents were fraudulent.
The High Court in second appeal upset the decree of the district court.
Allowing the appeal, ^ HELD: (1) The only question before the High Court was whether the entries on which the respondents relied were genuine or fraudulent.
This is as question of fact and the High Court had no jurisdiction to set aside the finding on that question in second appeal.
The High Court erroneously assumed that the district Court had not given any finding on the question of fraud.
The district Court had given at least half a dozen reasons for holding that the entries were fictitious and were made surreptitiously and fraudulently.
[521H; 522A H] (2) If the High Court thought that the district court had not recorded a clear finding on that issue and if the High Court were to determine under section 103 C.P.C. the issue under whether the entries were fraudulent or not it was necessary for it to discuss the evidence.
But, the High Court instead placed blind and easy reliance on the entries which are utterly uninspiring.
[523A B] (3) Entries in the revenue record ought generally to be accepted at their lace value and courts should not embark upon an appellate enquiry into the correctness.
But the presumption of correctness can apply only to genuine, not formed or fraudulent entries.
The distinction may be fine but it is real.
Fraud and forgery rob a document of all its legal effect and cannot found a claim lo possessory title.
[523B C]
|
minal Appeal No. 240 of 1959.
Appeal by special leave from the judgment and order dated July 15, 1959, of the Calcutta High Court in Criminal Revision No. 135 of 1959.
section C. Mazumdar, for the appellant.
Sukumar Ghose, for the respondent No. 1. 1962.
March 26.
The Judgment of the Court was delivered by KAPUR, J.
This is an appeal against the judgment and order of the High Court of Calcutta passed in revision against the order of the Additional Session,% Judge, Howrah, who had modified the order of conviction of the respondents under section 488 read with a. 386(1)(b) of the Calcutta Municipal Act (Act III of 1923) as extended to the Municipality of Howrah, hereinafter called the 'Act '.
The appellant before us is the Chairman of the Municipal Committee of Howrah who is the complainant and the respondent is a company with its premises at No. 1 Swarnamoyee Road, where it was carrying on the manufacture of bobbins, card pine, shuttles etc.
They were also storing their wood and timer in those premises.
49 The charge against the respondent was that it was using the premises within the municipality of Howrah without a license as required under section 386 of the Act and was therefore guilty under section 488 of the Act.
The defence of the respondent was that the premises had been licensed as a warehouse under the West Bengal Fire Services Act, 1950 (Act 18 of 1950) and consequently because of section 38 of that Act, section 386 of the Act stood repealed and the respondent was not required to take out another license under, section 386 of the Act.
The Magistrate, before whom the case was tried, was of the opinion that the effect of a. 38 of the West Bengal Fire Services Act was that the power of the Municipality to require a license under a. 386 of the Act for user as a warehouse had been taken away and therefore in respect of the rest of the premises used as a factory or for other purposes the applicability of section 386 remains unimpaired.
He found that the respondent was running a factory with workshops fitted with electric power in the premises for the manufacture of bobbins, card pins, shuttles etc.
He convicted the respondent under section 488 and sentenced him to a fine of Rs. 250.
In appeal the learned Additional Sessions Judge held that section 38 of the West Bengal Fire Services Act does not repeal all the three clauses of section 386 of the Act but partially repeals a. 386(3) which deals with the levy of fees and therefore a license under section 386(1) will still have to be taken but as the premises had al.
ready been licensed as a warehouse the respondent company could not be required to pay any fees under a. 386(3) of the Act.
The object, according to the learned Sessions Judge, was that the levy of fees twice over in respect of the same premises was prohibited and not that the license was not required.
The sentence of fine was therefore reduced from Rs. 250 to Rs. 10 only.
Against this order the appellant took a revision to the High Court.
50 The High Court held that where the premises are licensed as a warehouse under the Fire Services Act but a portion of it is used as a workshop the Municipal Committee has No. longer the power to levy any fees for granting the license in respect of the premises even though there may be a liability to take out a license i.e. while it may be necessary to take out a license under section 386(1) of the Act no fees could be charged and as the whole of the premises in case had been licensed as a warehouse under the West Bengal Fire Services Act no part of the premises would be liable for any charge of fees for granting a license.
A further argument was also raised for the appellant in the High Court and that was that a. 38 of the West Bengal Fire Services Act did not apply to the Howrah Municipality at all because the Howrah Municipality is governed neither by the Calcutta Municipal Act nor by the Bengal Municipal Act but by the Calcutta Municipal Act as extended to Howrah i. e. as modified in accordance with the powers conferred on the Government by section 541(2) of the Calcutta Municipal Act.
But the High Court was of the opinion that a. 38 of the West Bengal Fire Services Act is applicable to the Howrah Municipality and there.
fore repelled this last argument.
The revision was therefore dismissed, and the rule was discharged.
Against that order the appellant has come in appeal by special leave.
The main argument raised by the appellant was that section 38 of the West Bengal Fire Services Act could not affect the operation of section 386 of the Calcutta Municipal Act as it was extended to the Howrah Municipality.
Section 38 of the former Act reads as under: "On the application of this Act to Calcutta or any other Municipality, section 51 38 6 of the Calcutta Municipal Act, 1923, or section 370 of the Bengal Municipal Act, 1932, as the case may be, shall be deemed to be repealed in so far as they entitle the Corpo ration of Calcutta or the Commissioners of the Municipality to levy fees in respect of any premises or part thereof licensed as a warehouse under this Act".
It was contended that section 38 of that Act does not repeal section 386 of the Act because the interpretation of that section is that it repeals section 386 of the Calcutta Municipal Act 1923 which entitles the Corporation of Calcutta to levy fees and section 370 of the Bengal Municipal Act, 1932 which entitles the Commissioners of other Municipalities to levy fees in respect of any premises licensed as a warehouse; in other words the argument was that in the case of Corporation of Calcutta section 386 of the Act shall be deemed to be repealed to the extent mentioned in section 38 and in the case of other Municipalities and the Commissioners of those Municipalities s.370 of the Bengal Municipal Act.
1932 shall be deemed to be repealed to the extent that, s.38 is applicable and as Howrah Municipality is neither the Corporation of Calcutta nor is it governed by section 370 of the Bengal Municipal Act, section 38 is inoperative.
To test the correctness of this argument it is necessary to refer to the provisions by which the Act was extended to the Municipality of Howrah.
Under so.
540 and 541 of the Calcutta Municipal Act the Provincial Government was empowered to extend all or any of the provision of that Act to the Municipality of Howrah.
Under section 542 the effect of the extension was that the Bengal Municipal Act 1932 stood repealed qua the Municipality of Howrah from the date of such extension and sub cl.
(b) of that section provides: "Except as the Provincial Government may otherwise by notification in the Official 52 Gazette direct, all rules, by laws, orders, directions and powers made, issued or conferred under the portions of this Act which have been so extended and in force at the date of such extension, shall apply to the said municipality or part, in Supersession of all corresponding rules, by laws, orders, directions and powers made, issued or conferred under the said Bengal Municipal Act, 1932" and by an explanation to that section the extension of the Act did not put the Municipality of Howrah tinder the authority of the Corporation of Calcutta.
By a Gazette Notification NO.
260M of January 18, 1932 practically the whole of the Act, excepting the provisions which are not necessary, was extended to the Municipality of Howrah.
The language extending the Act was as follows: "Howrah.
260M. 18th January 1932 In exercise of the power conferred by sub section (2) of section 541 of the Calcutta Municipal Act, 1923 (Bengal Act III of 19 3).
the Government of Bengal (Ministry of Local Self Government) are pleased to extend to the Municipality of Howrah the following pro visions of the Calcutta Municipal Act 1923, subject to the modifications and restrictions specified therein which are 'shown in antique type.
As a result of this extension section 386 was extended to the Municipality of Howrah with this modification that in place of the word "Corporation of Calcutta ' the word "Commissioners" was substituted.
In 1951 the Calcutta Municipal Act 1951 being West Bengal Act 33 of 1951 was enacted thus replacing Act 3 of 1923 which was therefore repealed.
In the new Act corresponding provision to sections 540, 541 and 542 are sections 589, 590 and 591.
Section 614 of the new Act provides that the provisions of Act III of 1923 as extended to the Municipality of Howrah shall continue to be in force until the provisions of the new 53 Act are extended to that Municipality under the new Act.
Thus the effect of the extension by the Notification under sections 540 and 541 of the Calcutta Municipal Act is that to the Municipality of Howrah an amended Act with an amended section 386 is applicable and not section 386 of the Act III of 1923.
Keeping this in view we have then to see how far section 38 of the West Bengal Fire Services Act 1950 (Act 18 of 1950) has affected the operation of section 386 as it applies to the Municipality of Howrah.
Section 38 provides that section repeals section 386 of the Act III of 1925 to the extent therein mentioned.
It also repeals section 370 of the Bengal Municipal Act as it applies to the Commissioners of Municipalities in Bengal.
It does not apply to section 386 as modified and is inapplicable to the Municipality of Howrah because in section 386 as applicable to the Corporation of Calcutta the word used is ",Corporation" and not "Commissioners" and wherever the word "Corporation" is used in section 386 it is replaced by the word "Commissioners" in section 386 as it applies to the Howrah.
Municipality.
It cannot be said therefore that section 38 repeals section 386 of the Act III of 1923 as it applies to the Howrah Municipality.
In a somewhat similar case a similar view was taken by the Privy Council.
See Secretary of State for India vs Hindusthan Co operative lnsurance Society (1).
In that case certain provisions of the Land Acquisition Act were incorporated by reference Into the Calcutta Improvement Act 1911.
By an amendment of 1921 the right of appeal to the Privy Council from the decision of the High Court was provided in matters failing under the Land Acquisition Act.
It was held that the right of appeal so given was not applicable to the award of a tribunal under the Calcutta Improvement Act assessing compensation in respect of land acquired under the provisions of the.
Land Acquisition Act.
Dealing with this matter Sir George Lowndes quoted with (1) (1931) L.R. 58 1.A. 259.
54 approval the observations of Lord Westbury in Ex parts St. Sepulchre 's (1) and observed: "It seems to be no less logical to hold that where certain provisions from an existing Act have been incorporated into a subsequent Act, no addition to the former Act, which is not expressly made applicable to the subsequent Act, can be deemed to be incorporated in it, at all events if it is possible for the subsequent Act to function effectually without the addition".
Although a. 38 of the West Bengal Fire Services Act extends to the whole of Bengal and to the extent there set out it repeals section 386 of the Calcutta Municipal Act which applies to the Corporation of Calcutta and section 370 which applies to the other Municipalities of Bengal yet it does not affect the operation of section 386 of the former Act as modified and extended to the Municipality of Howrah by the notification which has been set out above.
The reason for that is that the language of section 386 has been modified to make it appropriate in its application to the Municipality of Howrah and for that purpose in place of the word `corporation ' the word " 'Commissioners" has been substituted.
Thus modified it is not a. 386 of the Calcutta Municipal Act but a different section.
Therefore what s.38 of the West Bengal Fire Services Act repeals is section 386 of the Calcutta Municipal Act and not section 386 of that as modified and applied to the Municipality of Howrah.
It may look rather anomalous but that is what the effect of the modification of the language is.
In our opinion therefore the contention of the appellant is well founded 'and section 38 of the West Bengal Fire Services Act does not repeal section 386 as modified and as applicable to the Municipality of Howrah.
From the point of view of the respondent the result may be unfortunate (1) , 376.
55 but that is the interpretation of the language of the various sections which are relevant in the present case.
We therefore allow the appeal, set aside the order of the High Court and convict the respondent of the offenses charged, but in view of the fact that the appellant succeeds on a question of interpretation we do not think it necessary to increase the sentence of fine imposed by the learned Sessions Judge, The, appeal is allowed to that extent.
Appeal allowed.
| The respondent company was prosecuted for using the premises within the Municipality of Howrah without a license as required under section 386 of the Calcutta Municipal Act 1923, as extended to the Municipality of Howrah by Notification No. 260 M dated January 'A 8, 1932, under sections 540 and 541 of the Act.
The Bengal Municipal Act, 1932, also stood repealed qua the municipality of Howrah under section 542 of the Act from the date of such extension.
The defence of the respondent was that the premises had been licensed as a warehouse under the West Bengal Fire Service Act, 1950, and consequently, because of section 38 of the Fire Services Act, section 386 of the Act stood repealed and the respondent was not required to take out another license under the said section 386.
The respondent was however convicted under section 488 of the Act.
In appeal the Sessions Judge reduced the sentence and fine.
The appellant took a revision to the High Court.
The High Court held inter alia that section 38 of the Fire Service Act was applicable to the Howrah Municipality.
Therefore, while it may be necessary to take out a license under section 386 (1) of the Act, no part of the premises would be liable for any charge of fees for granting a license.
The appellant came up in appeal by special leave to the Supreme Court.
Held, that the effect of extension of section 386 of the Calcutta Municipal Act, 1923, by notification No. 260 M dated .January 18, 1932, under section 540 and section 541 of the Act, to the Municipality of Howrah is that an amended Act with section 386 is applicable to the Municipality of Howrah and not section 386 of the Calcutta Municipal Act, 1923.
Although section 38 of the West Bengal Fire Services ' Act extends to the whole of Bengal and to the extent there set it, repeal section 386 of the calcutta Municipal Act which 48 applies to the Corporation of Calcutta and section 370 of the Bengal Municipal Act which applies to the other Municipalities of Bengal yet it does not affect the operation of section 386 of the former Act as modified and extended to the Municipality of Howrah by the notification.
The language of section 386 has been modified to make it appropriate in its application to the Municipality of Howrah and for that purpose in place of the word 'corporation ' the word 'commissioners ' has been substituted.
Thus modified it is not section 386 of the Calcutta Municipal Act but a different section.
Therefore what section 38 of the West Bengal Fire Services Act repeals in section 386 of the Calcutta Muncipal Act and not section 386 of that as modified and applied to the Municipality of Howrah.
Secretary of State for India vs Hindusthan Co operative Insurance Society, (1931) L. R. 59 1.
A. 259, referred to.
| These two appeals were preferred against the decision of the Nagpur High Court in an appeal under 'section 19(1)(f) of the Defence of India Act, 1939, modifying an award of compensation made 1178 under section 19(i)(b) of that Act in respect of certain premises requisitioned by the Government under 75(A) of the Rules framed under the Act.
Both the parties applied for and obtained leave to appeal to the Federal Court under sections 109 and 110 of the Code of Civil Procedure.
A preliminary objection was taken on behalf of the Government that the decision of the High Court was an award and not a judgment, decree or order within the meaning of sections 109 and 110 of the Code and as such no appeal lay therefrom : Held, that the objection must prevail and both the appeals stand dismissed.
There could be no doubt that an appeal to the High Court under section 19(1)(f) Of the Defence of India Act from an award made under section 19(i)(b) of that Act was essentially an arbitration proceeding and as such the decision in such appeal cold not be a judgment, decree or order either under the Code of civil procedure or under Cl. 29 Of the Letters patent of the Nagpur High Court.
Kollegal Silk Filatures Ltd. vs province, of Madyas, I. I,.
R. , approved.
There is a well recognised distinction between a decision given by the Court in a case which it 'hears on merits and one given by it in a proceeding for the filing of an award.
The former is a judgment, decree or order of the Court appellable under the general law while, the latter is an adjudication of a private individual with the sanction of the Court stamped on it and where it does not exceed the terms of the reference, it is final and not appealable.
There can be no difference in law between an arbitaration by agreement of parties and one under a statute.
A referrence to arbitration under a statute to a court may be to it either as a court or as an arbitrator.
If it is to it as a court, the decision is a judgment, decree or order appealable under the ordinary law unless the statute provides otherwise, while in the latter case the Court functions as a persona designata and its decision is air award not appealable under the ordinary law but only under the statute and to the extent provided by it.
An appeal being essentially a continuation of the original proceedings, what *as at its inception an arbitration proceeding must retain its character as an arbitration proceeding even where the statute provides for an appeal, Rangoon Botatung Company vs The Collecter , Rangoon (1912) L.R. 39 I.A. 197 .The special officer sales the building sites Dassabhai Beznoji, Bom 506 the special officer sales the Building sites vs Dassabhai Bozanji Motiwala Manavikram Tirumalpad vs the Collector of the Nilagrie, Mad 943 and secretary of state for India in council vs Hindustan Co operative Insurance society Limited ,(1931) L.R. 58 I. A 259 relied on.
National Telephone Company Limited vs Postmaster General, , explained.
| Under the Madhya Bharat Municipalities Act, 1954, the Municipal Corporation determined the house lax payable by the appellant in respect of his house with effect from April 1, 1954.
On appeal by the appellant regarding assessment, the Additional District Judge remanded the case to the Corporation for a fresh decision after due enquiry.
Ulti mately, by a notice dated October 12, 1965 issued under section 146 of the Madhya Pradesh Municipal Corporation Act, 1956 (as amended in 1961) the Corporation revised the amount of tax payable but maintained the date of liability for payment of tax as April 1, 1954.
On appeal by the appellant, the additional District Judge held that the tax was payable with effect from April 1, 1965 and not April 1, 1954 for the reason that the tax was finally fixed after the notice dated October 12, 1965.
The Revision Petition of the Corporation was allowed by the High Court holding that tax was payable from April 1, 1954 because the proceedings were started even before the 1956 Act came into force.
In appeal to this Court the appellant contended that (1 ) as the fresh notice was issued under section 146 of the 1956 Act on October 12, 1965 after remand of the case by the District Judge, house lax could be imposed only with effect from April 1, 1965 and not retrospectively and (2) the order of the District Judge being final under section 149(2) of the 1956 Act the High Court had no jurisdiction to interfere with that order and in any event the High Court exceeded its power under section 115, C.P.C. Dismissing the appeal.
HELD: The proceeding relating to the house tax was a continuous proceeding relating to the tax payable from April 1, 1954 and the notice issued by the Corporation after remand by the District Judge did not amount to notice of fresh assessment or re assessment.
[874 E F] 1.
There is no force in the contention .that under the 1956 Act the municipality had no power to pursue the pro ceedings regarding the levy of tax for an earlier period.
The notice issued by the Corporation to the appellant made it clear that the Commissioner was proceeding to fix the value in pursuance of the remand.
The appellant 's plea that the Commissioner was not authorised to determine the value and impose the tax for any period before the date of issue of the notice ignores the fact that the valuation and deter mination of tax from 1954 was pending and the proceedings related to that period.
Section 3(3) of the 1956 Act pro vides that all rates, taxes and sums of money due to the Municipalities when this Act was made applicable shall be deemed to be due to the Corporation and sub section
(4.) states that all suits and other legal proceedings instituted by or against a Municipality may be continued by or against the Corporation.
The proceedings in the instant case were originally taken under the Madhya Bharat Municipalities Act, 1954 and the proceedings regarding the levy of the house tax were not concluded when under the new Act the Corporation became entitled to pursue the proceedings.
[874F C, 875A D] 2.
(a) Under section 115, C.P.C. the High Court has power to revise the order passed by Courts subordinate to it.
The District Court being subordinate to 872 the High Court, is liable to the revisional jurisdiction of the High Court.
Moreover, the question of want of jurisdic tion of the High Court was not raised before that Court and cannot be allowed to be raised in this Court for the first time.
[875 F G] (b) The principles governing interference by the High Court trader section 115, C.I.C. have been laid down by this Court in a catena of decisions, the last of which is The Municipal Corporation of Delhi vs Suresh Chandra Jaipuria & Anr.
(A.I.R. [875H, 876A B] Baldevdas Shivlal & Anr.
vs Filmistan Distributors (India) (P) Ltd. & Ors. ; , M/s. D.L.F. Housing and Construction Co. (P) Ltd. vs Sarup Singh and Ors.
A.I.R. 1971 S.C. 2324, The Managing, Director (MIG) Hindustan Aeronautics Ltd. Balanagar, Hyderabad and Ant.
vs Ajit Prasad Tarway, Manager (Purchase and Stores) Hindu stan Aeronautics Ltd. Balanagar, Hyderabad, A.I.R. 1973 S.C. 76 and The Municipal Corporation of Delhi vs Suresh Chan dra Jaipuria and Anr.
A.I.R. 1976 S.C. 2621 referred to.
| An externment order was passed against the respondent under section 56 of the Bombay Police Act on the ground that he was found to be frequently engaged in illegal business of narcotics and was also involved in several cases of riot and criminal intimidation.
The respondent filed an appeal under section 60 of the Act and while the appeal was pending moved the High Court with a writ application.
The State Government dismissed the appeal by a short order.
Before the High Court it was urged that since the State Government omitted to give reasons in support of the order of dismissal of the appeal, the same was vitiated in Law.
The High Court agreed with the petitioner and allowed the writ application quasing the appellate order as well the initial externment order.
Allowing the appeal by the State to the extent of cor recting the error of law only, it was, HELD: (1) The High Court was in error in quashing the order of externment as confirmed by the State Government in appeal, on the ground that the State Government omitted to give reasons.
(2) A full and complete disclosure of particulars, as is requisite in an open prosecution, will frustrate the very purpose of an externment proceeding.
There is a brand of lawless elements in society which it is impossible to bring to book by established methods of judicial trial because in such trials there can be no conviction without legal evi dence.
And legal evidence is impossible to obtain, because out of fear of reprisal witnesses are unwilling to depose in public.
[972C E, G] 971 (3) If the authorities were to discuss the evidence in the case, it would be easy to fix the identity of the wit nesses who were unwilling to depose in public against the proposed externee.
A reasoned order containing a discussion would probably spark off another round of harassment.
[972G] Pandarinath Sridhar Rangnekar vs Deputy Commissioner of Police, , followed.
| % Respondent No. 1, Shri P.K. Mukerjee, filed an application under the U.P. Act No. 3 of 1947 (Temporary Control of Rent and Eviction Act) (OLD Act), seeking permission to file a suit for eviction of his tenant, Harbans Lal Soni, the father of the appellant, D.K. Soni, on the grounds of his bona fide requirement for his personal need.
The Rent Control and Eviction officer rejected the application, holding that the respondent 's requirement was not bona fide.
A revision was filed by the respondent No. 1 before the Commissioner who allowed the same.
The U.P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 (new Act) came into effect on July 15, 1972.
On August 2, 1972, the State Government rejected the representation of the tenant (father of the appellant) filed under section 7 of the old Act against the order of the Commissioner aforementioned.
The tenant then moved a writ petition in the High Court.
A Single Judge of the High Court allowed the petition and set aside the abovesaid orders of the Commissioner and the State Government.
Upon an appeal being filed by the respondent (No. 1) against the order of the Single Judge, a Division Bench of the High Court allowed the same, setting aside the order of the Single Judge and upholding the above said orders of the commissioner and the State Government, allowing the eviction of the tenant.
In September, 1978, the respondent No. 1 moved an application under section 21, read with section 43(2)(rr) of the new Act.
Thereafter, the respondent executed an agreement as vendor to sell the permises in dispute in favour of the vendee, the wife of the appellant, Smt.
Madhu Soni daughter in law of the tenant, Harbans Lal.
The agreement was dated November 7, 1978, and it mentioned therein that the landlord, respondent No. 1 had filed an application against the tenant above 617 named.
The father in law of the vendee for permission to file a suit for eviction of the tenant from the premises in dispute on account of the respondent 's personal need, and that the permission had been granted.
The agreement recited that a vacant portion of the land of the disputed premises, would be in the exclusive possession of the vendor and the rest of the property the disputed premises would be sold to the vendee, Smt.
Madhu Soni.
The agreement stipulated that the vendee or the other members of the family had no right over the portion of the land to be kept with the vendor, and that the appellant had given up his tenancy rights in respect of the same, and also that premises would be built on the said vacant land with the money to be obtained by selling the disputed house to Smt.
Madhu Soni.
The price of the house was settled at Rs.1,00,000 out of which a sum of Rs.5000 was paid as earnest money, and it was stipulated that the rest of the amount would be paid at the time of registration.
It was agreed that the parties would move the authorities for permission to transfer as early as possible and the saledeed would be executed within one month of the grant of permission and notice to the vendee.
It was stated that if the vendee failed to get the sale deed executed within the time stipulated, the earnest money of Rs.5000 would be forfeited and the property would stand released in favour of the vendor.
It was also stipulated that the need of the vendor for the premises subsisted and the agreement had been entered into to enable the vendor to get money out of the sale to construct a house for himself on the vacant piece of land.
On December 12, 1978, the father of the appellant, who was the tenant, died, leaving behind a widow, two sons, including the appellant, and a daughter.
On December 22, 1978, the appellant informed the Prescribed Authority before whom the application under section 21(1)(a) of the New Act, read with section 43(2)(rr), was pending, about the death of the tenant, Shri Harbans Lal Soni.
On March 23, 1979, the respondent No. 1 filed an application (in Case No. 53 of 1978) for substitution of the legal heirs of the deceased tenant, along with an application under section 5 of the Limitation Act.
The Prescribed Authority rejected the application for substitution on grounds of delay.
On December 11, 1979, the respondent No. 1 moved a second application under section 21(1)(a), read with section 43(2)(rr) of the new Act (on the ground as in his earlier application), which was registered as Case No. 68 of 1979.
On March 12, 1981, the respondent No. 1 executed two separate agreements for sale of the property in dispute, in favour of R.P. Kanodia and P.K. Kanodia, respectively.
618 The Prescribed Authority decided the Case No. 68 of 1979 abovementioned on July 7, 1981, directing the tenant to be evicted from the premises in dispute.
The Additional District Judge dismissed the appeal against the order of eviction passed by the Prescribed Authority.
On March 11, 1983, the appellant 's wife, Smt.
Madhu Soni filed a suit for injunction, restraining the respondent No. 1 from dispossessing her from the premises in dispute on the strength of the registered agreement, asserting that she resided in the premises in part performance of the agreement under section 53A of the Transfer of Property Act.
The trial Court dismissed the suit.
The High Court was then moved for relief by a writ petition against the orders of the Prescribed Authority for eviction and the order of the Additional District Judge.
The writ petition was dismissed, followed by the dismissal of a Review Petition too.
Aggrieved thereby the appellant has appealed to this Court by special leave.
Dismissing the appeal, the Court, ^ HELD: The questions involved in the appeal are: Firstly, in view of the provisions of section 43(2)(rr), was the High Court right in its decision, in the facts and circumstances of the case, specially the factum of the death of the (original) tenant being alleged, and in view of the fact that the execution of the order for eviction had become final before the new Act came into operation? Secondly, how far do the subsequent events, namely, the agreements by the respondent No. 1 with the wife of one of the sons of the tenant and with the Kanodias to sell the property in dispute, demolish or destroy the case of a bona fide need of the landlord? [622G H; 623A] In substance, the need was there of the landlord for his occupation of his premises as he wanted to reside in his house after his retirement from Government service, and for this purpose he had sought eviction and obtained the order of eviction prior to the coming into operation of the new Act.
The object of the landlord was not defeated by the provisions of the New Act.
[626G H] Considering the subsequent events, namely, the refusal of permission by the Urban Ceiling Authorities, the escalation of building cost (upto 1987), failure on the part of the vendee to register and execute the document, it is not possible to hold that the subsequent events have so materially altered the position as to defeat the original order for possession passed in favour of the landlord.
The subsequent events do not in 619 any way affect the existence of the need of the landlord for possession of premises in question.
[627C E] There was no failure on the part of the landlord to take steps for the substitution.
Nothing was proved before the Court that the agreements with R.P. Kanodia and P.K. Kanodia were valid today or given effect to in view of the provision of the Land ceiling Act.
It was not proved to the satisfaction of the authorities below that any agreement to sell the premises to Kanodias had been given effect to and acted upon and in that view of the matter, the need of the landlord indubitably succeeds, and any allegations made do not merit any revision of the order which had become final.
Finality of the judicial decisions is one of the essential ingredients upon which the administration of justice must rest.
In that view of the matter, even if the contentions advanced on behalf of the respondents are taken into consideration and a new look is taken because of the subsequent events, which cannot be done in view of the specific provisions in clause (rr) of section 43(2) of the new Act, the appellant has no case.
The High Court was right in not interfering with the order of the Prescribed Authority.
Finality of the decisions of the authorities under the Act has to be given due reverence and place in the judicial administration.
[629A C] The appeal fails.
As the appellant had been staying in the premises for quite some time, time till April 30, 1988 granted to him to deliver vacant possession of the house to the landlord, subject to his filing usual undertaking within four weeks.
[629E F] Pasupuleti Venkateswarlu vs The motor and general Traders; , ; Pattersion vs State of Alabama, ; at 607; Ramji Dayawala and Sons(P) Ltd. vs Invest Import; , ; Hasmat Rai and Anr.
vs Raghunath Prasad; , ; Syed Asadullah Kazmi vs The Addl.
District Judge, Allahabad and Ors.
, ; ; Sher Singh and Ors.
vs The State of Punjab, ; ; Bansilal Sahu vs The Prescribed Authority and Anr, [1980] All L.J. 331; Smt.
Sarju Devi vs Prescribed Authority, Kanpur, [1977] All L.J. 251 and Tara Chand Khandelwal vs Prescribed Authority, Agra, [1976] All L.J. 708, referred to.
| % A complaint filed in the court of the Chief Metropolitan Magistrate by the appellant, Chief Controller of Imports and Exports, against respondents Nos. 1 and 2, a private limited company and its Managing Director for the alleged commission of an offence under section 5 of the Imports and Exports (Control) Act, 1947 was subsequently transferred to another court and cognizance of the offence alleged was taken without examining the appellant as proviso (a) of section 200 of the Code of Criminal Procedure was applicable to this complaint.
An application filed by the accused persons for recall of summons and dismissal of complaint was dismissed by the trial Magistrate.
An appeal against the aforesaid order was dismissed by the High Court.
A special leave application filed against the High Court 's order was dismissed by the Supreme Court.
An application made at the trial stage for the discharge of respondent No. 2, the Managing Director on the plea that there was no allegation of any criminal misconduct against him and the Company respondent No. 1 was prepared to admit its guilt and may be appropriately penalised, was dismissed by the trial court.
On appeal, the High Court quashed the process issued against respondent No. 2 on the ground that the order of issuance of process 297 was clearly as a result of non application of mind by the trial Judge because when the process was issued against the petitioners, the Department and the State had merely filed a complaint case along with list of witnesses and documents, and none of the statements of witnesses or copies of documents was produced before the trial Judge, and that respondent No. 2 could not be prosecuted under section 5 of the Act, as the prosecution intended to charge him as principal offender alongwith respondent No. 1 the Company and there were no allegations in the complaint that respondent No. 2 either aided or abetted in the contravention of the licence conditions by respondent No. 1 Company.
Allowing the Department 's appeal, ^ HELD: 1.1 The High Court had not cared to look into procedural law applicable to the factual situation before it.
If a reference had been made to section 200, Proviso (a) of Code of Criminal Procedure, the proceedings against respondent No. 2 could not have been quashed.
[299G H] 1.2 Records of investigation are not evidence in the instant case, and a complaint could not be quashed by referring to the investigation records, particularly when the petition of the complainant did allege facts which prima facie show commission of an offence.
[300B] The High Court overlooked the fact that similar objections raised earlier were rejected by the same High Court, and this decision was upheld by the Supreme Court, and drew a distinction between the two situations, by saying that records of investigation were not available on the earlier occasion.
[300A B] 1.3 The licensee was a company and a company by itself could not act, and has to act through someone.
Since there was clear allegation that the Managing Director had committed the offence, acting on behalf of the licensee, there was no justification for quashing the proceedings against respondent No. 2.
[300C] Order of the High Court is vacated.
However, since the offence was committed 20 years back, it would not be in the interest of justice to allow a prosecution to start and the trial to be proceeded with at this belated stage even though respondent No. 2 has no equity in his favour and the delay has been mostly on account of his mala fide move.
Hence the case against respondent No. 2 is directed to be closed forthwith.
[300E,G]
| In a writ petition filed under article 226 of the Constitu tion impugning his dismissal from service, the respondent contended that since he had not been given a reasonable opportunity of meeting the allegations against him, his dismissal was void.
writ petition was dismissed.
Thereupon, the respondent flied a suit in a civil court challenging his dismissal on the ground, among others, that since he had been appointed by the Inspector General of Po lice, his dismissal by the Deputy Inspector General of Police was wrong.
The State took the plea that the suit was barred by res judicata.
Dismissing the suit, the trial court held that it was not barred by res judicata.
The first appellate court dismissed the respondent 's appeal.
Purporting to follow a line of decisions of this Court, the High Court held that only that issue between the parties would be res judicata which was raised in the earlier writ petition and was decided by the High Court after contest and since in this case the respondent did not raise in the earlier writ petition the plea of competence of the Deputy Inspector General of Police to dismiss him.
the parties were never at issue on it and that the High Court never consid ered and decided this issue in the writ petition.
On the question of invoking the principle of constructive res judicata by a party to the subsequent suit on the ground that the matter might or ought to have been raised in the earlier proceedings, the High Court held that this question was left open by the Supreme Court in Gulabchand Chhotalal Parikh vs State of Bombay ; , and allowed the respondent 's appeal.
Allowing the States appeal to this Court.
HELD: The High Court was wrong in its view because the law in regard to the applicability of the principle of constructive res judicata having been clearly laid down in Devi Lal Modi vs Sales Tax Officer Ratlam and Others ; it was not necessary to reiterate it in Gulabchand 's case as it did not arise for consideration in that case.
The clarificatory observation in Gulabchand 's case was misunderstood by the High Court in observing that the matter had been left open by this Court.
The doctrine of res judicata is based on two theo ries: (i) the finality and conclusiveness of judicial deci sions for the final termination of disputes in the general interest of the community as a matter of public policy, and (ii) the interest of the individual that he should be pro tected from multiplication of litigation.
[430 D] 2.
(a) In certain cases, the same set of facts may give rise to two or more causes of action.
In such cases res judicata is not confined to the issues which the Court is actually asked to decide but covers issues or facts which are so clearly part of the subject matter of the litigation and so clearly could have been raised that it would be an abuse of the process of the court to allow a new proceeding to be started in respect of them.
This rule has sometimes been referred to as constructive res judicata which is an aspect or amplification of the general principle.
[431 A] (b) Section 11 of the Code of Civil Procedure, with its six explanations, covers almost the whole field, but the section has, in terms, no application to a petition for the issue of a high prerogative writ.
[431 D] (c) Although in the Amalgamated Coalfields Ltd. and others vs Janapada Sabha, ; this Court held that constructive res judicata being a special and artifi cial form of res judicata should not generally be applied to writ petitions, in Devilat Modi 's this Court held that if the doctrine of constructive 429 res judicata was not applied to writ proceedings, it would be open to a party to take one proceeding after another and urge new grounds every time, which was plainly inconsistent with considerations of public policy.
The principle of constructive res judicata was, therefore, held applicable to writ petitions as well.
[433 G & 434 D] 3.
The High Court missed the significance of these deci sions and relied upon L. Jankirama lyer and 'Others vs
P.M. Nilakanta lyer and Others [1962] Supp. 1 S.C.R. 206 which had no bearing on the controversy.
In Gulabchand 's case, this Court observed that it did not consider it necessary to examine whether the principle of constructive res judicata could be invoked by a party to the subsequent suit oft the ground that a matter which might or ought to have been raised in the earlier proceeding but was not so raised therein could be raised again relying on which the High COurt concluded that the question was left open by this Court.
This in turn led the High Court to hold that the principle of resjudicata could not be made applicable to a writ petition.
[435 E F] In the instant case, the respondent did not raise the plea that he could not be dismissed by the Deputy Inspector General of Police.
This was an important plea which was within his knowledge and could well have been taken in the writ petition.
Instead he raised the plea that he was not afforded a reasonable opportunity of meeting the case in the departmental inquiry.
It was therefore not permissible for him to take in the subsequent suit the plea that he had been dismissed by an authority subordinate to that by which he was appointed.
That was clearly barred by the principle of constructive res judicata and the High Court erred in taking a contrary view.
[436 A B]
| A Sub Inspcctor of Police, Enforcement Branch, filed a report before the Police Officer in charge of a Police Station alleging that the respondent along with three others committed offences under ss.420, 120B read with s.420 Indian Penal Code.
Thereupon a First Information Report was drawn up and investigation was started.
The respondent surrendered before the judicial Magistrate and he was released on bail.
Subsequently he filed an application in the High Court under sections 439 and 561 A of the Criminal Procedure Code to get the case pending before the judicial Magistrate arising out of the 53 case registered in the Police Station quashed.
This appli cation was granted by the High Court.
The appellant the State of West Bengal then filed an appeal before the Supreme Court by certificate granted by the High Court under article 134 (1) (c) of the Constitution.
Held, that the statutory powers given to the Police under sections 154 and 156 of the Code of Criminal Procedure to investigate into the circumstances of an alleged cognizable offence without authority from a Magistrate cannot be interfered with by the exercise of powers under s.439 of the Code of Criminal Procedure or under the inherent powers conferred by section 561A of the Code of Criminal Procedure.
The High Court was therefore in error in allowing the respondent 's application.
King Emperor vs Khwaja Nazir Ahmad, (1944) L.R. 71 I.A. 203 allowed.
|
Appeals Nos. 10 and 10 A of 1952.
Appeal from the Judgment and Order dated 11th January, 1950, of the High Court of Judicature at Madras in Cases Referred Nos. 80 of 1946 and 38 of 1948.
M. C. Setalvad, Attorney General for India, (G. N. Joshi and P. A. Mehta, with him) for the appellant.
section Krishnamachariar for the respondent.
465 1952.
December22.
The Judgment of the Court was delivered by DAS J.
These two consolidated appeals are directed against the Judgment and order made on January 11, 1950) by the High Court of Judicature at Madras in References No. 80 of 1946 and No. 38 of 1948 under section 66 of the Indian Income tax Act whereby the High Court relying on its earlier decision in Commissioner of Income tax, Madras vs B. Rm.
M. Sm.
Sevugan alias Manickavasagam Chettiar(1) held that the references were incompetent and accordingly refused to answer the questions raised therein.
The facts are shortly as follows.
The respondent who is a Nattukotai Chettiar had, his headquarters at Karaikudi in India and also carried on his money lending business at branches at Maubin, Kualalumpur and Singapore.
He also had income from properties at Maubin and Singapore.
For the assessment year 1941 42 the Income tax Officer calculated the assessee 's accrued foreign income as Rs. 29,403 at Maubin, Rs. 27,731 at Kualalumpur and Rs. 34,584 at Singapore, in all Rs. 91,718.
After deducting out of this amount Rs. 4,500 allowed under the 3rd proviso to section 4 (1) of the Act, the Income tax Officer computed the total assessable foreign income at Rs. 87,218.
Out of the total remittances of Rs. 84,352 the Income tax Officer allocated Rs. 7,900 to the accrued income of Maubin and Rs. 62,315 to those of Kualalumpur and Singapore and the balance of Rs. 14,137 to the taxed income of earlier years.
The Income tax Officer disallowed the claim of the assessee to deductions under several heads.
On the basis of the total foreign income of Rs. 67,218 and income from ' other sources the Incometax Officer calculated Rs. 23,266 8 0 to be due by the assessee on account of income tax, super tax and surcharges thereon and by his assessment order dated January 31, 1942, made this amount payable on or before February 25, 1942.
The assessee preferred an (1) [1948] 16 I.T.R. 59; ; A.I.R. 1948 Mad, 418 466 appeal to the Appellate Assistant Commsioner against the disallowance of the several items of his claim including the claim for replantation expenses amounting to$498incurred at Kualalumpur and a bad debt of $ 15,472 at Singapore.
The Appellate Assistant Commissioner by his order dated May 25, 1942, allowed some of the several objections but disallowed the items of replantation expenses and ba` debt and reduced the assessment to Rs. 22,548.
The assessee took further appeal before the appellate Tribunal against the disallowance of the several claims by the Appellate Assistant Commissioner including the two items mentioned above.
The Appellate Tribunal by its order dated August 20, 1943, held that the replantation expenses "will be allowed to the appellant as expenses.
" As regards the bad debt the Tribunal held that it was permissible and that "the deduction claimed will, therefore, be allowed.
" The result was that the appeal was partly allowed.
The matter came back before the Income tax Officer on September 26, 1945.
Deducting Rs. 778 on account of replantation expenses the Kualalumpur income was reduced to Rs. 26,953 and after deducting Rs. 24,175 on account of the bad debt the Singapore income came down to Rs. 10,409.
These two reduced amounts together with Rs. 29,403 being the income 'from Maubin made up the total accrued income of Rs. 66,765.
Out of this amount Rs. 4,500 was deducted on account of unremitted profits of Maubin under the 3rd proviso to section 4(1) of the Act, leaving a balance of Rs. 62,265.
Out of the remittances the Income tax Officer allocated Rs. 7,000 towards the accrued income of Rs. 29,403 from Maubin and Rs. 37,362 against the totarl accrued income of Kualalumpur and Singapore.
He also allocated Rs. 24,549 as remittances out of assessed profits of previous years, leaving a balance of Rs. 13,541.
This amount the Income tax Officer considered as remittances out of earlier years ' unassessed income and held it to be asses. able to tax.
After adding Rs. 13,541 to Rs. 62,265 being the net accrued income of the year 467 from Maubin, Kualalumpur and Singapore, the Income tax Officer arrived at the total foreign income of Rs. 75,806.
On the basis of this foreign income together with other income the Income tax Officer.
recalculated the amount of income tax, super tax and surcharges thereon at Rs. 22,802 6 0 and after giving credit for certain amounts, found Rs. 21,211 14 0 as the balance due which by his order dated September 26, 1945, was made payable in equal moiety on or before September 30, 1947, and March 31, 1948.
He, however, did not issue any notice of demand under section 29 of the Act.
Being aggrieved by the inclusion of Rs. 13,541 as the alleged unassessed foreign income of earlier years remitted to India during the year of account the assessee preferred an appeal before the Appellate Assistant Commissioner.
The Appellate Assistant Commissioner was not satisfied that the assessee had any right of appeal under section 30 of the Act for there had been no assessment under section 23 and no notice of demand had been served on the assessee under section 29 of the Act.
Accordingly the Appellate Assistant Commissioner by his order dated November 19, 1945, declined to admit the appeal.
He, however, expressed the view that the assessee 's remedy might lie in a miscellaneous application to the Tribunal complaining that the Income tax Officer had either misconstrued or had not given effect to the order of the Appellate Tribunal.
The assessee then brought a miscellaneous application to the Appellate Tribunal.
The Appellate Tribunal held that the.
finding of the Income tax Officer that the sum of Rs. 13,541 was to be assessed as untaxed profits of earlier years remitted to India in the accounting year did not arise in the course of giving effect to the Appellate Tribunal 's order and by its order dated February 20, 1946, cancelled that finding and directed the Income tax Officer to revise the computation accordingly.
The last mentioned order having been served on the Commissioner of Income tax, Madras, on March 8, 468 1946, the latter on May 1, 1946, made an application before the Appellate Tribunal under section 66(1) of the Act and prayed that three questions formulated by him in his petition should be referred to the High court.
The contention was that the Appellate Tribunal had no jurisdiction in law to entertain, consider and pass the order which it did on the miscellaneous application seeing that it was neither an appeal under section 33 of the Income tax Act nor could it be regarded as a rectification under section 35 of any mistake committed by the Bench.
The Appellate Tribunal took the view that although no specific provision was made in the Act by which it could give effect to its order or explain any ambiguity in such an order by a later order in any miscellaneous application filed by any party, such power, nevertheless ', was inherent in" the Tribunal.
The Tribunal accordingly thought that a point of law did arise and on August 23, 1946, referred the following question to the High Court, namely: "Whether in the facts and circumstances of this case the order of the Bench dated 20th February, 1946, in the miscellaneous application is an appropriate order and is legally valid and passed within the jurisdiction and binding on the Income tax Officer.
" The Tribunal declined to refer the other questions formulated by the Commissioner.
This reference came to be numbered as Case Referred No. 80 of 1946.
It appears that pursuant to an order made by the High Court on March 30,1948, on the application of the Commissioner of Income tax under section 66 (2) of the Act the Tribunal referred the following question to the High Court: " If the answer to the question already referred to the High Court by the order of the Appellate Tribunal dated 23rd August, 1946, is in the affirmative,, whether, in the circumstances and on the facts of the case, the recomputation made by the Income tax Officer pursuant to the decision of the Appellate 469 Tribunal in R.A.A. No. 53 (Madras) of 1942 43 was valid and correct." The Appellate Tribunal made this further reference on July 19, 1948, which came to be numbered as Case Referred No. 38 of 1948.
The two referred cases came up for consideration before a Bench of the Madras High Court and it was held that the reference under section 66(1) was incompetent in view of the earlier decision of that Court mentioned above which they felt to be binding on them and accordingly the Bench declined to answer the questions.
The Commissioner of Incometax thereafter applied for and obtained leave to appeal to this Court from the decisions in both the references and obtained such leave on his undertaking to pay the costs of the assessee in any event.
The two appeals were thereafter consolidated and have come up before us for final disposal.
Section 66 A (2) gives to the aggrieved party a right of appeal to this Court from any judgment of the High Court delivered on a reference made under section 66 in any case which the High Court certifies to be a fit one for appeal to this Court.
Section 66, (5) provides that the High Court upon the hearing of any such case referred to it under section 66(1) and (2) shall decide the questions of law raised thereby and shall deliver its judgment thereon containing the grounds on which such decision is founded.
During the opening of the case by the learned Attorney General a question arose as to whether the simple refusal of the High Court to bear the case on the ground that the reference was incompetent was a decision and judgment such as is contemplated by section 66(5) of the Act from which alone a right of appeal to this Court is given.
While maintaining that the decision and judgment of the Madras High Court fell within the meaning of section 66(5) the learned Attorney General for greater safety asked that the appeal may be treated as one on special leave granted by this Court under article 136 of the Constitution.
The learned Advocate appearing for the 470 assessee respondent did not object to this prayer and accordingly we gave leave to the appellant under article 136 and treated this appeal as one filed pursuant to such leave.
In the circumstances it is not necessary for us to express any opinion on the appealability of the order of the High Court under section 66 A of the Act.
The learned Attorney General contends that the decision relied on by the High Court has no application to the facts of the present case.
In that case the Tribunal by its order dated July 11, 1944, allowed an appeal from the Appellate Assistant Commissioner and cancelled the assessment which it held to be illegal.
This order was served on the Commissioner shortly thereafter.
On October 5, 1944, an application was made to the Tribunal by the Income tax Officer under section 35 to correct a statement contained in the statement of facts in the order.
More than 60 days after the date of the service on him of the order of July 11, 1944, to wit on October 7, 1944, the Commissioner made an application under section 66 (1) of the Act requiring the Tribunal to refer to the High Court the question as to the correctness of its decision embodied in the order of July 11, 1944.
Both the applications were disposed of on the same day, namely, January 17, 1945, when the application for rectification was granted and a case was stated for the opinion of the Court as prayed.
Section 66 (1) requires the application to be made within 60 days of the date on which the applicant is served with notice of an order under sub section (4) of section 33.
It was held that the granting of an application for rectification under section 35 and correcting the error in the order was not an order under section 33 (4) and, therefore, was not one in respect of which section 66 (1) permitted a case to be stated.
It was further held that if the Appellate Tribunal improperly or incorrectly made a reference in violation of the provisions of the statute, the High Court was capable of entertaining an objection to the statement of the case and that, if it camp to the 471 conclusion that the case should not have been stated, the High Court was not compelled to express an opinion upon the question referred.
in the case before us there is no question that the present application was not made within time, but the contention is that section 66 (1) only contemplates an application for a reference of a question of law arising out of " such order" which clearly means an order made under section 33 (4), _and, therefore, if there is no valid order under that section no question of law can be said to arise out of "such order" and consequently the Appellate Tribunal can have on jurisdiction to make any reference to the High Court under section 66(1).
Section 66 (2) provides that if on any application being made under sub section (1) the Appellate Tribunal refuses to state the case on the ground that no question of law arises, the assessee or the Commissioner may, within the time specified therein, apply to the High Court and the High Court may, if it is not satisfied of the correctness of the decision of the Appellate Tribunal, require the Appellate Tribunal to state the case and to refer it.
The jurisdiction given to the High Court under this sub section is conditional on an application under sub section (1) being refused by the Appellate Tribunal.
This clearly presupposes that the application under sub section (1) was otherwise a valid application.
If, therefore, an application under sub section (1) was not well founded in that there was no order which could properly be said to be an order under sub section (4) of section 33 then the refusal of the Appellate Tribunal to state a case on such misconceived application on the ground that no question of law arises will not authorise the High Court, on an application under sub section (2) of section 66, to direct the Tribunal to state a case.
The jurisdiction of the Tribunal and of the High Court is conditional on there being an order by the Appellate Tribunal which may be said to be one under section 33 (4) and a question of law arising out of such an order.
The only question for our consideration, therefore, is whether in this case any question 472 of law arose out of an order which can properly be said to have been made by the Appellate Tribunal under sub section (4) of section 33, for if it did not, then the Appellate Tribunal would have no jurisdiction under sub section (1) of section 66 to refer a case, nor would the High Court have jurisdiction under sub section (2) of that section to direct the Tribunal to do so.
It was at one stage suggested by the learned AttorneyGeneral that we should in the first instance remit the matter to the High Court for their decision on this question but as the question is one of law depending on the construction of the relevant sections of the Act it will save time if it is decided by us here and now.
It is not disputed that we have the power, on the hearing of this appeal, to decide this question.
It will be recalled that when on 19th November, 1945, the Appellate Assistant Commissioner declined to admit the appeal, the assessee did not prefer any appeal but only made a miscellaneous application before the Appellate Tribunal.
There is no provision in the Act permitting such an application.
Indeed, in the statement of the case the Appellate Tribunal states that in entertaining that application and correcting theerror of the Income tax Officer it acted in exercise ofwhat it regarded as its inherent powers.
There being no appeal under section 33 (1) and the order having been made in exercise of its supposed inherent jurisdiction.
, the order cannot possibly be regarded as one under section 33 (4) and there being no order under section 33 (4) there could be no reference under section 66 (1) or (2) and the appellate Court properly refused to entertain it.
The learned Attorney General submits that this Court should not take such a narrow and technical view but should treat that miscellaneous application as really an appeal under section 33.
Turning now to section 33 we find that any assessee objecting to an order passed by an Appellate Assistant Commissioner under section 28 or section 31 may appeal to the Appellate Tribunal within the time specified in 478 sub section (1) which time, however, may be extended by the Tribunal under sub section (2A).
Under sub section (4) the Appellate Tribunal is given power, after giving both parties to.
the appeal an opportunity to be heard, to pass such order thereon as it thinks fit.
It is thus clear that the Appellate Tribunal can make an order under section 33 (4) only on an appeal from an order passed by the Appellate Assistant Commissioner under section 28 or section 31.
If, therefore, there is no order which may properly be said to have been made by the Appellate Assistant Commissioner under section 28 or section 31 then there can be no appeal under section 33 (1) and consequently there can be no order under section 33 (4).
Section 28 is not relevant for our present purpose.
Section 30 provides for filing of appeals against assessments made under the Act.
Sub section (1) of that section prescribes the different decisions against which an appeal will lie.
Sub section (2) prescribes the time within which the appeal is to be filed.
Subsection (3) prescribes the form in which the appeal is to be made.
Then comes section 31 which gives power to the Appellate Assistant Commissioner to hear and dispose of such appeal.
Sub section (3) of section 31 empowers the Appellate Assistant Commissioner in disposing of an appeal under section 30 to make one or other order under one or other of the several clauses of that ' sub section.
It is, therefore, clear that in order that the Appellate Assistant Commissioner may exercise his jurisdiction and make an order under section 3 1, there must be an appeal as contemplated by section 30.
The learned AttorneyGeneral only relies on the opening part of sub section (1) of section 30 and contends that the appeal before the Appellate Assistant Commissioner was with respect to the amount of income assessed under section 23 or section 27.
It will be recalled that the Appellate Tribunal held that the two sums claimed by the assessee would be allowed to him and concluded by saying that the appeal was partly allowed.
The power of the Appellate Tribunal under section 33(4) 474 is indeed wide, for on an appeal properly before it, it can make such order as it thinks fit.
Therefore, it be order made by the Appellate Tribunal in this case on August 20, 1943, must be read and construed as a direction to the Income tax Officer to carry out the directions by allowing the two deductions in question.
When the matter again came before the Income tax Officer his function was only to carry out the order of the Appellate Tribunal.
He could not otherwise reopen the assessment already made by him under section 23.
Therefore, in carrying out the directions of the Tribunal and in doing what be aid on September 26, 1945, the Income tax Officer cannot be regarded as having acted under section 23 or section 27 of the Act and that being the position no appeal lay from that order of the Income tax Officer under section 30 (1) of the Act, I The result of it was that there was no proper appeal before the Appellate Assistant Commissioner such as is contemplated by section 30 (1) and, therefore, the order made by the Appellate Assistant Commissioner cannot be regarded as an order made by him under section 31 (3), for an order under section 31 (3) can only be made in disposing of an appeal properly ' filed under section 30, and consequently no further appeal lay to the Appellate Tribunal under section, 33 (1) so as to enable the Appellate Tribunal to make an order under sub section (4) of that section.
In the premises, there being no order which may properly be said to have been made under section 33 (4), no question of law can be said to arise out of an order made under section 33 (4) and consequently there can be no valid reference under section 66, subsection (1) or sub section (2).
If, therefore, the reference was incompetent for want of jurisdiction both under section 66 (1) or section 66 (2) surely the High Court could decline to entertain it as it did.
Even if the order dated September 26, 1945, made by the Income tax Officer after the matter came back to him to give effect to the decisions of the Appellate Tribunal be regarded as an order made by him under 475 section 23 or section 27 and as such appealable under section 30 (1) then the order made by the Appellate Assistant Commissioner on November 19, 1946, declining to admit the appeal clearly amounted to a refusal on his part to exercise the jurisdiction vested in him by law.
An order thus founded on an error as to his jurisdiction way conceivably be corrected by appropriate proceedings but it cannot certainly be regarded as such an order as is contem plated by any of the sub sections of section 31.
Such an order not coming within the purview of section 28 or section 31, no, appeal lay therefrom to the Appellate Tribunal under section 33 (1) and if no such appeal properly came before the Appellate Tribunal it could not properly make an order under section 33 (4) and if there was no order under section 33 (4) there could be no reference under section 66, sub section (1) or sub section (2).
It follows, therefore, that the order of the Appellate Tribunal correcting the order of the Income tax Officer directing that the sum of Rs. 13,541 should not be included in the assessment cannot be regarded as an order passed by the Appellate Tribunal under section 33 (4) so as to attract the operation of section 66.
The learned Attorney General urged that having under section 66 (2) of the Act directed the Appellate Tribunal to state a case the High Court could not afterwards refuse to answer the question thus referred to it.
Whether the High Court was so precluded or not requires no decision on this occa sion, for even conceding but ;not deciding that the High Court was so precluded, this Court, at any rate, can surely entertain the question of the competency of the reference.
The result, therefore, is that we dismiss these appeals with costs.
Appeals dismissed.
| By an order dated August 20, 1943, the Appellate Tribunal directed that certain deductions claimed by the assessee should be allowed.
The matter came back to the Income tax Officer and he made an order on September 26, 1945, but did not issue any fresh notice of demand.
The assessee appealed to the Appellate Assistant Commissioner complaining that in his order of September 26, the Income tax Officer had wrongly included a sum of Rs. 13,000 60 464 as unassessed foreign income of earlier years.
The Appellate Assistant Commissioner held that the order of September 26 was not appealable.
The assessee, therefore, made a miscellaneous application to the Appellate Tribunal, which held that the Incometax Officer acted wrongly in including the sum of Rs. 13,000 at that stage and directed the Income tax Officer to revise his computation accordingly.
The Commissioner of Income tax, being of opinion that the Appellate Tribunal had no jurisdiction to entertain or make such order on a miscellaneous application applied for a reference to the High Court under section 66 (1) of the Income tax Act.
The Tribunal referred certain questions and the High Court directed the Tribunal to refer certain other questions also but when the references came on for bearing the High Court held that the references were incompetent.
The Commissioner of Incometax appealed to the Supreme Court with the leave of the High Court : Held, (i) that in carrying out the directions of the Tribunal and in passing the order of September 26, 1945, the Income tax Officer cannot be regarded as having acted under section 23 or section 27 of the Act and no appeal lay from his order under section 30 (1).
The order made by the Appellate Assistant Commissioner was not therefore an order under a. 31 (3) and no further appeal lay to the Appellate Tribunal under section 33 (1) so as to enable the Tribunal to make an order under section 33 (4) and us there was no order under a. 33 (4), no question of law can be said to arise out of an order under section 33 (4) and there can be no valid reference under section 66 (1) or section 66 (2); (ii) even assuming that the order of the Income tax Officer dated September 26, 1945, was an order under a. 23 or section 27 and as such appealable, the order made by the Appellate Assistant Commissioner declining to entertain the appeal was not an order under any of the sub sections of a. 31 and no appeal lay therefrom to the Appellate Tribunal under section 33 (1) and there could be no order of the Appellate Tribunal under section 34 (1).
The order of the Appellate Tribunal correcting the order of the Income tax Officer and directing that the sum of Rs. 13,541 should not be included cannot be regarded in any event as an order under section 33 (4) so as to attract the operation of section 66 (1) or (2).
| The assessee made a full disclosure of his income and claimed expenses incurred for the maintenance of his immature rubber plantations as deductions.
The Agricultural Income Tax Officer, after considering the matter, allowed such deductions as he thought proper.
The appellant Commissioner, in exercise of his revisional powers under section 34, Kerala Agricultural Income Tax Act, 1950, issued notice to the respondent (widow of the assessee) proposing to revise the assessment on the ground that the deductions allowed were excessive.
The appellant, after considering the respondent 's objections, held that the deductions allowed were excessive and remanded the matter to the Agricultural Income Tax Officer for fresh disposal according to law.
At the instance of the respondent, the question whether the appellant had jurisdiction to pass the order under section 34 was referred to the High Court, and the High Court, on the view that it was a case of re opening escaped assessment held, relying on Maharajadhiraj Sir Kameshwar Singh vs State of Bihar, , that the power of revision vested in the Commissioner under section 34 could not be invoked for the purpose of assessing income that had escaped assessment, and that such income could be assessed only by resorting to the procedure prescribed by section 35.
within the time limit prescribed therein.
Allowing the appeal to this Court, ^ HELD:(1) Every case of under assessment is not a case of escaped assessment.
The Agricultural Income Tax Officer may have committed an error in allowing the deductions to the extent he did, but he did so after applying his mind to the claims.
This is not a case where the officer omitted to assess any item of income disclosed in the assessee 's return as in the case relied on by the High Court and as in kamal Singh vs C.I.T.
Therefore, it is not a case of reopening escaped assessment.
[662F H] Deputy Commissioner of Agricultural Income tax and Sales Tax, Quilon and another vs Dhanalakshmi Vils Cashew Co., (1969) 24 S.T.C. 491, followed.
(2) Since it is not a case of escaped assessment, the appellant had jurisdiction to make the order under section 34.
[663B]
| The appellant, a private limited company, was incorporated in 1954 in the former Kotah State which had integrated with the United States of Rajasthan in 1949.
The United States of Rajasthan became State of Rajasthan, a Part B State.
The Indian Finance Act, 1950, made the Indian Income tax Act, 1922, applicable to Part B States with effect from April 1, 1950, whereupon Rajasthan became a taxable territory.
The Income tax (Amendment) Act, 1953, amended section 14(2)(C) of the Indian Income tax Act, 1922.
Thereupon the Income tax authorities sought to tax the profits and income of the appellant for the assessment year 1950 51 who claimed exemption under section 14(2)(C) of the Indian Income tax Act, 1922, as it stood before the amendment in 1953.
The question for decision was whether in view of the decision of this Court in Madan Gopal 's case it was still open to the appellant to contend that the amendment operated from April 1, 1950 and that income accrued prior to April x, 1950, was still exempt although the exemption was withdrawn only from April 1, 1950.
Held, that the withdrawal of the exemption in the assessment year 1950 51 conversely affected the income of the previous year 1949 50.
The application of the Indian Income tax Act made Rajasthan a taxable territory subject to the Indian Income tax law and Parliament was competent to enact a new law for the area, just as it did for the whole of the rest of India.
The fiction in the amendment made in section 14(2)(C) made the exemption in respect of liability to tax the income for the year 1949 50 to disappear as if it had never been granted and obliterated the exemption.
The whole purpose and intent of the amendment was to reach this result from the assessment year 1950 51 onwards, and there could be no saving.
The argument assumes the premise that the Income tax Act was incorporated in the Indian Finance Act, 1950, but there is neither precedent nor warrant for the assumption that when one Act applies another Act to some territory, the latter Act must be taken to be incorporated in the former Act.
It may be otherwise, if there were words to show that the earlier Act is to be deemed to be re enacted by the new Act.
454 Union of India vs Madan Gopal Kabra, ; , referred.
| The respondent imported 2,000 drums of mineral oil and the appellant confiscated 50 drums and imposed a personal penalty.
The appeal of the respondent was dismissed by the Central Board of Revenue.
The respondent filed a petition under article 226 of the Constitution in the Calcutta High Court.
A Full Bench of the High Court held that the High Court had no jurisdiction to issue a writ against the Central Board of Revenue in view of the decision in the case of Saka Venkata Subbha Rao.
However, as the Central Board of Revenue had merely dismissed the appeal against the 564 order of the appellant, the High Court further held that it had jurisdiction to pass an order against the appellant.
The appellant came to this Court after obtaining a certificate.
Held that the appellant had merged into that of the Central Board of Revenue and hence no order could be issued against the appellant.
It is only the order of the appellate authority which is operative after the appeal is disposed of.
It is immaterial whether the appellate order reverses the original order, modifies it or confirms it.
The appellate order of confirmation is as efficacious as an operative order as an appellate order of reversal or modification.
As the appellate authority in this case was beyond the territorial jurisdiction of the High Court, it was not open to the High Court to issue a writ to the original authority which was within its jurisdiction.
Election Commission, India vs Saka Vankata Subba Rao, , A. Thangal Kunju Mudatiar vs M. Venkitachalam Poiti, ; , Commissioner of Income tax vs M/s. Amritlal Bhogilal & Co. [1959] section C. R. 713 and Madan Gopal Rungta vs Secretary to the Government of Orissa, (1962) (Supp.) 3 S.C.R. followed.
Barkatali vs Custodian General of Evacuee Property, A. 1.
R. , overruled.
Joginder Singh Waryam Singh vs Director, Rural Rehabilitation, Pepsu, Patiala, A. 1.
R. 1955 Pepsu 91, Burhanpur National Textile Workers Union vs Labour Appellate Tribunal of India at Bombay, A. I. R. , and Azmat Ullah vs Custodian, Evacuee Property, A.I.R. 1955 All 435, approved.
State of U. P. vs Mohammed Nooh, ; , distinguished.
| The appellant firm filed appeals against orders assessing it to income tax and super tax for the years 1945 1946 and 1946 1947 beyond the time prescribed by section 30(2) of the Income tax Act.
The appeals were numbered, and notices were issued for their hearing under section 31.
At the hearing of the appeals before the Appellate Assistant Commissioner, the Department took the objection that the appeals were barred by time.
The appellant prayed for condonation of delay, but that was refused, and the appeals were dismissed as time barred.
The appellant then preferred appeals against the orders of dismissal to the Tribunal under section 33 of the Act, and the Tribunal dismissed them on the ground that the orders of the Assistant Commissioner were in substance passed under section 30(2) and not under section 31 of the Act and that no appeal lay against them under section 33 of the Act.
On a reference under section 66(1) of the Act the High Court held that the orders of the Appellate Assistant Commissioner were made under section 30(2) and were not appealable under section 33 of the Act.
On appeal by special leave to the Supreme Court the question for determination was whether an order dismissing an appeal presented under section 30 as out of time was one under section 30(2) or under section 31 of the Act because if it was the former there was no appeal provided against it; if it was the latter it was open to appeal under section 33.
Held that the orders of the Appellate Assistant Commissioner fell within section 31.
A right of appeal is a substantive right and is a creature of the statute.
section 30(1) confers on the assessee a right of appeal against certain orders and an order of assessment under section 23 is one of them.
The appellant had therefore a substantive right under section 30(1) to prefer appeals against orders of assessment made by the Income Tax Officer.
167 An appeal presented out of time is an appeal and an order dismissing it as time barred is one passed in appeal.
Section 31 is the only provision relating to the hearing and disposal of appeals and if an order dismissing an appeal as barred by limitation as in the present case is one passed in appeal it must fall within section 31 and as section 33 confers a right of appeal against all orders passed under section 31, it must also be appealable.
To fall within section 31 it is not necessary that the order should expressly address itself to and decide on the merits of the assessment and it is sufficient that the effect of the order is to confirm the assessment as when the appeal is dismissed on a preliminary point.
An order rejecting an appeal on the, ground of limitation after it had been admitted is one under section 31, though there is no consideration of the merits of the assessment.
Held therefore that the orders of the Appellate Assistant Commissioner holding that there were no sufficient reasons for excusing the delay and rejecting the appeals as time barred would be orders passed under section 31 and would be open to appeal, and it would make no difference in the position whether the orders of dismissal were made before or after the appeals were admitted.
Commissioner of Income tax, Madras vs Mtt.
`r. section Ar.
Arunachalam Chettiar, ([1953] S.C.R. 463), explained.
Case law discussed.
| The Settlement Officer under the Madras Estates (Abolition and Conversion into Ryotwari) Act, 1948 suo motu made an inquiry as to whether a particular village notified by the State Government was an estate or not within the contemplation of section 9(2) of the Act and held that it was not an "inam estate" within the meaning of section 2(7) of the Abolition Act but that the village became an estate by virtue of Madras Estates Land (3rd Amendment) Act, 1936.
Ther appellants unsuccessfully appealed to the Estate Abolition Tribunal.
The appellant then instituted a suit (O.S. 47 of 1953) against the State Government for a declaration that the village was not an "estate" under section 3(2)(d) of them Madras Estates Land Act, 1908 and consequently Madras Estate (Reduction of Rent) Act, 1947 and the Abolition Act were not applicable to it.
The trial court decreed the suit.
The State Preferred an appeal.
During the pendency of the appeal the appellant filed a suit (O.S. No. 101 of 1954) against the respondents for recovery of certain amount as rent or damages in respect of lands cultivated by them in the village in dispute.
The respondents contended that the village was an estate within the meaning of the Act and that it had been so held by the Settlement Officer.
Ultimately both the parties filed a joint memo on 26th March, 1958 that they would abide by the decision of the High Court or the Supreme Court in the appeal or revision arising out of the suit (O.S. 47/53) on the question whether the village was or was not an "estate" under, section 3(2)(d) of the Madras Estates Land Act.
The High Court (in A.S. No. 668 of 1954 which was an appeal arising out of O.S. 47 of 1953) confirmed the decree of the trial court that the village in dispute was not an 'estate '.
The State did not appeal, with the result that the High Court 's decision became final and the decree dated 28th March, 1958 became, effective.
Against the decree of 28th March, 1958 the appellants preferred an appeal (A.S. 239 of 1961) to the High Court.
The appeal related only to the extent of the land in the possession of the respondents and the quantum of rent or damages.
The appellants ' claim was that the entire land was under cultivation of the respondents and so the lower court was wrong in not decreeing the appellants ' claim for rent or damages in toto.
The respondents raised a preliminary objection at the time of hearing of the appeal that the suit itself was incompetent as the Civil Court had no jurisdiction to decide whether the suit village was an estate or not and, therefore, any (decision given by the High Court would not bind the parties and the decree in O.S. 101 of 1954 would be without Jurisdiction rendering it null and void and that the Settlement Officer was the competent authority to decide the tenure of the village and his deci sion had become final in view of the introduction of section 9A by Act 20 of 1960.
The High Court upheld the preliminary objection of the respondents and rejected the contentions of the appellants that since section 9A was inserted by an amendment which came into force on 23rd June, 1960, it could not affect the compromise decree of the court passed on March 28, 1958 or the decree of the High Court by which both the parties agreed to abide by the decision of the High Court or the Supreme Court in appeal or revision arising out of O.S. 47 of 1953.
The High Court held that the Civil Court was not the forum for the suit as framed by the appellants and the questions raised in the suit L748SuP CI/74 656 including the claim for arrears of rent or damages, were outside the jurisdiction of the Civil Court, and so dismissed the appeal.
Allowing the appeal, HELD:1 (a) There is no doubt that the question was within the competence of the Civil Court.
Under the Abolition Act, as it stood at the material date, the inquiry of the Settlement Officer could legitimately be confined to the ascertainment of only two disputes of fact, viz., (i) Was the village an "inam village"? (ii) If so, was it an 'Inam Estate ' as defined in section 2(7) of the Abolition Act ? Once issue (ii) was determined, the inquiry would be complete and the limits of his exclusive jurisdiction circumscribed by section 9(1) reached; if he went beyond those limits to investigate and determine something which is unnecessary or merely incidental or remotely related to issue No. (ii), 'then such incidental or unnecessary determination could be questioned in a Civil Court.
[668FG] (b) Any finding recorded by the Settlement Officer regarding the property in question being an 'inam village ' or not, ' is not final or conclusive it being a finding of a jurisdictional fact only, the Preexistence of which is a sine qua non to the exercise of his exclusive jurisdiction by the Settlement Officer.
[668H] (c) The legislature must have visualised that under the cloak of an erroneous finding as to the existence or nonexistence of this prerequisite, the Settlement Officer may illegally clutch at jurisdiction not conferred on him or refuse to exercise jurisdiction vesting in him.
Perhaps that is why the statute does not leave the final determination of this preliminary fact to the Settlement Officer/Tribunal and his erroneous finding on that fact is liable to be questioned in a Civil Court.
Once it is held that determination of this fact is not a matter of the exclusive jurisdiction of the Settlement Officer, the appellants cannot be debarred on the basis of any doctrine of res judicata from getting the matter fully and finally adjudicated by a court of competent jurisdiction.
[669B C; E] Addanki Tiruvenkata Tata Desika Charyulu vs State of Andhra Pradesh A.I.R. 1964 S.C. 807 followed.
District Board, Tanjore vs Noor Mohammed, (1952) 2 MJ.
586 (S.C.) referred to.
(2) It is well settled that ordinarily when the substantive law is altered during the pendency of an action, rights of the parties are decided according to law, as it existed when the action was taken unless the new statute shows a clear intention to vary such rights.
A plain reading of the impugned Act would show that there was nothing of this kind which expressly or by necessary intendment affects pending actions.
[67OC D] (b) There is no non obstante clause in the amending Acts 17 and 18 of 1957 with reference to pending or closed civil actions.
These amending Acts ' were published in the government gazette of December 23, 1957 and will therefore be deemed to have come into force from that date only.
They could therefore be construed as having prospective operation only.
[67OG H] (c) In the Amending Act 20 of 1960 also no back date for its commencement has been mentioned.
It will, therefore, be deemed to have commenced on June 23, 1960 which is the date on which it was published in the Government gazette.
[674E] Section 9A takes in its retrospective sweep only those decisions of the Settlement Officer or the Tribunal which at the commencement of 'the Amending Act 20 of 1960 were subsisting and had not been totally vacated or rendered non est by a decree of a competent court.
[675 F] In the instant case the decision of the Settlement Officer dated September 2, 1950 was not such a decision.
It had ceased to exist as a ' result of the inter linked decree in O.S. 47 of 1953 and O. section 101 of 1954 passed before the enactment of the Amending Act.
The Amending Act of 1960, therefore, does not in any way affect the finality or the binding effect of those decrees.
[675G] 657 (d) Order 23 rule 3 C.P.C. not only permits a partial compromise and adjustment of a suit by a lawful agreement, but further gives a mandate to the court to record it and pass a decree in terms of such compromise or adjustment in so far as it relates to the suit.
If the compromise agreement was lawful the decree to the extent it was a consent decree was not appealable because of the express bar in section 96(3) of the Code.
[672E] Raja Sri Sailendra Narayan Bhanja Deo vs State of Orissa ; , Shri Prithvi Cotton Mills Ltd. vs Broach Borough Municipality and Reid vs Reid at 408, followed.
(e) In any suit the parties, in order to avoid unnecessary expenses and botheration, could legitimately make an agreement to abide by a determination on the same point in issue in another pending action in an advanced stage There was nothing unlawful and improper in such an arrangement particularly when the interests,of the respondents were sufficiently safeguarded by the State.
By no stretch of reasoning it could be said that the agreement was collusive or was an attempt, to contract out of the statute.
In the instant case as soon as the parties made the agreement to abide by the determination in the appeal (A. section 668) and induced the court to pass a decree in terms of that agreement the principle of estoppel underlying section 96(3) C.P.C. became operative and the decree to the extent it was in terms of that agreement became final and binding between the parties.
It was as effective in creating an estoppel between the Parties as a judgment on contest.
[672F C & 673C] In the instant case that part of the decree in suit No. 101 of 1954 and the appeal from that decree could not be said to be a continuation of that part of the claim which had been settled by agreement.
The combined effect of the two integrated decrees was to completely vacate and render non est decision dated September 2, 1950 of the Settlement Officer.
[673F] Raja Sri Sailendra Narayan Bhanja Deo vs State of Orissa ; applied.
Per Krishna Iyer, J. concurring Courts have to be anchored to well known canons of statu tory construction and if they are out of tune With the law maker 's meaning and purpose the legitimate means of setting things right is to enact a new Interpretation Act.
[678B] The Indian Constitution, adopting the fighting faith of equal I protection of the laws to all citizens, necessarily contemplates a new jurisprudence where vested rights may be, and often times are, extensively interfered.
with for achieving the founding fathers ' social goals.
Legislative exercises directed towards distributive justice as in the present case, cannot be considered in the light of dated value system, though sanctified by bygone decisions of Courts.
[677H] In the present case the Act in question is clear about its intent and its application gives little difficulty.
| The then Satguru of the appellant Creed was assessed for the assessment years 1937 38, 1938 39 for the first time.
He was a retired Govt.
servant.
His pension as well as the income from the institution were assessed together.
On appeal, the Assistant Commissioner of Income tax confirmed the assessments made by the Income tax Officer.
The Income tax Commissioner under reference made under section 66(2) of the Income tax Act, 1922 held that the offerings made to the assessee Satguru were offerings as held in trust and same were exempted under section 4(3)(1) of the Act.
When an application under Section 35 of the Act was made for ratification, whether the offerings received by the assessee consisted of interest income, property income, and income derived from sale of books and photographs etc.
to be excluded, the Commissioner directed deletion thereof.
For the year 1939 40, though the Income tax Officer did not allow exemption u/s.4(3)(1) of the Act, the Appellate Assistant Commissioner allowed exemption.
Till 1963 64 the appellant was not taxed and its refund applications were accepted by the respondent Revenue.
For the assessment years 1964 65, 1965 66, 1966 67, 1967 68, 1968 69, 1969 70, the assessee appellant was as sessed, treating it to be an association of persons, and held that the donations and contributions received volun tarily had limited religious use.
When the appellant assesses appealed, the appellate authority upheld the assessments.
313 Against the orders of the Appellate authority the asses see appealed before the Income tax Tribunal.
The Tribunal allowing the appeals of the assessee, held that the assessee was entitled to the exemption claimed under Section 11 of the Income tax Act, 1961.
On the question, referred to the High Court by the Tribunal, "Whether on the facts and in the circumstances of the case the Tribunal was justified in holding that the income derived by the Radha Swami Satsang, a religious institution, was entitled to exemption under Sections 11 and 12 of the Income Tax Act, 1961?", the High Court answered the question in favour of the Revenuerespondent, holding that the trust deed was revocable and the conditions for exemption under Sections 11 and 12 of the Act were not satisfied.
Allowing the appeals of the assessee, this Court, HELD: 1.01.
Assessments are quasi judicial.
Each assess ment year being a unit, what is decided in one year may not apply in the following year but where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have al lowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year.
[320H, 321 A B] 1.02.
No formal document is necessary to create a trust.
The conditions which have to be satisfied to entitled one for exemption are: (a) the property from which the income is derived should be held under trust or legal obli gation, (b) the property should be so held for charitable or religious purposes which enure for the benefit of the pub lic.
[317 E G] 1.03.
The property was given to the Satguru for the common purpose of furthering the objects of the Sat Guru.
The property was therefore subject to a legal liability of being used for the religious or charitable purpose of the Satsang.
[319 E, F] 1.04.
The Tribunal was justified in holding that the income derived by the Radhasoami Satsang was entitled to exemption under Sections 11 and 12 of the Income Tax Act, 1961.
[321 D] Patel Chhotahhai and Ors.
Janan Chandra Bask and Ors., AIR 314 1935 Privy Council 97; Acharya Jagdish Waranand Avadhuta & Ors.
vs Commissioner of Police, Calcutta & Ant., , The Secretary of State for India in Council vs Radha Swami Sat Sang, ; All India Spinners 'Associ ation vs Commissioner of Income Tax, Bombay, ; TM.M. Sankaralinga Nadar & Bros. & Ors.
vs Commissioner of Income tax, Madras, ; Hoystead & Ors.
vs Commis sioner of Taxation, and Parashuram Pottery Works Co. Ltd. vs Income tax Officer, Circle 1, Ward A Rajkot, at p.10, referred to.
| This appeal by special leave was directed against the order of the High Court asking the Income tax Appellate Tribunal under section 66(4) Of the Income tax Act to submit a supplementary ' statement of case on points, which were never raised by the parties nor decided by the Income tax Authorities or the Tribunal.
The only question canvassed before them was whether certain cheques, which were received by the assessee at Bhavnagar having been cashed in British India, the monies in respect of them could be said to have been received in British India.
The Tribunal held that the monies related back to the receipt of the cleques and were as such received at Bhavnagar.
The question was whether the receipt of the cheques at Bhavnagar amounted to receipt of the sale proceeds at Bhavnagar. ' The High Court held that the mere receipt of the cheques by post at Bhavnagar was not conclusive in absence of a further finding as to whether the cheques were sent by post without any request, express or implied, having been made by the assessee and observed as follows " But we cannot shut out the necessary inquiry which even from our own point of view is necessary to be made in order that we should satisfactorily answer the question raised in the Reference.
It must not be forgotten that under sec.
66(4) of the Income tax Act we have a right independently of the conduct of the parties to direct the Tribunal to state further facts so that we may properly exercise our advisory jurisdiction.
" Held, that the High Court had misconceived its powers under section 66(4) of the Act and its decision must be set aside.
Section 66(4) of the Indian Income tax Act, which must be read with sections 66(1) and 66(2) Of the Act, did not empower the High Court to raise a new question of law which did not arise out of the Tribunal 's order or direct the Tribunal to investigate new and further facts necessary to determine the new question which had not been referred to it under s 66(1) or section 66(2) of the Act and direct the Tribunal to submit supplementary statement of case.
Such additions and alterations in the statement of case as section 66(4) of the Act empowered the High Court to direct, could 250 relate only to such facts as already formed part of the record but were not included by the Tribunal in the statement of the case.
Craddock (H. M. Inspector of Taxes) vs Zevo Finance Co. Ltd., ; Commissioner of Income tax, West Bengal vs State Bank of India, ; Industrial Development and Investments Co., Ltd. vs Commissioner of Excess Profits Tax, Bombay, [1957] 31 I.T.R. 688; Vadilal Ichhachand vs Commissioner of Income tax, Bombay North, Kutch and Saurashtra, Ahmedabad, and Commissioner of Income tax vs Bhurangya Coal Co. [195S] , referred to.
Commissioner of Income tax, Bihar & Orissa vs Visweshwar Singh, and Sir Sunder Singh Majithia vs Commissioner of Income tax, C. P. and U. P. [1942] 10 I.T.R. 457, considered.
|
Appeal No. 565 of 1960.
Appeal from the judgment and decree dated September 26, 1956, of the former Travancore Cochin High Court in A. section No. 57 of 1954.
A. V. Viswanatha Sastri, P. K. Subramania Iyer, R. Ganapathy Iyer, C. section Ananthakrishna Iyer and G. Gopalakrishnan, for the Appellants.
M. E. Nambiyar, Rameshwar Nath, section N. Andley and P. L. Vohra, for the respondent.
March 27.
The Judgment of the Court was delivered by 88 KAPUR, J.
This is an appeal against the Judgment and decree of the High Court of Travancore Cochin modifying the decree of the District Judge, Trichur.
The appellant was defendant No.1 in his personal capacity and defendant No. 2 in the capacity of a trustee of a trust.
Defendant No. 5 was a tenant of the building which is the subject matter of dispute between the parties, defendant No.10 was its successor in interest and the present respondent was the plaintiff in the suit.
The suit out of which this appeal has arisen was filed in the Court of the District Judge, Trichur, on ' October 31, 1945.
The suit was for possession of properties described in schedules A & B and for damages and mesne profits with interest.
The defence was that the appellant was not liable to restore possession on the basis of a document Exhibit X which was a deed of trust executed by the appellant, creating a trust and constituting himself the trustee of the trust.
The 5th defendant claimed Rs.20,000 and Rs.1019 as value of improvements and extensions made on the building.
A large number of issues were framed by the trial court and it passed a decree of which the most important part was as follows: (a) The plaintiff is allowed to recover possession of A & B schedule items from the defendants in possession and to utilise the income from the B schedule item according to the terms mentioned in Exhibit II.
(b) The 5th & 10th defendants are permitted to remove within a period of 2 months from today the constructions and additions made in the (A and B schedule items by them without causing any damage to the plaint properties.
Again this decree three appeals were filed one by the appellant, the other by the 10th defendant 89 and the third by the plaintiff respondent.
The High Court in appeal modified the decree of the trial court and held that the only claim which the appellant could put forward was for compensation for the structure he had erected.
The amount of Compensation was R.46,686 2 0.
The High Court also held that the respondent was entitled to recover mesne profit,% as against the appellant at the rate of Rs.88/ per annum till the recovery of property mentioned in schedule A and B at the rate of Rs.1500/ per annum in regard to schedule B buildings.
It is against this decree that the appellant has come in appeal to this court by special leave.
In order to understand the points in contro versy it will be helpful to give certain facts which led up to this litigation ' The respondent is a nonprofit sharing company, the main object of which seems to be to provide pecuniary assistance to the poor for educational and other charitable purpose.
The respondent company owned survey No. 465 in the revenue estate of the village Trichur abutting on the public road in 1944 45.
It was 55 cents in area.
The respondent company erected buildings on the South and which had been rented to the then Imperial Bank of India ' now the State Bank of India, and in the middle portion there was a building which has been leased out to the Post Office.
In the North there was a vacant plot measuring 20 cents which has been described as schedule A. A building was sought to be put up and was ultimately put up on about 7 or 8 cents out of this area which has been described in schedule B. Schedule A is the whole of the land measur ing 20 cents with the building on it on an area of 7 or 8 cents which is schedule B.
In 1942 the appellant became the Chairman of the Board of Directors of the respondent company and was entrusted with the construction of the building which the respondent company wanted to put up 90 on 7 or 8 cents out of schedule A property which the appellant agreed to construct.
The cost of the building at that time was estimated to be In Rs.12,000.
It was also resolved to entrust to the appellant the construction of a latrine, a kitchen, gate, compound and partition wall of schedule A property which was constructed at a cost of Rs.2,000 expended by the respondent company.
At the meeting ' of the Board of Directors of January 9, 1944 the directors of the respondent company were told by the appellant that Rs. 12,000 was insufficient for the completion of the building.
On April 1944,.
the appellant made an offer to the Directors of the respondent company that he would meet the entire cost of the construction of the building and hand over the building to the respondent company which would be a 'trust.
This offer is contained in Exhibit AB.
In this offer he stated that the estimated expenditure of the Dew building will be about Rs.30,000 and that he would meet the expenses and then he stated: "I shall entrust this building with the company as my trust property in accordance with the conditions mentioned below, and the company shall take over the above trust property and manage the affairs in accordance with three conditions mentioned below".
One of the conditions was that the minimum income of the property shall be calculated at Rs.1500/ per annum which would be spent for the education of poor students according to the rules framed by the company and then he set out certain rules.
He also stated what the name of the trust would be.
The document ended as follows.
"I shall execute at my own expense a trust deed and sign and give the same to the company, entering therein, all the above mentioned particulars and conditions.
The 91 company shall accept the same and shall mention the fact of acceptance in the deed in writing and shall get the same registered".
On the same day the directors seem to have resolved as follows: "It is decided to accept this trust property in accordance with the conditions, mentioned in it.
Copies of this resolution and the application, may be sent to the applicant".
The company agreed to accept the trust and a sum of Rs.7672 7 3 which had been given to the appellant by the respondent company was returned on April 30, 1944.
On July 2, 1944, the appellant placed before the Board of Directors a draft of the trust deed which is Exhibit IT.
The draft of the trust deed was approved by the company as follows: "The company has accepted the properties as 'Trust ' with all the above conditions.
To this effect, the Directors (Trustees) who have been authorised as per the decision of the Director Board, on behalf of the Dharmodeyam Company.
The draft of the 'Trust deed ' has been perused and accepted.
Four Trustees have been empowered to prepare the original deed and present it in the Registrar 's Office " .
It appears that at a meeting of the General Body of the Members of the Company this trust deed was approved.
Later on February 25, '1945 another meeting was held and certain changes were suggested in the trust deed.
On October 7, 1944, certain members of the respondent company filed a suit in" the court of District Munsif of Trichur and obtained an injunction both against, 92 the appellant and the company not to execute the trust deed as had been proposed by the appellant as contained in the draft (Exhibit II).
Thereafter the appellant resigned his Chairmanship of the respondent company on May 25, 1945 and also ceased to be a Director on May 28, 1945.
Two days before i.e. on May 23, 1945 the appellant registered a trust deed in regard, to the property which is Exhibit X.
It is there stated that he had constructed the building at his own expense at a cost of Rs 75,000/ and it was to be named Dharmodayam Company Silver Jubilee 11 lyyappan Trust Building.
The first trustee was the appellant with power to appoint other trustee or trustees.
The estimated income of the property was Rs. 3600/ out of which a rent of Rs 88/ per annum was to be paid to the appellant company for the compound where the building had been erected and then provision was made in regard to the income and how it wag to be spent.
This was registered and thus a trust was created of the properties in schedule A & B in which the trust became a tenant of the respondent company without any transfer from the respondent Company to the trust.
The suit for injunction which had been filed by some of the members was dismissed for default on March 25, 1946.
The respondent company on August 13, 1945, called upon the appellant to band over the building to the respondent company and it is stated that on August 22, 1945, during some holidays the appellant inducted the 5th defendant as a tenant.
The respondent thereupon filed the suit out of which this appeal has arisen.
The plaintiff in his plaint, after reciting the facts which have been above set out, stated that the appellant as an agent of the respondent company had misconducted himself by the breach of his duties and had thereby lost any right he had regarding the building described in schedule B; 93 that he had wilfully contravened the terms of his offer ; that the right of the appellant therefore was only to recover the money from the company to the extent to which he may be entitled in equity and the trust deed (Exhibit X) was inoperative.
The respondent further stated that it was ready and willing to pay such sum of money as the court may find the appellant to be entitled to.
The defence of the appellant was that the offer of the appellant to construct the building and to constitute the company as trustee to carry out the trust according to the terms and conditions detailed in his offer dated 2, 1944 having been accepted by the Board of Directors, it put an end to any previous relationship which might have existed between the appellant and the respondent company and could not therefore be enquired into.
It was also submitted that the respondent company was estopped from claiming the building after having accepted the aforesaid offer pursuant to which the appellant had invested a large sum of money in constructing the building; that as the offer of the trusteeship of the property in dispute made by the appellant and accepted by the Board of Directors of the respondent company had afterwards been cancelled as a result of the resolution passed by the General Body ' of Members the appellant could not constitute the respondent company as trustee and therefore he was entitled to implement his original intention by executing the deed of trust (Exhibit X.).
He therefore pleaded that the deed of trust was perfectly valid: that the rental value of the site in schedule A was not even Rs. 10/ a year and that he had not be.
come a tenant and the word "verumpattom" had been used for the want of a better word and that the trust had undertaken the liability to pay to the respondent company Rs. 88/ a year.
On these grounds it was submitted that the respondent company was not entitled to any relief.
These then are the facts of the case.
94 The appellant in this Court has mainly relied on the plea that he had been granted a licence and acting upon the license he 'had executed a work of a permanent character and incurred expenses in the execution thereof and therefore under section 60(b) of the (5 of 1882), hereinafter referred to as the 'Act ', which was applicable to the area where the property is situate and therefore the license was irrevocable.
Now in the trial court no plea of license or its irrevocability was raised but what was pleaded was the validity of the trust in Exhibit X.
In the judgment of the trial court no such question was discussed.
In the grounds of appeal in his appeal to the High Court which the appellant took against the decree of the trial court the relevant grounds are 9 to 13.
In the 9th ground it was pleaded that the first de fendant 's case of lease should have been upheld; in any event s.60 of the Act should have been applied.
In Ground No. 10 it was stated that Rs. 88/ was a reasonable compensation.
Grounds 11 to 13 dealt with the question of trust.
Thus it is for the first time in his grounds of appeal that section 60 of the Act was sought to be raised as an alternative plea.
At the time of the argument before the High Court the appellant abandoned his case in regard to the lease and relied on the irrevocability of the license and insisted that the trust deed (Exhibit X) was a valid document.
Now it is not open to a party to change his case at the appellate stage because at the most the case of the appellant in the trial court was what was contained in paragraph II of the Written Statement where the question of estoppel was raised and the plea taken was that the respondent company was estopped from claiming any right to the building after accepting the offer of the appellant pur suant to which the appellant had expended a large amount of money, That was not a plea of license at that stage.
it is not for us to say what the ease of the parties would have been if the case of 95 license had been specifically raised but the fact remains that the plea of license was not raised in the trial court nor was it adjudicated upon there.
The appellant was a Director of the company and it is now impossible to dispute the proposition that the Directors are in some sense, trustees a proposition which has been established by a long series of cases.
See Palmer 's Company Law p. 158, Ed. 19th.
This two fold character of directors is, perhaps, best expressed in Lord Belborne 's words in G. E. Ry.
vs Rurner(1) where he said: The directors are the more trustees or agents of the company trusees of the company 's money and property ; agents in the transactions which they enter into on behalf of the company.
And this is the way in which it is put by Sir George Jessel in the case of Re Forest Of Dean etc.
, Co. (1878) 10 Ch. D. 450.
Directors are called trustees.
They are no doubt trustees of assets which have come into their hands, or which are under their control".
Thus when the appellant was making the offer for creating a trust he was not merely an agent of the company; he was also a trustee of the assets of the company and was in a fiduciary relationship with the respondent.
Therefore the appellant could not, do anything in regard to the assets of the company which would prejudicially affect its rights.
The appellant made an offer that he would errect the buil ding on the land belonging to the respondent which .is in schedule A, the building being schedule B. He also offered that it would be a trust property i.e. the super structure would be the trust property.
He could not create a trust in regard to land which belonged to the company nor could he by a unilateral act create a lease in his own favour in regard to (1) , 152. 96 the land which is in schedule A.
Thus when a complaint is made that the appellant has unilaterally acted to deprive the company of some of its right the complaint.
is not wholly without foundation, although the company also may not be entirely without blame.
But the fact comes to this the appellant was asked to construct the building at a cost of Rs. 12,000; it was subsequently found that the cost would be more than the estimated amount which probably the company was not prepared to spend.
It is not that the building had not yet commenced, it had commenced and probably not completed.
At that stage the appellant made an offer which was accepted but the offer was that he would finish the construction of the building and hand it over to the respondent company as trust property of which the trustees would be the Directors of the company.
The transaction therefore was confined to the offer as contained in Exhibit AB and in Exhibit 11.
It is true that for some reason or another certain members of the company were not prepared to stick to the original arrangement and wanted certain modifications but in spite of that it was not open to the appellant to ignore his offer altogether and create a wholly new trust which he has done.
His right, if any, if they could be enforced would only be in Exhibit 11 which the appellant himself has abandoned.
He cannot now be heard to say that because the company after accepting his offer had refused to abide by the agreement, he was entitled, to appropriate by means of the trust created by him the land in schedule A by constituting the trust a tenant and deprive the company of which he was at that time a Director and therefore a trustee.
In these circumstances it is impossible to say that there were any equities in his favour which he is entitled to.
enforce by way of defence to the suit of the respondent.
97 In our opinion no case of license really arises but if it does what is the license which the appellant obtained and what is the license, which he is seeking to plead as a bar.
The license, if it was a license, was to construct the building and hand it over to the respondent company as trust property.
There was no license to create another kind of trust which the appellant has sought to create, It cannot be said therefore that there was an irrevocable license which falls under section 60 (b) of the Act.
Even such a license is deemed to be revoked under section 62 (f) of that Act where the license is granted for a specific purpose and the purpose is attained or abandoned or becomes impracticable.
In the present case the purpose for which the license was granted has either been abandoned or has become impracticable because of the action of the appellant.
In these circumstances the cases which were cited on behalf of the appellant are of little assistance.
The appellant relied on Manzoor Ahmad vs Muhammad Abdul Jamil(1) which was a case under a. 60 (b) of the Easements Act where a license had become irrevocable under section 60 (b) and it was held that it could not be revoked on payment of com pensation.
The East Punjab case.
Dominion of India vs B. B. Sohan Lal (2) again is not of much assistance of the appellant.
It was there stated that in every case the terms of the license have to be examined and the law applied to such terms.
It was also observed by Das, C. J. (as he then was) that in order to be irrevocable under section 60 the license has to be coupled with a transfer of property whereas under the English law it was enough if it was coupled with a grant or interest in the nature of profit and in every ease the irrevocability whether under the English law or under the Indian ' statute will give way to the special (1) ALL.
(2) A.I.R. 1950 E.P. 40, 47.
98 agreement if any of the parties but it is unnecessary to go into these cases because the offer which was originally made by the appellant and accepted by in the respondent company has not been adhered to and the appellant is not proceeding on an entirely new basis.
In our opinion the offer and the acceptance of the terms of the trust deed being wholly different from what has now been executed by the appellant and from the manner in which the new trust has been constituted into a lessee of the company without the company 's agreement it is not possible for a court in equity to accept the new trust as a bar to the respondent 's claim for possession.
In this case the appellant has suffered no loss.
The amount which he has expended has been returned to him.
In our opinion the judgment of the High Court was right and we therefore dismiss this appeal with costs.
Appeal dismissed.
| The respondent, a Company with charitable objects owned certain lands and the appellant who was the Chairman of the Board of Directors, was asked to construct a building on the said land.
It was subsequently found that the cost. would be more than the estimated amount, which probably the Company was not prepared to spend.
At that stage the 86 appellant made an offer that he would finish the construction of the building at his own cost and hand it over to the Company as trust property of which the Directors of the company would be the trustees and the Company will manage the affairs in accordance with the conditions laid down in his offer.
The offer was accepted, but for some reason or other certain members of the Company were not prepared to stick to the original arrangement and some of the members filed a suit and obtained an injunction against the appellant and the company not to execute the trust deed as proposed by the appellant.
Thereafter the appellant resigned from Chairman ship and also ceased to be a Director, two days before his resignation he appellant registered a trust deed and made himself the first trustee with powers to appoint other trustees.
The trust deed inter alia, recited that a rent of Rs. 88/ per annum was to be paid to the Company for the compound where the building had been erected.
Thus the appellant created a trust by which the trust became a tenant of the respondent Company without any transfer from the Company to the trust.
The respondent Company called upon the appellant to hand over the building to the Company and file a suit for possession of properties, damages and mesne profit.
The respondent Company 's case was that the appellant had wilfully contravened the terms of his offer, and the right of the appellant therefore 'was only to recover the money from the Company to the extent to which he may be entitled in equity and the trust deed was inoperative.
The defence of the appellant inter alia was that the respondent company was estopped from claiming the building after having accepted the aforesaid offer pursuant to which the appellant had invested a large sum of money in constructing the building; and that as the offer of the trusteeship of the property in dispute made by the appellant and accepted by the Board of Directors had afterwards been cancelled as a result of the resolution passed by the general body of members, the appellant could not constitute the respondent company as trustee and therefore he was entitled to implement his original intention by executing the deed of trust.
In the Supreme Court, the appellant relied on the plea that he had been granted a license and acting upon the license he had executed a work of permanent character and incurred expenses in the execution thereof and therefore under section 60(b) of the , the license was irrevocable.
Held, That a Director is also a Trustee of the assets of the company and is in a fiduciary relationship with the company; therefore he could not do anything in regard 87 to the assets of the Company which would prejudicially affect its rights.
A person cannot create a trust in regard to land which belonged to another person nor could he by an unilateral act create a lease in his own favour in regard to the land over which he has raised a super structure.
The offer and the acceptance of the terms of the trust deed being wholly different from what had been executed by the appellant and from the manner in which the new trust had been constituted into a lessee of the company without the company 's agreement it was not possible for a Court in equity to accept the new trust as a bar to the respondent 's claim for possession and there are no equities in the appellant 's favour which he is entitled to enforce by way of defence to the suit.
Held, further, that no case of license really arises but if it does, the license was to construct the building and hand it over to the respondent company as trust property.
There was no license to create another kind of trust which has been sought to be created.
It cannot be said, therefore, that there was an irrevocable license which fall under section 60(b) of the .
Even such a license is deemed to be revoked under section 62(f) of the Act where the license is granted for a specific purpose and the purpose is attained or abandoned or becomes impracticable.
G. E. By.
vs Rurner , Manzoor Ahmad vs Muhammad.
Abdul Jamil, (1933) 1.
L. R. 56 All.
207 and Dominion of India vs B. B. Sohan Lal, A. 1.
R. 1950 E.P. 40, referred to.
| The respondents filed a suit against the petitioner in 1954 for the possession of certain property and for mesne profits and obtained decree in their favour.
The petitioner 's appeal to the High Court was dismissed in April 1959 and a petition for special leave to appeal to this Court was granted in June, 1959.
Thereafter, the 7th respondent died in November 1959.
The petitioner filed the present applications in October 1964 for bringing on record the legal representatives of the 7th respondent and for condonation of delay on various grounds.
It was also contended on behalf of the petitioner that in view of the fact that after the preliminary decree for mesne profits had been passed, the respondents/plaintiffs brought the heirs and legal representatives of the deceased 7th respondent on record in the final decree proceedings within the time prescribed, and as the legal representatives were brought on record at one stage of the suit on the basis of the rule laid down by the Privy Council in Brij Inder Singh vs Kanshi Ram, 44 I.A. 218, no question of abatement would arise in respect of the appeal; that the final decree proceedings are a stage in the suit and the appeal is another stage in the suit and, therefore, the bringing on record of the legal representatives in one stage of the suit will enure for all stages of the suit.
HELD: (i) On the facts of the case there were no sufficient grounds for condoning the delay in bringing the legal representatives of the 7th respondent on the record.
(ii) The order bringing the legal representatives of the respondent on record in the final decree proceedings cannot enure for the benefit of the appeal filed against the preliminary decree.
The appeal therefore abated so far as the 7th respondent was concerned.
[217D] An order bringing the legal representatives of a deceased party on the record passed at the stage of an interlocutory application in a suit, or passed while an appeal is pending where the suit is subsequently remanded to the trial court or if passed while an appeal is pending against an interlocutory order in passed while an appeal the subsequent stages of the suit ' in all that suit, would enure for made at one stage of the suit be it the suit these.
cases the order is final appeal against the interlocutory order or final order in the suit, for here the appeal is only a continuation of the suit.
But the same legal position cannot be invoked where an order is made in a suit subsequent to the filing of an appeal at an earlier stage.
Such an order cannot be Projected,backwards into the appeal that has already been filed so as to become an order in that appeal [216F 217D] Brij Inder Singh vs Kanshi Ram, 44 I.A. 218 distinguished.
Shankarnaraina Saralaya vs Laxmi Hengsu, A.I.R. 1931 referred to.
N)3S.C.I. 1 212
| The respondent plaintiffs instituted a suit in 1961 in accordance with the Portuguese law then in force in those territories for ejectment of the defendant appellants from the suit property.
It was alleged in the plaint that on the death of father of the plaintiff No. 1.
Sadashiva the suit land was assigned to Sitabai mother of plaintiff No. 1 and that on the death of Sitabai the property devolved on the respondent No. 1 and his 6 sisters.
It was also contended that the house built on a portion of the land in dispute and occupied by the defendants should be removed by the defendants and the defendants should be directed to hand over vacant possession of the plot to the respondents.
The appellants in their written statement pleaded that the suit property was given on perpetual lease to the ancestors of the appellants and that no rent was paid for over 40 years.
The appellants further contended that the suit property was in their open peaceful and continuous possession including that of their predecessors in interest as owners for a period of more than 50 years and that the have acquired a title by prescription.
The trial court decreed the suit.
An appeal filed by the appellants before the learned Additional Judicial Commissioner was dismissed.
When the matter came up before this Court by special leave this Court remanded the matter to the court of the Judicial Commissioner for a finding on the plea of prescription raised by the appellants.
The learned Judicial Commissioner after remand came to the conclusion that the appellants have failed to prove the acquisition of full title to the suit property by prescription under the law in force at the relevant time.
The learned Judicial Commissioner also held that the appellants failed to establish their plea of perpetual lease.
Partly allowing the appeal.
^ HELD: (1) In view of the earlier decision of this, Court this Court would be justified in deciding the appeal only on the question of plea of prescription.
The appellants had been in continuous possession of the entire plot of land described in para 1 of the plaint which has a larger area including the portion where the house of the appellant stands.
In the year 1920, the respondents sought to make their construction on the vacant portion of the land close to the appellants ' house which led to opposition and obstruction from the appellants.
Later on, the appellants agreed to the construction by the respondents.
However, so far as the land on which the appellants had their house is concerned there was no proof nor any evidence of any change on the part of the appellants to their open hostility to the respondents ' title to the same.
The respondents did not give any evidence of any such amicable solution.
On the other hand, it is admitted that they had reported to the Administrator without even caring to know the result of such action against the appellants.
The further fact that the respondents annexed to the plaint a certified copy of the partition deed of 1920 which was obtained as early as in 1920 goes to show that they were fully cognizant of the public assertion by the appellants of their own title, to the land on which their house stands repudiating that of the respondents.
The learned Judicial Commissioner has erred in holding that the appellants have not been able to prove an overt act of possession to the knowledge of the respondents.
According to article 474 of the Portuguese Civil Code possession is defined as holding or fruition of anything or right.
The acts done by licence or permission do not constitute possession.
According to Article 505 things and rights are acquired by virtue of possession, just as obligations are extinguished by reason of not demanding their fulfillment.
The law lays down conditions and the period of time 1068 that are necessary for one as well as for the other thing and that is called prescription.
Under Article 528 of the Portuguese Code in the absence of registration of possession or title of acquisition prescription with respect to immovable property or rights to immovable will operate by virtue of possession for 15 years.
Under article 529 when the possession of immovable property or rights to immovable property has lasted for a period of 30 years prescription will operate.
Under the Portuguese law what appears to be clear is that permissive possession is not sufficient to prescribe title of the owner of the land.
There is no evidence whatsoever for the conclusion of the Judicial Commissioner that the possession of the appellants was permissible under the respondents.
On the other hand, evidence is against recognition by the appellants of any title in the respondents.
We are, therefore, left with the long continuous and peaceful, possession by the appellants of the land with the residential house thereon since the time of their ancestors after a clear repudiation of the title of the respondents to the land in 1920.
The fact that the appellants set up title in Vishnu Narcornim describing him as respondents ' ancestor does not affect the position in view of the respondents ' denial that Vishnu had anything to do with the land.
The Judicial Commissioner fell into an error by not keeping the distinction between Vishnu 's title and the respondents ' title.
The origin of ownership of land being dipped in the misty past what emerges from the evidence in the absence of proof of lease or permission by the respondents ' own ancestors is that the appellants have been in long and open possession of the land over which they have constructed their house for a period long enough for that possession to ripen into ownership.
The appellants have acquired title to the said land by prescription.
Since there is no proof of permissive possession under the respondents or their ancestors there is no question of application of Article 510.
The learned counsel for the appellants has confined his claim in this case only to the land on which appellants have their house.
The suit of the respondents so far as it relates to the portion of the land on which the appellants have their house is dismissed and in respect of the remaining portion of land is decreed.
[1070G, 1072A D, 1073A H, 1074A C, 1075D E]
| The respondent field a suit against the appellant for recovery of possession of a building on the ground of wilful deflault in payment of rent which was Rs. 900 per ;month.
The appellant denied the relationship of landlord and tenant, claiming himself as one of the "associates" or "co sharers" or "co owners" of the building.
The Munsif decreed the suit; and the decree was affirmed in appeal by the first appellate court as also by the High Court.
Hence the present appeal.
During the pendency of the present appeal, cl.
(ii) of section 30 of Tamil Nadu Buildings (Lease and Rent Control) Act, 1960, which exempted from application of the Act premises the monthly rent in respect of which exceeded Rs. 400, and on the basis of which the suit giving rise to the present appeal emanated, was struck down in a judgment by this Court.
** The appellant contended that as a result of the declaration by this Court of the constitutional invalidity of clause (ii) of section 30, of the Act, 311 which excluded from the purview of the Act any building or part thereof let out on a monthly rent of Rs. 400, the decree of the civil court became null and void and of no effect.
On behalf of the respondent it was submitted that the decree passed by the civil court was not a nullity for the Act did ;not bar the jurisdiction of the civil court but only prohibited execution of a decree of eviction otherwise than in accordance with the relevant statutory provision; and that such a decree was not void, but was merely under an eclipse, and would become executable as and when the bar is removed.
Allowing the appeal, this Court, HELD; 1.1 Section 10 of Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 prohibits jurisdiction of the civil court in respect of eviction of a tenant whether in execution of a decree or otherwise except in accordance with the provisions of that section and sections 14 to 16.
The sole circumstance and the condition precedent to the exercise of jurisdiction by a civil court as stated in second proviso to section 10(1) is that the tenant should have denied the title of the landlord or claimed right of permanent tenancy and the Controller, on such denial or claim by the tenant, reaches a decision and duly records a finding that such denial or claim was bona fide and only when these conditions are satisfied jurisdiction of the civil court can be invoked to pass a decree for eviciton on any of the grounds mentioned in section 10 or sections 14 to 16.
Except to this limited extend the jurisdiction of the civil court is completely barred and the same is vested in the tribunals set up under the Act.
Any suit instituted by a landlord for eviction of a tenant from a building falling within the ambit of the Act,otherwise than as stipulated by the section is, therefor, incompetent for lack of jurisdiction of the court and any decree of the court in such a suit is null and void and of no effect.
[317D E, G H; 318 D,G H] Sushil Kumar Mehta vs Gobind Ram Bohra, [1990] 1 SCC page 193, referred to.
1.2 The decision of the Controller is concerned solely with the bona fides, and not the correctness or validity, of the denial or claim, for these difficult questions of title are by the statute reserved for decision by the appropriate civil court which is the more competent forum in such matters.
[318D E] Magiti Sasamal vs Pandab Bissoi,[1962] 3 SCR 673, referred to.
1.3 If the decision of the Controller is that tenant 's denial or 312 claim is not bona fide, the jurisdiction of the civil court cannot be invoked by the landlord and the Controller will then be the competent authority to order eviction, after affording the parties a reasonable opportunity of being heard, on any one of the grounds specified under the statute, including the ground that the tenant has, without bona fide denied landlord 's title or claimed right of permanent tenancy.[318E F] 1.4 Although the Act contains no express bar of jurisdiction of the civil court, its provisions explicitly show that, subject to the extraordinary powers of the High Court, and this Court, such jurisdiction is statute for eviction of tenants "in execution or otherwise".
The provision of the Act are clear and complete in regard to the finality of the orders passed by the special tribunals set up under it, and their competence to administer the same remedy as the civil courts render in civil suits.
Such tribunals having been so constituted as to act in conformity with the fundamental principles of judicial procedure, the clear and explicit intendment of the legislature is that all questions relating to the special rights and liabilities created by the statute should be decided by the tribunals constituted under it.
[317A C] Dhulabhai &Ors.
vs The State of Madhya Pradesh & Anr.
, ; ; Secretary of State vs Mask & Co., [1939 40] IA 222 (PC, Raleigh Investment Co. Ltd. vs Governor General in Council, [1946] 47 IA 50 (PC and Barraclough vs Brown & Ors., , referred to.
In the instant case, the procedure stipulated in the second proviso to section 10 had not been complied with.
At the time of institution of the suite, the building in question did not come within the ambit of the Act, owing to the exclusionary provision contained in cl.
(ii) of section 30, but after leave to appeal was granted, the applicability of the Act was extended to the building by reason of the decision of this Court, declaring the invalidity of cl.
(ii) of section 30 on account of its inconsistency with Article 14 of the Constitution.
Whatever be the consequences of that declaration whether it has rendered the statutory provision null and void and of no effect, or, merely inoperative, unenforceable and dormant to be revitalised on subsequent removal of the constitutional ban in either event, the civil court acting without the aid of the exclusionary provision in cl.
(ii) of section 30, during the period of invalidity,had become coram non judice and its proceedings resulting in the decree a nullity.
[319A D] 313 Ratan Arya & Ors.
vs State of Tamil Nadu & Anr.
, ; , referred to.
Kiran Singh & Ors.
vs Chaman Paswan & Ors., ; relied on.
V.B. Patankar & Ors.v.
C.G. Sastry, ; , held inapplicable.
Behram Khurshed Pesikaka vs State of Bombay, ; Saghir Ahmad vs State of U.P. and Ors. ; ; Bhikaji Narain Dhakras & Ors.
vs The State of M.P.
The State of A.P. & Anr., ; , referred to.
| The appellant (holder of an inam in Madhya Pradesh) served a notice an his tenant, the respondent, terminating to tenancy on the ground that he wanted the land for personal cultivation and filed a suit for ejectment.
The trial court decreed the suit.
During the pendency of the appeal in the District Court, article 32 of 1954 was enacted, and pursuant to its provisions the hearing of the appeal was stayed.
After the Madhya Pradesh Land Revenue Code came into force in 1959, the District Court held that by virtue of section 185 of that Code the respondent acquired the rights, of an occupancy tenant and dismissed the suit.
The High Court confirmed the judgment of the District Court.
In appeal to this Court, it was contended that : (i) the rights of an occupancy tenant arise in favour of a personl under section 185(1) (i) (a) only if there was between him and the landlord a subsisting tenancy at the date when the Code came into force and since under the law in force before the commencement of the Code, the respondent had ceased to be a tenant because of the notice terminating the contract of tenancy the respondent was not invested with the rights of an occupany tenant; and (ii) bi virtue of sections 261 and 262(2), the operation of section 185 is expressly excluded when a person, against whom ejectment proceedings have been instituted prior to the commencement of the Code in enforcement of a right then acquired, claims the status of an occupancy tenant.
HELD : (i) The respondent acquired the right of an occupancy tenant under the Code, because the expression "tenant" in section 185 (1) (ii) (a) includes a person whose tenancy was terminated before the commencement of the Code.
The definition of the expression "tenant" in the Code postulates a subsisting tenancy, but the position of a tenant prior to the date on which the Code was brought into force is not dealt with in the definition.
In the context in which the expression "tenant" occurs in section 185(1), that definition could not be intended to apply in deter ining the conditions which invest a holder of land with the status of an occupancy tenant at the commencement of, the Code.
Therefore having regard to the object of the enactment the expression should be ascribed the meaning it 'has in Act 32 of 1954.
Under sections 3 & 4 of that Act a person who was inducted into the land as a tenant and who continued 'to hold the land at the commencement of the Act was entitled to protection against eviction and continue as tenant, notwithstanding that under the law in force prior to the commencement of the Act.
the contractual relationship of landlord and tenant was determined.
[432 D; 432 14 433 C] 428 There is no reason to think that the Legislature sought to make a A distinction between tenants of Inam land in section 185 (1) (ii) (a) and ryotwari sub lessees of other lands in section 185(1)(ii)(b).
Therefore, if the expression "ryotwari sub lessee ' in section 185(1)(ii)(b) includes a sub lessee whose tenaure was terminated before the commencement of the Code, a tenant of inam land, whose tenancy has been terminated would also be included in the protection, provided at some time prior to the date on which the Code was brought into force, he was in possession of the land as a tenant, and he continued to hold the land till the date of the commencement of the Code.
[434 E H] (ii) The provisions of the Code appeal to tenants in proceedings for ejectment pending at the commencement of the Code.
The proviso to section 261 protects a right which had been acquired under a law repeated by the Code and the right could be enforced as if the code had not been passed.
But the right to evict a tenant was governed by the general law of landlord and tenant and was not acquired under any repealed law.
The proviso had no operation and a legal proceeding pending at the date of the commencement of the Code will be disposed of according to the law enacted in the Code.
Therefore, the tenant could not ' be evicted otherwise than in the manner and for reasons mentioned in a. 193 of the Code but, personal requirement for cultivation of land is not a ground on which a claim for ejectment could be maintained.
[435 G436 A] Section 262(2) is only procedural it provides that a civil court will continue to have jurisdiction to dispose of a civil suit pending before it at the commencement of the Code, Which, if it had been instituted after the Code was passed would have been tried by a revenue court; and in the disposal of such a suit, the civil court will be governed by the procedural law applicable there to prior to the commencement of the Code.
It does not nullify the statutory conferment of occupancy right upon persons in the position of tenants against whom proceedings were taken at the date when the Code was brought into force.
[436 B D]
| The sixth respondent granted various Pattas of his lands to his wife, to the appellant and others in November, 1944.
After the coming into force of the Andhra Pradesh (Andhra Area) Estates Communal, Forest and Private Lands (Prohibition of Alienation) Act, 1947, section 4(1) of which declared alienation of Communal or Forest Lands after October, 1939, to be void, a petition was filed in the District Court by two ryots for a declaration that the alienations in the present case were void and did not confer any rights on the alienees.
The District Judge allowed the petition holding that the lands in question were forest lands and the alienations were void.
Revision petitions filed before a Single Judge of the High Court were dismissed but in a Letters Patent Appeal it was held that the petitioners as ryots had no right to maintain the petition, and a reasonable opportunity had to be given to the State to get itself transposed as the petitioner.
The State Government was then transposed as the petitioner but thereafter the District Judge held that the petition was not maintainable by reason of the repeal of the Act of 1947 upon the passing of a subsequent Act namely the Madras Estates (Abolition and Conversion into Ryotwari) Act, 1948.
However, a revision petition against this order was allowed by the High Court which remitted the matter to the District Judge.
By a judgement in November, 1960 the District Judge allowed the were forest lands and there transfers were void.
Further revision petitions filed by the appellant and others were dismissed by the High Court.
In appeal to this Court it was contended inter alia on behalf of the appellant that (1) the Act of 1947 was a temporary Act and all proceedings thereunder came to an end with the implied repeal of the Act by Act XXVI of 1948; (2) a notification by the State Government describing the land as forest land was an essential pre requisite to the application of the Act; and (3) the Act applied only to lands which were admittedly forest lands and the operation thereof could not be extended to lands in respect of which there was a dispute as to the nature thereof.
It was argued that any such dispute could only be decided by the Settlement Officer and not by the District Judge.
HELD: Dismissing the appeal, (1) The purpose of the Act of 1947 was to prohibit the alienation of communal, forest and private lands in estates in the Province of Madras and the preamble to the Act shows that it was enacted to prevent indiscriminate alienation of such lands pending the enactment of legislation for acquiring the interest of landholders in such estates and introducing ryotwari settlement therein.
No fixed duration of the Act was specified 330 and it was impossible to hold that merely because of the contents of the preamble, the Act became a temporary Act or that it stood repealed by the enactment of the later Act of 1948 unless there were express words to that effect or unless there was a necessary implication.
It is not reason able to hold that the alienation of large blocks of land which were rendered void under the Act of 1947 became good by reason of the passing of the later Act.
[332 B] (2) The definition of "forest lands" in section 2(b) of the Act is an inclusive one and shows that 'forest land ' would include not only waste land containing trees, shrubs and pasture lands but also any other class of lands declared by Government to be forest land.
This does not mean that before a piece of land could be said to be forest land there would have to be a notification by the Government and that otherwise the application of the Act would be excluded.
[334 C] (3) Section 20(1) of the Act of 1948 as originally enacted was substituted for another by section 9 of the Madras Estates (Abolition and Conversion into Ryotwari) (Amendment) Act, 1956, which was to.
be deemed to have come into force on April 19, 1949 being the date on which the Act of 1948 originally came into force.
The section as it now stands did not confer any jurisdiction on the Settlement Officer to determine any question as to whether any land was forest within the meaning of the Act and consequently the adjudication by the District Judge under sub.
section (4) of
| The appellants in execution of a decree passed in their favour for possession over a house obtained possession thereof on July 22, 1951.
The order for delivery of possession was made without notice to and in the absence of the respondent.
The respondent made an application in the Executing Court under sections 47, 144 and 151, Code of Civil Procedure for setting aside the ex parte order of delivery and for redelivery of possession of the house to him or in the alternative, for an order to the appellants for giving facilities for removing the moveables from the house.
The Executing Court upheld the contention of the appellant that 76 592 the respondent 's application was not maintainable.
On appeal by the respondent the High Court held that the Executing Court had no jurisdiction to order the eviction of the respondent because of the provisions of the Mysore House Rent and Accommodation Control Order, 1948, which was in operation on the date of eviction and under sections 9 and 16 of which certain restrictions were placed on the eviction of tenants.
On appeal to this Court by special leave, the appellants contended, inter alia, as they did in the High Court also , that the Mysore House Rent Control Order of 1948 was repugnant to the provisions of the (IV of 1882), which became applicable in the State of Mysore by Part B States (Laws) Act, 1951 (Act III of 1951), which came into force on April 1, 1951 ; and therefore the House Control Order could not operate on the rights of the parties on the day when the Executing Court made the order for delivery of possession to the appellants, i. e., July 9, 1951, or when delivery was actually given i.e., on July 22, 1951.
Held, that the came into force only when it was extended by notification dated September 12, 1951, under section 3 of that Act, i.e., from October 1, 1951, and therefore the Mysore House Rent and Accommodation Control Order, 1948, was not repealed as from April 1, 1951, when the Part B States (Laws) Act, 1951, came into force and was in force when the possession was delivered.
It was then an existing law which was saved by article 372 of the Constitution and remained unaffected by article 254, and the question of repugnancy to the (Act IV of 1882) did not arise in this case.
M/s. Tilakram Rambaksh vs Bank of Patiala, A.I.R. 1959 Punj.
440, considered.
Section 47 of the Code of Civil Procedure was applicable to the proceeding out of which this appeal has arisen because the question whether the decree was completely satisfied and therefore the court became functus officio was a matter relating to execution, satisfaction and discharge of the decree.
Ramanna vs Nallaparaju, A, I. R. and J. Marret vs Mohammad Shirazi and Sons, A.I.R. 1930 P. C. 86, considered.
Where the court was not aware of the statutory restriction by which the execution of a decree was prohibited and passed an ejectment decree against a tenant the Executing Court could not execute the decree and any possession given under an ex parte order passed in execution of such a decree could be set aside under section 151 of the Code of Civil Procedure.
K.Muhammad Sikri Sahib vs Madhava Kurup, A.I.R. 1949 Mad. 809, considered.
1 The contentions of the appellant based on the ground of res judicata and estoppel were without any force.
Sections 9(1) and 16 of the House Rent Control Order placed restrictions on 593 the power of the Court to execute the decree and ignoring them was not merely an error in the exercise of jurisdiction.
| In exorcise of the powers conferred by section 29 of the Tamil Nadu Buildings (Lease and Rent Control) Act, 1960 (Tamil Nadu Act 18 of 1960), the Government of Tamil Nadu by a Notification No. II (2) H. O. 6060/76 dated 21 t November, 1976 exempted the Buildings owned, inter alia by all the co operative societies from all the provisions of the said Act.
Since the protection available to the petitioners, who wore tenants in a building belonging to respondent No. 2, an Apex Society registered under the Tamil Nadu Co operative Societies Act, 1961 and covered by the said notification.
had been withdrawn and since the petitioners were facing the imminent prospect of suffering eviction decrees against them, they filed the present writ petitions challenging the constitutional validity of the impugned notification on the ground that the same was violative of article 14 of the Constitution.
The petitioners contended that treating the buildings owned by all the co operative societies in the State of Tamil Nadu as falling into one group while exercising the power under sec.
29 of the Act will have to be regarded as a rational classification based on an intelligible differentia but the differentia on which this classification was based had no excuse with the object of curbing the two evils of rack renting and unreasonable eviction for which the power to grant exemption had been conferred upon the State Government under sec.
29 of the Act and since the impugned notification did not satisfy be test of nexus the exemption granted to all such buildings could not be sustained and Will have to be regarded as discriminatory and violative of article 14.
In other words Counsel urged that there was and is up warrant OF any presumption that co operative societies qua landlords will not indulge in rack renting or will not unreasonably evict tenants; in fact they would not be different from other private landlords so far as the two evils sought to be curbed by the Act are concerned and therefore Counsel urged that the exemption granted could not be said to be in conformity with the guidance afforded by the scheme and the previsions of the Act.
417 Dismissing the petitions, ^ HELD: It is true that under sec.
4 of the Tamil Nadu Co operative Societies Act the very object of every co operative society registered thereunder is the promotion of economic interests of its members and sec.
62 of the Act provides for payment of dividends on shares to its members as also for payment of bonus to its members and paid employees.
But these aspects of a co operative society do not mean that it could be likened to any other body undertaking similar activities on commercial lines and to do so would be to miss the very basis on which the co operative movement was launched and propagated and has been making progress in the country during the last several decades.
Indisputably, co operative societies which carry on their activities in various fields do so for the purpose of attaining the social and economic welfare of a large section of the people belonging to the middle class and the rural class by encouraging thrift, self help and mutual aid amongst them, especially by eliminating the middle man.
But the object of promoting the economic interrupts of the members has to be achieved by following co operative principles where the profit motive will be restricted to a reasonable level unlike other commercial bodies where sky is the limit so far as their desire to earn profits is concerned.
Sections 4 and 62 of the Act and Rule 46 of the Rules make it clear that in the matter of distribution of profits by way of payment of dividend to members and payment of bonus to members as well as paid employees restrictions have been placed by law and the same is maintained at a reasonable level and considerable portion of the net profits is apportioned and required to be carried to various kinds of funds, like co operative development fund, co operative education fund, reserve fund etc.
In fact it is such statutory appropriations and restrictions on payment of dividends and bonus which differentiates co operative societies from other bodies undertaking similar activities on commercial lines and therefore, the buildings belonging to such co operative societies are substantially different from the buildings owned by private landlords.
Further it has to be appreciated that these statutory provisions are applicable to all types of co operative societies specified in Rule 14 whatever be their nature or functions.
The profit element being maintained at a reasonable level by provisions of law in all types of co operative societies there is every justification for the assumption that no co operative society will indulge in rack renting or unreasonable eviction.
In this view of the matter if the State Government came to the conclusion that in the case of co operative societies there being no apprehension that they would indulge in either of these two evils exemption from the provisions of the Tamil Nadu Act No. 18 of 1960 should be granted in favour of buildings belonging to such co operative societies it will have to be regarded is a legitimate exercise of the power conferred on it under sec.
29 of the Act the same being in conformity with the guidance afforded by the preamble and provisions of the Act in that behalf.
[422D 5; 424C G] Besides, on the factual side of the issue the facts and circumstances put forward by the State Government in its counter affidavit which have gone unchallenged clearly show that the differentia on the basis of which the classification was made had a clear nexus with the object with which the power to grant exemption has been conferred upon the State and therefore the impugned notification will have to be regarded as valid.
[425E F] 418
|
Appeal No. 340 of 1959.
Appeal by special leave from the judgment 953 and order dated May 21, 1958, of the Punjab High Court in Revision Application No. 27 of 1958.
M.C. Setalvad, Attorney General of India, section N. Andley, Rameshwar Nath and P. L. Vohra, for the appellant.
H.N. Sanyal, Additional Solicitor General of India, and I. N. Shroff, for the respondent.
March 20.
The Judgment of the Court was delivered by DAS, J.
This is an appeal by special leave from the judgment and order of a learned single Judge of the Punjab High Court dated May 21, 1958, hi Civil Revision application No. 27 of 1958 of that Court.
By that order the learned single Judge dismissed an application in revision made by the appellant herein in the following circumstances.
The appellant, Maharaj Jagat Bahadur Singh is the owner of the premises known as Ranzor Hall in Simla.
The respondent, Badri Prasad Seth, is in occupation of the premises as a tenant and is running a cinema ' therein which is known as Revoli theatre or Revoli cinema.
The correspondence between the parties shows that on or about April 12, 1956 the Executive Engineer, Simla Provincial Division, inspected the cinema building on behalf of the Licensing Authority, namely, Deputy Commissioner, Simla, and noted six defects, one of which was, to use the words of the Executive Engineer, "the right hand pillar of the screen has cracked and has gone out of plumb.
" The existence of these defects was communicated to the respondent and also to the Municipal Committee, Simla.
The respondent in his turn communicated the existence of these defects to the appellant by a letter dated April 17, 1956.
In that letter the respondent suggested to the appellant that the defect in the pillar should be removed before the beginning of June, 1956, when the rains were likely to 954 commence.
The respondent removed the other defects which were of a minor nature; but getting no reply from the appellant, he again wrote to him on September I 'd, 1956, and asked him to take early steps to repair the pillar to avoid any mishap.
The respondent also intimated to the appellant that the cost of repairs to the pillar was likely to be in the neighbourhood of Rs. 5000/ .
The appellant took no action in the matter for some time.
On September 24, 1956 the East Punjab Urban Rent Restriction Act, 1949 'East Punjab Act No.
III of 1949) (hereinafter referred to as the Act) was amended and a clause was inserted in section 13(3)(a) thereof which entitled the landlord to apply to the Rent Controller for an order directing the tenant to put the landlord in possession in the case of any building if he required it to carry out any building work at the instance of the Government or local authority or any Improvement, Trust under some improvement or development scheme or if the building had become unsafe or unfit it for human habitation.
Oil April 9, 1956, the appellant wrote to the President, Simla Municipal Committee, asking him to get the pillar in the Ranzor Hall inspected by the Executive Engineer in order to have his opinion whether the pillar was really in a dangerous condition and required any action on the part of the Municipal Committee under section 116 of the Punjab Municipal Act, 1911 (Punjab Act III of 1911).
On October 30, 1956, the Secretary, Municipal Committee, Simla, wrote to the respondent about the defect in respect of the right hand pillar of the screen and required the respondent by means of a notice to do the repairs within fifteen days of the receipt of the notice.
The Secretary issued the notice purporting to act under so. 113 and 114 of the Punjab Municipal Act, 1911.
It appears that the Municipal Committee had the pillar inspected again in November, 1956, by the Executive Engineer, 955 Simla Central Division.
This time the Executive Engineer suggested that the two end.
walls (pillars) supporting the beams for the screen were cracked and therefore must be replaced by thicker walls.
The Municipal Committee considered this report and came to the conclusion that as a precautionary measure what was necessary was to fill the doorway in the pillar with masonry so that the whole might become a solid block.
On April 11, 1957, the Municipal Committee wrote to the appellant asking the latter to fill the doorway with masonry so that the whole pillar might become a ,solid block.
This was in modification of the earlier notice which had suggested more extensive repairs to the pillar.
But before April 11, 1957, when the new notice from the Municipal Committee was received, the appellant had already made an application on December 1,1956, under section 13 of the Act praying for an order from the Controller directing the respondent to put the appellant in possession of the property on the ground that the appellant required the building for replacing the end walls supporting the beams of the screen by thicker walls.
This application was contested by the respondent mainly on the ground that the appellant 's claim was not bona fide and that the appellant did not really require the building to be vacated for the purpose of making the repairs to the pillar in question.
The Rent Controller came to the conclusion that the case was fully covered by cl.
(iii) of 8.13 (3)(a) of the Act inasmuch as on the evidence on the record it was established that the appellant required the building to carry gut the necessary building work which the Municipal Committee, Simla, had directed to be done,.
There was an appeal from the order of the Rent Controller to the District Judge who was the relevant appellate authority under s.15 of the Act.
The learned District Judge came to the conclusion that the notices under a. 113 and 114 of the Punjab Municipal 1, had been manipulated by the landlord after the amendment made in a. 13 of the Act on September 24, 1956, and that the appellant did not bona fide require the building for carrying out the repairs in question.
The learned District Judge pointed out that on April 11, 1957 the Municipal Committee had asked the landlord to fill the doorway with masonry so that the whole might become a solid block and though the Municipal Committee bad modified its earlier requirement of thicker walls by means of a notice after the filing of the application by the appellant, it was open to the Court to take into consideration facts which had come into existence after the filing of the application.
He also pointed out that the evidence of the Executive Engineer, Central P.W.D., showed that he inspected the building on June 8, 1957, in the compliance with the directions of the Court and was satisfied that the pillar had been satisfactorily repaired.
In this view of the matter the learned District Judge allowed the appeal and dismissed the application.
Then, there was an application in revision under a. 15(5) of the Act to the High Court.
This application was dealt with by K. L. Gosain, J. who wrongly proceeded on the footing ,that the application in revision was one under section 115, Code of Civil Procedure.
Though the learned Judge said that he had gone through the evidence and agreed with the findings arrived at by the District Judge,.
he came to the conclusion that as no question of jurisdiction was involved within the meaning of s.115, Code of Civil Procedure, he saw no reasons to interfere and dismissed the application in revision.
The present appeal is directed against this order of the learned single Judge.
The learned Attorney General who appeared on behalf of the appellant has rightly pointed out that the, learned Judge of the High Court was in 957 error in disposing of the case as though the application in revision made to the High Court was an application under a. 115, Code of Civil Procedure.
The application was really an application under a. 15(5) of the Act which is in these terms "15.
(5) The High Court may, at any time, on the application of any aggrieved party or on its own motion, call for and examine the records relating to any order passed or proceedings taken under this Act for the purpose of satisfying itself as to the legality or propriety of such order or proceedings and may pass such order in relation thereto as it may deem fit.
" It is manifest that the scope of sub a.
(5) of a. 15 of the Act is not the same as the scope of a. 115, Code of Civil Procedure.
The learned Attorney General has submitted, rightly in our opinion, that the scope of sub a.
(5) of a. 15 of the Act is wider and is not confined to questions of jurisdiction only.
But even if the learned Judge of the High Court was in error in treating the application as one under a. 115, Code of Civil Procedure, the fact ' still remains that he affirmed the findings of the learned District Judge and one of these findings was that the landlord did not require the building to carry out the repair work which was suggested by the Municipal Committee.
The Municipal Committee had suggested a very simple work of repair, namely, filling up of the doorway in the pillar so that the pillar might be one solid wall to support the screen.
It has not been seriously disputed before us that such repairs could be easily carried out with.
out the necessity of asking the respondent to vacate the building.
As a matter of fact the learned Dis trict Judge has pointed out that the Executive Engineer, Central P.W.D. had, subsequent to the application, examined the pillar and found that 958 the repair work had already been done 'by the respondent.
The learned Attorney General has contended that the learned District judge was in error in holding that the appellant had manipulated the notices under section 113 and 114 of the Punjab Municipal Act.
We think it unnecessary to go into that question because the relevant provision in section 13(3)(a) of the Act makes it quite clear that the landlord is entit led to an order from the Controller directing the tenant to put the landlord in possession of the building only when the landlord requires it to carry out any building work etc.
The relevant provision reads as follows .lm15 "13.
(1) A tenant in possession of a building or rented land shall not be evicted therefrom x. x x except in accordance with the provisions of this section, x x x. (2) x x x. (3) (a) A landlord may apply to the Controller for an order directing the tenant to put the landlord in possession (1) x x x (ii) x x x (iii)in the case of any building or rented land if he requires it to carry out any building work at the instance of the Government or local authority or any Improvement Trust under some improvement or development scheme or if ' it has become unsafe or unfit for human habitation.
x x X. We emphasise the word "requires" in the provision.
Having regard to the scheme and purpose of the legislation it is abundantly clear that cl.
(iii) of 959 a.13(3)(a) of the Act is attracted only when the building work is such that the landlord requires that the building be vacated by the tenant in order to carry out the work ; in other words, the repairs needed are so extensive and fundamental in character that they cannot be carried out if the tenant remains in possession.
Then only it can be said that the landlord requires the building to carry out the building work.
We think that it is absurd to suggest that any such small work as whitewashing, or filling up the gap in the doorway as in the present cage, comes within el.
(iii) of section 13(3)(a) of the Act.
The learned Attorney General has argued that the learned District Judge wrongly took into consideration facts which had come into existence after the filing of the application under section 13 of the Act.
Here again we think that having regard to the scheme and purpose of the. legislation it was open to the learned District Judge to take into considera tion such facts as existed at the time when the order for vacation was to come into effect.
Section (13) says that the Controller shall, if he is satisfied that the claim of the landlord is bona fide, make an order directing the tenant to put the landlord in possession of the building on such date as may be specified by the Controller.
In the present case the Controller made the order in July, 1957, and directed the building to be vacated by September 25, 1957.
But long before that date, namely, on June 8, 1957, the Executive 'Engineer, Central P.W.D., had inspected the building and found that the pillar had been repaired satisfactorily.
The ,Controller did not accept the testimony of the Executive Engineer and the learned District Judge pointed out that the testimony of the Executive Engineer had been rejected by the Controller on very insufficient grounds.
It was, open to the learned District Judge to take into consideration the testimony of the Executive Engineer and having regard 960 to that testimony, the learned District Judge rightly came to the conclusion that cl.
(iii) of a. 13(3) (a) of the Act was not attracted to the case.
For these reasons we have come to the conclusion that there is no merit in the appeal which is accordingly dismissed with costs.
Appeal dismissed.
| Appellant landlord applied to the Rent Controller for eviction of the Respondent tenant on 1.12.56 under section 13(3) of the Punjab Urban Rent Restriction Act for remedying certain defects in the based building.
The Municipal Commi ttee on 11.4.57 issued an amended notice requiring only that the cracked pillar be reinforced so as to make it a solid block.
Respondent carried out the repairs.
On June 8, 1957, the Executive Engineer inspected again in compliance with tile order of the Rent Controller And was satisfied that the pillar had been repaired satisfactorily.
The Rent Controller held that the case fell within section 13 (3) (a) of the Act and ordered eviction of the Respondent.
On appeal the District judge taking note of the state of repairs allowed the appeal.
In revision under section 15(5) of the Act the High Court judge held that the powers of the High Court in revision were similar to those under section 115 of the Civil Procedure Code and that there was no question of jurisdiction involved in the case.
He, however, affirmed the decision after considering the evidence.
Held, that the powers of the High Court under section 15 (5) of the Act were manifestly wider than those under section 115 of the Civil Procedure Code and were not confined to questions of jurisdiction.
That under section 13(3z(a) the requirement of vacant possession.
by the landlord could only be for the purpose of carrying out such fundamental and extensive repairs as could not be carried out without evicting the tenant and not for minor repairs and that it Was open to the District Judge to consider the subsequent events upto the time when eviction was ordered by the controller in view of the scheme and purpose of the legislation.
| FACTS
this appeal is by special leave against the judgment of the high court of punjab and haryana confirming the conviction of the accused.
the facts of the case in brief are that in view of the chinese invasion air field at sirsa required to be extended for which purpose the ministry of defence, govt. of india took steps to acquire some lands of agriculturists pursuant to which a notification dated november 27, 1962 was issued under section 4 of the land acquisition act 1894 for acquiring 51.79 acres of land situated in the state of ahmedpur.
on the next day another notification was issued under section 6 of the land acquisition act on november 28, 1962 and in view of the emergency action under section 17 was taken for obtaining possession of the land with a view to its development.
the lands which were acquired belonged to several land holders including moti ram and p.w. 12 kewal chand.
the collector gave his award on 26-2-63 in respect of these lands, which actually measured 49.47 acres, at rs. 1350 per acre amounting to rs. 66,784.50 np.
apart from this amount compensation was also awarded for standing crop amounting to rs. 11,073.13 np.
the case of the prosecution initially was that after the land so acquired with the standing crop was taken possession of by the appellant.
he sold the crop to moti ram and kewal chand for rs. 2500 and facilitated the cutting and taking away of the crop by postponing the handing over of the possession to the contractor.
a chargesheet was filed against the appellant under section 5 (1) (c) and 5 (1) (d) read with 5 (2) of the prevention of corruption act on 5-8-1966 after obtaining sanction from the govt. of india, ministry of home affairs.
ARGUMENT
the learned advocate for the appellant has meticulously taken us through the entire documentary and oral evidence and commented at length upon the various contradictions and incongruities in the case of the prosecution with a view to establishing that when the appellant took possession of the land there was no crop standing on it-that tile possession of the land 'was in fact delivered to telu ram, contractor on 10-1-1963; that the said contractor had admitted 'that possession of the entire land was received by him; that he carried on the construction work in extending the aerodrome; that 200/250 donkeys were also used for doing the work by reason of which the crop was damaged before tehsildar had put the appellant in possession of the land and as a matter of fact there was no crop thereon when he got the possession of the land.
it was also contended that the high court had not considered the contradictions in the earlier statement made by some of the witnesses to the military authorities and that it relied on many of the documents for affirming the conviction of the appellant without their actually being put to, him under section 342.
it is further contended that the stand taken by the prosecution was that 'the persons who we're permitted to cut the crops bad' not committed any offence.
ISSUE
whether the facts were sufficient to sustain the sanction under 5(1)(c) even if the charge under 5(1)(d) had failed. this question in turnwill depend upon what are the ingredients of the offences under 5(1)(c) and (d) read with section 5(2).
there was utter confusion in respect of the date on which possession of the acquired land was given to the appellant and the date on which it was given to the contractor for carrying on the work, as also in respect of the fact whether there was any crop standing when the appellant took possession of the land and at what period of time the crop was cut and the work commenced.
ANALYSIS
though it is desirable that the facts should be referred to in the sanction itself, nonetheless if they do not appear on the face of it, the prosecution must establish aliunde by evidence that those facts were placed before the sanctioning authorities.
it is therefore necessary to first examine the order of sanction to ascertain on what facts it has been accorded.
it is apparent that the facts which the central govt. considered for the purposes of according sanction were (a) that the appellant as a public servant was entrusted with crops situated on the land acquired for the extension of air field, sirsa ; (b) that by abusing his position as a public servant he allowed the standing crops to be cut from the said land. c. that by corrupt or illegal means and by abusing his position as a public servant he obtained pecuniary advantage of rs. 2500 as the value of the crops to be cut from the land and/or he dishonestly or fraudulently misappropriated that sum by converting it into his own use instead of depositing the said sale price in the govt. treasury.
it would be seen therefore that under section 5(1)(c) a public servant will be said to commit the offence of misconduct in hi&; duties if he dishonestly allows any other persons to convert to his own use property which is entrusted to the said public servant
the facts which have been set out in the order granting the sanction certainly are sufficient to indicate that the authorities granting the sanction had the offence under section 5(1)(c) also in their contemplation.
no work had in fact been undertaken on the land acquired and also that possession of the existing runway and track had already been given.
nothing is specifically mentioned about possession of the acquired land being given to him on that date. re no basis for sanction for a charge under section 5(1)(c.
a person could not be charged merely with the breach of a particular provision of the order; he must be charged with the commission of certain acts which constitute a breach, and it is to that prosecution that is for having done acts which constitution breach of the order-that the sanction 'is required.
in the present case -there is nothing on the face ,of the sanction, and no extraneous evidence, to show that the sanctioning authority knew the facts alleged to constitute a breach of the order, and the sanction is invalid.
the case of jaswant singh v. the state of puniab. 1957 indlaw sc 59 was also cited by the respondent's advocate in support of the contention that the trial of two offences requiring sanction was not valid.
STATUTE
the facts disclose the commission of the offence of criminal misconduct as defined in section 5(1)(d) read with section 5(2) of the prevention of corruption act 1947 by major som nath accused.
under 5(1)(c)-a public servant is said to commit the offence of misconduct in the discharge of his duty if he dishonestly or fraudulently misappropriates or otherwise converts for' his own use any property entrusted to him or under his control as a public servant or allows any other person so to do, and under (d) if he by corrupt or illegal means or by otherwise abusing his position as a public servant, obtains for himself or for any other person any valuable thing or pecuniary advantage.
| The appellant defendants fell in arrears of rent for the months of February and May to August 1974 for the demised premises.
The respondent plaintiffs sought their eviction under section 11(1)(d) of the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947 on the grounds of default.
Decreeing the suit, the trial court found that rent for the said five months had not been paid.
The decree was affirmed by the appellate court in part, that is, in respect of May and June, 1974.
That finding was affirmed by the High Court.
Allowing the appeal by special leave, the Court, HELD: The Supreme Court does not ordinarily interfere in proceedings under Article 136 of the Constitution particu larly when all the courts below had reached the same conclu sion.
But where the finding of fact is based on no evidence or opposed to the totality of evidence and contrary to the rational conclusion to which the state of evidence must reasonably lead, then the Court will in the exercise of its discretion intervene to prevent miscarriage of justice.
[154C D] In the instant case, there was no reliable oral evidence on the side of the plaintiffs to support the allegation that rents were in arrears.
Nor was there any documentary evi dence in support of their case.
Neither the first plaintiff, the widow nor the other two plaintiffs, her children, testi fied in support of the allegation PW 4, who verified the plaint on behalf of the plaintiffs admittedly had no person al knowledge that the defendants were in arrears of rent or whether the first plaintiff or anybody else had demanded rent from the defendants.
[156F G] On the other hand, DW 8, one of the defendants, stated that for the months of May and June 1974 he had paid the rent in June 1974 by 153 handing over the amount to the first plaintiff 's daughter when she went to his shop tO collect the rent.
Since she was a minor he accompanied her to her house to make sure that the amount was received by her mother, the first plaintiff.
This evidence has been supported by DW 7.
He was the Ac countant of the first defendant firm.
DW 6 also spoke of the fact that in June 1974 the defendants had given Rs.200 as rent to the younger daughter of the plaintiff.
These state ments of defence witnesses were categoric and clear.
There was no contradiction in term for there was no evidence on the side of the plaintiffs to the contrary.
The conclusion arrived at by the courts below that rents remained in ar rears was, therefore, perverse and totally unjustified.
[155A B, E; 156D, F, G]
| The Punjab Government acquired certain parcels of land belonging to two brothers Land N who refused to accept the compensation offered to them and applied to the Government of Punjab under r. 6 of the Punjab Land Acquisition (Defence of India) Rules, 1943, to refer to arbitration their joint claim based on the allegation that the land belonged to them jointly.
The State Government referred the matter to an arbitrator as required under r. 10 who passed an award in favour of both L and N ordering inter alia payment of an amount higher than what was offered to them by the Government.
The Government appealed against the said award to the High Court.
During the pendency of the appeal before the High Court respondent L died and as no application for bringing on record his legal representative had been made within the time limit, the High Court dismissed the appeal holding that the appeal had abated against L and that its effect was that the appeal against N also abated.
Held, that there can be no question of abatement of appeal against the correspondents of the deceased respondent as Order 22 Rule 4 of the Code of Civil Procedure does not provide for the same but in certain circumstances the appeal cannot proceed against them and such a result depends on the nature of the relief sought in the appeal.
If the Court can deal with the matter in controversy so far as regards the rights and interest of the appellant and the respondents other than the deceased respondent, it has to proceed with the appeal and decide it; otherwise it will have to refuse to proceed further with the appeal and therefore dismiss it.
Ordinarily, the consideration which will weigh with the court in deciding upon the question whether the entire appeal had abated or not will be whether the appeal between the appellants and the respondents other than the deceased respondent can be said to be properly constituted or can be said to have all the necessary parties for the decision of the controversy before the court and the tests to determine this have been described thus: (a) when the success of the appeal may lead to the court 's coming to a decision which will be in conflict with the decision between the appellant and the deceased respondent and therefore which would lead to the court 's passing a decree which will be contradictory to the decree which had become 637 final with respect to the same subject matter between the appellant and the deceased respondent; (b) when the appellant could not have brought the action for the necessary relief against those respondents alone who are still before the court and (c) when the decree against the surviving respondents, if the appeal succeeds, be ineffective that is to say it could not be successfully executed.
The abatement of an appeal against the deceased respondent means not only that the decree between the appellant and the deceased respondent has become final but also as a necessary corollary that the appellate court cannot in any way modify that decree directly or indirectly.
When the decree in favour of the respondents is joint and indivisible, the appeal against the respondents other than the deceased respondent cannot be proceeded with if the appeal against the deceased respondent has abated.
In the present case the appeal against N alone was not pro perly constituted when the appeal against L had abated and the State appeal against N alone could not proceed.
| The eviction of the Respondent 'from the appellants premises, which was used as a factory, was decreed and application for execution of an order for possession was made.
The respondents resisted the execution on the plea that the machinery installed in the factory could not be re moved without the prior permission of chief Inspector of Factories as provided by the East Punjab Factories (Control of Dismantling) Act.
The premises was allowed.
Both parties appealed.
The appellate Court took of the machinery was stayed, but the Possession of the part the premises was allowed.
Both parties appealed.
The appellate Court took the view that the machinery and spare parts were lying practically in all the rooms, and the locking and sealing of the factory would result in its closure which would be against the provisions of the Act, and therefore directed the appellant to pursue the matter with the State Government.
The order dated April 22, 1953 was not challenged by any appeal.
But the appellant restarted the execution proceedings in which it was held that the State Government had refused permission for demolition of the factory, so the file was ordered to be consigned to the record room. 'Me appellant filed an appeal, which was dismissed, but in further revision the High Court by its order dated July 13, 1955 observed that on the record it was not possible to decide whether the execution of the decree would defeat the provisions of section 3 of the Act, so it set aside the order and directed the executing court to give decision on points that arose under section 3 of the Act. 'Me executing court found that the provisions of the Art did not prohibit the execution and as such the respondents were liable to ejectment but since the application had become over a year old it would be 'struck off the file with liberty to make a fresh application.
The respondents appealed.
The District Judge held that the Act did not apply to involuntary dismantling of factories and that the issue raised by the executing court did not arise but in fact it had been decided against the appellant by the High Court in revision.
The appellant 's appeal to High Court was dismissed by a Single Judge, and in the Letters Patent Appeal, it was held that the delivery of possession was not barred in execution of decree by the Act, but the matter had become res judicata in consequence of the decisions in the first execution application and the decision of the High Court dated July 13 1955 in the second execution applica tion.
Allowing the appeal, HELD : The Act does not bar the delivery of possession in execution, of a decree.
It makes no reference to any decree for Possession against the owner of a factory.
By ordering delivery of possession of the premises, the executing court does not make an order for dismantling a factory and a bailiff charged with execution of a warrant for possession, does not infringe the provision of law by rendering possession of the property to the decree holder.
[510 C D] 507 There was no final order about the inexecutability of the decree on the first application for execution.
Further the High Court by its order dated July 13, 1955, did Dot decide the question as to whether the decree for possession would be inexecutable in view of the Act.
It stated expressly that it was not possible for it to decide whether the execution of the decree would defeat the provisions of the Act, and being unable to come to a decision on the record it remanded the matter to the court of execution.
It found itself unable to interpret the section on the evidence beforeit.
The proceedings subsequent to the remand order culminated in theorder of the Division Bench from which the present appeal arose.
The order dated July 13, 1955 was not a final order which put a seal on the proceedings.
[510 F H]
| The respondent, by a registered lease deed, let to the appellant for a period of five years the backyard of a residential house in Madras.
The backyard consisted of vacant land.
According to the lease deed the appellant was allowed inter alia to boil and dry paddy on the said land and he was also allowed to erect a temporary shed for keeping the paddy on condition that while vacating the land he would dismantle the same.
The deed also specifically provided that the appellant "should not erect any kind of permanent super structure on the said vacant site so as to entitle him to claim in future the value thereof." In continuation of his stipulation the appellant erected permanent super structures on the land.
On the expiry of the lease of the appellant refused to vacate the land.
The respondent thereupon filed a suit for his eviction.
The appellant claimed protection under the Madras City Tenants ' Protection Act, 1921, Within the prescribed time he flied an application under section 9 of the Act asking for an order that the respondent be directed to sell the land for a price to be fixed by the court.
The trial court decreed the respondent 's suit.
The first appellate court reversed the decree of the trial court but the High Court restored it.
In appeal by special leave to this Court the questions that fell for determination were: (i) Is the tenant of a vacant site in the backyard of a residential house a tenant of land within the purview of section 2(2) of the Madras City Tenants ' Protection Act, 1921 ? (ii) Having regard to the proviso to section 12 is such a tenant entitled to the protection of sections 3 and 9 of the Act in a case when he has erected buildings on the land in contravention of an express stipulated in a registered deed ? HELD: (i) If the respondent had let the residential building together with its appurtenant land the tenancy would not be a tenancy of land within the meaning of the Act.
But the respondent did not let the building with land appurtenant thereto.
He retained the building and let the land separately.
The letting was of land and nothing else.
The appellant was not a tenant of a building as defined in section 2(1) either before or after its amendment by Madras Act XIII of 1960.
He was a tenant of land as defined in section 2(2).
[162 A C] (ii) (a) Under section 3 a tenant on ejectment is entitled to he paid as compensation the value of any building erected by him.
A tenant entitled to compensation under section 3 and against whom a suit for ejectment has been instituted is entitled to purchase the whole or part of the land by invoking the procedure under section 9.
The effect of the main part of section 12 is that nothing in any contract made by a tenant takes away or limits his rights under sections 3 and 9.
The proviso to 159 however, saves stipulations as to erections of buildings made by a tenant in a registered writing.
[162 D E] (b) A stipulation as to the erection of buildings made orally or in an unregistered writing is not protected by the proviso and a tenant erecting a building in breach of the covenant is entitled to the benefits of as. 3 and 9.
[162 E F] R.V. Naidu vs Naraindas, [1966] 1 S.C.R. 110 and Naraindas vs Naidu, referred to.
(c) A stipulation for giving vacant land after demolition of the building which the tenant has been authorised to construct thereon is not one as to the erection of buildings within the proviso to section 12.
Therefore in the present case the stipulation that the appellant could erect a temporary shed on condition that while vacating the land he would dismantle the same was not protected by the proviso to section 12.
[164 C D] Vajrapani Naidu vs New Theatre Carnatic Talkies, ; , relied on.
Vajrapuri vs New Theatres Carnatic Talkies, , 477 8, referred to.
(d) But in the present case the lease deed also contained an express stipulation that the appellant would not erect permanent structures of any kind so as to entitle him to claim the future value thereof.
This stipulation was clearly one as to the erection of buildings.
[164 E] In contravention of the stipulation as to the erection of buildings in the registered deed the appellant erected permanent structures on the land after the date of the lease.
The effect of the proviso to section 12 is that nothing in the Act affects the stipulation.
Sections 3 and 9 are subject to and controlled by section 12.
The stipulation overrides the tenant 's right under section 3.
If the tenant erects a permanent structure in contravention of the stipulation he is not entitled to any compensation under section 3.
As he is not entitled to any compensation under section 3 he cannot claim the benefit of section 9.
The High Court rightly held that the appellant was not entitled to the benefit of section 9.
[164 C 165 B]
| The mortgagee of a property in which a cinema was run.
leased it to the first appellant on a monthly rental of Rs. 250/ for a period of 5 years renewable for 10 years by yearly renewals on the same terms.
The lessee was given the full right to use the property whether by itself or through.
agents or in partnership or by sub leasing.
The lessee sublet the premises after equipping the house with cinema machinery on a monthly rental of Rs. 1,250/ .
The property had been declared evacuee property, and the lessee applied under the for separation of his interest.
The Competent Officer ordered sale of the property, which was purchased for Rs. 65,000/ by the respondent.
Then (before the expiry of the term of the lease) the respondent filed a suit against the head lessee and the sub lessee for possession of the property.
On the questions (i) whether the respondent was entitled to possession before the expiry of the full term of the lease; and (ii) whether the subleases were protected under the East Punjab Urban Rent Restriction Act, 1949.
HELD: (i) No person can confer on another a better title than he himself has.
A mortgage is a transfer of an interest in specific immovable property for the purpose of securing repayment of a loan.
A mortgagee 's interest lasts only as long as the mortgage has not been paid off.
Therefore on redemption of the mortgage the title of the mortgagee comes to an end.
A derivative title from him must ordinarily come to an end with the termination of the mortgagee 's title.
The mortgagee by creating a tenancy becomes the lessor of the property, but his interest as lessor is coterminous with his mortgage interest.
The relationship of lessor and lessee cannot subsist beyond the mortgagee 's interest unless the relationship is agreed to by the mortgagor or a fresh relationship is recreated.
This the mortgagor or the person succeeding to the mortgagor 's interest may elect to do.
But if he does not, the lessee cannot claim any rights beyond the term of his original lessor 's interest.
[584 F] The exception to the above propositions is the one that flows from section 76(a) which lays down liabilities of a mortgagee in possession.
It is provided there that when during the continuance of the mortgage, the mortgagee takes possession of the mortgaged property, he must manage the property as a person of ordinary prudence would manage it if it were his own.
From this it is inferred that acts done bona fide and prudently in the ordinary course of management, may bind even after the termination of the title of the mortgagee in possession.
This principle applies ordinarily to the management of agricultural lands and has seldom been extended to urban property so as to tie it up in the hands of lessees or to confer on them rights under special statutes.
To this again there is an exception.
The base will continue to bind the mortgagor or persons deriving interest from him if the mortgagor had concurred to grant it.
[585 C] 582 The present case was not covered by the exception because such a long lease on a small rent could not be said to be an act of prudence, whether it was a bona fide act or not, and whether the exemption can apply to urban property.
Mahabir Gope and Ors.
vs Harbans Narain Singh, [1952] S.C.F. 775 and Asaram & Ors.
vs Mst.
Ram Kali, [1958] S.C.R: 986, followed.
(ii) A landlord means a person entitled to receive rent and a tenant means any person by whom or on whose account rent is payable.
These definitions apply if the tenancy, either real or statutory, could be said to survive after the termination of the mortgage.
The scheme of section 10 of the is that in the case of a mortgagor or a mortgagee, (a) the Competent Officer may pay to the Custodian or the claimant the amount payable under the mortgage debt and redeem the property or (b) the Competent Officer may sell the mortgaged property for satisfaction of the mortgage debt and distribute the sale proceeds thereof, or (c) the Competent Officer may partition the property between the mortgagor and the mortgagee proportionate to their shares, or (d) adopt a combination of any of these measures.
It is obvious that method (b) was followed.
The property was sold and the mortgage was satisfied.
This led to the extinction of the mortgagee 's interest and the purchaser acquired full title to the property.
The termination of the mortgagee interest terminated the relationship of landlord and tenant and it could not, in the circumstances, be said to run with the land.
There being no landlord and no tenant, the provisions of the Rent Restriction Act could not apply any further.
Nor could it be said that when the mortgagor cancelled the rent note and authorised the mortgagee to find any other tenant, the intention was to allow expressly a tenancy beyond the term of the mortgage.
[586 E]
| This was an appeal by the defendants in a suit for possession on redemption of certain mortgages instituted in the Court of the Special judge exercising jurisdiction under the Sangli State Agriculturists Protection Act (1 of 1936).
Their case was that the mortgaged properties had been sold at auction and purchased by their father who had sold most of them to other persons more than 12 years before the institution of the suit and as such the suit was barred by limitation.
The trial Court dismissed the suit.
On appeal the High Court of Sangli permitted the plaintiff to amend the plaint originally filed so as to include the relief for redemption and remanded the suit.
The trial court, thereafter, decreed the suit in part, holding that the claim in respect of portions only of the mortgaged properties was barred by limitation.
Both the parties appealed to the High Court of Bombay and the appeals were heard together.
The High Court dismissed the defendant 's appeal and allowed the plaintiff 's appeal holding that article 148 and not article I34 Of the Limitation Act applied.
In the result, the plaintiff 's suit was decreed in its entirety.
Held, that the preliminary objection that the Special judge had no jurisdiction under the Sangli State Agriculturists Protection Act to entertain the suit must be overruled.
The fixing of ,915 as the date line by the Act had reference to such reliefs as could be had only by way of reopening of closed transactions and could not, therefore, preclude the Special Judge from granting other reliefs in respect of transactions entered into prior to 1915.
Nor could it be contended in bar that the plaintiff was bound in the first instance to set aside an auction sale of the mortgaged properties in execution of a money decree in which she was not substituted in place of her deceased father as his true heir and legal representative nor made a party and no controversy was raised by the parties nor decided by the Court as to who was the true legal representative.
The plaintiff was entitled to ignore the sale and the suit was not barred under article 12 of the Limi tation Act.
480 Malkarjun Bin Shidramappa Pasare vs Narhari Bin Shivappa, (1900) L.R. 27 I.A. 216, doubted and distinguished.
In order that article I34 of the Limitation Act might be attracted to a suit for possession on redemption, it was necessary for the defendant to prove affirmatively that the mortgagee or his succesor in interest had transferred a larger interest than was justified by the mortgage.
Where, as in the present case, this was not done, article 134 could not apply and the only other article which could apply was article 148 Of the Limitation Act.
Under the Mitakshara School of Hindu Law partition may be either (1) a severance of the joint status of the coparcenary by mere defining of shares but without specific allotments or (2) partition by allotment of specific properties by metes and bounds according to shares.
The latter, if reduced to writing becomes compulsorily registrable under section I7(1)(b) of the Indian Registration Act but the former does not.
Consequently, in the present case such unregistered docu ments as were adduced by the plaintiff for the limited purpose of proving partition in the former sense did not fall within the mischief Of section 49 of the Indian Registration Act and were admissible in evidence.
|
Appeal No. 507 of 1960.
Appeal from the judgment and decree dated March 19, 1958, of the ' Punjab High Court (Circuit Bench) at Delhi in R. F. A. No. 299 of 1951.
K. L. Gosain, R. Ganapathy Iyer and G. GopalaKrishnan, for the appellant.
B. Sen and P. D. Menon, for the. respondent.
March 27.
The Judgment of the Court was delivered by WANCHOO, J.
This appeal on a certificate granted by the Punjab High Court raises a question as to the interpretation of article 31 of the Limitation Act.
The appellant had brought a suit in forma pauperis for recovery of a sum of over Rs. 24,000/from the Union of India in connection with non delivery of certain goods booker with the railway.
The appellant was trading in Crujranwala, which is now in Pakistan, under the name and style of G. M. Bootamal and Company and also under the name and style of Gopal Metal Rollin(, Mills and Company he being the sole proprietor of both.
On August 5, 1947, just before the partition the appellant handed over two consignments to the North Western 72 Railway at Gujranwala for carriage to Jagadhari and these consignments were booked on the same day by two railway receipts.
The consignments however did not reach Jagadhari.
The appellant made inquiries and when no delivery was made he made a claim on the railway on November 30, 1947, for the price of the goods not delivered.
Later, on January 22, 1948, the appellant gave notice to the railway under section 80 of the Code of Civil Procedure in which it was said that the goods booked under the two railway receipts had not been delivered in spite of repeated reminders and demands from the officials concerned.
It was further said that the value of the goods booked was Rs. 24,189/4/ and that the railway was liable for this loss which was due to the negligence of the railway.
It was further stated that the cause of action arose on August 21 and 30, 1947 and on subsequent dates when the appellant met with refusal.
It was finally said that if the amount was not paid a suit would be brought against the railway.
It seems however that in spite this notice correspondence went on between the appellant and the railway and on December 1, 1948, the railway informed the appellant that the two consignments were still lying at Gujranwala and that their despatch had been withheld by the North Western Railway due to restrictions imposed by the Pakistan Government on export.
The railway therefore requested the appellant to secure a permit from the Chief Controller , Exports and Imports, Karachi and also from the Custodian of Evacues Property West Punjab and to send the same to the Station Master Gujranwala to enable the goods being sent to Jagadhari.
The appellant was also told that in case he failed to produce the requisite permits the consignments would be disposed of in accordance with the law in force in Pakistan, and the railway administration would not be responsible for any loss, damage or destruction to the goods.
This seems to have been the end of the correspon 73 dence between the railway and the appellant, and the appellant brought the present suit on December 13, 1949.
The suit was resisted by the Union of India and a number of defenses were raised with which we are however not concerned in the present appeal.
As many as.
seven issues 'Were framed by the trial court, the most important being of limitation.
The trial court found in favour of the appellant on all the issues including limitation and gave him a decree for Rs. 24,189/4/ .
It however ordered the parties to bear their own costs.
Thereupon there was an appeal by the respondent to the High Court, and the main point pressed there was that the suit as filed on December 13, 1949, was barred by limitation.
Under article 31 of the Limitation Act time begins to run against a carrier for compensation for non delivery of or delay in delivering goods from the time "when the goods ought to be delivered".
The question canvassed in the High Court was the interpretation of these words in article 31.
It appears that there had been difference of opinion in the High Court as to the meaning.to be attached to these words in Art 31 and a reference had been made to a Full Bench in another case, namely, Dominion of India vs Firm Aminchand Bholanath (C.A. 97 of 1949, decided on May 2, 1956).
In that reference the Full Bench held that "the limitation tinder article 31 starts on the expiry of the time fixed between the parties and in the ' absence of such agreement, the limitation starts on the expiry of reasonable time which is to be decided according to the circumstances of each case.
" The High Court therefore followed the view taken in that case and held after taking into account the circumstances prevailing in August 1947 that the goods ought to have been delivered at the most within five or six months of the booking and therefore the suit was 'barred by limitation as it was brought in December 1949, the period of limitation being only one year.
The High Court therefore allowed the appeal, set aside the decree of the trial court and dismissed the suit.
It however ordered the parties to bear their costs.
As the case involved a substantial question of law the High Court granted a certificate to the appellant; and that is how the matter has come up before us.
Article 31 reads as follows ____________________________________________________________ Description of suit Period of Time from limitation which period beings to run.
____________________________________________________________ x x x x x x x x x 31 Against a carrier One year When the goods for compensation for ought to be delivered.
non delivery of, or delay in delivering goods.
Its interpretation has been the subject of a number of decisions by various High Courts in India and the question that has been considered in these decisions is as to the time from which the period begins to run.
Under the Article, the time begins .to run ,when the goods ought to be delivered" and one should have thought that there would be no difficulty in finding out the meaning of these words.
Ordinarily, the words of a statute have to be given their strict grammatical meaning and equitable considerations are out of place, particularly in provisions of law limiting the period of limitation for filing suits or legal proceedings. ' This was laid down by the Privy Council in two decisions in 75 Nagendranath vs Suresh(1)and General Accident Fire and Life Assurance Corporation Limited vs Janmahomed Abdul Rahim (2).
In the first case the Privy Council observed that "the fixation of periods of limitation must always be to some extent arbitrary and may frequently result in hardship. ' But in construing such provisions equitable considerations are out of place, and the strict grammatical meaning of the words is the only safe guide".
In the latter case it was observed that "a limitation Act ought to receive such a construction as the language in its plain meaning imports. .
Great hardship may occasionally be caused by statutes of limitation in cases of poverty, distress and ignorance of rights, yet the statutory rules must be enforced according to their ordinary meaning in these and in other like cases.
" Two lines of reasoning seem to have governed the decisions of various High Courts on the interpretation of these words in the third column of article 31.
The first is based on the consideration that it was for the railway to prove what time ought to 'be taken for the delivery of the goods and therefore limitation can only start when the railway says finally that it cannot deliver the goods.
The second line of reasoning seems to be based on the principle of estoppel and is to the effect that where the railway enters into correspondence and says that efforts are being made to trace the goods the railway would be estopped from pleading that the time began to run from sometime anterior to the period before the correspondence on the question came to an end.
It may however be noted that though the majority of the decisions follow these two lines of reasoning and hold that time begins to run only when the railway finally refuses to deliver the goods, here and there a dissentient note has also been struck.
We shall consider some of these cases later.
(1) A.I.R. (1932) P.C. 165.
(2) 76 Let us first see what these words in article 31 mean on a plain grammatical construction.
It would be noticed that article 31 as it now stands after the Limitation Act of 1877 and 1909, governs two class of cases, namely, (i) where there has been no delivery of goods and (ii) where there has been delay in delivering goods.
In both class of cases the time begins to run from the date when the goods ought to be delivered.
These words therefore in column three of the Article must have a meaning which will apply equally to the two situations envisaged in column one.
Whether there has been nondelivery or there has been delay in delivery, in either case limitation would run from the date when the goods ought to be delivered.
Now it is not in dispute that if there is a term in a contract of carriage fixing when the goods have to be delivered that would be the time "when the goods ought to be delivered" within the meaning of the words used in the third column of article 31.
The difficulty however ' arises in that class of cases where there is no term in the contract of carriage, whether express or im.
plied, from which the date on which the goods have to be delivered, can be inferred.
It is in these cases that the question of interpretation of the words in the third column of article 31 seriously arises.
But these words can only mean one thing whether it is a case of late delivery or of nondelivery.
Reading the words in their plain grammatical meaning they are in our opinion capable of only one interpretation, namely, that they contemplate that the time would begin to run after a reasonable period has elapsed on the expiry of which the delivery ought to have been made.
The words "when the goods ought to be delivered" can only mean the reasona ble time taken (in the absence of any term in the contract from which the time can be inferred expressly or impliedly) in the carriage of the goods from the place of despatch to the place of destination.
Take the case, where the cause of action is 77 based on delay in delivering the goods.
In such a case the goods have been delivered and the claim is based on the delay caused in the delivery.
Obviously the question of delay can only be decided on the basis of what would be the reasonable time for the carriage of goods from the place of despatch to the place of destination.
Any time taken over and above that would be a case of delay.
Therefore, when we consider the interpretation of these words in the third column with respect to the case of non.
delivery, they must mean the same thing, namely, the reasonable time taken for the carriage of goods from the place of despatch to the place of destination.
The view therefore taken by some of the High Courts that the time begins from the date when the railway finally refuses to deliver cannot ,be correct, for the words in the third column of article 31 are incapable of being interpreted as meaning the final refusal of the carrier to deliver.
We may in this connection compare the language used in the third column of article 31 with certain other articles of the Limitation Act which will show that.
where the legislature intended that time should run from the date of refusal it has used appropriate words in that connection.
For example, in article 18, which provides for a suit for compensation against Government when the acquisition is not completed, the time begins to run from "the date of the refusal to complete".
Similarly, in article 78 which provides for a suit by the payee against the drawer of a bill of exchange which has been dishonoured by non acceptance, time begins to run from "the date of the refusal to accept".
Again in article 131 which provides for a suit to establish a periodically recurring right, ' the limitation begins to run "when the plaintiff is first refused the enjoyment of the righe '.
Therefore, if the legislature intended that in case of non delivery, the limitation would start on the final refusal of the carrier to deliver, such a case would have been provided for by a separate article and we 78 would have found appropriate words in the third column thereof.
The very fact that article 31 deals with both cases of non delivery of goods and delay in delivering the goods shows that in either case the starting point of limitation is after reasonable time has elapsed for the carriage of goods from the place of despatch to the place of destination.
The fact that what is reasonable time must depend upon the circumstances of each case and the further fact that the carrier may have to show eventually what is the reasonable time for carriage of goods would .in our opinion make no difference to the interpretation of the words used in the third column of article 31.
Nor do we think that their could be generally speaking any question of estoppel in the matter of the starting point of limitation because of any correspondence carried on between the carrier and the person whose goods are carried.
But, undoubtedly, if the correspondence discloses anything which may amount to an acknowledgement of liability of the carrier that will give a fresh starting.
point of limitation.
A we have said already, the words in 'the third column refer to reasonable time taken for the carriage of goods from the place of despatch to the place of destination and this reasonable time generally speaking cannot be Affected by the subsequent conduct of the parties.
We are therefore of opinion that the answer given by the Full Bench in the case of Aminchand Bholanath (supra) that "the limitation in such cases starts on the expiry of the time fixed between the parties and in the absence of any such agreement the limitation starts of the expiry of reasonable time which is to be decide according to the circumstances of each case," is correct.
We shall now consider some of the representative cases decided by High Courts in this connection.
In Jugal Kishore vs The Great Indian Peninsala Railway(1) it was observed that "when the X.I. Railway Company, by its own conduct made the (1) All 43.
79 plaintiff await the result of the inquiry, it is rather ,startling to find the plea of limitation raised in defence on its behalf".
It was further observed that "the correspondence between the parties shows that the matter was being inquired into and that there was no refusal to deliver, up to well within a year of the suit ; in the circumstances of the case we are unable to hold that the suit was instituted more than a year from the expiry of a reasonable, time within which the goods should have been delivered.
" This decision seems to suggest that the meaning of the relevant words in the third column is that limitation starts from the expiry of the reason.
able time within which the goods should have been delivered.
But it has taken into account the subsequent conduct of the railway and the fact that there was no refusal to deliver the goods till much later.
It was therefore held that as the suit was brought within one year of the final refusal to deliver, it was within time.
With respect, it is rather difficult to understand how the subsequent correspondence between the railway and the consignor or the consignee can make any difference to the starting point of limitation, when that correspondence only showed that the railway was trying to trace the goods.
The period that might be taken in tracing the goods can have no relevance in determining the reasonable time that is required for the carriage of the goods from the place of despatch to the place of destination.
In Bengal and North Western Railway Company vs Maharajadhiraj Ramhwar Singh Bahadur(1) it was held that "the defendants (i.e. Railway) by a deliberate process of ignoring the plantiff"s repeated requests for attention to his claim misled him into delaying his suit and it is not open to them (1) Pat. 67, 77. 80 now to contend that the suit has been brought too late.
" This case seems to be based on estoppel.
But here again we find it difficult to understand how the starting point of limitation under.
article
31 could be changed because the railway ignored the plaintiff 's requests for attention to his claim.
In Jai Narain vs The Governor General of India (1) it was held that ""the time 'when the goods ought to be delivered ' within the meaning of article 31 is not the time when they should have been delivered in the normal course, it least in a case where there is no time fixed for delivery, but the time when they ought to be delivered according to the sub sequent promises by the railway which informs the parties that it is carrying on enquiries.
" With respect we, find it difficult to find bow in the face of the clear words in the third column of article 31 the starting point of limitation can be changed because of the subsequent conduct of the railway, which informed.
the consignor or consignee that ' it was making enquiries to trace the goods.
Finally in, Governor General in Council vs section Ahmed(2).
it was held that "cannot be overlooked that for some time the railway authorities themselves were hoping to deliver the remaining packages and were making inquiries all along the route.
In such cases it is not fair to expect the plaintiff to rush to Court with a suit without waiting for the result, of the inquiries.
Limitation can therefore begin only when there was a definite statement by the railway authorities that they were not in a position to deliver the goods".
With respect, this case seems to read in the third column as if the starting point of limitation is from the final refusal of the railway to deliver the goods, when the actual words may that limitation starts from the time when the goods ought to be delivered i.e. in the absence of any term fixing the time in the contract from (1) A.I.R. (1951) Cal.
(2) A.I.R (1952) Nag.
81 the expiry of the reasonable time taken for carriage from the place of despatch to the place of destination.
It was however urged for the appellant that even though the words in the third column plainly mean that the time starts when the reasonable period which may be taken for the carriage of the goods from the place of despatch to the place of destination expires, the subsequent conduct of the railway a,% disclosed in the correspondence that might pass between the railway and the consignor or the consignee, might have a bearing on this reasonable time.
Now if the correspondence is only about tracing the goods that would not be material in considering the question as to when the goods ought to have been delivered.
On the other hand if the correspondence discloses material which might throw light on the question of determining the reasonable time for the carriage of the goods from the place of despatch to the place of destination, then it may be open to the court to take into account the correspondence.
Further, if there is anything in the correspondence which has a bearing on the question of reasonable time and the railway wants to go back on that, to that extent the railway may be estopped from denying that.
But the correspondence can only be taken into account to determine what would be the reasonable time and not to show that because of the subsequent conduct of the railway the reasonable time got extended by the time taken by the railway in tracing the goods.
Where however the correspondence provides material from which reasonable time in a particular case may ' be found out the .correspondence would be relevant to that extent.
For example, take a case where the correspondence ,shows that a certain bridge between the place of despatch and the place of destination ' has been ' destroyed on account of floods and that is the reason why the goods have not reached 82 the place of destination.
In such a case the correspondence may well be taken into account to find out the reasonable time for the carriage of the goods in the circumstances.
This will show that reasonable time will depend upon the facts of each case and that in the absence of any special circumstances the reasonable time would practically be.
the same between two stations as would normally or usually or ordinarily be taken for the carriage of goods from the one station to the other.
Further there may be no difficulty in finding out the reasonable time where bulk of the goods have been delivered and only a part has not been delivered, for in such a case in the absence of special circumstances it should be easy to see that the reasonable time is that within which the bulk of the goods have been delivered.
We may in this connection refer to Union of India vs Meghraj Agarwalla (1) and Gajanand Rajgoria vs Union of India (2) where it has been held that where a part of the consignment has been delivered, that should, in spite of the correspondence regarding inquiries and in the absence of circumstances leading to the contrary view, be taken to be the date when the goods ought to have been delivered as a whole within the meaning of those words in article 31.
The view taken therefore by the High Court in Aminchand Bholanath 's case as to the interpretation of the words in the third column of article 31 is in our opinion correct.
Let us therefore see what was the reasonable time within which the goods ought to.
have reached Jagadhari from Gujranwala in the present case.
The appellant himself in his replication stated that the goods in ordinary course should have reached Jagadhari before August 15, 1947.
Further in their notice that he gave on January 22, 1948, he stated that the cause of action arose on August 21 and 30, 1947, and on subsequent dates when he met with (1) A.I.R. (1958) Cal.
(2) A.I.R. (1955) Pat 182.
83 refusal to deliver the goods.
The fact that the appellant gave notice under section 80 of the Code of Civil Procedure in January 1948 in our opinion shows that even taking into account the extra ordinary conditions prevailing on account of the partition of India in August 1947, the appellant was satisfy that the goods ought to have been delivered before January 22, 1948 when he gave the notice.
If that was not so and if the cause of action had not arisen, there was no reason why the appellant should have given the notice under a. 80 in January 1948.
We can see no difficulty therefore on the facts of this case 'in agreeing with the High Court that the goods 'ought to have been delivered even taking into account the extraordinary circumstances prevailing on account of partition within five or six months of the date on which they were sent, namely, August 5, 1947.
This is also home out by the fact that the appellant gave notice on January 22, 1948 i.e. about 5 1/2 months after the goods had been consigned.
In the circumstances the suit which was brought in December 1949 would be clearly barred by time, for we cannot take the reasonable time within which the goods ought to have been delivered in the circumstances of this case beyond January 22, 1948, when the notice under section 80 was given.
As to the correspondence between the parties it in enough to say that there is nothing in the correspondence which has any bearing on the reasonable time taken for the carriage of goods from Gujranwala to Jagadhari.
It is true that on December 1, 1948, the appellant was informed by the Railway that the goods were still lying in Gujranwala because of the restrictions imposed by the Pakistan Government and he was asked to get the necessary permits from that Government ; but that in our opinion has nothing to do with the question of reasonable time to be taken for the carriage of goods from Gujran wala to Jagadhari.
In the circumstances, the High Court was right in holding that the suit was barred by limitation under article 31.
84 Learned.
counsel for the appellant however drew our attention to the Displaced Persons (Institution of Suits) Act(No.
XLVII of 1948) as amended by the Displaced Persons (Institution of suits and legal proceedings) amendment Act, (No. LXVIII of 1950) and contended that the appellant being a displaced person would be entitled to file this suit under section 8 of this Act as amended upto March 31, 1952.
It appears that in part 9 of the plaint, the appellant relied on his being a displaced person in order to give jurisdiction to the court in Delhi where he filed the suit.
But he does not seem to have relied on his being a displaced person on the question of limitation.
The respondent in the written statement denied that the appellant was a displaced person and nothing further happened with respect to this aspect of the matter.
Learned counsel for the appellant urges that in fact the appellant is a displaced person and would be entitled to the benefit of the Act of 1948 as amended by the Act of 1950 and on that basis his suit would be within time and that the suit might be remanded to allow the appellant to bring his case under the Act of 1948 as amended.
Ordinarily we would not have allowed such a prayer when the point was not raised in the plaint ; but considering that the appellant claims to be a displaced person who is registered in Delhi and also considering that he had to file this suit in forma pauperis probably on account of the circumstances arising from the partition of India, we think that the appellant should be given a chance to prove his case under the Act of 1948 as amended by the Act of 1950.
We express no opinion on the question whether the appellant is a displaced person or whether he is entitled to the benefit of the Act of 1948 as amended by the Act of 1950.
But we think in the interest of justice he should be given a chance to bring his case under the Act of 1948 as amended, by the Act of 1950 in the matter of limitation subject to his 85 paying all the costs incurred by the respondent upto date irrespective of the result of the suit.
We therefore allow the appeal and remand the case to the trial court for considering only the question of limitation on the basis of the Displaced Persons (Institution of Suits) Act, (No. XLVII of 1948) as amended by the Displaced Persons (Institution of suits and legal proceedings) Amendment Act ( No. LXVIII of 1950) after giving parties a chance to lead evidence in this connection, if necessary.
If the court comes to the conclusion that the suit is within time on the basis, of these two Acts, a decree for the amount claimed minus the costs incurred upto this date by the respondent will be passed in favour of the appellant.
If on the other hand the court comes to the conclusion that the suit is not within limitation ,p a under these two acts the suit will be finally, dismissed Costs incurred hereinafter will be in the discretion of the court Appeal allowed.
| On August 5, 1947, the appellant booked two consigments by the N. W. Railway from Gujranwala, now in Pakistan, to jagadhari.
The consignments were not delivered and, on January 22, 1948, the appellant gave a notice to the railway under section 80 of the Code of Civil Procedure claiming the value of the goods by way of compensation.
It was stated in the notice that the cause of action had arisen on August 21 and 30, 1947, when delivery was refused.
On December 1, 1948, the railway informed the appellant that the consignments were still lying at Gujranwala and could be despatched on the appellant obtaining the necessary permits from the Pakistan authorities.
On December 13, 1949, the appellant bro ught a suit for compensation for non delivery of the goods.
The respondent contended that the suit was beyond time as it was not filed within one year from the time "when the goods ought to be delivered" as prescribed by article 31 of the Limitation Act.
Held, that the suit was barred by time.
The words "when the goods ought to be delivered" in article 31 had to be given their strict grammatical meaning and equitable consi derations were out of place.
Under article 31 limitation started on the expiry of the time fixed between the parties for delivery of the goods and in the absence of any such agreement the limitation started after reasonable time had elapsed on the expiry of which the delivery ought to have been made.
The reasonable time was to be determined according to the circumstances of each case.
The view taken by some High Courts that time began to run from the date when the railway finally refused to deliver was not correct ; where the legislature intended that time should run from ' the date of refusal it had used appropriate words in that connection.
The starting point of limitation could not generally be affected by the conduct of the parties or by the correspondence between them, unless it contained an acknowledgment of liability by the carrier or showed something affecting the reasonable time In the present case delivery ought to have been made within five or six months, as is also indicated by the s, 80 notice given 71 by the appellant and the suit was filed more than a year after that expiry of that time.
Dominion of India vs Firm Aminchand Bholanath (F. B.) decided by Punjab High Court on May 2, 1956, approved.
Jugal Kishore vs The Great Indian Peninsular Rat (1923) I. L. R. 45 All.
43 ; Bengal and North Western Railway Company vs Maharajadhiraj Kameshwar Singh Bahadur, (1933) I. L. R. 12 Pat. 67, 77 ; Jai Narain vs The Governor General of India, A. I. R. ; and Governor General in Council vs section G. Ahmed, A. 1.
R. , disapproved.
Nagendranath vs Suresh, A. 1.
R. and General Accident Fire and Life Insurance Corporation Limited vs Janmahomed Abdul Rahim, A. I. R. , referred to.
| The deceased, who was at the material time in the employment of the State of Rajasthan in the Public Department, was required to proceed from his office at Bhilwara to Banswara, in connection with famine relief work undertaken by the department.
For that purpose, he boarded a truck owned by the department from Bhilwara on May 19, 1952 with six others.
Throughout the journey the radiator of the truck was getting heated frequently and the driver was pouring water into it after every 6 or 7 miles of journey.
The truck took nine hours to travel the distance or seventy miles.
After having travelled four miles from Peragraph, the engine of the truck caught fire.
As soon as the fire was seen, the driver cautioned the occupants to jump out of the truck.
Consequently, they did so, The deceased struck against a stone lying by the side of the road and died instantaneously.
The widow of the deceased brought a suit for damages against the State of Rajasthan under the provisions of the Act.
The plaintiff alleged, inter alia, that it was on account of the negligence of the driver of the truck that a truck which was notroad worthy was put on the road and that it caught fire which led to the death of her husband and that the State was liable for the negligence of its employee in the course of his employment.
The plaint also alleged that the deceased had left behind him his widow namely, the plaintiff, two minor sons, one minor daughter and his parents.
The plaintiff claimed damages to the tune of Rs. 20,000/ and prayed for a decree for that amount.
The state resisted the claim denying negligence of the driver and pleading sovereign immunity.
The trial Court relied on the maxim res ipsa loquitur, found that in putting the truck on the road the driver was negligent as the truck was not road worthy and since the driver was negligent, it held that the State was vicariously liable for his act.
The court assessed the damages at Rs. 14,760/ and granted a decree for the amount to the plaintiff.
Against this decree the state appealed to the High Court on the evidence on record, the High Court held that the principle of res ipsa loquitur had no, application to the facts of the case.
Accordingly, the High Court allowed the appeal.
On appeal by special leave to this Court.
HELD : (1) Generally speaking an ordinary road worthy vehicle would not catch fire.
The driver was negligent in putting the vehicle on the road.
From the evidence, it is clear that the radiator was getting heated frequently and that the driver was pouring water in the radiator after every 6 or 7 miles of journey.
The vehicle took 9 hours to cover the distance of 70 miles between Chittorgarh and Paragraph The fact that normally a motor vehicle would not catch fire if its mechanism is in order would indicate that there was some defect in it.
The Distt.
Judge found on the basis of evidence of witnesses that the driver knew about this defective condition of the truck when he started from Bhilwara.
[554D F] It is clear that the driver was in management of the vehicle and the accident is such that it does not happen in the ordinary course of things.
There is no evidence as to how the truck caught fire.
There was no explanation by the defendant about it. ' It was a matter within the exclusive knowledge of the defendant.
It was not, possible for the plaintiff to give any evidence as to the cause of the accident.
these circumstances, the maxim ipsa loquitur is attracted.
[514F G] 550 The maxim does not embody many rule of substantive law nor a rule of evidence.
It is perhaps not a rule of any kind but simply a caption to an arguments on the evidence.
The maxim is only a convenient label to apply to a set of circums tances, in which the plaintiff proves a case so as to call for a rebuttal from the defendant, without having to allege any specific act or omission on the part of the defendant.
Its principal function is to prevent injustice which would result if a plaintiff were invariably compelled to prove the precise cause of the accident and 'the dependent responsible for it, even when the facts bearing on the matter are at the outset unknown to him and often within the knowledge of the defendant.
The maxim is based on commonsense and its purpose is to do justice when the facts bearing on causation and on care exercised by the defendant are at the outset unknown to the plaintiff and are or ought to be within the knowledge of the defendant.
[k52F 553 C] The plaintiff merely proves a result, not any particular act or omission producing the result.
If the result, in circumstances which he proves it makes it more probable than not that it was caused by the negligence of the defendant, the doctrine of res ipsa loquacious is said to apply, and the plaintiff will be entitled to succeed unless the defendant by evidence rebuts that probability.
Res display loquitur is an immensely important vehicle for importing strict liability into negligence cases.[583 C D, 584 F] Scott.
vs London & St. Catherine Docks ; , 601, (1923) section C. (HL) 43, Barkway vs South Wales Transport [1950]1 All E.R. 392, Jones vs Great Western, , referred to.
(11)As the law stands today, it is not possible to say that famine relief work is :.it sovereign function of the State as it has been traditionally understood.
It is a work which can be and is being undertaken by private individuals.
There is nothing ,peculiar about it so that it might be predicated that the State alone can legitimately undertake the work.
[555 E F] Kasturilal vs State of Uttar Pradesh [1965] 1 S.C,.
R. 375, referred to.
Quaere : (a) Whether the Immunity of the State for injuries on its citizens committed in the exercise of what are called sovereign functions has any moral justification today; (b) whether there is any rational dividing line between the so called sovereign and proprietary commercial functions for determining the liability of the state.
1555 B C, E] Sensable : The modern sovereign immunity doctrine which is based on the ground that there can be no legal right as against the authority that makes the law on which the right depends, for exempting the sovereign from suit is neither logical nor practical.
[555 D E].
| In Civil Appeal No. 937 of 1980 the Regional Transport Authority, out of two permits, Wanted one permit an the route Salem to Poolambadi to the appellant State Transport Undertaking and tie other to the first respondent.
In Civil Appeal No. 938 of 1980 them was only one permit for the route Salem to Pallipatti, which was Wanted to the State Transport Undertaking, denying the second respondent.
In Civil Appeal No. 939 of 1980, on the route Salem to Poolambadi, ant of two permits, one permit was granted to the State Transport Undertaking and the other to another private operator, denying the permit to the respondent therein.
In Civil Appeal No. 940 of 1980, on the route Salem to Erode, the objection of the State Transport Undertaking on the renewal sought by the respondent was sustained and the permit was granted to the State Transport Undertaking.
In Civil Appeal No. 941 of 1980, an the route Salem to Tiruchangode, the renewal application of the respondent was declined on objection by the State Transport Undertaking, who in turn, an its cation, was granted the permit.
All the aggrieved parties preferred appeals before the State Transport Appellate Tribunal, which dismissed the appeals, holding that since a draft scheme under Section 68C of the had been published by the State Government and was under consideration at the time when the matter was pending in appeal, subsection (1 D) of Section 68 F of the Act stood in the way for any relief being granted to the private operators.
709 The High.
Court allowing the revision preferred by the private operators, upset the orders of the Appellate Author ity, directing the Regional Transport Authority to re con sider the matters on merit against which the State Transport Undertaking approached this Court by Special Leave.
The appellants the private operators in C.A. Nos.
940 941 of 1980 contendeed that Section 68(F)(1 D), proviso of the was applicable to their cases on the strength of orders in terms of Section 134(1 A), as valid permits were continuing and were capable of being renewed for a limited period, so as to cease being effective on the publication of the final scheme under .section 68D(3).
Allowing C.A. Nos.
937 939 of 1980 unqualifiedly and C.A. Nos.
940 941 of 1980 qualifiedly, this Court, HELD 1.
To the cases of non grant of permits to the ag grieved private operates, sub section (1 D) of Section 68F of the Act was clearly attracted .No permit could be granted on their asking in the presence of the draft scheme.
And when none could be granted the exercise of consideration of the claim of the private operators on merit, was itself a futlifty.
When the law forbade the grant of a permit, merits of grant stood nowhere.
[711F G] 2.
The private operators in C.A. Nos. 940 941 of 1980 were functioning and had sought renewal of their existing permits on the routes in question and, on denial of the same, and corresponding grant thereof to the State Transport Undertaking, grievance arose to those private operators to take the matter in appeal.
Their cases fail within the proviso to sub section (1 D) to Section 68F of the Act.
Their permits were capaable of being renewed for a limited period provided they had exlpired after the publication of the draft scheme under Section 68C of the Act, [712B C] 3.
Even though the two appeals in C.A. Nos. 940 941 of 1980 shall also meet the same fate as that of C.A. Nos. 937 939 of 1980, they shall remain subjected to an alternate that in the event of orders under sub section (1 A) of Section 134 being existent the Appellate Authority shah examine the question and pass such orders in relation to the appeals of these private operators in accordance with law; but in case there were no such orders earlier, the view of the Appellate Authority dismissing the appeals shall stand affirmed.
[712G 713A] 710 K.A. Natarajan vs
M. Naina Mohammed & Ant., AIR 1978 Madras 28O, referred to.
| The Assistant Commissioner (Judicial) Sales Tax, Bareil ly, disposed of the respondents ' appeal made against an order of the Sales Tax Officer.
A copy of the order was served on the respondent, but he lost it.
Later, he ob tained another copy and filed a revision petition under sectiOn 10 of the U.P. Sales Tax Act.
The same was opposed as being time barred, but the Judge (Revision) accepted the respondent 's contention that under section 12(2) of the , he was entitled to exclude the time spent in obtaining the second copy of the order, while computing the limitation period.
The question whether such exclusion was permissible, was referred to the High Court which an swered in the affirmative.
The appellant contended that the U.P. Sales Tax Act itself provided for a specific period of limitation; and therefore the was not applicable, and also that, a copy of the order was not required to be filed with the revision petition, and so the time spent in obtaining a second copy could not be excluded in computation of limita tion.
Dismissing the appeal the Court, HELD: (1 ) Where the copy served upon a party is lost and there is no alternative for that party except to apply for a fresh copy in order to be in a position to file revi sion petition, the time spent in obtaining that copy would necessarily have to be excluded under Section 12(2) of the .
State of Uttar Pradesh vs Maharaj Narain & Ors. ; followed.
[688 B C] (2) The provisions of Section 12(2) of the would apply even though the copy mentioned in that Sub section is not required to be filed alongwith the Memorandum of appeal.
The same position should hold good in case of revision petitions ever since of 1963 came into force.
1686 B, D 687 FI J.N. Surty vs
T.S. Chettyar (55 IA 161), The Punjab Co.operative Bank Ltd., Lahore vs The Official Liquidators, the Punjab Cotton Press Co. Ltd. Lahore Series 191, MT.
Lalitkuari vs Mahaprasad N. Singh Panta Series 157, Additional Collector of Customs, Calcutta & Anr.
vs M/s. Best & Co. (AIR S.A. Gaffoor vs Ayesha Beghum & Ors.
(C.A. 2406/1969 decided on 18 8 1970 Unreported Judgment of Supreme Court, 1970 Vol. 2, page 784) followed.
(3) For the purpose of determining any period of limitation prescribed for any application by any special or local law, the provisions contained in Section 12(2), inter alia.
shall apply in so far as, and to the extent to which they are not expressly excluded by such special or local law, and there is nothing in the U.P. Sales Tax Act expressly excluding the application of Section 12(2) of the .
[685 H, 686 A]
| The appellant company manufactured railway wagons in accordance with the specifications, terms and conditions contained in the agreements entered between the appellant and the Railway Board from time to time.
The Railway Board without charging any price supplied wheel sets, axle boxes and various other finished components of wagons, which were termed as "free supply items," to the appellant, which were used in the manufacture of wagons and supplied the complete wagons to the Railway Board.
The invoice value of the wagon charged by the appellant did not include the value of the "free supply items.
" The central excise authorities issued show cause to the appellant as to why the excise duty be not computed and charged on the value of the complete, wagon, including that the "free supply items".
The appellant challenged the show cause notices by filing a Writ Petition before the High Court.
Holding that the excise duty could only be charged on the invoice value under the contract, the Single Judge allowed the petition.
The appeal filed by the Respondents against the judgment of the Single Judge was allowed by the Division Bench of the Court, against which the present appeal was made by the appellant company.
On the question, whether the excise duty under sections 3 and 4 of the Central Excise and Salt Act, 1944 was to be charged on the invoice value of the wagon or on the value of completed wagon including that of the "free supply items".
Dismissing the appeal, this Court, 961 HELD: 1.
Section 3 of the Act provides for levy of the duty of excise.
It is a levy on goods produced or manufactured in India.
Section 4 of the Act lays down the measure by reference to which the duty of excise is to be assessed.
The duty of excise is linked and chargeable with reference to the value of the excisable good and the value is further defined in express terms by the said section.
In every case the fundamental criterion for computing the value of excisable article is the normal price at which the excisable article or an article of the like kind and quality is sold or is capable of being sold by the manufacturer.
[940G 965A] 2.
What comes down from the assembly line of the appellant 's factory is a complete wagon and as such the appellant being manufacturer of wagons, is liable to pay duty of excise on the value of a complete wagon.
The "free supply items" like wheel sets etc.
in the process of manufacturing become part of the complete wagon and loose their identity.
It hardly matters how and in what manner the components of the wagon are procured by the manufacturer, so long as the appellant is manufacturing and producing the goods called "wagons" it is liable to pay duty of excise on the normal value of the wagon.
[965A C] Empire Industries Limited and Others vs Union of India and Others, ; and M/s. Ujagar Prints and Others vs Union of India and Others, ; , followed.
| The appellant is one of the State Transport Undertak ings.
On June 30, 1976 an approved scheme was published under s.68 D of the in respect of the route Madurai to Kumuli authorising the appellant to run its stage carriages and proposing to exclude completely all other persons from operating their stage carriage services under permits covering the entire route except those persons mentioned in Annexure 11 to the scheme, who were existing operators on the different sectors of the notified route on the date of the publication of the scheme.
The respondent 's name was not mentioned in Annexure I1 as he was operating on a non scheme route.
On February 28, 1981 the respondent secured the variation of his permit from the Regional Transport Authority enabling him to operate on a sector of the notified routes.
The appeal against the said order was dismissed and no revision petition was filed against that order.
On December 23, 1982 the respondent obtained from the Regional Transport Authority a second variation of his permit which authorised him to operate his stage carriage service on the route which was also a part of the notified route.
An appeal filed against that order was dismissed by the State Transport Appellate Tribunal.
The High Court dismissed the revision petition taking the view that s.68 F(I D) of the Act could not be considered as a bar for entertaining an application for the variation of a permit since such an application was neither an appli cation for a permit nor for its renewal.
In the appeal to this Court on behalf of the appellant it was 392 contended that a draft scheme published under s.68 C of the Act on June 4, 1976, which was still in force was a bar to the grant of variation of the permit authorising the re spondent to operate his stage carriage on a sector of the route in respect of which the scheme had been published.
On behalf of the respondent it was contended that on a true construction of the scheme only persons who were oper ating their stage carriages under permits issued in respect of the entire route from Madurai to Kumuli alone have been excluded under the approved scheme and not those who were operating between any two $aces on the notified route or between any place lying outside the notified route and a place on the notified route even though they might be oper ating on a portion of the notified route.
Allowing the appeal, HELD: 1.
In the context in which s.68 F(I D) of the appears it is difficult to hold that the application for variation of a permit by including the whole or any part of route in respect of which a scheme is published under s.68 C of the Act can be treated as failing outside the mischief of s.68 F(I D) of the Act.
There is no justification to limit the application of s.68 F(I D) to only applications for fresh permits or their renewal and to leave out their application for variation of a permit by the exclusion of the route or a portion of the route in respect of which a scheme is published.
The fact that the applicant is the holder of a permit to operate a stage carriage on another route whose variation he is seek ing by the inclusion of a route or a part whereof in respect of which a scheme is published under s.68 C ought not to make any difference.
The principle underlying s.68 F(I D) is that the number of services on such a route should be frozen on the publication of a scheme under s.68 C. [395E H] 2.
The approved scheme excludes the operation by others of stage carriage service on the said route except those whose names are mentioned in Annexure II attached thereto.
The respondent is not protected by any provision under the approved scheme itself.
He cannot be permitted to operate on any sector of the notified route in question in view of the provisions contained in s.68 C, 68 D and 68 FF.
[396B C] Karnataka State Road Transport Corporation, Bangalore vs
B.A. Jayaram and Others, [1984] 2 S.C.R. 768 & Adarsh Travels Bus Service and Another vs State of U.P. and Others, ; , referred to. 393
| The appellant was carrying on the business of a railway contractor in a place in the district of R.
In April 1943, the Income tax Officer of R which was under the charge of the Commissioner of Income tax, Bengal (Mufassil), served a notice under section 22(2) of the Indian Income tax Act, 1922, on the appellant who in pursuance of the notice filed the return on February 28, 1944.
The Income tax Officer then served notices on him under SS.
22(4) and 23(2) Of the Act for the production of books, etc., but before the final assessment was made, the Central Board of Revenue by an order passed under section 5(2) of the Act, transferred the appellant 's case along with some other assessment cases, to the Commissioner of Income tax (Central), Calcutta.
On February 11, 1948, the Income tax Officer, Calcutta, to whom the appellant 's case was assigned, issued notices again under SS.
22(4) and 23(2) of the Act and after making the usual enquiries made the assessment order on March 15, 1948.
The appellant 's appeals to the Appellate Assistant Commissioner and then to the Appellate Tribunal raising objections to the legality of the transfer of his case to Calcutta and to the jurisdiction of the Income tax Officer, Calcutta, were dismissed.
The Appellate Tribunal held that as the objection related to the place of assessment it was not competent for the Tribunal to go into that question.
The appellant then made an application to the Commissioner of Income tax for reference under section 66(1) of the Act, but this was dismissed on the ground that the assessee never raised any objection before the Income tax Officer to his jurisdiction and that, in any case, the question of jurisdiction could not arise out of the order of the Tribunal.
An application filed by the appellant to the High Court under section 66(2) of the Act was dismissed and though the order of dismissal was not taken up on appeal, the appellant filed an appeal to the Supreme Court against the order of the Appellate Tribunal.
It was contended for the appellant that under section 64(1) and (2) of the Act he was entitled to be assessed by the Income tax Officer of the area within which the place of his business was situate, that the 302 assessment by the Income tax Officer of Calcutta was illegal assumption of jurisdiction and that, in any case, the order of transfer by the Central Board of Revenue under section 5(2) of the Act was not valid because, if it wanted to transfer the assessment proceedings from the file of one Income tax Officer to another it could be done only under section 5(7A) and not under section 5(2).
Held : (1) Sub section (7A) of section 5 which confers on the Central Board of Revenue the power to transfer any case from one Income tax Officer to another is not a provision which in any way modifies or cuts down the power given to the Central Board of Revenue under sub section 2 of section 5 which enables it to specify as to which of the Commissioners would perform functions in respect of different areas, persons, incomes or cases or classes thereof.
The two sub sections are complementary and operate in two separate spheres.
Pannalal Binjraj vs Union of India, ; and Bidi Supply Co. vs Union of India, ; , distinguished.
In the present case, the Central Board of Revenue directed the Commissioner of Income tax (Central), Calcutta, to exercise his functions in respect of certain cases including the case of the appellant and that fell under section 5(2) and not under section 5(7A).
The order of transfer was, therefore, valid.
(2)The jurisdiction of the Income tax Officer, Calcutta, to make the assessment on the appellant cannot be challenged, in view of sub section 5(a) of section 64 of the Act, under which sub sections
(1) and (2) of section 64 have no application to an assessee in respect of whom anorder has been made by the Central Board of Revenue under S.5(2) of the Act.
(3) Objections as to the place of assessment cannot be raised in appeal either before the Appellate Assistant Commissioner or before the Appellate Tribunal.
Wallace Brothers & Co. Ltd. vs Commissioner of Income tax, Bombay, Sind and Baluchistan, and Seth Kanhaiyalal vs Commissioner of Income tax, [1936] 5 I.T.R. 739, relied on.
Dayaldas Kushiram vs Commissioner of Income tax (Central), and Dina Nath Hem Raj vs Commissioner of Income tax, All. 616, distinguished.
Consequently, as the question as to the place of assessment could not arise out of the order of the Appellate Tribunal no such question of law could be referred to the High Court.
| As per the directions of the appellant and on receipt of the requisite licence under the cotton Transport Act 1923, for transport of cotton, the Bombay seller despatched cotton to the ultimate buyer mills at Madurai and sent the Railway Receipts to the appellant who endorsed the same in favour of the Mills after collection of the substantial portion of the sale price.
The sales Tax authorities treated the transaction as intra sales and assessed the Mills as the last purchaser under the Madras General Sales Tax and assessed the appellant u/s 3(b) of the .
The question is whether in the circumstances the transaction is one of inter state sales falling u/s 3(a) or second sales under state sales u/s 3(b) of the .
The contentions of the appellant in this court were: (1) The sale of cotton by the appellant assessee to the buyer mill fell within the scope of section 3(a) of the Central Act as there was movement of goods from Bombay to Madras as a result of covenant in or incidental to the contract of sale and therefore u/s 9(1) of the Central Sales Tax the jurisdiction lay with Bombay state from where the goods moved from and (ii) Since the sale being in respect of declared goods, is exempt by the terms of notification of Order No. 3602 dated 28 12 63 issued u/s 8(5) of the C.S.T. and (ii) the turnover was exempt u/s 6(2) of C.S.T. Dismissing the appeal the court, ^ HELD: (1) The significant feature of the transaction viz. sending of the Railway Receipts by the Bombay seller to the appellant who thereafter endorsed the same to the mills, shows that (a) there could not be any unconditional appropriation of the goods at Bombay towards the contract entered into between the appellant; (b) It was an inter state sales to the appellant and the sale by the appellant to the mills is an intra state sales in as much as, the mere fact that the goods were consigned by the Bombay seller to the mills in accordance with the direction will not make the transaction inter state sales.
[718G H, 719A B] (ii) The State sales Tax authorities, (respondent) had jurisdiction to assess the transaction for sale by the appellant to the mills u/s 3(b) of the Central Act.
[719C] (iii) The exemption u/s 8(5) applies only to cases where the claimant had paid tax himself u/s 4 of the Madras Act in respect of local sales preceding the inter state transactions.
In the instant case, as the appellant did not pay tax u/s 4 of the Madras Act, he was not entitled to claim exemption under the Government order.
[719 E F] (iv) A dealer claiming exemption for subsequent sale during the movement of goods from one state to another is required by section 6(2) of the Central Act to furnish to the prescribed authority in the prescribed manner a certificate 718 duly filled and signed by the registered dealer by whom the goods were purchased containing the particulars.
In the instant case, the appellant produced the form from the Bombay seller but did not prove that his buyer was a registered dealer in cotton which disentitled him to exemption u/s 6(2) of the Act.
[720 B C]
|
iminal Appeal No. 46 of 1958.
Appeal from the judgment and order dated March 17, 1958, of the Allahabad High Court in Criminal Appeal No. 1635 of 1953, 123 A. section R. Chari, section Pichai and section Venkatakrishnan, for the appellant.
SarjooPrasad, G.C.Mathur and G.P.Lal, for the respondent.
March 28.
The Judgement of the Court was delivered by GAJENDRAGADKAR, J. The appellant R.R. Chari was a permanent employee in a gazetted post under the Government of Assam.
In 1941, his services were lent to the Government of India.
The first appointment which the appellant held under the government of India was that of the Deputy Director of Metals in the Munitions Production Department at Calcutta.
Then he came to Delhi on similar work in the office of the Master General of Ordnance which was the Steel Priority Authority during the War period.
He was subsequently trans ferred to Kanpur as Assistant Iron a Steel Controller in 1945.
Sometime thereafter, he become the Deputy Iron & Steel Controller, Kanpur Circle; which post he held for one month in September, 1945.
From January, 1946, be was appointed to the said post and he held that post until September 20 1946.
The period covered by the charges which were eventually formed against the appellant and, others is from January 1, 1946 to September 20, 1946.
On the latter date, the appellant proceeded on leave for four months and did not return to ' service either under the Government of India or under the Assam Government.
It appears that while the appellant had proceeded on leave the Government of India wrote to the Assam Government on February 8, 1947, intimating that it had desided to replace the services of the appellant at the disposal of the Assam Government on the expiry of the leave granted to him with effect from September, 21, 1946.
The Government of India also added that the exact 124 period of the leave granted to the appellant would be intimated to the Assam Government later.
On April 28, 1947, leave granted to the appellant was gazetted with effect from September 21, 1946 for a period of four months.
A subsequent notification issued by the Central Government extended the leave up to May 13, 1947.
On this latter date, the Central Government suspended the appellant, and on a warrant issued by the District Magistrate, Kanpur, he was arrested on the October 28, 1947.
Subsequently, he was released on bail.
Thereafter, the Government of India accorded sanction for the prosecution of the appellant under section 197 of the Criminal Procedure Code on the January 31, 1949.
A Charge sheet was submitted by the prosecution alleging that the appellant along with three of his former assistants had committed various acts of conspiracy, corruption and forgery during the period 1, 1.1946 to 20 9 1946 The other persons who were alleged to be co conspirators with the appellant, were vaish, a clerk in charge of licensing under the appellant, Rizwi and Rawat who were also working as clerks under the appellant.
Bizwi abs conded to Pakistan and Rawat died.
In the result, the case instituted on the ,,aid charge sheet proceeded against the appellant and Mr. Vaish.
Broadly stated the prosecution case was that during the period December 1945 to September 20, 1946, the appellant and Vaish and other entered into a criminal conspiracy to do illegal acts, such as the commission of offenses under, sections 161, 165, 467.
Indian Penal Code or in the alternative, Offenses such as were prescribed by r. 47 (3) read with r. 47 (2) of the Defence of India Rules, 1939 and.
abetment in the acquisition and sale of Iron and .steel, in contravention of the Iron and Steel (Control of Distribution) Order 1941 ; and that in pursuance of the said conspiracy, they did commit the aforesaid illegal acts from time to time and thus rendred themselves liable to be punished under s.120 B 125 of the Indian Penal Code.
That was the substance of the first charge.
The Second Charge was in regard to the commission of the offence under section 161 and it set out in detail the bribes accepted by the appellant from 14 specified persons.
In the alternative, it was alleged that by virtue of the fact that the appellant accepted valuable things from the persons specified, he had committed as offence under section 165 Indian Penal Code.
The third charge was under section 467 Indian Penal Code or in the alternative, under r. 47(3) read with r. 47(2) (a) of the Defence of India Rules.
The substance of this charge was that in furtherance of the conspiracy, the appellant fraudulently or dishonestly made, signed or executed fourteen documents specified in clauses (a) to (n) in the charge.
Amongst these documents were included the orders prepared in the names of several dealers and licences issued in their favour.
The fourth charge was that the appellant had abetted the firms specified in clauses (a) to (k) in the commission of the offence under r 81(2) of the Defence of India Rules.
That, in brief, is the nature of the prosecution case against the appellant as set out in the several charges.
At the initial stage of the trial, the appellant took a preliminary objection that the sanction accorded by the Government of India to the prosecution of appellant under section 197 Code of Criminal Procedure was invalid.
This objection was considered by Harish Chandra J. of the Allahabad High Court and was rejected on the July, 18th 1949.
The learned Judge directed that since he found no substance in the preliminary contention raised by the appellant, the record should be sent back to the trial Court without delay so that it may proceed with the trial of the case.
On 126 May 7 1953, the appellant alone with Vaish was tried by the Additional District and Sessions Judge at Kanpur.
The charge under section 120 B was tried by the learned Judge with the aid of assessors, whereas the remaining charges were tried by him with the aid of the jury.
Agreeing with the opinion of the assessors and the unanimous verdict of the jury, the learned Judge convicted the appellant under section 120 B and sentenced him to two years ' rigorous imprisonment.
He also convicted him under section section 161 and sentenced him to two years Rigorous imprisonment and a fine of Rs, 25,000/ .
in default to suffer further rigorous imprisonment for six months.
For the offence under section 467 Indian Penal Code of which the appellant was convicted, the learned Judge sentenced him to four years ' rigorous imprisonment.
Be was also convicted under r. 81 (4) read with r. 121 and cls.
4,5, 11 b (3) and 12 of the Iron and Steel Order of 1941 and sentenced to two years 'rigorous imprisonments.
All the sentences thus imposed on the appellant were to run concurrently.
Vaish who was also tried along with the appellant was similarly convicted and sentenced to different terms of imprisonment.
The appellant and Vaish then appealed to the High Court against the said order of convictions and sentence.
It was urged on their behalf before the High Court that the charge delivered by the Judge to the jury suffered from grave misdirections and non directions amounting to misdirections.
his plea was accepted by the High Court and so, the High Court examined the evidence for itself.
In the main, the High Court considered the ten instances adduced by the prosecution for showing that the appellant had accepted illegal gratification and had committed the other offenses charged, and came to the conclusion that the prosecution evidence in respect of eight instances could not be acted upon, whereas the said evidence in respect of two instances could be safely acted upon.
These two instances 127 were deposed to by Lala Sheo Karan Das and other witnesses and by Sher Singh Arora and other witnesses.
In the result, the High Court confirmed the appellant 's conviction under sections 161 and 467 and the sentences imposed by the trial Court in that behalf.
His conviction under section 120 B Indian Penal Code, and under r. 81(4) read with r. 121 Defence of India Rules was set aside and he was acquitted of the said offenses.
The High Court directed that the sentences imposed on the appellant under sections 161 and 467 should run concurrently.
The appeal preferred by Vaish was allowed and the order of conviction and sentence passed against him by the trial Court in respect of all the charges was set aside.
This order was passed on March 17th, 1958.
The appellant then applied for and obtained a certificate from the High Court and it is with that certificate that he has come to this Court in appeal.
At, this stage, it would be useful to indicate briefly the main findings recorded by the High Court against the appellant.
As we have just indicated, there are only two instances out of ten on which the High Court has made a finding against the appellant.
The first is the case of Lala Sheo Karan Das.
According to the prosecution case, as a motive or reward for issuing written orders and expediting supply of iron by the stock holders ' Association Kanpur to Lala Sheo Karan Das, the appellant accepted from him Rs. 4,000/ on 31.3.1946, Rs. 2,000/ on 9.4.1946; Rs. 1,060/ on 11.4.1946 and Rs. 1,000/ on 12.5 1946 as illegal gratification.
That is the basis of the charge under section 161.
The prosecution case further is that in regard to the supply of iron to Lala Sheo Karan Das, certain documents were forged and it is alleged that the written orders issued in that behalf Exhibits P 341 and P 342 were ante dated and the licences issued in that behalf were similarly ante dated.
In support of this case, oral evidence was given by 128 Lala Sheo Karan Das himself, his son Bhola Nath and Parshotam Das, his nephew who is a partner with him.
This oral evidence was sought to be corroborated by relevant entries in kachhi rokar books.
These entries indicated that the several amounts had been paid by the firm to the appellant.
The High Court considered the oral evidence and held that the said evidence was corroborated by entries in the account books.
The argument that dacca rokar books had not been produced did not appear to the High Court to minimise the value of the kachhi rokar books which were actually produced, and the contention that the books of Account kept by accomplices themselves could not, in law, corroborate their oral evidence, did not appeal to the High Court as sound.
It held that even though Sheo Karan Das, his son and his nephew may be black marketeers, it did not necessarily follow that they were liars.
Besides, the High Court took the view that there were certain pieces of circumstantial evidence which lent support to the oral testimony of the accomplices.
The ante dating of the orders, and the supply of a large quantity of iron, were two of these circumstances.
It is on these grounds that the High Court accepted the prosecution case against the appellant under section 161 Indian Penal Code.
The High Court then examined the evidence in support of the charge under section 467 and it held that the manner in which the dates in the quota register had been tampered with supported the oral testimony of the witnesses that the applications made by Sheo Karan Das had been deliberately and fraudulently ante dated and orders passed on them and the licences issued pursuant to the said orders all were fraudulent documents which proved the charge under section 467 as well as under r. 47 (3) read with 47(2)(a).
On these grounds, the appellant 's conviction under section 467 was also confirmed.
As to the prosecution case in respect of the bribes offered by Sher Singh Arora, the High Court 129 was not satisfied with the evidence adduced in respect of the actual offer of money, but it held that the evidence adduced by the prosecution in respect of the offer and acceptance of certain valuable things was satisfactory.
These valuable things were a three piece sofa sot, a centre piece, two stools and a revolving chair (Exts.
16 to 21).
These were offered on behalf of Sher Singh Arora and accepted by the appellant in January, 1946.
In dealing with this part of the prosecution case, the High Court considered the statements made by the appellant and ultimately concluded that the charge under section 161 had been proved in respect of the said articles.
In regard to the charge under section 467, the High Court adopted the same reasons as it had done in dealing with the said charge in respect of Sheo Karan Das 's transactions and held that the said .charge had been proved.
The licences which are alleged to have been ante dated are Exts.
P 535 and P 536.
The application which is alleged to have been ante dated is Ext.
P 294, and the High Court thought that the relevant entries in the quota register showed that the dates had been tampered with.
In the result, the charge under section 467 in respect of this transaction was held to be established.
An alternative charge was also proved against the appellant under r. 47(3) read with r. 47(2) (c) Defence of India Rules.
The first point which Mr. Chari has raised before us is that the Addl.
District & Sessions Judge had no jurisdiction to try this case, because at the relevant time, the Criminal Law Amendment Act, 1952(46 of 1952) had come into operation and the case against the appellant could have been tried only by a Special Judge appointed under the said Act.
This argument has been rejected by the High Court and Mr. Chari contends that the decision Of the High Court in erroneous in law.
In order to deal with the merits of this point, it is necessary to 130 refer to some dates.
The order of commitment was passed in the present proceedings on March 1, 1952.
It appears that thereafter a list of defence witnesses was tiled by the appellant before the Commiting Magistrate on July 24, 1952.
On July 28, 1952, the Criminal Law Amendment Act came into force.
On August 14, 1952, Vaish filed a list of witnesses before the committing Magistrate and requested that one of the prosecution witnesses should be recalled for cross examination.
On September 18, 1952, the District & Sessions Judge at Kanpur was appointed a Special Judge under the Act.
On December 19, 1952, the case was taken up before the Special Judge and the question as to where the case should be tried was argued.
The Special judge held that the question had been considered by the Madras High Court in the case of P. K. Swamy and it had been held that the Special Judge had no jurisdiction to hear the case because the order of commitment ' had been passed prior to the passing of the Criminal Law Amendment Act.
Since the order of commitment in the present case had also been passed before July 28, 1952, the Special Judge held that the case against the appellant must be tried under the provisions of the Criminal Procedure Code and not under the provisions of the Criminal Law Amendment Act; and so, an order was passed that the trial should be held by the Additional District & Sessions Judge at Kanpur.
After the case was thus transferred to the Add1.
Sessions Judge at Kanpur, it was actually taken up before him on May 7, 1953, when the charge was read out to the accused persons and the jury was empanelled.
It is in the light of these facts.
that the question about the jurisdictions of the trial Judge has to be determined.
Two provisions of the Criminal Law Amendment Act fall to be considered in this connections Section 7 provides that notwithstanding anything contained in the Code of Criminal Procedure, or in 131 any other law, the offenses specified in sub section (1) of section 6 shall be triable by a Special Judge only, Offenses under sections 161 and 165 Indian Penal Code are amongst the offenses specified by section 6(1).
Section 7(2)(b) provides that when trying any case, a Special Judge may also try any offence other than an offence specified in section 6 with which the accused may, under the Code of Criminal Procedure be charged at the same time.
Therefore, if the offence under section 161 falls under section 7(1) and has to be tried by a Special Judge, the other offenses charged would also have to be tried by the same Special Judge as a result of section 7(2)(b).
It is clear that the provisions of a. 7 are prospective.
This position is not disputed.
But it would be noticed that section 7 does not provide for the transfer of pending cases to the special Judge and so, unless the appellant 's case falls under the provisions of section 10 which provides for transfer, it would be tried under the ordinary law in spite of the fact that the main offence charged against the appellant falls under section 6(1) of the Criminal Law Amendment Act.
That takes us to section 10 which deals with the transfer of certain pending cases.
This section provides that all cases triable by a special Judge under section 7 which immediately before the commencement of the Act, were pending before any Magistrate shall, on such commencement, be forwarded for trial to the special Judge having jurisdiction over such cases.
It is thus clear that of the cases made triable by a special Judge by section 7, it is only such pending cases as are covered by s.10 that would be tried by the special Judge.
In other words, it is only cases triable by a special Judge under section 7 which were pending before any Magistrate immediately before the commencement of this Act that would tie transferred to the special Judge and thereafter tried by him.
So, the question to consider is whether the appellant 's case could be said to have been pending 132 before any Magistrate immediately before the commencement of the Act.
This position also is not in dispute.
The dispute centres round the question as to whether the appellant 's case can be said to have been pending before a magistrate at the relevant time, and this dispute has to be decided in the light of the provisions contained in section 219 of the Code of Criminal Procedure.
This section occurs in Chapter 18 which deals with the enquiry into cases triable by the Court of Sessions or High Court.
We have already seen that on March 1, 1952, an order of commitment had been passed in the present case and that means that the jurisdiction of the committing Court had been exercised by the said Court under section 213 of the Code.
Mr Chari contends that though the order of commitment had been passed, that does not mean that the case had ceased to be pending before the committing Magistrate.
It is not disputed that once an order of commitment is made, the committing Magistrate has no jurisdiction to deal with the said matter; he cannot either change the order or set it aside.
So far as the order of commitment is concerned, the jurisdiction of the Magistrate has come to an end.
The said order can be quashed only by the High Court and that too on a point of law.
That is the effect of section 215 of the Code.
It is, however, urged that section 216 confers jurisdiction on the committing magistrate to summon witnesses for defence as did not appear before the said Magistrate and to direct that they should appear before the Court to which the accused had been committed.
Similarly, before the said Magistrate, bonds of complainants and witnesses can he executed as prescribed by section 217.
Section 219 confers power on the committing Magistrate to summon and examine supplementary witnesses after the commitment and before the commencement of the trial, and to bind them over in manner here in before provided to appear and give evidence.
It is on the 133 provisions of this section that the appellant 's case rests.
The argument is that since the committing magistrate is given power to summon supplementary witnesses even after an order of commitment has been passed, that shows that the committing magistrate still hold jurisdiction over the case and in that sense, the case must be deemed to be pending before him.
We are not impressed by this argument.
The power to summon supplementary witnesses and take their evidence is merely a supplementary power for recording evidence and no more.
This supplementary power does not postulate the continuance of jurisdiction in the committing magistrate to deal with the case.
It is significant that this power can be exercised even by a Magistrate other than the committing magistrate, provided he is empowered by or under section 206 and clearly, the case covered by the commitment order passed by one magistrate cannot be said to be pending before another magistrate who may be empowered to summon supplementary witnesses.
When section 10 of the Criminal law Amendment Act refer to cases pending before any magistrate, it obviously refers to cases pending before magistrates who can deal with them on the merits in accordance with law and this requirement is plainly not satisfied in regard to any case in which a commitment order had been passed by the committing magistrate.
After the order of commitment is passed, the case cannot be said to be pending before the committing magistrate within the meaning Of section 10.
Therefore, we are satisfied that the High Court was right in coming to the conclusion that section 10 did not apply to the present case and so, the Addl.
Sessions Judge had jurisdiction to try the case in accordance with the provisions of the Code of Criminal Procedure.
It is true that in dealing with this point, the High Court has pro ceeded on the consideration that the appellant 's trial had actually commenced befere the 134 Addl.
Sessions Judge even prior to July 28, 1952.
In fact, it is on that basis alone that the High Court has rejected the appellant 's contention as to absence of jurisdiction in the. trial Judge.
We do not think that the reason given by the High Court in support of this conclusion is right, because the trial of the appellant could not be said to have commenced before May 7, 1953.
However, it is unnecessary to pursue this point any further because we are inclined to take the view that the appellant 's case does not fall under section 10 of the Criminal Law Amendment Act and that is enough to reject the contention of the appellant on this point.
The next argument raised is in regard to the validity of the sanction given by the Government of India to the prosecution of the appellant.
This sanction Ext.
P 550 purports to have been granted by the Governor General of India under section 197 of the Code for the institution of criminal proceedings against the appellant.
It has been signed by Mr. section Boothalingam, Joint Secretary to the Government of India on January 31, 1949.
The sanction sets out with meticulous care all the details of the prosecution case on which the prosecution rested their charges against the appellant and so, it would not be right to contend that the, sanction has been granted as a mere matter of formality.
The several details set out in the sanction indicate that prima facie, the whole case had been considered before the sanction was accorded.
Mr. Chari, however, attempted to argue that on the face of it, the sanction does not show that the Governor General granted the sanction after exercising his individual judgment.
Section 197 of the code at the relevant time required that sanction for the prosecution of the appellant should have been given by the Governor General exercising his individual Judgment, and since, in terms ' , it does not say that the Governor General in exercise of his individual 135 judgment had accorded sanction, the requirement of section 197 is not satisfied.
That is the substance of the contention.
In support of this contention, reliance is sought to be placed on certain statements made by Mr. Boothalingam in his evidence.
Mr. Boothalingam stated that sanction of the Governor General was conveyed by him as Joint Secretary to the Government of India.
He also added that authorities of the Government of India competent to act in this behalf accorded the sanction and he conveyed it.
His evidence also showed that the matter had been considered by the competent authorities and that he was one of those authorities.
Mr. Chari argues that Mr. Boothalingam has not, expressly stated that the Governor General applied his individual mind to the problem and exercising his individual Judgment, came to the conclusion that the sanction should be accorded.
This contention had not been raised at any stage before and the point had not been put to Mr. Boothalingam who gave evidence to prove the sanction.
If the point had been expressly put to Mr. Boothalingam be would have either given evidence himself on that point or would have adduced other evidence to show that the Governor General had exercised his indi vidual judgment in dealing with the matter.
Therefore, we do not think that this plea can be allowed to be raised for the first time in this Court.
The next ground of attach against the validity of the sanction is based on the assumption that at the time when the sanctions was (riven, the appellant had ceased to be in the employment of the Government of India and had reverted to the Assam Government.
.If it is established that at the relevant time, the ,appellant was a person employed in connection with the affairs of the Assam State, then of course, it is the Assam Government that would be competent to give the sanction.
The High Court has found that at the relevant time, the appellant continued to be 136 in the employment of the affairs of the Federation and had not reverted to the Assam Government ; and in our opinion, this finding of the High Court is right.
We have already referred to the course of events that led to the granting: of the leave to the appellant by the Government of India; to the extension of the leave by the said Government and to his subsequent suspension.
The appellant 's argument is that after he went on leave, he moved the Assam Government for extension of his leave and was, in fact, asked by the Assam Government to appear before a medical board appointed by it.
We do not think that these facts are enough to prove that the appellant had reverted to the service of the Assam Government.
In fact., it is clear that the Government of India had intimated to the Assam Government that the appellant continued to be under its employment and that the Assam Government had expressly told the Government of India that it had no desire that the appellant should revert to its service until the 'criminal proceedings instituted against him were over.
The Assam Government also pointed out that the appellant himself did not wish to rejoin in his post of Superintendent of the Assam Government 's Press but had only asked for Leave Preparatory to Retirement following medical advice.
It is thus clear that though the Government of India had originally thought of replacing the appellant 's services with the Assam Government at the end of the leave which was proposed to be granted to him, subsequent events which led to an investigation against the appellant and his suspension caused a change in the attitude of the Government of India and it decided to continue him in its employment in order that he should face a trial on the charges which were then the subject matter of investigation.
There is no order reverting him to the Assam Government passed by the Govt.
of India and there is no order passed by the Assam Government at all on this subject.
Therefore 137 there can be no doubt that at the relevant time, the appellant continued to be employed in the affairs of the Federation.
It was then sought to be argued that the effect of SR 215 was that the reversion of the appellant to the Assam Government should be deemed to have taken effect from the date when the leave was granted to him by the Government of India.
In our opinion, there is no substance in this argument.
The portion on which the appellant relies is merely an administrative direction under the Rule and it cannot possibly over ride the specific orders issued by the Government of India in respect of the appellant 's leave and reversion.
Besides, even the requirements of the said Rule are not satisfied in the present case.
Therefore, the conclusion is inescapable that the appellant was employed in the affairs of the Federation at the time when the sanction was accorded.
That takes us to the question as to whether the Government of India was competent to grant the sanction even if the appellant was at the relevant time a person employed in connection with the affairs of the Federation.
Mr. Chari contends that in the case of the appellant whose services had been loaned by the Assam Government to the Government of India, it could not be said that he was a parson permanently employed in connection with the affairs of the Federation and so, cl.
(a) of section 197 (1) would not apply to him at all.
He was a person permanently employed in connection with the affairs of a State and that took the case under cl.
(b) which means that it is the Governor of Assam exercising his individual judgment who could have a(, corded valid sanction to the appellant 's prosecution.
We are not impressed by this argument.
It is clear that the first part of section 197 (1) provides a special protection, inter alia, to public servants who are not removable from their offices save by or with the 138 sanction of the State Government or the Central Government where they are charged with having committed offenses while acting or purporting to act in the discharge of their official duties; and the form which this protection has taken is that before a criminal court can take cognizance of any offence alleged to have been committed by such public servants, a sanction should have been accorded to the said prosecution by the appropriate authorities.
In other words, the appropriate authorities must be satisfied that there is a prima facie, case for starting the prosecution and this prima facie satisfaction has been interposed as a safeguard before the actual prosecution commences.
The object of section 197(1) clearly is to save public servants from frivolous prosecution, Vide, Afzelur Rahman vs The King Emperor(1).
That being the object of the section, it is clear that if persons happened to be employed in connection with the affair 's of the Federation, it was the Governer General who gave sanction and if persons happened to be employed in connection with the affairs of the State, it was the Governor.
What is relevant for the purpose of deciding as to who should give the sanction, is to ask the question where is the public servant employed at the relevant time ? If he is employed in the affairs of the Federation, it must be the Governor General in spite of the fact that such employment may be temporary and may be the result of the fact that the services of the public servant have been loaned by the State Government to the Government of India.
Therefore, having regard to the fact that at the relevant time the appellant was employed in connection with the affairs of the Federation, it was the Governor General alone who was competent to accord sanction.
Therefore, our conclusion is that the sanction granted by the Governor General for the prosecution of the appellant is valid.
That still leaves the validity of the sanction to be tested in the light of the provisions of (1) ,12.
139 a. (6) of the prevention of the Corruption Act, 1947.
At the relevant time, section 6 read thus: "No court shall take cognizance of an offence punishable under section 161 or section 165 of the Indian Penal Code (XIV of 1860) or under sub section (2) of section 5 of this Act, alleged to have been committed by a public servant, except with the previous sanction: (a) In the case of a person who is employed in connection with the affairs of the Federation and is not removable from his office save by or with the sanction of the Central Government or some higher authority, Central Government.
(b) In the case of a person who is employed in connection with the affairs of a province and is not.
removable from his office save by or with the sanction of the Provincial Government or some higher authority, Provincial Government: (c) in the case of any other person, of the authority competent to remove him from his service".
It would be noticed that the scheme of this section is different from that of section 197 of the Code of Criminal Procedure.
The requirement of the first part of section 197 (1) which constitutes a sort of preamble to the provisions of section 197(1)(a) & (b) respectively, has been introduced by s.6 severalty in cls.
(a) and (b).
In other words, under els.
(a) and (b) of section 197(1) the authority competent to grant the sanction is determined only by reference to one test and that is the test provided by ,,the affairs in connection with which the public servant is employed"; if the said affairs are the affairs of the Federation, the Governor General grants the sanction ; if the said affairs are the affairs of a Province, the 140 Governor grants the sanction.
That is the position under section 197(1) as it then stood.
The position under section 6 of the Prevention of Corruption Act is substantially different.
Clauses (a) & (b) of this section deal with persons permanently employed in connection with the affairs of the Federation or in connection with the affairs of the Province respectively, and in regard to them, the appropriates authorities are the Central Government and the Provincial Government.
The case of a public servant whose services are loaned by one Government to the other, does not fall either under cl.
(a) or under cl.(b), but it falls under el.
Having regard to the scheme of the three clauses of section 6, it is difficult to construe the word "employed in cls.
(a) & (b) as meaning "employed for the time being".
The said Words, in the context, must mean ,,,permanently employed".
It is not disputed that if the services of a public servant permanently employed by a Provincial Government are loaned to the Central Govt., the authority to remove such public servant from office would not be the borrowing Government but the loaning Government which is the Provincial Government, and so, there can be no doubt that the employment referred to in cls.
(a) & (b) must mean the employment of a permanent character and would not include the ad hoc or temporary employment of an officer whose services have been loaned by one Government to the other.
Therefore, the appellant 's case for the purpose of sanction under section 6 will fall under el.
(c) and that inevitably means that it is.
only the Provincial Government of Assam which could have given a valid sanction under section 6.
At the relevant time, section 6 had come into operation, and section 6 expressly bars the cognizance of offenses under s.161 unless a valid sanction had been obtained as required by it.
Therefore, in the absence of a valid sanction, the charge against the appellant under a. 161 and section 163 could not have been tried and that renders the 141 proceedings against the appellant in respect of those two charges without jurisdiction.
The result is that the contention of the appellant that the sanction required for his prosecution under section 161 and section 165 is invalid, succeeds and his trail in respect of those two offenses must, therefore, be held to be invalid and without jurisdiction.
That being so, it is unnecessary to consider whether the finding of the High Court in respect of the charge under section 161 is justified or not.
So, we do not propose to consider the evidence led by the prosecution in respect of the said charge in relation to the two cases of Lala Shoo Karan Das and Sher Singh Arora.
The charge under section 467 or the alternative charge under Defence of India Rules still remains to be considered, because the said offenses are outside the scope of section 6 of the Prevention of Corruption Act and the sanction accorded by the Governor General in respect of the appellant 's prosecution for the said offenses is valid under section 197 of the Code of Criminal Procedure.
What, then, are the material facts on which the conclusion of the High Court is based? The first point on which stress has been laid both by Mr. Chari and Mr. Sarjoo Prasad relates to the background of the case.
Mr. Chari contends that the prosecution of the appellant is, in substance, the result of the attempts successfully made by the back marketeers in Kanpur to involve the appellant in false charges and in support of his plea, Mr. Chari has very strongly relied on the evidence of Mr. Kanhaiya Singh.
This witness was, at the relevant time, an Inspecting Assistant Commissioner of Income tax at Kanpur and his evidence seems to show that unlike his predecessor Mr. Talwar, the appellant gave whole hearted co operation to the witness in discovering the illegal dealings of black marketeers in Kanpur in 142 iron.
According to the witness, the black marketeers came to know about the cooperation between him and the appellant and that disturbed them very rudely.
Some lists were prepared by the appellant giving the witness detailed infor mation about the activities of the black marketeers and the witness suggested that in order to destroy the papers thus supplied to him by the appellant, a burgulary was arranged in his house in May or June, 1946.
A similar burgulary took place in the appellant 's house.
There was also a fire in the appellant 's house.
The witness was asked whether any of the persons who have given evidence against the appellant in the present case, were included in the list supplied by the appellant to him, and the witness refused to answer the said question and.
claimed protection under section 54 of the Income Tax Act.
Mr Chari 's argument is that the activities of the appellant in cooperation with Mr. Kanhaiya Singh frightened the black marketeers and so, they organised the present plot to involve the appellant in a false case.
In that connection, Mr. Chari also relies on the fact that out of the ten instances, the story deposed to in respect of eight has been rejected by the High Court.
On the other hand, Mr. Sarjoo Prasad has argued that as soon as the appellant took charge from Mr. Talwar, he evolved a very clever scheme of establishing personal contacts with the black marketeers; dispensed with the enquiry which used to be held prior to the granting of licences to them and.
thus introduced a practice of direct dealings with the black marketeers which facilitated the commission of the offenses charged against him.
He has also referred us to the evidence given by Mr. Sen which tends to show that the appellant was frightened by the prospect of investigation and so, suddenly left Kanpur under the pretext of illness.
In other words, Mr. Sarjoo Prasad 's argument is that the appellant deliberately adopted a very clever 143 modus operandi in discharging his duties as a public servant and has, 'in fact, committed the several offenses charged against him.
We do not think that the ultimate decision of the narrow point with which we are concerned in the present_ appeal can be determined either on the basis that the appellant is more sinned against than a sinner or that he is a cold blooded offender.
Ultimately, we will have to examine the evidence specifically connected with the commission of the offence and decide whether that evidence can legitimately sustain the charge under section 467.
Let us take the case as disclosed by the evidence of Sheo Karan Das in respect of the charge under section 467.
According to Sheo Karan Das, the two applications Exts.
35 and 36 were given by him in the office of the appellant on the 29th or 30th March, 1946, but the appellant asked the witness to get other applications in which the date should be prior to 23rd of March.
Accordingly, the witness put the date 22nd March on his applications.
On the 29th or 30th March when the witness met the appellant, he asked for 130 tons and the appellant told him that he could give him more than that, provided, of course, the appellant got his profit.
Accordingly, after these applications were antedated, the appellant passed orders and licences were issued.
Thus, it would be seen that the prosecution case is that the applications which were presented by Sheo Karan Das on the 29th or 30th of March, were deliberately ante dated in order that the orders subsequently passed by the appellant and the licences issued thereunder should also appear to have been issued prior to the 23rd of March and that, in substance, is the essence of the charge under section 467.
When this case was put to the appellant, he made a somewhat elaborate statement which it is necessary to consider.
According to this statement, 144 the appellant left Kanpur on March 23, 1946, for a meeting with Mr. Spooner who was the Iron Steel Controller at Calcutta.
Mr. Spooner told him in confidence that there would be no more need to issue licences after March 31, on account of decontrol.
He also expressly desired that no further licences need be issued by any Regional Dy.
Iron & Steel Controller after March 26, 1946.
The appellant returned to Kanpur on March 28, and attended office on ,he 29th.
He then found that the office had placed on his table a number of licences for which he had already issued orders before he left Kanpur on the 23rd.
Some new applications had also come thereafter and these included applications from Government bodies and other public institutions.
These were also placed on his table.
The appellant urged that statutorily he had the power to issue licences until March 31, even so, in order to comply with the desire expressed by Mr. Spooner, he ordered that all licences should be issued as on March 23.
The appellant emphasised that even if he had dated the licences and his own orders as on the 30th or 31st March, that would have introduced no invalidity in the orders or licences respectively, and so, he contended that even though in form, the orders and the licences can be said to have been ante dated, the ante dating did not introduce, any criminal element at all.
It appears that after his return to Kanpur on the 28th, a large number of licences were issued in this way.
This statement of the appellant thus shows that even on applications admittedly received after the 23rd, licences were issued as on the 23rd and orders had been passed by the appellant in support of the issue of such licences.
This antedating of the licences is a circumstance on which the prosecution strongly relies in support of the charge under section 467.
It is, however, significant that besides the testimony of the accomplices, there is no other 145 evidence on the record to show that the applications given by Sheo Karan Das had been brought to the office of the appellant for the first time on the 29th or 30th of March as deposed to by him.
No register had been produced from the office showing the date of the receipt of the said applications.
It is true that in the quota register, dates had been tampered with, but there is no evidence to show who tampered with those dates and so, the fact that dates had been tampered with will not afford any legal evidence in support of the case that the applications presented by Sheo Karan Das had in fact, been presented for the first time on the 29th of March and had not been filed on the 22nd of March as pleaded by the appellant.
The ante dating of the applications is a very important fact and of this fact there is no other evidence at all.
Therefore, in our opinion, the crucial fact on which the charge under section 467 is based is deposed to only by accomplice witnesses and their statements are Dot corroborated by any other evidence on the record.
The admission made by the appellant does not necessarily show that the applications had been ante dated.
Indeed, it is very curious that the appellant should have passed necessary orders and should have directed the issue of licences as on the 23rd of March even in regard to the applications received by him subsequent to the 23rd March and this has been done in respect of applications received from Government bodies and public institutions.
This fact lends some support to the appellant 's theory that he did not want to appear to have contravened the desire expressed by Mr. Spooner that no license should be issued subsequent to the 26th March.
There is no doubt that the appellant was competent to issue licences until the 31st of March and so, it is not as if it was essential for him to ante date his orders or to ante date the licences issued in accordance with them.
Then as to the orders passed by the appellant on the applications presented by 146 Sheo Karan Das, there is no date put by the appellant below his signature, though the date 22nd March appears at the top of the document.
But it may be assumed that the order was passed on the 29th.
That, however, does not show that the applications were made on the 29th and without proving by satisfactory evidence that the applications were made on the 29th, the prosecution cannot establish its charge against the appellant under section 467.
In our opinion, the High Court appears to have misjudged the effect of the admissions alleged to have been made by the appellant when it came to the conclusion that the said admissions corroborated the accomplice 's case that the applications had been presented by him for the first time on the 29th March.
The fact that there is no evidence offered by any of the prosecution witnesses examined from the appellant 's office to show the dates when the applications were received, has not been considered by the High Court at all.
Therefore, the finding of the High Court on the essential part of the prosecution story in respect of the charge under section 467 really rests on the evidence of the accomplice uncorroborated by any other evidence.
That being so, we must hold that the High Court erred in law in making a finding against the appellant in respect of the charge under section 467 as well as the alternative charge under the relevant Defence of India Rules.
What we have said about this charge in respect of the licences issued to Sheo Karan Das applies with the same force to the said charge in respect of the licences issued to Sher Singh Arora.
In respect of those licences also, there is no evidence to show that the applications made by Sher Singh Arora had been ante dated, and so, the charge in respect of the said licences also cannot be held to have been established.
The result is, the finding Of the High Court in respect of the charge against the appellant under section 467 or the alternative charge under the relevant Defence of India Rules must be reversed, his 147 conviction for the, said offenses set aside and be should be ordered to be acquitted and discharged in respect of those offenses.
That raises the question as to whether we should order a retrial of the appellant for the offence under section 161.
Mr. Sarjoo Prasad has argued that the interests of justice require that the appellant should be asked to face a new trial in respect of the charge under a. 161, Indian Penal Code if and after a valid sanction is obtained for his prosecution for the same.
We are not inclined to accept this argument.
Two facts have weighed in our minds in coming to the conclusion that a retrial need not be ordered in this case.
The first consideration is that the accused has had to face a long and protracted criminal trial and the sword has been hanging over his head for over 14 years.
The accused was suspended in 1947 and since then these proceedings have gone on all the time, The second factor which has weighed in our minds is that though the prosecution began with a charge of a comprehensive conspiracy supported by several instances of bribery, on the finding of the High Court it is reduced to a case of bribery offered by two persons; and then again, the substantial evidence is the evidence of accomplices supported by what the High Court thought to be corroborating circumstances.
It is true that offenses of this kind should not be allowed to go unpunished, but having regard to all the facts to which our attention has been drawn in the present case, we are not inclined to take the view that the ends of justice require that the accused should be ordered to face a fresh trial.
The result is that the conviction of the appellant under section 161 is set aside on the ground that his trial for the said offence was without jurisdiction since his prosecution in that behalf was commenced without a valid sanction as required by s.6 of the prevention of Corruption Act.
Appeal allowed.
| The appellant was in the permanent service of the Assam Government but his services were lent to the Central Government.
At the relevant time, i e , December 1945 to September 1946, he was posted at Kanpur as Deputy Iron & Steel Controller.
In connection with the granting of permits to certain persons charges under sections 120B, 161, 165 and 467 Indian Penal Code, and under r. 473(3) read with r.472, Defence of India Rules were leveled ' against him.
Sanction for his prosecution was granted by the Central Government on January 31, 1919, and a charge sheet was submitted against him.
On March 1, 1952, the appellant was committed to the Court of Sessions for trial.
The trial commenced on May, 7, 1953, and the Sessions judge convicted the appellant of all the charges.
On appeal the High Court upheld the conviction under sections 161 and 467 Indian Penal Code and set aside the conviction on the other charges.
The appellant contended (i) that the trial by the Sessions judge was illegal as after the coming into force of the Criminal Law Amendment Act, 1952, on July 28, 1952, he could only be tried by a Special judge, and (ii) that the sanction granted by the Central Government was invalid and of no avail as sanction for the prosecution of the appellant could only be granted by the Assam Government in whose permanent employment the appellant was.
Held, that the Sessions Judge had jurisdiction to hold the trial and it was not required that the appellant should have been tried by a special judge.
Though s.7 of the Criminal Law Amendment required all offenses under sections 1 61 and 165 Indian Penal Code to be tried by a Special judge, the section was only prospective and did not provide for transfer of all pending cases.
Under s.10 of the Act only such cases triable by a Special Judge under s.7as were ac tually pending before any Magistrate immediately before 122 the commencement of the Act could be transferred to the Special judge.
The case against the appellant having already been committed to the Sessions was no longer pending before the Magistrate.
The mere fact that the Magistrate still had power, under s.216 of the Code of Criminal, Procedure to summon witnesses for the defence and bind them to appear before the Court of Sessions, did not imply that his jurisdiction to deal with the merits of the case continued.
Held, further that though the sanction granted by the Central Government was a good sanction under section 197 of the Code of Criminal Procedure it was not a valid sanction under s.6 of the Prevention of Corruption Act.
At the time when the sanction was granted the appellant was in the permanent employment of the Assam Government but he was employed in the affairs of, the Federation.
Under s.197, in cases of persons employed in connection with the affairs of the Federation the Governor General was the authority to grant the sanction and in cases of persons employed in connection with the affairs of the States it was the Governor.
Under s.6 of the Corruption Act the position was different.
Clauses (a) and (b) of the section dealt with persons permanently employed in connection with the affairs of the Federation or of the Provinces and in regard to them, the appropriate authorities were the Central Government and the Provincial Government.
The word "employed" in cls.(a) and (b) referred to employment of a permanent character.
The case of a public servant whose services were loaned by one Government to another fell under cl.(c) under which sanction could be ranted by the authority competent to remove him from his service.
The authority competent to remove the appellant from his service was the Assam Government and that Government alone could have granted a valid sanction for the prosecution of the appellant.
Accordingly the trial of the appellant for offenses under sections 161 and 165 was without jurisdiction.
Held, further that the convinction of the appellant for the offence under s.467 could not stand as it was based entirely upon the uncorroborated testimony of accomplices.
| The respondent was the successful candidate at the general election held in March, 1957, for the Punjab Legislative Assembly.
The appellant who was one of the unsuccessful candidates, filed an election petition and challenged the validity of the respondent 's election on the grounds, inter alia, that the latter was not a citizen of India and was, therefore, not qualified to stand for election.
It was found that he was born of Indian parents sometime in 1927 in India as defined in the Government of India Act, 1935, in a village which since August 15, 1947, became part of Pakistan, that in 1944 he had moved from his home district to Jullunder in what is now the territory of India, and that after August 15, 1947, he definitely made up his mind to settle in India with the intention of residing there permanently.
There was some evidence to show that he went to Burma in January, 1950, and made unsuccessful attempts to secure permission from the Government of Burma to stay there permanently.
The question was whether the respondent could be deemed to be a citizen of India within the meaning of article 6 of the Constitution of India.
Held:(1) that the expression " migrated to the territory of India " in article 6 of the Constitution means " migrated at any time before the commencement of the Constitution to a place now in the territory of India ".
(2)that in article 6 the words " migrated to the territory of India " mean " come to the territory of India with the intention of residing there permanently ".
(3)that where a person moves from one country to another and has, at the time of moving, a intention to remain in the country where he moved only temporarily, but later on forms the intention of residing there permanently, he should be held in law to have migrated to that country at the later point of time.
(4)that for applying the test of being " ordinarily resi dent in the territory of India since the date of his migration " in article 6(b)(i), what is necessary to be shown is that during the period beginning with the date on which migration became 577 complete and ending with November 26, 1949, as a whole, the person has been " ordinarily resident in the territory of India ".
Whether he was not in India on January 26, 1950, or whether he formed an intention of taking up his permanent residence in Burma when he left for that place in January, 1950, was not relevant.
(5)That the words " ordinarily resident " in the Consti tution mean " resident during this period without any serious break ".
It is not necessary that for every day of this period the person should have resided in India.
(6)that the respondent satisfied the requirements of article 6 ofthe Constitution and that his claim to be deemed a citizen of India must be upheld.
| The plaintiff became a co sharer with the defendant in the suit property in the year 1941 as a result of some conveyances by members of the defendants ' family.
The property was in the occupation of military authorities by requisition under the Defence of India Act, 1939, and the Rules made thereunder, for four years from 1942 to 1946.
The defendants were in exclusive possession thereafter from 1946 to 1955 when the plaintiff filed a suit for partition and possession of his share.
On the question whether the suit was barred by limitation under article 144 of Limitation Act, 1908, on the plea that as the military authorities had taken possession of the property from the defendants and had restored the possession to them in 1946 the possession of the said authorities was really under or on behalf of the defendants without causing any break in the continuity of their possession, HELD : The possession of the Government was neither by permission of the defendants nor in the character of an agent of the defendants.
The orders of requisition, relinquishment of possession and payment, of compensation under the Defence of India Act read with Act and the Rules how that the possession was taken by Virtue of the powers under the Act and the Rules irrespective of any consideration as to the rights of the true owner or the occupier who could make a claim to compensation.
Therefore, possession of Government by requisition under rule 75 A can not enure for the benefit of the person who was in possession before, for the purpose of enabling such person to acquire a prescriptive title.
[669 E F; 670 B D] Karan Singh vs Bakar Ali Khan, 9 I.A. 99, applied.
Bobett vs South Eastern Railway Co. and Dagdu vs Kalu, 22 Bombay 733, explained.
| The respondent was engaged in the manufacture of stoneware pipes and other refractory material at its factory.
It had taken lease of reference.
The respondent issued a notice of closure of the factory and mines, on account of financial difficulties.
The factory was governed by the Madhya Pradesh Industrial Relations Act, 1960 and the Mines were governed by the .
A dispute having been raised by the workmen, the case relating to the factory was referred under section 51 of the State Act to an Industrial Court, while the dispute relating to the Mines was referred under section 10(1) (d) of the Central Act to the Central Government Industrial Tribunal cum Labour Court.
The main question referred under the State Act was whether the proposed closure was proper and justified, while the reference under the Central Act was whether the employers were justified in closing down the mines.
The Industrial Court held that it had no jurisdiction either to inquire into the propriety of the closure or to consider whether there was or was not a real closure, while the Central Government Industrial Tribunal held that though it had no jurisdiction to inquire whether the management 's decision to close down the business was proper and justified, it was entitled to consider whether, in fact, the business was closed.
In writ petitions filed by both sides, the High Court came to the conclusion that the jurisdiction of the Tribunal in industrial disputes is limited to the points specifically referred for its adjudication and to matters incidental thereto and that the Tribunal cannot go beyond the terms of reference made of.
Dismissing the appeals, ^ HELD: 1.
The references being limited to the narrow question whether the closure was proper and justified, the Tribiunals by the very terms of the references, had no jurisdiction to go behind the fact of closure and inquire into the question whether the business was in fact closed down by the management.
[130 E] 2.
The terms of the references show that the point of dispute between there parties was not the fact of the closure of business but the propriety and justification of the respondents decision to close down the business.
The Tribunals. 127 (Chandrachud, C. J.) were not called upon to adjudicate upon the question as to whether under the pretence of closing the business the workers were locked out by the management.
[130 C D] 3.
The history of the dispute indicated that the dispute between the parties related not to the question as to whether the business, in fact, was closed by the management but whether there was any justification or propriety on the part of the management in deciding to close down the business.
There is a clear and unequivocal admission on the part of the workers before the Tribunals that the business was in fact closed by the respondent.
[130F, 131D] 4.
The concept of 'closure ' as envisaged in section 2(8) of the State Act is perhaps wider than what is commonly understood by that expression but that cannot assist the appellant to contend that under the terms of the references, the Tribunals were entitled to enter into the question as to the fact OF the closure.
If ever it was the case of the appellant that there was in fact no closure and there was really an illegal lock out, the reference would have been asked for and made not under section Sl under which it was made, but under section 82.
1132B. D] 5.
The propriety of or justification for the closure of a business in fact and truly effected, cannot raise an industrial dispute as contemplated by the State and Central Acts.
[132 F] The Management of Express Newspapers Ltd. vs Workers and Staff Employed under it and Others ; , 548 referred to.
| The appellant Bank instituted a departmental inquiry against one of its employees, a clerk in one of its branch es.
The departmental inquiry was held for four acts of misconduct and the inquiry officer came to the conclusion that two of the charges were fully proved, while one charge was proved to a limited extent, and the fourth charge was not established.
On the basis of the report of the inquiry officer, the competent authority decided to dismiss the employee from service, and issued a notice to him under paragraph 521(10)(a) of the Award of the All India Industri al Tribunal popularly known as the Shastri Award, requiring him to show cause as to why the said punishment should not be imposed on him.
He was also given a hearing as required by the said provision, and thereafter an order was passed to the effect: that the established charges viz. uttering indecent words, threatening the agent, and failure to do the work allotted are quite serious and would warrant dismissal, though he may not be dismissed, in view of the extenuating circumstances, but that at the same time it would not be desirable to retain him in the Bank 's service, and that as such, "he be discharged on payment of one month 's pay and allowances in lieu of notice.
In terms of para 521(10)(c) of the Shastri Award this would not amount to disciplinary action." An industrial dispute was raised by the first respond ent Uuion, and it was referred to the Central Government Labour Court, for adjudication and by its award the Labour Court upheld the order of dismissal.
12 The first respondent Union preferred a writ petition to the High Court and raised several contentions, but the High Court confined its decision only to one point, viz. whether the termination of the service was retrenchment, and whether it was made in accordance with the provisions of Section 25F of the ; held that the termina tion of the service of the second respondent was retrench ment within the meaning of section 2(00), and was made in breach of the statutory provision contained in Section 25F in as much as no retrenchment compensation was paid to the employee, and set aside, the order of termination of serv ice.
In the appeal by the Bank to this Court, the question for consideration was: whether the order of termination of service served on the employee, amounts to punishment or not.
Allowing the appeal, this Court, HELD: 1.
It is not possible to sustain the view taken by the High Court since it proceeds on too literal an interpre tation of the provisions of paragraphs 521(5)(e) and 521(10)(c) of the Award and ignoring their context.
[17B] 2.
The termination of service of the employee in the instant case under paragraph 521(10)(c) of the Award is as a result of the disciplinary proceedings, and is punitive.
It is, therefore, not "retrenchment" within the meaning of Section 2(00) of the .
Hence, there was no question of complying with the provisions of Section 25F of the Act.
The decision of the High Court has, therefore, to be set aside.
[25G H; 26A] 3.
It is clear from the context in which sub clause (e) of sub para (5) occurs that the entire expression, namely, "have his misconduct condoned and he merely discharged" has nothing but penal implications, and the measure mentioned therein is a sequal to the disciplinary action taken for one of the gross misconducts mentioned in sub para (4).
It is not possible to arrive at any other conclusion on a reading of the sub paragraph as a whole.
The discharge spoken of there is nothing but a punishment for a gross misconduct.
This is so not only because it is enumerated as one of the punishments along with others but also because firstly there is a provision of simple discharge elsewhere in paragraph 522 of the Award.
and when the Award intended to provide for it, it has done so in sub paras (2)(c), (2)(d) and (3).
[20G H; 21A B] 13 4.
Sub paras (9) and (10) of paragraph 521 lay down the procedure for taking disciplinary action as well as for awarding punishment following such action.
Sub paras (9), 10(a), 10(b) would indicate that discharge under sub paras (2)(c), (3), (5) and (10)(c) is also a punishment, for when the employee is discharged under the said provisions after the inquiry, under the provisions of sub paras (9) and (10), there is no provision made for treating either the whole or part of the period of suspension during the inquiry, as on duty.
[21D & G H] 5.
In view of the fact that sub clause (a) requires that a hearing should be given to the employee against the pro posed punishment, the authority is enjoined under sub clause (c) to take into account the gravity of the mis conduct, the previous record of the employee and any other aggravating or extenuating circumstances that may exist and may be brought on record "while awarding punishment by way of disciplinary action".
The sub clause then provides for discharge with or without notice or on payment of a month 's pay and allow ances, in lieu of notice.
The punishment of discharge is to be awarded in two circumstances.
The first circumstance is when there are sufficiently extenuating circumstances but the mis conduct is of a "gross" type.
The second circum stance is when the charge is such that the Bank does not for some reason or other think it expedient to retain the em ployee any longer in service but the evidence is insuffi cient to prove the charge.
[22D E] 6.
Read with sub para (5)(e), the provisions of sub clause (c) of sub para (10) become more clear that if a mis conduct is not of a "gross" type, it may be merely condoned without any further action.
But when it is of "gross" type, the authority has no option but to condone and to proceed to discharge the employee.
The expressions used both in sub para (5)(e) and sub para 10(c) in that respect are identical.
Similar is the action contemplated for the second circumstance referred to in sub para 10(c), namely when the charge though unsustainable for want of evidence is such that it is considered inexpedient to retain the employ ee in service.
[23D E] 7.
Since in the context, such a discharge is by way of punishment, the relevant provisions give a discretionary power to the authority to convert, what would otherwise be a dismissal into a mere discharge.
This is for the benefit of the employee.
It protects him from the banefull consequences of dismissal.
At the same time, it relieves the management of the burden of retaining him in service when it has become inexpedient to do so.
Thus the provision of such discharge works to the advantage of both.
At the same time, it cannot be gainsaid that the said 14 discharge is as a result of the disciplinary proceeding.
Although in form it may not, and in the peculiar circum stances, it is intended that it should not look like a disciplinary action, it cannot be denied that it flows from and is a result of the disciplinary proceedings.
To make clear, however, that the action, though spawned by the disciplinary proceedings should not prejudice the employee, the last sentence viz: "Discharge in such cases shall not be deemed to amount to disciplinary action", has been added by way of abundant precaution.
[23F H; 24A] 8.
That this is not a discharge simpliciter or a simple termination of service becomes clear when it is compared both with the provisions of para 522(1), and with those of sub paras (2)(c), (2)(d) and (3) of paragraph 521 itself.
The distinction between discharge contemplated under para graph 521(10)(c) and discharge simpliciter or simple termi nation of employment under the other provisions is clear enough.
This will also show that the two belong to different categories and are not the same.
While the former is intend ed to be punitive, the latter is not.
As is further clear from the provisions of paragraphs 521(2)(c), (2)(d) and (3), the discharge contemplated there, as against simple termina tion, is in proceedings under "sub paragraphs (9) and (10) infra relating to discharge".
In other words, it is as a result of a disciplinary proceeding.
[24B; 25C D] 9.
To construe the discharge under paragraphs 521(5)(e) and 521(10)(c) as a simple discharge not flowing from disci plinary proceedings will deprive an employee of a valuable advantage, viz. that of challenging the legality and propri ety of the disciplinary action taken against him, whatever the form of the order, by showing that he was either not guilty of any misconduct or that the misconduct was not of a "gross" type or that the punishment meted out to him by way of discharge was not warranted in the circumstances etc.
It is not, therefore, in the interests of the employees to construe the provisions as the High Court has done.
The predominant object of the Award is to protect the interests of the employees.
[25E F] 10.
Remanding the matter to the High Court for deciding the other contentions raised in the writ petition, is not advisable for various reasons.
The misconducts complained of against the employee are of 1966.
He was charge sheeted in January 1968 and removed from service on April 9, 1970.
The Court proceedings have been pending for more than about 23 years.
In the meanwhile, the respondent No. 2 who was a clerk on the date he was charge sheeted, has become a lawyer and has been practicing as such.
Further, the mis conducts, which are held 15 proved by the Labour Court are of "gross" type within the meaning of paragraph 521(4) of the Award.
The Labour Court is the final fact finding forum.
The High Court while setting aside the order of the Labour Court has granted reinstatement in service and back wages and pursuant to the said order, the employee has already received an amount of Rs.93,000.
The effect of decision would be to set aside not only the order of reinstatement but also of the back wages which would require the employee to refund the said amount.
Even though the employee was prepared to refund the amount and to contest the petition on other grounds, at present, the employee is in his fifties.
Taking into consideration all these facts the interests of justice would be served if the order of the High Court is set aside and the order of the Labour Court is restored without requiring the employee to refund the amount he has already received.
[26E G; 27C E]
| The appellant was appointed as the Chief Labour officer by the Company in 1947.
In December; 1955, the company terminated his services The appellant, claiming to be a Welfare officer, preferred an appeal to the Chief Inspector of Mines under r. 74(2) of the Mines Rules, 1955.
^ Held, that the appellant was not a Welfare officer and as such could not prefer an appeal under r. 74 (2).
The Welfare officer mentioned in r. 74 (2) is the same officer as is mentioned in r. 72 (1) which rule contemplates a Welfare officer appointed in respect of one mine.
But the appellant was an officer of several mines of the Company and not of one of such mines only.
| The appellant was appointed an Assistant Engineer on June 10, 1963 in the Punjab State Electricity Board on probation for two years which ended on June 10, 1965.
On bifurcation of Punjab Electricity Board, the service of the appellant was allocated to Haryana State Electricity Board.
As a result of a disciplinary proceeding held against him in 1968, a minor penalty of stoppage of one increment without any future effect was imposed on the appellant.
After expiry of one year, the appellant was, however, given the increment.
By virtue of an order dated March 30, 1970, the appellant and respondents 2 to 19 were confirmed as Assistant Engineers, class II on satisfactorily completing the probation period of two years.
Though the others were confirmed with effect from April 1, 1969, the appellant was confirmed with effect from December 1, 1969.
Consequently, the appellant 's name was placed last of all the confirmed officers.
The appellant challenged the said order by way of a writ petition before the High Court which dismissed the petition.
This appeal by special leave is against the judgment of the High Court.
G Allowing the appeal, ^ HELD: 1.
The penalty by way of stoppage of one increment for one year was without any future effect.
In other words, the appellant 's increment for one year was stopped and such stoppage of increment will H 622 have no effect whatsoever on his seniority.
Accordingly, the Electricity Board acted illegally and most arbitrarily in placing the juniors of the appellant above him in the seniority list and/or confirming the appellant in the post with effect from December 1, 1969 instead of April 1, 1969.
The question of seniority has nothing to do with the penalty that was imposed upon the appellant.
It is apparent that for the same act of misconduct, the appellant has been punished twice, that is, first, by the stoppage of one increment for one year and, second, by placing him below his juniors in the seniority list.
[624G H; 625A] 2.
There is no explanation why the confirmation of the appellant was deferred till December 1, 1969.
The explanation that after some substantive posts had fallen vacant on April 1, 1969, the question of confirmation was taken into consideration is not supported by.
any material on record inasmuch as there is nothing to show when these posts had fallen vacant.
It is difficult to accept that all these posts had fallen vacant on the same day, that is, on April 1, 1969.
Though the vacancies had occurred before that day, the Board did not care to take up the question of confirmation for reasons best known to it.
While there is some necessity for appointing a person in government service on probation for a particular period, there may not be any need for confirmation of that officer after the completion of the probationary period.
The archaic rule of confirmation, still in force, gives a scope to the executive authorities to act arbitrarily or malafide giving rise to unnecessary litigations.
It is high time that the Government and other authorities should think over the matter and relieve the government servants of becoming victims of arbitrary actions.
[625H; 626B; 625C; D] S.B. Patwardhan & others vs State of Maharashtra & others; , , referred to.
[Setting aside the High Court judgment and the seniority list, this Court directed that a fresh seniority list be prepared within six months on the basis of this judgment and maintain the appellant 's seniority in the post to which he has been promoted in the meantime.] [626D]
| The appellant, who was holding a permanent post in a Central Government department, was selected for the post of Lecturer in a private aided college in Meghalya.
The order of appointment stated that it was subject to the approval of the first respondent.
On his seeking clarification from the Principal he was assured that the approval was a mere for mality.
Acting on the said assurance the appellant resigned his permanent post in the Government department and joined the college.
However, he found his services terminated just within five months for want of prior approval of the first respondent.
A suit filed by the appellant challenging the order of termination and for a declaration and permanent injunction was dismissed by the trial court.
The first Appellate Court found that the Assam Aided Colleges Management Rules, 1965 had not been adopted by the State Government at the time of the appellant 's appointment and that the Director of Public Instruction had acted wrongly in refusing to give approval to the appellant 's appointment, and as such the order of termination of service of the appellant was manifestly wrong.
It, therefore, declared appellant 's continuance in service.
The High Court while concurring with the view of the first Appellate Court that the termination of services of the appellant was unlawful, awarded one year 's salary and allowances as damages since the 573 appellant did not belong to the category of either Govern ment servants, industrial workmen or employees of statutory bodies, for which alone reinstatement could be ordered.
In this appeal by special leave it was contended for the appellant that the Appellate Court and the High Court having found the termination of service to be wrong and illegal, he should have been granted the relief sought for in the suit, that is, a declaration of continuance in service and rein statement with full back wages and allowances.
It was fur ther submitted that since the college was a private institu tion provided and by the Government and Government had full supervisory control over it, it was for all practical pur poses a Government institution.
As such, he was entitled to parity of treatment with a Government servant wrongly re moved from service.
For the respondent it was contended that the only remedy for the appellant was to file a suit for damages and not to seek a declaration of continuance in service, because it would amount to seeking specific per formance of a contract of service.
Allowing the Appeal in part, the Court, HELD: The appellant was not entitled to a declaration that he continued to be in the service of the college and that he was entitled to all the benefits flowing from the declaration.
[581G] Even though the College in question may be governed by the statutes of the University and the Education Code framed by the Government of Meghalaya and even though the college may be receiving financial aid from the Government, it would not be a statutory body because it haS not been created by any statute and its existence is not dependent upon any statutory provision.
[580F G] Vaish College vs Lakshmi Narain, ; and J. Tewari vs Jwala Devi Vidya Mandir & Others, , referred to.
There was no violation of the provisions of any Act or any Regulations made thereunder in the instant case.
The first respondent in declining to approve the appointment of the appellant had proceeded on the erroneous assumption that the Assam Aided College Employees Rules, 1960 and the Assam Aided College Management Rules, 1965 had been adopted by the State of Meghalya.
No doubt such action has been held to be wrongful but even so it was not in contravention of any 574 statutory provisions or regulations or procedural rules.
[581E G] I.P. Gupta vs Inter College, Thora, ; , distinguished.
The misfortune that has overtaken the appellant was partly due to his own hasty action in resigning his perma nent post and partly on account of the first respondent disapproving the appellant 's appointment on the basis of rules which had not been formulated and communicated to the aided colleges.
In spite of the sad plight of the appellant, therefore, it will not be possible to grant the relief of declaration as sought for by him.[578C D] [In the facts and circumstances of the case and in exercise of its powers under Article 136 of the Constitu tion, the Court enlarged the relief grunted to the appellant by the High Court by directing the State of Meghalaya to grant three years salary and allowances to the appellant at the rates prevalent when his services were terminated.
It further directed that in the event of there being a vacancy in the College in question for the post of Lecturer in English, and in the event of the Management willing to appoint him as Lecturer once again, the Management should be permitted to do so by granting relaxation of rules and regulations. ]
|
Appeal No. 242 of 1960.
Appeal from the judgment and order dated September 11, 1957, of the Andhra Pradesh High Court in Writ Petition No. 201 of 1952.
R. Can apathy Iyer, T. V. R. Tatachari, D. Venkatappaya Sastri and P. D. Menon, for the appellants.
K. Bhimasankaram and T. Satyanarana, for the respondent.
, March 30.
The Judgment of the Court was delivered by WANCHOO, J.
This appeal on a certificate granted by the Andhra Pradesh High Court raises a question of the constitutionality of the Madras Estates Land (Reduction of Rent) Act, No. XXX of 1947, as amended, (hereinafter referred to as the Act) and a notification issued thereunder.
The brief facts necessary for present purposes are these.
The respondent was the sole inamdar of village Chinnavenkatapuram in the Parlakimidi zamindari in the district of Srikakulam.
The legislature the composite State of Madras passed the Act, which came into force from January 7, 1948, to provide for the reduction of rents payable by ryots in estates governed by the Madras Estates Land Act, No. 1 of 1908, approximately to the level of the assessments levied on lands in ryotwari areas in the neighborhood and for the collection of such rents exclusively by the State Government.
The Act applied to all estates as defined in section 3 (2) of the Madras Estates Land Act.
Section 2 provided for the appointment of a special officer for any estate or estates for the purpose of recommending fair and equitable rates of rent for the ryoti lands in such estate or estates and laid down the procedure to be followed by the Special officer for 157 such purpose, and gave power to the special officer to determine after necessary enquiries the extent if any to which the rates of rent payable for each class of ryoti lands should in his opinion be reduced and to fix the rates of rent payable for each class of ryots after such reductions.
Under a. 3, the special officer had to submit a report after completion of his inquiry to the State Government on the two points mentioned above and after considering the recommendations of the special officer and the remarks of the Board of Revenue thereon, the State government was empowered by order published in the gazette to fix the rates of rent in respect of each class of ryoti land in each village in the estate, and the order so passed by the State Government was to take effect from the commencement of the Fasli year 1357.
Section 3 (4) then provided for the recovery of rents so fixed by the State Government and the amount so recovered in respect of each year, after deducting therefrom the cost of such recovery as may be determined according to the Rules to be framed and also after deducting the peshkash, cesses and other moneys due from the landholder to the State Government, was to be paid to the landholder.
Section 3 (7) laid down that the landholder shall not be entitled to collect rents thereafter.
Sections 5 and 6 made special provisions with regard to religious, educational and charitable institutions.
Section 7 provided for the framing of rules and sections 4, 8 and 9 made incidental provisions which are however not material for our purposes.
In pursuance of the provisions of the Act a notifications was issued by the State Government with respect to the estate of the respondent fixing the rates of rent for various classes of ryoti lands in the estate.
In the case of wet and dry lands the rate was reduced to half of the then existing rates and in the case of dry land (when agraharam well water 158 was used) the rate was reduced to one sixth of the existing rate.
Thereupon the respondent filed a writ petition on March 21.
1952, challenging the above notification.
The first challenge was on the ground that the estate of the respondent was not an estate within the meaning of the Madras Estates.
Land Act and therefore the Act was not applicable to it.
Secondly, it was contended that the reduction in the 'rents made by the notification was so drastic as to result virtually in depriving the respondent of his right to hold and enjoy his property, as the out goings were far in excess of the income after the reduction in rents.
Consequently, the notification amounted to an unreasonable restriction on the right of the respondent to hold property under article 19 (1) (f) of the constitution.
The petition was opposed on behalf of the State and it was contended that it was incorrect to say that the outgoings were more than the income after the reduction of rents made by the impugned notification.
It was pointed out that after meeting the cess, the quit rent and ten per centum for collection charges, the respondent would have a net income of Rs. 603/ and the reduction in the circumstances could not be said to be so drastic as to virtually deprive the respondent of his right to hold property under article 19 (1) (6).
When the matter came to be argued before the High Court, three points were raised by the respondent, namely, (i) that the village in dispute was not an estate, (ii) that even if it was an estate the notification under the Act offended article (19) (1) (f) of the Constitution because of the drastic nature of the reduction, and (iii) that the Act itself was ultra vires for the reason that it was contrary to the terms of article 31 of the Constitution and section 299 of the Government of India Act, 1935.
The third of these contentions, though it was not raised in the petition by the respondent, was eventually referred to a Full 159 Bench and the question put to the Full Bench was in these terms: "Whether the decision in Rajah of Bobbili V. State of Madras (1) insofar as that Madras Act XXX of 1947 does not offend against section 299 of the Government of India Act, 1935, is good law?" It may be mentioned here that the Act was challenged soon after it was passed by the Rajah of Bobbili on various grounds one of which was that the Act was bad as it contravened section 299 (2) of the Government of India Act.
This challenge to the Act was repelled by the Madras High Court in the case of Rajah of Bobbili(1) and it was held that mere reduction of rent was not acquisition of property within the meaning of section 299 (2) of the Government of India Act and the effect of the Act was held to be that the landholder continued to be the owner of the estate as before, his title being left untouched.
It was further pointed out that it was the tenant who was entitled 'to possession, the right of the landholder being only to recover rent and that right again was left unaffected by the legislation, the only change being that the collection of rent was to be made not by the landholder but by the Government.
Further though the learned Judges in Rajah of Bobbili 's case (1) were apparently of opinion that the acquisition contemplated by section 299 (2) of the Government of India Act was acquisition of title, they went on to say that even assuming that section 299 (2) of the Government of India Act, covered cases of posses sion, there was no such taking of possession in the case before them tinder the Act as would attract that provision.
The reference to the Full Bench in the High Court was due to the challenge to the narrow view of the word "acquisition" which was said to have been taken in Rajah of Bobbili '8 case (1) in view of (1) 160 certain later decisions of this Court.
Eventually, however, the Full Bench held that even if a wider interpretation was given to the word " 'acquisition ' as used in section 299(2) of the Government of India Act, there was no deprivation of the property of the landholder by the Act within the meaning of s.299(2) and therefore the decision in the Rajah of Bobbili 's case (1) was still good law.
The Full Bench also held that the provisions of the Act only regulated the relationship of landholder and tenant and as there was no acquisition by the Government even in the wider meaning to be given to the word "acquisition" in section 299(2) of the Government of India Act, the Act was not hit by article 19(1)(f) and was a reasonable restriction on the right to hold property and in the interest of the general public.
The Full Bench further held that, though prima facie .the reduction of rents to the ryotwari level could not be said to be unreasonable, the view expressed in the Rajah of Bobblli 's case (1) that if in a particular case the result of the reduction of rates of rent had the effect of total or substantial deprivation of the landholder of his net income it would offend article 19(1)(f) of the Constitution.
After this opinion of the Full Bench, the matter was again placed before a Division Bench, for final decision.
At that stage it seems that the point that the village in dispute was not an estate was given up and the only point urged was that the reduction was so drastic as to amount to an unrea sonable restriction on the fundamental right to hold property under article 19(1)(f).
The learned Advocate General placed before the Bench the effect of the reduction based on the notification of June 27,1950.
It was found that prior to the reduction the net income of the respondent was Rs. 3,875/ , and after the reduction his net income was reduced to Rs. 457/13/8.
It was urged by '.
the learned Advocate General that the respondent was getting the rent at the highest rate prevalent in the ryotwari (1) 161 areas of the district and that it could not be said that the reduction of rates of rent to the level of the highest ryotwari rate was an unreasonable restriction on the right of the respondent to hold property.
The Bench, however, observed that though ordinarily the reduction of rates of rent of the ryotwari level might be reasonable, there might be circumstances in a particular case to hold that the.
reduction was so drastic that it would be an unreasonable restriction.
It was observed that the State might reduce the rent to such a level after deducting the legal charges and the cost of collection fixed on an arbitrary basic that there might be nothing left to the landholder.
In such a case in the name of regulation of rents and collection thereof the State took away the grain and gave the husk to the landholder.
The Bench then added that though it was easy to state the principle it was difficult to apply it to the facts of each case.
It then :went on to consider the circumstances under which it could be held that reduction was so drastic that the landholder was substantially deprived of his income., and was of opinion that having regard to the object of the Act, if the income of the landholder after reduction of rents did not fall below 25 per centum of his previous income it could be held that the reduction was not an unreasonable restriction on the right to hold property enshrined in article 19 (1) (f).
As in this case, however, the income of the respondent fell far below 25 per centum of the income which be was getting before the reduction, the Bench held that the notification was bad.
Thereupon the State Government asked for a certificate to appeal to this Court, which was granted; and that is how the matter has come up before us.
So far as the constitutionality of the Act is concerned, there was no serious challenge to it by the respondent.
If one refers to the main provisions of the Act relating to reduction of rents 162 which we have already set out above, it will appear that the object of the Act was to put a check on rack renting in estate as defined in the Madras Estates Land Act.
As such agricultural tenants formed a considerable group of cultivators in the State, it was thought necessary to ameliorate their condition.
The Act was therefore enacted under the powers conferred on the provincial legislature under item 21, of List II of Schedule VII to the Government of India Act dealing with land.
It provided for reduction of rent to the level at which the rents prevailed in the neighbouring area where there was ryotwari settlement.
In these circumstances it cannot possibly be said that the reduction of the prevailing rents to the ryotwari level was an unreasonable restriction on the right of the landholder of an estate to hold property under article 19 (1) (f).
We must therefore hold that the Act is constitutional and lays down reasonable restrictions on the right of the landholder to hold his estate.
The attack based on reading the term ',acquisition" in s.299 of the Government of India Act, 1935 in the wide sense of any interference with property even when the title thereto does not pass to the State, which was the point debated before the Full Bench is no longer a live issue since the matter is concluded against the respondent by the decision of this Court in Guru Dutt Sharma vs State of Bihar (1).
This brings us to the main point that has been argued before us by counsel for the parties.
It is urged on behalf of the appellant that the High Court was wrong in holding that where the reduction is such that the previous net income is reduced below 25 per centum there would be an unreasonable restriction on the right to hold property, merely because of this circumstances It is said that the fixation of this percentage at 25 per centum is more (1) 163 or less arbitrary.
In any case it means that where a landholder had been successful enough previously to practice rack renting as an art and to increase the rents of his tenants unconscionably, he would get protection because in such a case it was likely that the reduction would be drastic and may even result in the reduced net income being less than 25 per centum of the previous net income.
On the other hand in the case of a landholder who was a humane person and did not increase his rents unconscionably, the reduction of 'rents on the basis of the same rate which might be used in the case of the former landholder who was a rack renter may not be hit because in his case the reduction may not be below 25 per centum.
So it is urged that if the reasonableness is to depend upon by how much the previous net income is reduced after the reduction, it will always work in favour of a landholder who was a rack renter even though the basis of reduction may be on the same rates in the case of a rack renting landholder and in the case of a humane landholder.
Therefore, it is urged that if the reduction is reasonable in the case of a humane landholder because it is brought into line with the prevailing rates of rent in the neighbouring areas under the ryotwari settlement, there is no reason why such reduction should not continue to be reasonable in the case of the other landholder.
The fact that in one case the reduction may not be below 25 per centum while in the other case it may go below 25 per centum will make no difference to the reasonab leness of the reduction, for in either case the basis of the reduction is the same.
We are of opinion that there is force in this argument and it must be accepted.
What we have to see is whether the Act when it provides for reduction of rent proceeds on a reasonable basis i.e. whether the reduction of rent to the level of the prevailing rent for the same class of land in the neighbouring areas where ryotwari settlement prevails is reasonable.
This in our 164 opinion is a reasonable basis on which the rent in estates covered by the Madras Estates Land Act can be reduced.
Once this basis is accepted 'as reasonable, we fail to see how the ratio between what the landholder was getting before the reduction and what he gets after the ' redaction will ' make what is per se reasonable into an unreasonable restriction.
Theoretically.
it may be possible to say that the reduction may be so much that nothing may be left to the landholder.
This is what the respondent tried to make out in his writ petition, for his case therein was that the rents were so far reduced in his case that instead of getting an income of Rs. 3,875/ he would be getting no income at all and would be actually suffering a net loss of Rs. 655/ by his holding the estate after reduction of rents. ' This of course has been found by the High Court to be incorrect and in actual fact the landholder is left with a net income of Rs. 457/ and odd after the reduction in rent.
Therefore.
except for the theoretical possibility where the landholder may be left with nothing on reduction of rents, it cannot be said from the mere fact that in some cases the ratio of net income falls after reduction of rent as compared to the net income before reduction below 25 per centum that the restrictions imposed by the Act are unreasonable.
, Actually 'we feel that there cannot possible be any case where after the reduction there will be nothing left to the landholder.
We cannot therefore agree with the High Court that simply because in a particular case the net income after reduction falls below 25 per centum of the net income before reduction the notification which results in such a position, is an unreasonable restriction on the right of the land holder to hold his estate.
As we have said already, the ratio by which the net income will fall after reduction will depend upon whether the landholder whose rents are being reduced was a rack renter or humane person; in the case of a rack renter the 165 fall may be heavier while in the case of a humane person the fall may be less.
But if the basis on which the, reduction is made is the same in both cases and is reasonable, we see no reason for holding that a notification which may in a given case result in a fall of the net income which is even below 25 per centum of the previous net income would necessarily be bad as an unreasonable restriction on the right of the landholder to hold his estate.
It is important in this connection to remember that the rent allowed to the respondent compares favorably with the highest rent payable by the ryotwari tenants in the locality.
Therefore, the basis on which rents are being reduced under the Act being good and reasonable the result of such reduction would not make the,notification in a particular case bad except where that theoretical case is reached where there is no income left to the landholder after reduction, which in our opinion is impossible.
We therefore allow the appeal and setting aside the order of the High Court dismiss the writ petition with costs throughout.
Appeal allowed.
| The Respondent, the sole inamdar of village Chinnaven katapuram in the Parlakimidi Zamindari in the District of srikakulam filed a Writ Petition before the High Court chal lenging lnter alia the notification issued under section 3 (4) of the Madras Estates Land (Reduction of Rent) Act by which the rents in respect of ryoti lands included in his Estate were reduced.
He also challenged the provisions of the Act.
The High Court accepted the challenge to the notification on the ground that the net income from rents was reduced to less than 25% of the original income and that the reduction was so substantial as to amount to an unreasonable restriction on the respondent 's right to hold property under article 19 (1) (f ) of the Constitution.
On appeal by a certificate.
Held, that the provisions of the Act were valid as they laid down reasonable restrictions in the interest of ameliorating the conditions of tenants of ryoti land in 'Estates ' who were at a disadvantage compared to tenants of ryotwari lands.
Held, further, that it is only in a theoretical case where a land holder would be virtually ' deprived of his income by the reduction of rents that it can be said that the reduction was unreasonable.
By the reduction the income of the Respondent was brought on a par with that of the highest prevailing rents in ryotwari lands and so it cannot be said that the reduction of rents made by the notification was violative of the land holders ' rights under article 19 (f ).
The method of comparing the rents prior to reduction with the rents after reduction for the purpose of deciding the unreasonableness of the restriction was not sound as not humane landholders but those who were charging unconscionable rents would benefit thereby.
| The appellants and the five respondents were displaced persons.
The Deputy Custodian of Nizamabad District allotted about 60 acres of land to the five respondents.
The allotment was by way of lease.
There was no condition imposed upon them that they should cultivate the lands personally.
While the lease was continuing in force, the Government of India issued a Press Note on November 13, 1953 by which they announced that they had decided to allot evacuee agricultural land in Hyderabad State to displaced persons whose claims for agricultural land had been verified under the Displaced Persons (Claims) Act, 1950.
The appellants made an application in pursuance of this notifi cation and on May 4, 1954 the land now in dispute, though under a subsisting lease in favour of the respondents, was allotted to them.
In the mean time the , came into force on October 9, 1954.
Under Section 20 of this Act, the Regional Settlement Com missioner issued Sanads in favour of appellants in respect of these lands.
Both the appellants and the respondents claimed these disputed plots.
The matter went up to the Deputy Chief Settlement Commissioner.
He referred the case of both parties to the Government of India for action under section 33 of the Act.
The matter was considered under section 33 of the Act by the Deputy Secretary in the Rehabilitation Ministry who upheld the contentions of these respondents.
The result was that the allotment made in favour of the appellants was set aside.
It is the legality of this order that is challenged in this appeal.
Held (i) The order of the Central Government was covered by section 33 of the Act as one dealing with and rectifying an error committed in relation to a "thing done or action taken" with respect to a rehabilitation grant to a displaced person.
Not merely the order of the Regional Settlement Commission rebut the entire question as to whether the respondents as original allottees by way of lease were entitled to the relief of restoration was referred to the Central Government by reason of the order of the Deputy Chief Settlement Commissioner.
Both the parties were heard on all the points by the Central Government before the orders were passed and it would not therefore be right to consider that the matter in issue before the Central Government was namely the correctness of the order of the Regional Settlement Commissioner, which read in vacuo might not be comprehended within section 39 of the Act.
(ii) It is manifest that a Sanad can be lawfully issued only on the basis of a valid order of allotment.
If an order of allotment which is the basis upon which a grant is made 104 is set aside it would follow, and the conclusion is inescapable that the grant cannot survive, because in order that grant should be valid, it should have been effected by a competent officer under a valid order.
If the validity of that order is effectively put an end to, it would be impossible to maintain unless there were any express provision in the Act or in the rules, that the grant still stands.
On the facts of this case it was held that where an order making any allotment was set aside the title which was obtained on the basis of the continuance of that order also fell with it.
Partumal vs Managing Officer, Jaipur, I.L.R. , distinguished.
Balwant Kaur vs Chief Settlement Commissioner (Lands), I.L.R. [1964] Punjab 36, approved.
| The appellant defendants fell in arrears of rent for the months of February and May to August 1974 for the demised premises.
The respondent plaintiffs sought their eviction under section 11(1)(d) of the Bihar Buildings (Lease, Rent and Eviction) Control Act, 1947 on the grounds of default.
Decreeing the suit, the trial court found that rent for the said five months had not been paid.
The decree was affirmed by the appellate court in part, that is, in respect of May and June, 1974.
That finding was affirmed by the High Court.
Allowing the appeal by special leave, the Court, HELD: The Supreme Court does not ordinarily interfere in proceedings under Article 136 of the Constitution particu larly when all the courts below had reached the same conclu sion.
But where the finding of fact is based on no evidence or opposed to the totality of evidence and contrary to the rational conclusion to which the state of evidence must reasonably lead, then the Court will in the exercise of its discretion intervene to prevent miscarriage of justice.
[154C D] In the instant case, there was no reliable oral evidence on the side of the plaintiffs to support the allegation that rents were in arrears.
Nor was there any documentary evi dence in support of their case.
Neither the first plaintiff, the widow nor the other two plaintiffs, her children, testi fied in support of the allegation PW 4, who verified the plaint on behalf of the plaintiffs admittedly had no person al knowledge that the defendants were in arrears of rent or whether the first plaintiff or anybody else had demanded rent from the defendants.
[156F G] On the other hand, DW 8, one of the defendants, stated that for the months of May and June 1974 he had paid the rent in June 1974 by 153 handing over the amount to the first plaintiff 's daughter when she went to his shop tO collect the rent.
Since she was a minor he accompanied her to her house to make sure that the amount was received by her mother, the first plaintiff.
This evidence has been supported by DW 7.
He was the Ac countant of the first defendant firm.
DW 6 also spoke of the fact that in June 1974 the defendants had given Rs.200 as rent to the younger daughter of the plaintiff.
These state ments of defence witnesses were categoric and clear.
There was no contradiction in term for there was no evidence on the side of the plaintiffs to the contrary.
The conclusion arrived at by the courts below that rents remained in ar rears was, therefore, perverse and totally unjustified.
[155A B, E; 156D, F, G]
| Jurisdiction to try suits and proceedings between landlords and tenants under the Bombay Rents, Hotel and Lodging House Rates Control Act 57 of 1947 was by virtue of section 28 of the Act given to Small Cause Courts.
Under section 49 of the Act the State Government was authorised to make rules for the purpose of giving effect to the provisions of the Act and in particular to make rules among other subjects, for the procedure to be followed in trying or hearing suits and proceedings including proceedings for execution of decrees and distress warrants.
For these purposes the Government of Bombay under r. 5 framed by it provided that the procedure under the would be followed.
By the enactment of the Bombay Reorganization Act 11 of 1960 a separate State of Gujarat was constituted out of the territory which formed the State of Bombay, and the area within the city limits of Ahmedabad formed part of the State of Gujarat.
The Legislature of the State of Gujarat enacted the Ahmedabad City Courts Act 19 of 1961 which by 17 extended the (15 of 1882) as well as the Bombay Rents Hotel and Lodging House Rates Control Act 57 of 1947 to the City of Ahmedabad with suitable modifications and amendments.
Jurisdiction to try suits under the Bombay Act was by amendment of section 28 thereof given to the Court of Small Causes Ahmedabad.
The appellants were tenants of a house owned by the respondent in Ahmedabad.
Apart 'from the rent the appellants had also agreed to pay municipal taxes and electricity charges.
In 1963 the appellants filed a suit in the Court of Small Causes Ahmedabad for an order inter alia determining the standard rent of the premises in exercise of the power under section 11 of Bombay Act 57 of 1947.
The said court on an application filed by the appellants fixed the contractual rent as the 'interim standard rent ' and directed the appellants to pay rent and municipal taxes, which the appellants accordingly deposited in Court.
The Court permitted the respondent to withdraw the rent so deposited but not the municipal taxes.
The respondent then obtained an order for the issues of a distress warrant under section 53 of the Presidency Small Cause Court , Act 15 of 1882 read with r. 5 of the Rules framed under Bombay Act 57 of 1947 for recovery of the amount due as municipal taxes.
Distress was levied and the order was confirmed.
A revision application in the High Court of Gujarat was rejected.
In their appeal against the High Court 's order the appellants urged : (i) that r. 5 of the Rules 'framed under section 49 of the Bombay Act 57 of 1947 was ultra vires the State Government; (ii) that the Court of Small Causes Ahmedabad had no jurisdiction to pass an order issuing a distress warrant in a proceeding under Bombay Act 57 of 1947 especially 81 when an application under section 11 was pending; (iii) that the municipal taxes and electricity charges did not constitute rent which could be recovered by the issue of a distress warrant.
HELD: (i) Rule 5 was framed under Bombay Act 57 of 1947 in exercise of the authority conferred by section 49(2)(iii).
After the enactment of the Ahmedabad City Courts Act, 1961, r. 5 as originally 'framed by the Government continued in force by virtue of section 87 of the Bombay Reorganization Act 11 of 1960, and applied to the Ahmedabad Small Causes Court.
When r. 5 was framed under Bombay Act 57 of 1947 it was not ultra vires and it was not shown to have become ultra vires after the enactment of the Ahmedabad City Courts Act in its application to the City of Ahmedabad.
[85 F G] (ii) The distress warrant issued by the Court of Small Causes Ahmedabad against the appellant was within its powers.
By the enactment of the Ahmedabad City Courts Act, 1961, the proceedings before the Court of Small Causes at Ahmedabad were governed by that Act and by virtue of the amendment made in section 28 of Bombay Act 57 of 1947 it became a court of exclusive jurisdiction to try suits, proceedings, claims and questions arising under that Act.
Being a court governed by the Presidency Small Causes Courts Act, the Ahmedabad Court of Small Causes was competent to exercise, subject to the Ahmedabad City Courts Act, all the powers which a Presidency Small Cause Court could exercise.
Power to issue a distress warrant being expressly conferred by section 53 of the upon the Courts governed by it, the Court of Small Causes Ahmedabad, was competent to exercise that power.
[85 D E] Section 28 does not make the Court of Small Causes trying suit under the Bombay Act a special Court : it is a court which is comptent to exercise all the powers conferred on it under the statute which governs it.
Its power to issue distress warrant could therefore be exercised even in respect of suits and proceedings which were exclusively triable by it by virtue of the Bombay Act 57 of 1947.
[85 H] Pendency of an application for fixation of standard rent does not suspend the court 's power to issue distress warrant, for until standard rent is determined or an interim order is made, rent at the contractual rate is payable and process for recovery by distress warrant may always be adopted.
In the present case the amount of municipal taxes was due and it was payable by the appellants.
Though deposited in Court it could not be withdrawn by the respondent.
The municipal taxes were therefore ill arrears and a distress warrant could be applied for under section 53 of the Presidency Small Cause Court by the respondent.
It was not necessary for the respondent to approach a higher court against the erroneous order of the Small Cause Court preventing him from recovering the amount of municipal taxes.
[86 B G] (iii) By the express terms of the tenancy the appellants had undertaken to pay the municipal taxes and electricity charges as part of the rent : it was not open to them to contend that these taxes and charger were not rent recoverable by the issue of a distress warrant.
[83 H 84 A]
| The appellant was employed in the service of the former Indian State of Hyderabad prior to the coming into force of the Constitution of India.
On the coming into force of the Constitution of India, the said State became a part of the territory of India as a Part State and the Appellant continued in the service of that State, till he retired from service on January 21, 1956.
The appellant claimed that he was entitled to be paid the salary of a High Court Judge from October 1, 1947 and also claimed that he was entitled to receive a pension of Rs. 1,000 a month in the Government of India currency being the maximum pension admissible under the rules.
Both the aforesaid claims were negatived by the Government.
The Appellant thereupon filed a writ petition in the High Court against the Respondent State of Andhra Pradesh, which was the principal successor State to the erstwhile State, which was contested under Regulation 6 of the Hyderabad Civil Service Regulations which were applicable in the case of the Appellant and that claim to pension was to be regulated by the rules in force at the time when the Government servant retired from the service of the Government.
Under clause (b) of Regulation 313, the maximum pension ordinarily admissible for superior service to which the Appellant belonged was to be Osmania Sikka Rs. 1,000 a month.
The Hyderabad Civil Service Regulations were replaced with effect from October 1, 1954 by the Hyderabad Civil Services Rules and under clause (b) of Rule 299 (which later became clause (b) of sub rule (1) of Rule 299) the maximum pension ordinarily admissible for superior service was to be Rs. 1,000 a month, 931 During the pendency of the writ petition, the Government by a Notification dated February 3,1971 amended clause (b) of sub rule (1) of Rule 299, with retrospective effect from October 1, 1954.
The expression 'Rs. 1,000 a month in the said clause (b) was substituted by the expression 'Rs 857.15 a month".
This amendment was made in exercise of the powers conferred by the proviso to Article 309 read with Article 313 of the Constitution of India.
The Single Judge who heard the Appellant 's writ petition rejected the claim made by the Appellant with respect to salary on the ground that the said claim had been negatived by the Government as far back as 1955 and merely by making representations to the Government he could not keep the said claim alive.
He however held that in view of the judgment of this Court in Deokinandan Prasad vs State of Bihar and Others [1971] Supp.
S.C.R 634 the right to receive pension was property and was a fundamental right and that it had accrued to the Appellant on the date when he retired and could not be affected by a rule made subsequently under the proviso to Article 309, and allowed the writ petition to the extent that the Appellant was entitled to get his future pension at the rate of Rs. 1,000 a month in the Government of India currency from the date of filing of the said writ petition and arrears of pension at the same rate for a period of three years prior to the filing of the said writ petition.
The Respondent State filed a Letters Patent Appeal, and the Division Bench held that this Court in Deokinandan Prasad 's case did not hold that a pensioner was entitled to any pension that he demanded but all that was done in the said case was to direct the State to consider properly the claim of the pensioner for payment of pension according to law, and relying upon its earlier decisions in State of Andhra Pradesh vs Ahmed Hussain Khan and State of Andhra Pradesh vs section Gopalan upholding the validity of the amendment made in clause (b) of Rule 299 (1) by the Notification dated February 3, 1971, allowed the appeal and dismissed the writ petition of the appellant.
Allowing the Appeal to this Court, ^ HELD: The relevance placed by the Division Bench upon its earlier decision in the two writ appeals (Ahmed Hussain Khan and section Gopalan) was misconceived.
The two appeals arose out of separate writ petitions filed by two Government servants who had joined the service of the former Indian State of Hyderabad and retired after the States Reorganization Act, 1956 had come into force.
This Court allowed the two Appeals and reversed the said judgment of the Division Bench, held that the letter dated April 28, 1973 from the Joint Secretary to the Government of India, Cabinet Secretariat did not amount to a previous approval granted by the Central Government to the amendment made by the Notification dated February 3, 1971 to clause (b) of Rule 299 (1) and that, the Notification was invalid and inoperative so far as it concerned persons referred to in sub sections (1) and (2) of Section 115 of the States Reorganization Act, 1956.
[936D G] In the instant case, the Appellant had retired prior to the appointed day, November 1, 1956.
He therefore did not fall under either sub section (1) or 932 sub section (2) of section 115 and the proviso to sub section (7) of that section had no application to him.
The amendment to the Rules, so far as he was concerned, did not, therefore, require any previous approval of the Central Government even though thereby the conditions of the service were being varied to his disadvantage.
[937F G] 2.
Pension being a fundamental right, it could only be taken away or curtailed in the manner provided in the Constitution, [938E] In the instant case, the fundamental right to receive pension according to the rules in force accrued to the Appellant when he retired from service.
By making a retrospective amendment to the said Rule 299 (1) (b) more than fifteen years after that right had accrued to him, what was done was to take away the Appellant 's right to receive pension according to the rules in force at the date of his retirement or in any event to curtail and abridge that right.
To that extent, the said amendment was void.
[938H; 939A] 3.
The Appellant was entitled to succeed in view of the judgment of this Court in Deokinandan Prasad 's case.
The Division Bench of the High Court has misunderstood the ratio of that decision.
It was held in that case that pension is not a bounty payable at the sweet will and pleasure of the Government but is a right vesting in a Government servant and was property under clause (1) of Article 31 of the Constitution and the State had no power to with hold the same by a mere executive order.
It was also held that this right was also property under sub clause (f) of clause (1) of Article 19 of the Constitution and was not saved by clause (5) of that Article, and that this right of the Government servant to receive pension could not be curtailed or taken away, by the State by an executive order.
[937H; 938A D] 4.
The fact that sub clause (f) of clause (1) of Article 19 and Article 31 have been omitted from the Constitution by the Constitution (Forty fourth Amendment Act,) 1978 with effect from June 20, 1979 was immaterial because on the date when the said Notification was issued, these provisions were part of the Constitution.
[939B C] 5, The Supreme Court reversed and set aside the Judgment of the Division Bench of the Andhra Pradesh High Court and restored the order passed by the Single Judge of that High Court.
The Supreme Court directed the State of Andhra Pradesh to pay to the Appellant the amounts due to him according to the Judgment of the Single Judge of the High Court within one month and pay to him pension in future at the rate of Rs. 1000 per month in the Government of India currency.
[939D E]
| The respondent by virtue of the sanad granted to his ancestors by the British Government, claimed, in respect of certain lands situated in village Shiramba Taluka Koregaon, District North Satara, compensation under section 6(2) of the Bombay Paragana and Kulkarni Watans (Abolition) Act.
1950, for the resumption of the lands by the appellant.
The suit claim of Rs. 15,074 4 0 being "a sum equal to ten times the amount of such land revenue" was decreed by the trial court.
On appeal by the State, the High Court affirmed the same.
after construing the sanad granted by the British Government in favour of the respondents ' ancestors and other relevant records, as it was a watan of land revenue and not in respect of the soil.
Dismissing the State 's appeal by special leave to this Court, ^ HELD: (1) The High Court was right in holding that the grant in favour of the ancestors of the respondent was a grant of land revenue only and not a grant of the soil and since the watan held by the respondent at the date of the coming into force of the Act was a watan of land revenue the respondent was entitled to compensation in the sum of Rs. 15,074 4 0 under section 6(2) of the Bombay Paragana and Kulkarni Watan (Abolition) Act, 1950.
[982B C] (2) The sanad undoubtedly used the words "lands" to describe the subject matter of the grant, but the word "land" is defined in Bombay Act II of 1863 [The Exemption From Land Revenue (No. 1 ) Act 1863], to include share of land revenue and this meaning would apply in the construction of the word "land" in the sanad since the sanad was apparently granted pursuant to the enquiry made under Bombay Act II of 1863.
The description of the subject matter would not, therefore, necessarily indicate that it was a grant of the soil.
In fact, this description standing alone would rather indicate that it was a grant of land revenue only, since grant of the soil would ordinarily be accompanied by words such as 'Darobast ' or 'Jal ', 'Taru ', 'Truna ', 'Kastha ' and 'Pashan '.
[981F H] [Their lordships deprecated the litigious approach adopted by the State Government and observed "State Governments which have public accountability in respect of their actions should not lightly rush to this Court to challenge a judgment of the High Court which is plainly and manifestly correct and drag the opposite party in unnecessary expense.]
| The appellant sought a declaration that certain premises belonged to his family as private property and did not constitute a temple within the meaning of the Madras Hindu Religious and Charitable Endowments Act (19 of 1951).
The District Court decreed the suit but the High Court found that the property in question was a temple.
The appellant then filed a petition for leave to appeal to this Court under article 133(1) (a) and (b) of the Constitution and submitted that the property was more than Rs. 20000 in value.
The High Court dismissed the application on the ground, inter alia, that the subject matter of the dispute whether as a private or a public temple was incapable of valuation as it could have in either case no market value.
The appellant by special leave came to this Court.
HELD:The High Court was not right in assuming that whether the property was a private or a public temple, it was incapable of valuation.
The subject matter of the dispute had to be ascertained with reference to the claim made by the plaintiff in his plaint and since according to the plaint the property was the private property of the appellant 's family capable of alienation, the High Court ought to have valued the property accordingly.
[157 A, B]
| The 1960 Act makes provision for imposition of Ceiling on Land holdings and for determination of surplus land.
It was amended by U.P. Act 18 of 1973 to lower the ceiling limit and to make provisions with regard to transfers of land in anticipation of the imposition of ceiling.
This Act came into force on June 8, 1973.
Further amendments were made in the Act by U.P. Act 2 of 1975 inserting Explanation I & Explanation II after sub section (1) of section 5 as substituted by 1973 Act and given effect retrospectively i.e. from June 8, 1973.
A notice under section10(2) of Act was issued to the appellant and he filed objections submitting that Chhiddu Singh, his father, had executed a registered gift deed dated October 13, 1971 in respect of plot No. 111 measuring 63 Bighas, 12 Biswas and 17 Dhur in favour of appellant 's mother.
appellant 's wife and two sons of the appellant.
Chhiddu Singh died on April 28, 1973.
Accordingly the said gifted land was not inherited by the appellant and it could not be treated as part of his holding for the purpose of imposition of ceiling.
The prescribed authority overruled the objections, included the said land as part of the hold ing of the appellant and declared the surplus land of the appellant to the extent of 49 Bighas and 17 Biswas.
The appellant filed an appeal to the First Additional Civil Judge.
It was allowed partly and the surplus land was reduced to 42 Bighas 13 Biswas and 6 Dhur.
The appellant thereafter filed a writ petition in the High Court which was dismissed.
Feeling aggrieved the appellant filed this appeal after obtaining special leave to appeal.
The appellant urged before this Court that amendments introduced by the 1973 Act are not retrospective in nature and are operative only from June 8, 1973, that the surplus land has to be determined as on June 8, 1973, the date of coming into force of 1973 Act, and that the 119 land gifted by the appellant 's father on October 13, 1971 could not be included in the holding of the appellant as he was not the tenure holder of the said land on the death of his father on April 28, 1973.
Dismissing the appeal, the Court, HELD: The 1973 Act postulates that ceiling area of a tenure holder has to be determined in accordance with the provisions contained in sec.
5 of the Act.
While determining the ceiling area, the surplus land held in excess of ceiling area, which is to be acquired by the State, has also to be determined.
[123H; 124A] For determining ceiling area sub section (6) of section 5 provides that any transfer of land, which but for the transfer would have been declared surplus land under the Act if made after January 24, 1971 shall be ignored and not taken into account but transfers falling within the ambit of clauses (a) and (b) of the proviso to sub sec.
(6) are, excluded, and such transfers even though made after January 24, 1971, have to be taken into account.
[124B] In the instant case, the gift was made and executed on October 13, 1971 and it was a transfer of land and as it was made after January 24, 1971 the transfer of land was in respect of land which would have been declared surplus land under the Act.
This transfer did not fall within the ambit of clauses (a) and (b) of the proviso to sub section (6) of section 5.
Thus such gift was liable to be ignored for the purpose of determining the ceiling area applicable to the appellant.
Sub section (6) of section 5 does not speak of a transfer by the tenure holder but it speaks of any transfer of land made after January 24, 1971.
So the contention of the appellant that gift was made by his father and not by him as tenure holder and he did not inherit the same on the death of his father is untenable, since sub section (6) of section 5 is applicable to a transfer even made by the predecessors in interest of the tenure holder whose ceiling area is to be determined and who inherited the land prior to June 8, 1973.
The land which was transferred vide gift deed dated October 13, 1971 was land which but for the said transfer would have been declared surplus land under the Act.
[124C H; 125A] Thus, once the gift is ignored it is to be treated to have continued to vest in the appellant 's father and after his death the appellant inherited the same and as such was part of the holdings of the appellant on June 8, 1973 and has to be taken into consideration for determining the surplus land held by the appellant.
[125B] 120
|
Appeal Nos. 252 and 253 of 1958.
Appeals by Certificate and special leave from the judgment and order dated August 5, 1955, of the former Andhra High Court in Writ Appeal No. 13 of 1955.
AND VICE VERSA D. Narsaraju, Advocate General for the State of Andhra Pradesh, D. Parsanna Kumari, P. V. R. Tatachari and P. D. Menon., for the, appellant (In C. A. No. 252 of 58) and Respondent No, 1 (In C. A. NQ 253 of 58).
175 P. Ram Reddy, for the the appellants (In C. A. No. 253 of 58) and Respondent No. 1 to 3 (In C. A. No. 252 of 58).
A. V. Vishwanatha Sastri and K. R. Choudhri, for the respondent No. 2 (In C. A. No. 253 of 58).
April 2.
WANCHOO, J.
These are two connected appeals arising out of the same judgment of the, Andhra Pradesh High Court.
The main appeal No. 252 is by the State of Andhra Pradesh while the other appeal No. 253 is by Duvvura Balarami Reddy and others.
We shall dispose of them by this common judgment and will hereinafter refer to the State of Andhra Pradesh as the appellant and Duvvuru Balarami Reddy and others at the respondents.
The brief facts necessary for present are these.
The respondents had filed a writ petition for the issue of a writ in the nature of mandamus or any other ap propriate writ directing the appellant to give permission to the respondents to carry on mica mining operations in survey No.49/1 in the village of Ananthamadugu in Rapur Taluk of Nellore district subject to the respondents executing as agreement in the manner provided under the Mineral Conces sion Rules, 1949 (hereinafter referred to as the Rules) and conforming to the conditions mentioned therein.
The case of the respondents was that they had obtained leases for mica mining purposes from various co owners in the shrotriem village of Ananthamadugu on March 24, 1952.
Thereafter on May 27, 1953, this village was notified under the Madras Estates (Abolition and Conversion into Ryotwari) Act, No. XXVI of 1948, (hereinafter referred to as the Act) and the interest of the shrotriem owners was taken over by the appellant.
The leases granted to the respondents were for a period of one year and one of the terms provided that the lessors were bound to extend and renew the period 176 of lease for such period as may be desired by the lessess subject to the Rules.
After the estate was taken over, the question arose whether the leases were enforceable against the Government under s.20 "1 of the Act.
In November 1953, the Manager of Estates, appointed on behalf of the Government, held that the leases were enforceable against the Government.
This order was confirmed by the Collector of Nellore.
Thereupon there was a revision petition by one of the co owners of the shrotriem who was not a party to the leases before the Board of Revenue.
The respondents also applied to the Government for permission to work the mines.
The Government however did not grant such permission.
The respondents contended that the Government had no right to withheld permission to work the mines.
Therefore, the writ petition was filed asking for the issue of a writ in the nature of mandamus or any other appropriate writ directing the appellant to give permission to the respondents to carry on mica mining in accordance with the leases.
The petition was opposed on behalf of the appellant and the main contention on its behalf was that the village in question being a shrotriem inam village there was no presumption that the inam grant included the grant of sub soil rights also to the shrotriemdars.
Therefore, the respondents could not claim any rights higher than these of their lessors.
In effect, the appellant had contended that the lessors had no rights to the minerals and therefore the leases even if not void within the meaning of s.20 of the Act would not confer any rights on the respondents to claim as a matter of right the grant of permission to work the mines from the appellant and that it was entirely within the discretion of the State whether to grant a mining lease or not in accordance with the Rules.
It was also stated in that the revision filed before the Board of Revenue had been stayed as the Points 177 raised before the Board were covered by the questions involved in the writ petition.
On these pleadings the main question that arose for decision was whether the shrotriemdars had any rights in the minerals at all and were entitled to grant leases thereof If the shrotriemdars had no right in the minerals the grant of lease by them would be of no value and would not entitle the respondents to claim a mining lease under the Rules from the appellant as a matter of right.
The learned Single Judge who heard the writ petition came to the conclusion that there was nothing to show that the inam grant in the present case covered the right to minerals.
In consequence, it was held that the respondents did not get any rights under the said leases to the minerals.
The learned Judge then considered the other points raised in the petition with which we are however not concerned and eventually dismissed it.
The respondents went in appeal to a Division Bench of the High Court, and the appeal court seems to have held on a review of the various,standing orders of the Board of Revenue of the composite State of Madras that the State was only entitled to impose a royalty on minerals taken out by the shrotriem inamdar.
It was pointed out that this seemed to be in accordance with common sense as the "grantee is entitled to the surface rights and the grantor to the sub soil rights and as the latter rights can only be exercised by entering upon the surface.
it is only natural and just that they should share what is produced by working the mine, since one cannot enter upon the land, as he has no right to do so and the other cannot work the mine, as he has no right to the land".
This would seem to suggest that the appeal court held that the sub soil right,,; belonged to the State and not to the inamdars; but because of the difficulty that arose on account of 178 the surface rights being in the inamdar and sub soil rights being in the State, it apparently head that the inamdar and the Government should share what is produced by working the mine.
Finally, however, the appeal court dismissed the appeal on the ground that the period of one year for which the leases had been granted had expired and the period of renewal which the respondents could get under the Rules also had expired before the decision of the appeal court.
It relied in this connection on the decision of this Court in K. N. Guruswamy vs The State of Mysore (1) : but as the respondents had failed on account of the expiry of time they were allowed their costs.
This was followed by an application by the State for a certificate which was granted, and that is how the State 's appeal has come up before us.
As for the appeal by special leave by the respondents, they contend that the decision being in their favour on the merits, the High Court should have ordered the State to grant them a lease even though the period fixed in the original leases and the period of renewal permissible under the Rules had expired.
The main question therefore that fails for decision in these appeals is whether shrotriemdars can be said to have rights in the minerals.
This matter has been the subject of consideration by the Madras High Court on a number of occasions and eventually the controversy was set at rest by the decision of the Judicial Committee in Secretary of State for India in Council vs Srinivasa Chariar (2) That case came on appeal to the Judicial Committee from the decision of the Madras High Court in the Secretary of State for India in Council vs,.
Sreenivasa Chariar (3).
The controversy before the Madras High Court was with respect to a shrotriem inam which was granted by the Nawab of Carnatic (1) ; (2) (1920) L.R. 48 I. A. 56.
(3) Mad.
179 in 1750 and had been enfranchised by the, British Government in 1862.
The inamdar started quarrying stones in the land granted to him and '.
the Government claimed that it had a right to levy royalty or seigniorage fee on stones quarried by the inamdar.
The inamdar contended on the other hand that an enfranchised inam was exactly.
in the same position as a zamindari estate under the permanent settlement and that he was entitled to the entire sub soil rights and the Government was not entitled to levy royalty or seigniorage fee on stones quarried by him.
The High Court held that under the terms of the grant, the grantor conveyed all that the grantor had in the.
soil including sub soil rights and therefore it was not open to the Government to levy any royalty or seigniorage fee on stones quarried by the inamdar.
In effect, the decision of the High Court negatived the claim of the Government to sub soil rights, for the Government could only levy royalty or seigniorage fee if it bad sub soil rights and the inamdar had no such rights.
This decision was taken in appeal to the Judicial Committee as already indicated above, and the controversy between the parties, was that the inamdar claimed a decree establishing his full rights to the said village to the rocks and hills within its boundaries.
The State on the other hand while admitting that there had been an inam grant of the village to the inamdar contended that there was no conveyance of the rights to minerals in the village.
The Judicial Committee held that the grant of a village in inam might be no more than an assignment of revenue, and even where there was included a grant of land, what interest in the land pawed must depend on the language of the instrument and the circumstances of each case.
The Judicial 'Committee also considered the standing orders of the Board of Revenue of 1890 and 1907 ,which have been referred to by the appeal court in 180 the judgment under appeal.
This decision thus establishes that the mere fact that a ' person is the holde 'r of an inam grant would not by itself be enough to establish that the inam grant included the grant of sub soil rights in addition to the surface rights and that the grant of sub soil rights would depend upon the language used in the grant.
If there are no words in the grant from which the grant of subsoil rights can be properly inferred the inam grant, would only convey the surface rights to the grantee, and the inam grant could not by itself be equated to a complete transfer for value of all that was in the grantor.
In particular, the Judicial Committee stressed the use of the words "the produce of the seasons each year" used in the grant to show that, only the surface rights were granted in that case.
It is not disputed that eversince the decision of the Judicial Committee in Srinivasa Chariar 's case(1) that has been the law with respect to sub soil rights of inamdars as distinct from zamindars under.
the permanent settlement.
The Boards standing orders of 1890 and 1907 to which the appeal court has referred in its judgment were also considered by the Judicial Committee and it is now too late in the day to use them to find out the rights of the inam dars and the Government in the minerals under the soil.
As the decision of ' the Judicial Committee, shows, the standing orders of the Board of Revenue themselves show how the views of the Government changed from time to time on this question.
, The older view seems to have been that the sub soil rights were in the inamdars but from 1907 at any rate the Government has taken the view that. sub soil rights are in the Government unless there: is anything in the grant to the contrary.
It is this later view which was upheld by the Judicial, Committee in Srinivasa Chariar 's case(1).and this view has ever since prevailed as to the rights of the Government in the minerals under the soil in the case of (1) (1920) L.R.48 I.A. 56.
181 inams.
We are unable to see bow this decision as to the rights of the Government to the minerals under the soil can be distinguished on the ground that the decision dealt only with the question of royalty.
It is obvious that the Government could charge royalty only if it had the right to the minerals under the soil and not the inamdars.
What therefore we have to see is whether on the terms of the grant in this case the shrotriemdars can be said to have been granted the sub soil rights also.
So far as, this matter is concerned, here does not seem to have been a serious controversy in the High Court and it does not appear that the respondents contended that under the term$ of the grant to the shrotriemdars the latter were entitled to sub soil rights.
We have already referred to that part of the judgment of the appeal court which suggests that ' even the appeal court was of the view that the subsoil rights were in the Government in this case and the surface rights were in the shrotriemdars.
The orioinal grant is not available and all that we have is the inam fair register of 1861 and all that is stated in that register is that the grant is for the personal ad vantage of the holder.
There is nothing therefore in the inam fair register to show that the grant included the grant of sub soil rights.
It is however urged on behalf of the respondents that the grant included Poramboke, and from the fact that Poramboke was also included it should be inferred that mere surface rights were not the subject matter of the grant.
Reliance in this connection has been placed on the decision of the Judicial Committee in Secretary of State vs Krishna Rao.
The dispute in that case related to levy of water cess under the Madras Irrigation Cess Act, .(No.
7 of 1865).
The Judicial Committee pointed out that the inam grant in that case included not only dry, wet. and garden land but also poramboke (1) (1945) L.R. 721.A. 211 182 i.e. unculturable land.
This was held to indicate that full proprietary rights were granted and therefore the Government could not charge any water cess.
It is urged for the respondents that this case shows that where poramboke is also granted, the grantee gets all the rights including the sub soil rights in full proprietorship.
It should however be remembered.
that the dispute in that case was whether the inamdar was entitled to free irrigation from water sources lying in the shrotiem village by virtue of the grant or whether the grantor could levy a cess under the Madras Irrigation Cess Act.
There was no dispute as to the sub soil rights 'in that case, the dispute being confined to surface rights relating to water.
The Government contended in that case that the grant to .the inamdar was only of the melvaram or the right of the revenue from the lands.
while the respondent 's contention was that the grant I carried not only the meraram but also the proprietary interest in the land itself and therefore the Government had no right to levy the irrigation cess.
It was in that connection that the Judicial Committee held that the grant of poramboke i. e. unculturable land, was one of the factors that indicated that it was not a mere grant of melvaram but full proprietary right.
It is remarkable however that though the Judicial Committee came to the. conclusion in that case that full proprietary right had been granted, it referred to the earlier decision in Srinivasa Chariar 's case during the course of the .judgment.
This later decision therefore in our opinion cannot be read in such a way as to lay down that wherever poramboke is included in the grant, a presumption must be drawn that the inam grant included sub soil rights also all that may be possible to infer by the inclusion of poramboke on the basis of this decision is that all the surface rights were granted and not merely the melvaram as 183 was contended in that case.
The fact therefore that in the inam fair register in this case the grant includes poramboke would not by itself ' establish that sub soil rights were also included in the grant.
So far as sub soil rights are concerned, they can only pass to the grantee if they are conferred as such by the grant or if it can be inferred from the grant that sub soil rights were also included therein.
We have already remarked that the original grant in this case is not available and we have only the inam fair register to go ' by.
There can be no doubt therefore on the facts of this case that the learned Single Judge was right in holding that the grant of sub soil rights to shrotriemdars is not established.
The appeal court also does not appear to differ from this view of the learned Single Judge.
Once the conclusion is reached that sub soil rights were not granted to the shrotriemdars it seems to us that the inference is plain ' that it was not open to the shrotriemdars to grant any lease of minerals lying under the soil to any one.
Therefore, the leases granted by the shrotriemdars to the respondents in this case would be of no legal effect in conveying any right to them in the minerals under the soil.
In the circumstances the respondents cannot put forward the leases in their favour to claim a mining leases under the Rules.
With respect, we have not been able to understand how the difficulty which may arise in practice, on account of the sub soil rights being in the Government and the surface rights being in the shrotriemdars, in the working of the mines would make the shrotriemdars shares in the sub soil rights and therefore entitled to grant a lease of the sub soil rights.
Whatever may have been the practice in the past and howsoever the Government may have been getting over the practical difficulty in the past would not confer any right to the minerals upon the shrotriemdar so as to enable 184 him to grant a mining lease to; any one.
It follows therefore that the mining,, leases granted in this case were granted by persons who had no right to the minerals and therefore confer no rights on the respondents to claim at; of right from the Government that they should be granted a mining lease under the Rules.
In view of the above decision appeal No. 252 must be allowed and appeal No. 253 must fail.
We therefore allow appeal No. 252 and setting aside the order of the appeal court dismiss the writ petition with costs to the State throughout.
Appeal No. 253 is hereby dismissed but in the circumstances parties will bear their own costs.
C. A. No. 252 of 1958 allowed.
C. A No. 253 if 1958 dismissed.
| The, respondents has obtained leases for mining mica from the owners of a certain shrotriem village for one year with a stipulation that the lessors were bound to renew the leases for such periods as may be desired by the lessees.
Shortly, there.
after, the village waseanoified and the estate of the owners was resumed by the appellant.
The respondent contended that 174 the appellant was bound to renew the leases.
The appellant contended that the shrotriemdars had no right in the minerals, that they could not have granted any leases for mining the minerals and that as such no question of renewing the leases arose.
Held, that shrotriemadras had no rights in the minerals and the leases granted by them to the respondent had no legal effect, The mere fact that a person was the holder of an inam grant was not by itself enough to establish that the inam grant included the grant of sub soil rights in addition to surface rights.
The grant of sub soil rights depended upon the language used in the grant ; if there were no words in the grant from which grant of sub soil rights could be properly inferred it would only convey surface rights to the grantee.
The original grant in the present case was not available and the inam fair register did not show that the grant included the grant of sub soil rights.
No inference could he drawn of the grant of sub soil rights from the fact that the inam grant included poramboke (unculturable land) also.
The difficulty that may arise in the working of the mines on account of the mines vesting in the state and the surface rights vesting in the shrotriemdars could not make the shrotriemdars co sharers in the sub soil rights so as to entitle them to grant leases of the subsoil rights.
Secretary of State for India in Council vs Srinivasa Chariar, (1920) L. R. 48 1.
A. 56, applied.
Secretary of State vs Krishna Rao, (1945) L. R. 72 1.
A. 21 1, distinguished.
| The appellant joined the Agricultural Department in 1963 with B.Sc.
(Geology).
Later, in 1979 he was promoted as Senior Geologist.
In 1982 he passed his M.Sc.
(Geology) and stood first in the University.
Sometime in 1982 he was also holding additional charge as Deputy Director.
In 1983, the State Public Service Commission called for applications for direct recruitment of Deputy Director in the Ground Water Survey and Development Agency.
The appel lant applied in response to the said advertisement, but was not called for interview, on the ground that he did not possess the necessary qualification of 10 years practical experience after acquiring the post graduate degree.
Ag grieved, the appellant filed a Writ Petition before the High Court contending that educational qualification and experi ence are two independent requirements and have to be read disjunctively and the experience required need not be after possessing basic educational qualification.
However, the High Court did not agree with the contention and dismissed the Writ Petition.
Against the said dismissal, the appellant preferred an appeal by special leave which was granted, by this Court in 1984, with an observation that the petitioner should not be reverted.
However, he was reverted to the post of Senior Geologist but subsequently promoted as Deputy Director in a new post created.
The appellant 's promotion was challenged by one of his colleagues by way of a Writ Petition contend ing that even for promotion, 10 years experience posterior to acquisition of post graduate degree was essential.
The High Court quashed the promotion of the appellant.
The appellant appealed against the said order after obtaining special leave of this Court in 1987.
522 During the pendency of these two appeals the State Government amended Rule 3(1)(a) whereby the requirement of 10 years experience mentioned in sub clause (iii) was delet ed in respect of appointment by promotion.
According to the State Government since the said requirement was redundant, it was deleted.
Allowing the 1987 appeal, and dismissing the 1984 ap peal, this Court, HELD: 1.1.
On the interpretation of Rule 3 of Maharash tra Ground Water Service, Class I (Recruitment) Rules, 1976 prior to its amendment, the view taken by the High Court on the Writ Petition filed by the appellant, does not call for any interference.
Normally when one talks of experience, unless the context otherwise demands, it should be taken as experience after acquiring the minimum qualifications re quired and, therefore, necessarily will have to posterior to the acquisition of the qualification.
However, in the case of promotion the same interpretation may not be just or warranted.
It would depend on the relevant provisions as also the particular type of experience which is required.
[336C D] 1.2.
The requirement of experience has been omitted by an amendment made on 16th February, 1988 and published in the Gazette on 24.3.1988.
Though the Rule does not say anything about its retrospective operation there could be no doubt that it is retroactive.
This amendment shall be deemed to apply to the present case as well especially when the matter is pending in this Court and the appointment in question is by promotion.
It is true that at the time when the appellant was promoted, the Rule had not been amended.
However, the appellant is the senior most among the Senior Geologists and even if he is to be considered again under the amended rules he shall have to be appointed and nothing is stated in these proceedings which would disqualify him even now.
[336E F]
| The respondents in the above appeals are owners of certain lands which are to be compulsorily acquired udder Madras Lignite (Acquion of Land) Act, 1953.
This Act came into force on August 20, 53 before article 31 of the Constitution was amended by the Constituion (Fourth Amendment) Act, 1955.
By the said Act substantially o provisions which are material to the present appeals were made.
,e first was that compensation for acquisition of lignite bearing lands der the Land Acquisition Act is to be assessed on the market value the land prevailing on August 28, 1947 and not on the date on which notification is issued under section 4(1) of the Land Acquisition Act.
condly it was provided that in awarding compensation the value of non agricultural improvements commenced since April 28, 1947 win not taken into consideration.
In accordance with the above provisions, after issuing the notices as acquired under sections 4(1) and 6 of the Land Acquisition Act the Land acquisition Officer made awards regarding the lands of the respondents.
he respondents thereupon filed petitions under article 226 of the Constition before the High Court of Madras challenging the validity of the ward on the ground that the provisions of the Act relating to the ward of compensation violate article 31(2) of the Constitution [as it food before the Constitution (Fourth Amendment) Act, [955].
The High Court upheld the contention.
In appeal, Held: (i) The validity of the Act impugned in the present appeal ,is to be examined in the light of the provisions of article 31 of the constitution as they stood before the Constitution (Fourth Amendment) Act, 1955.
Chiranjit Lai Chowdhuri V. Union of India, [1950] S.C.R. 869, State of West Bengal vs Subodh Gopal Bose, ; , and State of lest Bengal vs Mrs. Bela Banerjee, ; , relied.
937 (ii) The principle laid down in Bela Banerjee 's case, that the ceiling on the compensation without reference to the value of the land at the time of the acquisition is arbitrary and cannot be regarded as due compensation in letter and spirit within the requirement of article 31(2), would apply to the impugned Act.
Fixation of compensation for compulsory acquisition of land notified many years after that date on the market value prevailing on the date on which lignite was discovered is wholly arbitrary and inconsistent with the letter and spirit of article 31(2) as it stood before the Constitution (Fourth Amendment) Act, 1955.
(iii) Any principle for determination of compensation denying to the owner all increments in value between a fixed date and the date of issue of the notice under section 4(1) of the Land Acquisition Act must prima facie, be regarded as denying him the true equivalent of the land which is ex propriated and it is for the State to show that fixation of compensation on the market value on an anterior date does not amount to a violation of the Constitutional guarantee.
In the present appeals no materials have been placed by the State which would support any such case.
(iv) Denial of compensation for the value of non agricultural improvements would be denying to him just compensation for the loss suffered by him on account of compulsory acquisition of his holding and would amount to infringement of article 31(2) of the Constitution.
| The appellants, who were serving in the office of the Chief Engineer Nagarjuna Unit as officiating Upper Division Clerks, were transferred to the office of Deputy Chief Accounts officer,.
N.S. Project by an order dated February 8, 1964.
Respondents 2 to 108 were initially recruited as Lower Division Clerks during the period 1959 65 and some of them were promoted as Upper Division Clerks from 1961 onwards.
After their transfer, their services were regularised by the Chief Engineer, as per his proceedings dated August 11, 3 1968.
This was challenged by some of the persons similarly situated like the present respondent and the High Court dismissed the Writ Petition as well as the writ appeal, holding that the transfer was on administrative grounds and therefore their length of service in the parent department had to be taken into account for the purpose of determining their seniority.
By its order G.O.M.S. 27 P.W.D. dated February 3,1972, the State Government accorded sanction to the permanent retention of the posts set out in the order with effect from 1 4.1967 in the office of the Deputy Chief Accounts officer.
Among other, 38 posts of the Upper Division Clerks were thus made permanent by this order with a further provision that the posts so made permanent shall be filled in by personnel already working in the Accounts organisation.
The appellants, whose services were already regularised were now made permanent by the Deputy Chief Accounts officer.
Feeling aggrieved by the said orders the respondents filed a writ petition before the High Court of Andhra Pradesh which was transferred to the A.P. Administrative Tribunal.
The Tribunal allowing the petition held that the Deputy Chief Accounts officer had not the powers of the Head of a Department and was, therefore, not competent to absorb and retain the appellants in his office and confirm them against the posts made permanent.
Hence the appeal by special leave.
405 Allowing the appeal, tho Court ^ HELD: 1:1.
The Deputy Chief Accounts officer DOW redesignated as Director of Accounts is the Head of Department for the purpose of Rule 3(2) of Service Rules and, therefore, the confirmation of the appellants against the permanent posts of Upper Division Clerk is in order.
[411 E, 415 A B] 1:2.
The Deputy Chief Accounts officer is shown to be directly working 8 under a secretariat department without intervention of any higher office.
When the office of the Financial Adviser and Chief Accounts officer under whom the Dy.
C.A.O. was directly working, was declared in 1966 as Secretariat department, the Dy.
C.A.O. was invested with power of appointing authority which comprehended the power to appoint persons who would be eligible for pay scales applicable to the staff in the offices of the Heads of Department.
The unofficial note dated June 11, 1969 of the F.A. and C.A.O. makes the position clear.
[412 G; 413 A B] 1:3.
Even without reference to Rule 3(2), tho appellants could be absorbed, in tho instant case.
Appellants were transferred to tho office of Dy.
C.A.O. in 1964.
Their regularisation was held as valid and regular by an earlier decision of the A.P. High Court They having rendered service for eleven long years in the Accounts organisation before the impugned action was taken, they were entitled to be absorbed in the department by virtue of tho proviso in G.O.M.S. 27 dated 3rd February 1972.
[415 D,E,F H, 416 A] 2.1 The inter se seniority of the appellants and the respondents would be governed by the first proviso to Rule 36(e) and not by the second proviso thereto.
This position not only stands concluded by tho earlier decision of the A.P. High Court but also by the very orders of transfer.
[417 A B] 2:2.
The transfers were on administrative grounds and certainly not at the request of the appellant.
Further tho transferred personnel could not have been considered as on deputation because if a Government servant is sent outside his office on deputation, there are certain benefits to which be would be entitled which in this case are not shown to have been made available to the appellants.
[412 A B]
| The High Court allowed the writ petition and quashed the order of the Deputy Director of consolidation.
The appellants filed appeal in this Court against the order of the High Court.
The appeal came up for hearing on May 7, 1987, when it was dismissed for default of appearance, where after an application for restoration was filed on the ground that counsel for the appellants was busy in the High Court at the time of hearing of the appeal.
This Court found no justification for recalling its order, dismissing the appeal, but in view of the fact that the appellants would suffer for no fault of theirs, decided to hear the matter, directing that this practice should not be permitted in this Court any further.
Dismissing the appeal (on merits), the Court, ^ HELD: There is no merit in the appeal.
The High Court was right in holding that the respondents (concerned) were in possession of the land in 1958 when the case started under section 145 of the Cr.
P.C. and their date of occupation could not be later than 8.5.1958, so that the six years ' period of limitation for a suit for their eviction under section 209 of the Zamindari Abolition and Land Reforms Act would start running from July 1, 1958 and expire on June 30, 1964 i.e. before the consolidation operations commenced.
The appellants contended that there was a break in the possession of the respondents concerned between 8.5.1958 and 29.1.60, but during that period the land was in the custody of the Criminal Court which must be deemed to have been holding possession of the land on behalf of the person eventually found to be entitled to possession.
The respondents had matured their title by adverse possession and there could be no warrant for denying them the status of rightful owners.
There was no break in the possession of the respondents and they must be held to have been in continuous occupation at least from May, 1958.
1877A F]
| The appellant idol, a juristic person, was exercising the rights, through the Shebait, Mohanta Srimati Dandi Swami, of a Darpatnidar in the land in suit.
By a lease deed (exhibit A), dated July 10, 1941, the appellant granted to the respondents a lease of the suit land for the purpose of raising and taking sand out of the land for a period of nine years ending on July 13, 1949.
Subsequently, on April 27, 1950, the appellant made a similar grant (exhibit I) for another nine years expiring on April 13, 1959, but this grant was called "licence".
The respondents did not pay the licence fee for the period 1362 (14 4 1955) to 1365 B.S.
The appellant thereupon issued notice dated March 31, 1966, terminating the 'licence ' and then filed a suit No. 37 of 1960 for ejectment of the respondent in the Court of the Munsiff, Chandernagore.
The trial court having dismissed the suit, the appellant filed a first appeal which was allowed.
In second appeal the High Court restored the decree of the trial court.
In appeal by special leave to this Court, it was contended on behalf of the appellant: (a) The transaction evidenced by the document (exhibit I) dated April 277 1950 was a 'license ' for taking away sand and not a 'lease ' of immovable property.
Therefore, the appellant intermediary will be considered to be in Khas possession of the holding on the date of vesting (April 1, 1955) through the licensee and as such.
entitled to retain it under Section 6 of the Bengal Estates Acquisition Act.
1953; (b) Section 28 of the Bengal Estates Acquisition Act, 1953 is not applicable because there was no 'mine ' in the suit land, as defined in the Central Act 67 of 1957; the sand deposits naturally exist on the surface and not below it and mere collection and removal of the sand from the surface did not constitute mining operations.
therefore, it could not be said that the suit land was comprised in a mine or appertained to a mine within the meaning of the said Section 28; (c) Even if the land was a 'mine ' or appertained to a mine, the mine was being worked by the appellant through a licensee, and as such, was being 19 'directly worked ' by the appellant intermediary within the contemplation of Section 28 of the Bengal Estates Acquisition Act, and therefore, the land would be deemed to have been leased to the appellant by the Government.
Rejecting these contentions, and dismissing the appeal, ^ HELD: A.
In ascertaining whether a document evidences a 'lease ' or a 'licence ', regard must be had to the substance of the transaction and not merely the words or the form in which it is dressed.
[26F] .
The document (exhibit I the Agreement), in the instant case reveals the following characteristics.
which show that in fact and substance, it is a 'lease" and not a 'licence ': [27E, 32C] (i) A right to "raise ' and "take out" and remove sand "lying inside" the land in dispute was granted by the plaintiff to the defendant.
The words "raise" and "take out sand" from "inside" the land are wide enough to include not only the "right to carry out all the operations" necessary for extracting sand, but also to take it away and appropriate it.
Construed in the context of the document as a whole, these words put it beyond doubt that right to carry out "mining operations" [within the definition in Cl.
(d) of section 3 of the Central Act 67 of 1957] for winning sand and to appropriate it, were granted.
[27F G] (ii) The rights were granted for a period of 9 years, commencing from April 27.
[27H] (iii) These rights were granted for a "price" fixed on yearly basis, irrespective of the quantity of sand extracted.
The "price" fixed is Rs. 66/ per annum.
This consideration is payable in the month of Chaitra every year.
In case of default, the First Party (grantee) shall not be entitled "to raise the sand next year" and the Second Party (grantor) shall have a right to recover the arrears of rent together, with interest at 12% by bringing a suit against the First Party.
[28A B] (iv) "The Second Party will be entitled to take Khas possession of land" "at the end of the stipulated period.
This condition, (contained in paragraph 4 of exhibit 1) read along with the other parts of the document necessarily implies that if the First Party continues to pay the "price", as stipulated, (a) he shall be entitled to enter into and remain in exclusive khas possession of the land for the purpose of carrying out the mining operations for the full stipulated period of 9 years and (b) the Second Party (plaintiff) will not be entitled to retake khas possession of the land and revoke the so called "licence" before the end of the said period of 9 years.
[28B D] The term "lease" occurring in the definition of "mining lease" given in cl.
(c) of section 3 of the Mines and Minerals (Regulation and Development) Act is not used in the narrow technical sense in which it is defined in section 105 of the .
A mining lease may not meticulously and strictly satisfy in all cases, all the characteristics of a "lease" as defined in the .
Nevertheless, in the accepted legal sense, it has always been regarded as a lease in this country.
[29E G] In the instant case the transaction evidenced by exhibit I not only falls within the definition of a mining lease under Act, 67 of 1957, but also partakes of 20 all the essential characteristics of a "lease" defined in section 105 of the .
[30 A B] Balakrishna Pal vs Jagannath Marwari, ILR ; approved Raj Kumar Thakur Girdhari Singh vs Megh Lal Pandey LR 44 I.A. 246; Gowan vs Christie, ; differed.
The negative definition of "immovable property" given in section 3, Para 1 of the , is not exhaustive.
Therefore, applying the definition given in section 3(26) of the General Clauses Act (X of 1897) to the expression used in the , except as modified by the definition in the first clause of section 3 every interest in immovable property or a benefit arising out of land, will be 'immovable property ' for the purpose of section 105, .
[30E G] A right to carry on mining operations in land to extract a specified mineral and to remove and appropriate that mineral, is a right to enjoy immovable property within the meaning of section 105, more so, when it is coupled with a right to be in its exclusive khas possession for a specified period.
The right to enjoy immovable property spoken of in section 105, means the right to enjoy the property in the manner in which that property can be enjoyed.
If the subject matter of the lease is mineral land or a sand mine, it can be enjoyed and occupied by the lessee by working it as indicated in section 108 of the which regulates the rights and liabilities, of lessors and lessees of immovable property, [30G H, 31A] Nageshwar Bux Roy vs Bengal Coal Company, [1930] LR 58 IA 29; applied.
H. V. Low & Co. Ltd. vs Joyti Prasad Singh Deo, Cal. 699; LR 58 IA 392.
differed from.
Commissioner of Income Tax, Bihar and Orissa vs Kumar Kanakhaya Narain Singh, ILR (XX) Patna 13; approved.
The true character of the transaction evidenced by the document (exhibit 1) being that of a 'lease ' and not a 'licence, ' Section 6(1)(i) of the West Bengal Estates Acquisition Act, 1953 will not cover the appellant 's case and give him a right to retain the land in dispute, even if section 28 of that Act was out of the way.
[32C D.] B.
The definition of "mining operations" and "mine", in the Central Act 67 of 1957 are very wide.
The expression "winning of mineral" in the definition of "mining operations is spacious enough to comprehend every activity by which the mineral is extracted or obtained from the earth, irrespective of whether such activity is carried out on the surface or in the bowels of the earth.
Mines and minerals need not always be sub soil and there can be minerals on the surface of the earth.
[24G] B. Dass vs State of U.P. ; , reiterated.
It is true that in the definition of "mine", the term "excavation" in the ordinary dictionary sense means "hole", "hollow" or "cavity made by digging out".
But the word "any" prefixed to "excavation" in the context of the phrase "for the purpose of searching for or obtaining mineral" gives it a 21 much more extensive connotation, so that every "excavation", be it in the shape of an open cast cavity or a sub terranean tunnelling, will fall within the definition of 'mining operations '.
The essence of 'mining operations ' is that it must be an activity for winning a mineral, whether on the surface or beneath the surface of the earth.
[24H, 25A B] In tho instant case, the land in dispute has large deposits of sand, which is a minor mineral.
The sand was admittedly being excavated and removed by the respondent lessee.
The land was, thus, at the date of vesting, "com prised in or appertained to a 'mine ' within the meaning of section 28 of the West Bengal Estates Acquisition Act, 1953.
[25B C] C.
The phrase "being directly worked by him" in section 28 of the West Bengal Estates Acquisition Act, 1953, will not take in a case where the mine was being worked through a lessee or licensee to whom the right to conduct mining operations and to take away the mineral had been granted by the intermediary in consideration of receiving a periodic rent, royalty or a like amount.
[25E F] The word "directly" means "in a direct way, without a person or thing coming between", immediately as directly responsible.
The use of the expression "directly" in the context of the word "worked", followed by the words "by him" unmistakably shows that the legislative intent was to allow only those intermediaries to retain land comprised in or appertaining to a mine, as lessees under the State, who immediately before the date of vesting, were working the mine under their immediate control, management and supervision.
[25C E] Section 28 of the West Bengal Estates Acquisition Act, 1953 denies the right to retain the land comprised in a mine or appertaining to a mine, if, at the material date, it was not being directly worked by the intermediary but through a licensee, or other agency to whom the right to conduct mining operations had been granted by the intermediary.
In that respect, the provisions of s.28 are contrary to those of section 6(1)(i), which give to an intermediary a right to retain land held by him in khas for the purpose mentioned therein through a licensee.
In this situation, according to the legislative mandate in section 27, the provisions of section 6(1) (i) must yield to those in section 28.
[26 B C] Thus, even on the assumption that the respondent was at the material date, holding the land in Khas through a licensee and fulfilling all other conditions which entitled him to retain under section 6 (1) (i), then also, the case being in conflict with section 28, the latter section would prevail over the former.
[26D & 32E]
| The Government of Bihar sent to the Labour Court, Chota Nagpur Division, Ranchi, application in respect of 73 workers of the appellant for decision under sec.
33C(2) of the for retrenchment compensation.
The contention of the appellant was that it was a case of closer for reasons beyond its control and that, therefore, the workmen were entitled to compensation under the proviso to sub section (1) of sec.
25FFF of the Act and not to retrenchment compensation.
The workers contended that they were entitled to retrenchment compensation under sec.
25F. The Labour Court held that it was a case of retrenchment.
The writ petitions filed by the employer in the High Court has failed and these appeals have been preferred to this Court on the basis of the certificate of fitness granted by the High Court.
Dismissing the appeals, ^ HELD : (i) It was competent to the Labour Court to decade whether the case before it was a case of retrenchment compensation or the proviso to sub sec.
(1) of section 25FFF was attracted on closure of the establishment.
Even the employer does not dispute that the workmen are entitled to compensation.
It only says that the compensation should be calculated on a particular basis different from the basis on which the workmen claim.
The claim also falls under Chapter VA of the Act.
[266H; 267B C] Central Bank of India Ltd. vs P. section Rajagopalan ; relied on.
U.P. Electric Company vs R. K. Shukla [1970] 1 S.C.R. 507 and South Arcot Elect.
Co. vs N. K. Khan [1969] 2 S.C.R. 902, referred to.
(ii) Item No. 10 of the Third Schedule to the Act does not say that all questions arising out of retrenchment of workmen and closure of establishment have to be decided by Industrial Tribunal.
This entry refers to cases where the right to retrench workers or to lose an establishment is disputed and that question is referred for adjudication to the Industrial Tribunal.
In that case the Tribunal will be competent to decide whether the closure or retrenchment was justified and whether the retrenchment workmen should be reinstated or the workers in the establishment purported to have been closed should be continued to be paid on basis that the so called closure was no closure at all.
In the present case the workmen do not ask for reinstatement.
They accept the termination of the services and ask for compensation.
The only dispute is about the compensation whether it is to be paid under section 25F or 25FFF.
Item 10 of Third schedule will not cover such a case.
[267D G]
| By an office memorandum of the Central Government issued on the 4th January 1957, in respect of posts filled by promotion through competitive examinations limited to departmental candidates, reservations at 12 1/2% and 5 1/2% of vacancies were provided for Scheduled Castes and Scheduled Tribes respectively.
By an earlier office memorandum of the 7th May 1955, in regard to promotions on the basis of seniority subject to fitness and those by selection, no reservations were provided but certain concessions were allowed to members of the backward classes.
After the decision of the Supreme Court in the case of the General Manager, Southern Railway vs Rangachari, ; , the matter was reviewed by the Central Government and it was advised that there was no consti tutional compulsion to make reservations for Scheduled Castes and Scheduled Tribes in posts filled by promotion and the question whether the reservation should be continued or withdrawn was entirely a matter of public policy.
Subsequent to the review, by a further office memorandum issued on the 8th November 1963 the Government notified its decision inter alia, that there would be no reservation for Scheduled Castes and Scheduled Tribes in appointments made by promotions to Class I and II services as these required a higher degree of efficiency and responsibility; but that such reservations would continue in certain grades and services in Class III and Class IV.
The petitioner was a class III employee of the Railway Board Secretariat Service and claimed promotion to the post of a Section Officer in Class II on the basis of the provision for reservations made in the Government 's Memorandum of January 4, 1957.
By a writ petition under article 32 of the Constitution he challenged the latest office memorandum of November 8, 1963 and prayed for a restoration with retrospective effect of the office memoranda issued on May 7, 1955 and January 4, 1957.
It was contended on his behalf, inter alia (i) that the impugned order violated the guarantee given to the backward classes under article 16(4) of the Constitution; article 16(4) was not an exception engrafted on article 16 but was in itself a fundamental right granted to the Scheduled Castes and Scheduled Tribes.
(ii) that the order was discriminatory,, because (a) it made a discrimination by making Provision for reservation in certain types of Class III and Class IV services only and not in Class II and I Services, (b) reservation was kept within Class III and Class IV for appointments for which there was direct recruitment and for promotions made by (1) selection, or (2) on the 722 result of a competitive examination limited to departmental candidates, but no reservation was provided for in respect of appointments made by promotion on the basis of seniority cum fitness; and (c) there was discrimination between the employees belonging to Scheduled Castes and Scheduled Tribes in the Railway Service and similar employees in the Central Secretariat Service on the ground that a competitive departmental examination for promotion to the grade of Section Officers was not held by the Railway Board for the years 1955 63 but such an examination was held for the Central Secretariat Service and 74 employees belonging to the Scheduled Castes and Scheduled Tribes secured the benefit of the provisions for reservation.
Held: (i) Article 16(4) does not confer any right on the petitioner and there is no constitutional duty imposed on the Government to make a reservation for Scheduled Castes and Scheduled Tribes, either at the initial stage of recruitment or at the stage of promotion.
Article 16(4) is an enabling provision and confers a discretionary power on the State to make a reservation of appointments in favour of a backward class of citizens which, in its opinion, is not adequately represented in the Services of the State [734 B D].
General Manager, Southern Railway vs Rangachari, ; , referred.
(ii) The impugned order was not discriminatory.
(a) In view of the requirement of efficiency in the higher echelons of service it is obvious that the classification made in the impugned order between Classes I and II where no reservation was made and Classes III and IV where reservation was provided for, was reasonable.
[735 B, C].
(b) It is well established that there can be a reasonable classification of employees for the purpose of appointment by promotion and the classification as between direct recruits and promotees is reasonable [734 H 735 A].
Mervyn Coutindo vs Collector of Customs, Bombay, ; and section G. Jaisinghani vs Union of India, ; referred to.
(c) The petitioner being an employee of the Railway Board was governed by the rules applicable to the officers in the Service to Which he belonged.
The employees of the Central Secretariat Service belonged to a different class and it could not be said that there was any discrimination against the petitioner in violation of article 14.
[734 F G].
|
ION: Criminal Appeal No. 120 of 1961.
Appeal by special leave from the judgment and order dated March 17, 1961 of the Punjab High Court in Criminal Writ No. 2 of 1961.
WITH Petition No. 147 of 1961.
Petition under article 32 of the Constitution of India for enforcement of Fundamental Rights.
The appellant/petitioner in person.
H. section Doabia, Additional Advocate General, Punjab, Gopal Singh and P. D. Menon.
for respondent (in the appeal and the petition.) 1961.
November 2. 'The Judgment of Sinha, C. J., Subba Rao, Shah and Mudholkar, JJ, was delivered by Subba Rao, J. Dayal, J. delivered a separate Judgment.
SUBBA RAO, J.
Both these matters are connected and raise the same questions, and they may be disposed of together.
Ranbir Singh Sehgal, the petitioner in the writ petition, is now a prisoner in the Central Jail Ambala, in the State of Punjab.
He was prosecuted for committing offence in different places.
On June 13, 1961, he was convicted by the Additional District Magistrate, Ambala, under section 5 of the Indian Explosive Substances Act and sentenced to 298 5 years rigorous imprisonment and to pay a fine of Rs. 2,000/ .
The petitioner has preferred an appeal against the said conviction and sentence, and the said appeal is now pending the High Court of Punjab.
On January 30, 1961, the Additional Sessions Judge (II), Ambala, convicted the petitioner under sections 120 B and 399 of the Indian Penal Code and sentenced him to 7 years rigorous imprisonment and a fine of Rs. 2,000/ under the former section, d to 5 years rigorous imprisonment and a fine of Rs. 2,000/ under the latter section.
The petitioner preferred an appeal against this conviction and sentence to the High Court of Punjab and the same is now pending there.
The other eases are not disposed of and they are still pending in various courts.
The petitioner was arrested by the Ambala, police on September 11, 1958, and was detained in police custody for a period of about 8 months, and on May 7, 1959, he was transferred to judicial custody at Ambala.
On June 13,1960, he was convicted under the Indian Arms Act, and from that date he is in the Central Jail, Ambala,, as a convicted prisoner.
On December 15, 1960, the Governor of Punjab ordered that the petitioner should be treated as a 'B ' class prisoner.
On February 9, 1961, he filed a petition under article "26 of the Constitution in the High Court of Punjab at Chandigarh, questioning inter alia his confinement in that prison on the ground that para.
575 of the Punjab Jail Manual where under he was confined to a separate cell in the prison, offended article 14 of the Constitution, and that in fact discriminatory treatment was meted out to him not for the maintenance of discipline but for extraneous reasons.
That petition was dismissed by the said High Court on March 17, 1961, and Criminal Appeal No. 120 of 1961 was filed against the said order by special leave granted by this Court.
That apart he also filed the present writ petition (Writ Petition No. 147 of 1961) in this Court under article 32 of the Constitution covering the same ground.
The prisoner 299 argued his own case.
He raised before us two points, namely, (1) para.
575 of the Punjab Jail Manual offends article 14 of the Constitution in as much as it confers arbitrary power on the Superintendent of Jail to deal with a prisoner under the colour of the said provision in a brutal way circumventing other stringent provisions of the Prisons Act and other paragraphs of the Punjab Jail Manual conceived in the interest and fair treatment of prisoners, (2) the Superintendent of Jail, for extraneous reasons on the pretext of disciplinary action, gave him solitary confinement in a cell since the date he was transferred to that Jail, and thus acted with mala fide.
that apart, he discriminated him in the matter of treatment from other prisoners and even from the co accused, who were convicted along with him, and thus offended article 14 of the Constitution.
The first question falls to be decided on the relevant provisions of the Indian Penal Code, the Prisons Act, and the Punjab Jail Manual.
There are three types of punishment, namely, (i) solitary confinement,(ii) cellular confinement, and (iii) separate confinement.
Solitary Confinement means such confinement with or without labour as entirely secludes the prisoner both from sight of, and communication with, other prisoners.
The punishment of solitary confinement can be imposed by a Court only, and, in view of its dangerous potentialities stringent conditions are imposed thereon.
No person can be sentenced to undergo solitary confinement for more than three months.
There is a limit prescribed on the punishment of solitary confinement that can be imposed on a prisoner: it shall not exceed (a) one month, if the term of imprisonment does not exceed six months, (b) two months, if the term of imprisonment exceeds six months, but does not exceed one year, and (c) three months if the term exceeds one year: (vide section 73 of the Indian Penal Code).
Section 74 of the Indian Penal Code says, 300 In executing a sentence of solitary confinement, such confinement hall in no case exceed fourteen days at a time with intervals between the periods of solitary confinement of not less duration than such periods, and when the imprisonment awarded shall exceed three months, the solitary confinement shall not exceed seven days in any one month of the whole imprisonment awarded, with intervals between the periods of solitary confinement of not less duration than such periods.
" Section 29 of the Prisons Act reads, "No cell shall be used for solitary confinement unless it is furnished with the means of enabling the prisoner to communicate at any time with an officer of the prison, and every prisoner so confined in a cell for more than twenty four hour, whether as a punishment or otherwise, shall be visited at least once a day by the Medical officer or Medical Subordinate." Cellular confinement is a punishment which can be imposed on a prisoner by a Superintendent of Jail.
A Superintendent of Jail can punish in a suitable case a prisoner by imposing on him cellular confinement for a period not exceeding fourteen days, provided that after each period of cellular confinement an interval of not less than such period must elapse before the prisoner is again sentenced to cellular or solitary confinement.
Cellular confinement in defined to mean such confinement with or without labour as entirely secludes a prisoner from communication with, but not from sight of, other prisoners.
Separate confinement is defined to mean such confinement with or without labour as secludes a prisoner from communication with, but not from sight of, other prisoners, and allows him not less than one hour 's exercise per diem and to have his meals in association with one or more 301 other prisoners.
Separate confinement for a period not exceeding three months can be imposed on prisoner in a suitable case by the Superintendent of Jail.
(Vide section 46(8) of the Prisons Act).
Section 47 of the Prisons Act prohibits the combination of cellular confinement with separate confinement so as to prolong, the total period of seclusion to which a prisoner shall be liable.
Solitary confinement can he given only by a court and the other two by a Superintendent of Jail for jail offences.
The provisions conceived in the interest of the physical, moral and mental health of prisoners impose stringent conditions in carrying out those sentences in order to prevent their abuse.
But in the interest of maintaining discipline among the inmates of jail, the Prisons Act and the Jail Manual prescribe rules for a separation of prisoners.
The separation of prisoners depends upon the nature of the prisoner, the class to which he belongs and the availability of adequate number of cells.
Section 27 of the Prisons Act provides that, (1) in a prison containing female as well as male prisoners, the females shall be imprisoned in separate buildings, or separate parts of the same building, in such manner as to prevent their seeing, or conversing or holding any intercourse with the male prisoners (2) in a prison where male prisoners under the age of twenty one are confined, means shall be provide for separating them altogether from the other prisoners and for separating those of them who have arrived the age of puberty from those who have not (3) unconvicted criminal prisoners shall be kept apart from convicted Criminal prisoners; and (4) civil prisoners shall be kept apart from criminal prisoners.
Section of the said Act says, "Subject to the requirements of the last foregoing section, convicted criminal prisoners may be confined either in association or 302 individuals in cell or partly in one way and partly in the other".
Presumably in exercise of the power conferred on the State Government by section 59 of the Prisons Act, certain rules were framed for the separation of prisoners and they are contained in the Jail Manual.
Under para.
571 of the Jail Manual, 'shall convicts shall, so far as the requirements of labour and the cell accommodation of the Jail will allow, be kept separate both by day and by night.
" Paragraph 572 deals with the occupation of vacant cells, and para.
573 says that " 'convicts of the habitual class shall be subjected to the system of separation prescribed in the preceding rules, in rotation.
" Paragraph 574 provides.
If, at any time, there are more cells in any jail than suffice for the separation of all convicts of the habitual class, prisoners of the casual class shall be confined in cells, both by day and night, in rotation.
" Then comes the impugned provision, namely, para.
576, which reads: "A convict who would ordinarily came under the operation of any of the preceding rules relating to the separation of prisoners, but cannot be confined in a cell by day, by reason that he is required for some jail service, shall be confined in a cell by night.
" There rules, along with the provisions of the Prisons Act, form an integrated scheme conceived for the maintenance of discipline of prisoners, and the preferential treatment in the allotment of cells is based upon sex, age, nature of the crime committed and the nature of the prisoners, and also the availability of cells.
The question is whether para.
575 of the Jail Manual offends Act.
14 of the Constitution.
The said provision is only in a group of rules providing for the separation of prisoners and it only says that if a prisoner to whom any of the prison rules 303 applies cannot be confined to a cell by day shall be confined in a cell by night.
It pre supposes that the prisoner concerned belongs to the category to whom a separate cell is allotted and, by reason of his being required for jail service, cannot be confined to the cell by day: in such a case it says that he shall be confined to the cell by night.
It is only a rule providing for a contingency when a prisoner who should be so confined in a cell both by day and night cannot be confined by day in such a cell.
But the objection may be taken to mean that the other rules, along with this rule enable a Superintendent of Jail to put a prisoner in a cell offends article 14 of the Constitution.
It is settled law that article 14 of the Constitution permits classification, and the said classification must bear just and reasonable relation to the object of the legislation.
The object of the said provision is to maintain discipline among the inmates of jail.
The classification is made on the basis of sex and the nature of the prisoners and also on the availability of cells.
The classification has certainly a reasonable relation to the object sought to be achieved by the legislation nor can the power conferred on the Superintendent to separate prisoners be said to be arbitrary.
The object of the conferment of the said power is very limited, and the provisions clearly lay down the conditions for separation.
The power to separate is entrusted to the highest officer in the jail premises, who may ordinarily be expected to not reasonably, objectively and without bias.
In these circumstances, we must hold that para.
575 of the Jail Manual in it setting does not offend the provisions of article 14 of the constitution.
The next question is whether in purported exercise of the said power the Superintendent in the present case acted with mala fide and meted out discriminatory treatment to the petitioner and thus offended article 14 of the constitution the 304 affidavit filed in the Writ Petition, the petitioner made certain allegations against the Superintendent in respect of his treatment in jail.
The said allegations may be summarized thus: The petitioner was transferred to the judicial custody at the Central Jail Ambala, on May 7, 1959, after protracted police custody of over eight months.
On the very day of his arrival in the Jail, the petitioner was looked up in solitary confinement in a cell in the condemned prisoners block and lock up period of 24 hours inside the cell was clamped." Though several representations were made by the relatives of the petitioner to the higher authorities, no redress was given to him.
He was sought to be kept in the cell for 13 months till June 13, 1 when he was convicted in one of the cases filed against him.
On June 14, 1960, the Superintendent of the Jail again ordered the petitioner to be looked up in complete solitary confinement under para.
575 of the Punjab Jail Manual, and again a confinement of 24 hours inside the cell was "clamped".
On December 15, 1960, the Governor of Punjab ordered that the petitioner should be treated as a 'B ' class prisoner, and even thereafter he was not transferred to the general ward of the prison where others ' class prisoners were kept confined, but he was kept in the same condemned prisoners wards Though the look up period of 24 hours inside the cell was considerably reduced the ban imposed on his association with other prisoners had not been relaxed.
The petitioner was not allowed even to meet his co accused who were in the general ward of the prison.
While the other prisoners in the jail including the petitioner 's co accused were given numerous facilities i.e. of association work and recreation he was completely segregated in a cell without any such facilities.
The jail authorities adopted this method of torture for ulterior purposes, 305 The Superintendent of the Jail filed a counter affidavit.
His answer to the grave allegations may be stated thus: on the very day of his arrival in the jail the petitioner behaved rudely and impertinently towards the jail staff and in a defiant way tried to undermine jail discipline.
he was not kept in solitary cell for ulterior motives.
He committed 12 jail offences and he was punished for them.
After he was convicted he was put in a separate cell and that he was allowed one hour in the morning and one hour in the evening for exercise and also to have his bath outside the courtyard.
After he was classified as a 'B ' class prisoner, he was given amenities to which a 'B ' class prisoner was entitled under the rules, but in the interest of jail discipline he was segregated from other prisoners.
The cell in which the petitioner was kept was one of the cells in block of 32 cells out of which only were allocated for condemned prisoners and the rest were utilized for separate confinement for the segregation of hardened and troublesome convicted criminal prisoners.
The petitioner was confined in the cell only for the night and he could move about in the open compound of the cell throughout the day.
The affidavit and the counter affidavit disclose the following admitted facts: The cell in which the petitioner was and is confined is one of the cell in the block of 32 cells out of which 8 cells are used for condemned prisoners.
The cell has a small separate enclosure of its own.
From the date the petitioner entered the prison, that is, on May. 7, 1959, till he was convicted, that is, on June 13, 1960, when he was an under trial prisoner, he was separately confined to a cell.
though the superintendent vaguely says that the petitioner was not looked up in a solitary cell, he practically admits that the petitioner was given separate confinement in a cell as punishment for jail offences committed by him.
Though he 306 denies that the petitioner was kept in a cell for 24 thee hours, he does not say what facilities were provided for him to move about or mix with other prisoners.
The statement of offences committed by the J. petitioner and the punishments inflicted on him filed by the Superintendent does not contain any details and is thus vague.
Section 12 of the Prisons Act enjoins on a Superintendent to maintain a punishment book, and section 51 thereof requires him to enter the details therein.
But the statement before us does not strictly comply with that section and it is represented in court that no other register is maintained in the jail.
The statement, vague as it is, shows that even on the first day of imprisonment, the petitioner was kept in a separate cell and the offence alleged to have been committed by him is that he was rude and impertinent.
The subsequent entries show that the petitioner attempted to break articles and even struck his head against wall or door.
These acts of the petitioner appear to us to be more due to the effect of the inhuman and discriminatory treatment given to him even when he was an under trial prisoner rather than a conscious attempt on his part to commit any jail offences.
Be that as it may, we are not concerned at this stage whether the petitioner had committed those offences, for those were committed at a time when he was an under trial prisoner with which we are not now directly concerned.
The facts remain that even as an under trial prisoner from the date he entered the premises of the jail, he was segregated from other prisoners and kept in a separate cell.
Now coming to the second period, that is, the period commencing from the date he was convicted till he was classified as a 'B ' class prisoner, that is from June 14 1960 to December 15, 1960, the petitioner alleges that he was kept in solitary confinement as before throughout 24 hours of the day.
In the counter affidavit of the Superintendent 307 it is not denied that the petitioner was kept in a separate cell, but it is stated therein that he was given one hour in the morning and one hour in the evening for exercise and also he was allowed to have his bath outside the courtyard of the cell.
The Superintendent does not state that he allowed the petitioner to communicate with others or to talk to other prisoners.
It is not stated whether he was allowed for exercise to go out of the separate enclosure of the cell or whether he was allowed to mix up with other prisoners or to talk to them.
During this period, the petitioner did not commit any jail offences and, therefore, his separate confinement in a cell could not be a punishment for an offence, but only for the maintenance of discipline in the jail and for convenience of accommodation.
There is nothing on the record to suggest that he was guilty of any indiscipline during this period.
If so, his confinement in a separate cell for a period of six months without allowing`him to communicate with others is a punishment of either cellular confinement, separate confinement or solitary confinement.
The restrictions imposed on the prisoner on the pretext of separate allotment of a cell ignored even the limitations on the said confinements prescribed by section 73 of the Indian Penal Code or section 46 of the Prisons Act.
The confinement of the prisoner in a separate cell in the manner it was done was certainly illegal.
Coming to the third period after he was classified as a 'B ' class prisoner, the petitioner says that he was kept in the same condemned prisoners ' book with the exception that the look up period of 24 hours inside the cell was considerably reduced, but the ban imposed on his association with other prisoners was not relaxed.
The Superintendent does not say that the petitioner was allowed to communicate or to speak with other prisoners.
He also admits that the petitioner was continued to the 308 cell only in the night and that he can move about within the open compound of the cell throughout the days to put it in other words, the Superintendent admit that the petitioner is confined in a cell J. with a small separate enclosure and that the prisoner can only move in that enclosure in the morning.
This kind of confinement is either a solitary confinement or cellular confinement, for it secludes the prisoner from communicating with or from the sight of other prisoners.
If it is not a solitary confinement, it would certainly be a cellular confinement.
Even in a separate confinement as a punishment the prisoner should be allowed to have one hour 's exercise per diem and to have his meals in association with one or more prisoners.
The Superintendent therefore, acted illegally in confining the prisoner in the manner he did, and he is not entitled to do so under the rules prescribed for separation of prisoners.
It may also be mentioned that during this period, there is no allegation that the petitioner 's conduct was otherwise bad.
It is said that the confinement is neither solitary, cellular or separate, for he is allowed to go to courts.
The fact that a prisoner is to be sent to a court on summons has no bearing on the question whether the confinement is legal or not.
On the facts disclosed in the case, we have no doubt that, for one reason or other, which is not clear from the record, the petitioner was discriminated from other prisoners and, under the colour of the rules for separation, was illegally confined in a manner not authorized by law.
Before closing we would like to make some general remarks.
The modern development of criminology has revolutionized the system of treatment of convicted prisoners.
The old brutal treatment has given place to more humane one.
The concept of vengeance by society and of the deterence is fast disappearing and is being replaced by the concept of correction and rehabilitation.
309 Though our jail administration is moving with times, it is not keeping pace with advanced countries.
A statute may reflect the modern trend and may contain salutary provisions for fair treatment of prisoners; but in practice much depends upon the Superintendent, who is expected to implement them in the spirit in which they are conceived.
A superintendent of a jail may be a good disciplinarian, but it is not enough: he should also be a humanitarian possessing conscience and having an awareness that to his care is entrusted an abnormal class of society deserving more a sympathetic approach and sincere attempt at rehabilitation than that of vindictiveness.
In this case, the Superintendent, as we have already stated, not only did not carry out the spirit of the rules but also broke the letter of the law and illegally placed the petitioner practically in solitary confinement from May 7, 1959 up to date.
In the result we hold that the confinement of the petitioner in a separate cell in the manner it is being done in this case is illegal and we direct the respondent to confine the petitioner in the prison in strict compliance with the provisions of the Prisons Act and the rule made thereunder.
It is for the Government to consider, in the circumstances of this case, whether it is a fit case for transferring the petitioner to some other jail.
Writ Petition No. 147 of 1961 is allowed to the said extent, and there will be a similar order in criminal Appeal No. 120 of 1961.
RAGHUBAR DAYAL, J.
I have had the advantage of perusing the judgment prepared by my learned brother, Subba Rao J., and agree with him that paragraph 575 of the Punjab Jail Manual does not offend the provisions of the Constitution.
I however do not agree that there had been any illegal confinement of the appellant.
310 The appellant was admitted to the jail as an undertrial prisoner for offences under section 19 of the Indian Arms Act and under section 5 of Indian Explosive Substances Act and the allegation was that he was concerned in a conspiracy with others to muder certain persons and to create disorder and anarchy in India.
He behaved rudely and impertinently on admission into jail and showed a defiant attitude.
In there circumstances, according to the affidavit of the Superintendent of the Jail, the appellant was ordered to be kept in cell under paragraph 569 A of the Jail Manual to maintain jail discipline.
The entry in the punishment register, in this connection, states in the column meant for noting the offences: 'He is very rude and impertinent.
He has defiant attitude and tries to undermine the jail discipline. ' I am of opinion that it was not necessary for the jail authorities to make a more detailed note in the register with respect to the various acts committed or words spoken by the appellant on the occasion.
Section 51 of the Prisons Act provides what is to be recorded in this punishment book and requires to be recorded, among other matters, the prison offence of which the prisoner is guilty.
It does not require a detailed account of the actions of the prisoner which constituted the prison offences.
The description of the offences committed, suffices for the purpose of this register.
The entry is not made for the purpose of adjudication of the offences or for the purposes of the appellate authority, if any.
It is just a record of the conduct of the accused and the action taken.
The Superintendent, in this case, did not inflict any punishment of solitary confinement or separate confinement on the appellant for his conduct.
He simply ordered that the appellant be kept in a cell under paragraph 469 A of the Jail Manual.
There had been eleven other occasions when the appellant committed prison offences.
Those 311 offences and the action taken there are also mentioned in the punishment register and a copy of those entries has been filed in Court.
What I have said in connection with the nature of the entry in connection with the incident on the day of admission, applies equally to the other entries mentioned above.
The Superintendent has denied the allegations made by the appellant that he was kept in a separate cell, not in the interests of the jail discipline, but for ulterior motives or under orders of a vindictive Government.
There is no material on the record to suggest that the Superintendent of the jail was actuated, in passing the order for keeping the appellant in a separate cell, by any consideration other than that of the interests of jail discipline.
Therefore, the mere fact that the appellant was kept in a separate cell from the moment of his admission in jail does not indicate malafides on the part of the jail Superintendent.
The appellant was kept segregated in a separate cell after his conviction as well, in view of paragraph 575 of the Jail Manual.
He was allowed an hour in the morning and an hour in the evening for exercise.
He was allowed to have a bath in the court yard outside the cell.
The fact that the Superintendent did not state in his affidavit that he allowed the petitioner to communicate with others or to talk to other prisoners or that the appellant was allowed to mix up with other prisoners or to converse with them, does not necessarily mean that he disallowed any such thing or that, if he did so, the Superintendent acted against rules of law.
The Superintendent denied that the appellant 's request to meet Hari Das was disallowed.
There is no allegation that he had not been afforded the facilities which are to be provided to a prisoner or to a B class prisoner kept in a cell and therefore there was no occasion for the Superintendent to state about matters not complained of.
312 The mere fact that a person is kept in a separate cell will not make his confinement solitary, cellular or separate, though the difference between it and any of them be not appreciable.
Section 27 of the prisons Act provides for separation of prisoners.
If there happens to be only one prisoner of a particular category, he is necessarily to be kept separate from others.
His being kept alone from other prisoners and his not being allowed to mix with other prisoners will not be called solitary or cellular or separate confinement.
It is just an incident that he happens to be the only prisoner of a particular category and had therefore to be kept separated from all other prisoners in the jail.
Section 28 allows convicted criminal prisoners to be confined either in association or individually in cells or partly in one way and partly in the other.
The discretion is with the Superintendent of the Jail.
The Act contemplates an individual prisoner to be kept in a cell.
It is clear from the provisions of paragraphs 571 to 575 of the Jail Manual that the rules contemplate convicted prisoner to be kept separate.
Paragraph 571 of the Jail Manual provides that all convicts, subject to cell accommodation and requirements of labour, be kept separate both by day and by night, and justifies the segregation of the appellant as a convicted criminal in a separate cell.
Paragraphs 572, 573 and 574 lay down the order in which convicted prisoners are to be selected for being kept separate in cells when each of them cannot be so kept.
All these provisions are consistent with what is enacted in section 28 of the Prisons Act.
Paragraph 575 reads: "A convict who would ordinarily come under the operation of any of the preceding 313 rules relating to the separation of prisoners, but cannot be confined in a cell by day, by reason that he is required for some jail service, shall be confined in a cell by night.
Note 1 Separation under paragraphs 571 to 575 is distinct from 'solitary ' confinement and 'separate ' confinement inflicted as a punishment under section 46 of the Prisons Act, and is restricted merely to the separation of individual prisoners either by day or night for purposes of jail management; such separation is not to have any irksome conditions attached to it.
Note 2 Paragraphs 571 to 575 are of general application.
If, in the opinion of the Superintendent, the presence of any convict in association with others, is detrimental to good order and discipline or is likely to encourage or lead to the commission of any offence, such convict should be kept separate, in preference to others of his class.
" These provisions provide an exception to the provisions of paragraphs 571 to 574 and allow the convicted prisoner to be kept in a cell during night only instead of both by day and by night, in case he cannot be confined in the cell by day for reasons that he be required for jail service.
Note 1 makes it clear that keeping prisoners separate in view of the provisions of paragraphs 571 to 575 is not 'solitary ' or 'separate ' confinement which can be inflicted as punishment and is merely separation of the prisoner for purposes of jail management.
Further, Note 1 enjoins that no irksome conditions be attached to such separation.
We are not shown that any such conditions were attached to the order for keeping the appellant in a cell.
Note 2 further empowers the Superintendent of the Jail to keep a convict separate if he be of opinion that his association with others of his class 314 is detrimental to good order and discipline in the jail.
The Superintendent states in his affidavit he that he was of such opinion.
The entire scheme of the Act and the rules is that ordinarily a prisoner should be kept separated from others and that it is only in view of limitations of providing separate cells for each prisoner that prisoners of a particular category are kept together in a large hall.
The order classifying the appellant as a B class prisoner further necessitated his being kept separate from other prisoners.
There is no provision in the Act or the rules that a prisoner kept in a cell be specially allowed to associate or mix with other prisoners.
The main grievance of the appellant is that he was not allowed to associate with his co accused, even for purpose of consultation with respect to the defence to be put up and the grounds to be taken in the appeal.
The whole object of keeping convicted prisoners segregated in jail is defeated if they are allowed to meet and discus matters even when they are under special orders for being kept separate on account of their conduct being considered detrimental to jail discipline.
If it was really necessary for the appellant to have consultations with his co accused for the purpose of the case, it was open to him to obtain orders of the Court and facilities for such consultations, if considered necessary, could have been given just as facilities are provided for accused to consult their counsel.
I am therefore of opinion that the Jail authorities committed no discriminatory or illegal act against the appellant in keeping him in a separate cell.
I would therefore dismiss both the writ petition and the appeal.
BY COURT.
In accordance with the opinion of the majority, the Writ Petition and the Appeal are allowed to the extent indicated in the majority judgment.
| In May, 1959, the appellant was sent to Ambala Jail as an undertrial prisoner.
On account of certain jail offences alleged to have been committed by him the Superintendent of Jail segregated him from other prisoners and kept him in a separate cell.
He was convicted in June, 1960.
Though he was 296 not alleged to be guilty of any jail offence or indiscipline after this date he was still confined in a separate cell without being allowed to communicate with other prisoners; he was only allowed to come out in the compound attached to the cell for one hour in the morning and for one hour in the evening.
In December, 1960, the Governor ordered that the appellant be treated as a B" class prisoner.
Even after this he was still kept in a separate cell with this difference that he locked up only at night and was allowed to move in the compound attached to the cell during the day.
But he was still not allowed to communicate with others.
The Prisons Act provided for the separation of prisoners and s.28 thereof permitted convicted criminal prisoners to be confined in cells either in association or individually.
Paragraph 571 of the Punjab Jail Manual provided that so far as possible all convicts shall be kept separate both by day and by night.
Paragraph 575 provided that a convict who could not be confined in a cell by day by reason that he was required for some jail service shall be confined in a cell by night.
The appellant contended that his confinement was under para 575, that para 575 offended article 14 of the Constitution and that the Superintendent of Jail acted mala fide and discriminated against him by keeping him in solitary confinement. ^ Held, that para 575 of the Punjab Jail Manual did not offend article 14 of the Constitution.
This paragraph was a part of an integrated scheme for the maintenance of discipline of prisoners by providing for their separation.
The classification was made on the basis of sex and the nature of the prisoners and depended on the availability of cells; is had a reasonable relation to the object sought to be achieved.
The power to separate was entrusted to the highest officer in the jail who was ordinarily expected to act reasonably, objectively and without bias.
Held, further (per Sinha, C. J., Subba Rao, Shah and Mudholkar, JJ.) that the confinement of the appellant in a separate cell in the manner it was being done was illegal.
The separation of the appellant so as to seclude him from communicating with or from the sight of other prisoners certainly amounted to cellular confinement if not to solitary confinement.
This could only be done as a measure of punishment, and even then the prisoner was entitled to have one hour 's exercise every day and to have his meals in association with one or more prisoners.
The appellant was discriminated from other prisoners and, under the colour of the rules for separation, was illegally confined in a manner of authorised by law.
Per Dayal,J. There was no discrimination or illegality in keeping the petitioner in a separate cell.
The mere fact 297 that a person was kept in a separate cell did not make his confinement solitary, cellular or separate.
Paragraph 571 of the Jail Manual provided that subject to cell accommodation and requirement of labour all convicts be kept separate both by day and by night.
Paragraph 575 provided an exception that where the convict could not be kept separate by day he could be kept separate by night.
The entire scheme of the Prisons Act and the rules was that ordinarily a prisoner was to be kept separate and that only in cases of limitation of providing separate cells were prisoners to be kept together.
There was no provision that a prisoner kept in a cell was to be specially.
allowed to associate or mix with other prisoners.
| Respondent 1 joined the judicial service Class II in the State of Maharashtra on the 7th December, 1960 as per his order of appointment which clearly states (i) that he would be on probation for a period of two years from the date of his joining, (ii) that during that period, his appointment would be liable to be terminated without notice, (iii) that after the period of probation his services would be liable to be terminated on one month 's notice as long as his appointment was temporary.
The two years ' probationary period originally fixed expired on 6th December of 1962 even so he was allowed to continue in the post only in an officiating capacity and was not confirmed.
His services were terminated with effect from 1 2 1972 by a simple order of termination dated 15th December 1971.
Respondent 1 challenged the order of his termination by filing a writ petition.
The High Court of Bombay allowed the petition holding (1) that Respondent 1 would be deemed to have been confirmed in his post because his work was satisfactory and a vacancy in the permanent cadre was available.
The Government had no discretion in the matter and it was bound to confirm him under Rule 4(2)(iv) of the Rules (2) that the appointment of respondent 1, therefore, could not be terminated by a simple notice of termination and it was passed by way of punishment in violation of Article 311(2) of the Constitution.
Allowing the appeal by special leave, the Court ^ HELD: Per Untwalia J. 1.
Sub rule (2) of Rule 4 of the Bombay Judicial Service Rules, 1956 deals with the method of recruitment to the Junior Branch Class II.
Clause (iv) of Sub rule (2) of Rule 4 deals with probation and confirmation.
There are two parts of clause (iv) (a) that it is imperative to put every person appointed under sub rule (2) on probation for a minimum period of two years "unless 552 otherwise expressly directed" and (b) on the expiry of the said period of two years the eprson appointed may be confirmed, if there is a vacancy and if his work is found to be satisfactory.
[557H, 558 B C] The plain meaning of the rule is that there is no automatic confirmation on the expiry of the probationary period of two years in the first instance.
On the expiry of the said period and on the fulfillment of the requirement of sub clauses (a) and (b) a Government servant becomes eligible for being confirmed and normally he is likely to be confirmed.
But, in many branches of Government service including the judiciary that for administrative reasons or otherwise the confirmation is delayed and is made at a subsequent time.
It may also be delayed for watching the work of the Government servant for a further period.
The expression "unless otherwise expressly directed" governs only the first part of clause (iv) and not the second part.
Therefore the rule in question comes under the ordinary and normal rule that without an express order of confirmation the Government servant will not be taken to have been confirmed in the post to which he was appointed temporarily and/or on probation.
It is not covered by the exceptional rule like the one in State of Punjab vs Dharam Singh, ; [558C F] State of Punjab vs Dharam Singh, ; , Kedar Nath Bahl vs State of Punjab and Ors., A.I.R. 1972 SC 873; referred to.
Rule 4(2) (iv) of the Bombay Judicial Service Recruitment Rules, 1956 does not violate Articles 14 and 16 of the Constitution; there being several other reasons administrative or otherwise, which may delay the confirmation of an officer.
The confirmation can surely be delayed if the suitability of the Government servant has got to be watched further to decide whether he should be confirmed in the post or not.
[560 B, G H] section B. Patwardhan and Ors.
etc., etc v State of Maharashtra; , ; distinguished.
The Government Resolution dated 19 4 1963 and the Gazette Notification dated 11 5 1963 do not give a deemed confirmation status.
Two inferences are possible to be drawn from them. (1) that the period of probation stood extended beyond two years until and unless he was confirmed and (2) that in any event be continued in the post in his temporary or officiating capacity.
[561A, D E] 4.
Termination of services by a notice of termination simpliciter will be violative of the requirement of Article 311(2) of the Constitution, if the Government servant be held either as confirmed or deemed to have been conformed in the post to which he has been initially appointed.
In the instant case Respondent 1 was continuing in the post in an officiating capacity.
His services could be terminated by one month 's notice simpliciter.
[561E G] 5.
If the termination was by way of punishment, then also Article 311(2) would be attracted.
Even in the case of a temporary or officiating Government servant his services cannot be terminated by way of punishment casting a stigma on him in violation of the requirement of Article 311(2).
[561 G H] 6.
Ordinarily and generally, any of the three courses, namely, compulsory retirement, reversion to parent cadre from a higher officiating post; dispensing 553 with the services of an officiating or temporary Government servant with an order of termination simpliciter, is taken recourse to only, if there are some valid reasons for taking the action against the Government servant.
If a probe in the matter is allowed to be made in all such cases, then curious results are likely to follow.
In a given case there may be valid reasons, may be of a very serious kind, which led the authorities concerned to adopt one course or the other as the facts of the particular case demanded.
If reasons are disclosed in the order, then it could be said that the order of the Government was passed by way of punishment.
If not disclosed then it would be said as arbitrary and violative of Article 16 of the Constitution.
Only a practical and reasonable approach to the problem would solve it.
Ordinarily and generally the rule laid down in most of the cases by this Court, is that the Court should look to the order on the face of it and find whether it casts any stigma on the Government servant.
In such a case, there is no presumption that the order is arbitrary or malafide unless a very strong case is made out and proved by the Government servant, who challenges such an order.
[562B E] section P. Vasudeva vs State of Haryana & Ors., ; ; State of U.P. vs Ram Chandra Trivedi, ; ; Parshotam Lal Dhingra vs Union of India ; ; Shamsher Singh vs State of Punjab, ; and Manager Govt.
Branch Press & Anr.
vs D. P. Belliappa, ; ; referred to.
Malafide should be pleaded by specific allegations.
Merely to say that the action was not justified and it was out of bias that the impugned action was taken, was not, in the least, any allegation of malafide.
[565 E] In the instant case, in the absence of any specific allegation against any of the respondents in the Writ Petition, the conclusion would be that when the orders were passed against Respondent 1 the High Court must have examined the matter carefully and found that it was not desirable to allow him to continue in the service and must have further found that the facts did not warrant or make it expedient to hold any regular enquiry against him and to remove him from service by way of punishment.
The order of termination against Respondent 1 was not passed by way of punishment contravening the requirement of Article 311 (2) of the Constitution.
[565H, 566A B, G] 8.
The State counsel rightly refused to show the records of the case to Respondent 1.
Obviously it could not be shown to him.
Otherwise he would have come out with a plea, right or wrong, that the order was made against him by way of punishment.
[566B C] Per Pathak J. 1.
Where the services of a temporary Government servant or a probationer Government servant are terminated by an order which does not ex facie disclose any stigma or penal consequences against the Government servant and is merely a termination order simpliciter, there is no case ordinarily for assuming that it is anything but what it purports to be.
Where however, the order discloses on the face of it that a stigma is cast on the Government servant or that it visits him with penal consequences, then plainly the case is one of punishment.
There may still be another kind of case, where although the termination of services is intended 554 by way of punishment, the order is framed as a termination simpliciter.
In such a case, if the Government servant is able to establish by material on the record that the order is in fact passed by way of punishment, the innocence of the language in which the order is framed will not protect it if the procedural safeguards contemplated by Article 311(2) of the Constitution have not been satisfied.
[567 B D] 2.
The jurisdiction of the Court extends to examining and scrutinising the official records in the following circumstances: (a) The official records may be called for by the Court generally in a given case, for the purpose of determination the truth; where the Government servant succeeds in making out a prima facie case that the order was by way of punishment, but an attempt to rebut the case is made by the authorities.
[567D E] (b) It is not open to the Court to send for the official records on a mere allegation by the Government servant that the order is by way of punishment.
For unless there is material on the record before the Court in support of that allegation, an attempt by the Court to find out from the record whether the termination of service is based on the unsuitability of the Government servant in relation to the post held by him or is in reality an order by way of punishment will in effect be an unwarranted attempt to delve into the official records for the purpose of determining the nature of the order on the basis of a mere allegation of the Government servant.
On a sufficient case being made out on the merits before the Court by the Government servant it is open to the Court to resort to scrutiny of the official records for the purpose of verifying the truth.
[567E G] (c) Courts should not decline to peruse the official records in an appropriate case.
Where considerations of privilege and confidentiality do not suffer, the information set forth in the records should be made available to the Government servant.
The mere possibility that the official records could confirm what the Government servant had set out to prove, and prima facie had indeed proved, should not shut out disclosure of the information.
[567G H, 568A] (d) There is no absolute rule that where the order terminating the services of a temporary or a probationer Government servant is ex facie an order of termination simpliciter, the Government servant is barred from establishing that it is in fact an order by way of punishment and on the Government servant succeeding in establishing it to be so the Court is prohibited from examining the official records for the purpose of verifying the true position.
[568D E] (e) The question of scrutinising the official records arises where a Government servant is entitled to show that although the order impugned by him purports to be an order of termination simpliciter it is in fact an order made by way of punishment.
[568E F] (f) If a Government servant is able to establish that, although the impugned order is innocent ex facie it was made on the ground that he was guilty of misconduct and, therefore, the order was intended by way of punishment, the law still is that an order, although framed in terms which do not cast an aspersion against the character and integrity of the Government servant or visit him with evil consequences, may still be proved to be in fact one by way of punishment.
[569E F] 555 (g) In the present case, the reason for the High Court refusing to examine the official records was that the respondent Government servant had failed to make out any case whatever that the order was by way of punishment.
There being no doubt in the mind of the High Court on the point, it was justified in declining to look into the official records.
[570C D] State of U.P. vs Ram Chandra Trivedi, ; , Union of India vs R. section Dhaba, , R. section Sial vs The State of U.P. & Ors., , Shamsher Singh & Anr.
vs State of Punjab, ; ; applied.
section P. Vasudeva vs State of Haryana and Ors., ; ; explained and relied on
| Respondents 2 to 9 preferred an appeal to the Calcutta High Court against their conviction and sentence dated 19.3.
On 22.3.
1984 a Division Bench of the High Court admitted the appeal but did not grant bail on that date.
Within a fortnight thereafter, i.e. on 12.4.
1984, the application for bail moved by the Respondents came up before the Bench for consideration.
The appeal was not set for hearing on that day.
The records which had been requisi tioned from the Court of the Additional Sessions Judge had not been received and notices of the bail had not been issued.
Acting on an alleged concession made by the Public Prosecutor, the Bench allowed the appeal itself and acquit ted the respondents.
The appellant complainant 's Special Leave Petition No. 2025/84 dated 15.10.
1984 against the said orders of acquittal was allowed to be withdrawn to move the High Court for review.
The appellants ' review petition dated 5.12.
1984 having been dismissed on the ground that the High Court had no power to review its judgment under the Code of Criminal Procedure, 1973, the appellant has now come in appeal by special leave.
Allowing the appeal, the Court, HELD: 1.
Normally, the Supreme Court, as a matter of practice, is reluctant to interfere with an order of acquit tal recorded by the High Court at the instance of a private complainant, but the circumstances of the case are such that there is no other alternative but to interfere in this 306 case.
The procedure adopted by the High Court was not in consonance with the procedure established by law and has resulted in flagrant miscarriage of justice.
[306H; 307A] Under Section 385 of the Code of Criminal Procedure, 1973 it was obligatory for the High Court to have fixed a date for the hearing of the appeal and sent for the records of the Court of Sessions and thereafter hear the parties on merits.
It does no credit to any branch of administration of justice that an appeal against conviction or acquittal should be allowed without the Appellate Court having the records before it and without pursuing the evidence adduced by the prosecution.
Assuming that the learned Public Prose cutor conceded that there was no evidence, the High Court had time to satisfy itself upon perusal of the record that there was no reliable and credible evidence to warrant the conviction of the accused under section 148 and s.302 read with section 149 of the Indian Penal Code.
[308B E]
| In an appeal preferred by respondent No. 1 against orders reverting him from the post of Section Officer to a lower post and dismissing him from service, the State Gov ernment found that he had not been afforded a reasonable opportunity to defend himself at the inquiry, and set aside the order of dismissal directing the State Public Service Commission to reinstate him in the lower post and hold a fresh inquiry.
The Commission having declined to comply with the order of the State Government, respondent No. 1 filed a writ petition, and the High Court directed the Commission to comply with the said order.
In this petition for special leave to appeal, the Com mission contended (1) that since it was a Constitutional Authority being not subordinate to the State Government, the latter could not have heard the appeal filed against its order passed in a disciplinary proceeding; and (2) that in any event, the appeal should have been disposed of by the Governor himself and not by the Governor in accordance with the advice of the State Government.
Dismissing the petition, HELD: The Commission may be a constitutional authority not subordinate to any other authority.
But the orders passed by the Commission in disciplinary proceedings held against the members of its staff are subject to the appeal to the State Government under r. 69 of the Civil Service (Classification, Control and Appeal) Rules, 1930, read with Regulation 20 of the Uttar Pradesh Public Service Commission (Conditions of Service) Regulations, 1937 as amended in 1978.
There is 834 no ground for thinking that the independence ,of the Commis sion would be affected by the State Government exercising the appellate power in disciplinary matters as provided by Regulation 20.
[837H; 838A B] Hargovind Pant vs Dr. Raghukul Tilak & Ors., ; , referred to.
Rule 69 of the Civil Service (Classification, Control and Appeal) Rules, 1930 is to the effect that the .State Government may, of its own motion or otherwise, call for the record of any case decided by an authority subordinate to it in the exercise of any power conferred on such authority by these rules, and inter alia, confirm, modify or reverse the order passed by such authority, or direct that a further enquiry be held in the case.
Rule 69 A sets out the proce dure to be followed in filing a petition under rule 69.
Rules 69 and 69 A are substantially applicable to the mem bers of the staff of the Commission by virtue of Regulation 28 of the Uttar Pradesh Public Service Staff Regulations, 1942, even though the Commission may not be an authority subordinate to the State Government because while applying r. 69 to the staff of the Commission the rule should be read with the necessary modification by substituting in the place of the words 'an authority subordinate to it ' the words 'the Uttar Pradesh Public Service Commission '.
In any event by virtue of the amendment made to Regulation 20 of the Uttar Pradesh Public Service Commission (Conditions of Service) Regulations, 1937 in 1978 appeals against the orders of the Commission passed in respect of the gazetted ministerial officers other than the Under Secretary and the Assistant Secretary lie to the Governor.
Respondent No.1 being a gazetted officer holding the post of a Section Officer was entitled to prefer an appeal under Regulation 20 to the Governor.
[837C G] 2.
It is no doubt true that Regulation 20 of the Uttar Pradesh Public Service Commission (Conditions of Service) Regulations, 1937 provides that appeals against the orders of the Commission shall be made to the Governor.
But while exercising his powers under that Regulation the Governor has to act on the advice given by the State Government by virtue of article 163(1) of the Constitution.
The function of hearing an appeal against an order passed by the Commission in a disciplinary proceeding held against any member of its staff is an executive function and not one of those functions which the Governor is required to exercise in its discretion under any of the provisions of the Constitution.
The Gover nor has, therefore, to act on the advice of the State Gov ernment.
[838C F] 835 Shamsher Sing vs State of Punjab, ; , referred to.
| The respondent was convicted and sentenced to imprisonment for life by a court in the State of Madhya Pradesh.
At his request he was transferred to a jail in the State of Punjab, to which State he belonged.
He applied to the Government of Punjab that under the Punjab Jail Manual he is entitled to be released since he had completed more than 20 years of imprisonment.
The application was sent to the Government of Madhya Pradesh, which rejected it.
In a writ petition filed by him the High Court of Punjab and Haryana held that the State of Punjab was the appropriate authority to release him and directed the State of Punjab to consider the matter.
In appeal to this Court, the State of Madhya Pradesh contended: (i) that since the sentence was of imprisonment for life, it would not expire automatically at the expiry of ' 20 years including remissions: and (ii) that as the prisoner was convicted by a court in the State of Madhya Pradesh the appropriate Government the exercise discretion under sections 401 and 402 Cr.
P.C. was the State of Madhya Pradesh and not the State of Punjab., Allowing the appeal, ^ HELD: The High Court was in error in holding that the respondent was entitled to be released as of right on completing the term of 20 years including remissions.
[556] Gopal Vinayak Godse vs State of Maharashtra and Others, ; and Pandit Kishori Lal vs King Emperor, L.R. 72 I.A.1, followed.
(1) A sentence of imprisonment for life does not automatically expire at the end of 20 years including remissions because the administrative rules framed under the various Jail Manuals or under the Prisons Act cannot supersede the statutory provisions of the Indian Penal Code.
A sentence of imprisonment for life means a sentence for the entire life of the prisoner unless the appropriate Government chooses to exercise its discretion to remit either the whole or a part of the sentence under section 401 of the Code of Criminal Procedure.
[559G] (2) The appropriate Government has the discretion to remit or refuse to remit the sentence and where it refuses to remit the sentence no writ can be issued directing the State Government to release the prisoner.
[560A] (a) The appropriate Government which is empowered to grant remission under section 401 of the Code of Criminal Procedure is the Government of the State where the prisoner had been convicted and sentenced, that is, the transferor State and not the transferee State where the prisoner may have been transferred at his instance under the Transfer of Prisoners Act.
[56B] (b) Where the transferee State feels that the accused had complected a period of 20 years it has merely to forward the request of the prisoner to the Government of the State where the prisoner was convicted and sentenced and if this request was rejected by the State Government the order of the Government cannot be interfered with by a High Court in its writ jurisdiction.
[550D] 553 [Since the respondent was released in pursuance of the order of the High Court, the release order was allowed to stand.]
| The cross appeals arose from two writ petitions filed by A.V. Rao and N. V. Krishnaiah in the High Court.
A.V. Rao 's case was that while he was already in preventive detention.
on December 18.
a First Information Report was lodged against him in connection with some Sessions cases.
Some of the co accused in ' these cases were produced before the Magistrate on December 19, 1969 for remand, but Rao was produced before him only in mid April, 1970 after his release from preventive detention.
The accused in the Sessions cases were thereafter convicted and sentenced, and Rao.
filed a writ petition asking for an order on the State Government to set off u/s , the time between December 19, 1969 and April 13, 1970, against his term of imprisonment, treating the said period as the period of detention undergone by him as an undertrial prisoner, and also to take the same into account, for the purpose of remission of his sentence under the Prisons Act.
Rao con tended that he could have been produced before the Magistrate for remand on December 19, 1969.
The State Government contended that Rao could not be produced before the Magistrate for remand until the period of preventive detention was over.
In the case of Krishnaiah, he was in detention under the MISA, when his appeal against conviction in a criminal case was dismissed by the High Court, and a warrant was issued against him on December 1, 1975, but was served on him only on December 30, 1975, when the order against him under the MISA was revoked.
The High Court rejected the petitioners ' contention regarding set off under section 428 Cr.
P.C. but accepted their contention regarding the benefit of remission.
Allowing the appeals by the State, and partly allowing the appeals by the original writ petitioners, the Court, HELD: (1) Section 428 of the Cr. P.C., 1973 only pro vides that the period of detention of an accused as under trial prisoner shall be set off against the term of impris onment imposed on him on conviction.
It does not equate an "undertrial detention or remand detention with imprisonment on conviction" or do away with the difference in the two kinds of detention and put them on the .same footing for all purposes.
[11B C] G.V. Godse vs State of Maharashtra, ; ; 446, referred to.
(2) section 428 expressly says that the "period of detention" mentioned, refers to the detention during the investigation, enquiry or trial in connection with the "same case" in which the accused person has been convicted.
The period during which the writ petitioners were in preventive detention cannot be set off under section 428 against the term of imprisonment imposed on them.
[11G, 12 A B] (3) Section 418 does not exclude a case where the war rant concerns an accused who is already in detention.
We have not been referred to any provision either in the Cr.
P.C. or in the MISA which requires the service of the war rant to be delayed until after the period of preventive detention is over.
There is no bar to the preventive and punitive detention continuing simultaneously.
[13A B, C] 2 240SCI/77 8 Haradhan Saha & Anr.
vs State of West Bengal & Ors.
; , referred to.
| The appellant had dealings with the respondent in respect of a ruqqa and a mortgage.
The respondent filed two suits against the appellant for recovery of the moneys due on the ruqqa and the mortgage respectively.
The summons in the suits was not duly served on the appellant and the suits were decreed ex parte.
The appellant then filed an application to set aside the ex parte decree in the suit on the ruqqa.
The court passed an order on 16th August 1958.
, setting aside that ex parte decree and also informed the appellant who was present in court on that day, of the passing of the ex parte decree in the mortgage suit.
On 16th April 1959 the appellant filed an application for setting aside the ex parte decree in the mortgage suit.
The trial court and the High Court held that the application was barred by limitation under article 164 of the Indian Limitation Act, 1908, as more than 30 days had expired after the appellant had knowledge of the ex parte decree.
In appeal to this Court, HELD The application was rightly dismissed.
Under article 164 of the Limitation Act, the period of 30 days is counted, when the summons is not duly served, from the date when the applicant had knowledge of the decree; and the expression "knowledge of the decree" means knowledge of the particular decree which is sought to be set aside.
It is a question 'of fait 'in each case whether the information` conveyed is sufficient to impute the knowledge, and, the test is not what the information would mean to a stranger, but what it meant to the defendant in the light of his previous dealings with the plaintiff and the facts and circumstances known to him [759 B; 760B D] Pundlik Rowji vs Vasantrao Madhav Rao 11 B.L.R. 1296; Kumud Nath, Roy Choudhury vs Jotindra Nath Chowdhury I.L.R. ; Bapuraa Sitaram Karmarkar vs Sadbu Bhiva Gholap.
I.L.R. and Batulan.v.
S.K. Dwivedi, I.L.R. 33 Patna, 1025, approved.
| The appellant was an erstwhile member of the Indian Administrative Service in the cadre of the State of orissa.
At the relevant time in the year 1967, he was serving as Commissioner of Land Reforms, orissa.
According to the appellant he had disputes, differences and animosity with respondent No. 1, the Chief Secretary to the Government of orissa and respondent No. 2 who was at the relevant time Director of Vigilance and Additional Secretary to the Government of orissa.
The First Information Report was lodged against the appellant under section S(2) of the Prevention of Corruption Act, 1947, on 24 11 1967.
The appellant 's house was searched on 27 11 1967.
An order of suspension was made against the appellant by the Government of orissa on 28 11 1967 under rule 7(3) of the All India Services (Discipline and Appeal) Rules, 1955.
The Writ Petition filed by the appellant against his order of suspension and investigation was dismissed by the High Court in limine.
This Court allowed an appeal filed by special leave by the appellant against the High Court judgment and directed the High Court to admit and dispose of the petition in accordance with law.
The State Government approached the Central Government to accord sanction for prosecution of the appellant.
In spite of reminders, the Central Government neither accorded the sanction nor refused it.
Appellant was compulsorily retired by the Government in 1971.
Thereafter, charge sheet was submitted against him in the Court of the Special Judge, Sambalpur.
The trial concluded but because of the stay order passed by this Court judgment could not be delivered.
Against the order of the compulsory retirement, the appellant filed a writ petition in the Delhi High Court which was dismissed by a learned single Judge and against which a Letters Patent appeal is pending.
The orissa High Court dismissed the writ petition of the appellant on the ground of it having become infructuous since the appellant was no longer in suspension since he was compulsorily retired.
The High Court also did not think it necessary to examine the legality of the investigation against the appellant as chargesheet had already been submitted.
In an appeal by special leave the appellant contended: The suspension order may be quashed on the following grounds: (1) It was passed without following the various Governmental instructions on the point.
(2) The order was in violation of rule 7(3).
(3) The order was malafide.
^ HELD: (1) It is true that all the instructions contained in the circulars issued by the Central Government do not seem to have been strictly followed.
That would, however, not invalidate or nullify the order of suspension made under rule 7(3).
In dealing with the cases of high officers of the Administrative Service care ought to have been taken to follow the instructions as far as possible.
On the facts of the present case.
however.
failure to follow the instructions fully, does not render the order of suspension per se invalid.
[353GH] (2) Under rule 7(3) a member of the Service in respect of or against whom an investigation, enquiry or trial relating to a criminal charge is ponding, may at the discretion of the Government be Placed under suspension.
The 351 expression investigation, enquiry and trial are well known in the realm of the A criminal law under the Criminal Procedure Code.
In the present case, the First Information Report was lodged and the search warrants were issued before the suspension orders were passed.
Most of the allegations against the appellant were in relation to his alleged acts of corruption and misuse of his official position.
Whether the allegations are true or false is irrelevant.
Order under rule 7(3) was, therefore, legal and valid.
[354A E] (3) The suspension order came to an end by the compulsory retirement of the appellant.
After retirement from service he could no longer be deemed to be under suspension.
Since we are remitting the case back to the High Court we permit the appellant to raise the question of his salary and emoluments during the suspension period to be raised in the High Court.
The counsel for the appellant, however, assured this Court that if the appellant would be exonerated of the charges levelled against him and acquitted in the criminal proceedings the State Government would pay him his full pay and allowances for the period of suspension.
[354G H, 355B C] (4) We do not think it advisable to decide the point of malafide in the absence of the judgment in the criminal cases.
Since the two matters are so interwoven and interconnected that it would be expedient for the High Court to decide this issue after the judgment is delivered in the criminal trial.
[3 55D E]
|
Appeals Nos. 228 to 230 of 1960.
Appeals from the judgment and decree dated February ' 4, 1957, of the Madhya Pradesh High Court (Indore Bench) at Indore in Civil Reference No.15 of 1952.
B. Se??,, B. K. B. Yaidu and 1.
N. Shroff, for the appellants.
A. V. Viswanatha Sastri, K. A. Chitale, J. B. adachanji, section N. Andley, Rameshwar Nath and P. L. Vohra for the respondents.
April 3.
AYYANGAR, J. Rule 4 (1)(b) of Sch. 1 headed ((Rules for the computation of profits for the purposes of War Profits Tax" of the Gwalior War Profits Tax Ordinance, Samvat 2001 (hereinafter referred to as the Ordinance), provided: "4.
In computing the profits of a business carried on by a company, no deduction shall be made in respect of (1) remuneration paid to directors if during any part of the accounting period concerned they had controlling interest in the company; 207 Provided that this sub rule shall not apply (a). . . . . . . . (b) to the remuneration of any managing agent where such remuneration is included in the profits of The managing agents ' business for the purposes of the War Profits Tax".
The respondent Binod Mills Co. Ltd. which had its business at Ujjain in the State of Gwalior was a company whose profits were liable to War Profits Tax under the Ordinance.
The company was managed by a managing agency firm M/s.
Binodiram Balchand which had, by reason of its shareholding exceeding 50% of the issued sharecapital, a controlling interest in the company.
The respondent company was assessed to War Profits Tax for three chargeable accounting, periods July 1, 1944, to December 31, 1944 , January 1, 1945, to December 31, 1945, and January 1, 1946, to June 30, 1946.
During each of these accounting periods the respondent company had paid remuneration to its managing agents and claimed to deduct the remuneration so paid in the computation of its business profits during these three periods.
The assessingofficer disallowed the claim on the ground that the remuneration received by the managing agency firm had not been factually assessed in the hands of the managing agent and that consequently the matter was covered by the opening words of r. 4 and not saved by proviso (b) to the rule.
An appeal against this order of assessment was dismissed by the appellate authority and thereafter by the Commissioner of War Profits Tax in revision.
But at the request of the respondent the Commissioner submitted a reference under section 46 (1) of the Ordinance to the 208 High Court of Madhya Pradesh of the following question for its decision: "Whether in computing the profits of a business carried on by a company deduction shall be made in respect of any remuneration to any managing agent where such remuneration is included in the profits of the managing agent 's business for the purposes of the War Profits Tax ?" There was a consolidated reference in respect of the three chargeable accounting periods.
The learned Judges of the High Court answered the question in favour of the respondent and held that the remuneration, even though paid to a managingagent who had a controlling interest in the company, was a permissible deduction for the purpose of computing the profits of the company for the purposes of the War Profits Tax.
The High Court was thereafter moved by the appellant for the grant of certificates of fitness for appeals to this Court under section 47 of the Ordinance and the certificates having been granted these three appeals, which relate to the three chargeable accounting periods have been preferred to this Court.
Before proceeding further it might be convenient to set out certain facts to appreciate the form of the question which might provoke some enquiry.
There was not much dispute, and even if there was, it was abandoned fairly early, that M/s. Binodiram Balchand were "directors" of the company within the meaning of the Ordinance and bad a controlling interest in the company.
In this connection we might advert to the definition of ,director ' in section 2(10) of the Ordinance: "2.
'director ' includes any person occupying the position of a director by what ever name called and also includes any person who (i) is a manager of the company or 209 concerned in the management of the business; and (ii) is remunerated out of the funds of the business; and (iii) is the beneficial owner of not less than 20 per cent of the ordinary share capital of the company".
The controlling interest being established, it was common ground that the remuneration paid to the managing agent could not be deducted in computing the profits of the company unless it fell within proviso (b) of r. 4(1).
Before the departmental authorities it was suggested on behalf of the company that the expression 'included ' in proviso (b) meant ",disclosed in the return of the director" and on this basis it was contended that as M/s Binodiram Balchand had.
, in the statement of their own Profit & Loss account for Samvat 2000, 2001 and 2002, disclosed the managing agency commission received by them the remuneration had been "included" in their profits for the purposes of the War Profits Tax, though for reasons which are unnecessary to discuss they claimed that the sum was not liable to be brought to tax and this claim was accepted.
This argument which was rejected by the departmental authorities is however responsible for the form of the question referred to the High Court.
This contention however was not apparently repeated before the High Court and does not figure in the judgment as part of the reasoning of the learned Judges in the judgment now under appeal and has not been relied upon before us.
We shall therefore say no more about it, but proceed to deal with the substantial question raised.
The facts being as above stated the entire question in the appeals turns on the mean of the 210 expression "is included in the profits of the managing Agency business" in r.4(1) proviso (b) of Sch. 1 of the Ordinance.
Before however entering on a discussion of the words underlined and of proviso (b) in particular, it would be necessary to set out broadly the scheme underlying the levy of the tax under the Ordinance.
Section 4(1) of the Ordinance is the charging section and it enacts : "4.
(1) Subject to the provisions of this Ordinance, there shall, in respect of any business to which this Ordinance applies, be charged, levied and paid on the amount by which the profits during any chargeable period exceed the standard profits, an excess profit tax (in this Ordinance referred to as the 'War Profits Tax ') which shall be equal to 60 per cent.
of the aforesaid amount.
" The "business" to which the Ordinance applies has to be gathered from the terms of section 2 (5) which defines the term 'business '.
That clause reads : " business ' includes any trade, commerce or manufacture or any adventure in the nature of trade, commerce or manufacture or any profession or vocation ' but does not include a profession carried on by an individual or by individuals in partnership, if the profits of the profession depend wholly or mainly on his or their personal qualifications, unless such profession consists wholly or mainly in the making of contracts on behalf of other persons or the giving to other persons of advice of a commercial nature in connection with the making of contracts : Provided that where the functions of a company or of a society incorporated by or under any enactment consist wholly or mainly in the holding of investments or other property or both, the holding thereof shall be 211 deemed for the purpose of this definition to be a business carried on by such company or society; Provided further that all businesses to which this Ordinance applies carried on by the same person shall be treated as one business for the purposes of this Ordinance".
The second proviso uses the term 'person ' which is defined by section 2 (13) to include "any company or body of individuals or any other association of persons whether incorporated or not and also includes a Hindu undivided family".
The 'Profits ' which is referred to in the charging section is, by reason of the definition of the term in section 2 (16), to mean ,profits as determined in accordance with the provi sions of this Ordinance and its First Schedule".
The provisions of the Ordinance relating to the computation of profits do not bear upon the point now in controversy, but what is of relevance are certain of the Rules for the computation of the profits in Sch.1.
From the terms of the charging section read with the other provisions of the Ordinance to which we have adverted it would be seen that it is the profits accruing from business that is brought to charge and that each person whether he be an individual or comprehended within the inclusive definition of the term ',person" is an independent unit of assessment whose profits are computed by aggregation of all of its sources of income from every business which that unit may carry on.
How the profits of each unit is to be computed for the purposes of tax has to be gathered, apart from the provisions of the Ordinance which, as stated earlier, are not relevant to the present case, from Sch. 1 headed "Rules for the computation of profits for the purposes of War Profits Tax".
Rule 1 of these Rules which generally follows the pattern of the Indian Income Tax Act in setting out the list of 212 permissible deductions, provides as one of such deductions in r. I. (1) '(xi) ,,any expenditure (not being in the nature of capital expenditure or personal expense of the person to whose business this Ordinance applies) laid out or expanded wholly and exclusively for the purposes of such business".
If this provision were applied for computing the profits of a company as an unit of assessment, there, could be no dispute that generally speaking the remuneration paid to a managing agent would be an admissible deduction.
It hardly needs to be mentioned that the remuneration received by a managing agent would be profits from business on which he would be, liable to tax under the Ordinance, being a profit from business as defined in section 2(5) subject only to the condition that the amount of the profit brought it within the taxable limit.
To this prima facie rule as regards the manner in which the profits derived by a company are to be computed r. 4 enacts an exception, in the case of those companies in which the Directors have a controlling interest.
But the application of this special rule as regards companies under the management of Directors with controlling interest is, however, subject, among others, to proviso (b) not applying to the case.
In other words, if proviso (b) saved the case, the special rule as to controlled companies would cease to be applicable and the remuneration paid would be deductible in the computation of the companies ' profits.
This turns on whether the remuneration paid to the managing agent "is included in the profits of the managing agent 's business".
The words used being "is included" there is no doubt that an actual inclusion is posited.
But this, however, does not solve the problem, for the , 'inclusion in the profits" might refer to three distinct "inclusions" : (1) the inclusion by the managing agents as an assessee for the purposes of his individual assessment, i.e., in his return, (2) the inclusion by the assessing authority in the order of 213 assessment made against the managing agent, (3) the inclusion under the terms of the Ordinance of the remuneration as an amount chargeable to the tax as part of the profits of the managing agent.
In passing we might observe that r. 7 (2) (b) of Sch. 1 to the Excess Profits Tax Act, 1940, on which the Ordinance is modeled is in the same terms as the proviso (b) to r.4(1) of the Ordinance but the proper interpretation of the rule in the Excess Profits Tax Act has never come up before the Courts for decision.
The contention urged on behalf of the appellant, before the learned Judges of the High Court was that the inclusion referred to an inclusion by the "essment officer of the remuneration in the assessment of the managing agent and that unless the remuneration sought to be excluded in the computation of the profits of the company was actually assessed in the hands of the managing, the company could not claim the benefit of proviso (b).
The learned Judges repelled this submission by holding that the proviso could not be construed as to vest in the assessing authority an absolute discretion to assess either the company or the managing agent.
They read the words ",is included" as equivalent to "is liable to be included" and that as it was not contested before them that if the assessment officer had been so minded he could have included this sum in the profits of the managing agent 's business, the terms of proviso (b) were satisfied.
Mr. Sen learned Counsel for the appellant did not pursue the same line of argument as in the Court below.
We should add that we consider that Mr. Sen was right in not attempting to support the argument which was rejected by the learned Judges of the High Court.
Though tax laws occasionally make provision for the assessing authority to proceed against a particular unit of assessment on one or 214 more alternative bases, it would require 'very explicit and unambiguous language to permit an assessing authority to choose one of two units for assessment, particularly in, the context of there being no provision for the inter se adjustment of the rights and liabilities in the event of one unit benefiting at the expense of the other by reason of the exercise of the option and when admittedly the unit does not receive the income as agent for the other unit.
Besides, if the company had been first assessed to tax because let us say its return had been filed earlier, or the enquiry as regards the correctness of the return was completed earlier, there is no provision /in the Ordinance or in the Rules for excluding the sum in the personal assessment of the managing agent, so that it could not be urged that the assessing authority had any option in the matter to tax either the company or the managing agent.
If the managing agent is ex roncessis liable to have his remuneration included in his assessment for the tax, unless the income or the business is not within the Ordinance, it would be most anomalous to suggest that in order that the benefit of proviso (b) should be available to a company, the assessment of the managing agent should have been completed first a matter not always within the control of a company.
We do not think it necessary to dilate further on this construction since Mr. Sen did not commend it for our acceptance.
His submission, on the other hand, was that this was a special provision designed to meet the cases of companies in which the directors had a controlling interest.
In such cases it was these directors who had to submit and submitted the return on behalf of the company and who, of course, had to submit their own returns in their individual capacity as persons in receipt of taxable profits.
In these circumstances 215 he urged that the proviso should be read as conferring an option upon the directors either to include their remuneration in their own returns, get them taxed and pay the tax themselves or to include it in the company 's return and have the amount taxed in the company 's assessment.
His further submission was that having regard to the manner in which the proviso was worded, where the managing agent failed to include his remuneration in his own return and have it assessed as part of his profits, the effect was the same as if he had opted to have the sum taxed in the company 's assessment.
The option, it was urged, was that of the managing agent who controlled the affairs of a company and therefore in effect represented it and who in one capacity acted for himself and in another acted for the company.
In effect the submission of learned Counsel was that the provision was designed to obviate double taxation of the same income and for this purpose vested the controlling Director with a discretion to render the company immune from tax where the sum was included in his own return and was assessed in his hands.
The theory propounded regarding the provision being one for avoidance of double taxation in the manner above indicated by vesting a discretion in the controlling Director breaks even on a cursory examination.
Let us assume that the managingagent opts to have the company taxed and submits a return on behalf of the company in which no deduction is claimed in respect of this item and an assessment is made accepting that return.
On the terms of the Ordinance this would not afford any relief to the managing agent in his personal assessment, for admittedly there is, as pointed out earlier, no provision in the Ordinance or in the Schedule exempting the managing agent from the inclusion of this remuneration in his taxable profits, and this 216 must obviously be so, because for the purposes of the charging section he would be an independent unit of assessment.
He would have to include in the computation of his personal income for the purpose of the War Profits Tax the remuneration received by him.
This might be expressed in a slightly different form by stating that proviso (b) to r. 4(1) does not operate in the reverse direction, that is by exempting the managing agent from tax on the remuneration derived by him, merely because the deduction of that item has been denied to the company.
Obviously therefore r. 4(1)(b) is not a rule designed for the avoidance of double taxation in the sense in which learned Counsel for the appellant suggests that it is.
There are also other reasons why we find it unable to accept the submission of Mr. Sen that by the words is "included" is meant the inclusion in the return by the managing agent with the result that in cases where he does not so include, the company would not be entitled to the deduction.
The option suggested by Mr. Sen to the managing agent was that he might either elect to pay the tax himself or get the company to pay it.
Obviously it would always be in the interest of the managing agent to have the tax paid by the company if by that means, as is suggested by Mr. Sen, he could obtain absolution from the obligation of paying the tax himself, for if the tax is paid by the company the loss involved in the payment of the tax would fall on him only to the extent of his shareholding, being for the rest shared by the other share holders of the company.
It is really difficult to understand the principle by which one could construe a rule of this nature as enabling a managing agent who holds, say 51% of the share capital of the company to visit 49% of the burden of tax which normally one would expect to be paid by him, to be paid by the other shareholders of the company merely because 217 he happens to be the managing agent holding a controlling interest by the extent of his share holding.
We consider that the construction suggested by Mr. Son which leads to such an unreasonable result and inflicts an unjust injury on the other shareholders is not any proper interpretation of the provision.
Besides, there are other grounds why the meaning attributed to the words "is included" as referring to "included ' by the managing agent" cannot be accepted.
Suppose the managing agent includes it in his return but the assessing authority does not include it in the computation of his return but prefers to disallow the deduction in the case of a company.
Would that be "inclusion in his pro fits?" Again, suppose the managing agent does not include it in his return but the assessing authority does, and tax is paid by the managing agent, would there be no exclusion? These illustrations serve to bring out the anomalies that would arise if it were held that the words ",is included" meant "is included in his return by the managing agent".
This leaves for consideration the meaning that "is included" refers to the inclusion under the provisions of the Ordinance.
If this meaning were accepted it would not matter whether the managing agent has or has not included the sum in his return or whether the assessing authorities have or have not done their duty by having the remuneration included in the taxable profits of the managingagent.
If the managing agent has not done so being under an obligation imposed by the law to include it, the return would be liable to be revised by the assessing officer and if the failure to include the sum was due to any suppression, the managing agent would, besides having the sum included in his assessable profits, be liable to appropriate penalties for filing a wailfully incorrect return.
Similarly, the assessing officer being under a statutory duty to include the sum in the assessment of the managingagent would, if he failed to do so, render the order 218 liable to be revised.
The remedy for the failure either of the managing agent or of the assessing authorities to conform to the requirements of the law certainly cannot be the disallowance of the sum in the computation of the profits of the company.
The entirety of this reasoning, it would be noted, proceeds on the basis that the managing agent was liable to include his remuneration in his assessable profits.
In such a contingency it stands (to reason that neither the default of the managing agent as an assessee or of the assessing authority to include the sum in the profits of the managing agent could prejudice the rights of the company in the matter of the computation of its income.
Where the remuneration of the managingagent was not under the Ordinance liable to be brought to tax the position would be different and that is just what is indicated as that which would render the proviso inapplicable.
For instance, section 5(1) of the Ordinance enacts; ".
Provided further that this Ordinance shall not apply to (a). . . . . . . . . (b) profit from a business carried on wholly on behalf of a religious or charitable institution and the profits of which are applied solely to the purpose of the institution and enure for the benefit of the public, and (i) the business is carried on in the course of the carrying out of a primary purpose of the institution, and (ii) the work in, connection with the busi ness is carried on by the beneficiaries of the institution".
If for instance, the business of the managing agency was being carried on for or on behalf of a trust of 219 the character indicated by the provision just now read, the remuneration of the managing agent would not be liable to tax for the reason that it is outside the ambit of the Ordinance and to such a case the terms of proviso (b) to r. 4(1) would not be attracted, with the result that the managingagent not being liable to tax under the Ordinance on the remuneration derived by him, the company, if it were a controlled company.
would not be entitled to the deduction of that remuneration in the computation of its profits.
Except in case where the remuneration received by a managing agent is not liable to tax under the Ordinance, it is the managing agent that would be liable to pay tax on his remuneration and notwithstanding that the company is a controlled company the remuneration paid by it to the managing agent would be a permissible deduction by reason of the exception to the opening words of r. 4(1) contained in proviso (b).
It is unnecessary for our present purpose to consider whether besides section 5(1)(b), already referred to, there are other contingencies in which remuneration received by a Director could be held not to be ,included ' in the latter 's profits under the Ordinance, since in the case before us it is admitted that the remuneration received by the managing agent was liable to be include in the computation of his profits for the purposes of the War Profits Tax and therefore neither the fact that the managing agent did not "include" the sum in his return, nor the default of the assessing authority to correct this error by " 'including" the sum in his assessment, is any reason for depriving the respondent company of the benefit of proviso (b) to r. 4(1).
We therefore consider that the learned Judges of the High Court answered the question referred to them correctly.
The appeals fail and are dismissed with costs.
Appeals dismissed.
| Sub rule (1) of r. 4 of Sch. 1 to the Gwalior.
War Profits Tax Ordinance, Samvat 2001, provided: "In computing the profits of a business carried on by a company, no deduction shall be made in respect of the remuneration paid to directors if during any part of the accounting period concerned, they had controlling interest in the company; provided that this sub rule shall not apply (a). . (b) to the remuneration of any managing agent where such remuneration is included in the profits of the managing agents ' business for the purposes of the War Profits Tax".
The respondent company was ' managed by a managing agency firm which had, by reason of its shareholding exceeding 50% of the issued share capital, a controlling interest in the company.
The company was assessed to War Profits Tax under the provisions of the Gwalior War Profits Tax Ordinance, Samvat 2001, for three chargeable accounting periods between 1944 and 1946.
During each of these accounting periods the company had paid remuneration to its managing ,agent and claimed to deduct the remuneration so paid in the computation of its business profits during these three periods.
The assessing officer disallowed the claim on the ground that as the remuneration received by the managing agency firm had not been factually assessed in the hands of the managing agent, proviso (b) to r.4(1) of Sch.
I was not applicable.
It was found that the managing agents had in their statement of their own Profit and Loss account for the relevant years disclosed the managing agency commission received by them but they claimed before the assessing authority that the sum was not liable to be taxed and this claimed was accepted.
Held, that the remuneration paid to the managing agents, even though they had a controlling interest in the 206 company, was a permissible deduction for the purpose of computing the profits of the company under the War Profits Tax Ordinance, Samvat 2001, ' because by virtue of proviso (b) to r.4(i) of Sch. 1 to the Ordinance, the managing agent was liable to include this remuneration in his assessable profits.
The words "is included" in proviso (b) to r.4(1) refer to the inclusion under the provisions of the Ordinance.
Neither the default of the managing agent as an assessee nor of the assessing authority to include the sum in the profits of the managing agent could prejudice the rights of the company in the matter of the computation of its income.
| The appellant assessee was a cooperative society engaged in the business of banking The previous year relevant to the assessment year 1963 64 was the year ending June 30, 1962.
The business income of the assessee was exempt under the provisions of Section 80(1) as it then stood.
During the aforesaid accounting yew, the assessee received a sum of Rs. 19 being the interest on the deposit made by it with an Electricity Distribution Company.
This deposit had to be made by the assessee as it was required by the conditions notified by the electricity company for supply of energy, and it carried interest.
It was on account of the said deposit that the sum of Rs. 19 was received by the assessee, by way of interest.
The Income tax Officer treated the amount of Rs. 19 as income from other sources, and on that basis, he levied additional surcharge, in a sum of Rs. 81,920.
The assessee appealed to the Appellate Assistant Commissioner who upheld the assessee 's contention that the said sum of Rs. 19 constituted its business income and, was therefore, exempt.
He held that the levy of surcharge was unsustainable.
The Revenue appealed to the Appellate Tribunal which held that it was 'income from business ', and accordingly dismissed the Revenue 's 997 998 appeal.
At the instance of the Revenue, the Tribunal referred the question to the High Court.
The High Court held, that the assumption made by the Appellate Assistant Commissioner and the Tribunal that the liability of surcharge was not attracted in case the said sum of Rs. 19 represented business income may not be warranted and that in such a situation the High Court does possess the power to correct the error so long as the point arose out of the Tribunal 's order.
It returned the reference unanswered and directed the Tribunal to consider the case on all points that require consideration of the question whether additional surcharge was attracted.
In the assessee 's appeal to this Court, it was submitted that the High Court exceeded its jurisdiction in making the aforesaid direction, that the High Court widened the scope of enquiry which it was not empowered to do in a reference under Section 256 and that the matter should be sent back to the High Court for answering the question of law as stated by the Tribunal.
Dismissing the appeal, this Court, HELD : All that the High Court has asked the Tribunal to do is to consider whether the liability of surcharge is not attracted even if the said sum of Rs. 19 is treated as income from business.
The fact that the revenue was also a party to the said erroneous assumption before the Tribunal cannot stand in the way of the Revenue resiling from an er roneous assumption of law.
[1004 D F] In the instant case, the question was whether additional surcharge was leviable for the assessment year 1963 64 under the relevant Finance Act.
The assessee 's contention was that it had no income which was liable to be assessed to income tax inasmuch as its entire income was exempt under Section 81 (1) (a), and it was submitted that the sum of Rs. 19 was also a business income and, therefore, the liability of additional surcharge did not attach to the assessee.
The I.T.O. took the view that the said sum of Rs. 19 represented income from other sources and, therefore, liability of additional surcharge was attracted.
The Appellate Assistant Commissioner upheld this contention.
The High Court, however, thought that having regard to the language of the provisions of the relevant Finance Act, the Tribunal ought to examine whether the liability to additional 999 surcharge was attracted even if the said sum of Rs. 19 was treated as income from business.
The High Court was of the opinion that this legal submission, though raised for the first time, did call for serious consideration.
This was done to arrive at a correct decision in law relating to the liability to additional surcharge.
If really, additional surcharge was chargeable according to the Finance Act even In case the said sum of Rs. 19 represented business income, the High Court cannot be called upon to act on the assumption that it is not so chargeable and answer the question stated.
Such a course would neither be in the interest of law or justice.
That the Revenue was also a party to the erroneous assumption of law makes little difference to the principle.
[1004 B F] C.I.T. Bombay vs Scindia Steam Navigation Ltd., 42 I.T.R. 589, relied on.[1004 H] V.R.Y.K.N. Kallappa Chettiar vs Commissioner of Income Tax, ; C.L T. vs Ogale Glass Works Ltd., 25 I.T.R. 529; Keshav Mills Co. Ltd. vs Commissioner of Income Tax, Bombay North, Ahmedabad, ; Commissioner of Income Tax, Bihar and Orissa vs Kirkend Coal Co., 74 I.T.R. 67 and Kusumben D. Mahadevia vs Commissioner of Income Tax, Bombay City , not applicable.
[1004 H]
| One Maganlal Parbhudas who was a Director of the assessee company held 6,344 shares out of a total of 10,000 shares of the company and he made a gift of 1000 shares to each of his five sons.
During the accounting period the company had eight Directors including the said Maganlal Parbhudas and two of his sons and they held 4695 shares as between themselves.
Out of the balance of the shares 4754 shares were held by the relatives of some of the Directors.
Three sons of Maganlal Parbhudas were Directors of the Managing Company.
The Income tax Officer applied section 23A of the Income tax Act as it stood prior to its amendment by the Finance Act, 1955 to the company holding that this was not a company in which the public were substantially interested.
The order of the Income Tax Officer was confirmed on appeal both by the Assistant Commissioner and the Tribunal.
The High Court remitted the case to the Tribunal for a statement whether the Directors were exercising de facto control over any of the other shareholders.
The Tribunal thereupon gave the finding that the Directors, particularly the three sons of Maganlal Parbhudas who formed the Directors of the Managing Company were under the de facto control of their father.
The High Court agreed with the finding of the tribunal and held that on the facts and circumstances of the case the shares held by the three sons of Maganlal Parbhudas could not be considered to be shares held by the members of the public within the meaning of the Explanation to the third proviso to section 23A of the Income Tax Act.
On appeal by the assessee company, Held, that in the Explanation the word "public" is used in contradistinction to one or more persons who act in unison and among whom the voting power constitutes a block.
If such a block exists and possesses more than seventy five per cent of the voting power, then the company cannot be said to be one in which the public are substantially interested.
Sardar Baldev Singh vs Commissioner of Income tax, Delhi and Ajmer, ; , considered.
The test is first to find out whether there is an individual or a group which controls the voting power as a block.
If there is such a block the shares held by it cannot be said to be held 979 "unconditionally" or "beneficially" by the public.
Only those shares which are "unconditionally" and "beneficially" held by the public uncontrolled by the controlling group can be treated as shares held by the public under the Explanation.
The group may be composed of Directors or their nominees or relations in different combinations, but none can be said to belong to that c group, be he a Director or a relative unless he does not hold the shares unconditionally and beneficially for himself.
It is only such a person who can fall properly outside the word "public".
The view that Directors merely by reason of their being Directors stand outside the "public" is erroneous.
Commissioner of Income tax vs H. Bjordal, , followed.
Mere relationship is of no consequence unless it is proved that the voting power of one relative is controlled by another relative.
Tatem Steam Navigation Co. vs Commissioner of Inland Reve nue, , followed.
| The income derived by the Bar Council of Maharashtra from securities (interest) and other income by way of enrollment fees during the accounting periods relevant to the assessment years 1962 63,1963 64,1964 65 was subjected to tax by the Income Tax Officer.
Since the Central Government had accorded approval to the assessee for the purpose of section 10(23A) during the pendency of the appeal before the Tribunal by a notification dated August 5, 1966 with effect from December 28,1961, the Tribunal held that the assessee Council was entitled to exemption under section 10(23A) in respect of its income by way of enrollment fees.
The Tribunal remanded the case back to the Appellate Assistant Commissioner and directed him to dispose of the case by examining the question as to the purpose for which the securities were held by the assessee Council.
It observed that if the said securities were held for educational purpose or for any other charitable purpose then the exemption under section 11 would be admissible to the extent available under the law.
The High Court, on a reference made at the instance of the assessee Council, answered the question: "Whether on the facts and in the circumstances of the case, the assessee Council could be taken to be a body intended to advance any object of general public utility falling within section 2(15) for purposes of section 11 of the Act ?" in favour of the assessee and hence the appeals by Revenue after obtaining special leave from the Court.
Dismissing the appeals, the Court ^ HELD: 1.
Having regard to the Preamble of the and the nature of the various obligatory functions including the one under clause (d) enjoined upon every State Bar Council under section 6(1) of the , it is clear that the primary or dominant purpose of an institution like the assessee Council is the advancement of the object of general public utility within the meaning of section 2(15) of the Income Tax Act, 1961 and as such the income from securities held by the assessee Council would be exempt from any tax liability under section 11 of the Income Tax Act, 1961.
[551 E G] 543 2.
If the primary or dominant purpose of a trust or institution was charitable any other object which by itself might not be charitable but which was merely ancillary or incidental to the primary or dominant purpose would not prevent the trust or institution from being a valid charity.
The restrictive words "not involving the carrying on any activity for profit" in section 2(15) of the Income Tax Act, 1961, qualify "object" and not the advancement or accomplishment thereof.
In other words, the true meaning of the restrictive words is that when the purpose of a trust or institution was the advancement of an object of general public utility it was that object of general public utility and not its accomplishment or carrying out which must not involve the carrying on of any activity for profit.
Here, admittedly, the State Bar Councils are not indulging in any activity for profit and hence the question of applying the restrictive words in s.2(15) does not arise.
[547 C F, 548 G H] Commissioner of Income Tax, Madras vs Andhra Chamber of Commerce, ; Additional Commissioner of Income Tax, Gujarat vs Surat Art Silk Cloth Manufacturers Association, , reiterated.
| The appellant firm M/s. Kishinchand Chellaram was assessed to tax for the assessment year 1947 48, the relevant accounting year being the year ending 6th April, 1947.
The concerned Income Tax Officer on an information that a sum of Rs. 1,07,350 purported to have been sent by the assessee by a telegraphic transfer through the Punjab National Bank Ltd., Madras, to its Bombay Branch favouring one Nathirmal on 16 10 1946, has escaped assessment, called upon the assessee, through his letters dated 24th February, 1955 and 4th March, 1955 to explain the same.
The Income Tax Officer did not refer to the letters dated 14th January, 1955 and 10th February, 1955 addressed by him to the Bank Manager nor the reply of the Manager dated 18th February, 1955 in the said two letters addressed to the assessee.
Nor were the copies supplied to the assessee nor even made available on record before all authorities including the Supreme Court.
The assessee through its letter dated 24th March, 1955 replied that as per its records no such remittance was ever sent by it from Madras to Nathirmal in Bombay.
On 2nd February, 1956, the Income Tax Officer for the second time called the very same particulars to which the assessee by its letter dated 9th February, 1956 once again denied the remittance by it.
Despite this, by his letter dated 4th March, 1957 addressed to the assessee, the Income Tax Officer repeated his earlier request to it to explain about the remittance, complaining at the same time of silence by the assessee to his letter dated 2nd February, 1956.
The assessee in its reply dated 13th March, 1957 while inviting attention to its earlier replies dated 24th March, 1955 & 9th February, 1956 reiterated that no amount of Rs. 1,07,350 was remitted by it from Madras to Nathirmal.
Disbelieving it, the Income Tax Officer, by his order brought to tax the amount of Rs. 1,07,350 on the ground that it represented the concealed income of the assessee and observed that "there was no reason to doubt the banker 's statement that the amount was remitted by M/s. Kishinchand Chellaram from Madras".
The assessee preferred an appeal to the Assistant Appellate Commissioner.
At this stage, it came to light that the purported telegraphic transfer was applied for by one "Tilok Chand C/o M/s. K. Chellaram, 181, Mount Road, Madras" and it was received at Bombay by one "N.B. Bani".
In spite of the plea of the assessee that the transaction did not relate to its firm, the Assistant Appellate 721 Commissioner holding that the assessee has not discharged the burden of proof lying on it to explain the amount, rejected the appeal.
Further appeal to the Tribunal and a reference called for by the High Court at the instance of the assessee was also answered against it.
Hence the appeal after obtaining special leave of the Court.
Allowing the appeal, the Court, ^ HELD: (1) There was no material evidence at all on the basis of which the Tribunal could come to the finding that the amount of Rs. 1,07,350 was remitted by the assessee from Madras and that it represented the concealed income of the assessee.
[731E].
In the face of the application for remittance signed in the name of Tilok Chand, that this amount was sent by the assessee and the finding to that effect reached by the Tribunal is unreasonable and perverse.
What at the highest could be said to be established by the material evidence on record is that Tilok Chand remitted the amount of Rs. 1,07,350 from Madras and this amount was received by Nathirmal in Bombay.
Even if it is accepted that Tilok Chand and Nathirmal were employees of the assessee as held by the Tribunal, the utmost that could be said is that an employee of the assessee in Madras remitted the amount of Rs. 1,07,350 to another employee in Bombay.
But, from this premise it does not at all follow that the remittance was made by the employee in Madras on behalf of the assessee or that it was received by the employee in Bombay on behalf of the assessee.
The burden was on the Revenue to show that the amount of Rs. 1,07,350 said to have been remitted from Madras to Bombay belonged to the assessee and it was not enough for the Revenue to show that the amount was remitted by Tilok Chand, an employee of the assessee, to Nathirmal, another employee of the assessee.
It is quite possible that Tilok Chand had resources of his own from which he could remit the amount of Rs. 1,07,350 to Nathirmal.
It was for the Revenue to rule out this possibility by bringing proper evidence on record, for the burden of showing that the amount was remitted by the assessee was on the Revenue.
[730H 731D] The two documents viz. the letters dated 18th February, 1955 and 9th March, 1957 did not constitute any material evidence which the Tribunal could legitimately have taken into account for the purpose of arriving at the finding that the amount of Rs. 1,07,350 was remitted by the assessee from Madras to Bombay because while the former was not disclosed to the assessee by the Revenue Authorities till the hearing before the Tribunal in regard to the preparation of the supplemental statement of the case, giving the assessee an opportunity to cross examine the Manager of the Bank, the latter was not disclosed to the assessee at any stage.
Further, there is no explanation given by the Revenue as to how these two important documents were not traceable earlier.
Even if these two letters were to be taken into account, they did not supply any reasonable basis for reaching the finding that it was the assessee which sent the remittance of Rs. 1,07,350.
There can be no doubt that if the amount had been remitted by Tilok Chand on behalf of the assessee he would have signed the application for telegraphic transfer on behalf of the assessee and not in his own name.
This apart it is impossible to believe that the Manager of the Bank could have failed to appear before the Income Tax Officer in answer to the summons dated 5th March, 1957 and there is no doubt that this statement must have been recorded and the said statement also withheld.
[729H 730A; 729B, C; 730B, E; 729F G] 722 (2) It is true that the proceedings under the Income Tax law are not governed by the strict rules of evidence and therefore it might be said that even without calling the Manager of the Bank in evidence to prove this letter, it could be taken into account as evidence.
But before the Income Tax Authorities could rely upon it, they were bound to produce it before the assessee so that the assessee could controvert the statements contained in it by asking for an opportunity to cross examine the Manager of the Bank with reference to the statements made by him.
Moreover, this letter was said to have been addressed by the Manager of the Bank to the Income Tax Officer on 18th February, 1955 in relation to a remittance alleged to have been sent on 16th October, 1946 and it is impossible to believe in the absence of any evidence to that effect, that the Manager who wrote this letter on 18th February, 1955 must have been incharge of the Madras Office on 16th October, 1946 so as to have personal knowledge as to who remitted the amount of Rs. 1,07,350.
The Revenue authorities ought to have called upon the Manager of the Bank to produce the documents and papers on the basis of which he made the statements contained in his letter and confronted the assessee with those documents and papers but instead of doing so, the Revenue authorities chose to rely merely on the statements contained in the letter and that too, without showing the letter to the assessee.
[728A F]
| For the two accounting periods the assessee, a resident company, incorporated outside India paid estate duty payable on the death of its certain share holders not domiciled in India and debited the said amounts to revenue in its accounts in ascertaining the profits and gains of its business for the said years.
The Income tax Officer included the said amounts so paid towards estate duty in the profits and gains of the company for the said two accounting periods and assessed the company to income tax for 1955 56 and 1956 57 on that basis.
The appeals by the assessee to the Appellate Assistant Commissioner were dismissed but on further appeal, the Appellate Tribunal set aside the said orders and held that the assessee was entitled to deduct the said amount in computing its profits.
On an application by the Commissioner of Income tax, the Tribunal stated a case under section 66(1) of the Act to the High Court and referred the following question of law for its opinion: "Whether on the facts and in the circumstances ,of the case, the estate duty paid by the company under s, 84 ,of the , is a revenue expenditure deductible in computing the assessee 's business income for the ,assessment years in question." The High Court agreed with the view of the Tribunal and answered the question in the affirmative.
On appeal by special leave it was urged on behalf of the appellants, (1) that the sum paid by the assessee under section 84 of the were not expenditure of the assessee company and therefore, they could not be deducted from its profits in computing its assessable income under section 10(2)(xv) of the Act; and (2) that even if it was revenue expenditure, it was not laid out or expended wholly or exclusively for the purpose of the assessee 's business within the meaning of the said sub clause.
Held: (i) There was nothing on the record to show whether in England, where the concerned share holders died, the resident company could recover the amount representing the estate duty paid by it in India from the legal representative of the deceased share holders.
Therefore, the assessee who, as a statutory agent paid to the State the estate duty, could not recover the same from the legal representative of the deceased non resident share holders.
In that situation the company would be out of pocket to the extent it paid the estate duty of the said persons.
Therefore, it cannot be held that the amounts paid by the assessee towards estate duty were not expenditure incurred by it, but only amounts paid by it on account with a right to recover the same from the persons on whose behalf it paid.
(ii)The expression" for the purpose of the business"in s.10(2) (xv) of the Act is wider in scope than the expression "for the purpose of earning profits".
Its range is wide: it may 694 take in not only the day to day running of a business but also the rationalization of its administration and modernization of its machinery; it may include measures for the preservation of the business and for the protection of its assets and property from expropriation, coercive process or assertion of hostile title; it may also comprehend payment of statutory dues and taxes imposed as a pre condition to commence or for carrying on of a business; it may comprehend many other acts incidental to the carrying on of a business.
However wide the meaning of the expression may be, its limits are implicit in it.
The purpose shall be for the purpose of the business, that is to say, the expenditure incurred shall be for carrying on the business and the assessee shall incur it in his capacity as a person carrying on the business.
It cannot include sums spent by the assessee as agent of a third party, whether the origin of the agency is voluntary or statutory; in that event, he pays the amount on behalf of another and for a purpose unconnected with the business.
In the present case, the amounts in question were paid by the assessee as a statutory agent to discharge a statutory duty unconnected with the business, though the occasion for the imposition arose because of the territorial nexus afforded by the accident of its doing business in India.
Therefore, it must be held that the estate duty paid by the respondent was not an allowable deduction under section 10(2)(xv) of the Act.
Case law reviewed.
| Held (Per section R. DAs, ACTING C.J., VIVIAN BOSE, BHAGWATI and B.P. SINHA, JJ.
JAGANNADHADAS J., dissenting) that section 5(1) of the Taxation on Income (investigation Commission) Act, 1947 (Act XXX of 1947) is ultra vires the Constitution as it is discriminatory and violative of the fundamental right guaranteed by article 14 of the Constitution by reason of two amendments which were made in section 34 of the Indian Income Tax Act, 1922 (Act XI of 1922) one in 1948 by the enactment of the Income Tax and Business Profits Tax 1248 (Amendment) Act, 1948 (Act XLVIII of 1948) and the other in 1954 by the enactment of the Indian Income Tax (Amendment) Act, 1954 (Act XXXIII of 1954).
If the provisions of section 34(1) of the Indian Income tax Act as it stood before its amendment by Act XLVIII of 1948 had been the only provisions to be considered, the Court would have reached the same conclusion as it did in A. Thangal Kunju Musaliar vs M. Venkitachalam Potti & Anr., ([1955] 2 S.C.R. 1196), but the position was materially affected by reason of two amendments made in that section by two Acts, one in 1948 and the other in 1954.
Amended section 34(1) of the Indian Income tax Act was substantially different from the old section 34(1) which was in operation up to the 8th September 1948.
The words "if in consequence of definite information which has come into his possession the lncome tax.
Officer discovers that income, profits or gains chargeable to income tax have escaped assessment in any year. . . which appear in the old section were substituted by the words "if the Income tax Officer has reason to believe that by reason of the omission or failure on the part of the assessee. . income, profits or gains chargeable to income tax have escaped The requisites of (i)"definite" information (ii) which had " come into" possession of the Income tax Officer and in consequence of which (iii) he "discovers" that income, profits or gains chargeable to income tax bad escaped assessment, were no longer necessary and the only thing which was required to enable the Income tax Officer to take proceedings under section 34(1) as amended was that he should have reason to believe that by reason of the omission or failure on the part of the assesses income, profits or gains chargeable to income tax had escaped assessment for a particular year.
Whereas before this amended section 34(1) came to be substituted for the old section 34(1) there was no com parison between the provisions of section 5(1) of Act XXX of 1947 and section 34(1) of the Indian Income tax Act as it then stood, the provisions of section 34(1) as amended after the 8th September 1948 could stand comparison with the provisions of section 5(1) of Act XXX of 1947 and the cases which were covered by section 5(1) of Act XXX of 1947 could be dealt with under the procedure laid down in section 34(1) of the Indian Income tax Act.
After the 8th September 1948, therefore, even in the case of substantial evaders of income tax who were a distinct class by themselves intended to be treated by the drastic and summary procedure laid down by Act XXX of 1947, some cases that were already referred by the Central Government for investigation by the Commission could be dealt with under that Act and other cases, though falling within the same class or category, could be dealt with under the procedure prescribed in the amended section 34(1) of the Indian Income tax Act.
The persons who were thus dealt with under section 34(1) of the Indian Income tax Act had available to them the whole procedure laid down in that Act including the right to inspect documents and the right to question the findings of fact arrived at 1249 by the Income tax Officer by the procedure of appeal and revision and ultimate scrutiny by the Income tax Appellate Tribunal which was denied to those persons whose cases had been referred by the Central Government for investigation by the Commission under s.5(1) of Act XXX of 1947.
Different persons, though falling under the same class or category of substantial evaders of income tax, would, therefore, be subject to different procedures, one a summary and drastic procedure and the other a normal procedure which gave to the assessees various rights which were denied to those who were specially treated under the procedure prescribed in Act XXX of 1947.
Per JAGANNADHADAS J.
The class of persons falling under section 5(1) of the Taxation on Income (Investigation Commission) Act, 1947 (Act XXX of 1947) is totally different from that which falls within amended section 34 of the Indian Income Tax Act 1922 (Act XI of 1922) and therefore section 5(1) of Act XXX of 1947 is not unconstitutional as offending article 14 of the Constitution.
Suraj Mall Mohta vs A. V. Visvanatha Sasttrii and Another ([1955] 1 S.C.R. 448), Shree Meenakshi Mills Ltd. vs A. V. Visvanatha Sastri and Another ([1955] 1 S.C.R. 787), A. Thangal Kunju Musaliar vs M. Venkitachalam Potti & Anr.
and M. Venkitachalam Potti & Anr.
vs A. Thangal Kunju Musaliar, ([1955] 2 S.C.R. 1196), Syed Qasim Bazvi vs The State of Hyderabad and Others ([1953] S.C.R. 581), Habeeb Mohamed vs The State of Hyderabad ([1953] S.C.R. 661) and Gangadhar Baijnath and others vs Income tax Investigation Commission, etc.
(A.I.R. 1955 All. 515), referred to.
| The claim of his pension at the rate of 1sh 9d.
to a rupee by the respondeent, a former Secretary of State Service Officer was allowed by the Accountant General, but the Union appellant reversed it and directed recovery of the excess payment.
The respondent basing his claim under the second proviso to article 934 of the Civil Service Regulations moved the High Court under article 226 of the Constitution which was accepted.
The Letters Patent Appeal filed by the Union was dismissed.
The appeal by special leave, in view of the Constitution (28th amendment) Act 1972 introducing article 312A and the , was accepted and the court.
^ HELD: (i) Under section 12 of the Former Secretary of State Service Officers (Conditions of services) Act 1972, enacted by Parliament by virtue of article 312A of the Constitution the provisions of the Act or of any order made thereunder shall have effect notwithstanding anything inconsistent therewith contained in any law other than the Act or in any rule, regulation or order or other instrument, having effect by virtue of any law other than the 1972 Act.
[863 B] (ii) The former members of the Indian Civil Service as a result of Ss. 8 & 12 of the Conditions of Service Act, 1972 are not entitled to claim payment of pension in sterling or outside India, or by converting $ 1000/ at the rate of exchange exceeding the rate of exchange of rupees thirteen one third to the pound sterling.
[863 C] (iii) The Judgment of the High Court holding that the second proviso to article 934 of the Civil Service Regulations applied to the instant case, cannot be sustained by reason of change in law.
[863 D] V. B. Raju vs State of Gujarat & Ors.
[1975] 1 S.C.R. 797, followed.
|
Appeal No. 538 of 1960.
Appeal from the judgment and order dated September ' 3, 1958, of the Punjab High Court in Civil Reference No. 2 of 1956.
B. Sen, D. Gupta and P. D. Menon for the appellant.
The respondent did not appear.
April 3.
The Judgment of the Court was delivered by DAs GUPTA, J.
In an appeal against the assessment of house tax of bungalow No. 127 B, Bank Road, Ambala Cantonment, by the assessment committee of the Cantonment Board, Ambala, three questions arose as regards the liability of the assessee on which the officer bearing the appeal entertained reasonable doubt and accordingly made a reference to the High Court of Punjab under a. 84 (2) of the , for the decision of these questions.
Admittedly half of this Bungalow had been.
appropriated under the provisions of the Cantonments (House Accommodation) Act No. VI of 1923 on a lease by the Central Government and was being used at the relevant time by some military officer for his residence.
It was also admitted that the assessment list was signed originally by three of the four persons who formed the assessment committee and was signed by the fourth member a few days later.
The appellate officer set out these circumstances in 198 his statement and then formulated the three questions thus .lm15 "1.
Whether the occupation of the property by a Military Officer under the above circumstances amounts to user thereof for the public purpose.
Whether the occupation of the Military officer of the portion of the Bungalow appropriated under Act No. 6 of 1923 amounts to its occupation by the Central Government, within the meaning of a. 99 (2)(6) of the . 3.
Whether the authentication of the Assessment list in the present case is valid as required by the provisions of Section 69, ".
The appellate officer who is required by section 84 (2) to state his own opinion on the points referred stated that in his opinion the occupation by the Military Officer, did not amount to user for a public purpose nor did it amount to occupation by the government and further that authentication of the assessment list was valid.
The High Court answered the two questions in the affirmative and the third in the negative.
In other words, the High Court 's opinion is that the occupation of the property by the Military Officer amounts to user or the public purpose an also amount to occupation by the Central Government within the meaning of section 99 (2) (f) of the and that the authentication was valid.
Against the High Court 's decision on the second question the Cantonment Board has filed this appeal on the strength of a certificate granted by the High Court.
199 The assessee was not represented before us but we were taken through all the relevant provisions of law by Mr. Sen who appeared for the Cantonment Board.
For a proper decision of the question in controversy it is necessary first to take note of the scheme of appropriation of houses under the Cantonments (House Accommodation) Act, No. VI of 1923.
Under section 5 every house situate in a Cantonment is liable to appropriation by the Central Government on a, lease in the manner and subject to the conditions provided in the Act.
Section 6 provides that (a) where a military officer stationed in the Cantonment or a President of a military mess in the Cantonment applies in writing to the officer commanding of the Station that he is unable to secure suitable accommodation by private agreement and no government property is available for the purpose and the Officer Commanding is satisfied of the truth of the facts stated or(b) the Officer Commanding is satisfied on enquiry that there is not in the cantonment a sufficient and assured supply of houses available at reasonable rates of rent by private agreement, the Officer Commanding may serve a notice on the owner of any house which appears to him to be suitable requiring him to permit the house to be inspected, measured and surveyed.
Under section 7 if a Officer Commanding is satisfied thereafter that the house is suitable for occupation by a military officer or a military mess, he may by notice require the owner to execute a lease of the house to the Central Government; require the .existing occupier, if any, to vacate the house; and require the owner to execute the necessary repairs.
The section further provides that on the expiry of the lease the house shall be re delivered to the owner in a state of reasonable repair.
Section 11 of the Act provides that if a house is unoccupied, a notice under section 7 may require the owner to give possession of the same to the Officer Commanding within 21 days from the service of the notice and 200 if a house is occupied, a notice issued under section 7 shall not require its vacation in less than thirty days from the service of the notice.
Section 12 provides that if the owner fails to give possession of a house to the Officer Commanding in pursuance of a notice issued under section 7, or if the existing occupier fails to vacate a house in pursuance of such a notice, the District Magistrate, shall enter the premises and enforce the surrender of the house.
It is clear from this resume of some of the provisions of the Act that where as the appropriation can take place under the conditions mentioned in s.6" what happens on the appropriation having been made is that the house is made over to the possession of the Officer Commanding on behalf of the Central Government.
What if; done with the house thereafter is not dealt with by the Act.
Coming now to the provisions of the , we have to consider first section 65, which is in these words : "65.
Save as otherwise expressly provided in the notification imposing the tax, every tax assessed on the annual value of buildings or lands or of both shall be leviable primarily upon the, actual occupier of the property upon which the said tax is I assessed, if he is the owner of the buildings or lands or holds them on a building or other lease granted by or on behalf of the government or the Board or on a building lease from any person.
In any other case, the tax shall be primarily leviable as follows, namely a) if the property is let, upon the ' lessor; (b) if the property is sub let, upon the superior lessor; (c) if the property is unlet, upon the 201 person in whom the right to let the same rests.
On failure to recover any sum due on account of such tax from the person primarily liable, there may be recovered from the occupier of any part of the buildings or lands in respect of which the tax is due such portion of the sum due as bears to the whole amount due the same ratio which the rent annually payable by such occupier bears to the aggregate amount of rent so payable in respect of the whole of the said buildings or lands, or to the aggregate amount of the letting value thereof, if any stated in the authenticated assessment list.
An occupier who makes any payment for which he is not primarily liable under this section, in the absence of any contract to the contrary, be entitled to be reimbursed by the person primarily liable for the payment, and, if so entitled, may deduct the amount so paid from the amount of any rent from time to time becoming due from him to such person.
" The right to impose the tax is conferred by a. 60.
Section 99 (2) contains the provisions for exemption from the tax on property.
It is in these words: "The following buildings and lands shall be exempt from any tax on property other than a tax imposed to cover the cost of specific services rendered by the Board, namely : (a) places set apart for public workshop and either actually so used for no other purpose; (b) buildings used for educational purposes 202 and public libraries, play grounds and dharam salas which are open to the public and from which no income is derived; (c) hospitals and dispensaries maintained wholly by charitable contributions; (d) burning and burial grounds, not being the property of the Government or a Board, which are controlled under the provisions of this Act; (e) buildings or lands vested in a Board; and ( f) any buildings or lands,used or acquired for the public service or for any public pur pose,which are the property of the State or in the occupation of the central or any State Government.
The tax in the present case is not one imposed to cover the cost of specific services rendered by the Board and so if the property falls within any of the clauses mentioned in cis.
(a) to (f) it will be entitled to exemption.
We are not concerned, however, with cls.
(a) to (e) as the only claim to exemption which has been made by the owner of the_ property is that it falls within el.
The question is whether that claim is justified.
It appears to us to be clear that to be entitled to the exemption under el.
(f) the building or land must satisfy two conditions.
First, that it has 'been used or acquired for public service or for public purpose, and secondly, that it is either the property of the State or in the occupation of the Central or any State Government.
The finding of the High Court that the building was being used at .the relevant date for a public purpose is not disputed before us.
That question therefore need not be further considered.
What is disputed however is : Was it in the occupation of the Central 203 Government ? On behalf of the appellant, the Cantonment Board, Mr. Sen has strenuously urged that the portion of the building with which we are concerned in this appeal was in fact being occupied by a Military officer and such occupation is not occupation of the Government.
It is to be made clear that while it is known that this portion of the building was appropriated by the government on lease under section 7 of the Cantonments ( House Accommodation) Act, it is not the appellant 's case that the occupation of the Military Officer was as a sub lessee of the government.
Mr. Sen 's argument proceeded on the basis that the government being the lessee of this portion of the building permitted a Military Officer to occupy it.
The question we have to consider is whether oil such occupation by the Military Officer the building ceased to be in ', ,he occupation of the Central Government, the lessee.
It is worth noticing that while section 65 (1) speaks of actual occupation by the owner and makes the tax primarily leviable on the owner if he is the actual occupier, section 99(2) uses the words ((in the occupation of the Central or any State Government" and not "in the actual occupation of the Central or the State Government".
Even so, it has been argued by Mr. Sen that the word "occupation" without anything more, should ordinarily be interpreted as actual occupation.
While this may be correct, we find it difficult to agree that when a person, entitled to actual occupation by reason of his lease permits another to occupy it, then it ceases to be in the actual occupation of the person so permitting.
Where the Central or the State Government after obtaining the lease under s.7 leases it out to any person, it is itself not entitled to actual occupation but has to put the sub lessee into occupation.
In such a case it may be reasonably said that the government has ceased to be in occupation.
204 In the case where the government after taking the lease merely gives a licence to some person to come and live in it, it is entitled to take away the permission at any time and thus to come into possession itself.
We can see no reason for thinking that in such a case the fact that the person to whom permission has been given is residing in the building, makes it anytheless the actual occupation of the government.
If that was so, the fact that the Military Officer may be away for months together and the members of his family or his servants are residing would make the building cease to be in occupation of the Military Officer.
That is on the face of it absurd.
In our opinion, where the person entitled to occupy, permits some other person to be in the building, he is in actual occupation through such other person.
Accordingly, we are of opinion that the building in question was in occupation of the Central Government through the Military Officer whom it has permitted to reside in it.
The answers given by the High Court were therefore correct.
The appeal is accordingly dismissed.
But, as there was no appearance for the other side, there will be no order as to costs.
| One half of bungalow No. 127 B, Bank Road, Ambala Cantt., was taken on lease by the Central Government and was being used by some Military Officer for his Residence The Assessment Committee of 'the Cantonment Board, Ambala, made an assessment of house tax but the assessment list was signed Originally by three out of four persons who formed the assessment committee and was signed by the fourth a few days later.
The officer bearing the appeal entertained reasonable doubt and made a reference to the High Court under s.84(2) of the , for the decision of those questions.
The questions referred to the High Court were : (1) Whether the occupation of the property by a Military Officer amounts to a user thereof for public purposes.
(2) Whether the occupation of the Military Officer of the portion of the bungalow appropriated under Act VI of 1923 amounts to its occupation by the Central Government within the meaning of section 99(2)(f) of the Cantonment Act, 1924.
(3) Whether the authentication of assessment list in the present form is valid as required by the provisions of section 96 of the .
The High Court answered the two questions in the affirmative and the third in the negative.
The opinion of the High Court was that the occupation of the property by the Military officer amounted to user for public purpose and also amounted to occupation by the Central Government and the authentication was valid.
Against the decision of the High Court on the second questions the Cantonment Board went in appeal to the Supreme Court on the strength of a certificate granted by the High Court.
197 Held,, that the building in question was in occupation of the Central Government through the Military Officer whom it had permitted to reside in it.
Where the person entitled to occupy, permits some other person to be in the building, he is in actual occupation through the other person.
| After the land in suit was sold in June, 1957, for an ostensible sum of Rs. 1,35:000/ , the appellants and respondents 1 to 3 instituted two separate suits for pre emptions in which the sale price inserted in the sale deed was also questioned.
The two suits were consolidated and the plaintiffs in each suit were joined as defendants in the other suit under section 38 of Punjab Pre emption Act, 1913.
The vendees thereafter admitted the rights of preemptors in both the suits conceding that a decree may be passed in their favour.
The appellants accepted the sale price of Rs, 1,35,000 on or before 30th July 1958 and although respondents 1 to 3 wanted this issue to be decided on the merits, the trial court passed a decree in both the ,suits granting respondents 1 to 3 the right to preemption in the first instance on payment of Rs. 1,35,000 and, on their failure to so pay, holding the appellants entitled to exercise the right to pre emption on payment of the said amount on or before 30th October 1958.
In an appeal to the High Court, respondents 1 to 3 challenged the correctness of the amount of the deposit to be made.
Allowing the appeal, the High Court reduced the amount of deposit to Rs. 1,05,800/ and directed respondents 1 to 3 to deposit the amount within three months.
In an appeal by the appellants to this Court against the decision of the High Court, a preliminary objection was taken challenging the appelants right to appeal it was contended that the appellants had based their right to pre emption in their suit on the ground of their being proprietors of the village where the land was situated.
They were deprived of that right by the amendment of section 31 of the Punjab Pre emption Act by Punjab Act 10 of 1969 which amendment was retrospective in its operation and prohibited the Courts from passing any decree inconsistent with the amended Act.
On the other hand it was contended inter alia for the appellants that they had already secured a decree in their favour by the trial court which had become final 'and with the terms of which the had complied: in the present appeal they were merely seeking modification of the decree of the High Court in favour of respondents 1 to 3 by getting the amount of pre emption money enhanced t0 Rs. 1,35,000/ without claiming any rights of pre emption in their own favour furthermore, the only appeal preferred by respondents 1 to 3 to the High Court was from the decree in 'heir own suit and for this reason also the decree in favour of the appellants by the trial court had become conclusive and unassailable.
130 HELD: Upholding the preliminary objection, It was not open to this Court to pass a decree of pre emption in favour of the appellants who were deprived by the Amendment Act of 1960 of their right to secure such a decree.
[133 C D] The contention that the decree in the appellants ' suit had become final and the High Court 's order was only in relation to the suit of respondents 1 to 3 ignored the scheme of section 28 of the Act read with O.20, r. 14, C.P.C. which does not postulate decrees of pre emption in favour of rival preemptors on payment of different amounts of purchase money in respect of the same sale.
Such a course may lead to conflicting decisions on the question of value of the property sought to be pre empted for the purposes of a pre emption suit.
Besides., the appellants ' right to pre empted the sale under the unamended law was admittedly inferior to that of respondents 1 to 3 and the appellants could only be held entitled to exercise their right after the failure of those respondents to comply with the terms of the decree in their favour.
[133 E G] Ram Swarup vs Munshi and Others, ; ; referred to.
| The deceased husband of the respondent leased out the entire portion of his house, except a big hall, to tenant in Chandigarh.
He was then putting up in a Government quarter.
After his death, his widow the respondent, leased out the hall to the appellant on April 1, 1981 for a period of 11 months on a monthly rent of Rs.650.
The Government quarter which had been allotted to her husband was transferred to the name of her eldest son.
The respondent filed two applications, more or less concurrently, in February 1982 against tenants of both the portions of the house seeking their eviction oh grounds that they had changed the user of the premises to non residential purposes, and that she bona fide required the premises for her own use and occupation.
The Rent Controller and the Appellate Authority held that the first tenant had changed the user of the premises and ordered his eviction.
Insofar as the appellant was concerned, both the authorities found against the respondent on both the grounds and dismissed the action for eviction.
The High Court dismissed the revision preferred by the first tenant, but allowed the one filed by the respondent and ordered the eviction of the second tenant too.
The first tenant abided by the order of eviction and surrendered possession to the respondent.
The second tenant, however, appealed by special leave to this 553 Court.
It was contended that when the Rent Controller and the Appellate Authority have rendered concurrent findings of the fact, the High Court was not entitled to disregard those findings, and come to a different conclusion of its own, that the respondent could not seek recovery of possessing of the hail by means of an application under section 13(3)(a) (i)(a) of the East Punjab Rent Restriction Act, 1949 for residen tial use because even of the hail had been let out for residential and nonresidential purposes, the premises would constitute a non residential building as per the amended definition under the East Punjab Rent Restriction (Chandi garh Amendment) Act, 1982, that he was entitled to raise these questions though they had not been raised earlier because they were questions of law, that as per the second proviso to section 13(3)(a) of the Act the respondent was not entitled to apply once over again for eviction of a tenant on the ground of bona fide requirement after having obtained an earlier order on the same ground.
Dismissing the appeal, HELD: 1.1 The findings of the Rent Controller and the Appellate Authority are vitiated by inherent defects.
The High Court was, therefore, justified in taking the view that those findings have no binding force on the revisional court.
[565E] 1.2 The rule that when the courts of fact render concur rent findings of fact, the High Court would not be entitled to disregard those findings and come to a different conclu sion of its own, would apply where the findings have been rendered with reference to facts.
In the instant case, both the statutory authorities have based their findings on conjectures and surmises and lost sight of relevant pieces of evidence which have not been controverted.
When the evidence of the respondent and her son, which has not been challenged, was that the Government quarter consisted of only one bed room, one store, one kitchen and one small dining room and nothing more, it has been construed by the authorities as comprising of three bed rooms and held that as there was enough accommodation for the entire family she was not likely to vacate it.
When the respondent wanted the entire house to be vacated by the two tenants so that she and her family members could occupy the whole house, the authorities have proceeded on the basis that the respondent was seeking recovery of possession of one hail alone for her residential needs and held that the entire family could not manage to live in a single hail.
They have failed to take note that the respondent had con temporaneously initiated proceedings against the 554 other tenant also for recovery of possession of the remain ing portion of the house leased to him.
Those proceedings were also before the very same Rent Controller and the Appellate Authority and they themselves had ordered the eviction of the other tenant.
The respondent had clearly stated in her evidence that she required the property for her own use and for her children and that she had filed the ejectment petition against the other tenant also.
That evidence was not and indeed could not be challenged.
When the respondent had not demanded increase of rent, even as per the admission of the appellant, the authorities have proceeded on the basis that the respondent was not likely to forego the income derived by way of rent for the hall.
They have failed to give due consideration to the respondent 's statement that her daughter and sons were all fully grown up and she wanted to perform their marriages and as such she was very much in need of the entire house, including the hall, for her occupation.
All these findings have been rendered on either non existent or fictitious material.
They cannot, therefore, be construed as findings of fact and once they cease to be findings of fact, they stand denuded of their binding force on the appellate or revisional court.
[558H; 559A H] Hiralal Vallabhrara vs Sheth Kasturbhai Lalbhai and others, AIR 1967 S.C. 1653, referred to.
2.1 The finding rendered by the Rent Controller and the Appellate Authority about the purpose for which the hall was let out were vitiated by several errors of fact and law.
The appellant, therefore, was not entitled to rely on those findings and dispute the respondent 's right to seek his eviction under section 13(3)(a)(i)(a) of the Act.
[563C] 2.2 The pleadings of the parties form the foundation of their case and it is not open to them to give up the case set out in the pleadings and propound a new and different case.
[560H] In the instant case, the tenant had averred in his written statement that the hall was taken by him for the purpose of his residence and for running his clinic but when he entered the witness box he propounded a different case that the hall had been taken on lease only for non residen tial purposes.
The statutory authorities failed to notice the perceptible manner in which the appellant had shifted his defence.
[560G] 2.3 Yet another factor which vitiates the findings of the statutory authorities is that both of them have over looked section 11 of the Act and the sustainability of any lease transaction entered in contravention of that 555 provision which interdicts conversion of residential build ings into nonresidential ones without the written consent of the Rent Controller.
[561C D] In the instant case the parties had not obtained the consent in writing of the Rent Controller for converting the hall in a residential building into a clinic.
Such being the case the appellant cannot get over the embargo placed by section 11 by pleading that the respondent was well aware of his running a clinic in the hall and that she had not raised objection at any time to the running of the clinic.
[561D E] Kamal Arora vs Amar Singh & Ors., [1985] SCC (Supplemen tary) 481, referred to.
Dr. Gopal Dass Verma vs Dr. S.K. Bhardwaj & Anr., [1962] 2 SCR page 678, distinguished.
Having taken a categoric stand during the enquiry that he had taken the hail on rent only for running his clinic and not for his residential needs as well, the appel lant cannot reprobate and contend that the lease of the hall was of a composite nature, to seek the benefit of the en larged definition of a 'non residential building ' given in the Amendment Act.
A pure question of law can be raised for the first time before the High Court or the Supreme Court even though the question had not been raised before the trial court or the appellate court.
But in the instant case, the conten tions advanced by the counsel on the nature of user of the hail pertain to mixed questions of fact and law.
Moreover these contentions run counter to the legislative direction contained in section 11 of the Act prohibiting conversion of a residential building into a non residential one without the written consent of the Rent Controller.
These contentions cannot, therefore be said to be pure questions of law.
Management of the State of Bank of Hyderabad vs Vasudev Anant Bhide and others; , , referred to.
The eviction proceedings were initiated by the re spondent against both the tenants concurrently and not after an interval of time.
As such, merely because the respondent succeeded in one of the petitions and failed in the other it cannot be said that the continuation of the proceedings in that case in appeal or revision would amount to applying once over again under the Act to seek eviction of a tenant on the ground of bona fide requirement.
| Respondent was assessed for the assessment years of 1967 68, 1968 69 and 1969 70 treating her as the head of the HUF.
She contended before the income Tax Officer that under the partition agreement dated 3.7.1958 the Tavazhi was divided, the HUF status of the Tavazhi was disrupted on account of the CIvil Court decree made in a partition suit and the properties were divided into 14 shares and the HUF could not be assessed to income tax.
The Income Tax Officer rejected the claim of the respondent on the ground that since the preliminary decree of the Civil Court, and not become final and no physical or actual partition had taken place; the status of HUF continued for the purpose of Tax.
The Single Judge of the High Court allowed the Writ Petition of the respondent holding that Section 171 of the Income Tax Act does not apply to a case where the division was effected before the commence 474 ment of the accounting period and HUF having received no income during the accounting period it could not be assessed to tax notwithstanding the legal fiction under Section 171.
In appeal the Division Bench held that there was no express provision in Section 171 nor was there any necessary impli cation arising from the provisions of the section that the income of the family after its division must be treated or deemed to be the income of the HUF inspite of disruption of joint status.
The Bench held that HUF is a separate and distinct entity from the members constituting it and if that entity does not receive any income, the members ' income could not he assessed as income of the HUF.
The Division Bench further held that since there had been partition in the family and Tavazhi had ceased to he HUF long before the accounting periods, the provisions of the Act could not he pressed into service for the purpose of taxing the income of the individual members of the family treating them having the status of HUF with the aid of Section 171 of the Act.
The High Court granted certificate to the Revenue under Article 133 of the Constitution.
Hence these appeals.
Allowing the appeal, the Court, HELD: 1.
Under Section 171 a Hindu Family assessed as HUF, is deemed for the purposes of the Act to continue as HUF except where partition is proved to have been effected in accordance with the section.
The section further provides that if any person at the time of making of assessment claims that partition total or partial has taken place among the members of the HUF, the Income Tax Officer is required to make an inquiry after giving notice to all the members of the family, and to record findings on the question of parti tion.
If on inquiry he comes to the finding that there has been partition, individual liability of members is to be computed according to the portion of the joint family property allotted to them.
The definition of partition does not recognise a partition even if it is effected by a decree of court unless there is a physical division of the property and if the property is not capable of being physically divided then there should be division of the property to the extent it is possible otherwise the severance of status will not amount to partition.
In considering the factum of partition for the purposes of assessment it is not permissible to ignore the special meaning assigned to partition under the explanation, even if the partition is effected through a decree of the court.
Ordinarily decree of a Civil Court in a partition suit is good evidence in proof of partition but under Sec tion 171 a legal fiction has 475 been introduced according to which a preliminary decree of partition is not enough, instead there should be actual physical division of the property pursuant to final decree, by metes and bounds.
The Legislature has assigned a special meaning to partition under the aforesaid Explanation with a view to safeguard the interest of the Revenue.
Any assessee claiming partition of HUF must prove the disruption of the status of HUF in accordance with the provisions of Section 171 having special regard to the Explanation.
The assessee must prove that a partition ef fected by agreement or through court 's decree, was followed by actual physical division of the property.
In the absence of such proof partition is not sufficient to disrupt the status of Hindu Undivided Family for the purpose of assess ment of tax.
Under the Hindu Law members of a joint family may agree to partition of the joint family property by private settlement, agreement, arbitration or through court 's de cree.
Members of the family may also agree to share the income from the property according to their respective share.
In all such eventualities joint status of family may be disrupted but such disruption of family status is not recognised by the Legislature for purposes of Income Tax.
Section 171 of the Act and the Explanation to it, prescribes a special meaning to partition which is different from the general principles of Hindu Law.
It contains a deeming provision under which partition of the property of HUF is accepted only if there has been actual physical division of the property, in the absence of any such proof, the HUF shall be deemed to continue for the purpose of assessment of tax.
Any agreement between the members of the joint family effecting partition, or a decree of the Court for partition cannot terminate the status of HUF unless it is shown that the joint family property was physically divided in accord ance with the agreement or decree of the Court.
The respondent for the first time raised the plea of partition and disruption of HUF in the proceedings for the assessment years 1967 68, 1968 69 and 1969 70.
There had been no physical division of the properties by metes and bounds.
The status of HUF had not been disrupted, and the income derived from the properties for the purposes of assessment continued to be impressed with the HUF character.
Parameswaran Nambudiripad vs Inspecting Assistant Com missioner of Agricultural Income tax, ; In specting Assistant Commissioner of Agricultural Income Tax and Sales Tax (Special), Kozhikode vs Poomulli Manekkal Parameswaran Namboodiripad, , distinguished.
476 Kaloomal Tapeshwar Prasad vs
C.I.T., Kanpur, 133 I.T.R. 690, followed.
Sunder Singh Majithia vs Commissioner of Income Tax, Shankar Narayanan vs Income Tax Offi cer, , referred.
| N owned agricultural lands in Bahawalpur State now forming part of Pakistan and also owned some property in Punjab in India.
He died in June 1947 while on a visit to India in the normal course of business, leaving behind three sons, the respondents in the appeal.
On the partition of India, the land in Pakistan originally owned by N and after his death by his sons, had to be abandoned.
After migrating to India, the three respondents filed separate claims as displaced persons and were allotted an area of land in Punjab.
Thereafter a complaint was filed before the Managing Officer that these respondents had received double allotments.
The Managing Officer, held this allegation was not substantiated but came to the conclusion that N, although he had died before the partition, must be treated as a displaced land holder for the purpose of allotment of land as his name continued to be shown in the Jamabandi as the owner of the abandoned land in Pakistan.
In consequence of this finding a large portion of the land allotted to the three respondents was cancelled by an order of the Managing Officer dated September 18, 1961.
Appeals made by the respondents to the Assistant Settlement Commissioner as well as revision petitions before the Chief Settlement Commissioner Punjab, were dismissed.
In dismissing the revision petitions, the Chief Settlement Commissioner relied on para.
17 of "Tarlok Singh 's Land Resettlement Manual" 1952 edition Page 180, to the effect that "Even where a displaced land holder in whose name the land stands in the records received from West Punjab has died, the allotment is made in the name of the deceased".
He therefore upheld the view 4 at the land could only be allotted in the name of N.
The respondents then filed a writ petition against the orders of the Chief Settlement Commissioner which was allowed.
On appeal to this Court, HELD:Dismissing the appeal, The definition of a "displaced person" in para 2(e) of the Notification of July 8, 1949, issued by the Custodian in accordance with provisions of the East Punjab Evacuees (Administration of Property) Act 1947, and the Rules made thereunder, or of a "Refugee" in Section 2(d) of the East Punjab Refugees (Registration of Land Claims) Act 12 of 656 1948, show that these expressions have been used in the relevant enactments with reference to a person who has migrated to India as a result of disturbances or fear of disturbances or the partition of the country.
Therefore if a person had died before the disturbances took place or he had never migrated to India as a result of the disturbances and he died before such migration, he could not come within the meaning of the expression "displaced person" or the word "refugee" under the relevant statutory enactments.
N died in June, 1947, long before the partition of the country and he did not abandon or was not made to abandon his land in Bahawalpur on account of the civil disturbances or the fear of such disturbances or the partition of the country.
[660 A D] There was no force in the contention that even though N never became a refugee or a displaced land holder, the allotment had to be made in his name because he was shown in the revenue records received from West Punjab as the owner of the land and there had been no mutation of the names of the respondents in the revenue records.
The rule in para 17 of "Tarlok Singh 's Manual" consistently with the statutory enactments, would be applicable only to such persons who were land holders 'it the time of their becoming displaced persons or refugees and who died afterwards before allotment could be made in their favour.
It does not apply to a person like N who was not a displaced land holder at the time of his death.
[661 D F]
| The respondent assessee carried on business in coal as the owner of various collieries.
One of the collieries, was occupied by the military from 1942 until it was derequisitioned in 1955.
During that period the assessee did not work the said colliery: although the business in coal and working of the other collieries were carried on.
While the colliery remained under military occupation the assessee incurred expenditure in respect of the colliery on account of payment of surface rent, minimum royalty and salary for the watch and ward staff, which expenditure was claimed and allowed as business expenditure of the assessee.
After the colliery was handed over to the assessee upon derequisition the assessee incurred an expenditure of about Rs. 1.6 lakhs in renovating the building, reconditioning the machinery and clearing the land of all debris accumulated over a number of years.
In the assessment proceedings for the assessment year 1959 60 the assessee claimed deduction of the aforesaid amount under section 10(2)(xv) of the Indian Income Tax Act.
The deduction was disallowed by the Income Tax officer on the ground that the expenditure was capital in nature.
The appeals by the assessee to the Appellate Assistant Commissioner and the Income Tax Appellate Tribunal were dismissed.
In the reference to the High Court at the instance of the assessee the High Court observed that the business of the assessee had to be considered as a whole and not on the basis of its different sources of supply or units of production, and held that on the facts admitted and found it could not be said that any fresh asset had been acquired by the assessee by spending Rs. 1.6 lakhs and that the expenditure was incurred by the assessee for the purpose of carrying on an existing concern.
The expenditure was, therefore, in the nature of a revenue expenditure.
In the appeal by the Revenue to this Court, it was contended: (a) where repairs are effected to buildings and machinery a deduction under section 10(2) is permissible only in respect of "current repairs" and repairs which are not "current repairs" are not intended to be the subject of relief, (b) the repairs made by the assessee cannot be described as "current repairs", and (c) if section 10(2) (v) is the relevant clause, being the specific provision in respect of expendi 759 ture on "current repairs" to buildings and machinery, there is no justification for relying on section 10(2)(xv) a residuary clause.
Dismissing the appeal, ^ HELD: 1.
The High Court was right in holding that the expenditure was not of a capital nature.
[764 E] 2.
The expenditure of Rs. 1.6 lakhs was expenditure laid out as part of the process of profit earning.
The nature of the expenditure was clearly revenue in character.
[764 D] 3.
There can be little doubt that the expenditure incurred was incidental to the business of the assessee.
It was involved in renovating the buildings, reconditioning the machinery and clearing the debris, from the land, for the purpose of resuming the operation of the colliery.
The expenditure was laid out wholly for the purpose of the business.
[763 D] 4.
There must be strong evidence that in the case of repairs which are not "current repairs", the Legislature intended a departure from the principle that an expenditure laid out or expended wholly and exclusively for the purposes of the business, and which expenditure is not capital in nature, should not be allowed in computing the income from business.
There is nothing in the language of section 10(2) (v) which declares or necessarily implies that repairs, other than, "current repairs", will not qualify for the benefit of that principle.
On accepted commercial practice and trading principles an item of business expenditure must be deducted in order to arrive at the true figure of profits and gains for tax purposes.
[762 G 763 A] C.I.T. vs Chitnis 50 I.A. 292; Motipur Sugar Factory Ltd. vs C.I.T. Bihar and Orissa, ; Devi Films Ltd. vs C.I.T. Madras, ; Badridas Daga vs C.I.T. , 15; Calcutta Co. Ltd. vs C.I.T. West Bengal, , 9; the Law Shipping Co. Ltd. vs Commissioners of Inland Revenue 12 Tax Cases 621,625 referred to.
The scope of Section 10(2)(xv) should be construed liberally.
[763 B] In the instant case even if the expenditure made by the assessee cannot be described as "current repairs" he is entitled to invoke the benefit of section 10(2)(xv).
[763 C] 5.
Whether an expenditure can be described as capital or revenue falls to be decided by serial tests, each one of which approaches the question from one perspective or another, conditioned by the particular facts of each case.
[763 F] Assam Bengal Cement Co. Ltd. vs C.I.T. West Bengal referred to.
In the instant case the business of the assessee was coal mining and it was carried on by the operation of a network of collieries.
Each colliery was a unit of production.
While the several units of production continued to be employed and the business continued to be carried on, one alone of all the units, was compelled to suspend production.
The suspension was due to the property being requisitioned for military use.
As soon as it was derequisitioned the assessee 760 took measures to resume production of coal.
The buildings were renovated, the machinery reconditioned and the accumulated debris removed from the land No new asset was brought into existence, no advantage for the enduring benefit of the business was acquired.
The activity which was continuously in operation but had been temporary suspended was resumed.
[763 G 764 C]
| The Appellant was a tenant of the Respondent.
The Respondent was in Central Government service and was allotted Government residential accommodation.
By a general order, the Government directed that all Government servants who had their own dwelling houses at the place of posting should vacate the Government accommodation allotted to them or in default to pay market rent in respect thereof.
The Respondent therefore vacated tho Government accommodation allotted to him and resided in another premise belonging to him which was adjoining the premises let out to the Appellant.
The Respondent later filed an application under section 25B of the Delhi Rent Control Act, 1958 on the ground specified in section 14A(1) thereof for possession of the premises occupied by the Appellant which was contested.
The Rent Controller after considering the accommodation in the respective occupation of the parties held that it could not be said that the premises occupied by the Respondent constituted reasonably suitable residential accommodation.
He further held, that section 14A(1) of the Act did not contain a condition that the Government servant who made an application under section 14A(1) should not be in possession of reasonably suitable alternative accommodation as was the case under clause (e) of the proviso to sub section (1) of section 14, and that even if such a factor were to be taken into consideration it could not be said that the Respondent was in occupation of reasonably suitable alternative accommodation.
The Rent Controller therefore passed an order of eviction against the Appellant and directed it not to be executed for a period of two months.
This order was confirmed by the High Court in the revision petition filed by the Appellant under section 25B(8).
In tho Appeal to this Court tho maintainability of the eviction petition was impugned on behalf of the Appellant on two ground : (1) the Respon 1026 dent was not in occupation of the government accommodation allotted to him on the date when be filed his application, and (2) on the date when he filed his application, the Respondent was already residing in premises belonging to him.
Allowing the Appeal, ^ HELD: A. (1) It is not necessary that a person in occupation of residential premises allotted to him by the Central Government or a local authority who is required by or in pursuance of a general or special order made by that Government or authority to vacate such accommodation or, in default, to incur certain obligations, such as payment of market rent, on the ground that he owns in the Union Territory of Delhi a residential accommodation either in his own name or in the name of his wife or dependent child should be in occupation of the accommodation allotted to him on the date when he files an eviction application under section 14A(1) of the Delhi Rent Control Act, 1958 to recover possession of the residential premises which he so owns and which has been let by him.
[1038 G H, 1039 A] (2) If such person has, however, other premises which he owns either in his own name or in the name of his wife or dependent child which are available to him for his residential accommodation or into which he has already moved, he cannot maintain an application under section 14A(1) of the Act.
[1039 B] (3) Even if the other premises owned by him their in his own name or in the name of his wife or dependent child are reasonably suitable for his accommodation he cannot maintain an application under section 14A(1) but must file an application on the ground specified in clause (e) of the proviso to sub section (1) of section 14 of the Act.
[1039 C] B. (1) Though the Statement of Objects and Reasons accompanying a legislative Bill cannot be used to determine the true meaning and effect of the substantive provisions of a statute, it is permissible to refer to the Statement of Objects and Reasons accompanying a Bill for the purpose of understanding the background, the antecedent state of affairs, the surrounding circumstances in relation to the statute, and the evil which the statute sought to remedy.
[1033 H; 1034 A] (2) The object underlying section 14A introduced by the Delhi Rent Control (Amendment) Act 1976 is that a person who is compelled to vacate residential accommodation allotted to him on the ground that he owns other residential premises in the Union Territory of Delhi either in his own name or in the name of his wife or dependent child should not be left without a roof over his head or should not be made to incur heavy financial obligation by continuing to reside in the accommodation allotted to him by paying market rent in respect thereof to the Central Government or the local authority, as the case may be.
[1035 C D] In the instant case, the Rent Controller was in error in considering the respective needs of the parties and the suitability of accommodation 1027 occupied by the Respondent.
The order of the High Court dismissing the revision petition is reversed and the eviction suit filed by respondent in the Court of the Rent Controller is dismissed.
| The assessee was incorporated as a Private Limited Company in March, 1947 with G as its Managing Director and it took over the business of the trading company carried on by 'D ' in Delhi.
D was the brother in law of G and was placed in charge of the management of the business of the Delhi Branch of the assessee and he was paid a salary of Rs. 1000 per month, commission at the rate of 1 per cent on the sales of the Delhi Branch and bonus equivalent to three months salary.
The assessments of the assessee for the years 1949 50 to 1959 60 were finalised on the basis of the decisions of the Income Tax Tribunal and the amounts paid to the Managing Director and the other Directors including D by way of salary, commission and bonus were allowed in full as permissible deductions and so was the interest paid on the credit balances in their respective accounts.
On the 28th March, 1968, the Income Tax Officer issued a notice under Section 148 of the Income Tax Act, 1961 seeking to reopen the assessment of the assessee for the assessment year 1959 60 on the ground that the income of the assessee had escaped assessment at the time of the original assessment.
The Income Tax Officer, however, did not state the reasons which had led to the belief that the income of the assessee had escaped assessment by reason of omission or failure to disclose material facts nor did he give any reasons though requested by the assessee.
The assessee 's writ petition challenging the validity of the notice was allowed by a Single Judge and the notice issued by the Income Tax Officer was quashed.
It was held that there was no omission or failure on the part of the 565 assessee to disclose material facts relating to his assessment and that there was no reason to believe that any part of the income of the assessee had escaped assessment at the time of the original assessment by reason of wrong allowance of the remuneration paid to D as a permissible deduction.
The Division Bench allowed the appeal, holding that the Income Tax Officer had reason to believe that the remuneration paid to D had been wrongly allowed as a permissible deduction by reason of omission or failure on the part of the assessee to disclose the material facts and the notice issued by the Income Tax Officer was justified.
Allowing the appeal to this Court, ^ HELD: 1.
(i) Neither of the two conditions necessary for attracting the applicability of Section 147(a), was satisfied.
The notice issued by the Income Tax Officer is therefore without jurisdiction.
[574 G] (ii) It is not possible to sustain the conclusion that the assessee omitted or failed to disclose fully and truly any material facts relating to his assessment.
[574 F] 2.
(i) Before the Income Tax Officer can assume jurisdiction to issue notice under Section 147(a), two distinct conditions must be satisfied.
First, he must have reason to believe that the income of the assessee has escaped assessment and secondly, he must have reason to believe that such escapement is by reason of the omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for his assessment.
If either of these conditions is not fulfilled, the notice issued by the Income Tax Officer would be without jurisdiction.
[571 F] (ii) The important words under Section 147(a) are "has reason to believe" and these words are stronger than the words "is satisfied.".
The belief entertained by the Income Tax Officer must not be arbitrary or irrational.
It must be reasonable or in other words it must be based on reasons which are relevant and material.
The Court, cannot investigate into the adequacy or sufficiency of the reasons which have weighed with the Income Tax Officer, in coming to the belief, but the Court can examine whether the reasons are relevant and have a bearing on the matters in regard to which he is required to entertain the belief before he can issue notice under Section 147(a).
If there is no rational and intelligible nexus between the reasons and the belief, so that, on such reasons, no one properly instructed on facts and law could reasonably entertain the belief, the conclusion would be inescapable that the Income Tax Officer could not have reason to believe that any part of the income of the assessee had escaped assessment and such escapement was by reason of the omission or failure on the part of the assessee to disclose fully and truly all material facts and the notice issued by him would be liable to be struck down as invalid.
[571 G 572 C] 3.
Even a close relative who is in management and charge of a business on a full time basis is entitled to be paid remuneration and, in fact, it would be wholly unreasonable to expect him to work free of charge.
[573 C] 566 In the instant case D was the brother in law of G the Managing Director of the assessee but this circumstance cannot lead to an inference that the payment of remuneration to D who was solely managing and looking after the business of the Delhi Bench of the assessee was sham and bogus.
There is nothing unusual in D giving a loan to his brother in law, the Managing Director or making gifts to the son, wife and daughter in law of the Managing Director who were his close relatives.
Any inference that the payment of remuneration to D was sham and bogus cannot be drawn merely from the manner in which he expended the amount of remuneration received by him, particularly when the persons to whom he gave a loan and made gifts were his close relatives.
[573 E 574 B] 4.
The statements of account of D with the assessee for the relevant accounting year as also the previous years were with the Income Tax Officer at the time of the original assessment and these statements of account clearly showed that out of the amount of remuneration credited to his account, he had made gifts to the sons of G on 31st July, 1957 and given a loan to G on the 25th August, 1958 and the Income Tax Officer was fully aware that G was the Managing Director of the assessee.
The assessee could not therefore be said to be under an obligation to disclose to the Income Tax Officer in the course of its assessment as to how the director who was in sole charge of the management of the business of the assessee, and who was being paid remuneration for the services rendered by him to the assessee, had utilised the amount of remuneration received by him.
[574 C F]
|
Appeal No. 331 of 1961.
Appeal by special leave from the judgment and order dated April 20, 1961, of the Punjab High Court in Civil Writ No. 460 of 1961.
section P. Sinha and.
M. K. Madan, for the appellant.
Har Prasad and J. P. Goyal, for respondents Nos;. 1 and 2.
section M. Sikri, Advocate General, Punjab, N. section Bindra and P. D. Menon, for the respondent No. 3. 1,962.
April 4.
The Judgment of the Court was delivered by AYYANGAR, J.
,The point arising for decision in this,appeal by special leave is,, a, very Shortly one and relaters to the proper construction of the definition of 'damaged area ' in section 2(d) of the Punjab 244 Development and Damaged Areas Act, 1951 which will hereafter be referred to as the Act.
A few facts are necessary to be stated in order to appreciate how this point arises.
The appellant claims to be the trustee of a Public Trust created for the management of certain properties situated in Amritsar.
Of the properties belonging to the trust is one which is said to be a dharamshala.
By a resolution of the Amritsar Improvement Trust dated March 21, 1957 the Improvement Trust decided to acquire a portion of this property for the purpose of widening a road under a development scheme framed under section 3 of the Act.
This section enacts; "3.
The Trust may frame a scheme or schemes for the development of a damaged area, providing for all or any of the matters mentioned in section 28 of the Punjab Town Improvement Act, 1922; and any scheme already framed or sanctioned in respect of a damaged area under the provisions of that Act shall be deemed to have been framed or sanctioned under this Act".
Section 4 makes provision for the publication of the schemes setting out with particularity the properties which would be affected by the scheme and specifying the period within which the objections to the scheme would be received.
Section 5 makes provision for the consideration of the objections which might be put forward under a. 4 and sub sections
(3) and (4) of this section read; "5.
(3) The State Government shall then notify the scheme either in original or as modified by it and the scheme so published shall be deemed to be the sanctioned scheme.
(4) The publication under subsection (3) shall be conclusive evidence that a scheme has been duly framed and sanctioned," 245 Thereafter section 6 proceeds to make provision for the acquisition of property in the ', 'damaged area" and there are other provisions as regards the ascertainment and payment of compensation but as these are not relevant to the appeal, no reference to them is needed.
It is common ground that a scheme has been framed under section 3 and this has been finalised after considering objections.
It was in pursuance of this scheme that the Improvement Trust took steps to effect the acquisition of the property bearing Municipal No. 2320/1, 884/9 belonging to the appel lant trust.
The appellant filed a suit for a declaration that the acquisition proceedings were illegal and ultra vires and for a permanent injunction restraining the Improvement Trust from proceeding with the acquisition.
The suit was, however, withdrawn by reason of a Consent Memo which was filed and subsequently the appellant filed a petition under article 226 of the Constitution in the Punjab High Court challenging the validity of the action of the Improvement Trust and praying for appropriate reliefs quashing the proceedings for the acquisition.
The petition, however, was summarily dismissed by the High Court by order dated April 20, 1961.
The further petition filed by the appellant praying for a certificate of fitness under article 133(1)(c) was also dismissed.
Thereafter the appellant obtained special leave of this Court to prefer an appeal against the judgment of the High Court and that is bow the appeal is now before us.
Though several points have been, taken in the memorandum of appeal to this Court, learned Counsel confined his arguments to only one point to which we shall refer immediately and which alone requires to be dealt with in the appeal.
We have already pointed out that the acquisition now sought to be made and which, it is contended, is illegal and not justified by law, is under a scheme 247 under the Act of 1947 vis a vis the definition in section 2(d) of the Act.
By a proclamation issued under section 93 of the Government of India Act, 1935 the Governor of the Punjab assumed to himself the powers vested in the Punjab Provincial Legislature and under the powers so vested he enacted the Punjab Damaged Areas Act, 1947 (Punj.
Act 11 of 1947).
Section 3 of that enactment enabled the Provincial Government by notification "to declare any urban area, or any portion thereof to be a damaged area" and it was in Pursuance of this provision that the notification of April 1948, to which we have referred, was issued.
It might at once be stated that the Act of 1947 contained no provision for framing schemes or for acquisitions of property for implementing such schemes, but this feature might not be very material for ,he purposes of this case.
Section 93 of the Government of India Act, 1935 which made provision in cases of failure of constitutional machinery in the Provinces enacted by sub s.(4): "93.(4).
If the Governor by a proclamation under this section assumes to himself any power of the Provincial Legislature to make laws, any law made by him in the exercise of that power shall, subject to the terms thereof, continue to have effect until two years have elapsed from the date on which the proclamation ceases to have effect unless sooner repealed or reenacted by an Act of the appropriate Legislature. . ." The rule of the Governor under s.93 ended on ' August 15, 1947 and in consequence this enactment which was temporary would have lapsed on August 15, 1949.
Section 93 of the Government of India Act, 1935 was repealed by the Governor General under the powers vested in him by s.8 of 248 the Indian Independence Act, 1947 by virtue of the India (provisional Constitution) Order, 1947, but cl.6 of this order enacted: "6.
Where any law made by the Governor of a Province by virtue of Section 93 of the Government of India Act, 1935, is in force immediately before the appointed day, the said law, notwithstanding that the said section is directed to be omitted is in Schedule to this Order or that by reason of such omission a Proclamation under the said section ceases to have effect, shall remain in force for the period for which it would have remained in force if the said section bad been At all material times in operation.
" The result was that the Punjab Act of 1947 continued till August 15,1949 and no further.
It was to make provision for the gap that would be caused by the expiry of this Act in 1949 that the Fast Punjab Damaged Areas Act, 1949, which is referred to in s.2(d) of the Act of 1951, was enacted.
The Act of 1949 reproduced sub stantially the terms of the Act which it was replacing.
Section 2 contained definitions which were in terms indentical with the definitions in the Act of 1947, subject to changes necessitated by the partition of the country and Lahore ceasing to be within India and s.3 which enabled the State Government by notification to declare an urban area to be a (damaged area" was brought into force at once, i.e., in April 1949 when the Governor 's assent was received, and by section 1(3) the State Government reserved the power to direct that the other provisions of the Act viz. ss.4 to 21 may come into force from such date as it may by notification appoint.
In spite of diligent research no notification under section 1(3) bringing the rest of 249 the Act into force could be discovered in any event, there is nothing to show that the rest of the sections were brought into force before August 15, 1949 when owing to the laps; of two years prescribed by section 93(4) of the Government of India Act, the Act of 1947 expired and ceased to be in force.
Based on the fact that the Act of 1949 practically reproduces, the earlier Act of 1947 the contention urged before us was that the Act of 1947 was in effect repealed and re enacted 'by the Act of 1949, that by virtue of section 22 of the Punjab General Clauses Act, which runs: "22 Where any Punjab Act is repealed and re enacted with or without modification, then, unless it is otherwise expressly provided, any appointment, notification, order, scheme rule, form or bye law, made or issued under the repealed Act, shall, so far as it is not inconsistent with the provisions reenacted, continue in force, and be deemed to have been made or issued under the provisions so re enacted, unless and until it is superseded by any I appointment, notification, order, scheme, rule, form or bye law made or issued under the provisions so re enacted." the notification issued under the Act of 1947 should be deemed to have been issued under the Act of 1949 and that in consequence the reference to a notification under the Act of 1949 in section 2(d) of the Act of 1951 would include the notification of 1948 made under the Act of 1947.
We are unable to accept this argument.
In the first place, there was no repeal of the Act of 1947 to attract the application of the rule of construction embodied in section 22 of the Punjab General Clauses Act.
No doubt, even temporary enactments could be repealed and re enacted so as to attract the operation of provisions like a. 22 of 250 the Punjab General Clauses Act vide, for instance State of Punjab vs Mohar Singh (1).
It is however conceded that here there is no express repeal of the Act of 1947.
Learned Counsel for the respondents ,submitted that by reason of the very existence of the enactments of 1947 and 1949 on the Statute Book in terms identical with each other, the earlier ,statute should be held to have been impliedly repealed by the later enactment.
If, as we have pointed out earlier, the first Act was temporary and ,Its place was taken by a later enactment after the former ceased to be in force, it is obvious that there could be no scope for invoking the principal embodied in section 22 of the Punjab Central Clauses Act.
Further, apart from the larger question as the whether implied repeals are within the contemplation of section 22 of the Punjab General Clauses Act or similar provisions in like enactments, we 'consider that there is no basis for invoking the doctrine of implied repeal in the present case for that assumes that there is an inconsistency between the two enactments such that the two cannot stand together.
It is a maxim of the law that, implied 'repeals are not to be favoured, and where two statute,% are entirely affirmative and identical no question of inconsistency could arise.
Where the Operative terms of the two enactments are identical and the enactments, so to speak, run parallel to each other, there would be no scope for the application of the doctrine of implied repeal and that would be so particularly in a case where the earlier ,enactment is one of temporary duration while the later is a permanent enactment, even ignoring the fact that sections 4 to 21 'of the Act of 1949 were not in force during the life of the Act of 1947.
Ultimately, the question would have to be decided on the pro per interpretation of section 2 (d) of the Act 'of 1951 under which the impugned scheme (1) [19S6] I S.C.R. 893 251 was framed and proceedings for acquisition are sought to be taken.
It is clear that besides the areas notified under the Act of 1951 the only other areas contemplated are those which were notified under the Act of 1949 which on any normal and reasonable construction could only include the areas which were the subject of notification under section 3 of the Act of 1949 and not those under the Act of 1947 but which are deemed to be areas notified under the Act of 1949 assuming every submission of the respondent to be correct.
In this view we consider that the appellant is entitled to the relief sought because the acquisition was in respect of a scheme for an area which it was not within the power of the Improvement Trust to frame under section 3 of the Act.
Learned Counsel for the Improvement Trust made a furl her submission that the appellant was precluded from challenging the validity of the scheme by reason of the provisions of section 5 (4) of the Act (already extracted) which imparted a conclusive effect as to the legality of the scheme which had received the approval of the government and had been published under section 5 (3) of the Act.
We are clearly of the opinion that there is no substance in this argument.
The foundation of the jurisdiction of the Improvement Trust to frame a scheme and for the government to approve of the same depends upon the scheme relating to a "damaged area" and if, as we have held, the property now sought to be acquired is within an area which does not fall within the definition of a 'damaged area ' under section 2 (d) of the Act, it follows that there was total lack of jurisdiction on the part of the Improvement Trust or the government to frame a scheme for this area.
The position is not very different from what it would have been if the Act itself bad not been extended to an area in regard to which a scheme 252 has been framed.
The conclusive effect postulated by section 5(4) can only be in regard to the formalities prescribed 'by as. 3, 4 and 5 and does not touch a case where there is complete lack of jurisdiction in the authorities to frame a scheme.
, The result is that the appeal succeeds and there will be a direction that the proceedings for the acquisition of the property belonging to the appellant under the Punjab Development of Damaged Areas Act, 1951 be quashed.
The appellant will be entitled to its costs here.
Appeal allowed.
| The Amritsar Improvement Trust framed a scheme under section 3 of the Punjab Development and Damaged Areas Act, 1951, which empowered it to frame a scheme for the development of a damaged area, It passed a resolution to acquire certain property of the appellant for widening a road under the scheme.
The appellant contended that the scheme was without jurisdiction as the area was not a "damaged area" within section 2 (d) of the Act which contemplated only two classes of areas, i. e. (i) areas which may, by notification, under the Act be declared by the Government to be "damaged areas", and (ii) areas already notified under the Punjab Damaged Areas Act, 1949.
The respondents contended that a notification 243 issued under the Punjab Damaged Areas Act, 1947, which declared the entire walled City of Amritsar as a "damaged area" should be deemed to be a declaration" under the 1949 Act because of the operation of section 22 of the Punjab General Clauses Act and was sufficient to sustain the scheme and that the scheme could not be challenged as it had been notified by the State Government and under section 5 (4) of the Act the publication was conclusive evidence that the scheme had been duly framed and sanctioned.
Held, that the scheme was without jurisdiction and that the proceedings for the acquisition of the appellant 's property were illegal.
Admittedly the area had not been declared a "damaged area either under the 1951 Act or under the 1949 Act.
The declaration under the 1947 Act was of no avail, firstly, because there was no basis for the argument that it would be "deemed to be a declaration" under the Act of 1949 and secondly even if it were so deemed the same was not within the definition of damaged area" in the Act of 1951.
The appellant was not precluded by section 5 (4) from challenging the scheme and the acquisition ; since the collusiveness postulated by section 5 (4) was only in respect of the formalities prescribed by sections 3,4 and 5 and did not touch a case where there was complete lack of jurisdiction in the authorities to frame a scheme.
| On October 1, 1963, the State Government issued a notification under section 3(c), authorising one M who was then the Special Land Acquisition Officer, Baroda, to perform the functions of a Collector and also directed him to hold an enquiry under the Land Acquisition (Companies) Rules on the application of the third respondent company requesting the government to acquire the appellant 's land.
In supersession of that notification, the Government issued another notification on October 11, 1963 authorising all Special Land Acquisition Officers to perform the functions of the Collector under the Act within the area of their respective jurisdiction.
After M had made an enquiry under Rule 4, the respondent State Government issued a notification under Section 4 of the Land Acquisition Act, 1894, on August 28.
1964 in respect of the appellant 's land which was stated to be required for the establishment of a factory by the third respondent company.
Objections filed by the appellants in an enquiry under section 5A were rejected and the State Government thereafter issued a notification under section 6 on October 18, 1965.
The appellants challenged the notification by writ petitions but these were, dismissed by the High Court.
In the appeal to this Court, it was contended on behalf of the appellants, inter alia.
(i) that M was only a Special Land Acquisition Officer and not the Collector within the meaning of Rule 4; in any event the notification of October 11, 1963 did not "specially" appoint him but was a general notification authorising all the Special Land Acquisition Officers in the State appointed not only before the date of section 4 notification but also those who would be appointed in future,.
furthermore, the notification did not "appoint" but simply authorised him to perform the functions of the Collector, the State Goverrunent had not given any direction to him to make a report as required by .Rule 4; therefore the enquiry held by him under that Rule and the ,report made was invailed and consequently no notification either under section 4 or section 6 could be validly issued; (ii) that the section 6 notification was issued without complying with Part VII of the Act and without the valid consent of the State Government as required by section 39; (iii) that the acquisition was made mala fide and without application of mind to the relevant facts: (iv) that the acquisition did not involve any public purpose: and (v) that the State Government was bound to give an opportunity of being heard to the appellants before taking a decision under section 5A particularly when the report made by M was against the acquisition, 598 HELD: Dismissing the appeal.
(i) No objection to the appointment of M to perform the functions of the Collector under section 3(c) or to his competence to make the enquiry and the report under Rule 4 or their legality can be validly made.
It follows that the consent given by the State Government in initiating acquisition proceedings was validly given and was in comp liance with the provisions of Part VII of the Act and the State Government could validly issue the impugned notifications.
[604G] There being nothing repugnant in the subject or context, the word "Collector" must, by virtue of section 20 of the , have the same meaning in the Rules as in section 3(c) of the Act which includes an officer specially appointed to perform the functions of the Collector.
[602H] The words "specially appointed" simply mean that as a Sp.
L.A. Officer is not a Collector and cannot perform the functions of a Collector under the Act.
he has to be "specially appointed", i.e. appointed for the specific purpose of performing those functions.
The word "specially" has therefore reference to the special purpose of appointing and is not used to convey the sense of a special as against a general appointment.
Furthermore, section 15 of the General Clauses Act provides that where a Central Act empowers an authority to appoint a Person to Perform a certain function such power can be exercised either by name or by virtue of office.
[603C F] In the context of section 3(c) when an officer is authorised to perform the functions of the Collector, it means that he is appointed to perform those functions.
The distinction between the two is without a difference.
[604B] There is no force in the contention that the enquiry under rule 4 has to be held after the notification under section 4 and not before.
There is nothing in rule 4 or any other rule to warrant such a proposition.
(ii) On the facts, the appellants had failed to establish their allegation either as to mala fides or the non application of mind by the State Government.
(iii) There is no force in the contention that when the appellant 's lands were already being used for the manufacture of a building, material and that was also a public purpose, the legislature could not have intended to empower the Government to destroy that purpose and substitute in its place another Public purpose.
[606D] Arora Case, [1962] Supp, 2 'S.C.R. 149: referred to.
(iv) It is not disputed that during the section 5A enquiry the appellants were heard and their objections were taken on record.
The record of the enquiry is required under section 5A to be sent to the Government so as to enable the Government to decide whether the acquisition is necessary for a public purpose or for a company.
The Government thus had before it not only the opinion of M but also all that the appellants had to say by way of objections against the proposed acquisition.
The appellants therefore had an opportunity, of being heard.
Neither section 5A nor any other provision of the Act lays down that a second opportunity has to be given before the issuance of the Section 6 notification.
[606F 607A]
| Respondent No.2 a registered House Building Society with 32 members entered into an agreement with the Government of Punjab where under the Government agreed to advance a loan of Rs. 1,02,000 to its members under the lower income group housing scheme for the purpose of constructing residential houses in Dera Baba Nanak.
As per the written agreement the loan advance was payable in three instalments.
The first instalment of Rs. 20400 was to be paid by the Govt.
On the execution of the deed of agreement, the second instalment of Rs. 51000 to be paid on the completion of the houses to the plinth level and the last instalment of Rs. 30,600 on the completion of the house to the roof level.
The society on the other hand had to mortgage the sites together with the houses erected or to be erected thereon to the govt.
as security for the repayment of loan and the amount of loan was to be paid back in several instalments.
Pursuant to the agreement the Government issued a cheque for Rs. 71,400 towards the first and SECOND instalments.
The third instalment was not paid for failure to furnish the required certificate that the houses had reached the roof level.
The members of the society also failed to repay the loan in the situation, a notice was issued by the Collector of the District to the members of the society to deposit the overdue instalments of loan and to appear before the Deputy commissioner, Gurdaspur on August 24, 1964 to show cause why the entire amount should not be recovered from them by means of arrest and DETENTION.
The society challenged the notice by filing a writ petition in the Court.
Its stand was that in the absence of any such stipulation in the loan agreement the amount could not be recovered by arrest of the members of the 706 society in the first instance.
The writ petition remained pending for more than six years but no instalments had been paid by the members of the society to the government during that period.
The Writ Petition was allowed by the learned Single Judge by his judgment dated 17th March, 1971 holding that the government must resort to the contractual remedy which it reserved to itself while entering into the loan agreement.
The State preferred a letters patent appeal which was summarily dismissed.
Hence the appeal by special leave.
Dismissing the appeal, the Court, ^ HELD: A bare reading of clause 4 of the agreement makes it evidently clear that the Government has first to proceed against the property xaf mortgaged and sell the property.
Only in case the entire amount could not be realised that the Government could proceed against the borrower personally.
The government is as much bound by the agreement as the borrower and, therefore, the Government has first to proceed against the mortgaged property.
In other words, the government must resort to the contractual remedy which it reserved to itself when entering into the loan agreement before resorting to clause (b) of section 67 of the Punjab Land Revenue Act.
[709 B C, 706 H, 710] Ram Narayan Agarwal etc.
vs State of U.P. & Ors.
explained and distinguished.
| A part of the land allotted to the appellant on quasi permanent basis as a displaced person from West Pakistan was acquired by the Government.
When the question of payment of compensation in respect of the land acquired was pending, the was passed which enabled holders of quasi permanency rights to obtain permanent settlement pursuant to which permanent settlement in respect of acquired land was made in favour of the appellant.
Alleging that the land allotted to the appellant was not allottable on a permanent basis, the Chief Settlement Commissioner, by his order dated 17th March, 1961, cancelled the allotment.
The appellant 's petition questioning the correctness of this decision was dismissed by the High Court in limine.
Thereupon the appellant preferred a petition under s.33 of the Act to the Joint Secretary to the Government of India, Rehabilitation Department, challenging the order of the Chief Settlement Commissioner.
By his order dated 29th September, 1964 the Joint Secretary rejected the petition pointing out that the cancellation of the appellant 's permanent settlement rights in the land was in accordance with law and that no interference was called for.
The appellant filed a writ petition in the High Court.
In rejecting the appellant 's writ petition impugning the order dated 29th September, 1964 the High Court was of the view that it was barred by principles analogous to res judicata because if that petition were allowed, it would in effect, amount to cancellation of the order dated the 17th March, 1961 which became final as against the appellant on dismissal of his first petition.
Allowing the appeal, ^ HELD: 1(a) Where a petition under article 226 is dismissed in limine without a speaking order, such a dismissal would not constitute a bar of res judicata to a subsequent petition on the same cause of action.
When a petition is dismissed on the ground that the petitioner has an alternative remedy by way of appeal or revision under a statute and on failure to get relief after pursuing the remedy by way of appeal or revision, he moved the High Court, it would be incorrect to dismiss the petition on the ground that the order made by the revisional authority had the effect of merging the original order with the order of the revisional authority, and that the challenge on the fresh cause of action to the order of the revisional authority would of necesity be a challenge to the original order also and that therefore the petition would be barred by principles analogous to res judicata as the first order had become final.
[407C E] 400 Daryao & Ors.
vs State of U.P. & Ors.
; ; Virudhunagar Steel Rolling Mills Ltd. vs The Govt of Madras, ; ; Tilokchand Motichand & Ors.
vs H. B. Munshi & Anr., ; referred to.
In the instant case in the first writ petition the appellant questioned the correctness of the order of the Chief Settlement Commissioner dated 17th March, 1961 without claiming therein any compensation for the land acquired.
That having been dismissed in limine he invoked the revisional jurisdiction under section 33 of the Act.
When that petition was dismissed by the revisional authority he preferred the second writ petition.
What he prayed in the second petition was a direction quashing the order dated 29th September, 1964 of the Joint Secretary to the Government of India.
The High Court was, therefore, in error in rejecting the second petition on the sole ground that the order of 17th March, 1961 merged into the order of 29th September, 1964 and in substance the challenge was to the order dated 17th March, 1961 which had become final.
[408 A B] (b) Secondly, if the claim for compensation was not raised in the first petition but was specifically raised in the second, it would not be dismissed on the ground that it was barred by principles analogous to res judicata.
[408 D] 2(a) It has been well established by a long line of decisions of this Court that after July 22, 1952 the Custodian had no authority to cancel or modify quasi permanent allotment, that the allottes of these rights could not be dispossessed at the whim or caprice of the Custodian, that the quasi permanent rights were heritable and that the holders were entitled to permanent settlement by issuance of sanad.
Added to this was the fact that r. 14(6) of the Administration of Evacuee Property (Central) Rules, 1950 as amended from July 22, 1952 restricted the power of the Custodian to resume or cancel quasi permanent rights of the allottees except in the circumstances mentioned in the subrule and no material is placed on record to show that the Custodian had exercised his power under r. 14(6) of the Rules.
[411 D E] P. D. Sharma vs State Bank of India, ; ; Amar Singh vs Custodian, Evacuee Property, Punjab, [1957] SCR 801; State of Punjab vs Suraj Prakash Kapur, etc., ; Joginder Singh & Ors.
vs Deputy Custodian General of Evacuee Property, ; at 740; referred to.
(b) Nor again is there any material to show that the Custodian had the power to cancel the allotment under the State Rules.
It was not shown that the State Government had framed any re settlement scheme and that the allotment was cancelled for that purpose.
[412 H] 3 (a) Under the Evacuee Property Act, 1950 property which was declared us evacuee property vested in the Custodian and was allotted to displaced persons on a quasi permanent basis.
To obviate difficulties caused by continued unextinguished title of the evacuee, the 1954 Act was passed, under section 12(2) of which the right, title and interest of any evacuee in the evacuee property specified in the notification issued under the section stood extinguished and the evacuee property would vest absolutely in the Central Government.
Evacuee property acquired in this manner formed part of the compensation pool.
Therefore, the appellant 's property which was acquired in 1953, much before the coming into force of the 1954 Act, could not have become part of the compensation pool.
[413 G H] 401 (b) Even assuming that though the property was taken over by the Central Government in 1953 evacuee interest in it had not been extinguished till a notification under section 12 of the 1954 Act had been issued and that on the issue of the notification it became part of the compensation pool, the consequence envisaged by section 10 of the 1954 Act must ensue.
It is that so long as the property remained vested in the Central Government it shall continue in possession of the person to whom it was allotted on the same conditions on which he held the property immediately before the date of acquisition.
[914 C D] In the present case if the property had been taken over by the Central Government much before the 1954 Act came into force neither section 12 of the 1954 Act nor r. 49 would be attracted.
If on the other hand the evacuee interest in the property came to be extinguished on the issue of a notification under section 12, section 10 would be attracted and the appellant would be entitled to hold the property till it continued to vest in the Central Government under section 12.
In other words in either event he would be entitled to compensation.
[415 C D] (c) Nor again is it correct to say that it was a fresh allotment under section 10 of the 1954 Act.
The land was allotted in 1949 and section 10 does not purport to make a fresh allotment.
[415 A] 4(a) The whole of chapter VIII of the 1955 Rules (which includes rr.
49 to 69) would not apply because the land allotted was agricultural land and the allotment was made under the notification of the Government of Punjab dated 8th July, 1949.
[416 C] (b) Once chapter VIII of the 1955 Rules and especially r. 49 which provides for payment of compensation in the form of land is out of the way, there is nothing in the Act which would debar a quasi permanent allottee asking for compensation in cash and the Govenment paying it.
Moreover on the former occasion the appellant was paid compensation in cash for a part of the land acquired from him.
[417 D E]
| In May 1985, some of the hutments in the Bombay Port Trust lands were cleared by the Port Trust and these hut ments were demolished.
The petitioners filed a writ petition in the Bombay High Court for restraining the Bombay Port Trust from carrying out any further demolition of the hut ments.
The writ petition was dismissed by a Single Judge of the High court.
An appeal preferred against the order of the Single Judge was dismissed by a Division Bench.
Hence the appeal by special leave to this Court.
By an interim order dated 27th January 1986 a Division Bench of this Court fixed a cut off date as January 1, 1981 for the purpose of granting relief in the form of providing alternative sites to the hutment dwellers and directed that those hutment dwellers who have been continuously in occupa tion for at least two years prior to January 1, 1981 shall not be thrown out unless and until, alternative sites are provided to them for occupation.
A Commission was also appointed to identify the persons who were eligible for alternative sites in terms of the aforesaid interim order.
In its report submitted on 4th November 1986, the Commission pointed out that only 50 hutment dwellers could satisfy the Commission that they were living on the site for a period of two years prior to the cut off date.
The other hutment dwellers were unable to do so.
174 It was contended on behalf of the petitioners that (i) in view of the time which has gone by, cut off date fixed by this Court should be extended, and (ii) the policy of the State of Maharashtra was not to evict unauthorised occupants on public lands except after providing them alternative accommodation.
Disposing of the special leave petition, it was, HELD: 1.
The problem of hutment dwellers is a human problem and the removal of hutments is bound to cause an untold hardship and misery to the occupants.
However, on that consideration, the Bombay Port Trust cannot be prevent ed from putting its land to its own use.
[178C] 2.
Once the cut off date has been fixed by this Court, there is no basis for extending the cut off date merely because time has gone by since that would render the entire task given to the Commission futile.
Moreover, doing so would run counter to the intention of this Court in making the aforesaid order which was to protect only those hutment dwellers who had been in occupation for at least two years prior to 1.1.1981.
In view of the fact that no policy state ment of the Government of the State of Maharashtra was pointed out it cannot be taken into account.
Moreover, the Port Trust land cannot be regarded as public land in occupa tion of the Government, either the Central Government or the State Government.
[177E H] 2.1.
Under the circumstances, directed that the said 50 hutment dwellers along with their families who had been identified by the Commission as having occupied the said hutments for two years or more prior to the cut off date, namely, 1.1.1981, shall not, be removed from their hutments and their hutments shall not be demolished except after provision of alternative sites for them.
The Port Trust will be at liberty to remove these hutments after giving alterna tive sites to these hutment dwellers.
[177H; 178A B] 3.
It is not possible for this Court to say whether there would be a greater injury to public interest by the removal of the unauthorised hutment dwellers or by prevent ing the Port Trust from putting its own land to a proper use.
[178C D] 4.
The State Government or the Central Government or even the Bombay Port Trust may make some provision for providing alternative sites at least to some of these hut ment dwellers.
However, 175 the provision of such alternative sites is not made a condi tion precedent to the removal of the hutment dwellers or the hutments in question other than those who are entitled to protection on the basis set out earlier.
| The appellant 's land was acquired and compensation was awarded to him by the Land Acquisition Officer.
Demanding a higher amount, the appellant had the matter referred to the District Judge who increased the award, but still discon tented, the appellant went in appeal.
The High Court also increased the compensation but could not satisfy the appel lant who thereupon obtained leave to appeal to the Supreme Court, contending that small plots of land adjoining his large area were sold at much higher rates.
Dismissing the appeal, the Court, HELD: 1.
The price ' paid for small plots of laud cannot provide a safe criterion for determining the amount of compensation for a vast area of land.
The large area of land cannot possibly fetch a price at the same rate at which small plots are sold.
[635 A B] Smt.
Padma Uppal etc.
vs State of Punjab & Ors.
; , applied.
The essential thing is to keen in view the relevant factors prescribed by the Act.
If the judgment of the High Court reveals that it has taken into consideration the relevant factors, the assessment of the market value of the acquired land should not be disturbed.
[635 D E] Thakur Kanta Prasad Singh (dead) by L. Rs vs State of Bihar ; , applied.
| The respondent was appointed a Naib Tehsildar under the appellant, in the year 1937.
On August 4, 1952, he was suspended on complaints received against him and his case was referred for investigation to the Administrative Tribunal appointed under the Rules.
While the proceedings were pending, additional complaints were received by the appellant against his conduct and they were communicated to the Tribunal with an intimation that the appellant proposed to send those further charges against the respondent for enquiry.
The Tribunal did not wait for receipt of the said additional charges and on enquiry exonerated him from the charges framed against him, in August, 1952.
On October 28, 1956, the respondent was again suspended and the charges framed on the additional complaints were delivered to him.
The respondent submitted his explanation and pleaded that the enquiry might be entrusted to the Administrative Tribunal in accordance with the Rules; but his request was rejected and the case was entrusted to the Commissioner with directions to take disciplinary proceeding , against him.
The High Court allowed the writ petition of the respondent and the order directing the enquiry to be held by the appointed authority under r. 55 of the said Civil Services Rules was quashed.
The question for decision in this Court was, whether like the word "may" in r. 4 (1) which confers the discretion on the Governor, the word "may" in sub r.
(2) confers discretion on him, or does the word "may" in sub r.(2) really mean "shall" or "must".
Held, that the whole purpose of r. 4 (2) would be frustrated if the word ,may" in the said rule receives the same construction as in sub r.
The plain and unambiguous object of enacting rule 4 (2) is to provide an option to the 198 .
Gazetted Government servants to request the Governor that their cases should be tried by a Tribunal and not otherwise.
Thus r. 4 (2) imposes an obligation on the Governor to grant a request made by the Gazetted Government Servant and such a request not having been granted in the present case, the appeal must fail.
| The appellant was a tenant of the 3rd respondent since 1950 in respect of 49 bighas of land situated in the Punjab.
He applied for the purchase of those lands under section 18 of the Punjab Security of Land Tenures Act, 1953, and rule 23 of the Rules made thereunder.
The Assistant Collector allowed his application and on appeal the Collector confirmed the order.
The Additional Commissioner and the Financial Commissioner however took the view that the 3rd respondent had not 'reserved ' the land under section 5(1) of the Act but had 'selected ' it under section 5 B and therefore the appellant had no right to purchase the land under section 18.
The appellant 's writ petition against the Financial Commissioner 's order was dismissed in limine and he came to this Court by special leave.
It was contended on behalf of the appellant that (i) the Financial Commissioner had committed an error of law in holding that the 3rd respondent had not reserved the land under section 5(1) when in fact he bad not done so; and (ii) a landlord who did not 'reserve ' any area under section 5(1) of the Act but 'selected ' the area under section 5 B of the Act could not evict the tenant under section 9(1) of the Act and therefore the tenant had the right under section 18 to purchase the said land in his possession for the prescribed period.
HELD : (i) A valid reservation can only be made by the landowner under section 5(1) of the Act, read with the rules made thereunder, when the particulars contained in the application sent by him to the Patwari were verified by the latter.
In the present case the landowner sent an applica tion to the Patwari in the prescribed form, but there was nothing on the record to show that the Patwari verified the correctness of the said particulars.
In view of this it could not be said that the Financial Commissioner 's finding that there was no reservation under section 5(1) was vitiated by an error of law.
[929 E] (ii) The purpose of the Act must be borne in mind in Construing the relevant provisions of the Act.
The two concepts on which the entire Act revolves are the 'permissible area ' and the 'surplus area '.
Out of the permissible area the landowner is empowered to reserve land not exceeding the said area and the balance is defined as surplus area.
This reservation is to enable the land owner to sustain himself by self cultivation.
The object of the surplus area is to confer rights in respect thereof on the tenants.
This twofold object of the Act cannot be achieved unless the landlord has reserved some land in the manner prescribed by section 5 of the Act.
But for one reason or another, if the reservation has not been made by the land owner, section 5 B gives him another opportunity to do so.
[932 C D] Though 'reserved area ' has been defined there is no definition of 'selected area '.
This indicates that the Legislature did not introduce a new concept of 'selected area ' in the Act.
Even a comparison of sections 5 and 5 B 927 shows that the process of reservation and selection are almost the same.
Under section 5(1) reservation is made by selection of the land and under section 5 B the landowner selects his reserved area.
The expressions 'reservation ' and 'selection ' involve the same process and indeed to some extent they are convertible for one can reserve land by selection and select land by reservation.
[932 E.G] It is true that under section 9(1) (1) a tenant of the area reserved under the Act can be evicted and there is no other clause enabling the landowner to evict a tenant from the selected area.
But under section 9(1)(1) the expression used is 'the area reserved under the Act, and not 'reserved area '.
The land selected by the landowner out 'of the permissible area can legitimately be described as the area reserved under the Act.
If that be the interpretation of section 5(1), section 5 B and section 9(1), it follows that under section 18 the tenants cannot claim to purchase the land from the landowner for it is included in the reserved area of the landowner.
[932 H; 933 A] Karam Singh vs Angrez Singh, and Angrej Singh vs Financial Commissioner, Punjab, Chandigarh, , approved.
|
Appeal No. 105 of 1952.
Appeal from the Judgment and Decree dated the 16th September, 1949, of the High Court of Judicature at Madras (Subba Rao and Chandra Reddi JJ.) in Appeal No. 162 of 1946 arising out of Judgment and Decree dated the 30th November 1945 of the Court of the Subordinate Judge of Tanjore in Original Suit No. 34 of 1945.
section Ramachandra Iyer, for the appellant.
T. R. Srinivasan, for the respondents.
February 27.
The Judgment of the Court was delivered by MAHAJAN J.
One Thangathammal who was a dasi (dancing girl) lived in the Tanjore district in Madras State and died possessed of some properties.
She left her surviving three daughters, Saraswathi, Jagadambal and Meenambal.
Jagadambal filed the suit out of which 941 this appeal arises against her sisters for partition of the movable and immovable properties set out in the plaint and for allotment of a third share to her therein.
She alleged that her mother was married to one Thyagaraja Pillai, that the properties in suit were the stridhanam properties of her mother who died intestate on 26th July, 1943, and that according to the law or custom of the community to which the parties belonged she and her sisters were entitled to share equally the properties of her mother.
Saraswathi Ammal, the 1st defendant contested the suit.
She pleaded that her mother was not a married woman but a dasi who followed her hereditary occupation and was attached to Shri Saranatha Perumal temple at Tiruchurai in the Tanjore district, that of the three daughters the plaintiff and the 2nd defendant married and lived with their husbands, while she (1st defendant) was duly initiated as a dasi in the said temple and remained unmarried and that according to the law and custom of the community, the mother 's property devolved solely on her to the exclusion of the plaintiff and the 2nd defendant.
The 2nd defendant supported the 1st defendant 's case.
The material issue in the suit was issue No. 1 which was in these terms: " Who is the proper heir of Thangathammal.
Whether according to custom as set tip by the plaintiff, all the daughters are heirs, or according to the custom put forward by the 1st defendant, the unmarried daughters alone are entitled to inherit." The Subordinate Judge dismissed the suit holding that Thangathammal was a dasi and not a married woman, that according to the custom of the dasi community in South India, a dasi daughter is regarded as a nearer heir to the mother than a married daughter and that the 1st defendant was entitled to remain in possession of the suit properties.
Against this decision an appeal was taken to the High Court.
The High Court reversed the decree of the Subordinate Judge and held that the custom pleaded by the 1st defendant 942 was not proved and that the rule of propinquity of Hindu law as a rule of justice, equity and good conscience, governed the succession and the married and dasi daughters were equally entitled to the inheritance.
It was further held that a dasi daughter was not in the status of a maiden or unmarried daughter for purposes of succession to stridhanam property.
Leave to appeal to the Supreme Court was granted under article 133 of the Constitution.
After bearing the learned counsel for the appellant, we feel no hesitation in concurring with the decision of the High Court.
It was contended that the High Court was in error in holding that the custom set up by the defendant was not proved.
To prove the custom that a dasi daughter was a preferential heir and excluded her married sisters reliance was placed on, the evidence of some members of the community and reference was also made to certain instancese same kind of evidence was led by the plaintiff support of her case.
The evidence of both the parties on the the issue of custom is of an unsatisfactory and inconclusive character and from it no inference can be drawn of the existence of a uniform, certain and ancient custom prevailing in the community on this point.
Out of the defendant 's witnesses, the first witness, Rajagopal Pillai, deposed that his wife was the daughter of dasi Kamakshi who had six daughters of whom three were married and three were dasis, that on Kamakshi 's death, her dasi daughters alone would take the inheritance and that his wife, would be excluded.
This statement does not hurt him in any way as his wife will not be bound by what be might state.
His bald assertion about the custom in the community is not of much value.
He does not disclose any source of his information.
In cross examination he admitted that he did not know a single specific instance where such a custom was enforced .
The second witness on the point is the first defendant.
She stated that one Tulasi 's sister Mangalam got no share in her mother Ammani 's properties.
In cross examination it was admitted that Mangalam died about fort years ago, 943 i.e., some time before the defendant was born.
She could therefore have no personal knowledge about Ammani 's instance.
No written record of that inheritance is forthcoming.
Mangalams son Govindaswami Pillai appeared as D. W. 3.
He deposed that Mangalam 's mother Ammani had divided her properties between her dasi daughters in her lifetime.
The instance therefore is not an instance concerning succession and cannot be treated as relevant in this enquiry.
The 1st defendant further deposed to an instance in Srirangam when succession opened out on the death of dasi Chellappa.
It was said that her property was taken by her dasi daughter Visalakshi to the exclusion of her married daughters Marakatham and Rukmini and that the assets were worth a lakh of rupees.
One would have expected some written documents about that sucession if it took place in the manner deposed to.
In the absence of any evidence from the descendants of Chellappa and in the absence of any documentary evidence regarding that succession it is difficult to place any reliance on this so called instance.
Defendant No. I stated that her knowledge of it was only from hearsay, and the requirements of section 32 of the Evidence Act not being fulfilled, her evidence on this point cannot be treated as admissible.
The third witness, about whom reference has already been made, apart from deposing as to Mangalam 's instance also deposed about the instance of dasi Meenakshi.
Her daughter Jeevaratnam is married to the witness.
He said that Meenakshi 's dasi daughters inherited her property and that his wife was excluded.
The only property alleged to belong to Meenakshi was a house, the value of which is not known.
The succession is said to have occurred over twenty years ago.
None of the daughters of Meenakshi have been examined as witnesses in the case, to enable the court to find out the details about it and merely on the statement of this witness the instance cannot be held proved.
The fourth witness for the defendant is her non contesting sister.
She said nothing on the on the question of custom.
She, however, stated 944 that she was not entitled to a share in the assets of her mother.
When asked why she was making that statement, she said that she was saying so because her husband and some.
elders (whose names were.
not disclosed) had told her so.
Evidence of this character on the question of custom cannot be seriously considered.
Venugopal Pillai is the fifth,witness for the defendant.
He is the husband of the second defendant.
His evidence regarding the instance of Chellappa is purely, hearsay.
He deposed that he had learnt that a dasi 's married daughter is not entitled to claim a share as she is not her heir in the presence of a dasi daughter and therfore he told his wife not to claim a share.
He did not disclose the source of his information.
Janaki Ammal, the sixth witness, is a dasi.
She deposed that she has five daughters of whom two are married, one is a dasi and the other two are young girls and that according to their caste custom her properties on her death would devolve on her dasi daughters and that the married daughters must remain content with the presents given at their marriage.
In cross examination she admitted that she was deposing about the caste custom not from any specific instance in which the custom was observed but at the request of the defendant, and that she bad heard of this custom from her elders whose names she did not disclose.
She further admitted that she had an uncle living but she did not even ask him about the custom.
The witness, it appears, knows nothing about the custom and is giving evidence in order to oblige the defendant.
The next witness 'Who gave evidence on the issue is D. W. 8, Kamalathammal, a dasi.
Her mother was also a dasi.
She deposed that her mother 's properties were divided between her and her other dasi sister and Amba, her third sister, who was married, was not given a share.
In cross examination she admitted that Amba never asked for a share.
Neither was Amba produced, nor any written munici pal records showing that the witness actually inherited the property of her mother to the exclusion of Amba.
It is difficult to hold this incident proved merely on the 945 vague testimony of this witness.
Pappathi Ammal, the next witness in the case, is also a dasi.
She deposed that her father 's mother 's property devolved on her two dasi daughters on her death and that there was no married daughter in existence.
This evidence is of a neutral character and is not of much use on the question of custom pleaded in the case.
Apart from asserting that in this community dasi 's property devolves on her death only on the dasi daughters to the exclusion of married daughters, she cited the instance of Chellappa, a dasi of Srirangam.
It was elicited in cross examination that Chellappa left a house and landed properties.
No explanation is forthcoming why documentary evidence of revenue records about this instance has been withheld.
Oral evidences as to instances which can be proved by documentary evidence cannot safely be relied upon to establish custom, when no satisfactory explanation for withholding the best kind of evidence is given.
The last witness in the case is Rajamani Ammal, another dasi who does service in Sri Ranganathaswami temple.
She also referred to the instance of Chellappa.
She said that her jewels which were worth Rs. 1,000 would pass on her death to her dasi daughter.
She went to the length of saying that if a dasi leaves an only child who is a married woman, even then her properties will pass to a next heir such as a cousin and not a married daughter.
This is all the evidence led by the defendant to prove custom.
On this meagre and unsatisfactory material we cannot hold that the custom pleaded is proved.
The opinion evidence is not of a convincing character and evidence as to specific instances in support of the custom is really nil.
Our attention was also drawn to a decision of the Madras High Court in Shanmugathammal vs Gomathi Ammal(l) In that case the plaintiff, a member of the dasi community, claimed to succeed to her deceased maternal aunt and pleaded that the three surviving sisters of the deceased who were impleded as defendants were not entitled to inherit because one of them (1) 122 946 had been adopted by another dancing girl and the other two had become married.
The issue raised in the case was whether the custom set up by the plaintiff that among dancing women married women are excluded by a woman who continues to be ' a dasi is true, valid and enforceable.
Certain dasis gave evidence in support of the custom.
No evidence whatever was given to the contrary and the custom pleaded was held proved in the circumstances of that case.
Emphasis was laid on the circumstance that there was no evi dence whatsoever against the plaintiff and defendants 2 and 3 who denied the existence of the custom in their written statements did not venture to deny it on oath in the witness box.
The dasi community concerned in that case was a small one consisting originally of twenty houses of which only seven or eight were then in existence and in that situation it was said that the custom might well be one that was well recognized and so much a part of the consciousness of the community, that any dispute like the present dispute amongst so small a body of women would be an extremely rare occurrence and therefore impossible of proof and that the plaintiff could not reasonably be expected to search the presidency for witnesses to speak to some similar dispute in other places.
In our opinion, that decision does not furnish a good judicial instance in respect of the custom pleaded in the present case.
There is no evidence that the customs of that small community of dasis are applicable to the community of dasis in the present case which form a considerable community in this district.
Moreover, the case was decided on the peculiar circumstances of that case on very meagre materials and did not lay down any general custom of dasis on this point.
It is unnecessary to examine the plaintiff 's evidence in detail.
Suffice it to say that it is more than sufficient to rebut the evidence led by the defendant and it neutralizes its effect, if any.
In the absence of proof of existence of a custom governing succession the decision of the case has to rest on the rules of justice, equity and good conscience because admittedly no 947 clear text of Hindu law applies to such a case.
The High Court thought that the just rule to apply was one of propinquity to the case, according to which the married and dasi daughters would take the mother 's property in equal shares.
No exception can be taken to this finding given by the High Court.
No other rule was suggested to us leading to a contrary result.
It was argued that the dasis have a distinct status in Hindu society and, that a rule has been evolved by judicial decisions under which the state of degradation by itself furnishes a rule of preference in a competition between dasi daughters and married daughters.
The juidicial decisions referred to concern the community of prostitutes and the rule evolved concerning them has been abrogated by later decisions.
It was contended that though the said rule had been abrogated and was no, longer applicable to that community concerning which it was evolved, it should by analogy be applied to cases of succession to dasis.
Narasanna vs Oangu(1) was the first case cited.
There, an adopted niece of a prostitute dancing girl was preferred to a brother remaining in caste.
It was said that the legal relation between a prostitute dancing girl and her undegraded relations remaining in caste becomes severed and they are therefore not entitled to inherit the estate.
In Subbaratna Mudali vs Balakrishnaswami Naidu(2), the next, case cited, the facts were that a deceased woman Palani inherited the property in dispute from her mother Nagu, who inherited it from her mother Mottai who again inherited it from her father Arunachalam.
Arunachalam had two brothers Ramaswami and Mathurbutham and the question in that case was whether Mathurbutham 's daughter Seethai or Ramaswami 's daughter 's son Marudamuthu Mudali was the heir of Palani.
The learned judges held that Mathurbutham 's daughter was preferential heir to Ramaswami 's daughter 's son.
It was pointed out that the rule of preference based on degradation was no longer good law.
It was, however, (1) I.L.R. (2) 33 M.L.J. 207.
948 added that in cases of dancing girls the law remained as it was before.
Our attention was also drawn to certain observations in Subbaraya Pillai vs Ramaswami Pillai(1) at page 177, and to the decision in Balasundaram vs Kamakshi Ammal(2).
In the former case the learned Judges rejected the broad proposition that Degradation of a woman in consequence of her unchastity entails in the eye of the law cessation of the tie of kindred between her and the members of her natural family and also between her and the members of her husband 's family.
We think that decision on this point is sound in law.
Degradation of a woman does not and cannot sever the ties of blood and succession is more often than not determined by ties of blood than by the moral character of the heir.
In Balasundaram vs Kamakshi Ammal(2) it was held that the property acquired by the mother had been acquired by her as a married woman and notwithstanding her lapse into unchastity, it devolved on her daughters clothed with the ordinary character of property acquired by a Hindu female, that is to say, the daughters took a life estate in it.
The learned counsel attempted to persuade us to hold the custom pleaded proved by the assistance of decisions given in analogous cases and by applying the principles of the rules said to have been, enunciated in some of them.
Those cases were decided on their own facts and in some of them a rule was enunciated that degraded people are a class by themselves and their degraded relations are preferential heirs to the undegraded ones.
As already said, we cannot subscribe to the view that any such rule can be evolved merely on logical grounds.
Its existence can only be justified on the basis of established custom.
No trustworthy evidence has been led in this case to establish that the daughters of a dasi by marriage lose their right of inheritance and form a separate community.
The correct approach to a case where a party seeks to prove a custom is the one pointed out by their Lordships of the (1) I.L.R. (2) 949 Privy Council in Abdul Hussein Khan vs Soma Dero(1).
It was there said that it is incumbent on a party setting up a custom to allege and prove the custom on which he relies and it is not any theory of custom or deductions from other customs which can be made a rule of decision but only any custom applicable to the parties concerned that can be the rule of decision in a particular case.
It is well settled that custom cannot be extended by analogy.
It must be estabished inductively, not deductively and it cannot be established by a priori methods.
Theory and custom are antitheses, custom cannot be a matter of mere theory but must always be a matter of fact and one custom cannot be deduced from another.
A community living in one particular district may have evolved a particular custom but from that it does not follow that the community living in another district is necessarily following the same custom.
The last point taken by the learned counsel was that under Hindu law the 1st defendant as a maiden was entitled to preference over her married sisters.
Defendant No. I was admittedly married to the idol and she has been on her own show.
living a life of prostitution.
The text of the Mitakshara dealing with the case of a virgin can.
not be applied to her case.
[Vide Tara vs Krishna(1)].
It is inconceivable that when the sages laid down the principle of preference concerning unmarried daughters they would have intended to include a prostitute within the ambit of that text.
For the reasons given above we see no force in this appeal and it is dismissed with costs.
Appeal dismissed, Agent for appellant: section Subramaniam.
Agent for respondent No. I : M. section K. Aiyangar.
| The evidence on record did not establish the custom which had been pleaded, namely that among the community of dasis 940 (dancing girls) in South India a dasi daughter succeeded to her mother in preference to the married daughters; and in the absence of such custom, succession to a dasi must be governed by the rule of propinquity of Hindu law as a rule of justice, equity and good conscience and dasi daughters and married daughters would succeed to their mother 's property in equal shares.
A rule that degraded relations are preferential heirs to undegraded ones cannot be evolved merely on logical grounds the existence of such a rule can only be justified on the basis of established custom.
Custom cannot be extended by analogy.
It must be establish ed inductively, not deductively, and it cannot be established by a priori methods.
It cannot be a matter of mere theory but must always be a matter of fact and one custom cannot be deduced from another.
Shanmugathammal vs Gomathi Ammal , distin guished.
Narasanna vs Gangu (I.L.R. , Subbaratna Madali vs Balakrishna Naidu (33 M.L.J. 207), Subbaraya Pillai vs Ramaswami Pillai (I.L.R. , Balasundaram V. Kamakshi Ammal , and Abdul Husein Khan vs Soma Dero (I.L.R. P.C.) referred to.
The rule of Hindu law by which a maiden is a preferential heir to her married sisters does not apply to daughters who are admittedly married to an idol and lead a life of prostitution.
Tara vs Krishna (I.L.R. referred to.
| A decree was passed in a money suit against N and his four sons who were members of a Mitakshara Hindu joint family.
In execution of that decree the shares of the four sons in the joint family properties, described altogether as 4/5 th share, were put up for auction in December, 1936 and purchased by section N 's interest was not put up for sale as it was the subject matter of insolvency proceedings.
The sale to S was duty confirmed.
S sold the properties to P.
On November 6, 1939 an order was made under 0.
21 rr.
33(2) and 96 of the Code of Civil Procedure for delivery of joint possession of the properties purchase to P along with the members of the joint family already in possession.
This order was carried out and possession was delivered to P by publishing that fact by beat of drum as prescribed in the rules.
Subsequently P retransferred the properties to section On October 16, 1951 S filed a suit against the then members of the joint family and various alienees asking for a partition of the joint family properties into five equal shares and thereafter for possession of four of such shares by removing the defendants from possession.
The trial court decreed the suit but held that S was not entitled to a 4/5th share but only to a 2/3rd share because before the decree a 5th son had been born to N who had not been made a party to the suit or the execution proceedings and whose share had consequently not passed under the auction sale.
Some of the defendants filed an appeal to the High Court which allowed the appeal holding that the suit was barred by limitation under article 144 of Schedule 1 to the Limitation Act.
S had field a coss objection in the High.
Court on the ground that he should have been held entitled to a 4/5th share of the properties which was dismissed by the High Court without discussion of the merits in view of its decision on the question of limitation.
S having died the appellants as his successors in interest appealed to this Court under article 133 of the Constitution.
The two questions that arose for decision were (1) whether the suit was barred by limitation under article 144 or article 120 and (2) whether S was entitled to a 4/5th share.
HELD : (Per Sarkar and Raghubar Dayal, JJ.) (i) (a) 'Me view that the suit was barred under article 144 of the suit presented great difficulties.
The article obviously contemplates a suit for possession of property where the defendant might be in possession of it as against the plaintiff.
However, the purchaser of a copartner 's undivided interest in joint family property is not entitled to possession of what he has purchased.
His only right is to sue for partition of the property and ask for allotment to him of that which an partition might be found to fall to the share of the copartner whose share he has purchased.
His right to possession would date from the period when a specific allotment is made in his favour.[632 H] 629 S was therefore not entitled to possession till a partition had been made.
As possession of the defendants could tie adverse to him only if he was entitled to possession the difficulty in applying article 144 arose.
[633 B] Sidheshwar Mukherjee vs Bhubneshwar Prasad Narain, ; , relied on.
Vyapuri vs Sonamma Boi Ammani, Mad. 81, referred to.
Mahant Sudarsan Das vs Mahan Ram Kirpal Das, (1949) L.R. 77 I.A 42, distinguished.
(b) Even on the assumption that article 144 applied the suit was not barred.
In the present case the defendants were not in uninterrupted possession for twelve years as required by the Article.
By the delivery of symbolical possession under the order of November 6, 1939, the adverse possession of the defendants was interrupted.
Time had therefore to commence to run from that date, and the suit having been brought within twelve years of that date, it was not bared under that article.
[633 F G] Sri Radha Krishna Chanderji vs Ram Bahadur, A.I.R. (1917) P.C. 197, relied on.
It could not be said that the order of delivery of possession was a nullity though S and his transferee who had purchased an undivided share in copartners property were not entitled in law to any possession at all.
In making the order the learned Judge had gone wrong in law but he had acted within his jurisdiction.
Such an order has full effect if it is not set aside.
[634 A B] Yelumalai Chetti vs Srinivasa Chetti, Mad. 294, distinguished.
Mahadev Sakharam Parkar vs janu Namji Hatle, (1912) I.L.R. and fang Bahadur Singh vs Hanwant Singh All.
520, held inapplicable.
(ii) Article 120 applies to suits for which no period of limitation is provided elsewhere and prescribes a period of six years commencing from the date when the right to sue accrues.
[636 D] The right to sue accrues for the purpose of article 120 when there is an accrual of the right asserted in the suit and an unequivocal threat by the respondent to infringe it.
In the present case there was nothing to show that the right was ever challenged in any way by the respondents.
It was impossible therefore to hold that the suit was barred under article 120.
[636 F] Mst.
Rukhmabai vs Lala Laxminarayan, ; and C. Mohammad Yunus vs Syed Unnissa, ; , relied on.
Bai Shevantibai vs Janardan R. Warick, A.I.R. 1939 Bom.
322 disapproved in so far as it held that the right to sue accrued from the date of sale.
(iii) The cross objection had no merit.
What S purchased at the auction sale was the share of the sons of S then bom, in the joint family Properties.
At the date of the auction sale that share which was originally 4/5th had been reduced to 2/3rd by the birth of another son to N who had not been made a party either to the suit or the execution proceedings.
What was purchased at the execution sale was only the shares of the four elder sons of N and their share at the date of sale was 2/3rd.
That 630 being so S was not entitled to get the 1/6th share of the fifth son also allotted to him in the partition suit.
[637 B C] Per Ramaswami, J. : (i) The purchaser of a share of joint Hindu family property doe , not acquire any interest in the property he cannot claim to be put.
in possession of any definite place of Property.
A suit for partition filed by the alienee from a is not, in a technical sense, a suit for partition and such a suit have the necessary effect of breaking up the joint ownership of the members of the family in the joint family in the joint property nor the corporate character of the family.
Such being the rights of the alienee his right to sue for partition cannot be said to be a continuing right subject to no period of limitation for enforcing it.
[638 F H] Aiyyagari Venkataramayya vs Aivyagari Ramayya, I.L.R. 25 referred to.
(ii) Though the alienee of an undivided interest of a Hindu is not entitled to joint possession with other copartners or to separate possession of any part of the family property he is entitled to obtain possession of that part of the family property which might full to the share of his alienor at a partition.
[640 B] In the present case the alienee instituted a suit for general the prayer that he may be put in possession of that part of the family property which may be allotted to his share.
It is not right to such a suit as a suit for mere partition.
The main relief sought by the plaintiff is the relief of possession of that part of the property which may be allotted to the alienor 's share and a relief for partition is only a machinery for working out his right and ancillary to the main relief for possession of the property allotted to the alienor 's share.
what the plaintiff seeks is actual delivery of possession.
Such a suit falls within the of article 144 of the Limitation Act.
[640 B D] Thani vs Dakshinamurthy.
I.L.R. , appoved (iii) the possession of the non alieniting members of the family cannot be said to be possession on behalf of the alienee also because the purchaser alienee does not acquire in interest in the property sold and does not become tenant in common with the members of the family tier is he entitled to joint possession with them.
In the absence of clear acknowledgement of the right of the alienee or participation in the enjoyment of the family property by the alienee the possession of his alienors share.
The fact that the alienee has purchased an undivided interest is not inconsistent with the conception of adverse possession, of that interest.
[640 E H] Sudarsan Das vs Ram Kirpat Das, A.I.R. 1950 P.C. 44, reliel on.
According to the third column of article 144, time begins to run from the date when the possession of the defendant becomes adverse to the plaintiff.
In the present case, therefore, adverb possession bengon to run from the date of purchase of the undivided share i.e. front December 21.
[640 E; 641 FF] (iv) However the grant of symbolic possession bv the court in favour of P after notice to defendants 2 to 5 was tantamount in law to delivery of actual possession and therefore efficient to break up the continuity of adverse "scion in favour of the defendants.
Even assuming that the grant of symbolic possible ought not to have been made and that, 631 the executing court acted illegally in making such an order, it could not be argued that the executing court had no jurisdiction to make the order or that the act of symbolic possession was a nullity in the eye of law.
[642 B] Yelumalai Chetti vs Srinivasa Chetti,I.L.R. , referred Sri Radha Krishna ' Chanderii vs Ram Bahadur, A.I.R. 1917 P.C. 197, relied on.
According the suit of the plaintiff was no.t barred by limitation under ' article 144 of the Limitation Act and the view taken by the High Court on this part of the case was not correct.
[642 D]
| A Hindu Brahmin governed by the Mitakshara law made a will in which he gave the following directions: " After my life time, you, the aforesaid Ranganayaki Ammal, my wife, shall till your lifetime enjoy the aforesaid entire properties .
After your lifetime, Ramalakshmi Ammal, our daughter and her heirs shall enjoy them with absolute rights and powers of alienation such as gift, exchange and sale from son to grandson and so on for generations.
As regards the payment of maintenance to be made to C, wife of my late son, H, my wife Ranganayaki Ammal shall pay the same as she pleases and obtain a release deed." After the death of the testator his wife entered into possession of his properties but before the death of his wife, his daughter and all her children died: Held, (i) that on a proper construction of the will in the light of surrounding circumstances, the testator bad conferred on his 849 wife only an ordinary life estate, and alienations made by her would not endure beyond her lifetime ; (ii) that the testator 's daughter obtained under the will a vested interest in the properties after the lifetime of the widow, to which her husband succeeded on her death.
The rule of construction by analogy is a dangerous one to follow in construing wills differently worded, and executed in different surroundings.
Ram Bahadur vs Joger Nath Prasad , Pavani Subbamma vs Arumala Rama Naidu ([1937] , Nathu Rain Mahajan vs Ganga Bai ([1938] , Vasanta Rao Ammennamma vs Venkata Kodanda Rao ([1940] , Maharaja of Kolhapur vs Sundaram Iyer (I.L.R. 48 Mad. 1), Mahoned Shumsool vs Shewakram (2 I.A. 7), Ratna Chetty vs Narayana swami Chetty , Mst.
Bhagwati Devi vs Choudry Bholonath Thakur (2 I.A. 256) and Lallu vs Jagmohan (I.L.R. referred to.
Judgment of the Madras High Court affirmed.
| Under the deed of settlement (exhibit 2A) dated May 22,1930, the appellant landlady acquired a life interest in certain agricultural lands under dispute and the reversion remainder was in her children.
During her lifetime she was entitled to enjoy the income of the property but she could not dispose of the property by will, gift or sale.
She was also under a disability to encumber the estate though she had the right of carrying on the "vahivat" (management).
By virtue of the provisions of section 32 of the Bombay Tenancy and Agricultural Lands Act, 1948, providing that on April 1, 1957 styled as tillers ' day, a tenant of Agricultural land covered by the said Act would be the owner of the land held by him, if other conditions specified therein are fulfilled, the respondents made five separate applications on August 27, 1962 against the appellant before the Agricultural Lands Tribunal, Raver under section 32G for determining the price of the land held by each of them as tenant.
The appellant contested the right of the tenant to purchase the land, inter alia contending that under the deed of settlement she acquired a right only to usufruct of land involved in the dispute and she being a limited owner and the settlement imposing certain disability on her precluding her from dealing with the property which would indicate that she could not have leased out the land thereby creating an encumbrance which would be impermissible under the deed of settlement and consequently the tenant of each piece of land could not be said to be lawfully cultivating the land so as to a become the deemed tenant under section 4 of the Tenancy Act.
The respondents not being tenants within the meaning of the Tenancy Act could not have become the owner of the land on the tillers ' day.
Alternatively it was contended that the minor children of the appellant, she being a limited owner had acquired a vested right in the land and, therefore, as they were minors the date of compulsory purchase would be postponed under section 32F ousting the jurisdiction of the tribunal to determine the price under section 32G.
The Tribunal allowed 608 the applications and negatived the appellant 's contentions.
All the five appeals preferred by the appellant were allowed by the Collector of Jalgaon.
The revision petitions filed by the tenants under section 76 of the Tenancy Act before the Maharashtra Revenue Tribunal were allowed holding that even though the landlady in these cases was a limited owner the instrument settling the property on the landlady did not preclude her from leasing the land and the lease was accordingly valid under section 4, the tenant would be a deemed tenant within the meaning of the Tenancy Act and such deemed tenant would become the owner of the land held by him on the tillers ' day.
The appellant approached the High Court under Article 227 of the Constitution.
While rejecting the special civil applications the High Court remanded the case to the Collector to give an opportunity to the appellant to agitate the contention about the quantum of price as it was not dealt with by the Collector on merits.
The appellant having obtained a certificate under Article 133(1) (a) and (b) of the Constitution preferred these five appeals.
Dismissing the appeals, the Court, ^ HELD: 1.
On a plain reading of the deed and the admitted position that the appellant had leased the land to each of the respondents and in view of the requirements of section 4 of the Tenancy Act, 1948, it is clear that the respondents would be deemed tenants under that section.
[616 E F] 1 :1.
Section 4 comprehends within its sweep any person lawfully cultivating any land belonging to another person.
If land belongs to one person and another is lawfully cultivating it, unless such person falls under any of the excepted categories; he would acquire the status of a deemed tenant.
The excepted categories are: (a) a member of the owner 's family, or (b) a servant on wages, payable in cash or kind but not in crop share or a hired labourer cultivating the land under the personal supervision of the owner or any member of the owner 's family, or (c) a mortgagee in possession.
It would thus appear that if the land belonging to one person is being lawfully cultivated by another person and that such other person is not a member of the owner 's family or a servant on wages payable in cash or kind but not in crop share or a hired labourer or a mortgagee in possession then such cultivator lawfully cultivating the land would be deemed to be a tenant.
The legal fiction of clothing a lawful cultivator of land belonging to other person has widened the traditional concept of expression "tenant" which would normally imply contractual relationship.
[615 E H, 616A] 1:2.
Under the deed of settlement appellant was given a life estate.
She was the owner of the land during her life time with a limitation that she could not will, gift or sell the property or encumber the same.
In view of these four limitations she is undoubtedly a limited owner.
But this limited owner holding the life estate has been given the right to administer the estate after she attained majority.
Administration of the estate would normally include leasing of the property except where a specific condition is prescribed precluding the administrator from leasing the property.
There is no such limiting or restrictive condition prohibiting the appellant in the course of her management from leasing the land.
The appellant beneficiary being a woman, the settlors must have thought that she may not be able to personally carry on agricultural operations and therefore when the settlors authorised her, on attaining majority, to administer the estate 609 it would per se in the absence of a limiting or restricting condition to the countrary enable her to lease the land.
Thus, if the appellant as beneficiary after attaining majority took over the administration and as part of the administration leased the land, the person so inducted by her on the land would be lawfully cultivating the land belonging to the appellant and being not in any of the excepted categories would be deemed to be a tenant.[616 B E] Dahyalal and Ors.
vs Rasul Mohammed Abdul Rahim, ; , followed.
Upon a pure literal construction of deed coupled with intendment of the settlement, the appellants ' interest in the property was a vested interest during the life lime with a right to take over management on attaining majority and to deal with the property in her own way, and the children had only contingent interest during the period.
The property would devolve on the heirs named in the deed and the devolution would take place on her death.
Section 13 of the Transfer of Property Act makes this position clear since none of her children to whom the remainder was given was in existence at the time of transfer.
Even if transfer is in favour of unborn person, at the date of transfer to be valid there has to be a prior interest created by the very transfer.
This prior interest though limited would not be contingent but vested interest.
In fact the interest of future born children would be contingent till the death of the appellant.
The deed of settlement cannot be construed as a transfer in favour of unborn person, yet it settles property on trust and the unborn children, under trust, may be beneficiaries but they can claim interest only after the death of the appellant and no interest in her life time.
Under the deed of settlement an interest is created in favour of the children of the appellant and the interest would take effect on the happening of specified uncertain event uncertain as to time namely, the death of the appellant the interest of the children would be contingent.
It is nothing short of spes successionis [618 D H, 619 A] Rajes Kanta Roy vs Santi Debi, ; , discussed and distinguished.
The right to administer the property conferred on the appellant on her attaining majority inheres the right to lease the property.
If it be so, it is futile to contend that restraint on the right to encumber would preclude her from leasing the land.
The right to manage or administer an immovable property such as agricultural land as a prudent man, comprehends the right to lease, save where the contrary intention is indicated.
It is equally well recognised that a limited owner or a life estate holder in agricultural land, unless a clear intention to the contrary is expressed, would be entitled to lease the land during his or her life time.
Reading the deed of settlement as a whole no such contrary intention could be found.
[620 B D]
| The question involved in this appeal was whether under the customary law of the Punjab a sister was a preferential heir in respect of her brother 's self acquired property, to a collateral.
The respondent, the sister, relied on a custom, which she termed a special custom, and on that basis claimed her brother 's property, and the appellant, a collateral of the 8th degree of her brother, resisted her claim relying solely on a general custom stated in paragraph 24 Of the Rattigan 's Digest of the Customary Laws of the Punjab to the effect that sisters were excluded by collaterals in the matter of inheritance to non ancestral property.
The Subordinate judge, and the District judge on appeal, held in favour of the appellant but the High Court reversed their decisions holding that, there was no such general custom as recorded by Rattigan and that it was in any event for the appellants to prove that custom and this he had failed to do.
The High Court also held that the respondent had succeeded in proving the custom set up by her.
It was contended on behalf of the appellant that the High Court was in error in placing the onus of proving the custom on him since the custom was a general custom as stated by Rattigan.
Held, that no distinction could be made between a general custom or other customs so far as the need of proof was con cerned and the ordinary rule was that all customs, general or otherwise, had to be proved unless by repeated recognition by the courts a custom had become entitled to judicial notice under section 57(1) of the Evidence Act.
Raja Rama Rao vs Raja of Pittapur, (1918) L.R. 45 I.A. 148, relied on.
Although there could be no doubt that Rattigan 's Digest was of the highest authority on questions of custom of the Pun jab, it was not possible, regard being had to the formidable array of conflicting decisions of the courts as to its existence, to take judicial notice of the custom mentioned in paragraph 24 of the Digest, without further proof.
Case law reviewed.
Although the respondent had in the plaint relied on a custom and termed it a special custom, that could not amount to an 782 admission which would obviate the necessity of proof of the general customs or its terms by the appellant.
Even supposing that the High Court was not correct in its finding that the respondent had proved the custom entitling her to succeed, as the custom set up by the appellant had not also been established, section 5 Of the , applied and the case had to be decided by the personal law of the parties.
The respondent was entitled to base her claim on the personal law although in her plaint she had relied on a custom.
The personal law of the parties was the Hindu law and the respondent was entitled to succeed under that law also.
Daya Ram vs Sohel Singh, 110 P.R. 1906, Abdul Hussein Khan vs Bibi Sona Dero, (1917) L.R. 45 I.A. 10 and Mst.
Fatima Bibi vs Shah Nawaz, Lah. 98, relied on.
| The appellant assessee sold his house in Ernakulam on 25th of December, 1965 to his daughter in law and five of his children for the same price of Rs. 16,500 at which he purchased in the year 1958.
The assessment of the assessee for the assessment year 1966 67 for which the relevant accounting year was the calendar year 1965 was thereafter completed in the normal course and in this assessment, no amount was included by way of capital gains in respect of the transfer of the house, since the house was sold by the assessee at the same price at which it was purchased and no capital gains accrued or arose to him as a result of the transfer.
On 4th April 1968, however, the Income Tax officer issued a notice under section 148 of the Act seeking to reopen the assessment of the assessee for the assessment year 1966 67 and requiring the assessee to submit a return of income within thirty days of the service of the notice, without stating what was the income alleged to have escaped assessment.
However, by his subsequent letter dated 4th March, 1969, the Income Tax officer stated that he proposed to fix the fair market value of the house sold by the assessee at Rs, 65,000 as against the consideration of Rs. 16,500 for which the house was sold and assess the difference of Rs. 48,500 as capital gains in the hands of the assessee.
The objections raised by the assessee were overruled and an order of reassessment was passed by the Income Tax officer including the sum of Rs. 48,500 as capital gains and bringing it to tax under sub section (2) of section 52, taking the view that this sub section did not require as a condition precedent that there should be under statement of consideration in respect of the transfer and it was enough to attract the applicability of the sub section if the fair market value of the property as on the date of the transfer exceeded the full value of the consideration declared by the assessee by an amount of not less than 15% of the value so declared.
The assessee thereupon filed a writ petition in Kerala High Court challenging the validity of the order of re assessment insofar as it brought a sum of Rs. 48,500 to tax relying on sub section (2) of section 52 of the the Income Tax Act, 1961.
The writ petition was allowed, but in appeal the Full Bench by a majority judgment agreed with the views of the Income Tax officer and dismissed the writ petition.
Hence the assessee 's appeal by certificate.
630 Allowing the appeal, the Court ^ HELD: 1: 1.
Sub section (2) of section 52 of the Income Tax Act, 1961 can be invoked only where the consideration for the transfer has been understated by the assessee or in other words, the consideration actually received by the assessee is more than what is declared or disclosed by him.
Sub section (2) has no application in case of an honest and bonafide transaction where the consideration received by the assessee has been correctly declared or disclosed by him and there is no concealment or suppression of the consideration.
[657 B, C D] 1: 2.
The burden of proving an understatement or concealment is on the Revenue, which may be discharged by it by establishing facts and circumstances from which a reasonable inference can be drawn that the assessee has not correctly declared or disclosed the consideration received by him and there is understatement or concealment of the consideration in respect of the transfer.[657 B C] 1: 3.
Sub section (4), in the instant case, had no application and the Income Tax officer could have no reason to believe that any part of the income of the assessee had escaped assessment so as to justify the issue of a notice under section 148.
It was a common ground between the parties and that was a finding of fact reached by the Revenue Authorities that the transfer of the property by the assessee was a perfectly honest and bonafide transaction where the full value of the consideration received by the assessee was correctly disclosed at the figure of Rs. 16,500.
The order of re assessment made by the Income Tax officer pursuant to the notice issued under section 148 was accordingly without jurisdiction.
[657 D G] 2: 1.
The task of interpretation of the statutory enactment is not a mechanical task.
It is more than mere reading of mathematical formula because few words possess the precision of mathematical symbols.
It is an attempt to discover the intent of the legislature from the language used by it and it must always be remembered that language is at best an imperfect instrument for the expression of human thoughts and it would be idle to expect every statutory provision to be "drafted with divine prescience and perfect clarity".
Courts, therefore, must eschew literalness in the interpretation of a statutory provision and construe the language having regard to the object and purpose which the legislature had in view in enacting that provision and in the context and the setting in which it occurs.
[640 C D, F.G, 642 B C] 2: 2.
Where the plain literal interpretation of a statutory provision produces a manifestly absurd and unjust result which could never have been intended by the legislature, the Court may modify the language used by the legislature or even "do some violence" to it so as to achieve the obvious intention of the legislature and produce a rational construction.
The Court may also in such a case read into the statutory provision a condition which, though not expressed, is implicit as constituting the basic assumption underlying the statutory provision.
It is true that the consequences of a suggested construction cannot alter the meaning of a statutory provision but they can certainly help to fix its meaning.
631 Luke vs Revenue Commissioner, ; Headan 's case ; ; In re May Fair Property Company, LR [1898] 2 Ch.
Dn; Eastman Photographic Material Company vs Comptroller General of Patents, Designs and Trade Marks, , quoted with approval, 2:3.
The speeches made by the Members of the Legislature on the floor of the House when a Bill for enacting a statutory provision is being debated are inadmissible for the purpose of interpreting the statutory provision but the speech made by the Mover of the Bill explaining the reason for the introduction of the Bill can certainly be referred to for The purpose of ascertaining the mischief sought to be remedied by the legislation and the object and purpose for which the legislation is enacted.
[654 E G] Lok Shikshana Trust vs Commissioner af Income Tax, ; Indian Chamber of Commerce vs Commissioner of Income tax, ; Additional Commissioner of Income tax vs Surat Art Silk Cloth Manufacturers Association, , referred to.
Again it is undoubtedly true that the marginal note to a section cannot be referred to for the purpose of construing the section but it can certainly be relied upon as indicating the drift of the section or to show what the section dealing with.
It cannot control the interpretation of the words of a section particularly when the language of the section is clear and unambiguous but, being part of the statute, it prima facie furnishes some clue as to the meaning and purpose of the section.
[647 A B] Bushel vs Hammond, , quoted with approval.
Bengal Immunity Company Limited vs State of Bihar, , referred to.
The rule of construction by reference to contemporanea expositio is a well established rule for interpreting a statute by reference to the exposition it has received from contemporary authority, though it must give way where the language of the statute is plain and unambiguous.
[650 B C] Baleshwar Bagarti vs Bhagirathi Dass, I.L.R. 35 Calcutta 701, approved.
Deshbandhu Gupta and Co. vs Delhi Stock Exchange Association Ltd,. ; , referred to.
Having regard to the well recognised rule of interpretation, a fair and reasonable construction of section 52 sub section (2) would be to read into it a condition that it would apply only where the consideration for the transfer is understated or in other words, the assessee has actually received a larger consideration for the transfer than what is declared in the instrument of transfer and it would have no application in case of a bonafide transaction where the full value of the consideration for the transfer is correctly declared by the assessee.
[642 E F] 3.
Several considerations which lead to this conclusion are: 632 (a) The first consideration is the object and purpose of the enactment of section 52(2).
The speech made by the Finance Minister while moving the amendment introducing sub section (2) clearly states what were the circumstances in which such sub section (2) came to be passed, what was the mischief for which section 52 as it stood then did not provide and which was sought to be remedied by the enactment of sub section (2) and why the enactment of that sub section was found necessary.
The object and purpose of sub section (2), as explicated from the speech of the Finance Minister, was not to strike at honest and bonafide transactions where the consideration for the transfer was correctly disclosed by the assessee but to bring within the net of taxation those transactions where the consideration in respect of the transfer was shown at a lesser figure than that actually received by the assessee, so that they do not escape The chargeable tax on capital gain by understatement of the consideration.
This was real object and purpose of the enactment of sub section (2) and the interpretation of this sub section must fall in line with the advancement of that object and purpose.[642 F, 646 B. F] (b) Further the marginal note to section 52 as it now stands, was originally a marginal note only to what is presently sub section (1) and significantly enough, this marginal note remained unchanged even after the introduction of sub section (2) suggesting clearly that it was meant by Parliament to apply to both sub sections of section 52 and it must therefore be taken as indicating That, like sub section(l), sub section (2) is also intended to deal with cases where there is under statement of The consideration in respect of the transfer.
[647 C D] (c) The placement of sub section (2) in section 52 does indicate in some small measure that Parliament intended that sub section to apply only to cases where the consideration in respect of the transfer is under stated by the assessee.
If Parliament intended sub section (2) to cover all cases where the condition of 15% difference is satisfied, irrespective of whether there is under statement of consideration or not, it is reasonable to assume that Parliament would have enacted that provision as a separate section and rot pitch forked it into section 52 with a total stranger under an inappropriate marginal note.
Moreover there is inherent evidence in sub section (2) which suggests that the thrust of that sub section is directed against cases of under statement of consideration.
The crucial and important words in sub section (2) are: "the full value of the consideration declared by the assessee".
The word 'declared ' is very eloquent and revealing.
It clearly indicates that the focus of sub section (2) is on the consideration declared or disclosed by the assessee as distinguished from the consideration actually received by him and it contemplates a case where the consideration received by the assessee in respect of the transfer is not truly declared or disclosed by him but is shown at a different figure.
[647 D G, 648 A B] (d) The two circulars issued by the Central Board of Direct Taxes dated 7th July, 1964 and 14th January, 1974 are not only binding on the Tax Department in administering or executing the provision enacted in sub section (2), but are in nature of contemporenea expositio, furnishing legitimate aid in the construction of sub section (2).
It is clear from these two circulars that the Central Board of Direct Taxes, which is the highest authority entrusted with the execution of the provisions of the Act understood sub section (2) as limited to 633 cases where the consideration for the transfer has been under stated by the assessee.
These two circulars are legally binding on the Revenue and this legally binding character attaches to the two circulars even if they be found not in accordance with the correct interpretation of sub section (2) and they depart or deviate from such construction.
[650 A, F G] Navnitlal C. Jhaveri vs KK, Sen, 56 I.T.R. SC 198: Ellerman Lines Ltd. vs Commissioner of Income tax, West Bengal, , followed.
1 4: 1, It is a well settled rule of law that the onus of establishing that the conditions of taxability are fulfilled is always on the Revenue.
To throw the burden of showing that there is no understatement of the consideration, on the assessee would be to cast an almost impossible burden upon him to establish the negative, namely that he did not receive any consideration beyond that declared by him.
[653 F H, 654 A] 4: 2.
If the Revenue seeks to bring a case within sub section (2), it must show not only that the fair market value of the capital asset as on the date of the transfer exceeds the full value of the consideration declared by the assessee by not less than 15% of the value so declared, but also that the consideration has been under stated and the assessee has actually received more than what is declared by him.
There are two distinct conditions which have to be satisfied before sub section (2) can be invoked by the Revenue and the burden of showing that these two conditions are satisfied rests on the Revenue.
It is for the Revenue to show that each of these two conditions is satisfied and the Revenue cannot claim to have discharged this burden which lies upon it, by merely establishing that the fair market value of the capital asset as on the date of the transfer exceeds by 15% or more the full value of the consideration declared in respect of the transfer and the first condition is therefore satisfied.
The Revenue must go further and prove that the second condition is also satisfied.
Merely by showing that the first condition is satisfied, the Revenue cannot ask the Court to presume that the second condition too is fulfilled, because even in case where the first condition of 15% difference is satisfied, the transaction may be a perfectly honest and bonafide transaction and there may be no understatement of the consideration.
The fulfillment of the second condition has therefore to be established independently of the first condition and merely because the first condition is satisfied, no inference can necessarily follow that the second condition is also fulfilled.
Each condition has got to be viewed and established independently before subsection (2) can be invoked and the burden of doing so is clearly on the Revenue.
[653 B F] 4:3.
The object of imposing the condition of difference of 15% or more between the fair market value of the capital asset and the consideration declared in respect of the transfer clearly is to save the assessee from the rigour of subsection (2) in marginal cases where difference in subjective valuation by different individuals may result in an apparent disparity between the fair market value and the declared consideration.
This condition of 15% or more difference is merely intended to be a safeguard against undue hardship which would be occasioned to the assessee if the inflexible rule of the thumb enacted in sub section (2) were applied in marginal case and it has nothing to do with the question of burden of proof, for the burden of establishing that there is understatement of the concide 534 ration in respect of The transfer always rests on the Revenue.
The postulate underlying sub section (2) is that the difference between one honest valuation and another may range upto 15% and that constitutes the class of marginal cases which are taken out of the purview of sub section (2) in order to avoid hardship to the assessee.
[654 B C, F H] 4: 4.
Once it is established by the Revenue that the consideration for the transfer has been under stated, sub section (2) is immediately attracted, subject of course to the fulfillment of the condition of 15% or more difference, and the Revenue is then not required to show what is the precise extent of the understatement or in other words, what is the consideration actually received by the asseesee.
That would in most cases be difficult, if not impossible, to show and hence sub section (2) relieves the Revenue of all burden of proof regarding the extent of under statement or concealment and provides a statutory measure of the consideration received in respect of the transfer.
It does not create any fictional receipt.
It does not deem as receipt something which is not in fact received.
It merely provides a statutory best judgment assessment of the consideration actually received by the assessee and brings to tax capital gains OD the footing that the fair market value of the capital asset represents the actual consideration received by the assessee as against the consideration untruly declared or disclosed by him.
This approach in construction of sub section (2) falls in line with the scheme of the provisions relating to tax on capital gains.
[665A E] 4: 5.
Section 52 is not a charging section but is a computation section.
It has to be read alongwith section 48 which provides the mode of computation and under which the starting point of computation is "the full value of the consideration received or accruing .
What in fact never accrued or was never received cannot be computed as capital gains under section 41.
Therefore sub section (2) cannot be construed as bringing within the computation of capital gains an amount which, by no stretch of imagination, can be said to have accrued to the assessee or been received by him.
[655 E F] 4: 6.
This construction of sub section (2) also marches in step with the Gift Tax Act, 1958.
If a capital asset is transferred for a consideration below its market value, the difference between the market value and the full value of the P consideration received in respect of the transfer would amount to a gift liable to tax under the Gift Tax Act, 1958.
Since the Income Tax Act, 1961 and the Gift Tax Act, 1958 are parts of an integrated scheme of taxation the same amount which is chargeable as gift could not be intended to be charged also as capital gains.
[656 A C] 4: 7.
Besides, under Entry 82 in List I of the Seventh Schedule to the Constitution which deals with "Taxes on income" and under which the Income Tax Act, 1961 has been enacted, Parliament cannot "choose to tax as income an item which in no rational sense can be regarded as a citizen 's income or even receipt.
Sub section (2) would, therefore, on the construction of the Revenue, go outside the legislative power of Parliament, and it would Dot be possible to justify it even as an incidental or ancillary provision or a provision intended to prevent evasion of tax.
[656 E F] 635 4: 8.
Sub section (2) would also be violative of the fundamental right of the assessee under Article 9(1) (f) which fundamental right was in existence at the time when sub section (2) came to be enacted since on the construction canvassed on behalf of the Revenue, the effect of sub section (2) would be to penalize the assessee for transferring his capital asset for a consideration lesser by 15% or more than the fair market value and that would constitute unreasonable restriction on the fundamental right of the assessee to dispose of his capital asset at the price of his choice.
The Court must obviously prefer a construction which renders the statutory provision constitutionally valid rather than that which makes it void.
[656 F H, 657 A]
| In a suit for partition of the joint family properties filed by the respondent against his brother and his sons, appellants 1 to 5 respectively, the latter while admitting the relationship of the respondent and his half share to the family properties, pleaded, inter alia, that the court had no jurisdiction to divide the immoveable properties situated in Burma and in the Indian State of Pudukottai.
The trial court passed a preliminary decree excluding from its operation the aforesaid immoveable properties.
Against the preliminary decree appeals were preferred before the High Court by the several parties on various grounds, but in his appeal the respondent did not challenge the finding of the trial court that it had no jurisdiction to deal with foreign immoveable properties.
During the pendency of the appeals, on the joint application made by the parties, the trial court made an order referring for determination by the two arbitrators named by them " all the matters in dispute in the suit and all matters and proceedings connected therewith ".
In due course the arbitrators gave an award which was then filed in the trial court.
As regards immoveable properties in Pudukottai the award recited that since the parties had separated and the properties in suit before the arbitrators had been actually divided by metes and bounds, the two branches shall enjoy the Pudukottai properties in equal halves; while with reference to the properties in Burma the arbitrators asked the parties to hold the documents of title half and half for safe custody and added that when the parties decided to divide the properties all the documents would have to be 27 210 brought together and a partition made according to law.
The appellant challenged the validity of the award on the grounds inter alia (1) that the reference and the award dealt with immoveable properties in Burma and Pudukottai and so they were invalid, and (2) that the trial court was not competent to make the order of reference under section 21 of the Indian .
Held: (1) that the reference and the award could not be challenged on the ground that they purported to deal with foreign immoveable properties because (a) at the time when the matters in dispute were referred to arbitration it was on the basis of the finding of the trial court that the court had no jurisdiction to deal with foreign immoveable properties, and (b) the award did not divide the said properties or declare their shares in them, but merely recited the fact that the parties having become divided and accepted a half share in each of the branches they would hold and enjoy the properties half and half.
There is a distinction between a mere recital of a fact and something which in itself creates a title.
Bageshwari Charan Singh vs Jagarnath Kuari, (1932) L.R. 53 I.A. 130, relied on.
(2) that the words " suit " and " court " in section 20 of the Indian , include appellate court proceedings and appellate court, respectively.
Abani Bhusan Chakravarthy and Others vs Hem Chandra Chakravarthy and Others, , disapproved.
Thakur Prasad vs Baleshwar Ahir and Others, A.I.R. 1954 Pat. 106, Moradhwaj vs Bhudar Das A.I.R. 1955 All. 353 and Subramannaya Bhatta vs Devadas Nayak and Others, A.I.R. 1955 Mad. 693, approved.
(3)that the word " judgment " in section 21 of the Act means a judgmentwhich finally decides all matters in controversy in the suit and does not refer to the various interlocutory orders and judgments that may be passed during the hearing of the suit.
(4) that a judgment delivered by a court in a partition suit which is followed by a preliminary decree is not a final judgment in the suit and that a court after a preliminary decree has been passed has jurisdiction to make an order of reference under section 21 of the Act.
Jadu Nath Roy and Others vs Paramesway Mullick and Others, (1939) L.R. 67 I.A. 11, relied on.
(5) that where a preliminary decree has been drawn up and an appeal has been filed against it, both the trial court and the appellate court are possessed of the matters in dispute in part and it would be open to either court to make an order of reference in respect of all the matters in dispute between the 211 parties; that as in the present case proceedings subsequent to the preliminary decree were pending before the trial court, the latter was competent to act under section 21 of the Act.
| A Hindu died bequeathing all his properties to his mother absolutely by a will executed three days before his death.
In the will he stated his age to he 19 years, and that he was thereby disposing of his entire properly, movable and immovable, in favour of his mother.
After his death, the nearest reversioner under the law as it then stood, filed a suit for a declaration that the will was not valid because it was executed by the testator when he was a minor and when he was not in a sound disposing state of mind.
The mother of the testator (legatee) contened the suit and asserted in her written statement that when he executed the will the testator was a major and was in a sound disposing state of mind.
The suit was compromised By the compromise, the reversioner admitted that testator when he executed the will was a major and was in a sound disposing state of mind, that the will was valid and genuine, and the testalor 's properties were divided between the reversioner and the legatee There was a decree in terms of the compromise.
Thereafter, the reversioner and the legatee conducted themselves as the absolute owners of their respective shares of the property.
The legatee executed settlement deeds in favour of her daughters with respect to part of the land received by her under the decree.
The daughters took passion of the properties accepting their mother as their absolute owner.
After the death of the legatee, the appellants.
who were the sons of those daughters obtained a deed of surrender from their mothers accepting the legatee as the absolute owner of the properties.
They then filed a suit against the respondents.
who were the descendants of the reversioner who filed the first suit contending that the compromise decree in the first suit was collusive.
that the testator was not a major nor of sound disposing state of mind when he executed the will, that the will did not.
cover all the properties of the testator and that the appellants were in any event entitled to those properties with respect to which there was an intestacy.
as the sisters sons of the last male holder under the Hindu Law of Inheritance (Amendment) Act of 1929.
The respondents contested the suit and case notice to the appellants to produce the original will alleging that it was in the posses 293 sion of the appellants, but the appellants denied the allegation, and the respondents, thereupon, relied upon a certified copy of the wilt produced from the records of the court filed in the first suit.
The trial court dismissed the suit and the High Court confirmed the dismissal in appeal.
In appeal to this Court, it was contended inter alia: (1) that the burden of proof that the will was validly executed by the testator and that he was a major at the time of executing it was upon the respondents ,red that they failed to discharge that burden; and (2) that there was an intestacy with respect to a portion of the land and that the appellants were entitled to it.
HELD:(1) (a) As the lower Courts held that the appellants deliberately withheld the original will, its certified copy could be admitted as secondary evidence of its contents under 8. 65 of the Evidence Act, 1872.
But the High Court was not justified in presuming under section 90 of the Evidence Act, that the will itself was duly executed and attested.
merely because the copy was more than thirty years old and was produced from proper custody.
Such a presumption arises only in respect of the original document and not with respect to a copy.
[297 H; 298 A, C. D, F] Harihar Prasad vs Must.
of Mttnshi Nath Prasad, [1956] S.C.R.1. followed.
Munnalal vs Krishobai, A.I.R. 1947 P.C. 15 and Basant Singh vs Bnj Pad, 62 I.A. 180, referred to.
But, apart from the presumption.
on the oral evidence adduced and from the conduct of the legatee, the High Court was justified, in concluding that the testator executed the will and was at that time in a sound disposing state of mind and in construing the contents of the will as disclosed by the certified copy and holding that it was natural and rational.
[298 G; 299 C, F G] Setthava vs Somayajulu, 56 I.A. 146, applied.
(b) The respondents who relied on the will had discharged the onus which lay on them, namely, of proving that the testator was a major at the time he executed the will.
[299 G H] The statement of the mother of the testator in the written statement of the earlier suit that the testator was a major was not relevant either under section 32(5) or 32(6) of the Evidence Act, because, it was made post litm motam.
The words in the sub ,section, namely, 'before The question in issue was raised ' do not mean before it was raised in the particular litigation in which such a statement is sought to be adduced in evidence.
They mean before the existence of any actual controversy.
When the legatee flied her written statement in the first suit a dispute had arisen as to the age of the testator, and the controversy having existed time when the statement was made; the statement was inadmissible.
1303 B D, F H] Bahadur Singh v, Mohan Singh, 29 I.A. 1 and Kalka Prasad vs Mathura Prasad, 35 I.A. 166, referred to.
But, the statement of the testator in the will that he was a major at the time he was executing it was relevant under the sub sections because.
294 the question of age fails within the sub sections as it indicates the commencement of relationship.
[303 A] Md. Syedol Arffin vs Yeohooi Gark, 43 I.A. 256, Rama Chandra Dutt vs Yogeshwar Narain Dec, I.L.R. , Oriental Govt.
Security Life Assurance Co. Ltd. vs Narisimha Chari, I.L.R. , Gulab Tharkur vs Fadali , Prolhad Chandra vs Ramsaran, A.I.R. 1924 Cal.
420, and Mst.
Naima Khatun vs Basant Singh, A.I.R. 1934 All. 406 referred.
Further the conduct of the appellants and their mothers was consistent only with the fact that it was understood amongst the members of the family that the testator was a major at the time of the execution of the will and that the will was validly made.
[303 H; 304 A D] The documents relied upon by the appellants, namely, a memorandum and an endorsement received from the Taluk Office showing that there were no entires relating to the birth of any children in the testators family in the birth register for the year in which the testator stated he was born, were not admissible in evidence as the writers of the documents were not examined to testify to the contents of those documents and to establish that notwithstanding their diligent efforts the original register was not traceable.
[301 B D] (2) In face of the expressly declared intention in the body of the will that he was disposing of the entire property it is impossible to hold that the testator desired to hold back a portion thereof from his mother and leave it intestate.
merely became, there was discrepancy between the total measurement mentioned in the body of the will and that in the schedule to the will.
[304 H; 305 A]
|
Appeal No. 455/59.
Appeal by special leave from the judgment and order dated January 16, 1956, of the former 429 Nagpur High Court, in Misc.
Petition No. 448 of 1954.
N. section Bindra and D. Gupta, for the appellants.
Purshottam Trikamdas, G. J. Ghate and Naunit Lal, for the respondents.
April 6.
The Judgment of the Court was delivered by MUDHOLKAR, J.
The respondent was a proprietor of mauza Bhivapur, Tehsil Umerer, District Nagpur.
His proprietary interest in the village was abolished by the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950 (M.P. 1 of 1951).
By virtue of section 4 of the Act, ill rights, titles and interests, among others, in all pathways, village sites, hats, bazars and melas in Bhivapur vested in the State of Madhya Pradesh for the purposes of the State free from all encumbrances under section 4(1)(a) of the Act.
Under the provisions of the those rights vested in the State of Bombay and now by virtue of Bombay Re Organisation Act, 1960 (11 of 1960) in the State of Maharashtra.
The provisions of section 4(1)(a) are as follows: " All rights, title and interest vesting in the proprietor or any person having interest in such proprietary right through the proprietor in such area including land (cultivable or barren) grass land, scrub jungle, forest, trees, fisheries, wells, tanks, ponds, waterchannels, ferries, pathways, village sites, hats, bazars and melas;. . shall cease and be vested in the State for purposes of the State free of all encumbrances; and the mortgage debt or charge or any proprietary right shall be a charge on the amount of compensation payable for such proprietary right to the proprietor under the provisions (if this Act" 430 After the Act came into operation proceedings for compensation in respect of the village Bhivapur were started in the court of the Compensation Officer, Umrer, in Revenue case No. 583/1 A 4/1950 51 decided on January 19, 1952.
The Compensation Officer held that 0.
14 acres of land out of Khasra No. 61/1 which is recorded in the village papers as abadi wherein a bazar is held, should be settled with the respondent under section 5(a).
On a portion of the land which was used for bazar, ottas and chabutras, with or without sheds, and separated by passages, exist.
It is common ground that they belong to the respondent.
It is also common ground that the land covered by ottas and chabutras on which sheds have been constructed were ordered to be settled on the respondent in the revenue case referred to above.
The respondent 's contention, however, was that not only the sheds and the land on which those sheds were erected but also the open uncovered ottas and chabutras should also have been settled with him by virtue of the provisions of section 5(a) of the Act along with the land appurtenant to those structures.
The total area of this land, according to him, is 2.85 acres.
The respondent, therefore, preferred an appeal against the order of the Compensation Officer which directed settling only 0.14 acres of land on him.
That appeal was.
however, dismissed by the Additional Commissioner of Land Reforms and Additional Commissioner of Settlement, Madhya Pradesh, on March 28, 1952.
The respondent thereafter was asked to remove his ottas and chabutras.
Even so, the matter of settling land covered.
by ottas and chabutras on the expropriators was being considered by Government.
On May 16, 1952, a press note was issued by the Directorate of Information and Publicity, Government, of Madhya Pradesh the material portion of which runs thus: "The Government consider that the option 431 given to expropriators to remove the material etc., might cause hardship to them in such cases.
Government have, therefore, decided on the following lines of action in such matters: (i) where the ottas and chabutras were, constructed in brick and stone, they should be allowed to remain with the exproprietors and the land thereunder should be settled with them under section 5(a) of the Madhya Pradesh Abolition of Proprietary Rights Act, 1950 (1 of 1951) on terms and conditions determined by the Government; and (ii) where the ottas and chabutras are in mud, the land Under them should be deemed to have vested in the State Government.
But after this press note was issued the Government, apparently on the advice of its law officers, issued instructions to the Deputy Commissioners on June 22, 1954, to give one month 's notice all ex proprietors to remove the materials, clear the site of ottas and chabutras other than those on which there were sheds.
In pursuance of this, a notice was issued to the respondent on July 13, 1954.
Feeling aggrieved by this, the respondent preferred a petition under article 226 of the Constitution before the High Court of Nagpur for issue of a writ of mandamus or certiorari or other appropriate to writ to quash the orders passed by the Commpensation Officer and the appellate authority as well as the order of the State Government of Madhya Pradesh dated June 22, 1954, and the notice issued in pursuance thereto on July 13, 1954.
The High Court allowed the petition and set aside the impugned orders and directed the State Government to settle the on tire area of Khasra No. 61 /1 of Bhivapur 432 with the respondent on such terms and conditions as may be determined by it.
It may be mentioned that the entire area of Khasra No. 61/1 is 12.85 acres or so.
The State of Madhya Pradesh sought a certificate from the High Court under article 133(1)(c) of the Constitution.
But the certificate was not granted.
Thereupon a special leave petition was made before this Court under article 136 of the Constitution.
Leave was granted by this Court by its order dated March 18, 1957.
That is how the appeal has come up before us.
It may be mentioned that the High Court granted the petition of the respondent on the view that ottas and chabutras etc.
, are buildings within the meaning of section 5(a) of the Act and that consequently the State Government was bound to settle the land covered by them with ex proprietors along with land appurtenant to those structures.
In the application made before the High Court for grant of certificate, the following three grounds were raised: "5.
For that the total market area as claimed by the non applicant being only 2.85 the entire abadi area of 12.85 acres in Khasra No. 61/1 could not be granted and settled with the ex proprietor.
For that the ottas and chabutras in the bazar area could not be held to be buildings contemplated under section 5(1)(a) read with section 4 (1) (a) of the Act 1 of 1941 and could not be settled with the ex proprietor under the law.
For that the buildings envisaged in the provisions 5(1)(a) are those buildings which are situated in the abadi and not those stand ing in bazars even though the bazar may also be located in the abadi and that ottas and chabutras etc., in the bazar being an integral part thereof are clearly different from those other 433 buildings used for agricultural or domestic purposes.
" It would, however, appear from para.
2 of the order of the High Court refusing certificate that the learned Advocate General for "the State did not challenge the correctness of the meaning given by the High Court to the word "buildings" in section 5(a) of the Act.
But the contention he pressed was that the words "ottas and chabutras" must be restricted to structures standing on the abadi of the village excluding that on which bazar was held, which under section 4(1)(a) vests in the State.
Before us however, Mr. Bindra reiterated the contention which was originally pressed in the High Court that ottas and chabutras cannot be regarded as buildings within the meaning of that word in section 5(a) of the Act.
According to him the concession made by the learned Advocate General was on a question of law and the State is entitled to withdraw that concession.
In our opinion the question whether ottas and chabutras fall within the term " 'buildings" is not purely one of law and the State is not entitled to withdraw that concession.
It would also appear from grounds 5 and 6 in the special leave petition that what was really sought to be urged before this Court was the contention actually pressed by the learned Advocate General in support of the application for grant of certificate.
All the same we allowed Mr. Bindra to urge the contention that ottas and chabutras are not included in the term "buildings" in section 5(a) of the Act.
The relevant portion of section 5(a) of the Act reads thus: "Subject to the provisions in sections 47 and 63 all open enclosures used for agricultural of domestic purposes and in continuous possession for twelve years immediately before 1948 49; all open house sites purchased for 434 consideration; all buildings;. . . within the limits of a village site belonging to or held by the out going proprietor or any other person, shall continue to belong to or be held by such proprietor or other person as the case may be; and the land thereof with the areas appurtenant thereto shall be settled with him by the State Government on such terms and conditions as it may determine;" "Village site" means the abadi in an estate or a mahal.
Section 5(a) is an exception to section 4(1)(a) of the Act.
No. doubt, section 4(1)(a) provides for the vesting in the State of the land on which bazar is held.
But reading that section along with section 5(a) it is clear that where any buildings belonging to the proprietor exist on any portion of the abadi land that land, together with the land appurtenant to those buildings, bad to be settled with the ex proprietor.
Land on which the bazar is held is part of the village abadi land and, therefore, all buildings standing on such land would fall within section 5(a) of the Act and would have to be settled with the ex proprietor.
The only question, therefore, is whether ottas and chabutras can be regarded as buildings.
A perusal of that provision would show that where the ex proprietor has spent money on constructing something within the limits of the village sites, that thing had to be settled with him.
The word "buildings" should, therefore, be given its literal meaning as something which is built.
Mr. Bindra 's contention, however, is that for a structure to be regarded as a building, it should have walls and a roof and in support of this contention lie relied upon the decision in Moir vs Williams (1) In that case Lord Esher has observed that the term building generally means all (1) 435 enclosures of brick and stone covered by a roof.
But he has also made it clear that the meaning to be given to that word must depend upon the enactment in which the word is used and the context in which it is used.
There, what was being considered was the provisions of the Metropolitan Buildings Act, 1855 (10 & 19 Vict.
c. 122) which dealt with residential houses.
He also relied upon the decision in Morrison vs Commissioners of Inland Revenne (1).
That was a case under the Finance (10 Miw.
7 c. 8).
The observations on which he relied are as follows: " It is quite clear that the expression 'buildings ' does not mean everything that can by any means be described as built: it means buildings in a more narrow sense than struct ures, because there are other structures of a limited class which under the terms of the sub section may also be taken into considera tion.
" Far from these observations helping him they clearly show that the natural or ordinary meaning to be given to the word "Buildings", is something which has been built.
That meaning would be modified if the provisions of law justify giving some other meaning.
Finally he relied upon the decision in Samuel Small vs Parkway Auto Supplies (2).
The observations relied on by him are as follows: "The word 'building ' in its ordinary sense denotes 'a structure or edifice including a. space within its walls and usually covered with a roof, such as a house, a church, a shop, a barn or a shed. ' The word 'building ' cannot be held to include every Species of erection on land, such as fences, gates or other like structures.
Taken (1) (1915) I K. B. 176 at 722.
(2) 49 A.I.R. 1361 at 1363.
436 in its broadest sense, it can mean only an erection intended for use and occupation as a habitation or for some purpose of trade, manufacture, ornament or use, constituting a fabric or edifice, such as a house, a store, a church, a shed. .
These observations must Be considered in the context of the Act which was being construed and in the context in which they were made.
There the Court bad to consider whether erection of gasoline pumps and construction of under ground gasoline tanks and pits with concrete sides sunken in the ground are within a restrictive covenant that no building of any kind shall be erected or maintained within a certain distance of a street.
In the particular context buildings had, according to the Court, to be given its popular meaning.
That case, therefore, does not assist the appellants.
In our opinion the High Court was quite right in holding that even uncovered ottas and chabutras fall within the term "building" as used in section 5(a) of the Act and, therefore, along with the land appurtenant to them they must be settled with the respondent.
Mr. Bindra pointed out that the High Court was in error in asking the Government to settle the whole of Khasra No.61/1 on the respondent because whereas its area is 12.85 acres, the land covered by the structures, including the appurtenant land, does not measure more than 2.85 acres.
Mr. Purushottam Trikamdas, learned counsel for the respondent readily conceded this fact and said that the High Court has committed an error through an oversight and that all that the respondent wants is 2.85 acres of land and nothing more.
Mr. Bindra then said that it would not be proper to give a direction to the Government to settle any particular area of the land and it should be left to the revenue authorities 437 to determine the precise area covered by the structures and the passages separating these various structures.
We agree with him.
It would be sufficient to direct the Government to settle with the respondent the whole of the land covered by the structures as well as land appurtenant to those structures from out of Khasra No. 61/1.
What the area of that land would be is a matter to be determined during the settlement proceedings.
With this modification we dismiss the appeal with costs.
Appeal dismissed.
| The proprietary interest of the respondent in his village was abolished by the M. P. Abolition of Proprietary Rights (Estates, Mahals, Alienated Lands) Act, 1950, and all rights, title and interest were vested in the State by section 4.
Section 5(a) of the Act provide that where any "buildings" belonging to the proprietor exist on any portion of the abadi land, that land together with the land appurtenant to those buildings shall be settled with the ex proprietor.
Land covered by ottas and chabutras on which sheds had been constructed was settled with the respondent but not the land on which open uncovered ottas and chabutras existed.
Held, that the respondent was entitled under section 5(a) of the Act to have the land on which uncovered ottas an chabutras existed, as also the land appurtenant thereto, settled with him.
Uncovered ottas and chabutras fell within the term "buildings" as used in section 5(a).
The provisions showed that where the proprietor had spent money on constructing something on an abadi site within the limits of the village sites, that site had to be settled with him.
Accordingly the word "buildings" has to be given its literal meaning as something which is built.
Moir vs Williams, , Morrison vs Commissioners of Inland Revenue, and Samuel Small vs Parkway Auto Supplies, , distinguished.
| These two appeals were preferred against the decision of the Nagpur High Court in an appeal under 'section 19(1)(f) of the Defence of India Act, 1939, modifying an award of compensation made 1178 under section 19(i)(b) of that Act in respect of certain premises requisitioned by the Government under 75(A) of the Rules framed under the Act.
Both the parties applied for and obtained leave to appeal to the Federal Court under sections 109 and 110 of the Code of Civil Procedure.
A preliminary objection was taken on behalf of the Government that the decision of the High Court was an award and not a judgment, decree or order within the meaning of sections 109 and 110 of the Code and as such no appeal lay therefrom : Held, that the objection must prevail and both the appeals stand dismissed.
There could be no doubt that an appeal to the High Court under section 19(1)(f) Of the Defence of India Act from an award made under section 19(i)(b) of that Act was essentially an arbitration proceeding and as such the decision in such appeal cold not be a judgment, decree or order either under the Code of civil procedure or under Cl. 29 Of the Letters patent of the Nagpur High Court.
Kollegal Silk Filatures Ltd. vs province, of Madyas, I. I,.
R. , approved.
There is a well recognised distinction between a decision given by the Court in a case which it 'hears on merits and one given by it in a proceeding for the filing of an award.
The former is a judgment, decree or order of the Court appellable under the general law while, the latter is an adjudication of a private individual with the sanction of the Court stamped on it and where it does not exceed the terms of the reference, it is final and not appealable.
There can be no difference in law between an arbitaration by agreement of parties and one under a statute.
A referrence to arbitration under a statute to a court may be to it either as a court or as an arbitrator.
If it is to it as a court, the decision is a judgment, decree or order appealable under the ordinary law unless the statute provides otherwise, while in the latter case the Court functions as a persona designata and its decision is air award not appealable under the ordinary law but only under the statute and to the extent provided by it.
An appeal being essentially a continuation of the original proceedings, what *as at its inception an arbitration proceeding must retain its character as an arbitration proceeding even where the statute provides for an appeal, Rangoon Botatung Company vs The Collecter , Rangoon (1912) L.R. 39 I.A. 197 .The special officer sales the building sites Dassabhai Beznoji, Bom 506 the special officer sales the Building sites vs Dassabhai Bozanji Motiwala Manavikram Tirumalpad vs the Collector of the Nilagrie, Mad 943 and secretary of state for India in council vs Hindustan Co operative Insurance society Limited ,(1931) L.R. 58 I. A 259 relied on.
National Telephone Company Limited vs Postmaster General, , explained.
| The appellant brought three suits claiming full payment with interest in respect of three hospitals constructed by him in execution of three separate contracts between him and the Deputy Commissioner.
The trial Judge decreed the suits for part of his claim against the State of Madhya Pradesh and held that other defendants were not liable, and accordingly dismissed the suits against them.
On appeals preferred by the State of Madhya Pradesh, the High Court set aside the decree against the State Government ' and allowed the, appeals with costs.
The plaintiff at that stage prayed for leave of the High Court to file a cross objection and also for decrees to be passed against the Deputy Commissioner under O. 41, r. 33 of the Code Of Civil Procedure, which was rejected and all the suits were dismissed.
It was urged that (1) the State Government was liable in respect of all of these contracts and (2) the High Court ought to have granted relief against such of the other defendants as it thought fit under O. 41, r. 33 of the Code of Civil Procedure.
Held, that the State Government was not liable in respect of any of these contracts.
Held, further, that the wide wording of O. 41, r. 33 empowers the appellate court to make whatever order it thinks fit, not only as between the appellant and the respondent but also as between a respondent and a respondent.
It could not be said that if a party who could have filed a cross objection under O. 41, r. 22 did not do so, the appeal court could under no circumstances give him relief under the provision of O. 41, r. 33.
Order 41, r. 22 permits as a general rule, a respondent to prefer an objection directed only against the appellant and 981 it is only in exceptional cases that an objection under O. 41, r. 22 can be directed against the other respondents.
On the facts of these cases the High Court refused to exercise its powers under O. 41, r. 33 on an incorrect view of the law and so the appeal must be remanded to the High Court for decision what relief should be granted to plaintiff under O. 41 r. 33.
Burroda Soundree Dasee v, Nobo Gopal Mullick, , Maharaja Tarucknath Boy vs Tuboorunissa Chowdhrain, , Ganesh Pandurang Agte vs Gangadhar Ramakrishna, (1869) 6 Bom.
H.C.Rep.
2244, AnwarJan Bibee vs Azmut Ali, , Tirmnama vs Lakshmanan, Venkateswarulu vs Rammama, I.L.R. , Jan Mohamed vs P. N. Razden, A.I.R. and Ghandiprasad vs Jugul Kishore, A.I.R. , referred to.
Anath Nath vs Dwarka Nath, A.I.R. (1939) P. C. 86, held inapplicable.
| The appellant, a private limited company, was incorporated in 1954 in the former Kotah State which had integrated with the United States of Rajasthan in 1949.
The United States of Rajasthan became State of Rajasthan, a Part B State.
The Indian Finance Act, 1950, made the Indian Income tax Act, 1922, applicable to Part B States with effect from April 1, 1950, whereupon Rajasthan became a taxable territory.
The Income tax (Amendment) Act, 1953, amended section 14(2)(C) of the Indian Income tax Act, 1922.
Thereupon the Income tax authorities sought to tax the profits and income of the appellant for the assessment year 1950 51 who claimed exemption under section 14(2)(C) of the Indian Income tax Act, 1922, as it stood before the amendment in 1953.
The question for decision was whether in view of the decision of this Court in Madan Gopal 's case it was still open to the appellant to contend that the amendment operated from April 1, 1950 and that income accrued prior to April x, 1950, was still exempt although the exemption was withdrawn only from April 1, 1950.
Held, that the withdrawal of the exemption in the assessment year 1950 51 conversely affected the income of the previous year 1949 50.
The application of the Indian Income tax Act made Rajasthan a taxable territory subject to the Indian Income tax law and Parliament was competent to enact a new law for the area, just as it did for the whole of the rest of India.
The fiction in the amendment made in section 14(2)(C) made the exemption in respect of liability to tax the income for the year 1949 50 to disappear as if it had never been granted and obliterated the exemption.
The whole purpose and intent of the amendment was to reach this result from the assessment year 1950 51 onwards, and there could be no saving.
The argument assumes the premise that the Income tax Act was incorporated in the Indian Finance Act, 1950, but there is neither precedent nor warrant for the assumption that when one Act applies another Act to some territory, the latter Act must be taken to be incorporated in the former Act.
It may be otherwise, if there were words to show that the earlier Act is to be deemed to be re enacted by the new Act.
454 Union of India vs Madan Gopal Kabra, ; , referred.
| % Under an agreement with the respondent landlord, the appellant had been appointed to do worshipping in a temple as pujari to look after the management of two dharamshalas and to cultivate three agricultural, lands, and for all these services, he had been allowed to take crop share the whole crop from the lands cultivated by him, instead of his being paid any wages in cash.
The respondent filed a suit for possession of the agricultural lands.
The appellant 's defence was that he was a deemed tenant as understood under section 6 of the Bombay Tenancy and Agricultural Lands (Vidarbha Region) Act, 1958, and was in lawful cultivation of the lands.
The Naib Tahsildar, who decided the suit, passed an order, holding the appellant to be a tenant.
The Sub Divisional officer, in appeal by the respondent, set aside the order of the Naib Tahsildar and remanded the matter.
Against the order of the Sub Divisional officer, the appellant appealed in revision to the Maharashtra Revenue Tribunal.
The Revenue Tribunal set aside the order of the Sub Divisional officer and restored that of the Naib Tahsildar.
The respondent moved the High Court.
The High Court decided that the appellant was not entitled to claim the rights of a deemed tenant, and quashed the orders of the authorities below holding the contrary view.
The appellant appealed to this Court by Special Leave against the order of the High Court.
Allowing the appeal, the Court, ^ HELD: The appellant was lawfully cultivating the lands, having been permitted to do so by the landlord.
He was not a member of the landlord 's family, nor was he his hired labourer.
The landlord did not belong to any of the classes specified in Sub Section (2) of section 41.
The appellant was rendering service as pujari and the service of looking after the dharamshalas, and for these services, he had been given the right to cultivate the lands and appropriate the crop share the entire 673 crop instead of being paid any wages in cash.
The appellant was not hit by the provisions of clause (b) of Sub section (1) of section 6 of the Act, and he must be held to be a deemed tenant under the provisions of section 6.
[676G H;677B C] Dahya Lal and others vs Rasul Mohammad Abdul Rahim, ; at 6, 7, referred to.
| Respondent No. 2, a Co operative Society allotted a flat to respondent No. l. Respondent No. 2 sought recovery of possession of the flat on the ground that the appellant was inducted into the flat without the written consent of the Society.
The appellant pleaded that it was continuing in possession of the flat on the basis of the lease and licence agreement by payment of licence fee, and as such the dispute did not come within Section 91 of the Co operative Societies Act as it had become as tenant under Section 15A of the Bombay Rent Act.
The Cooperative Court after hearing all the parties made an award holding that the dispute fell within the jurisdiction of the Cooperative Court and that the appellant was occupying the flat in question as a trespasser after the licence in its favour was terminated and that there was no subsisting licence to occupy the flat by the appellant on Ist February, 1973 and so Section 15A of the Bombay Rent Act was not applicable.
The appellant 's appeal to the Appellate Authority and writ petition to the High Court having been dismissed, the appellant appealed by special leave to this Court.
Dismissing the Appeal, HELD: 1.
The appellant is an outsider who has been permitted to possess the suit premises as licencee of respondent No. 2 in contravention of the Rules, bye laws and regulations of the society.
The dispute falls squarely within the provision of section 91 of the Maharashtra PG NO 29 PG NO 30 Cooperative Societies Act 1960 and the Cooperative Court has exclusive jurisdiction to entertain and decide the dispute and not the Court under the Bombay Rent Act, 1947.
M/s. A.V.R. & Co. & Ors.
vs Fairfield Cooperative Housing Society Ltd., [1988] Supp.
3 S.C.R.48.
The decree will not be executed for a period of four months.
The appellant will not transfer, assign or encumber the flat in any manner whatsoever, and hand over peaceful possession of the flat on or before the expiry of the aforesaid period.
He will go on paving the occupation charges equivalent to the amount he had been paying for each month 7th of succeeding month.
In default of compliance the decree shall become executable forthwith.
[31E F]
| The appellant, a working journalist who was appointed on November, 1961 as a Staff Correspondent in the Calcutta Office of the respondent company while working as such at Calcutta, applied on 29 April, 1975 to the Government of West Bengal under sub section
(1) of section 17 of the Working Jour nalists and Newspaper Employees (Conditions of Service) and Miscellaneous Provisions Act, 1955 for recovery of the unpaid portion of his wages relating to the period April 1968 to February 1973.
While the conciliation proceedings were on, he was promoted and transferred to Pune on 16 February, 1976.
The Conciliation Officer reported the fail ure of the proceedings before him on 16 November, 1976 and the Government of West Bengal made a reference under sub section
(2) of section 17 of the Act to the First Labour Court, West Bengal on 23 August, 1977 for the adjudication of the dis pute between the parties.
The preliminary objection raised by the respondent company that the Government of West Bengal was not competent to make the reference was rejected by the Labour Court.
The respondent company 's writ petition chal lenging 'the order of the Labour Court was allowed by a Single Judge whose decision was affirmed in appeal by the Division Bench of the High Court.
Allowing the appeal by special leave and dismissing the writ petition of the respondent company, this Court.
HELD: (i) Sub section
(1) ors.
17 of the Act requires that an application by the newspaper employee complaining that an amount due to him has remained unpaid by the employer should be made to the State Government.
Which is the State Govern ment to which such application lies is 476 indicated by r: 36 of the Rules made under the Act and that rule provides that an application under section 17 of the Act shall be made to the Government of the State where the central office or the branch office of the newspaper estab lishment in which the newspaper employee is employed is situated.
It is the location of the central office or the branch office in which the newspaper employee is employed which determines which State Government it will be.
The rule works in favour of the convenience of the newspaper employ ee.
[478C E] (ii) Sub section
(2) of section 17 provides that if any question arises as to the amount due under the Act to a newspaper employee from his employer, the State Government may refer the question to any Labour Court, constituted by it under the or under any corresponding law relating to investigation and settlement of industrial disputes in force in the State.
If a question arises as to the amount due, it is a question which arises on the appli cation made by the newspaper employee, and the application having been made before the appropriate State Government, it is that State Government which will call for an adjudication of the dispute by referring the question to a Labour Court.
The State Government before whom the application for recov ery is made is the.
State Government which will refer the question as to the amount due to a Labour Court.
[478F G; 479C D] In this case, the appellant was employed at the Calcutta branch of the respondent company.
He made the application to the Labour Department of the Government of West Bengal for recovery of the unpaid portion of his wages.
When the ques tion arose as to the amount due to the appellant, the Gov ernment of West Bengal made the reference for adjudication to the First Labour Court, West Bengal.
Upon the construc tion of sub section
(2) of section 17 as indicated at (ii) above, it is beyond dispute that the Government of West Bengal is competent to make the reference.
The High Court erred in holding that the reference was without jurisdiction and that it was the State of Maharashtra which was competent to make the reference.
[479E G]
| The appellants ' lands were acquired under the Land Acquisition Act.
The appellants claimed land value at the rate of Rs. 10 per sq. yard, but the Land Acquisition Offi cer awarded compensation at the rate of Rs.0.88 per sq. yard.
On a reference the Sub Judge determined the market value at Rs. 11 per sq. yard on the basis of certain com parable transactions, but granted the compensation at the rate of Rs. I0 as the appellants themselves had claimed only at that rate.
On an appeal preferred by the Respondent State, the High Court determined the market value of the lands at the rate of Rs. 6.50 per sq. yard and reduced the total compensation, following the decision of this Court in Tribeni Devi vs Collector, Ranchi, AIR 1972 SC 141 that a deduction of 1/3 of the value is to be made when large extent of land is acquired under housing scheme.
Aggrieved by the High Court 's decision, the appellants preferred the present appeals, contending that the High Court had erroneously applied the principle laid down in Tribeni Devi 's case without properly appreciating the nature of the land in question and the purpose for which it had been acquired.
It was further contended that there was no justification for making any deduction since the land in question was fully developed and eminently suitable for being used as house sites.
Even in respect of the land acquired for the purpose of formation of the road, it was argued, the High Court wrongly proceeded on the basis that expenses have to be incurred for development.
On behalf of the Respondents, it was contended that the appellants ' lands form part of large tract acquired for the purpose of construction of 173 houses, that the other transaction based .on which compensa tion was decided by the Sub Judge, related to small plots of land which were fully developed and while comparing the transactions, it was necessary to take into account the development that is required to be made for bringing the acquired land suitable for the purpose of construction and that 1/3 of the value was rightly deducted.
Allowing the appeals, this Court, HELD 1.
The principle of deduction in the laud value covered by the comparable sale is adopted in order to arrive at the market value of the acquired land.
In applying the principle it is necessary to consider all relevant facts.
It is not the extent of the area covered under the acquisi tion, the only relevant factor.
Even in the vast area there may be land which is fully developed having all amenities and situated in an advantageous position.
If smaller area within the large tract is already developed and suitable for building purposes and have in its vicinity roads, drainage, electricity, communications etc.
then the principle of deduction simply for the reason that it is part of the large tract acquired, may not be justified.
[177 D].
Tribeni Devi vs Collector, Ranchi, ; , distinguished.
Kaushalya Devi vs Land Acquisition Officer, ; ; Administrator General of West Bengal vs Collector, Varanasi, ; ; Special Tahsildar, Land Acquisi tion, Vishakapatnam vs Smt, A. Mangala Gown, ; , relied on.
2 In the instant case, the lands involved are of even level and fit for construction without the necessity for levelling or reclamation.
Having found that the land is to be valued only as building sites and stated the advantageous position in which the land in question lies though forming part of the larger area, the High Court should not have applied the principles of deduction.
[177 F H] 3.
The proposition that large area of land cannot possibly fetch a price at the same rate at which small plots are sold is not absolute proposition and in given circum stances it would be permissible to take into account the price fetched by the small plots of land.
If the larger tract of land because of advantageous position is capable of being used for the purpose for which the smaller plots are used and is also situated in a 174 developed area with little or no requirement of further development, the principle of deduction of the value for purpose of comparison is not warranted.
With regard to the nature of the plots involved in these two cases, it has been satisfactorily shown on the evidence on record that the land has facilities of road and other amenities and is adjacent to a developed colony and in such circumstances it is possi ble to utilise the entire area in question as house sites.
In respect of the land acquired for the road, the same advantages are available and it did not require any further development.
[178 B,C).
|
Appeal No. 49 of 1958.
Appeal from the judgment and decree dated April 17, 1954, of the former Nagpur High Court in F. As.
Nos. 95 and 103 and 1946.
section P. Sinha, Yogeshwar Prasad and M. 1.
Khowaja, for the appellants.
Achhru Ram and Ganpat Rai, for respondents Nos. 1 (a) to 1 (d), (2) and 4. 1962.
April 10.
The Judgment of the Court was delivered by MUDHOLKAR, J.
This is an appeal by certificate from the decree of the High Court of Nagpur dismissing the appellants ' suit for setting aside sale of two villages mauza Amaldihi and mouza Gondhami situate in Mungali tehsil, district Bilaspur.
It is common ground that the two villages, along with several others, were the Joint family property of the appellant, and their father the third 650 defendant, Gorelal.
On April 8, 1944, Gorelal, acting for himself and as guardian of his minor son Balramdas, appellant No. 2 and Radhakrishnadas, appellant No. 1 describing himself as a major executed a sale deed in favour of two persons, Pandit Ramlal, son of Motiram, defendant No. 2 and Kaluram the first defendant for a consideration of Rs. 50,000/ .
It was stated in the sale deed that the executants were transferring full 16 annas interest in the village Amaldihi and Gondkhami ', 'together with sir and khudkast lands, grass, kothar padia gochar rivers, brooks, wells, tanks, bandkies, orchards and gardens and houses and the like, as well &is the cultivated and the uncultivated lands in the village with all the rights and privileges.
" The entire sixteen annas share in mauza Gondkhami and twelve annas share in mauza Amaldihi was sold to Kaluram for Rs. 37,500/ and the remaining four annas share of Amaldihi to Pandit Ramlal for Rs. 12,500/ .
Out of the consideration of Rs. 50,000/ a sum of Rs. 30,491/8/ was kept with Kalaram for satisfying a mortgage decree obtained against the family by one Gayaram in respect of these two village; as ' well as two other villages.
Similarly a further amount of Rs. 2,000/ was allowed to be retained by Kaluram for paying the land revenue due in respect of these villages.
The balance of the amount was received in cash.
It was further stated in the sale deed that this amount was required for performing the marriages of the appellant No. 1 Radhakrishnadas and Gorelal 's daughter Ramjibai, who were both stated to be majors.
The possession of the property sold was handed over to the defendant 1 and 2 who are respondents 1 and 2 to the appeal.
On May 5, 1945, the two appellants instituted a suit out of which this appeal arises.
It was contended in the suit that since the income of the 651 family was Rs. 7,000/. per year, considerable savings could be made out of it after defraying the expenses of the family.
There was, therefore, no necessity for executing the sale deed.
It was further stated that the consideration for the sale was extremely low, bearing in mind the value of the two villages.
It was further stated that the appellant No. I who was one of the executants of the sale deed was in fact a minor on the date of its execution and, therefore, the document is void in so far as his interest in the property sold is concerned.
It was then stated that the sale deed did not purport to transfer the cultivating rights in the sir lands in the two villages and, therefore, in any case only the proprietary interest in the sir land could pass to the respondents 1 and 2 under the sale.
The trial court negatived the appellants ' contention about the want of legal necessity for the sale and found as a fact that Rs. 10,000 were required for the marriages of the appellant No. 1 and his sister Ramjibai, Rs;. 7, 508 8 0 for paying various creditors, Rs. 1,655 2 0 for the payment of land revenue and the balance to satisfy the mortgage decree of Gayaram Sao.
It, however, found that the appellant No. 1 was a minor at the date of the execution of the sale deed and that its execution by him was void and ineffective.
But it held that he is bound by the sale deed as his father Gorelal, who is respondent No. 3 to the appeal, is to be deemed to have executed the sale deed as Manager of the family.
It, however, upon a construction of the sale deed, came to the conclusion that cultivating rights in sir were not transferred thereunder and, therefore, passed a decree in favour of the appellants for possession of the sir lands in the suit as these lands had become their ex proprietary occupancy lands by virtue of section 49 (1) of the C. P. Tenancy Act, 1920 (C. P. 1 of 1920).
The appellants preferred an appeal before the High Court against that part of the decree which dismissed their claim 652 for the possession of their share in the villages.
The respondents 1 and 2 preferred a cross appeal.
These appeals were heard together and while the appellants ' appeal was dismissed, that of the respondents was allowed.
Before us Mr. section P. Sinha accepts the position that Rs. 45,000/. out of the consideration of Rs. 50,000/ was in fact for debts binding on the family, but contends that even so it cannot be said that there was legal necessity for the sale.
His argument is that a sum of Rs. 5,000 or so for which, according to him, legal necessity had not been established was not a negligible part of the consideration of Rs. 50,000/ .
This argument is based upon a misapprehension of the true legal position.
It is well established by the decisions of the Courts in India and the Privy Council that what the alience is required to establish is legal necessity for the transaction and that it is not necessary for him to show that every bit of the consideration which he advanced was actually applied for meeting family necessity.
In this connection we may refer to two decisions of the Privy Council.
One is Sri Krishan Das vs Nathu Ram (1).
In that case the considera tion for the alienation was Rs. 35,000/ .
The alience was able to prove that there was legal necessity only to the extent of Rs. 3,000/ and not for the balance.
The High Court hold that the alienation could be set aside upon the plaintiff 's paying Rs. 3,000/ to the alience.
But the Privy Council reversed the decision of the High Court observing that the High Court had completely misapprehended the principle of law applicable to a case of this kind.
What the alience has to establish is the necessity for the transaction.
If he establishes that then he cannot be expected to establish how the consideration furnished by him was applied by the alienor.
The reason for this, as has been stated by the Privy Council in some other cases, is that the (1) I L.R. 49 All.
149 (P.C.) 653 alience can rarely have the means of controlling and directing the actual application of the money paid or advanced by him unless he enters into the management himself.
This decision was followed by the Privy Council in Niamat Rai vs Din Dayal where at p. 602 and 693 it has observed : "It appears from the judgment of the learned Judges of the High Court that if they had been satisfied that the whole of the Rs. 38, 400 paid out of the sale proceeds was paid in discharge of debts incurred before the negotiation of sale, they would have been of opinion that the sale ought to have been upheld.
With this conclusion their Lordships agree, but they are of opinion that undue importance was attached by the learned Judges to the question whether some of the payments where made in discharge of debts incurred i n the interval between the negotiation of the sale and the execution of the sale deed.
Even if there had been no joint family business, proof that the property had been sold for Rs. 43,500 to satisfy pre existing debts to the amount of Rs. 38,000 would have been enough to support the sale without showing how the balance had been applied, as held by their Lordships in the recent case of Krishan Das vs Arathu Ram.
(2) " Both these decisions stale the correct legal position, Mr. Sinha 's argument must, therefore, be rejected.
His next argument is that the appellant No. 1 Radhakrishnadas having been found to be a minor on the date of the transaction, that transaction cannot bind his interests.
If the appellants ' father, Gorelal, who was admittedly the manager of the family, had not joined in the sale deed, the appellant No. 1 could have contended with profit that the transaction does not bind him.
As it is, his joining (1) 1.
L. R (2) 1 L. R. 49.
149 (P.C.) 654 as an executant in the sale deed does not make any difference.
The fact that sale deed had been executed also by his father who was the manager of the family makes the transaction binding upon him just as it is admittedly binding upon his brother, the second appellant, who was then a minor.
Mr. Sinha, however, contended that the fact that the appellant No. I was required by the alience, respondents 1 and 2. to join in the transaction clearly shows that Gurelal in executing the sale deed did not and could not act for him.
We cannot accept the argument.
For ascertaining whether in a particular transaction the manager purports to act on behalf of the family or in his individual capacity one has to see the nature of the transaction and the purpose for which the transaction has been entered into.
A manager does not cease to be a manager merely because in the tran saction entered into by him a junior member of the family, who was a major, or believed to be a major also joined.
It is not unusual for alienees to require major members of the family to join in transactions entered into by managers for ensuring that later on no objections to the transaction are raised by such persons.
Further, such circumstance is relevant for being considered by the court while determining the existence of legal necessity for such a transaction.
But that is all.
Here we find that Gorelal acted not merely for himself but also expressly for his minor son appellant No. 2.
The money was required partly for paying antecedent debts, partly for paying public demands, partly for paying other creditors and partly for performing the marriages of appellant No. 1 and the latter 's sister Ramjibai.
It is thus clear that Rs. 45,000/ out of the consideration of Rs. 50,000/ were required for the purposes of the family.
Even where such a transaction has been entered into solely by a manager it would be deemed to be on behalf of the family and binding on it.
The position is not worsened by the fact that 655 a junior member joins in the transaction and certainly not so when the joining in by such junior member proves abortive by reason if the fact that member has no capacity to enter into the transaction because of his minority.
In this connection we may make a mention of three decisions Gharib Ullah vs Khalak Singh (1); Kanti Chunder Goswami vs Bisheswar Goswami (2); Bijrai Nopani vs Pura Sundary Dasee (3) each of which proceeds upon the principle that if one of the executants to a sale deed or mortgage deed has the capacity to bind the whole estate, the transaction will bind the interest of all persons who have interest in that estate.
We have, therefore, no doubt that the second contention of Mr. Sinha is equally devoid of substance.
Lastly, Mr. Sinha contended that the High Court was in error in reversing the decree of the trail court in so far as the sir land is concerned.
He has laid particular stress on the fact that the sale deed at no place says in express terms that cultivating rights in sir land have also been trans ferred and said that the absence of such a recital in the sale deed clearly entitles the alienor to retain possession of the sir land, under the exception set out in cl.
(a) of section 49 (1) of the C. P. Tenancy Act.
The relevant portion of section 49(1) of the Act runs thus: "A proprietor who loses under a transfer his right to occupy his sir land as a proprietor, shall, at the date of such loss, become an occupancy tenant of such sir land except in the following cases, (a) when a transfer of such sir land is made (1) I.L.R. 25 All.
407,415 (P.C.) (2) F.B. (3) 656 by him expressly agreeing to transfer his right to cultivate such sir land. . " What this provision no doubt requires is an express agreement between the transferor and the transferee concerning the transfer of the cultivating rights in sir land.
We have already quoted the Precise language used in the document describing the interest which has been transferred under the sale deed.
The recital shows that the executant of the sale deed not only transferred sir and khudkast lands, cultivated and uncultivated lands, but transferred these properties along with "all rights and privileges".
If the intention was not to transfer the cul tivating rights in sir lands the concluding words were not necessary.
Each interest which has been specified in the recital is governed by the concluding words ,all the rights and privileged contained in that recital.
In the absence of these words what would have passed under the sale deed, in so far as the sir land is concerned, would have been only the proprietary interest in that land.
The question is, what is the effect of the addition of those words ? According to Mr. Sinha they only emphasise the fact that the entire proprietary in the sir land is transferred.
If we accept the interpretation then those words would be rendered otiose.
That would not be the right way of interpreting a formal document.
To look at it in another way, where a person transfers sir lands together with "all rights and privileges" therein he transfers everything that he has in that land.
which Must necessarily include the cultivating right.
It would follow from this that where there is a transfer of this kind no kind of interest in sir land is left in that person thereafter.
Mr. Sinha further said that when the statute requires that cultivating rights in sir land must be expressly transferred it makes it obligatory on the parties to say clearly in the documents that cultivating rights in the sir land have also been transferred.
We see no reason for placing 657 such an interpretation on the provisions of cl.
(a) of section 49(1) of the C. P. Tenancy Act.
When it says that the transfer of cultivating rights in sir land has to be made expressly all that it means is that a transfer by implication will not be enough.
Finally Mr. Sinha 's point is that the words "all the rights and privileges" in the recital do not govern the interests specified in the clause just preceding these words but they govern following words "sixteen anna in muza Gondkhami and twelve anna in mauza Amaldihi to Seth Kaluram etc. " Apart from such a construction rendering the expression meaningless it would be ungrammatical to read the expression as applying to "sixteen anna in mauza Gondkhami and twelve anna in mauza Amaldihi etc.
" Therefore, there is no substance in the appeal and accordingly we dismiss it with costs.
Appeal dismissed.
| R and his father executed a sale for Rs. 50,000/ transfer.
ring 16 annas interest in two villages belonging to the joint family ,together with sir and khudkashat lands. . as well as the cultivated and the uncultivated lands in the village with all the rights and privileges".
Subsequently.
R filed a suit to set aside the sale on the grounds that actually he was a minor when he executed the sale deed and that the legal necessity was only for Rs. 45,000/ .
He further contended that the cultivatory rights in the sir lands were not transferred and claimed possession over them.
Held, that the alienation was for legal necessity and was valid and binding, The alience was only required to establish legal necessity for the transaction and it was not necessary for him to show that every bit of the consideration was applied for meeting family necessity.
The transaction being for legal necessity the father was competent to execute the sale deed binding on the entire family and the joining of R, even though he was a minor, did not affect its validity or binding character.
649 Sri Krishan Das vs Nathu Ram, 1.
L. R. 49 All.
149 (P. C.) and Naimat Rai vs Din Dayal, 1.
L. R. relied on.
Gharib Ullah vs Khalak Singh, I. L. R. 25 All.
407 (C.) Kanti Chunder Goswami vs Bisheswar Goswami, 25 Cal.585 Biraj Nopani Pura Sundary Dasee, C.), referred to.
Held, further, that cultivating rights in the sir lands bad also been expressly transferred to the vendees by the sale deed.
The provisions of section 49 (1) of the C. P. Tenancy Act, 1920, that there must be an express agreement between the transferor and the transferee concerning the transfer of the cultivating rights in sir land are satisfied where the sale deed not only transferred sir and Khudkashat lands, cultivated and uncultivated lands but transferred these properties along with "all rights and privileges", since they would include cultivating rights in sir land.
| % The lands of the appellant were situated on the banks of the river Tapti known for its frequent floods.
They were sought to be acquired under the Land Acquisition Act, 1894.
The preliminary notification declaring the intention to acquire the said land was issued under section 4 of the act and published in the Government Gazette on April 30, 1970.
It was notified that the proposed acquisition was for the public purpose for extension of the village site for the purpose of housing 12 families who had been rendered homeless because of floods in the Tapti river.
An individual notice under section 4 of the Act was served on the Appellant on May 2, 1970.
He filed his objections against the proposed acquisition on May 12, 1970 and filed additional objections on June 20, 1970 and July 6, 1970 respectively.
After the consideration and rejection of the said objections, the notification of the lands under section 6 was issued on December 8, 1970.
Notices under section 9 were issued on January 8, 1971.
The appellant challenged the aforesaid acquisition in a writ petition in the High Court on various grounds, the main ground being that the provisions of sections 4 and 6 of the Act were ultra vires the Constitution.
The High Court dismissed the petition, but granted a certificate of fitness under Article 133(t)(c) of the Constitution. 777 In the appeal to this Court on behalf of the appellant it was conceded: (1) that the vires of sections 4 and 6 could no longer be called in question, but it was submitted that (t) under the provisions of the Bombay Land Revenue Code, 1879 it must be established that the lands in the existing village site are insufficient for the extension of the village site before any acquisition can be resorted to, (2) the land acquisition authorities had failed to consider what were the other lands available which could have been more conveniently acquired, and (3) since several years have passed from the date of the Notification under section 4, the victims of the floods must have been housed and rehabilitated elsewhere and hence the public purpose for which the lands were sought to be acquired does not survive.
Dismissing the Appeal the Court, ^ HELD: t.
The challenge to the vires of sections 4 and 6 of the Land Acquisition Act, 1894 no longer survive in view of the validity of the sections having been upheld by this Court in Manubhai Jehtalal Patel and Anr.
vs State of Gujarat and others, ]983 4 SCC 553.
[778F] 2.
Section 126 of the Bombay Land Revenue Code merely deals with the limits of the site of any village, town or city and prescribes the procedure for fixing the limits of such sites.
There is nothing in the Bombay Land Revenue Code or the Land Acquisition Act which would suggest that before acquisition can be resorted to for enlarging a village site, the Collector or a Survey officer or Revenue Authority must decide upon such enlargement.
[781E F] Chandrabhagabai Udhaorao and others vs Commissioner, Nagpur Division, Nagpur Ors., [1962] Nagpur Law Journal, Vol.
XLV at p. 466 and Sitaram Maroti vs State of Maharashtra, [1963] 65 Bombay Law Reporter, 241 distinguished.
The assessment of suitability of the land proposed to be acquired for the concerned public purpose is primarily for the Land Acquisition officer to consider, and no good reason has been shown on behalf of the appellant which could warrant interference with his decision.
Moreover, the appellant had not even given proper particulars of the other lands which, according to him, were available and were more suitable for acquisition and hence he can make no grievance on the score of proper consideration not having been given to the question of acquiring such lands.
[782BC D] 778 4.
The delay in the acquisition has taken place on account of the legal proceedings adopted by the Appellant himself and by reason of the interim orders obtained by him.
He cannot take advantage of this delay and claim that the public purpose no longer survives.
Moreover, the public purpose stated in the Notification is the extension of a village site or goathan of the village Bhairav and there is nothing to show that the public purpose has exhausted itself.
In fact, on account of increasing population, it would be more necessary today that the village site should be extended even then it was at the time when the notification was issued.[782E F]
| In the State of Madhya Pradesh vs V. P. Sharma, ; this Court held that once a declaration under section 6 of the Land Acquisition Act 1894 was made the notification under section 4(1) of the Act was exhausted and there could be no successive notifications under section 6 with respect to land in a locality specified in one notification under section 4(1).
Relying on the above judgment the present writ petitions were filed in order to challenge successive notifications under section 6 following a single notification under section 4(1) in respect of land belonging to them.
Meanwhile in order to meet the situation created by the judgment in V. P. Sharma 's case the President of India promulgated the Land Acquisition (Amendment and Validation) Ordinance (1 of 1967).
The Ordinance was later followed by the Land Acquisition (Amendment and Validation) Act 1967.
Section 2 of this Act purported to amend section 5 A of the principal Act by allowing the making of more than one report in respect of land which had been notified under section 4(1).
Section 3 purported to amend section 6 of the principal Act by empowering different declarations to be made from time to time in respect of different parcels of land covered by the same notification under section 4(1) irrespective of whether one report or different reports had been made under section 5 A sub section
Section 4 of the Act purported to validate all acquisitions of land made or purporting to have been made under the principal Act before the commencement of the ordinance namely January 10, 1967, notwithstanding that more than one declaration under section 6 had been made in pursuance of the same notification under section 4(1), and notwithstanding any judgment, decree or order of any court to the contrary.
The Amending Act also laid down time limits for declarations under section 6 of the principal Act after the notification under s 4(1), had been issued in respect of notifications made after January 20.
1967 the time limit was three years; in respect of notification made before that date the time limit was to be two years after that date.
Provision was also made for payment of interest on compensation due to persons in respect of whose land declarations under section 6 had been delayed beyond a specified period; no interest was however, to be paid to those to whom compensation had already been paid.
The petitioners by leave of Court amended their petitions to attack the validity of the.
aforesaid Validating Act on the following main grounds : (1) By seeking to validate past transactions of a kind which had been declared invalid by this Court without retrospectively changing the substantive law under which the past transactions had been effected the legislature was encroaching over the domain of the judicial power vested by the Constitution in the judiciary exclusively; (ii) The Validating Act did not L4Sup.
C.I.1684 42 revive the notification under section 4 which had become exhausted after the first declaration under section 6 and no acquisition following thereafter could be made without a fresh notification under section 4; (iii) The Validating Act violated article 31(2) of the Constitution inasmuch as it purported to authorise acquisitions without fresh notifications under section 4 thereby allowing compensation to be paid on the basis of the said .
notification under section 4 without allowing for increase in the value of land thereafter; (iv) The Validating Act violated article 14 of the Constitution in various ways.
HELD: Per Wanchoo C.J., Bachawat & Mitter, JJ. (i) The American doctrine of well defined separation of legislative and judicial powers has no application to India and it cannot be said that an Indian Statute which seeks to validate invalid actions ' is bad if the invalidity has already been pronounced upon by a court of law.
A.K. Gopalan vs State, ; , referred to.
(ii) The absence of a provision in the amending Act to give retrospective operation to section 3 of the Act does not affect the validity of section 4.
It was open to Parliament to adopt either course e.g. (a) to provide expressly for the retrospective operation of section 3, or, (b) to lay down that no acquisition purporting to have been made and no action taken before the Land Acquisition (Amendment and Validation) Ordinance, 1967 shall be deemed to be invalid or even to have become invalid because, inter alia, of the making of more than one declaration under section 6 of the Land Acquisition Act, notwithstanding any judgment decree or order to the contrary.
Parliament was competent to validate such actions and transactions, its power in that behalf being only circumscribed by appropriate entries in the Lists of the Seventh Schedule and the fundamental rights set forth in Part III of the Constitution.
Section 4 of the Amending Act being within the legislative competence of Parliament, the provisions thereof are binding on all courts of law notwithstanding judgments, orders or decrees to the contrary rendered or made in the past.
[67 C F] Case law referred to.
(iii) The impugned Act does not violate article 31(2).
The Act does not in express terms enact any law which directly affects compensation payable in respect of property acquired nor does it lay down any principles different from those which were already in the Land Acquisition Act of 1894.
After the amendment of the Constitution in 1955 the question of compensation is not justiciable and it is enough if the law provides that a person expropriated must be given compensation for his property or lays down the principles therefor.
[67 G H] The Legislature might well have provided in the Act of 1894 that it would be open to the appropriate Government after issuing a notification under section 4 to consider objections raised under section 5 with regard to the different localities from time to time enabling different reports to fie made under section 5 A with consequent adjustments in section 6 providing for declarations to be made as and when each report under section 5A was considered.
By the validation of action taken under section 6 more than once in respect of a single notification under section 4, the original scheme of acquisition is not altered.
The public purpose behind the notification remains the same.
It is not as if a different public purpose and acquisition of land for such purpose were being interploated by means of the Validating Act.
Only the shortcoming in the Act as to want to provision to enable more than one decla ration under section 6 are being removed.
[68 D F] 43 The date of valuation under the Validation Act is that of the issue of notification under section 4(1), a principle which has held the field since 1923 Legislative competence to acquire land under the provisions of the Land Acquisition Act cannot be challenged because of constant appreciation of land values all over the country due to the prevalent abnormal inflation.
There must be some time lag between the commencement and conclusion of land acquisition proceedings and in principle there is nothing wrong in accepting the said commencement as the date of valuation.
Sections 4 and 23 of the Land Acquisition Act are protected by article 31(5) (a) of the Constitution.
Only sections 5 A and 6 of the Act have been amended.
The amendment does not alter the principle of compensation fixed by the Act nor contravene article 31 of the Constitution in any way.
[69 G 70 B] It cannot be said of the Validating Act that it was fixing an arbitrary date for the valuation of the property which bore no relation to the acquisition proceedings.
The population in Indian cities especially in the capital is ever increasing.
The State has to plan the development of cities and it is not possible to take up all schemes in all directions at the same time.
The resources of the State may not be sufficient to acquire all the area required by a scheme at the same time.
Of necessity the area under the proposed acquisition would have to be carved into blocks and the development of one or more blocks at a time could only be taken up in consonance with the resources available.
Even contiguous blocks could be developed gradually and systematically.
In view of such factors it cannot be said that the principle of fixing compensation on the basis of the price prevailing on the date of the notification under section 4(1) of the Land Acquisition Act was not a relevant principle which satisfied the requirements of article 31(2).[70 C 71 H] The State of West Bengal vs Mrs. Bela Banerjee, ; , State of Madras vs D. Namasivaya Mudaliar, ; and, P.V. Mudaliar vs Deputy Collector, ; , considered.
(iv) The validating Act was not violative of article 14.
Whenever an Amending Act is passed there is bound to be some difference in treatment between transactions which have already taken place and those which are to take place in the future.
That by itself will not attract the operation of article 14.
Again, even with respect to transactions which may be completed in the future, a reasonable classification will not be struck down.
[72 C] Jalan Trading Co. vs Mazdoor Union, ; , relied on.
It is not possible to say that because the Legislature thought of improving upon the Act of 1894 by prescribing certain limits of time as from 20th January 1967 the difference in treatment in cases covered by the notification before the said date and after the said date denies equal protection of laws because the transactions are not similarly circumstanced.
Some of the notifications issued under section 4 must have been made even more than 3 years before 20th January, 1967 and such cases obviously could not be treated in the same manner 'as notifications issued after that date.
article 14 does not strike at differentiation caused by the enactment of a law between transactions governed thereby and those which are not so governed.
[73 H 74 B] Hatisingh Manufacturing Co., Ltd. vs Union of India, ; No grievance can be made because interest is denied to persons who have already taken the compensation.
Even here the classification is not unreasonable and cannot be said to be unrelated to the object of the Act.
[74 E F] 44 Per Shelat and Vaidialingam, JJ.
(dissenting) By validating the acquisition orders and declarations made on the basis of an exhausted notification under section 4 the impugned Act saves government from having to issue a fresh notification and having to pay compensation calculated on the market value as on the date of such fresh notification and depriving the expropriated owner of the benefit of the appreciated value in the meantime.
The real object of section 4 of the impugned Act is thus to save the State from having to compensate for such appreciation under the device of validating all that is done under an exhausted section 4 notification and thus in reality fixing an anterior date i.e. the date of such a dead section 4 notification for fixing the compensation.
The impugned Act thus suffers from a two fold vice : (i) that it purports to validate acquisitions orders and notifications without resuscicating the notification under section 4 by any legislative provision on the basis of which alone the validated acquisitions, orders and declarations can properly be sustained and (ii) that its provisions are in derogation of article 31(2) as interpreted by this Court by fixing compensation on the basis of value on the date of notifications under section 4 which had become exhausted and for keeping them alive no legislative provision is to be found in the impugned Act.
It is therefore not possible to agree with the view that the purpose of section 4 is to fill the lacuna pointed out in Sharma 's case nor with the view that it raises a question of adequacy of compensation.
The section under the guise of validating the acquisitions, orders and notifications camouflages the real object of enabling acquisitions by paying compensation on the basis of values frozen by notifications under s 4 which by part acquisitions thereunder had lost their efficacy and therefore required the rest of the land to be notified afresh and paying compensation on the date of such fresh notifications.
The fact that neither section 4 nor section 23 of the principal Act are altered does not make any difference.
[89 D H, 85 H] Section 4 of the Amending Act must therefore be struck down as invalid.
[90 A]
| Civil Appeal Nos. 931 of 1977 and 200 of 1978 relate to the same dispute though arose from, two suits and separate judgements.
Civil Appeal No. 931 of 1977 arose out of the suit for possession by the Gram Panchayat against the descendants of the grantee of inam.
The suit was dismissed by the Trial Court and was confirmed by the High Court and the High Court granted leave under Art.133.
Civil Appeal No. 200 of 1978 arose out of the suit for possession and mesne profits which was laid by the descendants of the grantee of inam.
The pleadings are the same in both cases.
A Zamindar granted 100 acres of land inam to dig, preserve 532 and maintain a tank in favour of the predecessors of the respondents of C.A. No. 931/77.
In 1700 A.D.i.e.
, 1190 Fasli, the tank was dug by the villagers and ever since, the villagers were using the tank for their drinking purpose and perfected their right by prescription.
In course of time the tank was silted up and fresh water existed only in and around 30 acres.
The grantee 's descendants respondents did not make any repairs, Grass and trees had been grown in the rest of the area and was being enjoyed.
Under section 3 of the A.P.Inams ( Abolition and Conversion into Ryotwari) Act, ( Act XXXVII of 1956) Ryotwari Patta was granted to the respondents in individuals capacity and on appeal the Revenue Divisional Officer confirmed the same and it became final, as it was not challenged any further.
On 7.7.1965, the Gram panchayat the appellant in C.A. No. 931/77 took unilateral possession of the tank and ever since , it was exercising possession, supervision and control over it.
After the expiry of three year from the date of dispossession, the respoondents filed a suit for possession based on title.
Earlier thereto the appellant Gram Panchayat had filed a suit for possession.
The Trial Court found that the tank was a 'public trust ', the appellants would be hereditary trustees and could be removed only by taking action under section 77 of the A.P. Hindu Charitable and Religious Institutions and Endowments Act, 1966 and that the respondents had acquired title by adverse possession.
Accordingly the suit for possession was decreed relegating the filing of separate application for mesne profit.
On appeal, the High Court reversed the decree and held that the tank was a public tank, and the tank and the lands stood vested in the Gram Panchyat under A.P. Gram Panchayat Act,1964.
Since, the Gram Panchayat was in possession from July 7, 1966, though dispossessed the respondents forcibly and as the suit was not under section 6 of the , but one based on title, it called for interference and dismissed the suit.
This court granted leave to appeal under article 136.
533 The respondents in C.A. No. 931/77 (the appellants in C.A. No. 200/78) contended that in view of the entries of the Inam Fair Register, the tank was a public trust and not a public tank; they could not be dispossessed until recourse made under section 77 of the A.P. Charitable and Religious Institutions and Endowments Act; that under the Gram Panchayat Act, the lands did not vest in the gram Panchayat; and that since the grant of ryotwari patta under the Inams Act had become final, section 14, thereof barred the jurisdiction of the Civil Court to entertain the suit.
The appellant Gram Panchayat in C.A. No. 931/77 (the respondents in C.A. No. 200/78) contended that the tank and the appurtenant land was correctly held as public tank by the High Court that by operation of sections 85 and 64 of the Gram Panchayat Act, the land and the tank stood vested in the Panchayat, that the entries in the Inam Fair Register established that the grant of land was for preservation, maintenance and repairs of the tank and therefore, the grant should be in favour of the institution, i. e., the tank and the respondents thereby did not acquire any title, that ryotwari patta was only for the purpose of land revenue; that the Gram Panchayat acquired absolute right, title and interest in the land; and the suit was not a bar in the facts of the case.
Dismissing both appeals, this Court HELD: 1.01.
Any property or income, which belongs to or has been administered for the benefit of the villagers in common or the holders in any of the village land generally or of land of a particular description or of lands under particular source of irrigation shall vest in Gram Panchayat and be administered by it for the benefit of the villagers or holders.
The lands or income used for communal purpose shall either belong to the Gram Panchayat or has been administered by the Gram Panchayat.
It is not the case of the Gram Panchayat nor any finding recorded by the courts below to that effect.
section 64 is not attracted though the villagers acquired prescriptive right to use the water from the tank for their use and of their cattle.
[554D F] 1.02.
All public water courses, springs, reservoirs, tanks, cisterns, etc.
and other water works either existing on the date of the Act or made thereafter by the Gram Panchayat, or otherwise including those used by the public ripened into prescriptive right for the use and benefit of the public and also adjacent or any appurtenant land not being private property shall vest in the Gram Panchayat under section 85(1) and be subject to its control.
[554F G] 534 2.01.
The word`vesting ' in section 85 would signify that the water courses and tanks, lands etc.
used by the public to such an extent as to give a prescripvtive right to their use, are vested in the Gram Panchayat, and placed them under the control and supervision of the Gram Panchayat.
It confers no absolute or full title.
It was open to the Government, even after vesting, to place restriction upon the Gram Panchayat in the matter of enjoyment and use of such tanks, and appurtenant lands etc.
The assumption of management by the Government would be subject to the prescriptive right of the villagers, if any.
The vesting of the tanks etc.
in the Gram Panchayat was with absolute rights and the village community rights would over ride against rights of the Government.
[546C F] 2.02.
The tank is a public tank and not a public trust and that under section 85(1) and section 64, the vesting of the tanks, the appurtenant land and the common land is only for the purpose of possession, supervision, control and use thereof for the villagers for common use subject to the over riding title by the Government and its assumption of management should be in terms of sub section
(3) of section 85 of the Act and subject to the prescriptive right in the water, water spread tank for common use.
[547A B] Gram Panchayat, Mandapaka & Ors.
V. Distt.
Collecctor, Eluru & Ors. , approved.
Anna Narasimha Rao & Ors.
vs Kurra Venkata Narasayya & Ors., , OVER RULED. 3.01.
Under A.P. Land Encroachment Act, 1905; Talengana Area Land Revenue Act, relevant Abolition Acts like A.P. Estates (Abolition and Conversion into Ryotwari) Act, 1948, Inams Abolition Act etc.
give absolute rights or vesting in the State over the forest land, tanks, rivers, mines, poramboke, land, etc.
free from all encumbrances and the preexisting rights in the other land stood abolished and will be subject to the grant of Ryotwari Patta etc.
[546F H] 3.02 Grant of Ryotwari patta is not a title but a right coupled with possession to remain in occupation and enjoyment, subject to payment of the land revenue to the State.
[546H] 3.03.
The entries in the Inam Fair Register are great acts of the State and coupled with the entries in the survey and settlement record 535 furnishes unimpeachable evidence.
On construction of these documents, it would clearly emerge that the original grant was made for the preservation and maintenance of the tank and tax free Inam land was granted for that purpose, though it was in the name of the individual grantee.
The grant was for the preservation and maintenance of the tank.
[548C D] 3.04.
The grant was for the institution.
Under section 3 of the Inams Act, the enquiry should be, whether (1) a particular land is Inam land; (2) Inam land in a Ryotwari, Zamindar or Inam Village; and (3) is held by any institution.
In view of the finding that the grant was for the preservation and maintenance of tank, the Inam land in an inam village was held by the institution, namely, the tank.
Ryotwari patta shall, therefore, be in favour of the institution.
Undoubtedly the ryotwari patta was granted in favour of the descendants.
[548D F] 3.05.
The pattas were obtained in the individuals name, the trustees of an institution cannot derive personal advantage from the administration of the trust property.
The grant of patta was for the maintenance of the trust.
[548G] 3.06.
The descendants, though enjoyed the income from the properties, did not effect the repairs and neglected the maintenance and upkeep of the tank.
They rendered the tank disused and abandoned.
By operation of section 85 of the Act the lands and tank stood vested in the Gram Panchayat for control, management and supervision.
[550E F] 3.07.
A hereditary trustee is entitled to be the Chairman of a Board of Trustees, if any, constituted under the Endowment Act or else be in exclusive possession and management of the public trust registered thereunder until he is removed as per the procedure provided therein.
Since the tank always remained a public tank and not being a public trust, the Endowment Act does not apply.
Therefore, the question of initiating action under section 77 of the Endowment Act for removal of the descendants as trustees does not arise.
[550F G] Arunachalam Chetty vs Venkatachalpathi Garu Swamigal, AIR 1919 P.C. 62 at P. 65; Syed Md. Mazaffaral Musavi vs Bibi Jabeda & Ors., AIR 1930 Pc 1031; Bhojraj vs Sita Ram & Ors, AIR 1936 P.C. 60; M. Srinivasacharyulu & Ors.
V. Dinawahi Pratyanga Rao & Ors., ; Ravipati Kotayya & Anr.
vs Ramaswamy Subbaraydu & Ors., , referred to.
536 K.V. Krishna Rao vs Sub Colletor, Ongole, ; , followed.
Nori Venkatarama Dikshitulu & Ors.
vs Ravi Venkatappayya & Ors., , approved.
Krishan Nair Boppudu Punniah & Ors.
vs Sri Lakshmi Narasimhaswamy Varu, ; Bhupathiraju Venkatapathiraju & Ors.
V. The President Taluq Board, Narsapur & Ors.; [1913] 19 1.C. 727 (Mad.) (D.B.), distinguished.
Tagore Law Lecture, ``Hindu Religious Endowments and Institutions at p. 6, distinguished.
In the laws made to restructure the social order creating rights in favour of the citizens and conferring power and jurisdiction on the hierarchy of Tribunals or the authorities constituted thereunder and giving finality to their orders or decisions and divested the jurisdiction of the established civil courts expressly or by necessary implication Departure in the allocation of the judicial functions would not be viewed with disfavor for creating the new forums and entrusting the duties under the statutes to implement socio economic and fiscal laws.
Courts have to consider, when questioned, why the legislature made the departure.
The reason is obvious.
The tradition bound civil courts gripped with rules of pleading and strict rules of evidence and tardy trial, four tier appeals, endless revisions and reviews under C.P.C. are not suited to the needed expeditious dispensation.
The adjudicatory system provided in the new forums is cheap and rapid,.
The procedure before the Tribunal is simple and not hide bound by the intricate procedure of pleadings, trial, admissibility of the evidence and proof of facts according to law.
Therefore, there is abundant flexibility in the discharge of the functions with greater expedition and inexpensiveness.
{552D H] 4.02.
In order to find out the purpose in creating the Tribunals under the statues and the meaning of particular provisions in social legislation, the Court would adopt the purposive approach to ascertain the socials ends envisaged in the Act, to consider scheme of the Act as an integrated whole and practical means by which it was sought to be effectuated to achieve them.
Meticulous lexographic analysis of words and phrases and sentences should be subordinate to this purposive approach.
The dynamics of the interpretative functioning of the Court is to reflect the contemporary needs and the prevailing values consistent with the constitutional and legislative declaration of the policy envisa 537 ged in the statute under consideration.
[552H 553B] 4.03.
The law should, therefore, respond to the clarion call of social imperatives evolve in that process functional approach as means to subserve ``social promises ' ' set out in the Preamble, Directive Principles and the Fundamental Rights of the Constitution.
[553d] 4.04.
Section 9 of the Civil Procedure Code, 1908 provides that whenever a question arises before the Civil Court whether its jurisdiction is excluded expressly or by necessary implication, the court naturally feels inclined to consider whether remedy afforded by an alternative provision prescribed by special statute is sufficient or adequate.
In cases where exclusion of the civil court 's jurisdiction is expressly provided for, the consideration as to the scheme of the statue in question and the adequacy of sufficiency of the remedy provided for by it may be relevant, but cannot be decisive.
Where exclusion is pleaded as a matter of necessary implication such consideration would be very important and inconceivable circumstances might become even decisive.
[553G 554B] 4.05.
The jurisdiction of a Tribunal created under statute may depend upon the fulfilment of some condition precedent or upon existence of some particular fact.
Such a fact is collateral to the actual matter which the Tribunal has to try and the determination whether it existed or not is logically temporary prior to the determination of the actual question which the Tribunal has to consider.
At the inception of an enquiry by a Tribunal of limited jurisdiction, when a challenge is made to its jurisdiction, the Tribunal has to consider as the collateral fact whether it would act or not and for that purpose to arrive at some decision as to whether it has jurisdiction or not.
There may be Tribunal which by virtue of the law constituting it has the power to determine finally, even the preliminary facts on which the further exercise of its jurisdiction depends; but subject to that, the Tribunal cannot by a wrong decision with regard to collateral fact, give itself a jurisdiction which it would not otherwise have except such tribunals of limited jurisdiction when the statue not only empowers to enquire into jurisdictional facts but also the rights and controversy finally it is entitled to enter on the enquiry and reach a decision rightly or wrongly.
If it has jurisdiction to do right, it has jurisdiction to do wrong.
It may be irregular or illegal which could be corrected in appeal or revision subject to that the order would become final.
[554B F] 4.06.
The Inams Act did not intend to leave the decisions of the revenue courts under section 3 read with section 7 to retry the issue once over in the civil court.
[561D E] 538 4.07.
The glimpse of the object of the Inams Act, scheme, scope and operation thereof clearly manifest that Inams Act is a self contained code, expressly provided rights and liabilities; prescribed procedure; remedies; of appeal and revision, excluded the jurisdiction of the civil court, notwithstanding anything contained in any law, given primacy of Inams Act though inconsistent with any law or instrument having force of law.
The jurisdictional findings are an integral scheme to grant or refuse ryotwari pattta under section 3, read with section 7 and not collateral findings.
It was subject to appeal and revision and certiorari under Art 226.
The decision of the Revenue Tribunal, are final and conclusive between the parties or persons claiming right, title or interest through them.
The trick of pleadings and the camouflage of the reliefs are not decisive but the substance or the effect on the order of the tribunal under the Inams Act are decisive.
The civil suit except on grounds of fraud, misrepresentation or collusion of the parties is not maintainable.
The necessary conclusion would be that the civil suit is not maintainable when the decree directly nullifies the ryotwari patta granted under section 3 of the Inams Act.
[561E 562A] Deena vs Union of India, [1984] ISCR, referred to.
Kamala Mills Ltd. vs State of Bombay, ; ; Secretary of State vs Mask & Co., [1940] L.R. 67 I.A. 222; Raleigh Investment Co. Ltd. V. Governor General in Council, L.R. 74 I.A. 50; Firm and Illuri Subbayya Chetty & Sons vs State of Andhra Pradesh; , ; Deesika Charyulu vs State of A.p., AIR 1964 SC 807; Dhulabhai & Ors vs State of M.P. & Anr., ; ; Hati vs Sunder Singh, ; ; Muddada Chayana vs Karam Narayana and Anr.
; , ; T. Munuswami Naidu vs R. Venkata Reddy, AIR 1978 A.P. 200; O. Chenchulakshmamma & Anr.
vs D. Subramanya Reddy; , ; A. Bodayya & Anr.
V. L. Ramaswamy(dead) by Lrs., ; Doe vs Bridges, at p. 359; Premier Automobiles Ltd. vs Kamlakar Shantaram Wadke and Ors., ; ; State of Tamil Nadu vs Ramalinga Samigal Madam, ; ; Syamala Rao vs Sri Radhakanthaswami Varu, ; Jyotish Tahakur & Ors.
vs Tarakant Jha & Ors., [1963] Suppl.
1 SCR 13; Sri Athmanathaswami Devasthanam vs K. Gopalaswami Aiyangar, {1964] 3 SCR 763; Sri VEdagiri Lakshmi Narasimha Swami Temple vs Induru Pattabhirami Reddy, ; ; Shree Raja Kandragula Srinivasa Jagannadha Rao Panthulu Bahadur Garu vs State of Andhra Pradesh, ; ; Dr. Rajendra Prakash Sharma vs Gyan Chandra & Ors., ; ; Anne Basant National Girls High School vs Dy.
539 Director of Public Instruction & Ors., ; Raja Ram Kumar Bhargava (dead) by Lrs.
vs Union of India, [1988] 2 SCR 352; Pabbojan Tea Co., Ltd., etc.
vs the Dy.
Commissioner, Lakhimpur, etc.
; , and K. Chintamani Dora & Ors.
vs G. Annamnaidu & Ors., ; , distinguished.
D.V. Raju vs B.G. Rao & Anr., , approved.
P.pedagovindayy vs Subba Rao, , over ruled.
The word `vest ' clothes varied colours from the context and situation in which the word came to be used in a statue of rule.
[545B C] 5.02.
The word [vest '], means, to give an immediate, fixed right of present or future enjoyment, to accrue to, to be fixed, to take effect, to clothe with possession, to deliver full possession of land or of an estate, to give seisin to enfeoff.
[545C D] 5.03.
The word, `vest ', in the absence of a context, is usually taken to mean, `vest ' in interest rather than vest in possesion '.[545E F] 5.04.
`Vest '.
``generally means to give the property in ' '.
[545E F] 5.05.
The word, `vested ' was defined, `as to the interest acquired by public bodies, created for a particular purpose, in works, such as embankments, whcih are `vested ' in them by statute. ' {545D E] 5.06.
``Vesting ' ' in the legal sense means, to settle, secure, or put in fixed right of possession; to endow, to descend, devolve or to take effect, as a right '.
[545C] Chamber 's Mid Century Dictionary at P. 1230; Blacks Law Dictionary, 5th Edition at P. 1401; Stroud 's Judicial Dictionary, 4th Edition Vol, 5 at P. 2938, Item 12, at P 2940, Item 4 at P. 2939; Port of London Authority vs Canvey Island Commissioners, {1932] 1 Ch.
446; Fruit and Vegetable Merchants Union vs Delhi Improvement Trust, ; , referred to.
Under the Gram Panchayat Act the statutory interposition of vesting the tank and the appurtenant land in the Gram Panchayat made it to retain possession, control and supervision over it, though the Gram Panchayat unlawfully took possession.
The need to grant decree for possession in favour of the Gram Panchayat is thus redundant.
The suit 540 of the descendants normally to be decreed on the finding that ryotwari patta under section 3 of the Inams Act was granted in their favour and that they were unlawfully dispossessed.
Since the grant of ryotwari patta, though in the name of individuals, was to maintain the public tank whcih stood vested under section 85 of the Act in the Gram panchayat, the descendants are divested of the right and interest acquired therein.
Thus the suit of the descendants also is liable to be dismissed.
[562A C]
| The respondent by virtue of the sanad granted to his ancestors by the British Government, claimed, in respect of certain lands situated in village Shiramba Taluka Koregaon, District North Satara, compensation under section 6(2) of the Bombay Paragana and Kulkarni Watans (Abolition) Act.
1950, for the resumption of the lands by the appellant.
The suit claim of Rs. 15,074 4 0 being "a sum equal to ten times the amount of such land revenue" was decreed by the trial court.
On appeal by the State, the High Court affirmed the same.
after construing the sanad granted by the British Government in favour of the respondents ' ancestors and other relevant records, as it was a watan of land revenue and not in respect of the soil.
Dismissing the State 's appeal by special leave to this Court, ^ HELD: (1) The High Court was right in holding that the grant in favour of the ancestors of the respondent was a grant of land revenue only and not a grant of the soil and since the watan held by the respondent at the date of the coming into force of the Act was a watan of land revenue the respondent was entitled to compensation in the sum of Rs. 15,074 4 0 under section 6(2) of the Bombay Paragana and Kulkarni Watan (Abolition) Act, 1950.
[982B C] (2) The sanad undoubtedly used the words "lands" to describe the subject matter of the grant, but the word "land" is defined in Bombay Act II of 1863 [The Exemption From Land Revenue (No. 1 ) Act 1863], to include share of land revenue and this meaning would apply in the construction of the word "land" in the sanad since the sanad was apparently granted pursuant to the enquiry made under Bombay Act II of 1863.
The description of the subject matter would not, therefore, necessarily indicate that it was a grant of the soil.
In fact, this description standing alone would rather indicate that it was a grant of land revenue only, since grant of the soil would ordinarily be accompanied by words such as 'Darobast ' or 'Jal ', 'Taru ', 'Truna ', 'Kastha ' and 'Pashan '.
[981F H] [Their lordships deprecated the litigious approach adopted by the State Government and observed "State Governments which have public accountability in respect of their actions should not lightly rush to this Court to challenge a judgment of the High Court which is plainly and manifestly correct and drag the opposite party in unnecessary expense.]
| The appellant was the owner of the suit land.
Alleging that the 2nd respondent, who was the Mahant of an Akhara, was the occupancy tenant and that he had allowed his lessee to dig it up and rendered it unfit for cultivation, the appellant evicted the 2nd respondent from a part of the land in 1940, and from the rest of it in 1943.
In 1950, the 2nd respondent was removed from the office of Mahant, in proceedings under section 92, C.P.C., and in 1953, the 1st respondent was appointed in his place.
In 1957 the 1st respondent filed a suit for possession of the land, alleging that the Akhara itself was the occupancy tenant.
The trial court decreed the suit and the High court confirmed the decree.
In the appeal to this Court, the appellant contended that the suit was barred by limitation.
HELD: Upon the eviction of the 2nd respondent the occupancy right in the land merged in the right of ownership of the appellant.
Apart from it, the actual physical possession of the land having been continuously with the appellant to the exclusion of the occupancy tenant, whether it was the 1st respondent or the Akhara itself, for a period of more than 12 years before the institution of the suit, the occupancy right was extinguished.
If the 2nd respondent represented the Akhara in the eviction proceeding the decrees therein would bind the 1st respondent as his successor.
If the 2nd respondent did not represent the Akhara, the possession of the appellant under those decrees would be adverse to the Akhara.
The 2nd respondent as the Mahant, or the Receiver appointed by the Court In the section 92 proceedings, could have filed a suit on behalf of the Akhara, and so, the 1st respondent 's suit after 12 years of adverse possession by the appellant was barred.
(436D E; 438F H] Sudaram Das vs Ram Kirpal, L.R. 77 T.A. 42 and Subbaiya V. Mustapha, L.R. 50 I.A. 295, applied Dwijendra Narain Roy vs Joges Chandra De, A.I.R. 1924 Cal.
600, referred to.
| The father of the first respondent sold his lands to the second respondent but continued to be in possession.
The second respondent sold them to the appellants who were put in possession in 1934.
In August 1945, the first respondent filed a petition against the second respondent, before the Debt Adjustment Board, under Ss. 17, 18 and 45 of the Bombay Agricultural Debtors Relief Act, 1939, within the time prescribed by section 17, alleging that the transaction with the second respondent was a mortgage and that the debt was liable to be adjusted under the Act.
The first appellant was impleaded as a party to the petition in December 1945, beyond the time specified in section 17.
No appeal was filed against that order, and in 1947, the Board disposed of the petition for adjustment of debt by directing the second respondent to render accounts.
He appealed and, pending the appeal, the 1939 Art was repealed by the Bombay Agricultural Debtors Relief Act of 1947.
In 1949, the appellate Court set aside the Board 's order and remanded the case to the Civil Judge, for deciding the nature of the transaction, because, under the 1947 Act, the Board was dissolved and its jurisdiction was vested in the Civil Judge.
In 1950, the first respondent 's application to the Civil Judge for impleading the second respondent also as a party to the petition for adjustment of the debt, was allowed, and thereafter, the matter was disposed of on merits.
On the questions: (i) Whether the orders impleading the appellants were without jurisdiction.
and (ii) whether the appellants had acquired title to the lands by adverse possession, HELD: (i) The orders were not without jurisdiction.
Under the repealed Act, if a party was added beyond the period prescribed under section 17 of the Act, if he was added as a necessary party to a petition filed in time, the said order might be improper but not without jurisdiction.
[151 C D] Under section 56 of the 1947 Act, original and appellate proceedings initiated under the repealed Act but pending at the time the 1947 Act came into force will have to be disposed of in accordance with the substantive and procedural sections of the 1947 Act.
Under section 46 of the 1947 Act, the court is empowered.
in a suitable case, to add Parties under 0.1, r. 10, Civil Procedure Code, and they may be added irrespective of the time limit prescribed under the repealed Act, or the time specified in Ss. 4 and 24 of the 1947 Act.
[152 A C] Case law referred to.
(ii) The appellants had not acquired any title by adverse Possession, as the petition for adjustment of debt was filed within 12 years from the date of their occupation of the suit lands.
| The appellant owned a land which was held for the of miscellaneous inferior services and was classified as a Huzur Sanadi Inam land.
The respondents were in possession of the land as tenarlts and were declared as purchasers under the Bombay Tenancy & Agricultural Lands Act, 1948.
The Tenancy Act provides by section 32 that on 1st April, 1957, every tenant subject to certain conditions shall be deemed to have purchased from his landlord the land held by him as a tenant.
The Bombay Legislature passed the Bombay Merged Territories Miscellaneous Alienations Abolition Act of 1955.
The appellant contended that in view of the provisions of the Abolition Act, the relationship of landlord and tenant came to an end between the appellant and the respondents and that, therefore, respondents have no right to purchase the land.
The contention of the appellant was negatived by the Agricultural Lands Tribunal which was confirmed in appeal by the special Deputy Collector and in revision by the Maharashtra Revenue Tribunal.
A writ petition filed by the appellant in the High Court of Bombay was summarily dismissed Dismissing the appeal by Special Leave, ^ HELD: 1.
By section 4 of the Abolition Act, all alienations in the Merged Territories were abolished with effect from the appointed date.
Sections 6, 7, 8 and 9 of the Abolition Act provide for the grant of occupancy rights hl respect of the erstwhile Inam Iands.
There is no provision in that Act by virtue of which the relationship of landlord and tenant between the ex lnamdar and his tenant would stand extinguished.
On the contrary, section 28 Provides that nothing contained in the Act shall in any way be deemed to effect the application of any of the provisions of the Tenancy Act to any alienated land or the mutual rights and obligations of a landlord and his tenants save in so far as the said provisions are in any way inconsistent with the express provisions of the Act.
The provisions of the Tenancy Act contained in section 32 are in no way inconsistent with any of the express provisions of the Abolition Act.
[495 A, B C, & D] 2.
Section 32(O) of the Tenancy Act applies only to tenancies created after the tiller 's day.
[495E] 3.
The object of the Abolition Act was the elimination of Inamdars as intermediaries and not the eviction of the tillers of the soil.
[495G] 4.
Section 32G(6) of the Tenancy Act shows that nothing contained in the Abolition Act can affect the tenant 's right of Purchase under section 32, even if any land is regranted to the holder under the Abolition Act on condition that it was not transferable.
[496A B]
|
minal Delhi Appeal Nos.
7 to 9 of 1961.
Appeals by special leave from the judgment and order dated January 2, 1961, of the Punjab High Court (Circuit Bench) at Delhi in Criminal Appeals Nos.
464 C, 465 C and 463 D of 1959.
Dingle Foot, D. R. Prem, section M. Sikri, G. H.Jauhari and A. N. Goyal, for the appellant (in Cr. A. No. 7 of 61).
R. L. Kohli and A. N. Goyal, for the appellant (in Cr. A. No. 8 of 1961).
Prem Nath Chadha, Madan Gopal Gupta and R. Choudhri, for appellant No. 2 (in Cr. A. No. 9 of 1961).
C. K. Daphtary, Solicitor General of India, R. L. Mehta and R. H. Dhebar, for the respondents.
April 5.
The Judgment of the Court was delivered by RAGHUBAR DAYAL, J.
These three appeals are by special leave.
Appeal No. 7 of 1961 is by R. K. Dalmia.
Appeal No. 8 of 1961 is by R.P.Gurha.
Appeal No. 9 of 1961 is by G.L.Chokhani and Vishnu Prasad.
All the appellants were convicted of the offence under section 120 read with s.409 I.P.C., and all of them, except Vishnu Prasad, were also convicted of certain offences arising out of the overt acts committed by them.
Dalmia and Chokhani were convicted under section 409 I.P.C. Chokhani was also convicted under section 477A read with section 110, I. P. C. Gurha was convicted under section 477A I. P. C. To appreciate the case against the appellants, we may first state generally the facts leading to the case.
Bharat Insuirance Company was incorporated 258 in 1896.
In 1936, Dalmia purchased certain shares of the company and became a Director and Chairman of the company.
He resigned from these offices in 1942 and was succeeded by his brother J. Dalmia.
The head office of the Bharat Insurance Company was shifted from Lahore to 10, Daryaganj, Delhi.
in 1947.
Dalmia was co opted a Director on March 1.0, 1949 and was again elected Chairman of the company on March 19, 1949 when his brother J. Dalmia resigned.
R. L. Chordia, a relation of Dalmia and principal Officer of the Insurance Company, was appointed Managing Director on February 27, 1950.
Dalmia was appointed Principal Officer of the company with effect from August 20, 1954.
He remained the Chairman and Principal Officer of the Company till September 22, 1955.
The period of criminal conspiracy charged against the appellant is from August 1954 to September 1955.
Dalmia was therefore, during the relevant period, both Chairman and Principal Officer of the Insurance Company.
During this relevant period, this company had its current account in the Chartered Bank of India, Australia and China Ltd. (hereinafter called the Chartered Bank) at Bombay.
The Company also had an account with this bank for the safe custody of its securities the company also had a separate current account with the Punjab National Bank, Bombay.
At Delhi, where the head office was, the company had an account for the safe custody of securities with the Imperial Bank of India, New Delhi.
Exhibit P 785 consists of the Memorandum of Association and the Articles of Association of the Bharat Insurance Company.
Articles 116 and 117 deal with the powers of the Directors.
Exhibit P 786 is said to be the original Byelaws passed by the Directors on September 8, 1951.
259 The pages are signed by K.L. Gupta, who was the General Manager of the company during, the relevant period, and not by Dalmia the Chairman, as De should have been the case in view of the resolution dated May 8, 1951.
The genuineness of this document is not, however, admitted.
Exhibits P 15 and P 897 are said to be copies of these Bye laws which were sent to Shri K. Annadhanam (Chartered Accountant, appointed by the Government of India on September 19, 1955, to investigate into the affairs of the Bharat Insurance Company under section 33(1) of the ) and to the Imperial Bank of India, Now Delhi, respectively, and the evidence about their genuineness is questioned.
Bye law 12 deals with the powers of the Chairman.
Clause (b)) thereof empowers the Chairman to grant loans to persons with or without security, but from August 30, 1954, the power was restricted to grant of loans on mortgages.
Clause (e) empowers the Chairman to negotiate transfer buy and sell Government Securities and to pledge, indorse, withdraw or otherwise deal with them.
On January 31, 1951, the Board of Directors of the Insurance Company passed resolutions to the following effect : (1) To open an account in the Chartered Bank at Bombay.
(2) To authorise Chokhani to operate on the account of the Insurance Company.
(3) To for the keeping of the Government securities had by the company, in safe custody, with the Chartered Bank.
(4) To instruct the Bank to accept institutions with regard to withdrawal from Chokhani and Chordia.
On the same day, Dalmia and Chordia made an application for the opening of the account at Bombay with the result that Current Account No. 1120 was opened.
On the same day Chokhani was appointed Agent of the company at Bombay.
260 He was its agent during the relevant period.
From 1951 to 1953, Chokhani alone operated ' on that account.
On October 1, 1953, the Board of Directors directed that the current account of the company with the Chartered Bank, Bombay, be operated jointly by Chokhani and Raghunath Rai, P.W. 4.
Ragbunath Rai, joined the company in 1921 as a Clerk, became Chief Accountant in 1940 and Secretary cum Chief Accountant of the company from August 17, 1954.
The modus operandi of the joint operation of the bank account by Chokhani and Raghunath Rai amounted, in practice to Chokbani 's operating that account alone.
Chokbani used to get a number of blank cheques signed by Raghunath Rai, who worked at Delhi.
Chokhani signed those cheques when actually issued.
In order to have signed cheques in possession whenever needed, two cheque books were used.
When the signed cheques were nearing depletion in one cheque book, Chokhani would send the other cheque book to Raghunath Rai for signing again a number of cheques.
Thus Raghunath Rai did not actually know when and to whom and for what amount the cheques would be actually issued and therefore, so far as the company was concerned, the real operation of its banking account was done by Chokhani alone.
This system led to the use of the company 's funds for unauthorized purposes.
Chokhani used to purchase and sell securities on behalf of the company at Bombay.
Most of the securities were sent to Delhi and kept with the Imperial Bank of India there.
The other securities remained at Bombay and were kept with the Chartered Bank.
Sometimes securities were kept with the Reserve Bank of India and inscribed stock was obtained instead.
The presence, of the inscribed stock was a guarantee that the securities were, in the Bank.
261 Chokhani was not empowered by any resolution of the Board of Directors to purchase and sell securities.
According to the prosecution, he purchased and sold securities under the instructions of Dalmia.
Dalmia and Chokhani state that Dalmia had authorised Chokhani in general to purchase and sell securities and that it was in pursuance of such authorisation that Chokhani on his own purchased and sold securities without any further reference to Dalmia or further instructions from Dalmia.
The transactions which have given rise to the present proceedings against the appellants consisted of purchase of securities for this company and sale of ' the securities which the company held.
The transactions were conducted through recognised brokers and ostensibly were normal transactions.
The misappropriation of funds of the company arose in this way.
Chokhani entered into a transaction of purchase of securities with a broker.
The broker entered into a transaction of purchase of the same securities from a company named Bhagwati Trading Company which was owned by Vishnu Prasad, appellant, nephew of Chokhani and aged about 19 years in 1954.
The entire business for Bhagwati Trading Company was really conducted by Chokhani.
The securities purchased were not delivered by the brokers to Chokhani.
It is said that Chokhani instructed the brokers that he would have the securities from Bhagwati Trading, Company.
The fact, however, Chokhani however was that Bhagwati Trading Company did not deliver the securities.
Chokhani however issued cheques in payment of the purchase price of the securities to Bhagwati Trading Company.
Thus, the amount of the cheques was paid out of the company 's funds without any gain to it.
The sale transactions consisted in the sale of the securities held or supposed to be held by the company to a broker and the price obtained from 262 the sale was unutilised in purchasing formally further securities which were not received: The purchase transaction followed the same pattern, viz., Chokhani purchased for the company from a broker, the broker purchased the same securities from Bhagwati Trading Company and the delivery of the securities was agreed to be given by Bhagwati Trading Company to Chokhani.
Bhagwati Trading Company did not deliver the securities but received the price from the Insurance Company.
In a few cases, securities so purchased and not received were received later when fresh genuine purchase of similar securities took place from the funds of the Bharat Union Agencies or Bhagwati Trading Company.
These securities were got endorsed in favour of the Insurance Company.
The funds of the company, ostensibly spent on the purchase of securities, ultimately reached another company the Bharat Union Agencies.
Bharat Union Agencies ( hereinafter referred to as the Union Agencies) was a company which dealt in speculation in shares and, according to the prosecution was practically owned by Dalmia who held its shares either in his own names or in the names of persons or firms connected with him.
The Union Agencies suffered Icsses in the relevant period from August 1954 to September, 1955.
The prosecution case is that to provide funds for the payment of these losses at the due time, the accused persons entered into the conspiracy for the diversion of the funds of the Insurance Company to the Union Agencies.
To cover up this unauthorised transfer of funds, the various steps for the transfer of funds from one company to the other and the falsification of accounts of the Insurance Company and the Union Agencies took place and this conduct of the accused gave rise to the various offences they were charged With and convicted of.
263 The real nature of the sale and ' purchase transactions of the securities did not come to the notice of the head office of the Insurance Company at Delhi as Chokhani communicated to the head office the contracts of sale and purchase with the brokers ' statements of accounts, with a covering letter stating the purchase of securities from the brokers, without mentioning that the securities had not been actually received or that the cheques in payment of the purchase price were issued to Bhagwati Trading Company and not to the brokers.
Raghunath Rai, the Secretary cum Accountant of the Insurance Company, on getting the advice about the purchase of securities used to inquire from Dalmia about the transaction and used to get the reply that Chokhani had purchased them under Dalmia 's instructions.
Thereafter, the usual procedure in making the entries with respect to the purchase of securities was followed in the office and ultimately the purchase of securities used to be confirmed at the meeting of the Board of Directors.
It is said that the matter was put up in the meeting with an office note which recorded that the purchase was under the instructions of the Chairman.
Dalmia however, denies that Raghunath Rai ever approached him for the confirmation or approval of the purchase transaction and that he told him that the purchase transaction was entered into under his instructions.
The firm of Khanna and Annadhanam, Chartered Accountants, was appointed by the Bharat Insurance Company, its auditors for the year 1954.
Shri Khanna carried out the audit and was not satisfied with respect to certain matters and that made him ask for the counterfoils of the cheques and for the production of securities and for a satisfactory explanation of the securities not with the company at Delhi.
264 The matter, however, came to a head not on account of the auditors ' report, but on account of Shri Kaul, Deputy Secretary , Ministry of Finance, Government of India, hearing at Bombay in September 1955 a rumour about the unsatisfactory position of the securities of the Insurance Company.
He contacted Dalmia and learnt on September 16, 1955 from Dalmia 's relatives that there was a short fall securities.
He pursued the matter Departmentally and, eventually, the Government of India appointed Shri Annadhanam under a. 33 (1) of the to investigate into the affairs of the company.
This was done on September 19, 1955.
Dalmia is said to have made a confessional statement to Annadhanam on September 20.
Attempt was made to reimburse the Insurance Company with respect to the short fall in securities.
The matter was, however, made over to the Police and the appellants and a few other persons, acquitted by the Sessions Judge, were proceeded against as a result of the investigation.
Dalmia 's defence, in brief, is that be had nothing to do with the details of the working of the company, that he had authorised Chokhani, in 1953, to purchase and sell securities and that thereafter Chokbani on his own purchased and sold securities.
He had no knowledge of the actual modus operandi of Chokhani which led to the diversion of the funds of the company to the Union Agencies.
He admits knowledge of the losses incurred by the Union Agencies and being told by Chokhani that he would arrange funds to meet them.
He denies that he was a party to what Chokhani did.
Chokhani admits that he carried out the transactions in the form alleged in order to meet the losses of the Union Agencies of which he was an employee.
He states that be did so as he expected that the Union Agencies would, in due course, 265 make tip the losses and the money would be returned to the Insurance Company.
According to, him, he was under the impression that what he did amounted to giving of a loan by the Insurance Company to the Union Agencies and that there was nothing wrong in it.
He asserts emphatically that if he bid known that he was doing, was wrongful, he would have never done it and would have utilised other means to raise the money to meet the losses of the Union Agencies as he had large credit in the business circle at Bombay and as the Union Agencies possessed shares which would be sold to meet the losses.
Vishnu Prasad expresses his absolute ignorance about the transactions which were entered into on behalf of Bbagwati Trading Company and states that what he did himself was under the instructions of Chokhani, but in ignorance of the real nature of the transactions.
Gurha denies that he was a party to the fabrication of false accounts and vouchers in the furtherance of the interests of the conspiracy.
The learned Sessions Judge found the offences charged against the appellants proved on the basis of the circumstances established in the case and, accordingly, convicted them as stated above.
The High Court substantially agreed with the findings of the Sessions Judge except that it did not rely on the confession of Dalmia.
Mr. Dingle Foot, counsel for Dalmia, has raised a number of contentions, both of law and of facts.
We propose to deal with the points of law first.
In order to appreciate the points of law raised by Mr. Dingle Foot, we may now state the charges which were framed against the various appellants.
266 The charge under section 120 B read with section 409, I.P.C., was against the appellants and five other persons and read: "I, Din Dayal Sharma, Magistrate I Class, Delhi, do hereby charge you, R. Dalmia (Ram Krishna Dalmia) s/o etc.
G. L. Chokhani s/o etc.
Bajranglal Chokhani s/o etc.
Vishnu Pershad Bajranglal s/oetc.
R. P. Gurha (Ragbubir Pershad Gurba) s/o etc. 6.
J. section Mittal (Jyoti Swarup Mittal) s/o etc.
7. section N. Dudani (Shri Niwas Dudani) s/o etc. 8.
G. section Lakhotia (Gauri Sbadker Lakbotia) s/o etc.
V. G. Kannan Vellore Govindaraj Kannan S/o etc.
accused as under : That you, R. Dalmia, G. L. Chokhani, Bajrang Lal Chokhani, Vishnu Pershad Bajranglal, R. P. Gurha, J. section Mittal, section N. Dudani, G. section Lakhotia and V. G. Karinan, during the period between August 1954 and September 1955 at Delhi, Bombay and other places in India.
were parties to a criminal conspiracy to do and cause to be done illegal acts ; viz., criminal breach of trust of the funds of the Bharat Insurance Company Ltd., by agreeing amongst yourselves and with others that criminal breach of trust be Committed by you R. Dalmia and G. L. Chokhani 267 in respect of the funds of the said Insurance Company in current account No. 1120 of the said Insurance Company with the Chartered Bank of India, Australia and China, Ltd., Bombay, the dominion over which funds was entrusted to you R. Dalmia in your capacity as Chairman and the Principal Officer of the said Insurance Company, and to you G. L. Chokhani, in your capacity as Agent of the said Insurance Company, for the purpose of meeting losses suffered by you R. Dalmia in forward transaction (of speculation) in shares ; which transactions were carried on in the name of the Bharat Union Agencies Ltd., under the directions and over all control of R. Dalmia, by you, G. L. Chokhani, at Bombay, and by you, R. P. Gurha, J. section Mittal and section N. Dudani at Calcutta; and for other purposes not connected with the affairs of the said Insurance Company, by further agreeing that current account No. R1763 be opened with the Bank of India, Ltd., Bombay and current account No. 1646 with the United Bank of India Ltd., Bombay, in the name of M/s. Bhagwati Trading Company, by you Vishnu Pershed accused with the assistance of you G. L. Chokhani, and Bajranglal Chokhani accused for the illegal purpose of divertin g the funds of the said Insurance Company to the said Bharat Union Agencies, Ltd., by further agreeing that false entries showing that the defalcated funds were invested in Government Securities by the said Insurance Company be got made in the books of 268 accounts of the said Insurance Company at Delhi, and by further agreeing to the making of false and fraudulent entries by you R. P. Gurha, J. section Mittal, G. section Lakhotia, V. G. Kannan, and others, relating to the diversion of funds of the Bharat Insurance Company to the Bharat Union Agencies Ltd., through M/s. Bhagwati Trading Company, in the books of account of the said Bharat Union Agencies, Ltd., and its allied concern known as Asia Udyog Ltd., and that the same acts were committed in pursuance of the said agreement and thereby you committed an offence punishable under section 120 B read with section 409 I.P.C., and within the cognizance of the Court of Sessions.
" Dalmia was further charged on two counts for an offence under section 409 I. P. C.
These charges were as follows : "I Din Dayal Sharma, Magistrate I Class, Delhi charge you, R. Dalmia accused as under : FIRSTLY, that yon R. Dalmia, in Pursuance of the said conspiracy between the 9th day of August 1954 and the 8th day of August 1955, at Delhi.
Being the Agent, in your capacity as Chairman of the Board of Directors and the Principal Officer of the Bharat Insurance Company Ltd., and as such being entrusted with dominion over the funds of the said Bharat Insurance Company, committed criminal breach of trust of the 269 funds of the Bharat Insurance Company Ltd., amounting to Rs. 2,37,483 9 0, by wilfully suffering your co accused G. L. Chokhani to dishonestly misappropriate the said funds and dishonestly use or dispose of the said funds in violation of the directions of law and the implied contract existing between you and the said Bharat Insurance Company, prescribing the mode in which such trust was to be discharged, by withdrawing the said funds from current account No. 1120 of the said Bharat Insurance Company with the Chartered Bank of India, Australia & China, Ltd., Bombay, by means of cheque Nos.
B 540329 etc., issued in favour of M/s. Bhagwati Trading Company, Bombay, and cheque No. B 540360 in favour of F. C. Podder, and by dishonestly utilising the said funds for meeting losses suffered by you in forward transactions in shares carried on in the name of Bharat Union Agencies, Ltd., and for other purposes not connected with the affairs of the said Bharat Insurance Company ; and thereby committed an offence punishable under section 409, 1.
P. C., and within the cognizance of the Court of Sessions; ,SECONDLY, that you R. Dalmia, in pursuance of the said conspiracy between the 9th day of August 1955 and the 30th day of September 1955, at Delhi, Being the Agent in your capacity as Chairman of the Board of Directors and the Principal Officer of the Bharat Insurance Company, Ltd., and as such being entrusted with dominion over the funds of the said Bharat Insurance Company, 270 committed criminal breach of trust of the funds of the Bharat Insurance Company Ltd., amounting to Rs. 55,43,220 12 0, by wilfully suffering your co accused G.L. Chokhani to dishonestly misappropriate the said funds and dishonestly use or dispose of the said funds in violation of the directions of law and the implied contract existing between you and the said Bharat Insurance Company prescribing the mode in which such trust was to be discharged, by withdrawing the said funds from current account No. 1120 of the said Bharat Insurance Company with the Chartered Bank of India, Australia & China, Ltd., Bombay by means of Cheque Nos.
B 564835. issued in favour of M/s. Bhagwati Trading Company Bombay, and, by dishonestly utilising the said funds for meeting losses suffered by you in forward transactions in shares carried on in the name of the Bharat Union Agencies Ltd., and for other purposes not connected with the affairs of the said Bharat Insurance Company, and thereby committed an offence punishable under section 409 1.
P. C., and within the cognizance of the Court of Sessions." Mr. Dingle Foot has raised the following contentions (1) The Delhi Court had no territorial jurisdiction to try offences of criminal breach of trust committed by Chokhani at Bombay.
(2) Therefore, there had been misjoinder of charges.
(3) The defect of misjoinder of charges was 271 fatal to the validity of the trial and was not curable under a. 531 section
537 of the Code.
(4) The substantive charge of the offence under section 409, 1.
P. C., against Dalmia offended against the provisions of a. 233 of the Code; therefore the whole trial was bad.
(5) The funds of the Bharat Insurance Company in the Chartered Bank, Bombay, which were alleged to have been misappropriated were not "property ' within the meaning of sections 405 and 409, I. P. C. (6) If they were, Dalmia did not have dominion over them.
(7) Dalmia was not an agent ' within the meaning of section 409 I. P. C., as only that person could be such agent who professionally carried on the business of agency.
(8) If Dalmia 's conviction for an offence under section 409 I. P. C., fails, the conviction for conspiracy must also fail as conspiracy must be proved as laid.
(9) The confessional statement Exhibit P 10 made by Dalmia on September 20, 1955, was not admissible in evidence.
(10) If the confessional statement was not inadmissible in evidence in view of section 24 of the Indian Evidence Act, it was inadmissible in view of the provisions of cl.
(3) of article 20 of the Constitution.
(11) The prosecution has failed to establish that Dalmia was synonymous with Bharat Union Agencies Ltd. (12) Both the Sessions Judge and the High Court failed to consider the question of onus of proof i.e., failed to consider whether the evidence on record really proved or established the conclusion arrived at by the Courts.
272 (13) Both the Courts below erred in their approach to the evidence of Raghunath Rai.
(14) Both the Courts below were wrong in holding that there was adequate corroboration of the evidence of Reounath Rai who was an accomplice or at least such a witness whose testimony required corroboration.
(15) It is not established with the certainty required by law that Dalmia had knowledge of the impugned transactions at the time they were entered into.
We have heared the learned counsel for the parties on facts, even though there are concurrent findings of fact, as Mr. Dingle Foot has referred us to a large number of inaccuracies, most of them not of much importance, in the narration of facts in the judgment of the High Court and has also complained of the omission from discussion of certain matters which were admittedly urged before the High Court and also of misapprehension of certain arguments presented by him.
We need not, however, specifically consider points No. 12 to 15 as questions urged in that form.
In discussing the evidence of Ragbunath Rai, we would discuss the relevant contentions of Mr. Dingle Foot, having a bearing on Raghunath Rai 's reliability.
Our view of the facts will naturally dispose of the last point raised by him.
Mr. Dingle Foot 's first four contentions relating to the illegalities in procedure may now be deal ,with.
The two charges under section 409, I.P.C., against Chokbani mentioned that he committed criminal breach of trust in pursuance of the said conspiracy.
One of the charges related to the period from August 9, 1954 to August 8, 1955 and the other related to the period from August 9, 1955 to September 30, 1955.
273 This Court held in Purushotam Das Dalmia vs State of West Bengal (1) that the Court having jurisdiction to try the offence of conspiracy has also jurisdiction to try an offence constituted by the overt acts which are committed, in pursuance of the conspiracy, beyond its jurisdiction.
M. Dingle Foot submitted that this decision required reconsideration and we heard him and the learned Solicitor General on the point and, having considered their submissions, came to the conclusion that no case for reconsideration was made out and accordingly expressed our view during the hearing of these appeals.
We need not, therefore, discuss the first contention of Mr. Dingle Foot and following the decision in Purushottam Das Dalmia 's case(1) hold that the Delhi Court had jurisdiction to try Chokhani of the offence under section 409 I.P.C. as the offence was alleged to have been committed in pursuance of the criminal conspiracy with which he and the other co accused were charged.
In view of this opinion, the second and third contentions do not arise for consideration.
The fourth contention is developed by Mr.Dingle Foot thus.
The relevant portion of the charge under section 409 I. P. C., against Dalmia reads: "Firstly, that you Dalmia, in pursuance of the said conspiracy between. being the Agent, in your capacity as Chairman of Board of Directors and as Principal Officer of the Bharat Insurance Company Ltd., and as such being entrusted with dominion over the.
funds of the said Bharat Insurance Company, committed criminal breach of trust of the fund, . by wilfully suffering your co accused G. L. Chokhani to dishonestly misappropriate the said funds and dishonestly use or dispose of the said funds in violations of the directions of law and the implied contract existing between you and the said Bharat Insurance (1) [1962]2S.C.R101. 274 Company prescribing the mode in which such trust was to be discharged. " This charge can be split up into four charges, each of the charges being restricted to one particular mode of committing the offence of criminal breach of trust.
These four offences of criminal breach of trust were charged in one count, each of these four amounting to the offence of criminal breach of trust by wilfully suffering Chokhani (i) to dishonestly misappropriate the said funds; (ii) to dishonestly use the said funds in violation of the directions of law; (iii) to dishonestly dispose of the said funds in violation of the directions of law; (iv) to dishon estly use the said funds in violation of the implied contract existing between Dalmia and the Bharat Insurance Company '.
Section 233 of the Code or Criminal Procedure permits one charge for every distinct offence and directs that every charge shall be tried separately except in the cases mentioned in sections 234, 235, 236 and 239.
Section 234 allows the trial, together, of offences up to three in number, when they be of the same kind and be committed within the space of twelve months.
The contention, in this case is that the four offences into which the charge under section 409 I.P.C. against Dalmia can be split up were distinct offences and therefore could not be tried together.
We do not agree with this contention.
The charge is with respect to one offence, though the mode of committing it is not stated precisely.
If it be complained that the charge framed under s.409 1.
P. C. is vague because it does not specifically state one particular mode in which the offence was committed, the vagueness of the charge will not make the trial illegal, especially when no prejudice is caused to the accused and no contention has been raised that Dalmia was prejudiced by the form of the charge.
275 We may now pass on to the other points raised by Mr. Dingle Foot.
Section 405 I.P.C. defines what amounts to criminal breach of trust.
It reads "Whoever, being in any manner entrusted with property, or with, any dominion over property, dishonestly misappropriates or converts to his own use that propertly, or dishonestly uses or disposes of that property in violation of any direction of law prescribing the mode in which such trust is to be discharged, or of any legal contract, express or implied, which be has made touching the discharge of such trust, or wilfully suffers any other person so to do, commits 'criminal breach of trust '.
" Section 406 provides for punishment for criminal breach of trust.
Section 407 provides for punishment for criminal breach of trust committed by a carrier, wharfinger or warehouse keeper, with respect to property entrusted to them as such and makes their offence more severe than the offence under section 406.
Similarly, section 408 makes the criminal breach of trust committed by a clerk or servant entrusted in any manner, in such capacity, with property or with any dominion over property, more severely punishable than the offence of criminal breach of trust under section 406.
Offences under ss.407 and 108 are similarly punishable.
The last section in the series is section 409 which provides for a still heavier punishment when criminal breach of trust is committed by persons mentioned in that section.
The section reads : "Whoever, being in any manner entrusted with property, or with any dominion over property in his capacity of a public servant or in the way of his business as a banker, merchant, factor, broker, attorney or agent, 276 commits criminal breach of trust in respect of that property, shall be punished with imprisonment for life, or with imprisonment of either description for a term which may ex tended to ten years, and shall also be liable to fine." Both Dalmia and Chokhani have been convicted of the offence under section 409 I.P.C. Mr. Dingle Foot contends that no offence of criminal breach of trust has been committed as the funds of the Bharat Insurance Company in the Bank do not come with the expression 'property ' in section 405 I.P.C.
It is urged that the word 'property ' is used in the Indian Penal Code in different senses, according to the context, and that in section 405 it refers to movable property and not to immovable property or to a chose in action.
It is then contended that the funds which a customer has in a bank represent closes in action, as the relationship between the customer and the banker is that of a creditor and a debtor, as held in Attorney General for Canada vs Attorney General for Province of Quebec & Attorneys General for Saskatchewan, Alberta & Manitoba (1) and in Foley vs Hill (2).
Reliance is also placed for the suggested restricted meaning of property in section 405 I.P.C. on the cases Reg.
vs Girdhar Dharamdas (3); Jugdown Sinha vs Queen Empress( 4) and Ram Chand Gurvala vs King Emperor (5) and also on the scheme of the Indian Penal Code with respect to the use of the expressions 'property ' and 'movable property ' in its various provisions.
The learned Solicitor General has, on the other hand, urged that the word 'property ' should (1) (2) ; (3) [1869] 6 Bom.
High Ct.
Rep. (Crown Cases) 33.
(4) (1895)1.L.R.23Cal.372.
(5) A.I.R.1926Lah 385. 277 be given its widest meaning and that the provisions of the various sections can apply to property other than movable property.
It is not to be restricted to movable property only but includes chose in De. action and the funds of a company in Bank.
We are of opinion that there is no good reason to restrict the meaning of the word 'property ' to movable property only when it is used without any qualification in section 405 or in other sections of the Indian Penal Code Whether the offence defined in a particular section of the Indian Penal Code can be committed in respect of any particular kind of property will depend not on the interpretation of the word 'property ' but on the fact whether that particular kind of property can be subject to the acts covered by that section.
It is in this sense that it may be said that the, word property in a particular section covers only that type of property with respect to which the offence contemplated in that section can be committed.
Section 22 I.P.C. defines 'movable property '.
The definition is not exhaustive.
According to the section the words 'movable property ' are intended to include corporeal property of every description, except land and things attached to the earth or permanently fastened to anything which is attached to the earth.
The definition is of the expression ,movable property ' and not of 'property ' and can apply to all corporeal property except property excluded from the definition.
It is thus clear that the word 'property ' is used in the Code in a much wider sense than the expression movable property '.
It is not therefore necessary to consider in detail what type of property will be included in the various sections of the Indian Penal Code.
In Reg.
vs Girdhar Dharamdas (1) it was held that reading sections 403 and 404 I.P.C. together, section 404 (1) (1869) 6 Bom.
High Ct.
Rep. (Crown Cases) 278 applied only to movable property.
No reasons are given in the judgment.
It is to be noticed that though section 403 I.P.C. speaks of dishonestly misappropriating or converting to one 's own use any movable property, section 404 speaks of only dishonestly misappropriating or converting to one 's own use property.
If the Legislature had intended to restrict the operation of section 404 to movable property only, there war, no reason why the general word was used without the qualifying word ,movable '.
We therefore do not see any reason to I restrict the word 'property ' to , 'movable property only.
We need not express any opinion whether immovable property could be the subject of the offence under section 404 I.P.C. Similarly, we do not see any reason to restrict the word 'property ' in section 405 to movable property ' as held in Jugdown Sinha vs Queen Empress (1).
In that case also the learned Judges gave no reason for their view and just referred to the Bombay Case (2).
Further, the learned Judges observed at page 374 : "In this case the appellant was not at most entrusted with the supervision or management of the factory lands, and the fact that he mismanaged the land does not in our opinion amount to a criminal offence under section 408.
" A different view has been expressed with respect to the content of the word property ' in certain sections of the Indian Penal Code, including section 405.
In Emperor vs Bishan Prasad (3) the right to sell drugs was held to come within the definition of the word 'property ' in section 185, I.P.C. which makes certain conduct at any sale of property an offence.
(1) Col. 372.
(2) (1869) 6 Boni.
High Ct.
Rep. (Crown Cases) 33, 3) All. 128.
279 In Ram Chand Gurwala vs King Emperor (1) the contention that mere transfer of amount from the bank account to his own account by the accused did not amount to misappropriation was repelled, it being held that in order to establish a charge of dishonest misappropriation or criminal breach of trust, it was not necessary that the accused should have actually taken tangible property such as cash from the possession of the bank and transferred it to his own possession, as on the transfer of the amount from the account of the Bank to his own account, the accused removed it from the control of the bank and placed it at his own disposal.
The conviction of the accused for criminal breach of trust was confirmed.
In Manchersha Ardeshir vs Ismail Ibrahim it was held that the word 'property ' in section 421 is wide enough to include a chose in action.
In Daud Khan vs Emperor (3) it was said at page 674 : "Like section 378, section 403 refers to movable property.
Section 404 and some of the other sections following it refer to property without any such qualifying description; and in each case the context must determine whether the property there referred to is intended to be property movable or immoveable.
" The case law, therefore, is more in favour of the wider meaning being given to the word 'property ' in sections where the word is not qualified by any other expression like movable '.
In The Delhi Cloth and General Mills Co. Ltd. V. Harnam Singh (4) this court said "That a debt is property is, we think, clear.
It is a chose in action and is heritable (1) A.I.R. 1926 Lah.
(3) A.I.R. 1925 All.
(2) Bom.
(4) ,417.
280 and assignable and it is treated as property in India under the Transfer of Property Act which calls it an actionable claim '.
" In Allchin vs Coulthard (1) the meaning of the expression fund ' has been discussed it is said: "Much of the obscurity which surrounds this matter is due to a failure to distinguish the two senses in which the phrase 'payment out of a fund ' may be used.
The word fund ' may mean actual cash resources of a particular kind (e. g., money in a drawer or a bank), or it may be a mere accountancy expression used to describe a particular category which a person uses in making up his accounts.
The words 'payment out of when used in connection with the word fund ' in its first meaning connote actual payment, e. g., by taking the money out of the drawer or drawing a cheque on the bank.
When used in connection with the word 'fund ' in its second meaning they connote that, for the purposes of the account in which the fund finds a place, the payment is debited to that fund, an operation which, of course, has no relation to the actual method of payment or the particular cash resources out of which the payment is made.
Thus, if a company makes a payment out of its reserved fundan example of the second meaning of the word fund ' the actual payment is made by cheque drawn on the company 's banking account, the money in which may have been derived from a number of sources".
The expression funds ' in the charge is used in the first sense meaning thereby that Dalmia and Chokhani had dominion over the amount credited to the Bharat Insurance Company in the account (1) , 234, 281 of the Bank, inasmuch as they could draw cheques on that account.
We are therefore of opinion that the funds referred to in the charge did amount to 'property ' within the meaning of that term in section 405 I.P.C.
It is further contended for Dalmia that he had not been entrusted with dominion over the funds in the Banks at Bombay and had no control over them as the Banks had not been informed that Dalmia was empowered to operate on the company 's accounts in the Banks and no specimen signatures of his had been supplied to the Bank.
The omission to inform the Banks that Dalmia was entitled to operate on the account may disable Dalmia to actually issue the cheques on the company 's accounts, but that position does not mean that he did not have any dominion over those accounts.
As Chairman and Principal Officer of the Bharat Insurance Company, he had the power, on behalf of the company, to operate on those accounts.
If no further steps are taken on the execution of the plan, that does not mean that the power which the company had entrusted to him is nullified.
One may have dominion over property but may not exercise any power which he could exercise with respect to it.
Non exercise of the power will not make the dominion entrusted to him, nugatory.
Article 116 of the Articles of Association of the Bharat Insurance Company provides that the business of the company shall be managed by the Directors, who may exercise all such powers of the company as are not, under any particular law or regulation, not to be exercised by them.
Article 117 declares certain powers of the Directors.
Clause (7) of this Article authorises them to draw, make, give, accept, endorse, transfer, discount and negotiate 'such bill of exchange, promissory notes and other similar obligations as may be desirable for carrying on the business of the 282 company.
Clause (10) authorizes them to let, mortgage, sell, or otherwise dispose of any property of the company either absolutely.
Clause (12) authorises them to invest such parts of the fund of the company as shall not be required to satisfy or provide for immediate demands, upon such securities or investments as they may think advisable.
It also provides that the funds of the company shall not be applied in making any loan or guaranteeing any loan made to a Director of the company or to a firm of which such Director is a partner or to a private company of which such Director is a Director.
Clause (23) empowers the Director to deal with and invest any Moneys of the company not immediately required for the purposes thereof, in Government Promissory Notes, Treasury Bills, Bank Deposits, etc.
The bye laws of the company entrusting the Chairman with dominion over its property, were revised in 1951.
The Board of Directors, at their meeting held on September 8, 1951, resolved: "The bye laws as per draft signed by the Chairman for identification be and are hereby approved, in substitution and to the exclusion of the existing bye laws of the company." No such draft as signed by the Chairman has been produced in this case.
Instead, K. L. Gupta, P. W. 112, who was the Manager of the Bharat Insurance Company in 1951 and its General Manager from 1952 to August, 1956, has proved the bye laws, Exhibit P. 786, to be the draft revised bye laws approved by the Board of Directors at that meeting.
He states that he was present at that meeting and had put up these draft bye laws before the Board of Directors and that the Directors, while passing these bye laws, issued a directive that they should come into force on January 1, 1952, and that, accordingly, be added in ink in the opening words of 283 the bye laws that they would be effective from January 1, 1952.
When cross examined by Dalmia himself, he stated that he did not attend any other meeting of the Board of Directors and his presence was Dot noted in the minutes of the meeting.
He further stated emphatically: "I am definite that I put up the bye laws P 786 in the meeting of the Board of Directors.
I did not see any bye laws signed by the Chairman.
" There is no reason why Gupta should depose falsely.
His statement finds corroboration from other facts.
It may be that, as noted in the resolution, it was contemplated that the revised bye laws be signed by the Chairman for the purposes of their identity in future, but by over sight such signatures were not obtained.
There is no evidence that the bye laws approved by the Board of Directors were actually signed by the Chairman Dalmia.
Dalmia has stated so.
It is not necessary for the proof of the bye laws of the company that the original copy of the bye laws bearing any mark of approval of the Committee be produced.
The bye laws of the company can be proved from other evidence.
K. L. Gupta was present at the meeting when the bylaws were passed.
It seems that it was not his duty to attend meetings of the Board of Directors.
He probably attended that meeting because he had prepared the draft of the revised bye laws.
His presence was necessary or at least desirable for explaining the necessary changes in the pre existing bye laws.
He must have got his own copy of the revised bye laws put up before the meeting and it is expected that he would make necessary corrections in his copy in accordance with the form of the bye laws as finally approved at the meeting.
The absence of the copy signed by the Chairman.
if ever one existed, does not therefore make the other evidence about the bye laws of the 284 company in admissible.
The fact that Gupta signed each page of Exhibit P. 786 supports his statement.
There was no reason to sign every page of the copy if it was merely a draft office copy that was with him.
He must have signed each page on account of the importance attached to that copy and that could only be if that copy was to be the basis of the future bye laws of the company.
Copies of the bye laws were supplied to '.he
Imperial Bank, New Delhi, and to the auditor.
They are Exhibits P. 897 and P. 15.
Raghunath Rai deposed about sending the bye laws Exhibits P. 897 to the Imperial Bank, New Delhi, with a covering letter signed by Dalmia on September 4, 1954.
Mehra, P. W. 15, Sub Accountant of the State Bank of India (which took over the under taking of the Imperial Bank of India on July 1, 1955) at the time of his deposition, stated that the State Bank of India was the successor of the Imp erial Bank of India.
Notice was issued by the Court to the State Bank of India to produce latter dated September 4, 1954, addressed by Dalmia to the Agent, Imperial Bank of India, and other documents.
Mehra deposed that in spite of the best search made by the Bank officials that letter could not be found and that Exhibit P. 897 was the copy of the bye laws of the Bharat Insurance Company which he was producing in pursuance of the notice issued by the Court.
It appears from his statement in cross examination that the words received 15th September 1954 meant that copy of the byelaws was received by the Bank on that date.
Mehra could not personally speak about it.
Only such bye laws would have been supplied to the Bank as would have been the corrected bye laws.
These bye law Exhibit P. 897 tally with the bye laws Exhibit P. 786.
Raghunath Rai proves the letter Exhibit P. 896 to be a copy of the letter sent along with these bye laws to the Bank and states that 285 both the original and P. 896 were signed by Dalmia.
He deposed: "exhibit P. 786 are the bye laws of the Bharat Insurance Company which came into operation on 1 1 52 I supplied copy of exhibit p. 786 as the copy of the bye laws of the Bharat Insurance Company to the State Bank of India, New Delhi Shri Dalmia thereupon certified as true copies of the resolutions which were sent along with the copy of the bye laws.
He also signed the covering letter which was sent to the State Bank of India along with the copy of the bye laws exhibit p.786 and the copies of the resolutions.
I produce the carbon copy of the letter dated 4 9 54 which was sent as a covering letter with the bye laws of the Bharat Insurance Company to the Imperial Bank of India, New Delhi.
It is exhibit p. 896.
The carbon copy bears the signatures of R. Dalmia accused, which signatures I identify The aforesaid Bank (Imperial Bank) put a stamp over exhibit p. 896 with regard to the receipt of its original.
The certified copy of the byelaws of the Bharat Insurance Company which was sent for registration to the Imperial Bank along with the original letter of which exhibit p. 896 is a carbon copy is Ex.p.
897 (heretofore marked C).
The copy of the bye laws has been certified to be true by me under my signatures.
" Dalmia states in answer to question No. 15 (put to him under section 342, Cr. P. C.) that the signature,,, on exhibit p. 896 appear to be his.
286 Letter Exhibit P. 896 may be usefully quoted here "SEC The Agent, 4 9 54 Imperial Bank of India, New Delhi: Dear Sir, Re : Safe Custody of Govt.
Securities.
We are sending herewith true copies of Resolution No. 4 dated 10th March, 1949, Resolution No. 3 dated 10th March, 1949, and Resolution No. 8 dated 8th September, 1951, along with a certified copy of the Bye laws of the Company for registration at your end.
By virtue of article 12 clause (e) of the Byelaws of the Company I am empowered to deal in Government Securities etc.
The specimen signatures Card of the undersigned is also sent herewith.
Yours faithfully, Encls.
5 Sd/ R. Dalmia Chairman.
" By Resolution No. 4 dated March 10, 1949, Dalmia was co opted Director of the Company.
By Resolution No. 'a dated March 19, 1949, Dalmia was elected Chairman of the Board of Directors.
Resolution No. 8 dated September 8, 1951 was : "Considered the draft bye laws of the Company and Resolved that the Bye laws as per draft signed by the Chairman for identification be and are hereby approved in substitution and to the exclusion of the existing bye laws of the Company.
" 287 The letter Exhibit P. 896 not only supports the statement of Raghunath Rai about the copy of the bye laws supplied to the Bank to be a certified copy but also the admission of Dalmia that he was empowered to deal in Government Securities etc., by virtue of article 12, clause (e), of the bye laws of the company.
There therefore remains no room for doubt that bye laws Exhibit P. 897 are the certified copies of the bye laws of the company passed on September 8, 1951 and in force on September 4, 1954.
We are therefore of opinion that either due to oversight the draft bye laws said to be signed by the Chairman Dalmia were not signed by him or that such signed copy is no more available and that bye laws Exhibits P. 786 and P. 897 are the correct bye laws of the company.
Article 12 of the company 's bye laws provides that the Chairman shall exercise the powers enumerated in that article in addition to all the powers delegated to the Managing Director.
Clause (e) of this article authorises him to negotiate, transfer, buy and sell Government Securities etc., and to pledge, endorse, withdraw or otherwise deal with them.
Article 13 of the bye laws mentions the powers of the Managing Director.
Clause (12) of this article empowers the Managing Director to make, draw, sign or endorse, purchase, sell, discount or accept cheques, drafts, hundies, bills of exchange and other negotiable instruments in the name and on behalf of the company.
Article 14 of the bye laws originally mentioned the powers of the Manager.
The Board of Directors, by resolution No. 4 dated October 6,1952 resolved that these powers be exercised by.
K. L. Gupta as General Manager and the necessary corrections be made.
288 By resolution No. 4 dated August 30, 1954, of the Board of Directors, the General Manager was empowered to make, draw, sign or endorse, purchase, sell, discount or accept cheques, drafts, hundies, bills of exchange and other negotiable instruments in the name and on behalf of the company and to exercise all such powers from time to time incidental to the post of the General Manager of the Company and not otherwise excepted.
By the same resolution, the words 'Managing Director ' in Article 12 of the Bye laws stating the powers of the Chairman, were substituted by the words 'General Manager. ' Thereafter, the Chairman could exercise the powers of the General Manager conferred under the byelaws or other resolutions of the Board.
It is clear therefore from these provisions of the articles and bye laws of the company and the resolutions of the Board of Directors, that the Chairman and the General Manager had the power to draw on the funds of the company.
Chokhani had authority to operate on the account of the Bharat Insurance Company at Bombay under the resolution of the Board of Directors dated January 31, 1951.
Both Dalmia and Chokhani therefore had dominion over the funds of the Insurance Company.
In Peoples Bank vs Harkishen Lal (1) it was ,stated "Lala Harkishen Lal as Chairman is a trustee of all the moneys of the Bank." In Palmer 's Company Law, 20th Edition, is stated at page 517 "Directors are not only agents but they are in some sense and to some extent trustees or in the position of trustees." (1) A.I.R. 1936 Lah.
468, 409. 289 In G. E. Ry.
Co. vs Turner (1) Lord Selborne said : "The directors are the mere trustees or agents of the company trustees of the company 's money and property agents in the transactions which they enter into on behalf of the company.
In Re. Forest of Dean etc.
, Co. (2) Sir George Jessel said: "Directors are called trustees.
They are no doubt trustees of assets which have come into their hands, or which are under their control.
" We are therefore of opinion that Dalmia and Chokhani were entrusted with the dominion over the funds of the Bharat Insurance Company in the Banks.
It has been urged for Chokhani that he could not have committed the offence of criminal breach of trust when he alone had not the dominion over the funds of the Insurance Company, the accounts of which he could not operate alone.
Both Ragbunath Rai and he could operate on the accounts jointly.
In support of this contention, reliance is placed on the case reported as Bindeshwari vs King Emperor (3).
We do not agree with the contention.
Bindeshwari 's Case (3 ) does not support the contention.
In that case, a joint family firm was appointed Government stockist of food grain.
The partners of the firm were Bindeshwari and his younger brother.
On check, shortage in food grain was found.
Bindeshwari was prosecuted and convicted by the trial Court of an offence under section 409 1.
On appeal, the High Court set aside the conviction of Bindeshwari of the offence under (1)L. R. ,152 (2) L. R. ,453, (3) Pat. 703, 715.
290 section 409 I. P. C. and held him not guilty of the offence under that section as the entrustment of the grain was made to the firm and not to him personally.
The High Court convicted him, instead, of the offence under section 403 1.
P. C. This is clear from the observation : "In my opinion, the Government rice was entrusted to the firm of which the petitioner and his younger brother were the proprietors.
Technically speaking, there was no entrustment to the petitioner personally.
" This case clearly did not deal directly with the question whether a person who, jointly with another, has dominion over certain property, can commit criminal breach of trust with respect to that property or not.
On the other hand, a Full Bench of the Calcutta High Court took a different view in Nrigendro Lall Chatterjee vs Okhoy Coomar Shaw (1).
The Court said : "We think the word, of Section 405 of the Penal Code are large enough to include the case of a partner, if it be proved that he was in fact entrusted with the partnership property, or with a dominion over it, and has dishonestly misappropriated it, or converted it to his own use." Similar view was expressed in Emperor vs Jagannath Raghunathdas.
(2) Beaumont C. J.Said at.
But, in my opinion, the words of the section (section 405) are quite wide enough to cover the case of a partner.
Where one partner is given authority by the other partners to collect moneys or property of the firm I think that he is entrusted with dominion over (1) (1874) 21 W. R. (criminal Rulings) 59. 61 ,1521 291 that property, and if he dishonestly misappro priates it, then I think he comes within the Section.
" Barlee J., agreed with this opinion.
The effect of Raghupath Rai 's delivering the blank cheques signed by him to Chokbani may amount to putting Chokbani in sole control over the funds of the Insurance Company in the Bank and there would Dot remain any question of Chokhani 's having joint dominion over those funds and this contention, therefore, will not be available to him.
It was also urged for Chokhani that he bad obtained control over the funds of the Insurance Company by cheating Raghunath Rai inasmuch as he got blank cheques signed by the latter on the representation that they would be used for the legitimate purpose of the company but latter used them for purposes not connected with the company and that, therefore, he could not commit the offence of criminal breach of trust.
This may be so, but Chokhani did not got dominion over the funds on account of Raghunath Rai 's signing blank cheques.
The signing of the blank cheques merely facilitated Chokhani 's committing breach of trust.
He got control and dominion over the funds under the powers conferred on him by the Board of Directors, by its resolution authorising him and Raghunath Rai to operate on the accounts of the Insurance Company with the Chartered Bank, Bombay.
The next contention is that Dalmia and Chokhani were not agents as contemplated by section 409 I. P. C.
The contention is that the word "agent ' in this Section refers ' to a professional agent ' i. e., a person who carried on the profession of agency and that as Dalmia and Chekbani did not carry on such profession, they could not be covered by the expression 'agent ' in his section.
292 Reliance is placed on the case reported as Mahumarakalage Edward Andrew Cooray vs The Queen (1).
This case approved of what was said in Reg.
vs Portugal (2) and it would better to discuss that case first.
That case related to an offence being committed by the accused under section 75 of the Larceny Act, 1861 (24 & 25 Viet. c. 96).
The relevant portion of the section reads.
"Whosoever, having been intrusted, either solely or jointly with any other person, as a banker, merchant, broker, attorney or other agent, with any chattel or valuable security, or any power of attorney for the sale or transfer of any share or interest in any public stock or find. . or in any stock or fund of any body corporate, & c. for safe custody or for any special purpose, without any authority to sell, negotiate, transfer, or pledge, shall, in violation of good faith and contrary to the object or purpose for which such chattel & c., was intrusted to him sell, negotiate, pledge, & c., or in any manner convert to his own use or benefit, or the use or benefit of any person other than the person by whom he shall have been so intrusted. . shall be guilty of a misdemeanor.
The accused in that case was employed by a firm of Railway contractors for commission ' to use his influence to obtain for them a contract for the construction of a railway and docks in France.
In the course of his employment, he was entrusted with a cheque for pound 500/ for the purpose of opening a credit in their name in one of the two specified banks in Paris.
He was alleged to have misappropriated the cheque to his own use fraudulently.
He was also alleged to have fraudulently dealt with another bill for pound 250/ and other securities which had (1) , 419.
(2) 293 been entrusted to him for a special purpose.
He was committed for trial for the offence under section 75.
He, on arrest under an extradition warrant, was committed to prison with a view to his extradition in respect of an offence committed in France.
It was contended on his behalf: "To justify the committal under the Extradition Act, it was incumbent on the prosecutors to offer prima facie evidence that the money and securities which the prisoner was charged with having misappropriated were intrusted to him in the capacity of "agent ', that is, a person who carries on the business or occupation of an agent, and intrusted with them in that capacity, and without any authority to sell, pledge, or negotiate, and not one who upon one solitary occasion acts in a fiduciary character.
" It was held, in view of the section referring to ,banker, merchant, broker, attorney or other agent ', that a. 75 was limited to a class, and did not apply to everyone who might happen to be intrusted as prescribed by the section, but only to the class of persons therein mentioned.
It was further said : "In our judgment, the 'other agent ' mentioned in this section means one whose business or profession it is to receive money, securities or chattels for safe custody or other special purpose; and that the term does not include a person who carries on no such business or profession, or the like.
The section is aimed at those classes who carry on the occupations or similar occupations to those mentioned in the section, and not at those who carry on no such occupation, but who may happen from time to time to undertake some fiduciary position, whether for money or otherwise".
294 This case therefore is authority to this effect only that the term agent ' in that section does not include a person who just acts as ,in agent for another for a particular purpose with respect to some property that is entrusted to him, i. e., does not include a person who becomes an agent as a consequence of what he has been charged to do, and who has been asked to do a certain thing with respect the property entrusted to him, but includes such person who, before such entrustment and before being asked to do something, already carried on snob business or profession or the like as necessitates, in the course of such business etc.
, his receiving money, securities or chattels for safe custody or other special purpose.
That is to say, he is already an agent for the purpose of doing such acts and is subsequently entrusted with property with direction to deal with it in a certain manner.
It is not bold that a person to be an agent within that section must carry on the profession of an agent or must have an agency.
The accused, in that case, was therefore not held to be an agent.
It may also be noticed that he was so employed for a specific purpose which was to use his influence to obtain for his employers a contract for the construction of a railways and docks in France.
This assignment did not amount to making him an agent of the employers for receiving money etc.
In Mahumarakalage Edward Andrew Cooray 's Case (1) the Privy Council was dealing with the appeal of a person who had been convicted under section 392 of the Penal Code of Ceylon.
Sections 388 to 391 of the Ceylon Penal Code correspond to sections 405 to 408 of the Indian Penal Code.
Section 392 corresponds to section 409 1.
It was contended before the Privy Council that the offence under section 392 was limited to the case of one who carried on an agency business and did not comprehend a person who was casually entrusted with money either on one individual (1) 419.
295 occasion or a number of occasions, provided that the evidence did not establish that he carried on an agency business.
Their Lordships were of opinion that the reasoning in Reg.
vs Portugal (1) for the view that section 75 of the Larceny Act was limited to the class of persons mentioned in it, was directly applicable to the case they were considering, subject to some immaterial variations, arid finally said : " 'In enunciating the construction which they have placed on section 392 they would point out that they are in no way impugning the decisions is certain cases that one act of en trustment may constitute a man a factor for another provided he is entrusted in his busi ness as a mercantile agent, nor are they deciding what activity is required to establish that an individual is carrying on the business of an agent".
These observations mean that the view that section 75 was limited to the class of persons mentioned therein did not affect the correctness of the view that a certain act of entrustment may Constitute a person a factor for another provided be was entrusted in his business as a mercantile agent.
It follows that a certain entrustment, provided it be in the course of business as a mercantile agent, would make the person entrusted with a factor, i. e., would make him belong to the class of factors.
The criterion to hold a person a factor, therefore, is that his business be that of a mercantile agent and not necessarily that he be a professional mercantile agent.
Further, their Lordships left it open as to what kind of activity on the part of a person alleged to be an agent would establish that he was carrying on the business of an agent.
This again makes it clear that the emphasis is not on the person 's carrying on the profession of an agent, but on his carrying on the business of an agent.
(1) 296 These cases, therefore, do not support the contention for Dalmia and Chokhani that the term "agent ' in section 409 I. P. C., which corresponds to section 392 of the Ceylon Penal Code., is restricted only to those persons who carry on the profession of agents.
These cases are authority for the view that the word 'agent ' would include a person who belongs to the class of agents, i.e., who carries on the business of an agent.
Further, the accused in the Privy Council Case (1) was not held to be an agent.
In so holding, their Lordships said : "In the present case the appellant clearly was not doing so, and was in no sense entitled te receive the money entrusted to him in any capacity, nor indeed, had Mr. Ranatunga authority to make him agent to hand it over to the bank." To appreciate these reasons, we may mention here the facts of that case.
The accused was the President of the Salpiti Koral Union.
The Union supplied goods to its member societies through three depots.
The accused was also President of the Committee which controlled one of these depots.
He was also Vice President of the Co operative Central Bank which advanced moneys to business societies to enable them to buy their stocks.
The societies repaid the advance weekly through cheques and/or money orders, except when the advance be of small sums.
The Central Bank, in its turn, paid in the money orders, cheques and cash to its account with the Bank of Ceylon.
The accused appointed one Ranatunga to be the Manager of the depot which was managed by the Committee of which he was the President.
The payments to the Central Bank used to be made through him.
The accused instructed this Manager to follow a course other than the prescribed routine.
It was that he was to collect (1) , 419. 297 the amounts from the stores in cash and hand them over to him for transmission to the Bank.
The accused thus got the cash from the Manager and sent his own cheques in substitution for the amounts to the Central Bank.
He also arranged as the Vice President of that Bank that in certain cases those cheques be not sent forward for collection and the result was that he could thus misappropriate a large sum of money.
The Privy Council said that the accused was not entitled to receive the money entrusted to him in any capacity, that is to say as the Vice President of the Cooperative Central Bank or the President of the Union controlling the depots or as the President of the Committee.
It follows from this that he could not have received the money in the course of his duties as, any of these office bearers.
Further, the Manager of the depot had no authority to make the accused an agent for purposes of transmitting the money to the Bank.
The reason why the accused was not held to be an agent was not that he was not a professional agent.
The reason mainly was that the amount was not entrusted to him in the course of the duties he had to discharge as the office bearers of the various institutions.
Learned counsel also made reference to the case reported as Rangamannar Chatti vs Emperor (1).
it is not of much help.
The accused there is said to have denied all knowledge of the jewels which had been given to him by the complainant for pledging and had been pledged and redeemed.
It was said that it was not a case under a. 409 I. P. C.
The reason given was: "There is no allegation that the jewels were entrusted to the accused 'in the way of his business as an agent '.
No doubt he is said to (1) (1935) M.W.M, 649.
298 have acted as the complainant 's agent, but he is not professionally the complainants agent nor was this affair a business transaction.
" The reasons emphasize both those aspects we have referred to in considering the judgment of the Privy Council in Mahumarakalag Edward Andrew Cooray 's Case (1), and we need not say anything more about it.
What section 409 I.P.C. requires is that the person alleged to have committed criminal breach of trust with respect to any property be entrusted with that property or with dominion over that property in the way of his business as an agent.
The expression in the way of his business ' means that the property is entrusted to him in the ordinary course of his duty or habitual occupation or profession or trade '.
He should get the entrustment or dominion in his capacity as agent.
In other words, the requirements of this section would be satisfied if the person be an agent of another and that other person entrusts him with property or with any dominion over that property in the course of his duties as an agent.
A person may be an agent of another for some purpose and if he is entrusted with property not in connection with that purpose but for another purpose, that entrustment will not be entrustment for the purposes of section 409 I.P.C. if any breach of trust is committed by that person.
This interpretation in no way goes against what has been held in Reg.
vs Portugal (2) or in Mahumarakalage Edward Andrew Cooray 's 'Case (1), and finds support from the fact that the section also deals with entrustment of property or with any dominion over property to a person in his capacity of a public servant.
A different expression 'in the way of his business ' is used in place of the expression 'in his capacity, ' to make it clear that entrustment of property in the capacity of agent will not, by itself, be sufficient to make (1) 419.
(2) (188 5) lb Q.B.D. 487.
299 the criminal breach of trust by the agent a graver offence than any of the offences mentioned is sections 406 to 408 I.P.C.
The criminal breach of trust by an agent would be a graver offence only when he is entrusted with property not only in his capacity as an agent but also in connection with his duties as an agent.
We need not speculate about the reasons which induced the Legislature to make the breach of trust by an agent more severely punishable than the breach of trust committed by any servant.
The agent acts mostly as a representative of the principal and has more powers in dealing with the property of the principal and, consequently, there are greater chances of his misappropriating the property if he be so minded and less chances of his detection.
However, the interpretation we have put on the expression 'in the way of his business ' is also borne out from the Dictionary meanings of that expression and the meanings of the words 'business ' and 'way ', and we give these below for convenience. 'In the way of ' of the nature of, belong ing to the class of, in the course of or routine of (Shorter Oxford English Dictionary) in the matter of, as regards, by way of (Webster 's New Inter national Dictionary, II Edition, Unabrid ged) Business ' occupation, work (Shorter Oxford Eng lish Dictionary) mercantile transactions, buying and selling, duty, special imposed or under 300 taken service, regular occupation (Webster 's New Inter national Dictionary, II Editional, Unabrid ged) duty, province, habitual occupation, profession, trade (Oxford Concise Dictionary) 'Way ' scope, sphere, range, line of occupation Oxford Concise Dictionary) Chokhani was appointed agent of the Bharat Insurance Company on January 31, 1951.
He admits this in his statement under section 342, Cr.
P.C. He signed various cheques as agent of this company and he had been referred to in certain documents as the agent of the company.
Dalmia, as a Director and Chairman of the company, is an agent of the company.
In Palmer 's Company Law, 20th Edition, is stated, at page 513 : "A company can only act by agents, and usually the persons by whom it acts and by whom the business of the company is carried on or superintended are termed directors. .
Again, at page 515 is noted : (Directors are, in the eye of the law, agents of the company for which they act, and the general principles of the law of principal and agent regulate in most respects the relationship of the company and its directors.
,, 301 It was held in Gulab Singh vs Punjab Zamindara Bank (1) and in Jasuwant Singh vs V.V. Puri (2) that a director is an agent of the company.
Both Dalmia and Chokhani being agents of the company the control, if any, they had over the securities and the funds of the company, would be in their capacity as agents of the company and would be in the course of Dalmia 's duty as the Chairman and Director or in the course of Chokhani 's duty as a duly appointed agent of the company.
If they committed any criminal breach of trust with respect to the securities and funds of the company, they would be committing an offence under ss.409 I.P.C.
In view of our opinion with respect to Dalmia and Chokhani being agents within the meaning of section 409 I.P.C. and being entrusted with dominion over the funds of the Bharat Insurance Company in the Banks which comes within the meaning of the words 'property ' in section 409, these appellant would commit the offence of criminal breach of trust under section 409 in case they have dealt with this 'property ' in any manner mentioned in section 405 I.P.C.
We may now proceed to discuss the detailed nature of the transactions said to have taken place in pursuance of the alleged conspiracy.
It is, however, not necessary to give details of all the impugned transaction.
The details of the first few transactions will illustrate how the whole scheme of diverting the funds of the Insurance Company to the Union Agencies was worked.
The Union Agencies suffered losses in its shares speculation business in the beginning of August, 1954.
The share brokers sent statements of accounts dated August 6, 1954, to Chokhani and (1) A. I.R. (2) A.I.R. 1951 Pu n. 99. 302 made demand of Rs. 22,25,687 13 0 in respect of the losses, The total cash assets of the Union Agencies in all it,; banks and offices at Bombay, Calcutta and Delhi amounted to Rs. 2,67,857 11 7 only.
The Union Agencies therefore needed a large sum of money to meet this demand and to meet expected future demands in connection with the losses.
At this crucial time, telephonic communications did take place between presumably Dalmia and Chokhani.
The calls were made from Telephone No. 45031, which is Dalmia 's number at 3, Sikandara Road, New Delhi to Bombay No. 33726, of Cho khani.
Two calls were made on August 7, 1954, three on August 8, two on August 11 and one each on August 13 and August 14, respectively.
Of course, there is no evidence about the conversation which took place at these talks.
The significance of these calls lies in their taking place during the period when the scheme about the diversion of funds was coming into operation for the first time, but in the absence of evidence as to what conversation took place, they furnish merely a circumstance which is not conclusive by itself.
On August 7 and 9, 1954, the Punjab National Bank, Bombay, received Rs. 2,00,000 and Rs. 3,00,000 respectively in the account of the Union Agencies, telegraphically from Delhi.
On the same day, Vishnu Prasad, appellant, opened an account with the Bank of India, Bombay, in the name of Bhagwati Trading Company.
He gave himself out as the sole proprietor and mentioned the business of the company in the form for opening account as merchants and commission agents '.
He made a deposit of Rs. 1, 100 said to have been supplied to him by Chokhani.
On August 11, 1954, Vishnu Prasad made another deposit of Rs. 1,100, again said to have 303 been supplied by Chokhani, as the first deposit in the account he opened with the United Bank of India, Bombay, in the name of Bhagwati Trading Company.
The business of the company was described in the form for opening account as merchants, piece goods dealers. ' There is no dispute now that Bhagwati Trading Company did not carry on any business either as merchants and commission agents or as merchants and piece goods dealers.
Vishnu Prasad states that he acted just at Chokhani told him and did not know the nature of the transactions which were carried on in the name of this company.
It is however clear from the accounts and dealings of this company that its main purpose was simply to act in such a way as to let the funds of the Insurance Company pass on to the Union Agencies, to avoid easy detection of such transfer of funds.
Chokhani states that he did this business as the Union Agencies needed money at that time.
He thought that the Union Agencies would make profit after some time and thereafter pay it back to Bhagwati Trading Company for purchasing securities and therefore he postponed the dates of delivery of the securities to the Insurance Company.
He added that in case of necessity be could raise money by selling or mortgaging the shares of the Union Agencies in the exercise of his power of attorney on its behalf.
We may now revert to the actual transaction gone through to meet the demands in connection with the losses of the Union Agencies.
On August 9, 1954, Chokbani purchased 3% 1963 65 securities of the face value of Rs. 22,00,000 on behalf of the Insurance Company from Naraindas and Sons, Security Brokers.
Chokhani entered, into a cross contract with the same firm of brokers 304 for the sale of similar securities of the same face value on behalf of Bhagwati Trading Company.
He informed the brokers that the payment of purchase price would be made by the Insurance Company to Bhagwati Trading Company from whom it would get the securities.
Thus the actual brokers practically got out of the transaction except for their claim of brokerage.
On August 11, 1954, a similar transaction of purchase on behalf of the Insurance Company from the brokers and sale by Bhagwati Trading Company to those brokers, of 3% 1963 65 securities of the face value of Rs. 5,00,000, was entered into by Chokhani.
It may be mentioned, to avoid repetition, that Chokhani always acted in such transaction which may be referred to as usual purchase transactions both on behalf of the Insurance Company and on behalf of Bhagwati Trading Company, and that the same arrangement was made with respect to the payment of the purchase price and the delivery of securities.
The securities were not delivered to the Insurance Company by Bhagwati Trading Company and yet Chokhani made payment of the purchase price from out of the funds of the Insurance Company.
On August 11, 1954, Chokhani got the statement of accounts from the brokers relating to the purchase of securities Worth Rs. 22,00,000.
The total cost of those securities worked out at Rs. 20,64,058 6 9.
Chokhani made the payment by issuing two cheques in favour of Bhagwati Trading Company, one for Rs. 10,00,000 and the other for the balance, i.e., Rs. 10,64,058 6 9.
Needless to say that he utilised the cheques which had already been signed by Raghunath Rai, in pursuance of the arrangement to facilitate transactions on behalf of the Insurance Company.
305 On August 12, 1954, the statement of account with respect to the purchase of securities worth Rs. 5,00,000 was received.
The cost worked out to Rs. 4,69,134 15 9.
Chokhani made the payment by issuing a cheque for the amount in favour of Bhag wati Trading Company.
All these cheques were drawn on the Chartered Bank, Bombay.
On August 12, 1954, Vishnu Prasad drew cheques for Rs. 9,00,000 in the account of Bhagwati Trading Company in the United Bank of India.
The amount was collected by his father Bajranglal.
He drew another cheque for Rs. 9,60,000 in the account of the Bhagwati Trading Company with the Bank of India, Bombay, and collected the amount personally.
The total amount withdrawn by these two cheques viz., Rs. 18,60,000 was passed on to the Union Agencies through Chokhani that day.
Thereafter Chokhani deposited Rs. 7,00,000 in the account of the Union Agencies with the Bank of India, Rs. 7,00,000, in the account of the Union Agencies with the United Bank of India and Rs. 4,40,000 in the account of the Union Agencies with the Punjab National Bank Ltd. The Punjab National Bank Ltd., Bombay, as already mentioned, had received deposits of Rs. 2,00,000 and Rs. 3,00,000 on August 7 and August 9, 1954, respectively, in the account of the Union Agencies from Delhi.
Between August 9 and August 19, 1954, Chokhani made payment to the brokers on account of the losses suffered by the Union Agencies.
He issued cheques for Rs. 9,37,473 5 9 between August 9 and August 13, 1954, on the account with the Punjab National Bank.
On August 13, he issued cheques on the account of the Union Agency with the United Bank of India in favour of the Bombay brokers on account of the losses of the Union Agencies, for Rs. 7,40,088 5 9.
He also issued, between August 13 and August 19., 1954, cheque for Rs. 6,84,833 14 0 on the Bank of India, in favour 306 of the share brokers at Bombay on account of the losses suffered by the Union Agencies.
Chokhani informed the head office at Delhi about these purchase transaction of securities worth Rs. 27,00,000, through letter dated August 16, 1954, and along with that letter sent the contract note and statements of accounts received from the brokers.
No mentioned was made in the letter about the payment being made to Bhagwati Trading Company through cheques or about the arrangement about getting the securities from Bhagwati Trading Company or about the postponement of the delivery of the securities by that company.
On receipt of the letter, Raghunath Rai contacted Dalmia and, on being told that the securities were purchased under the latter 's instructions, made over the letter to the office where the usual entries where made and records were prepared, as had to be done in pursuance of the office routine.
Ultimately, the formal confirmation of the purchases was obtained on August 30, 1954, from the Board of Directors at its meeting for which the office note Stating that the securities were purchase under the instruction of the Chairman (Dalmia) was prepared.
The office note, Exhibit P. 793, with respect to the purchase of these securities worth Rs. 27,00,000 was signed by Chordia, who was then the Managing, Director of the Bharat Insurance Company.
On August 16, 1954, Vishnu Prasad withdrew Rs. 2,200 from the account of the Bhagwati Trading Company with the Bank of India, according to his statement, gave this money to Chokhani in return for the amount Chokhani had advanced earlier for opening accounts for Bhagwati Trading Company with the Bank of India and the United Bank of India.
Thereafter, whatever money was in the account of Bhagwati Trading Company with these Banks was the money obtained through the dealings entered into on behalf of Bhagwati Trading Company, the funds 307 for most of which came from the Bharat Insurance Company.
On August 18,1954, Vishnu Prasad drew a sum of Rs. 50,000 from Bhagwati Trading Company 's account with the Bank of India and passed on the amount to the Union Agencies through Chokhani.
On August 23.
1954, he withdrew Rs. 90,000 from Bhagwati Trading Company 's account with the United Bank of India and Rs. 5,10,000 from its account with the Bank of India and passed on these amounts also to the Union Agencies through Chokhani.
Chokhani then issued cheques to telling Rs. 5,88,380 13 0 from August 23 to August 26,1954, on the account of the Union Agencies with the Chartered Bank, Bombay, in favour of the brokers on account of the losses suffered by that company.
Thus, out of the total amount of Rs. 25,33,193 6.6 withdrawn by Chokhani from the account of the Bharat.
Insurance Company and paid over to Bhagwati Trading Company, Rs. 25,10,000 went to the Union Agencies, which mostly utilised the amount in payment of the losses suffered by it.
The Union Agencies suffered further losses amounting to about Rs. 23,00,000.
Demands for payment by the brokers were received on September 3, 1954, and subsequent days.
The Bharat Insurance Company had no sufficient liquid funds in the Banks at Bombay.
There was therefore necessity to deposit funds in the Bank before they could be drawn ostensibly to pay the price of securities to be purchased.
This time the transactions of sale of securities held by the Insurance Company and the usual purchase transactions relating to certain other securities were gone through.
The details of those transactions are given below.
308 On September 4, 1954, securities of the face value of Rs. 17,50,000 held by the Insurance Company were withdrawn from its Safe custody account with the Imperial Bank of India, New Delhi, by letter Exhibit P. 1351 under the signature of Dalmia.
Securities worth Rs. 10,00,000 were 2 1/40% 1954 securities and the balance were 2 1/2% 1955 securities.
These securities were then sent to Bombay and sold there.
On September 9, 1954, Rs. 6,25,000 were transferred from Delhi to the account of the Insurance Company with the Chartered Bank, Bombay, by telegraphic transfer.
Thus the balance of the funds of the Insurance Company with the Char tered Bank rose to an amount out of which the losses of about Rs. 23,00,000 suffered by the Union Agencies could be met.
The 1954 securities sold were to mature on November 15, 1954.
The 1955 securities would have matured much later.
No ostensible reason for their premature sale has been given.
On September 6, 1954, Chokhani purchased 3% 1959 61 securities of the face value of Rs. 25,00,000 on behalf of the Insurance Company from M/s. Naraindas & Sons, Brokers.
A cross contact of sale of similar securities by Bhagwati Trading Company to the brokers was also entered into.
Steps which were taken in connection with the purchase of securities worth Rs. 27,00,000 in August 1954 were repeated.
On September 9, 1954, Chokhani issued two cheques, one for Rs. 15,00,000 and the other for Rs. 9,20,875 on the account of the Insurance Company with the Chartered Bank, in favour of Bhagwati Trading Company which deposited the amount of the cheques into its account with the Bank of India, Bombay.
Vishnu Prasad passed on Rs. 24,00,000 to the Union Agencies through Chokhani.
This amount was utilised in meeting the losses suffered by the Union Agencies to the extent of Rs. 22,81,738 2 0, A sum of Rs. 75,000 was paid 309 to Bennett Coleman Co. Ltd., of which Dalmia was a director and a sum of Rs. 15,000 was deposited in the Punjab National Bank.
It is again significant to note that telephonic communication took place between Dalmia 's residence at New Delhi at, Chokhani 's at Bombay, between September 4 and September 10, 1954.
There was two communications on September 4, one on September 5, three on September 6 and one on September 10, 1954.
The Union Agencies suffered further losses amounting to about Rs. 10,00,000 in the month of September.
Again, the accounts of the Union Agencies or of the Insurance Company, at Bombay, did not have sufficient balance to meet the losses and, consequently, sale of certain securities held by the Insurance Company and purchase of other securities again took place.
This time, 3% 1957 securities of the face value of Rs. 10,00,000 hold by the Insurance Company in its safe custody deposit with the Chartered Bank, Bombay, were sold on September 21, 1954, and Rs. 9,84,854 5 6, the net proceeds, were deposited in the Bank.
On the same day, Chokhani purchased 3% 1959 61 securities of the face value of Rs. 10,00,000 on behalf of the Insurance Company following the procedure adopted in the earlier usual purchase transactions.
No telephonic communication appears to have taken place between Delhi and Bombay, on receipt of the demand from the brokers on September 17, 1954, for the payment of the losses, presumably because necessary steps to be taken both in connection with the fictitious purchase of securities, in order to pay money to Bhagwati Trading Company for being made over to the Union Agencies when funds were needed and also or providing funds in the Insurance Company 's account with the Chartered Bank, Bombay, in case the 810 balance was not sufficient to meet the losses, had already been adopted in the previous transactions, presumably, after consultations between Dalmia and Chokhani.
This lends weight to the significance of the telephonic communications between Delhi and Bombay in the critical period of August and early September, 1954.
To complete the entire picture, we may now mention the steps taken to cover up the non receipt of securities purchased, at the proper time.
By November, 19, 1954, securities of the facevalue of about Rs. 80,00,000 bad been purchased by Chokhani on behalf of the Insurance Company and such securities bad not been sent to the head office at Delhi.
Raghunath Rai referred the matter to Dalmia and, on his approval, sent a letter on November 19, 1954, to Chokhani, asking him to send the distinctive numbers of those securities.
The copy of the letter is Exhibit P. 805.
The securities referred to were 3% Loan of 1959 61 of the face value of Rs. 35,00,000, 3% Loan of 1963 65 of the face value of Rs. 27,00,000 and 2 3/40/% Loan of 1960 of face value of Rs. 18,00,000.
It was subsequent to this that stock certificates with respect to 3% 1963 65 securities of the face, value of Rs. 27,00,000 arid with respect to 2 3 14% 1960.
Loan securities of the face value of Rs. 18,00,000 were received in Delhi.
We may now refer to the transactions which led to the obtaining of these stock certificates.
The due dates of interest of 3% 1963 65 securities purchased in August 1954 were June 1 and December 1.
It was therefore necessary to procure these securities or to enter into a paper transaction of their sale prior to December 1, as, otherwise, the non obtaining of the income tax deduction certificate from the Reserve Bank would have clearly indicated that the Insurance Company did not hold these 311 securities, Chokhani, therefore, entered into a genuine contract of purchase of 3% 1963 65 securities of the face value of Rs. 27,00,000 on behalf of Bhagwati Trading Company with Devkaran Nanjee, Brokers, Bombay, on November 3, 1954.
He instructed the brokers to endorse the securities in favour of the Insurance Company, even though the securities were being sold to Bhagwati Trading Company.
These securities so endorsed were received on November 24, 1954, and were converted into inscribed stock (Stock Certificate Exhibit P. 920) from the Reserve Bank of India on December 7,1954.
The stock certificate does not mention the date on which the securities were purchased and therefore it existence could prevent the detection of the fact that these securities were not purchased in August 1954 when, according to the books of the Insurance Company, they were shown to have been purchased.
The Insurance Company did not ostensibly pay for the purchase of these shares but partially paid for it through another share purchase transaction.
In order to enable Bhagwati Trading Company to pay the purchase price, Chokbani paid Rs. 16,00,000 to it from the account of the Bharat Union Agencies with the Banks at Bombay, and Rs. 10,08,515 15 0 from the account of the Insurance Company with the Chartered Bank by a fictitious purchase of 2 1/2% 19611 securities of the face value of Rs. 11,00,000 on behalf of the Insurance Company.
These 2 1/2% 1961 securities of the face value of Rs. 11,00,000 were purchased by Chokhani on November 16, 1954.
by taking a step similar to those taken for the purchase of securities in August and September, 1954, already referred to.
Interest on the 2 3/4% Loan of 1960 of the face value of Rs. 18,00,000 was to fall due on January 15, 1955.
Both on account of the necessity for obtaining the interest certificate and also on 312 account of the expected check of securities by the auditors appointed for auditing the accounts of the Insurance Company for the year 1954, it became necessary to procure these securities or to sell them off.
Chokhani purchased, on December 9, 1954, 2 3/4% 1960 securities of the face value of Rs. 18,00,000 on behalf of Bhagwati Trading Company.
The purchase price was paid out of the funds of the Union Agencies and Bhagwati Trading Company.
The securities were, however, got endorsed in the name of the Insurance Company.
Chokhani got the securities sometimes about December 21, 1954, and, therefore, got them converted into stock certi ficates which were then sent to the head office at Delhi.
There still remained 3% 1959 61 securities of face value of Rs. 35,00,000 to be accounted for.
They were purchased in September, 1954, as already mentioned, but had not been received up to the end of December.
On December 27, 1954, Chokhani purchased 2 3/4% 1962 securities of the face value of Rs. 46,00,000, in two lots of Rs. 11,00,000 and Rs. 35,00,000 respectively, on behalf of the Insurance Company.
He also entered into the usual cross contract with the brokers for the sale of those securities on behalf of the Union Agencies.
This was a fictitious transaction, as usual, and these securities were not received from the Union Agencies.
On the same day, Chokhani entered into a contract for the sale of 3% 1959 61 securities of the face value of Rs. 35,00,000 on behalf of the Insurance, Company and also entered into a cross contract on behalf of the Union Agencies for the purchase of these securities from the same brokers.
As these securities did not exist with the Jnsuranco Company, these transactions were also paper transactions.
We need not give details of the passing of money from one concern to the other in connection with these transactions.
For purposes of audit the 1959 61 securities of the face value of 313 Rs.35,00,000 had been sold.
Now securities viz., 2 3/4% 1962 securities of the face value of Rs. 46,00,000 had been ostensibly purchased.
The auditors could demand inspection of these newly purchased securities.
Chokhani therefore entered into another purchase transaction.
This time a genuine transaction for the purchase of 2 3/4% 1962 securi ties of the face value of Rs 46,00,000 was entered into on January It, 1955.
The purchase price was paid by the sale of 3% 1957 securities of the face value of Rs. 46,00,000 which the Insurance Company possessed.
For this purpose , Chokhani withdrew these securities of the face value of Rs. 8,25,000 from the Chartered Bank, Bombay, and Rs. 37,75,000 worth of securities were sent to Bombay from Delhi.
These securities were then converted into inscribed stock.
The Insurance Company was now supposed to have purchased 2 3/4% 1962 securities of the face value of Rs. 92,00,000 having purchased Rs.416,00,000) worth of securities in December 1954 and Rs. 46,00,000 worth of securities in January 1955.
It possessed securities worth Rs. 46,00,000 only and inscribed stock certificate with respect to that could serve the purpose of verifying the existence of the other set of Rs. 46,00,000 worth of securities.
These transactions are sufficient to indicate the scheme followed by Chokhani in the purchase and sale of securities on behalf of the Insurance Company.
It is clear that the transactions were not in the interests of the Insurance Company but were in the interests of the Union Agencies inasmuch as the funds were provided to it for meeting its losses.
It is also clear that the system adopted of withdrawing the funds of the Insurance Company ostensibly for paying the purchase price of securities after the due date of payment of interest and selling the securities off, if not actually recouped from the funds of the Union Agencies or 314 Bhagwati Trading Company prior to the next date of payment of interest, was not in the interests of the Insurance Company.
When, however, the sale price could not be paid out of the funds of the Union Agencies or Bhagwati Trading Company, Chokhani, on behalf of the Insurance Company entered into a fresh transaction of purchase of securities which were not actually received and thus showed repayment of the earlier funds though out of the funds withdrawn from the same company (viz., the Insurance Company) ostensibly for paying the purchase price of newly purchased securities.
Turning to the evidence on record, the main statement on the basis of which, together with other circumstances, the Courts below have found that Dalmia had the necessary criminal intent as what Chokhani did was known to him and was under his instructions, is that of Raghunath Rai, Secretary cum Account of the Bharat Insurance Company.
Mr Dingle Foot has contended firstly that Raghunath Rai was an accomplice of the alleged conspirators and, if not, he was a witness whose testimony should not, in the circumstances be believed without sufficient corroboration which does riot exist.
He has also contended that the Courts below fell into error in accepting the statements made by him which favoured the prosecution case without critically examining them, that they ignored his statements in favour of the accused for the reason that he was under obligation to Dalmia and ignored his statements inconsistent with his previous statement as he was not confronted with them in cross examination.
An accomplice is a person who participates in the commission of the actual crime charged against an accused.
He is to be a particleboard.
There are two cases, however, in which a person has been held to be an accomplice even if he is not a particeps criminis.
Receivers of stolen property 315 are taken to be accomplices of the thieves from whom they receive goods, on a trial for theft.
Accomplices in previous similar offences committed by the accused on trial are deemed to be accomplices in the offence for which the accused is on trial, when evidence of the accused having committed crimes of identical type on other occasions be admissible to prove the system and intent of the accused in committing the offence charged Davies Director of Public Prosecution8 (1).
The contention that Raghunath Rai was an accomplice is mainly based on the facts that (i) Raghunath Rai did not produce the counterfoils of the cheques for the inspection of the auditors, though asked for by them, in spite of the fact that the counterfoils must have come to Delhi during the period of audit; (ii) the alleged scheme of the cons pirators could not have been carried out without his help in signing blank cheques which were issued by Chokhani subsequently.
The mere signing of the blank cheques is hardly an index of complicity when the bank account had to be operated both by Chokhani and Raghunath Rai, jointly.
Raghunath Rai had to sign blank cheques in order to avoid delay in payments and possible occasional falling through of the transactions.
No sinister retention can be imputed to Raghunath Rai on account of his signing blank cheques in the expectation that those cheques would be properly used by Chokhani.
The counterfoils have not been produced and there is no evidence that they showed the real state of affairs, i. e., that the cheques were issued to Bhagwati Trading Company and not to the brokers from whom the securities were purchased.
It is not expected that the name of Bhagwati Trading Company would have been written on the counterfoils of the cheques when its existence and (1) L. R. 316 the part it took in the transactions were to be kept secret from the head office.
When counterfoils were sent for in August, 1955, they were not received from Bombay.
Chokhani states that he did not get that letter.
Moreover, counterfoils reach the head office after a long time and there is no particular reason why Raghunath Rai should notice the counterfoils then.
He does not state in his evidence that he used to look over the counterfoils when the cheque books came to him for further signatures.
We do not therefore agree that Raghunath Rai was an accomplice.
Even if it be considered that Raghunath Rai 's evidence required corroboration as to the part played by Dalmia, the circumstances to which we would refer later in this judgment, afforded enough corroboration in that respect.
Raghunath Rai made a statement.
Exhibit P. 9, before Annadhanam on September 20, 1955.
He made certain statements in Court which were at variance with the statement made on that occasion.
This variation was not taken into consideration in assessing the veracity of Raghunath Rai as he had not been cross examined about it.
The argument of Mr. Dingle Foot is that such variation, if taken into consideration, considerably weakens the evidence of Raghunath Rai.
He has urged that no cross examination of Raghunath Rai was directed to the inconsistencies on any particular point in view of the general attack on his veracity through cross examination with respect to certain matters.
He has contended that in view of section 155 of the Indian Evidence Act, any previous statement of a witness inconsistent with his statement in Court, if otherwise proved, could be used to impeach his credit and that therefore the Courts below were not right 317 in ignoring the inconsistencies in the statement of Raghunath Rai merely on the ground that they were not put to him in cross examination.
On the other hand, the learned Solicitor General contends that section 155 of the Indian Evidence Act is controlled by section 145 and that previous inconsistent statements not put to the witness could not be used for impeaching his credit.
We do not consider it necessary to decide this point as we are of opinion that the inconsistent statements referred to are not of any significance in impeaching the credit of Raghunath Rai.
The specific inconsistent statements are : (i) 'I never of my own accord send securities to Bombay nor am authorised to do so ': In Court Raghunath Rai said that certain securities were sent by him to Bombay on his own accord because those securities were redeemable at Bombay and the maturity date was approaching.
(ii) Before the Administrator, Raghunath Rai had stated: 'I cannot interfere in the matter as, under Board Resolution, Chokhani is authorised to deal with the securities.
Chokhani always works under instructions from the Chairman. ' In Court, however, he stated that there was no resolution of the Board of Directors authorising Chokhani to sell and purchase securities.
The misstatement by Raghunath Rai, in his statement P. 9 to the Investigator made on September 20, 1955.
about Chokhani 's being authorised by a Board resolution to deal with the securities, is not considered by Dalmia to be a false statement as he himself stated, in answer to question No. 21, that such a statement could possibly be made by Raghunath Rai in view of the Board of Directors considering at the meeting the question whether Chokhani be authorised to purchase and sell securities on behalf of the company in order to make profits.
(iii) 'Roughly 1 3/4 chores of securities were sent to Bombay from here during the period from 318 April 1955 to June 1955.
The period was wrong and was really from July to August 1955.
Raghunath Rai admitted the error and said that he had stated to Annadhanam without reference to books.
(iv) 'Securities are sent to Chokhani at Bombay through a representative of Dalmia.
The statement is not quite correct as securities were sent to Bombay by post also.
Raghunath Rai stated that on the receipt of the advice from Chokhani about the purchase or sale of securities, he used to go to Dalmia on the day following the receipt of the advice for confirmation of the contract of purchase or sale of securities and that after Dalmia 's approval the vouchers about the purchase of those securities and the crediting of the amount of the sale price of those securities to the account of the Insurance Company with the Chartered Bank, as the case may be, used to be prepared.
Kashmiri Lal and Ram Das, who prepared the vouchers, describe the procedure followed by them on receipt of the advice but do not state anything about Raghunath Rai 's seeking confirmation of the purchase transactions from Dalmia and therefore do not, as suggested for the appellants, in any way, contradict Raghunath Rai.
It is urged by Mr. Dingle Foot that it was somewhat unusual to put off the entries with respect to advises received by a day, that the entries must have been made on the day the advices were received and that in this manner the entries made by these clerks contradict Raghunath Rai.
A witness cannot be contradicted by first supposing that a certain thing must have taken place in a manner not deposed to by any witness and then to find that was not consistent with the statement made by that witness.
Further, we are of opinion that there could be no object in making consequential entries 319 on receipt of the advice about the purchase of securities if the purchase transaction itself is not approved of and is consequently cancelled.
The consequent entries were to be with respect to the investments of the Insurance Company and not with respect to infructuous transactions entered into by its agents.
It has also been urged that if Dalmia 's confirmation was necessary, it was extraordinary that no written record of his confirming the put chase of securities was kept in the office.
We see no point in this objection.
If confirmation was necessary, the fact that various entries were made consequent on the receipt of advice is sufficient evidence of the transaction being confirmed by Lalmit, as, in the absence of confirmation, the transaction could not have been taken to be complete.
Further, office notes stating that securities had been purchased or sold 'under instructions of the Chairman ' used to be prepared for the meeting of the Board of Directors when the matter of confirming sale and purchase of securities went before it.
The fact that office notes mentioned that the securities had been purchased under the instructions of the Chairman is the record of the alleged confirmation.
The proceedings of the meeting of the Board of Directors with respect to the confirmation of the purchase and sale of securities do not mention that action was taken on the basis of the office notes.
Minutes with respect to other matters do refer to the office notes.
This does not, however, mean that office notes were not prepared.
Confirmation of the purchase and sale of the shares was a formal matter for the Board.
All the office notes, except one, were signed by Raghunath Rai.
The one not signed by him is Exhibit P. 793.
It is signed by Chordia and is dated August 18,1954.
This also mentions under instructions of the Chairman certain shares have been 320 purchased '.
Chordia was a relation of Dalmia and had no reason to write the expression 'Under instructions of the Chairman ' falsely.
Such a note cannot be taken to be a routine note when the power to purchase and sell securities vested in Chordia as Managing Director of the company.
Clause (4) of article 13 of the Bye laws empowered the Managing Director to transfer, buy and sell Government securities.
When Chordia, the Managing Director, wrote in this office note that securities were purchased under the instructions of the Chairman, it can be taken to be a true statement of fact.
It is true that he has not been examined as a witness to depose directly about his getting it from Dalmia that the purchase of securities referred to in that note was Under his instructions.
This does not matter as we have referred to this office note in connection with Raghunath Rai 's statement that office notes used to be prepared after Dalmia 's statement that the particular purchase of shares was under his instructions.
The statements made by Raghunath Rai which are said to go in favour of the accused may now be dealt with.
Raghunath Rai was cross examined with respect to certain letters he had sent to Chokhani.
He stated, in his deposition on July 29, 1958, that Dalmia accepted his suggestion for writing to Chokhani to send him the distinctive numbers of the securities which had been purchased, but not received at the head office, and that when he reported non compliance of Chokhani in communicating the distinctive numbers and suggested to Dalmia to ring up Chokhani to send the securities to the head office, Dalmia agreed.
This took place in November and December 1954.
Dalmia 's approval of the suggestion does not go in his favour.
He could not have refused the suggestion.
Raghunath Rai also stated that in September or October 1954 there was a talk between hier, 321 K. L. Gupta and Dalmia about the low yield of interest on the investments of the Insurance Company and it was suggested that the money be invested in securities, shares and debentures.
Dalmia then said that he had no faith in private shares and debentures but had faith in Government securities and added that he would ask Chokhani to invest the funds of the Insurance Company in the purchase and sale of Government securities.
He, however, denied that Dalmia had said that the investment of funds would be in the discretion of Chokhani, and added that Chokhani was not authorised to purchase or sell securities on behalf of the Insurance Company unless he was authorised by the Chairman.
The statement does not support Dalmia 's authorising Chokhani to purchase and sell securities in his discretion.
Another statement of Raghunath Rai favourable to Dalmia is said to be that according to him he told the auditors on September 9, 1955, that the securities not then available were with Cbokhani at Bombay from whom advices about their purchase had been received.
Annadhanam stated that Raghunath Rai had told him that Dalmia would give the explanation of the securities not produced before the auditors.
There is no reason to prefer Raghunath Rai 's statement to that of Annadhanam.
Annadhanam 's statement in the letter Exhibit P. 2 about their being informed that in March, 1954, after the purchase, the securities were kept in Bombay in the custody of Chokhani refer to what they were told in the first week of January, 1955, and not to what Raghunath Rai told him on September 9, 1954.
Raghunath Rai stated that on one or two occasions be, instead of going to Dalmia, talked with him on telephone regarding the purchase and sale of securities by Chokhani and that Dalmia told him on telephone that be bad instructed for the purchase 322 and sale of securities and that he was confirming the purchases or sales.
This does not really favour Dalmia as Raghunath Rai maintains that Dalmia did confirm the purchase or sale reported to him.
It is immaterial whether that was done on telephone or on Raghunath Rai actually meeting him.
Questions put to the Administrator, Mr. Rao, in cross examination, implied that Raghunatb Rai was a reliable person and efforts to win him over failed.
It was suggested to the Administrator that the reasons for the appointment of Sundara Rajan as the Administrator 's Secretary was that he wanted to conceal certain matters from Raghunath Rai.
His reply indicated different reasons for the appointment.
Another suggestion put to him was that Raghunath Rai offered to retire, but he kept his offer pending because of this case.
This suggestion too was denied.
It was brought out in the cross examination of Raghunath Rai that he was in a position in which he could be influenced by the Administrator.
Raghunath Rai was using the office car.
Its use was stopped by the Administrator in January, 1956.
He was not paid any conveyance allowance.
In April, 1958, he made a representation to the Administrator for the payment of that allowance to him.
The Administrator passed the necessary order in May, 1958, with retrospective effect from January 1956.
The amount of conveyance allowance was Rs. 75 per mensem.
Raghunath Rai could not give any satisfactory explanation as to why he remained silent with regard to his claim for conveyance allowance for a period of over two years, but denied that he was given the allowance with retrospective effect in order to win him over to the prosecution.
Raghunath Rai applied for extension of service in the end of 1956 or in the beginning of 323 1957 and, in accordance with the resolution passed on August 17, 1954, by the Board of Directors, his service was extended up to 1961.
The Administrator forwarded the application to the higher authorities.
This matter had not been decided by July 29, 1958.
The amount of his gratuity and provident fund in the custody of the Insurance Company amounted to Rs. 35,000.
We do not think that the Administrator had any reason to influence Raghunath Rai 's statement and acted improperly in sanctioning oar allowance to him retrospectively and would have so acted with respect to Raohunath Rai 's gratuity if Raghunath Rai had not made statements supporting the prosecution case.
Raghunath Rai stated on July 29, 1958, that in July, 1955, when he informed Dalmia that the bulk of the securities were at Bombay and the rest were at Delhi, Dalmia asked him to write to Chokhani to deposit all the securities in Bombay in the Chartered Bank.
At this he told Dalmia that if the sale and purchase of securities was to be carried on as hithertofore, there was no use depositing them in the Bank and thus pay frequent heavy withdrawal charges, and suggested that the securities could be deposited in the Bank if the sale and purchase of them had to be stopped altogether and that Dalmia then said that the securities should be sent for to Delhi in the middle of December, 1955 for inspection by the auditors.
Raghunath Rai was re examined on July 30 and stated that the aforesaid conversation took place on July 14, 1955, and added that he had, in the same context, a further talk with Dalmia in August, 1955.
The Public Prosecutor, with the permission of the Court then questioned him 324 about the circumstances in which he had to go a second time to Dalmia and talk about the matter.
His reply was that he had the second talk as the securities purchased in May, 1955, and those purchased in July and August, 1955, had not been received at the head office.
He asked Dalmia to direct Chokhani to deposit all the securities in the Chartered Bank or to send them to Head Office.
Dalmia then said that the sale and purchase of securities had to be carried on for some time and therefore the question of depositing those securities in the Bank or sending them to the head office did not arise for the time being and that the securities should be sent for to the head office in December, 1955.
Raghunath Rai thus made a significant change in his statement.
On July, 29,1958, he opposed the direction of Dalmia for writing to Chokhani to deposit the securities in the Bank as that would entail heavy withdrawal charges in case the sale and purchase of securities were not to be stopped while, according to his statement the next day, he himself suggested to Dalmia in August, 1955, that Chokhani be asked to deposit all the securities in the Bank or to send them to the head office.
He denied the suggestion that he made this change in his statement under pressure of the Police.
The cross examination was really directed to show that he had been approached by the police between the close of his examination on July 29 and his further examination on July 30, 1958.
Raghunath Rai admitted in court that after giving evidence he went to the room allotted in the Court building to the Special Police Establishment and that the Investigating Officer and the Secretary to the Administrator of the Insurance Company were there.
He went there in order to take certain papers which he had kept there.
He, however, had not brought any papers on July 30 as, accord 325 ing to him, his main cross examination had been over.
He however denied that he had been dictated notes by the police in order to answer questions in cross examination or that be remained with the police till 9 p. m. or that the Secretary to the Administrator held out a threat about the forfeiture of his gratuity in case be did not make a statement favourable to the prosecution.
We see no Reason for the police to bring pressure on Raghunath Rai to introduce falsely the conversation in August.
Between July 14, 1955, and middle of August, 1955, the head office learnt of the purchase of securities of the face value of Rs. 74,00,000 and again, on or about August 26, of the purchase of securities of the face value of Rs. 40,00,000.
A further conversation in August is therefore most likely as deposed to.
The main fact remains that Dalmia said that the securities be sent for in December, 1955, which implies his knowledge of the transactions in question.
We are of opinion that the discrepancies or contradictions pointed out in Raghunath Rai 's statement are not such as to discredit him and make him an unreliable witness and that he is not shown to be under the influence of the prosecution.
Further, his various statements connecting Dalmia with the crime, find corroboration from other evidence.
Letter Exhibit P. 1351 dated September 4, 1954, was sent to the Imperial Bank of India, Delhi Branch, under the signature of Dalmia as Chairman.
The letter directed the bank to deliver certain securities to the bearer.
Dalmia admits his signatures on this document and also on the letter Exhibit P. 1352 acknowledging the receipt of the securities sent for, thus corroborating Raghunath Rai 's statement that the securities were withdrawn under his instructions.
326 Letters Exhibit D. 3, dated March 16, 1955, and P. 892 dated August 5, 1955, from Raghunath Rai to Chokhani, mentioned that the stock certificates were being sent under the instructions of the Chairman.
They corroborate Raghunath Rai 's statements in Court of the dispatch of these stock certificates under Dalmia 's instructions.
He had no reason to use this expression if he was sending them on his own.
It is true that the date on which the Chairman gave the instruction is not proved, but it stands to reason that the stock certificates must have been despatched soon after the receipt of the instruction from the Chairman.
it cannot be presumed that in such transactions there could be such delay as would make statement in these letters not corroborative evidence under section 157, of the Evidence Act which provides that previous statements made at or about the time a fact took place can be used for corroborating the statement in Court.
Chokhani 's statement that he did not mention the name of Bhagwati Trading Company in his letters to the head office as be did not want Dalmia to know about the dealings with Bhagwati Trading Company, implies that in the ordinary course of business the information conveyed in those letters would be communicated to Dalmia and thus tends to support Raghunatb Rai 's statement that he used to visit Dalmia on receipt of the statement of account and inform him about the purchase or sale of the securities.
Chokhani had been inconsistent about Raghunath Rai 's later knowledge of the existence of Bhagwati Trading Company.
In answer to question No. 66, on November 13, 1958, he stated : "I did not contradict the statement made in Ex xi :P. 813 that cheque No. B564809 327 dated 17 11 54 had been issued in favour of Narain Das and Sons although that cheque had in fact been issued in favour of Bhagwati Trading Company and not in favour of Narain Das and Sons because those at the Head Office did not know anything about Bhagwati Trading Company".
In answer to question No. 149, on November 14, 1958, he stated: "I did not mention the name of Bhagwati Trading Company in my letters addressed to the Head Office of the Bharat Insurance Company as the party with whom there were cross contracts because Raghunath Rai would not have known as to what was Bhagwati Trading Company.
I also did not mention the name of Bhagwati Trading Company in my letters to the Head Office of the Bharat Insurance Company because I did not want Shri Dalmia to know that I was having dealings with Bhagwati Trading Company.
I also want to add that Raghunath Rai must have known that the cross contracts were with Bhagwati Trading Company because the name of Bhagwati Trading Company was mentioned as the payee on the counterfoils of the cheques issued in favour of Bhagwati Trading Company.
" Chokhani seems to have attempted to undo the effect of his statement on November 13, but being of divided mind, made inconsistent statements even on November 14, 1958.
He was in difficult position.
He attempted to show that Dalmia did not know about Bhagwati Trading Company and also to show that Raghunath Rai had reasons to know about it and was therefore in the position of an Accomplice, a stand which is also taken by Dalmia 328 We may now deal first with the case of Chokhani, appellant.
Chokhani has admitted his entering into the various transactions of purchase and sale and to have set up Bhagwati Trading Company for convenience to carry out the scheme of diverting the funds of the Insurance Company to the Union Agencies by way of temporary loan.
His main plea is that he had no attention to cause loss to the Insurance Company and did not know that the way he arranged funds for the Union Agencies from the Insurance Company was against law.
He contends that he had no dishonest intentions and therefore did not commit any of the offences he had been charged with, and convicted of.
Learned counsel for Chokhani has urged two points in addition to some of the points of law urged by learned counsel for Dalmia.
He urged that the transactions entered into by Chokhani were ordinary genuine commercial transactions and that there was no evidence of Chokhani 's acting dishonestly in entering into those transactions.
It is further said that the High Court recorded no finding, on the latter point though it was necessary to record such a finding, even though this point was not seriously urged.
In support of the contention that the purchase and sale transactions were genuine commercial transactions, it is urged that to meet the losses of the Union Agencies Chokhani was in a position to sell the shares held by it or could have raised the money on its credit.
He did not sell the shares as they were valuable and as their sale would have affected the credit of the Union Agencies.
Chokhani had been instructed in September, 1954, that the yield from the investment of the Insurance Company was not good and that the funds of the Insurance Company be invested in securities.
Such instructions are said to have been given when he was authorised by Dalmia to purchase and sell securities 329 on behalf of the Insurance Company.
It is suggested that these instructions were given in 1953 and not in 1954 when Dalmia was going abroad.
In view of this authority, Chokhani decided on a course of action by which he could invest the insurance money in securities and also help the Union Agencies.
It is submitted that it was not necessary to mention Bhagwati Trading Company to the head office as the Insurance Company was going to suffer no loss and was simply concerned in knowing of the sale and purchase transactions.
Chokhani 's payment of the purchase price in anticipation of the delivery of the securities, was bona fide.
We have already expressed the opinion that the transaction in connection with the investment of the funds of the Insurance Company were not bonafide purchase and sale transactions.
They were transactions with a purpose.
They were motivated in the interests of the Union Agencies and not in the interests of the Insurance Company.
The mere fact that on account of the nondelivery of securities within a reasonable time of the payment of the purchase money made the brokers or Bhagwati Trading Company or both of them liable to an action, does not change the nature of the transactions.
That liability can co exist with the criminal liability of Chokhani if the transactions were such which could amount to his committing breach of trust.
In fact, the offence of breach of trust is not with respect to his entering into the sale and purchase transactions.
It is really on the basis of his paying the money out of the Insurance Company 's funds to the Union Agencies through Bhagwati Trading Company, in contravention of the manner in which he was to deal with that money.
These purchase and sale transactions were just a device for drawing on those funds.
We do not believe that Chokhani really intended to purchase the securities though he did purchase 330 some, in certain circumstances, and that the nondelivery of the securities was not a case of just his slightly postponing the delivery of the securities.
No reason is given why such a concession should have been made to the seller of the securities and the period during which such purchased securities remained undelivered is much longer than what can be said to be a reasonable period during which purchased securities for ready delivery should be delivered.
The fact, if true, that the Insurance Company suffered no monetary loss on account of the purchase and sale transactions and the passing of its money to the Union Agencies, does not suffice to make the transaction an honest one.
The gain which the Union Agencies made out of the money it got from the Insurance Company was wrongful gain.
It was not entitled to profit by that money.
One is said to act dishonestly when he does any thing with the intention of causing wrongful gain to one person or wrongful loss to another.
Wrongful gain means gain by unlawful means of property to which the person gaining is not legally entitled and wrongful loss is loss by unlawful means of property to which the person using it is legally entitled.
It is urged that Chokhani 's keeping Bhagwati Trading Company secret from Delhi was not the result of a guilty conscience, but could be due to his nervousness or fear.
We do not agree with this suggestion.
He had nothing to fear when he was acting honestly and, according to him, when he was doing nothing wrong.
It is further submitted that what Chokhani did amounted simply to the mixing of the funds of the Insurance Company and the Union Agencies.
We do not think that this would bethe correct interpretation of what Chokhani did.
It was not a case of mixing of funds but was a case of making 331 over the funds of the Insurance Company to the Union Agencies.
The fact that the Administrator did not cancel any contract entered into on behalf of the Insurance Company under the powers given to him by section 52(c) of the , does not mean that every such contract was in the interest of the Insurance Company.
The Administrator has stated that he did not know the legal position as to whether those contracts stood or not.
Of the points of law urged for Chokhani, we have already dealt with those relating to the jurisdiction of the Delhi Court to try the various offences, to the content of the words 'property ', dominion ' and agency ' in section 409, I. P. C. The only other points raised are that the offence under section 477 A could not be said to be committed in pursuance of the conspiracy and that it was not a case of one conspiracy but of several conspiracies.
The charge under section 477 A, 1.
P. C. is based on the letters written by Chokhani from Bombay to Delhi intimating his entering into the contracts of purchase of securities and indicating that cheques had been issued in payment to the brokers.
It is true that these letters did not specifically state that the cheques had been issued to the brokers, but that is the implication when the letters refer to the contracts and the statements sent along with them and which relate simply to the transactions between the Insurance Company and the brokers and in no way indicate the cross contracts between the brokers and Bhagwati Trading Company.
It is further said that the payment to Bhagwati Trading Company was as an agent of the brokers.
There is no evidence that the brokers appointed Bhagwati Trading Company as their agent for the purpose.
The evidence is that on Chokhani 's representation that the Insurance Company would 332 pay to Bhagwati Trading Company and get the securities from Bhagwati Trading Company that the brokers neither got the price nor delivered the securities.
It is also contended that Chokhani was not a ,servant ' of the Insurance Company and therefore does not come within section 477 A. 1.
P. C. which makes certain conduct of a clerk, officer or servant an offence Chokhani was a servant of the Insurance Company as he was its Agent and received payment for doing work as an agent.
His being a full time servant of the Union Agencies does not mean that he could not be a servant of any other company, or other employer.
We do not agree with the contention that it was a case of several conspiracies, each transaction to meet the losses, as they occurred, giving rise to an independent conspiracy.
The conspiracy was entered into in the beginning of August, 1954, when such circumstance arose that funds had to provided to the Union Agencies to meet its losses.
The conspiracy must have been to continue up to such time when it be possible to anticipate that such a situation would no more arise.
Similar steps to meet the losses were taken whenever the occasion arose.
The identity of purpose and method is to be found in all the transactions and they must be held to have taken place in pursuance of the original conspiracy.
We next come to the case of Vishnu Prasad, appellant.
He was the sole proprietor of Bhagwati Trading Company.
His main defence is that he was ignorant of the various transactions entered into by Chokhani on behalf of Bbagwati Trading Company and that it was Chokbani who kept the books of accounts and entered into those transactions.
The courts below have found that he knew of transactions and the nature of the conspiracy.
333 We agree with this opinion.
There is sufficient material on record to establish his knowledge and part in the conspiracy.
Bhagwati Trading Company came into existence just when the Union Agencies suffered losses and was not in a position to pay them and, consequently, there arose the necessity for Dalmia and Chokhani to devise means to raise funds for meeting those losses.
Vishnu Prasad opened the banking accounts in two banks at Bombay on August 9 and August 11, 1954, depositing the two sums of Rs. 1,100 each in each of the two banks.
He states that he got this money from Chokbani.
The money was, however withdrawn after a short time and paid back to Chokhani and no further contribution to the funds of the Bhagwati Trading Company was made on his behalf.
The Company functioned mainly on the amounts received from the Insurance Company.
Vishnu Prasad, therefore, cannot be said to be quite innocent of the starting of the company and the nature of its business.
He started, in answer to question No. 24: "I started business in the name of Bhagwati Trading Company in 1953, or beginning of 1954.
1 however did no business in the name of that company.
G. L. Chokhani stated that I should do business for the purchase or sale of securities." and in answer to question No. 26 he stated that he had no knowledge about Chokhani 's entering into contracts on behalf of the Bharat Insurance Company for the purchase of securities and his entering into crose contracts with the same firm of brokers for the sale of those securities on behalf of Bhagwati Trading Company but admitted that he knew that Chokhani was doing business for the purchase and sale of securities on behalf of Bhagwati Trading Company.
He expressed ignorance 334 about similar future contracts for purchase of securities on behalf of the Insurance Company and cross contracts for the sale of those securities on behalf of Bhagwati Trading Company.
Vishnu Prasad, however, made a statement at the close of the day when he had made the above statement, and said: "In answer to question No. 24 I want to state that I did not start business of Bhagwati Trading Company in 1953 or the beginning of 1951 but only intended to start that business.
" The latter statement deserves no acceptance and is a clear indication that the implications of his earlier statement worked on his mind and he attempted to indicate that he was not even responsible in any way for the starting of the business of Bhagwati Trading Company.
Bhagwati Trading Company did come into existence and ostensibly did business.
The latter statement therefore cannot be true.
Vishnu Prasad further knew, as his answer to question No. 157 indicates, that Chokhani did shares speculation business at Bombay.
He, however, stated that he did not know on behalf of which company he did that business.
What Vishnu Prasad actually did in connection with the various transactions which helped in the diversion of the funds of the Insurance Company to the Union Agencies has to be looked at in this background.
He cashed a number of cheques issued on behalf of the Insurance Company and made over that money to Chokhani, who passed it on the Union.
Agencies.
He issued cheques on behalf of Bhagwati Trading Company in favour of Bharat Union Agencies after the amounts of the cheques of the Insurance Company in favour of Bhagwati Trading Company had been deposited in the Bank.
Some of 335 these cheques issued in favour of Union Agencies were filled in by Vishnu Prasad himself and therefore he must have known that he was passing on the money to the Union Agencies.
In fact, some of the cheques issued on behalf of Bhagwati Trading Company in favour of the Union Agencies were deposited in the bank by Vishnu Prasad himself It is therefore not possible to believe that Vishnu Prasad did not know that the amounts which his company viz., Bhagwati Trading Company, received from the Insurance Company must have purported to be on account of securities sold to the Insurance Company, as that was the business which Bhagwati Trading Company professed to do and, according to him, he knew to be its business, He knew that most of this amount was passed on to the Union Agencies.
Both these facts must have put him on enquiry even if he did not initially know of the nature of the business which brought in the money to, and took out the money from, Bhagwati Trading Company.
He is expected to knew that the Insurance Company was not likely to purchase securities so frequently.
If he had made enquiries, he would have learnt about the nature of receipts and payments and in fact we are inclined to the view that he must have known of their nature and that it is not reasonable that he would be completely in the dark.
The business of Bhagwati Trading Company is said to have been started as Vishnu Prasad was not taking interest in the other business.
This should indicate that he must have evinced interest in the activities of Bhagwati Trading Company which continued for over a year and which made him receive and dispose of lakhs of Rupees.
Surely, it is not expected that he would have made no effort to know what is required to be know by one earring on business for the purchase and sale of securities, and any attempt to have known this would have 336 necessarily led him to know that securities were being purchased on behalf of the Insurance Company and were not delivered to it and that Bhagwati Trading Company purchased no securities from the Union Agencies and that any payment by it to the latter was for something which B wait Trading Company was not liable to pay.
It follows that he must have known that money was being received from the Insurance Company for nothing which was due to Bhagwati Trading company from that company and that most of that money was being paid to the Union Agencies for payment of which Bhagwati Trading Company had no liability and that the net result of the transactions of receipt of money from the Insurance Company and payment of it to the Union Agencies was that Bhagwati Trading Company was acting to help the diversion of funds from the Insurance Company to the Union Agencies.
We therefore hold that Vishnu Prasad has been rightly found to be in the conspiracy.
We may now deal with the case of Dalmia, appellants The fact that the funds of the Bharat Insurance Company were diverted to Union Agencies by the transactions proved by the prosecution, is not challenged by Dalmia.
His main contention is that he did not know what Chokhani had been doing in connection with the raising of funds for meeting the losses of the Union Agencies.
There is, however, ample evidence to indicate that Dalmia knew of the scheme of the transactions and was a party to the scheme inasmuch as the transactions were carried through under his instructions and approval: The facts which have a bearing on this matter are: (1) Dalmia had the clearest motive to devise means for meeting the losses of the Union Agencies.
337 (2) Dalmia actually looked after the share business of the Union Agencies at Calcutta and Delhi.
He had knowledge of the losses of the Union Agencies.
(3) The frequency of telephonic calls between him and Chokhani during the period when the losses took place and steps were taken to meet them, especially during the early stages in August and September, 1954, when the scheme was being put into operation, and in July and August, 1955, when there bad been heavy and recurring losses.
(4) Dalmia 's informing the Imperial Bank, Delhi, on September 4, 1954, about his powers to deal with securities and actually withdrawing securities that day, which were shortly after sold at Bombay and whose proceeds were utilised for meeting the losses.
(5) The gradually increasing retention of securities in the office of the Insurance Company and consequently the gradually reduced deposit of securities in the Banks.
(6) The transfer of securities held by the Insurance Company from Delhi to Bombay when funds were low there to meet the losses.
(7) The purchase and sale of securities in the relevant period in order to meet the losses were under his instructions.
(8) A larger use of converting securities into inscribed stock certificates which was used for concealing the disclosure of the interval between the date of purchase of the securities which were then not received, and the date when those securities were recouped later.
(9) Dalmia 's annoyance and resentment on September 9, 1955, when the auditors made a surprise inspection of the office of the insurance company and wanted to see the securities, 338 (10) His conduct on September 15, 1955.
(11) His not going to meet Mr. Kaul on September 16, 1955, and instead, sending his relatives to state what was not the full and correct statement of facts which, according to his own statements, were known to him by then.
(12) His confession P. 10 together with the statement Exhibit p. 11 and the statement made to Annadhanam that he carried on his speculative business in shares in the name of the Union Agencies.
One of the main factors urged in support of the contention that Dalmia was in the conspiracy is that the entire scheme of conspiracy was entered into for the sole benefit of Dalmia.
It is not reasonably probable that such a conspiracy would come into existence without the knowledge or consent of Dalmia.
The conspiracy charge framed against Dalmia mentioned the object of the conspiracy as 'meeting losses, suffered by you, R. Dalmia, in forward transactions, of speculation in shares, which transactions were carried on in the name of the Bharat Union Agencies Limited. ' and the charge under section 409 1.
P. C. referred to the dishonest utilisation of the funds of the Insurance Company.
This matter has been considered from several aspects.
The first in that Dalmia is said to have owned the entire shares issued by the Union Agencies, or at least to have owned a substantial part of them and was in a position to control the other shareholders.
To appreciate this aspect, it is necessary to give an account of the share holding in this company.
The Union Agencies was incorporated at Bombay on April 1, 1948, as a private limited company, with its registered office at Bombay.
It also had an office at 10, Daryaganj, Delhi, where the head office of the Bharat Insurance Company was.
Its authorised capital was Rs. 5,00,000.
The total number of shares issued in 1949 Was 2,000, Out of these 339 Dalmia held 1,200 shares, Dalmia Cement & Paper Marketing Company Ltd. (hereinafter called the Marketing Company) 600 shares, Shriyans Prasad Jain, brother of section P. Jain, 100 shares and Jagat Prasad Jain, the balance of 100 shares.
The same position of share holding continued in 1950.
In 1951, Dalmia continued to hold 1,200 shares, but the other 800 shares were hold by Govan Brothers.
The position continued in 1952 as well and, in the first half of 1953, Dalmia increased the number of his shares to 1,800 and Govan Brothers increased theirs to 1,200 and the total shares issued thus stood at 3,000.
This position continued up to September 21, 1954.
On September 22, 1954, 2,000 shares were further issued to section N. Dudani, a nominee of Asia Udyog.
The total shares on that date stood at 5,000 of which Dalmia held 1,800, Govan Brothers 1,200, and Dadani 2,000.
On October 4, 1954, R.P. Gurha and J. section Mittal each got 100 shares from Govan Brothers with the result that thereafter the position of shareholding was: Dalmia 1,800; Govan Brothers 1000; Dudani 2,000; Gurba 10); and Mittal 100, out of the total number of issued shares of 5000.
It is said that Dalmia transferred his 1,800 ,shares to one L. R. Sharma on October 30, 1954.
Sharma 's holding 1,800 shares was mentioned in the return, Exhibit P. 3122 filed by the Union Agencies as regards share capital and shares as on December 31, 1955, in the office of the Register of Companies in January 1956 with respect to the year 1955.
The return showed that the transfer had taken place on January 31, 1955.
It would appear that the alleged sale of shares to Sharma in October 1954 was not mentioned in a similar return which must have been submitted to the Registrar of Companies in January, 1955, and that therefore its transfer was show on January 31, 1955, Probably 340 a date subsequent to the submission of the relevant return for the year 1954.
A brief account of the various share holders may be given.
Dalmia was a Director of Govan Brothers Ltd., and was succeeded, on his resignation, by O. P. Dhawan, who was an Accountant in the Delhi Office of the Union Agencies.
He was also an employee of another company named Asia Udyog Ltd. Another Director of Govan Brothers Ltd. was D. A. Patil, lncome tax Adviser in the concerns of Dalmia.
The share scrips in the Marketing Company standing in the name of Govan Brothers Ltd. and three blank share transfer forms signed by section N. Dudani as Secretary of Govan Brother Ltd., in the column entitled 'seller ' were recovered from Dalmia 's house on search on November 25, 1955.
Dudani was the personal accountant of Dalmia and Manager of the Delhi Office of Bharat Union Agencies.
The inference drawn by the Courts below from these circumstances is that Govan Brothers Ltd. was the concern of Dalmia, and this is reasonable.
No Satisfactory explanation is given why the shares standing in the name of Govan Brothers Ltd. and the blank transfer forms should be found in Dalmia 's residence.
Dudani was the personal accountant of Dalmia and Manager of the Delhi Office of the Union Agencies, and was also Secretary of Asia Udyog Ltd. Asia Udyog appears to be a sister concern of the Union Agencies.
It was previously known as Dalmia Jain Aviation Ltd. It installed a telephone at one of Dalmia 's residences in January, 1953.
Its offices were in the same room in which the offices of the Union Agencies were.
Dhawan, who succeeded Dalmia as Director of Govan Brothers Ltd., was an employee of Asia Udyog.
Gurha was the Accountant of Asia Udyog, in addition to being Director of the Union Agencies.
He bad powers over the staff of both the companies.
J, S, Mittal was Director of 341 Union Agencies and held 100 shares in the Union Agencies as nominee of Govan Brothers Ltd., from October 4, 1954, and 1,000 shares as nominee of Crosswords Ltd., from some time about January 31, 1955.
L. N. Pathak, R. B. Jain and G. L. Dalmia, were authorised to operate on the account of both the Union Agencies, Calcutta, and Asia Udyog Ltd., with the United Bank of India, Calcutta.
The issue and transfer of shares of the Union Agencies in September and October, 1954, seem to be in pursuance of an attempt to meet a contention, as at present urged for the State, that Dalmia was the largest shareholder in it.
The same idea seemed to have led to the transfer of shares to Sharma by Dalmia.
The verbal assertion of the sale having taken place in October, 1954, is not supported by the entry in Exhibit P. 3122 and what may be taken to be the entries in a similar return for the year 1954.
This can go to support the allegation that Dalmia knew about the shady transactions which were in progress from early August, 1954.
The learned Sessions Judge relied on the following circumstances for his conclusion that Dalmia was synonymous with Bharat Union Agencies.
The speculation business of Dalmia Cement and Paper Marketing Co,.
Ltd., the paid up capital of which nearly all belonged to Dalmia was on the liquidation of that company taken over by Bharat Union Agencies and more or less the same persons conducted the business of Bharat Union Agencies who were previously looking after Dalmia Cement & Paper Marketing Company.
Bharat Union Agencies was known and taken to be the concern of Dalmia by its then Accountant Dhawan and by the brokers with whom it had dealings 342 3.
Chokhani, who hold power of attorney on behalf of Dalmia and Bharat Union Agencies, told the brokers at the time he gave business of Bharat Union Agencies to them J. that it was the business of Dalmia.
The salaries of personal and domestic employees of Dalmia were paid by Bharat Union Agencies and those payments were debited to the Salaries Account of the company.
The personal employees of Dalmia were thus treated as the employees of Bharat Union Agencies.
The business done in the name of Dalmia with Jagdish Jagmohan Kapadia was treated as the business of Bharat Union Agencies.
The funds of Bharat Union Agencies were used to discharge an obligation personally undertaken by Dalmia.
The price of the shares purchased in the process in the name of Dalmia was paid out of the funds of Bharat Unio n Agencies and the purchase of those shares was treated in the books of Bharat Union Agencies as part of its investment.
When sister in law of Dalmia wanted money it was lent to her out of the funds of Bharat Union Agencies and in the books of that company no interest was charged from her".
It has been strenuously urged by Mr. Dingle Foot that what certain persons considered to be the nature of the Union Agencies or what Chokhani told them could not be evidence against Dalmia with respect to the question whether he could be said to be identical with the Union Agencies.
We need not consider this legal objection as it is not very necessary to rely on these considerations for 343 the purpose of the finding on this point.
It may be said, however, that prima facie there seems to be no legal bar to the admissibility of statements that Chokhani told certain persons that Union Agencies was the business of Dalmia.
He had authority to represent Dalmia and Union Agencies on the basis of the power of attorney held by him from both.
His statement would thus appear to be the statement of their 'agent ' in the course of the business.
We have considered the reasons given for the other findings by the learned Sessions Judge and accepted by the High Court and are of opinion that the findings are correct and that they can lead to no other conclusion than that no distinction existed between Dalmia and the Union Agencies and that whenever it suited Dalmia or the interests of the Union Agencies such transactions of one could be changed to those on behalf of the other.
We may, however, refer to one matter.
Dalmia admits having purchased shares of Dalmia Jain Airways of the face value of Rs.6,00,000/from Anis Haji Ali Mohammad, on behalf of the Union Agencies, in his own name, though the real purchaser was the Union Agencies and that he did so as the seller and his solicitor did not agree to sell the shares in the name of the latter.
The explanation does not appear to be satisfactory.
The seller had no interest in whose name the sale took place so long as he gets the money for the shares he was selling.
Mr. Dingle Foot has urged that these various considerations may indicate strong association of Dalmia with the Union Agencies but are not sufficient to establish his complete identity with it, as is necessary to establish in view of the charges framed.
Dalmia 's identity with Union Agencies or having great interest in it is really a matter providing motive for Dalmia 's going to the length of entering into a conspiracy to raise funds for Meeting the 344 losses of the Union Agencies by diverting the funds of the Insurance Company and which would amount to Committing criminal breach of trust.
Dalmia admits having given instructions about the business of the Union Agencies in 1954 when he was not a Director of that company, and in 1955 when he was not even a shareholder.
Dalmia 's own statement to Annadhanam on September 20, 1955, goes to support the conclusion in this respect.
He stated to him then that he had lost the moneys in speculation which he did through his private companies and that most of those transactions were through the Union Agencies.
Further, the charge said that he committed criminal breach of trust of the funds of the Insurance Company by wilfully suffering Chokhani to dishonestly misappropriate them and dishonestly use them or dispose of them in violation of the directions of law and the implied contract existing between Dalmia and the Insurance Company prescribing the mode in which such trust was to be discharged.
It was in describing the manner of the alleged dishonest misappropriation or the use or disposal of the said funds in violation of the legal and contractual directions that the charge under section 409 I.P.C. described the Manner to consist of withdrawing the funds from the banks by cheques in favour of Bhagwati Trading Company and by the utilisation of those funds for meeting losses ' suffered by Dalmia in forward transactions in shares carried on in the name of Bharat Union Agencies, and for other purposes not connected with the affairs of the Insurance Company.
Even in this description of the manner, the emphasis ought to be placed on the expression 'for meeting losses suffered by Dalmia in forward transactions in shares carried on in the name of the Bharat Union Agencies and for other purposes not connected with 345 the affairs of the said Bharat Insurance Company ' and not on the alleged losses suffered by Dalmia personally.
We are therefore of opinion that firstly the evidence is adequate to establish that Dalmia and the Union Agencies can be said to be interchangeable and, secondly, that even if that is not possible to say, Dalmia had sufficient motive, on account of his intimate relations with the Union Agencies, for committing breach of trust, and thirdly, that the second finding does not in any way adversely affect the establishment of the offence under section 409 I. P. C. against Dalmia even though the charge described the utilisation of the money in a somewhat different manner.
The entire scheme of the transactions must start at the instance of the person or persons who were likely to suffer in case the losses of the Union Agencies were not paid at the proper time.
There is no doubt that in the first instance it would be the Union Agencies as a company which would suffer in its credit and its activities.
We have found that Dalmia was so intimately connected with this com pany as could make him a sort of a sole proprietor of the company.
He was to lose immensely in case the credit of the Union Agencies suffered, as it was commonly believed to be his concern and he bad connections and control over a number of business concerns and had a high stake in the business world.
His prestige and credit were bound to suffer severely as a result of the Union Agencies losing credit in the market.
There is evidence on record that if the losses are not promptly paid, the defaulter would suffer in credit and may not be able to persuade the brokers to enter into contracts with him.
It is suggested for Dalmia that Chokbani had a greater interest in seeing that Union Agencies does not suffer in credit.
We do not agree.
If the Union Agencies failed on account of its losing credit in the market on its failure to meet the losses, Chokhani 346 may stand to lose his service with the Union Agencies.
That would have meant the loss of a few hundred rupees a month.
In fact, he need not have suffered any loss.
He could have been employed by Dalmia who bad great confidence in him and whom he had been serving faithfully for a long time.
Chokhani, as agent of Dalmia, had certainly credit in the market.
There is evidence of his good reputation, but much of it must have been the result of his association with Dalmia and his concerns.
He really enjoyed reflected glory.
He bad no personal interest in the matter as Dalmia had.
We therefore do not consider this suggestion to be sound and are of opinion that Dalmia was the only person who bad to devise means to meet the losses of the Union Agencies.
Further, Dalmia admits that he used to give instructions with regard to the speculation in shares business of the Union Agencies at Calcutta and Delhi during 1954 and 1955, and stated, in answer to question No. 210 with respect to the evidence that Delhi Office of the Union Agencies used to supply funds for meeting the losses suffered by it in the speculation business at Calcutta and Delhi: " 'It is correct that as the result of shares speculation business at Calcutta and Delhi Bharat Union Agencies suffered losses in the final analysis.
I was once told by R. P. Mittal on telephone from Calcutta that G.L. Chokhani had informed him that the Bombay Office would arrange for funds for the losses suffered by the Calcutta Office of the Bharat Union Agencies.
It was within my knowledge that if the Bombay Office of the Bharat Union Agencies was not in a position to supply full funds for meeting the losses at Calcutta the Delhi Office of the Company would supply those funds." And, in answer to question No. 211 which referred 347 to the evidence about the Delhi Office of the Union Agencies being short of liquid funds from August, 1954, onwards and in 1955, to meet the losses, he said "It was within my knowledge that Bharat Union Agencies was holding very large number of shares.
But I did not know the name of the Companies of which the shares were held by the Bharat Union Agencies and the quantum of those shares.
" Dalmia also admitted his knowledge that Chokhani had entered into contract for the forward sale of Tata Shares at Bombay on behalf of the 'Union Agencies during 1954 and 1955 and that the Union Agencies suffered losses on this business, but stated that he did not know the extent or details of the losses.
Dalmia must be expected not only to know the losses which the Union Agencies suffered, but also their extent.
He is also expected to devise or at least know the ways in which those losses would be met.
A mere vague knowledge, as stated, about the 'Union Agencies possessing a number of shares could not have been sufficient satisfaction about the losses being successfully met.
It is to be noted that he did not deny that the Delhi Office was short of funds and that it used to supply funds to meet the losses.
Further, if Dalmia 's statement about Mittal 's communication to him be correct, it would appear that when the Bombay Office of the Union Agencies was not in a position to meet the losses, Chokhani would not think of arranging, on his own, funds to meet the losses, but would first approach the Delhi Office of the Union Agencies.
The Delhi Office., then, if unable to meet the losses, would necessarily obtain instructions from Dalmia.
It can therefore be legitimately concluded that Dalmia alone, or in consultation with Chokhani, devised the scheme of 348 the transactions which led to the diversion of the funds.
of the Insurance Company to the Union Agencies and carried it out with the help of the other appellants.
It has been contended both for Chokhani and for Dalmia that funds could have been found to meet the losses of the Union Agencies by means other than the diversion of the Insurance Company 's funds.
We need not discuss whether the shares held by the Union Agencies at the time could be sold to raise the funds or whether on the mere credit of Dalmia funds could be raised in no time.
These courses were not adopted.
The selling of the shares which the Union Agencies possessed, might itself affect its credit, and that no business concern desires, especially a concern dealing in sharespeculation business.
Dalmia had been in telephonic communication with Chokhani.
It is significant, even though there is no evidence about the content of the conversations, that there had been frequent calls, during the period of the losses in August and September, 1954, between Dalmia 's telephone and that of Chokhani at Bombay.
That was the period when Dalmia was confronted with the position of arranging sufficient funds at Bombay for the purpose of diverting them to the Union Agencies.
Very heavy losses were suffered in July and August, 1955.
Securities of the face value of Rs. 79,00,000 and Rs. 60,00,000 were purchased in July and August, 1955, respectively.
A very large number of telephone calls took place during that period between Dalmia at Delhi and Chokhani at Bombay.
It is true that during certain periods of losses, the record of telephonic communications does not indicate that any telephonic communication took place.
We have already stated, in considering the transactions, that the pattern of action to be taken had been fully determined by the course adopted in the first few transactions.
349 Chokhani acted according to that pattern.
The only thing that he had to do in connection with further contingencies of demands for losses, was to send for securities from Delhi when the funds at Bombay were low.
Such requests for the transfer of securities could be made in good time or by telephonic communication or even by letters addressed to Dalmia personally.
The fact remains that a number of securities were sent from Delhi to Bombay under the directions of Dalmia when there was no apparent reason to send them other than the need to meet losses incurred or expected.
Dalmia informed the Imperial Bank at Delhi about his power to deal with securities on September 4, 1954, though he had that power from September, 1951, itself.
This was at the early stage of the commencement of the losses of the Union Agencies ,suffered for a period of over a year and the planned diversion of the funds of the Insurance Company to meet the losses of the Union Agencies.
Raghunath Rai states that on the resignation of Chordia it was deemed necessary that the powers of the Chairman be registered with the Bank so that he be in a position to operate on the securities ' safecustody account of the company with the Bank, and that he sent the copy of the bye laws etc.
, without the instructions of Dalmia, though with his knowledge, as he was told that it was necessary for the purpose of the withdrawal of the securities for which he had given instructions.
This was, however, not necessary, as Raghunath Rai bad the authority to endorse, transfer, negotiate and or deal with Government securities, etc., standing in the name of the company.
We are of opinion that Dalmia took this step to enable him to withdraw the securities from the Bank when urgently required and another person authorised to withdraw be not available or be not prepared to withdraw them on his own.
350 The position of the securities may be brifely described on the basis of Appendix 1 of the Investigator 's report Exhibit D. 74.
The amount of securities at Bombay with the Chartered Bank, on June 30, 1953, was Rs. 53,25,000 out of a total worth Rs. 2,69,57,200.
The amount of securities in the Bank continued to be the same till March 31, 1954, even though the total amount of securities rose to Rs. 3,04,88,600.
Thereafter, there had been a depletion of securities with the Chartered Bank at Bombay with the result that on December 31, 1954, it had no securities in deposit.
The amount of securities in the Imperial Bank of India, New Delhi, also fell subsequent to June 30, 1954.
It came down to Rs. 2,60,000 on March 31, 1955, from Rs. 59,11,100 on June 30, 1954.
Securities worth Rs. 52,00,000 were in the two offices on June 30, 1953.
The amount of such securities kept on steadily increasing.
It was Rs. 1,88,47,500 from September, 1953, to March 31, 1954.
Thereafter, it rapidly increased every quarter, with the result that on March 31, 1955, the securities worth Rs. 3,76,50,804 out of the total worth Rs. 3,86,97,204 were in the offices.
The overall position of the securities must have been known to Dalmia.
The saving of Bank charges is no good explanation for keeping the securities of such a large amount, which formed a large percentage of the Company 's holdings, in the offices and not in deposit with a recognized bank.
The explanation seems to be that most of the securities were not really in existence.
Raghunath Rai states that be spoke to Dalmia a number of times, presumably, in July and August, 1955, about the non receipt of the securities of the value of Rs. 81,25,000, Rs. 75,00,000 and Rs. 69,00,000 which were purchased in the months of April May.
July and August 1955 respectively, and Dalmia used 351 to tell him that as the purchase and sale of securities had to be effected at Bombay, Chokhani could send them to the head office only after it had been decided about which securities would be finally retained by the Insurance Company.
This statement implies that Dalmia knew and anticipated the sale of those securities and such a sale of those securities, as already mentioned, could not be in the usual course of business of the company.
The securities were to be sold only if by the next due date for payment of interest they could not be recouped and did not exist with the company.
Such an inference is sufficient to impute Dalmia with the knowledge of the working of the scheme.
Securities were sent to Bombay from Delhi seven times during the relevant period and they were of the face value of Rs. 2,114,82,500.
Securities of the face value of Rs. 17,50,000 were withdrawn from the Imperial Bank, Delhi, on September 4, 1954 vide Exhibit P. 1351.
They were sold at Bombay on September 9, 1954.
Thereafter, 30/ 1957 securities of the face value of Rs. 37,75,000 were sent on January 6, 1955.
Raghunath Rai deposes that he withdrew these from the Imperial Bank, Delhi, under the directions of Dalmia, and that he handed them over to Dalmia.
These securites did reach Bombay.
There is no clear evidence as to how they Went from Delhi to Bombay.
They were sold on January 11, 1955.
Eleven stock certificates of the face value of Rs. 57,72,000 were sent to Bombay on March 16, 1955, vide letter exhibit D. 3.
Thereafter, stock Certificates were sent thrice in July 1955.
Stock certificate in respect of 3% Bombay Loan of 1955, of the face ' value of Rs. 29,75,000 was sent to Bombay on July 15, 1955 vide Exhibit P. 923.
On the next day, i.e., on July 16, 1955, stock certificates of 3% Bombay Loan of 1955 of the face value of Rs. 15,50,000 and stock 352 certificates of 3 % Loan of Government of Madhya Pradesh of the face value of Rs. 60,500 were sent to Bombay vide Exs.
D. 1 and D. 2 respectively.
J. Lastly, stock certificates of 2 3/4% Loan of 1962 of the face value of Rs. 56,00,000 were sent to Bombay on August 5, 1955.
Letters Exhibits D. 3 and P. 892 state that the stock certificates mentioned therein were being sent under instructions of the Chairman '.
Raghunath Rai has deposed that the other stock certificates send with letters Exhibits D. 1, D. 2 and P. 923, were sent by him as the securities with respect to which those certificates were granted were maturing in September and were redeemable at Bombay.
It has been urged that they could have been redeemed at Delhi and that they need not have been sent by Raghunath Rai on his own a couple of months earlier.
We do not consider the sending of the securities a month and a half or two months earlier than the date of maturity to be unjustified in the course of business.
It is to be noticed that what was sent were the stock certificates and it might have been necessary to get the securities covered by those certificates for the purpose of redemption and that might have taken time.
No pointed question was put to Raghunath Rai as to why he sent the securities two months ahead of the date of maturity.
Dalmia denies that he gave any instructions for the sending of the securities.
There seems to us to be no good reason why the expression under the instructions of the Chairman ' would be noted in letters Exhibits D. 3 and P. 892, unless that represented the true statement of fact.
We have already discussed and expressed the opinion, in considering the evidence of Raghunath Rai, that Raghunath Rai was told by 353 Dalmia, when informed of the purchase or sale of securities, that had been done under instructions and that he had confirmed them.
We may further state that there is no resolution of the Board of Directors empowering Chokbani to deal with the Rag securities.
He was, however, empowered by resolutions at the meeting of the Board dated June 29, 1953, to lodge and receive G. P. Notes from the Reserve Bank of India for verification and endorsement on the same and to endorse or withdraw the G. P. Notes on behalf of the company in the capacity of an agent.
Chokbani was also empowered by a resolution dated October 1, 1953, to deposit and withdraw Government securities held in safe custody account by the company.
The aforesaid powers conferred on Chokhani are different from the powers of sale or purchase of securities.
Dalmia has stated that he authorised Chokhani to purchase securities in about October, 1953,when he was to leave for abroad and that thereafter Chokhani had been purchasing and selling securities in the exercise of that authority without consulting him.
It is urged for him that Raghunath Rai 's statement that be used to obtain confirmation of the purchase and sale of the securities from him cannot be true, as there was no necessity for such confirmation.
Chokbani does not appear to have exercised any such authority during the period Dalmia was abroad or till August, 1954, and therefore Dalmia 's statement does not appear to be correct.
Chokhani and Raghunath Rai were authorised to operate upon the Bank account at Bombay on October 1, 1953.
Dalmia states, in paragraph 17 of the written statement dated March 30, 1959, that this was done as Chokhani bad been given 354 the authority for the sale and purchase of securities at the same time.
The Board did not give any such authority to Chokhani and if the system of joint signatures was introduced for the reason alleged, there seems to be no good reason why the Board itself did not resolve that Chokhani be empowered to sell and purchase securities.
The explanation for the introduction of joint signature scheme does not stand to reason.
Even if it be not correct that Raghunath Rai had to obtain confirmation, it stands to reason that he should report such transactions on the part of Chokhani to the Chairman, if not necessarily for his approval, at least for his information, as Chokhani had no authority to purchase and sell securities.
These transactions have to be confirmed by the Board of Directors and therefore confirmation of the Chairman who was the only person authorised to purchase and sell securities was natural.
Raghunath Rai states that when he received no reply to his letter dated November 19, 1954, asking for distinctive numbers of securities not received at headquarters.
Dalmia said that he would arrange for the dispatch of those secu rities from Bombay to the head office.
No action was apparently taken in that connection.
Raghunath Rai further states that on March 23, 1955, when he spoke to Dalmia about the non receipt of certain securities Dalmia told him that he had already instructed Chokhani for the conversion of those securities into stock certificates and that it was in view of this statement of Dalmia that he had written letter Exhibit P. 916 to Chokhani stating therein.
"You were requested for conversion of the above said G. P. Notes into Stock Certificate.
The said certificate As not been received by us 355 as yet.
It may be sent now immediately as it is required for the inspection of the company 's auditors.
" This indicates that Dalmia was in the know of the position of securities and, on his own, gave instructions to Chokhani to convert certain securities into inscribed stock.
Dalmia admits Raghunath Rai 's speaking to him about the non receipt of the securities and his telling him that he would ask Chokhani to send them when he would happen to talk to him on the telephone.
Mention has already been made of securities of the face value of Rs. 17,50,000 being sent to Bombay from Delhi in the first week of September 1954.
At the time securities of the face value of Rs.53,25,000 were in deposit in the Chartered Bank at Bombay.
There was thus no need for sending these securities from Delhi.
Chokhani could have withdrawn the necessary securities from the Bank at Bombay.
This indicates that on learning that there were no liquid funds for meeting the losses at Bombay, Dalmia himself decided to send these securities to Bombay for sale and for thus providing for the liquid funds there for meeting the cost of the intended fictitious purchase of securities to meet the losses of the Union Agencies.
It is not suggested that these securities were sent to Bombay at the request of Chokhani.
Securities withdrawn in January, 1955, and stock certificates sent in March and August, 1955, coincided with the period when the Union Agencies suffered losses and the funds of the Insurance Company at Bombay were low and were insufficient to meet the losses of the Union Agencies.
3% 1957 securities of the face value of Rs. 46,00,000 (Rs. 37,75,000 set from Delhi and 356 Rs. 8,25,000 withdrawn from the Chartered Bank at Bombay) were sold on January 11, 1955, and the proceeds were utilised in purchasing 2 3/4% 1962 securities of the face value of Rs. 46,00,000 in two lots, one of Rs. 35,00,000 and the other of Rs. 11,00,000.
On January 11, 1955, Rs. 3,34,039 15 3, the balance of the sale proceeds was deposited in the accounts of the Insurance Company.
Inscribed stock for these securities worth Rs. '46,00,000 was duly obtained.
Dalmia himself handed over inscribed stock certificate to Raghunath Rai some time in the end of January 1955.
This purchase, though genuine, was not a purchase in the ordinary course of business, but was for the purpose of procuring the inscribed stock certificate to satisfy the auditors, as already discussed earlier, that similar securities purchased in December, 1954 existed.
The auditors were than to audit accounts of 1954 and not of 1955.
In this connection reference may be made to Dalmia 's attitude to the auditors ' surprise inspection on September 9, 1954, on the ground that they could not ask for inspection of securities purchased in 1955.
It may also be mentioned that purchasing and selling securities was not really the business of the Insurance Company.
The Insurance Company had to invest its money and, under the statutory requirements, had to invest a certain portion at least in Government Securities.
The value of Government securities does not fluctuate much.
Dalmia states, in answer to question No. 25 (under a. 342 Cr. P. C.): 'Government securities are gift edged securities and there is very small fluctuation in these. ' The question of purchasing and selling of securities with a view to profit could not therefore be the ordinary business of the Insurance 357 Company.
It has to purchase securities when the statutory requirements make it necessary, or when it has got funds which could be invested.
The Insurance Company had Government of India 3% Loan of 1957 in deposit with the Chartered Bank, Bombay, the face value of the securities being Rs. 53,25,000, from April 6, 1951, onward.
The fact that these securities remained intact for a period of over three years, bears out our view that the purchasing and selling of securities was not the normal business of the Insurance Company, Securities are purchased for investment and are redeemed on the date of maturity.
In this connection, reference may be made to Khanna 's statement in answer to question in cross examination The frequency of transactions relating to purchase and sale of securities depends upon the share market and its trends ? His answer was that was so, but that it also depended on the character of the company making the investment in securities.
It may be said that the trend of the share market will only guide the purchase or sale transactions of securities of a company speculating in shares, like the Union Agencies, but will not affect the purchase and sale by a company whose business is not speculation of shares like the Insurance Company.
Raghunath Rai states that when on September 9, 1955, the auditors wanted the production of the securities, said to be at Bombay, in the next two days, he informed Dalmia about it and Dalmia said that he would arrange for their production after two days.
Dalmia, however, took no steps to contact Chokhani at Bombay, but rang up Khanna instead and asked him to certify the accounts as they had to be laid before the Company by September 30, and told him that everything was in order,.
that he would give all satisfaction later, 358 soon after Chokhani was available and that he did not ask for an extension of time for the filing of the accounts as that would affect the prestige of the company.
On September 10, 1955, when Raghunath Rai handed over the letter Exhibit P. 2 of even date from the auditors asking him to produce a statement of investments as on September 9, 1955, along with the securities or evidence if they were with other persons, by Tuesday, September 13, Dalmia had stated that Chokbani 's mother had died and that he would himself arrange for the inspection of securities direct with the auditors.
Chokhani 's mother died on September 4, 1955.
Dalmia had no reason to tell Raghunath Rai on September 9 that the securities would be produced for inspection in the next two days, unless he believed that he could get them in that time on contacting Chokhani, or did not wish to tell him the real position.
Dalmia states that he contacted Chokhani for the first time on September 15, the last day of the mourning and then learnt from Chokhani that the securities were not in existence, the money withdrawn for their purchase having been lent to the Union Agencies.
The various statements made by Dalmia in these circumstances and his conduct go to show that he had a guilty mind and when he made the statement to Raghunatb Rai that the securities would be produced within two days, he trusted that he would be persuasive enough for the auditors to pass the accounts without further insistence on the production of those securities.
Dalmia 's not going to Mr. Kaul 's Office on September 16, and sending his relations to inform the latter of the shortfall in securities can have no other explanation than that he was guilty and therefore did not desire to have any direct talk about the matter with Mr. Kaul.
There was no need to avoid meeting him and miss the opportunity 359 of explaining fully what Chokhani had done without his own knowledge.
Dalmia has admitted that he sent his relations to Mr. Kaul and has also admitted that what they) stated to Mr. Kaul was under his instructions.
, He states in answer to question No. 450, that after the telephonic talk with Chokhani on the evening, of September 15, he consulted his brother Jai Dayal Dalmia and his son in law section P. Jain about the position and about the action to be taken and that it was decided between them before they left for the office of Mr. Kaul that they would tell him that either the securities would be restored or their price would be paid off as would be desired by the Government and in answer to question No. 451, said that it was correct that these persons told Mr. Kaul that a considerable amount of the securities were missing and that they were to make good the loss.
It is clear that these persons decided not to disclose to Mr. Kaul that the securities were not in stock because they were not actually purchased and the amount shown to be spent on them was lent to the Union Agencies.
was not a case of the securities missing but a case of the Insurance Company not getting those securities at all.
It is a reasonable inference from this conduct of Dalmia that he did not go himself to Mr. Kaul as he was guilty and would have found it inconvenient to explain to him how the shortfall had taken place.
We may now discuss the evidence relating to Dalmia 's making a confession to Annadhanam.
Annadhanam was a Chartered Accountant and partner of the Firm of Chartered Accountants M/s. Khanna and Annadhanam, New Delhi, and he was appointed by the Central Government, in exercise of its powers under section 33(1) of the , on September 19, 1955, to investigate into the affairs of the Bharat Insurance 360 company and to report to the Government on such investigation.
He started this work on September 20.
Annadhanam, having learnt from Raghunath Rai about the missing of a number of Government securities and the amount of their value from the statement prepared by him, called Dalmia to his office that evening in order to make a statement.
Dalmia made the statements Exhibits P. 10 and P. reads : " 'I have misappropriated securities of the order of Rs. 2,20,00,000 of the Bharat Insurance Company Ltd. I have lost this money in speculation.
" Exhibit P. 11 reads: "Further stated on solemn affirmation.
At any cost, I want to pay full amount by requesting my relatives or myself in the interest of the policy holders.
" Dalmia admits having made the statement Exhibit P. 11.
but made some inconsistent statements about his making the statement Exhibit P. 'LO.
It is said that he never made that statement, but in certain circumstances he asked the Investigator to write what he considered proper and that he signed what Annadhanam recorded.
He did not directly state, but it was suggested in cross examination of Annadhanam and in his written statement that he made that statement as a result of inducement and promise held out by either Annadhanam of Khanna (the other partner of M/s. Khanna and Annadhanam, Chartered Accountants, New Delhi) or both.
Dalmia 's contention that Exhibit P. 10 was inadmissible in evidence, it being not voluntary, was repelled by the learned Sessions Judge, but was, in a way, accepted by the High Court which did not consider it safe to rely on it.
The learned Solicitor General urged that the confession Exhibit P. 10 was 361 voluntary and was wrongly not taken into consideration by the High Court.
Mr. Dingle Foot contended that the High Court took the proper view and the confession was not voluntary.
He further urged that the confession was bit by the provisions of el.
(3) of article 20 of the Constitution.
The only witnesses with respect to the recording of the statement Exhibit P. 10. are Annadhanam and Khanna.
The third person who knew about it and has stated about it is Dalmia himself.
He has given his version both in his statement recorded under section 342 Cr.
P. C. and in his written statement filed on October 24, 1958.
We may first note the relevant statement in this connection before discussing the question whether the alleged confession is voluntary and therefore admissible in evidence.
Annadhanam made the following relevant statements: Dalmia came to the office at 6.30 p.m. though the appointment was for 5.30 p.m.
His companion stayed outside the office room.
Annadhanam asked Dalmia the explanation with regard to the missing securities.
Dalmia wanted two hours ' time to give the explanation.
This was refused.
He then asked for half an hour 's time at least.
This was allowed.
Dalmia went out of the office, but returned within ten minutes and said that he would make the statement and it be record.
Annadhanam, in the exercise of the powers under section 33(3) of the , administered oath to Dalmia and recorded the statement Exhibit P. 10.
It was read over to Dalmia.
Dalmia admitted it to be correct and signed it.
Shortly ' after, Dalmia stated that he wanted to add one more sentence to his statement.
He was again administered oath and his further statement, Exhibit P. 11 was recorded.
This was also read over and Dalmia signed it, admitting its accuracy.
362 Annadhanam states that no threat or inducement or promise was offered to Dalmia before he made these statements.
A third statement is also attributed to Dalmia and it is that when Dalmia was going away and was nearing the stair case, Annadhanam asked him whether the speculation in which he had lost the money was carried on by him in the company 's account or in his private account.
Dalmia replied that he had lost that money in his personal speculation business which was carried on chiefly through one of his private companies, viz., the Union Agencies.
This statement was not recorded in writing.
Annadhanam did not consider it necessary, but this was mentioned by Annadhanam in his supplementary interim report, Exhibit P. 13, which he submitted to the Deputy Secretary, Ministry of Finance, on September 21, 1955.
Annadhanan also mentioned about the statement recorded in Exhibit P. 10 in his interim report, Exhibit P. 12, dated September 21, 1955, to the Deputy Secretary, Ministry of Finance.
In cross examination, Annadhanam stated that he did not send for Dalmia to the office of the Bharat Insurance Company where he had examined Raghunath Rai, as he had not made up his mind with respect to the further action to be taken.
He denied that he had any telephonic talk with Mr. Kaul, the Deputy Secretary, Ministry of Finance, prior to the recording of the statements, Exhibits P. 10 and P. II His explanation for keeping Khanna with him during the examination of Dalmia was that Khanna had done the detailed auditing of the accounts of the company in pursuance of the firm Khanna and Annadhanam being appointed auditors for 1954 by the Insurance Company.
He denied that Dalmia told him that he had no personal knowledge ' of the securities and that the only information he had from Chokhani was that the 363 latter had given money on loan to the Union Agencies.
He stated that the statements Exhibits P. 10 and 11 were recorded in the very words of Dalmia.
The statements were not actually read over to Dalmia but Dalmia himself read them over.
Annadhanam denied that he told Dalmia that he would not be prosecuted if he made the statements Exhibit P. 10 and P. 11 and deposited.
the money alleged to have been embezzled and further stated that Khanna did not tell this to Dalmia.
He denied that Exhibit P. 10 was never made by Dalmia and was false and reiterated that statement was made by Dalmia.
He did not consider it proper to reduce to writing every word of what transpired between him and Dalmia from the moment of the latter 's arrival in his office till the time of his departure, and considered it proper ' to reduce in writing the statement which was made with regard to the missing securities.
He further stated that his statement above Dalmia 's making statements Exhibits P. 10 and P. 11 voluntarily was on account of the facts that Dalmia himself volunteered to make those statements and that he himself had offered no inducements or promises.
In cross examination by Mr. T. C. Mathur, he denied that he told Dalmia that as Chairman of the Insurance Company he should own responsibility for the missing securities and that would make him a greater Dalmia because he was prepared to pay for the short fall and further denied that it was on account of the suggested statement that Dalmia had asked for two hours ' time before making his statement.
In cross examination by Dalmia personally, Annadhanam explained the discrepancy in the amount of the securities admitted to be misappropriated.
Exhibit P. 10, mentions the securities to be of the order of Rs. 2,20,00,000/.
In his report 364 Exhibit P. 12, he stated the admission to be with respect to securities of the face value of Rs. 2,22,22,000/ .
The explanation is that in the interim report he worked out the face value of the missing securities to be Rs, 2,22,22,000/ , and he mentioned this figure in his report as Dalmia had admitted the misappropriation of the securities.
Nothing sinister can be inferred from this variation.
Khanna practically supports the statement of Annadhanam, not only with respect to Exhibit P. 10 and P. II, but also with respect to the third statement said to have been made near the staircase.
His statements in cross examination that it was possible that Annadhanam might have asked the companion of Dalmia to stay outside the office as the proceedings were of a confidential nature, does not in any way belie Annadhanam 's statement as this statement itself is not definite.
In answer to the question whether it struck him rather improper that Dalmia made the statement Exhibit P. 10 in view of his previous statement to Khanna that satisfaction would be afforded to the auditors on the points raised by them after Chokhani was available, he replied that his own feeling was that the statements Exhibits P. 10 and P. 11 were the natural culmination of what he learnt in the office of Mr. Kaul on September 16, 1955.
He also denied that be told Dalmia that whoever was at fault, the ultimate responsibility would fall on the Chairman and other Directors as well as the officers of the Insurance Company by way of misfeasance, and that Dalmia should sign the statement which would be prepared by himself and Annadbanam so that the other Directors and the officers of the Insurance Company be not harassed and that if this sugges tion was accepted by Dalmia, he would save every one and become a greater Dalmia.
He denied the suggestion that when Dalmia talked of his charitable disposition in his office on September 20, 1955, it should have been in answer to his (Khanna 's) 365 provocative remarks wherein he had made insinuations regarding Dalmia 's integrity and stated that he was merely a silent spectator of what actually Del: had happened in the office that day.
He further stated that no question arose of Annadhanam 's attacking the integrity of Dalmia on September 20, 1955.
He denied that Mr. Kaul had told him or Annadbanam on September 19, when the order appointing Annadhanam Investigator was delivered, that Dalmia had to be implicated in a criminal case.
Khanna denied that his tone and remarks during the discussion were very persuasive and that told Dalmia that it was very great of him that he was going to pay the amount represented by the short fall of the securities.
He also denied the suggestion that Dalmia told him and Annadhanam on September 20, at their office, that be had no knowledge of the missing securities, that it, appeared that the securities had either been sold or pledged and that the money had been paid to the Union Agencies, which Dalmia did not , like, and that in the interest of the policy holders and the Insurance Company Dalmia was prepared to pay the amount of the short fall of securities, and also that when Dalmia spoke about the securities being sold or pledged.
Khanna and Annadhanam remarked that the securities bad been misappropriated.
He denied that he told Dalmia that if he took personal responsibility in the matter, it would be only then that no action would be taken and stated that he and Annadhanam were nobody to give any assurance to Dalmia.
Dalmia stated, in this statement under section 342 Cr.
P.C. on November 7, 1958, that his companion Raghunath Das Dalmia stayed out because he was not allowed to stay with him inside the office.
He denied that he first spoke about his charitable disposition and piety when asked by Annadhanam to explain about the missing securities and stated that 366 there could be no occasion for him to talk at that time of his piety and charitable disposition when he had been specifically called to explain with regard to the missing securities.
His version of what took place may now be quoted (answer to question No. 471) in his own words: "What actually happened was that I told Shri Annadhanam that I had learnt from G. L. Chokhani that the amount of the missing securities had been lent temporarily on behalf of the Bharat Insurance Company by Shri G. L. Chokhani to Bharat Union Agencies and that the amount had been lost in speculation.
Shri Annadhanam then asked me about the missing securities.
I then told him that I did not know as to whether the securities had been sold or mortgaged.
My replies here being noted by Shri Annadhanam on a piece of paper.
Shri Annadhanam then asked me as to when the securities had been sold or mortgaged I replied that I did not know with regard to the time when the securities had been sold or mortgaged.
Shri Annadhanam then asked me as to what were the places where there were offices of Bharat Union Agencies.
I then told him that the offices were at Bombay and Delhi.
I than remarked that whatever had happened, I wanted to pay the amount of the missing securities as the interest of the policy holders of the Bharat Insurance Company were close to my heart.
During the course of that talk sometimes Shri Annadhanam questioned and sometimes the questions were asked by Shri Khanna.
Shri Khanna then stated that I should forget the events of 9 9 1955.
Shri Khanna further stated. 'We too are men of hearts.
And not bereft of all feelings.
We too have children.
I am very much impressed by your offer of such a huge 367 amount '.
Shri Khanna also remarked that Shri Annadhanam had been appointed under section 33 of the to investigate into the affairs of the Bharat Insurance Company and as such the words of Shri Khanna and Shri Annadhanam would carry weight with the Government.
Shri Khanna also stated other things but I do not remember them.
I however distinctly remember that Shri Khanna stated to me that I should go to Shri C. D. Deshmukb and that Shri Khanna would also help me.
I then replied that I would not like to go to Shri Deshmukh.
Shri Khanna then remarked that the Government attached great importance to the interests of the policy holders and that if the matter got undue publicity it would cause a great loss to the policy holders.
Shri Khanna accordingly stated that if I agreed to his suggestion the matter would be settled satisfactorily and without any publicity.
It was in those circumstances that I asked for two hours ' time to consult my brother and son in law." He further stated that when Annadhanam told him that he could have half an hour 's time and that more time could not be given as the report had to be given to the Government immediately, he objected to the shortness of time as he could not during that interval go to meet his brother and son in law and return to the office after consulting them and further told Annadhanam and Khanna to write whatever they considered proper as he had trust in them.
His reply to question No. 476 is significant and reads: "The statement was read over tome.
I then pointed out that what I had stated had not been incorporated in exhibit P. 10.
I made 368 no mention that the statement exhibit ' P. 10 was correct or not.
Shri Annadhanam then reduced to writing, whatever was stated by me.
That writing if exhibit P. 11 and is in the very words used by me.
" He does not directly answer question No. 479: "It is in evidence that the statement exhibit P. 1 1 was read over to you, you admitted it to be correct and signed it.
Do you want to say anything with regard to that?" and simply stated, 'I did sign that statement '.
He denied the third statement alleged to have been made near the staircase.
Dalmia also stated that he had mentioned some facts about the statements Exhibits P. 10 and 11 in his written statement.
Paragraphs 53 to 59 of the written statement dated October, 24, 1958, refer to the circumstances about the making of the statements Exhibits P. 10.
and P. II.
In paragraph 53 Dalmia states that the recording of his statement in Annadhanam 's office took place as it was only there that Annadhanam and Khanna could get the necessary privacy.
The insinuation is that they did not want any independent person to know of what transpired between them.
Paragraph 54 refers to a very minor discrepancy.
Paragraph 55 really gives the version of what took place in, Annadhanam 's office.
We refer only to such portions of this version as do not find a place either in the suggestions made to Annadhanam and Khanna in their cross examination or in the statement of Dalmia under a. 342 or which be inconsistent with either of them.
Dalmia stated that he told Annadbanam that the 369 money that had been received by Bharat Union Agencies as loan belonged to Bharat Insurance Company and it appeared that the Union Agencies had lost that money in speculation.
He further which tend to impute an inducement on the part of Khanna to him.
These statements may be quoted in Dalmia 's own words: "On this Shri Khanna said that I was a gentleman, that I was prepared to pay such a heavy amount which has never been paid so far by anybody, that I should accept his advice and that I should act according to his suggestion and not involve myself in this dis pute, the Government was not such a fool that they would not arrive at a quiet settlement with a man who thought that his first duty was to protect the policy holders and thus by spoiling the credit of the Bharat Insurance Co. would harm its policy holders.
If the Government did so it would be an act of cruelty to the policy holders, and when I was prepared to pay the money it (Government) would not take any such course by which I may have to face troubles, that my name would go very high, that he advised me as being my well wisher that I should confess that I had taken the securities, that they would help me.
They added that Shri Annadhanam has been appointed as Investigator by the Government and therefore their words carry weight with the Government, that it was my responsibility, being the Chairman and Principal Officer of the Bharat Insurance to pay the money.
At that time I was restless to pay the money.
I was influenced by their talk and anybody in my place would have trusted their words.
I was impressed by their saying to me that Po wise Government or officers would take 370 such action which would harm the policyholders through publicity.
Therefore I took that whatever Shri Khanna and Annadhanam were saying was for my good".
He stated that he asked Annadhanam and Khanna for two hours ' time to consult his brother.
and son in law and that one of them said that they could not give more than half an hour, This is inconsistent with what he stated under section 342.
He further stated : "I told them to write in whatever way they thought best and whatever they wrote I simply signed.
After signing when I read it, I pointed out to them that they had not written that I wanted to pay every pie of the policy holders and then they wrote as I told them and I signed".
The statement referred to is a short one, and it is not possible to believe that he signed it without reading it.
Paragraph 56 makes no reference to the events of that evening, but paragraph 57 refers to the improbability of his writing things which brought trouble to him when just before it he had been talking irrelevantly.
The question in cross examination did suggest that he was forced to make irrelevant talk due to certain provocation.
That does not fit in with the explanation in paragraph 57 that his talk about a temple was invented to support the statement Annadhanam had made to the police about Dalmia 's talking irrelevantly.
His statement 'How could I have acted in such a way without any positive assurances, implies that he did make the statements though on getting assurances.
In para graph 58 he states : "On 20th September Shri Khanna and Annadhanam had put all sorts of questions 371 to Raghunath Rai but let me off after recording my statement in just one or two lines.
Their design had succeeded and therefore they, did not care to record any further question".
This again implies his making the statement P. 10.
Of course, after he had made the statement P. 10 there was no necessity of asking anything further.
His statement explained the missing of the securities.
Reference may now be made to what Raghunath Rai, who was the Secretary of the Bharat Insurance Company, states in reference to the statement made by Dalmia to Annadhanam.
Raghunath Rai states that when he went to Dalmia about 7 p. m. on September 200, 1955, and told him about the recording of his own statement by Annadhanam and the preparation of the statement about Exhibit P. 8 and about his talk regarding the securities at Bombay, Dalmia said : 'I have been myself in the office of the Investigator.
He has recorded my statement wherein I have admitted the short fall of the securities '.
This also points to Dalmia 's making the statement Exhibit P. 10.
Raghunatb Rai did not admit, but simply said that Dalmia did tell him something when he was questioned as to whether Dalmia told him that he had been told by Anadbanam and Khanna that if he had made the statement in accordance with their desire, there would be no trouble.
Dalmia evaded a direct answer to the question put to him under section 342, Cr. P. C.
When question No. 482 was put to him with reference to this statement of Raghunath Rai he simply stated that he had briefly told Raghunath Rai with regard to what bad transpired between him and Khanna and Annadhanam and that he had told Raghhunath Rai that he need not worry.
372 The various statements of Dalmia suggesting that inducement was; held out to him by Khanna have not been believed by the Courts below, and we see no good reason to differ from their view.
There was no reason for Annadhanam to record an incriminating statement like P. 10 and get it signed by Dalmia.
The High Court does not also hold that the confession was the result of some threat extended by Annadhanam.
It did not consider it safe to rely upon it as it considered the confession to be not voluntary in a certain sense.
It said : "In that sense, therefore, it was not a voluntary statement, because although no words of threat or inducement were uttered by Mr. Annadhanam or anyone else, the circumstances had shaped themselves in such a manner that there was an implied offer of amnesty being granted to him if he did not persist in his negative behavior.
He therefore made a statement that he had misappropriated the securities and immediately offered to make good the loss through his relatives".
What are those circumstances which implied an offer of amnesty being granted to him if he did not persist in his negative behaviour, presumably in not giving out full information about the missing securities ? Such circumstances, as can be gathered from the judgment of tile High Court seem to be these : (1) Dalmia, a person of considerable courage in commercial affairs was Dot expected to make a voluntary confession.
(2) He had evaded meeting the issue lull face whenever he could do so and did not appear before Mr. Kaul on September 16, 1955, to communicate to him the position about the securities.
(3) He not only appeared before Annadbanam an hour late, but further asked for two hours ' time before answering a simple question about the missing securities.
(4) He made the 373 statement when he felt cornered on account of the knowledge that Annadhanam had the authority of law to question and thought that, the only manner of postponing the evil consequence of his act was by making the statement which would soften the attitude of the authorities towards him.
We are of opinion that none of these circumstances would make the confession invalid.
Dalmia 'a knowledge that Annadhanam could record his statement under law and his desire to soften the attitude of the authorities by making the statement do not establish that he was coerced or compelled to make the statement.
A person of the position, grit and intelligence of Dalmia could not be so coerced.
A person making a confession may be guided by any considerations which, according to him, would benefit him.
Dalmia must have made the statement after weighing the consequences which he thought would be beneficial to him.
His making the confession with a view to benefit himself would not make the confession not voluntary.
A confession will not be voluntary only when it is made under some threat or inducement or promise, from a person in authority.
Nothing of the kind happened in this case and the considerations mentioned in the High Court 's judgment do not justify holding the confession to be not voluntary.
We are therefore of opinion that Dalmia made the confession Exhibit P. 10, voluntarily.
It was argued in the High Court, for the State, that Dalmia thought it best to make the statement because, by doing so, he hoped to avoid the discovery of his entire scheme of conspiracy which had made it possible for him to misappropriate such a large amount of the assets of the Insurance Company.
The High Court held that even if the confession was made for that purpose, it would not be a voluntary confession.
We consider this ground to hold the confession involuntary unsound, 374 Mr. Dingle Foot has contended that the statement, Exhibit P. 10, is not correct, that Annadhanam and Mr. Kaul colluded and wanted to get a confession from Dalmia and that is why Annadhanam extracted the confession and that various circumstances would show that the confession was not voluntary in the sense that it was induced or obtained by threat.
He has also urged that Annadhanam was 'a person in authority ' for the purpose of section 24 of the Indian Evidence Act.
These circumstances, according to him, are that Dalmia 's companion was not allowed to stay in the office, that only balf an hour was allowed for Dalmia to make consultations, that there had been a discussion before the recording of Exhibit P. 10, that no record on the discussion was maintained, that Annadhanam, as Investigator, was a public servant, that section 176, 1.
P. C. was applicable to Dalmia if he had not made the statement and that the statement on oath really amounted to an inquisition.
It was further contended that if the confession was not inadmissible under section 24 of the Evidence Act; it was inadmissible in view of cl.
(3) of article 20 of the Constitution.
Mr. Dingle Foot has further contended That the statement, exhibit P. 10, is not correct inasmuch as it records: 11 have misappropriated securities of the order of rupees two crones, twenty lakhs of the Bharat Insurance Company Ltd. ', that it could not be the language of Dalmia and that these facts supported Dalmia 's contention that be simply signed what Annadhanam had written.
The public prosecutor had also questioned the correctness of this statement inasmuch as the actual misappropriation was done by Chokhani and Dalmia had merely suffered it and as the accurate statement would have been that there was mis appropriation of the money equivalent of the Securities.
375 We are of opinion that any vagueness in the expression could have been deliberate.
The expression used was not such that Dalmia, even if he had a poor knowledge of English, could not have used.
The statement was undoubtedly very brief.
It cannot be expected that every word was used in that statement in the strict legal sense.
The expression 1 misappropriated the securities ' can only mean that he misappropriated the amount which had been either spent on the purchase of the securities which were not in existence, or realised by the sale of securities, and which was shown to be utilised in the fictitious purchase of securities.
The main fact is that Dalmia did admit his personal part in the loss of the amount due to the shortfall in the securities.
There is nothing on record to justify any conclusion that Annadhanam and Mr. Kaul bad colluded and wanted to get a confession from Dalmia.
It is suggested that Annadhanam war, annoyed with Dalmia on account of the latter 's resentment at the conduct of Annadhanam and Khanna in conducting a surprise inspection of the accounts and securities on September 9, 1955.
Raghunath Rai protested saying that they had already verified the securities and that they, as auditors for the year 1954, had no right to ask for the inspection of securities in the year 1955.
At their insistence, Raghunath Rai showed the securities.
After their return to the office, Dalmia rang them up and complained that they were unnecessarily harassing the officers of the Bharat Insurance Company and had no right to inspect the securities.
Dalmia was not satisfied with their assertion of their right to make a surprise inspection.
There was nothing in this conduct of Dalmia, which should have annoyed Annadbanam or Khanna.
They did 376 what they considered to be their duty and,., successfully met the opposition of Raghunath Rai.
If there could be any grievance on account of their inspection, it would be to Dalmia who, as a result, would not be easily induced by them to make the confession.
Mr. Kaul, as Deputy Secretary, Ministry of Finance, did take part in the bringing of the matter to a bead, not on account of any personal animus against Dalmia such animus is not even alleged but on account of his official duties, when be heard a rumour in Bombay that Dalmia had incurred heavy losses amounting to over two crores of rupees through his speculative activities and had been drawing upon the funds of the Insurance Company of which he was the Chairman to cover his losses.
He asked Dalmia on September 14, 1955, to see him on the 15th in connection with the securities of the Insurance Company.
When Dalmia met him on the 15th in the presence of Mr. Barve, Joint Secretary, he asked whether he had brought with him an account of the securities of the Bharat Insurance Company.
Dalmia expressed his inability to do so for want of sufficient time and promised to bring the account on September 16.
On the 16th, Dalmia did not go to Mr. Kaul 's office; instead, his relations section P. Jain and others met Mr. Kaul and made certain statements.
Mr. Kaul submitted a note, exhibit D. 67, to the Finance Minister or September 18, 1955, and in his note suggested that of all the courses of action open to the Government, the one to be taken should be to proceed in the matter in the legal manner and launch a prosecution as the acceptance of section P. Jain 's offer would amount to compounding with a criminal offender.
Mr. Kaul stated that he did not consider it necessary to make any enquiry because the merits of the case against Dalmia remained unaffected whether the loss was rupees two crores or a few lakhs, more or less, On the basis of the aforesaid suggestion of 377 Mr. Kaul and his using the expression 'courses against Shri Dalmia it is urged that criminal action was contemplated against Dalmia and that there must have been some understanding between Mr. Kaul and Annadhanam about securing some sort of confession from Dalmia for the purpose of the case which was contemplated.
We consider this suggestion farfetched and not worthily of acceptance.
As a part of his duty, Mr. Kaul had to consider the various courses of action open to the Government in connection with the alleged drawing upon the funds of the Insurance Company to cover his losses in the speculative activities.
Mr. Kaul did not know what bad actually transpired with respect to the securities.
He had heard something in Bombay and then he was told about the short fall in the securities of the Bharat Insurance Company and.
naturally.
, he could co template that the alleged conduct could amount to a criminal offence.
In fact, ,according to Mr. Kaul, a suggestion had been made to him by section P. Jain that on the making up of the short fall in securities no further action be taken which might affect the position of Dalmia and his other associates in business and of various businesses run by them.
The fact that Annadhanam knew that there had been a short fall of over rupees two crores prior to Dalmia 's making the statement Exhibit P. 10 cannot justify the conclusion that Annadhanam and Mr. Kaul were in collusion.
Annadhanam does not admit he had ordered Dalmia 's companion to stay out of the office.
Even if he did, as stated by Dalmia, that would not mean that Annadhanam did it on purpose, the purpose being that he would act unfairly towards Dalmia and that there be not any witness of such an attempt.
Similarly, the non maintenance of the record of what conversation took place between Dalmia and the Investigator, does not point out to any sinister purpose on the part of Annadhanam.
It was 378 Annadhanam 's discretion to examine a person in connection with the affairs of the insurance Company.
He put simple question to Dalmia and that required him to explain about the missing securities.
So long as Dalmia did not make a statement in that connection, it was not necessary to make any record of the talk which might take place between the two.
In fact, Annadhanam had stated that the word discussion used by him in his supplementary interim report Exhibit P. 13, really be read as "recording of the statement of Shri Dalmia and the talk he had with when he came to Annadhanam 's office and which he had with him while going to the staircase '.
This explanation seems to fit in with the context in which the word discussion ' is used in Exhibit P. 13.
The interval of time allowed to Dalmia for consulting his relations might have been considered to be insufficient considering for confession voluntary in case that was the time allowed to a confessing accused produced before a Magistrate for recording a confession.
But that was not the position in the present case.
Annadhanam was not going to record the confession of Dalmia.
He was just to examine him in connection with the affairs of the Insurance Company and had simply to tell him that he had called him to explain about the missing securities.
There was therefore no question of Annadhanam allowing any time to Dalmia for pondering over the pros and cons of his making a statement about whose nature and effect he would have had no idea.
We do not therefore consider that this fact that Dalmia was allowed half an hour to consult his relations can point to compelling Dalmia to make the statement.
We do not see that examination of Dalmia on oath be considered to be an inquisition.
Sub section (3) of section 33 of the empowers the Investigator to examine on oath any manager, managing director or other officer of the insures in relation to his business.
, Section 176 of the Indian 379 Penal Code has no application to the examination of Dalmia under section 33 of the .
Section 176 reads: "Whoever, being legally bound to give any notice or to furnish information on any subject to any public servant, as such, inten tionally omits to give such notice or to furnish such information in the manner and at the time required by law, shall be punished with simple imprisonment for a term which may extend to one month, or with fine which may extend to five hundred rupees, or with both.
or, if the notice or information required to be given respects the commission of an offence or is required for the purpose of preventing the commission of an offence, or in order to the apprehension of an offender, with simple imprisonment for a term which may extend to six months, or with fine which may extend to one thousand rupees, or with both; or, if the notice or information required to be given is required by an order passed under sub section (1) of section 56.5 of the Code of Criminal Procedure, 1898, with imprisonment of either description for a term which may extend to six months, or with fine which may extend to one thousand rupees.
or with both.
" For the application of this section, it is necessary that Annadhanam, as Investigator, be a public servant.
Annadhanam cannot be said to be a servant.
He was not an employee of Government.
He was a Chartered Accountant and had been directed by the order of the Central Government to investigate into the affairs of the Insurance Company and to report to the Government on the investigation made by him.
of course, he was to get 380 some remuneration for the work he was entrusted with. 'Public servant ' is defined in section 21 of Indian Penal Code.
Mr. Dingle Foot has argued that Annadhanam was a public servant in view of the ninth clause of section 21.
According to this clause, every officer in the service or pay of the Government or remunerated by fees or commission for the purpose of any public duty would be a public servant.
A person who is directed to investigate into the affairs of an Insurance Company under section 33(1) of the , does not ipso facto become an officer.
There is no office which he holds.
He is not employed in service and therefore this definition would not apply to Annadhanam.
The making of a statement to the Investigator under section 33(3) of the does not amount to furnishing information on any subject to any public servant as contemplated by a. 176 I. P. C., an omission to furnish which would be an offence under that section.
This section refers to information to be given in statements required to be furnished under some provision of law.
We are therefore of opinion that a. 176.
I. P. C. did in no way compel Dalmia to make the statement Exhibit P. 10.
We believe the statements of Annadhanam and Khanna about Dalmia 's making the statement Exhibit P. 10 without his being induced or threatened by them.
Their statements find implied support from the statement of Raghunath Rai with respect to what Dalmia told him in connection with the making of the statement to Annadhanam, and from certain statements of Dalmia himself in his written statement and in answers to questions put to him under section 342, Cr. P. C. We therefore hold the statement Exhibit P. 10 is a voluntary statement and is admissible in evidence.
381 We also hold that it is not inadmissible in view of cl.
(3) of article 20 of the Constitution.
It was not made by Dalmia at a time when he was accused of an offence, as is necessary for the application of that clause, in view of the decision of this Court in The State of Bombay vs Kathi Kalu Oghad (1) where the contention that the statement need not be made by the accused person at a time when he fulfilled that character was not accepted.
Dalmia was not in duress at the time he made that statement and therefore was not compelled to make it.
It was said in the aforesaid case : " "Compulsion ', in the context, must mean what in law is called duress. .
The compulsion in this sense is a physical ob jective act and not the state of mind of the person making the statement, except where the mind has been so conditioned by some extraneous process as to render the making of the statement involuntary and, therefore, extorted." The various circumstances preceding the making of the statement Exhibit P. 10 by Dalmia have all been considered and they fall far short of proving that Dalmia 's mind had been so conditioned by some extraneous process as to render the making of this statement involuntary and therefore extorted.
We believe the statement of Annadhanam that Dalmia had told him near the staircase that he had lost the money in his personal speculation business which was carried on chiefly through one of his private companies, viz. the Union Agencies.
The later part of his confession, Exhibit P. 10, is an admission of Dalmia 's losing the (1) ; , 35. 382 money in speculation.
His further statement was only an amplification of it as to the name under which speculation was carried on.
the statement finds support from the facts established by other evidence that the speculation business carried on by the Union Agencies was really the business of Dalmia himself though, ostensibly, it was the business of the company of which there were a few shareholders other than Dalmia.
Mr. Dingle Foot has urged that adverse inference be drawn against the prosecution case on account of the prosecution not producing certain documents and certain witnesses.
We have considered the objection and are of opinion that there is no case for raising such an inference against the prosecution.
The prosecution did not lead evidence about the persons holding shares in Asia Udyog Ltd., and in Govan Brothers Ltd. Such evidence would have, at best, indicated how many shares Dalmia held in these companies.
That was not necessary for the prosecution case.
The extent of shares Dalmia held in these companies had no direct bearing on the matter under inquiry in the case.
The prosecution led evidence about the telephonic calls up to August 31, 1955, and did not lead evidence about the calls between September 1 and September 20. 1955, It is urged that presumption be raised that Dalmia and Chokhani had no telephonic communication in this period.
Admittedly, Dalmia had telephonic communication with Chokhani on September 15.
The prosecution has not impugned any transaction entered into by Chokhani during this period.
It is not therefore essential for the prosecution to have led evidence of telephonic calls between Dalmia and Chokhani during this period.
Another document which the prosecution is 383 said not to have produced is the Dak Receipt.
Register.
The Register could have at best shown on which dates the various advices received from Bombay about the transactions were received.
On that point there had been sufficient evidence led by the prosecution.
The production of the Register was there fore not necessary.
The accused could have summoned it if he had particular reason to rely on its entries to prove his case.
Lastly, complaint is made of the non production of certain documents in connection with the despatch of certain securities from Delhi to Bombay.
Again, there is oral evidence with respect to such despatch of securities and it was not essential for the prosecution to produce the docu ments in that connection.
Of the witnesses who were not produced, complaint is made about the prosecution not examining Mr. Barve, Joint Secretary, Ministry of Finance, who was present at the interview which Dalmia had with Mr. Kaul on September 15,1954, and of the non production of the Directors of the Insurance Company.
It was quite unnecessary to examine Mr. Barve when Mr. Kaul has been examined.
It was also not necessary to examine the Directors of the company who are not alleged to have had any first hand knowledge about the transactions.
They could have spoken about the confirmation of the sale and purchase transactions and about the passing of the bye laws and other relevant resolutions at the meeting of the Board of Directors.
The minutes of the proceedings of the Board 's meetings served this purpose.
It is admitted by Dalmia that there was no ,resolution of the Board of Directors conferring authority on Chokhani to purchase and sell securities.
Certain matters have been referred to at 384 pages 206 210 of Dalmia 's statement of came, which, according to Dalmia, could have been proved by the Directors.
, All these matters are such which were not necessary for the unfolding of the prosecution case and could be proved by the accused examining them if considered necessary.
We therefore see no force in this contention.
It is urged for Dalmia that he could not have been a party to a scheme which would cause loss to the Insurance Company, because he was mainly responsible for the prosperity of the company.
The Union Agencies has assets.
The Government was displeased with Dalmia.
The company readily agreed to the appointment of M/s. Khanna and Annadhanam as auditors.
There was the risk of detection of the fraud to be committed and so Dalmia would have acted differently with respect to such affairs of the Union Agencies as have been used as evidence of Dalmia being synonymous with it.
We are of opinion that these considerations are not such which would off,set the inferences arrived at from the proved facts.
It cannot be it matter of mere coincidence that frequent telephonic conversations took place between Dalmia and Chokhani when the Union Agencies suffered losses, that the usual purchase transactions by which the funds of the Insurance Company were diverted to the Union Agencies took place then, that such purchases should, recur several times during the relevant period, that such securities which could not be recouped had to be shown as sold and when the Union Agencies or Bhagwati Trading Company could not pay for the sale price which had to be credited to the account of the Insurance Company, a further usual purchase transaction took place.
We are therefore satisfied from the various facts considered above that the transactions which 385 led to the diversion of funds of the Insurance Company to the Union Agencies were carried through under the instructions and approval of Dalmia.
It is clear that he had a dishonest intention to cause at least temporary loss of its funds to the Insurance Company and gain to the Union This could be achieved only as a result of the conspiracy between him and Chokhani.
Vishnu Prasad was taken in the conspiracy to facilitate diversion of funds and Gurha to facilitate the making up of false accounts etc.
in the offices of the Union Agencies and Asia Udyog Ltd., as would be discussed hereafter.
We may now turn to the charges against Gurha, appellant.
He was charged under section 120 B read with section 409 I. P. C. and also on three counts under section 477 A for making or abetting the making of false entries in three journal vouchers Nos. 98, 106 and 107 dated January 12, 1955, of the Union Agencies.
It is necessary to give a brief account of how these vouchers happened to be made.
Gurha was a Director of the Union Agencies and looked after the work of its office at Delhi.
He was also the Accountant of Asia Udyog Ltd. At Delhi there was a ledger with respect to the account of the transactions by the Bombay Office of the Union Agencies.
Under the directions of Chokhani who was an agent of the Union Agencies at Bombay and also held power of attorney on its behalf.
Kanna used to send a cash statement and a journal to the Bombay Office and the Union Agencies at Delhi.
These documents used to be sent to Gurha personally.
Now, the cash statement from Bombay showed correctly entries of the amounts received from Bhagwati Trading Company.
Such amounts were noted to the credit of Bbagwati Trading Company.
When the Union Agencies made Payment to Bhagwati 386 Trading Company, an entry to that effect was noted in the cash statement to the debit of Bhagwati Trading Company.
On receipt of these cash statements in 1955, it is alleged, Gurha used to get the genuine cash statement substituted by another fictitious cash statement in which no mention was made of Bhagwati Trading Company.
Entries to the credit of Bhagwati Trading Company used to be shown to be entries showing the receipt of those moneys from the Delhi Office of the Union Agencies through Chokhani.
The debit entry in the name of Bhagwati Trading Company used to be shown as a debit to the Delhi Office of the Union Agencies.
This substituted cash statement was then made over to one Lakhotia, who worked in the Delhi Office of the Union Agencies on behalf of the Bombay Office of the company.
He was also prosecuted, but was acquitted.
Lakhotia issued credit advices on behalf of the Bombay Office of the Union Agencies to the Delhi Office of the Union Agencies in reference to the entry in the cash statement which, in the original statement, was in respect of the amount received from Bhagwati Trading Company, intimating that amount had been credited by the Bombay Office to the account of the Delhi Office.
A debit advice on behalf of the Bombay Office to the Delhi Office was issued intimating that the amount had been debited to the account of the Delhi Office when in fact, the original entry debited that amount to the account of Bhagwati Trading Company.
Lakhotia also made entries in the ledger of the Bombay Office which was maintained in the Delhi Office of the company.
In its column entitled 'folios ' reference to the folio of the cash statement was given by writing the letter 'C ' ' and the number of the folio of the cash statement from which the entry was posted.
On receipt of such advices from Lakhotia on behalf of the Bombay Office, Dhawan, P. W,19, 387 Accountant of the Delhi Office of the Union Agencies used to prepare the journal voucher.
In the case of the credit advices, the amount was debited to the Bombay Office of the Union Agencies and credited to Asia Udyog Ltd. In the case of the debit advices, the amount was debited to Asia Udyog Ltd., and credited to the Bombay Office of the Union Agencies.
According to the statement of Dhawan, he did so under the instructions of Gurha.
Gurha used to sign these vouchers and when he fell ill,, they were signed by another Director, J. section Mittal.
Corresponding entries used to be made in the account of the Bombay Office and the Asia Udyog Ltd., in the ledger of the Delhi Office of the Union Agencies.
After Dhawan had prepared these vouchers he also used to issue advices to Asia Udyog Ltd. intimating that the amount mentioned therein had been credited or debited to its account.
Thus the name of Bhagwati Trading Company did not appear in the various advises, vouchers and the ledgers prepared at Delhi.
In the office of Asia UdyogLtd., on receipt of the credit advice, a journalvoucher crediting the amount to the Bombay Officeand debiting it to the Delhi Office of the Union Agencies was prepared.
A journal voucher showing the entries in the reverse order was prepared on the receipt of the debit advices.
Asia Udyog Ltd., issued advice to the Bombay Office intimating that the amount had been credited or debited to the Bombay Office of the Union Agencies in the case of vouchers relating to the credit or debit advice from that Office.
All such vouchers in Asia Udyog Ltd. were signed by Gurha even during the period when he was ill and was not attending the office of the Union Agencies.
The result of all such entries in the vouchers Was that on paper it appeared in the case of credit 388 advices that the Delhi Office of the Union Agencies advanced money to the Bombay Office which paid the money to Asia Udyog Ltd., which in its turn, paid the money to the Delhi Office of the Union Agencies, and in the case of debit advices, the Bombay Office debited the amount to Delhi Office of the Union Agencies and that debited it to Asia Udyog Ltd., which in its turn debited it to the Bombay Office.
All these entries were against facts and they must have been done with a motive and apparently it was to keep off the records any mention of Bhagwati Trading Company.
No explanation has been given as to why this course of making entries was adopted.
The genuine cash statements are on record.
The alleged fictitious statements are not on the record.
It is not admitted by Gurha that any fictitious cash statement was prepared.
It is not necessary for our purposes to bold whether a fictitious cash statement in lieu of the genuine cash statement received from Bombay was prepared under the directions of Gurha or not.
The fact remains that the entries in the various advices prepared by Lakhotia on the basis of the cash statements received, did not represent the true entries in the genuine cash statements and that journal vouchers prepared by Dhawan also showed wrong entries and did not represent facts correctly.
Of the journal vouchers with respect to which the three charges under section 477 A, 1. P. C. had been framed, two are the vouchers prepared by Dhawan crediting the amounts mentioned the rein to Asia Udyog Ltd., and debiting them to the Bombay Office of the Union Agencies.
They are Exhibits P. 2055 and P. 2060.
Each of them is addressed to Asia Udyog Ltd. and states that the amount mentioned therein was the amount received by the former, i. e. the Bombay Office from Chokhani on account of the latter, i, e., Asia Udyog Ltd., on 389 January 7 and January 10, 1955,respectively and adjusted.
One Exhibit P.2042 debits the amount to Asia Udyog Ltd, and credits it to the Bombay Office of Union Agencies and states the amount mentioned therein to have been paid by the latter, i.e., Bombay Office to Chokhani on account of the former, i.e Asia Udyog Ltd., and adjusted.
Other facts which throw light on the deliberate preparation of these false vouchers are that there had been tampering of the ledger of the Bombay Office in the Delhi Office of the Union Agencies and also in the journal statement of that office.
The letter "C ' in the folio column of the ledger had been altered to 'J ' indicating that entry referred to an entry in the journal statement received from Bombay.
Sheets of the journal statement on which corresponding entries are noted have also been changed.
These two documents remained in the possession of the Union Agencies till November 12, 1955, though the advices and vouchers in the Delhi Office were seized by the Police on September 22, 1955, and therefore interested persons could make alterations in them.
It has been suggested for Gurha that the alterations were made by the Police.
The suggestion has not been accepted by the learned Sessions Judge for good reasons.
The changed entries did not in any way support the prosecution case and therefore the police had no reason to get those entries concocted.
The entries did show the receipt of the amounts from Bhagwati Trading Company, but the prosecution case was that the amount was received in cash and not through transfers which transactions had to be adjusted.
The learned Sessions Judge, did not, however, believe the statement of Sri Kishen Lal who investigated the case that he had noticed these alterations earlier than his statement in Court Which was some time in 1958, for the reason that 390 Dhawan was not questioned by the prosecution in this regard and no reference was made by Sri Kishen Lal in the case diary about his questioning Dhawan about the alterations.
The learned Sessions Judge appears to have overlooked the statement of Sri Kishen Lal to the effect: "I made a note in the case diary about myself having put the overwriting to Lakhotia and about having asked his explanation about that." The Court could have verified the fact from the case diary.
It is too much to suppose that Sri Kishen Lal would make a wrong statement whose inaccuracy could be very easily detected.
However, the learned Session Judge himself has given good reasons for not accepting the suggestion that the over writing of the letter 'C ' by the letter 'J ' and the changing of the journal papers were made by the police.
The part that Gurha played in getting these false entries prepared is deposed to by Dhawan, P.W. 19, who used, occasionally, to approach Gurha for instructions.
Further, Gurha, as the accountant of Asia Udyog Ltd., must have known that Asia Udyog Ltd., bad neither advanced any amounts to ' the Bombay Office of the Union Agencies nor received any amounts from the Bombay Office of the Union Agencies.
He however signed all the vouchers prepared in the office of Asia Udyog Ltd., in connection with these transactions.
He did so even during his illness (May, 1955, to July, 1955, which, according to the statement of Gurha, in answer to question No. 134 was from March 15 to August 12, 1955, during which period he did not attend the office of the Union Agencies).
He signed them deliberately to state false facts, 391 Dhawan particularly stated that on receipt of the advice, Exhibit P. 2041, on the basis of which journal entry No. 98 was prepared by him, he went ' to Gurha to consult as it was not clear from that advice to whom the amount mentioned in it had ' been paid.
Gurha, on looking up the Journal state ment received from the Bombay Office told him to debit that amount to Asia Udyog Ltd. Dhawan prepared journal voucher P. 2042, accordingly, and Gurha initialed it.
It may be mentioned that this debit advice was addressed to M/s. Delhi Office and therefore could be taken to refer either to the Delhi Office of the Union Agencies or the Delhi Office of ' Asia Udyog Ltd., both these offices being in the ' same building and being looked after by Gurha.
Gurha admits in his statement under s.342, Cr P. C., that Dhawan referred this matter to him and that he asked him to debit the amount to Asia Udyog Ltd., The journal statement of the Bombay Office at the relevant time could have no reference to this item which was really entered in the cash statement and Gurha 's conduct in looking up the journal was a mere ruse to show to Dhawan that was giving instructions on the basis of the entries and not on his own.
Gurha stated, in answer to question No. 45, that he remembered to have seen an entry relating to this amount of Rs. 4,61,000 which is the amount mentioned in exhibit P. 2042 in the cash statement of the Bombay Office of the Union Agencies when O.P. Dhawan referred an advice relating to that amount to him.
In answer to questions Nos. 217 and 218, in connection with his advising Dhawan about the debiting of this amount to Asia Udyog Ltd., he stated that he gave that advice after tracing the relevant entry in the journal statement of the Bombay Office.
This answer is not consistent with his earlier answer to question No. 45 as entry with respect to the same amount could not have existed 392 simultaneously both in the cash statement and the journal statement of the Bombay Office.
If his later answer is correct, his referring to the journal would have been just a ruse as already stated.
If his earlier answer is correct that would indicate that either Gurha had supplied the office with the fictitious cash statement of the Bombay Office as alleged by the prosecution or that seeing in the journal cash statement that the entry related to Bhagwati Trading Company, deliberately told Dhawan, in accordence with the scheme, to debit that amount to Asia Udyog Ltd. In either view of the matter, this conduct of Gurha in advising Dhawan to debit the amount to Asia Udyog Ltd., is sufficient to indicate his complicity in the whole scheme, as otherwise, he had no reason to behave in that manner.
Gurba, among the accused, must have been chosen for the purpose of the conspiracy because he had connection both with the Union Agencies and with Asia Udyog Ltd. He had been in the employ of a Dalmia concern from long before.
He was the Accountant of the Dalmia Cement and Paper Marketing Company from 1948 till its liquidation in 1953.
Gurha, as Director of the Union Agencies, knew that it had suffered losses as a result of sharespeculation business in 1954 55 and that the Delhi Office was short of liquid funds to meet these losses.
He must have known how the funds to meet the losses were being secured from the funds of the Insurance Company through Bhagwati Trading Company.
He must have also known that this was wrong.
It is only with such knowledge that he could have been a party to the making of false ad vices and vouchers.
There could be DO other reason.
It could not have been possible for the prosecution to lead direct evidence about Gurha 's knowledge with respect to the full working of the scheme to provide for the losses of the Union Agencies from the funds of the Insurance Company.
It is further 393 not, necessary that each member of a conspiracy must know all the details of the conspiracy.
Mr, Kohli, for Gurha, has urged that Gurha could have had nothing to do with the diversion of the funds of the Insurance Company to the Union Agencies, even though he was a Director of the latter as he never issued instructions regarding the activities of the Union Agencies, had no knowledge of the passing of money from the funds of the Insurance Company to the Union Agencies as he had nothing to do with the movement of the securities held by the Insurance Company or the receipt of cash or the other transactions, his role having begun, according to the prosecution, after the offence under section 409 1.
P. C. had been actually commit ted, i.e., after Chokhani had issued cheques on the bank accounts of the Insurance Company with the Chartered Bank in favour of Bhagwati Trading Company, and therefore could know nothing regarding the diversion of funds and the desirability of falsifying the accounts and papers of the Office; he had to deal with.
Great reliance is placed on the letter, Exhibit B. 956 in submitting that Gurha did not know about the whole affair and simply knew, as stated by him, that Chokhani had borrowed money for the Union Agencies to pay its losses, from Bhagwati Trading Company.
This letter is of significance and we quote it in full "Girdharilal Chokhani Times of India Building, Horn by Road, Bombay 1.
CONFIDENTIAL 17th September 55.
Bharat Union Agencies Ltd., Delhi.
Mr. R. P. Gurha Dear Sir, I have to inform you that the various a mounts 394 arranged by me as temporary loans to Bharat Union Agencies Ltd., Bombay Office from time to time in the name of Bbagwati Trading Company, actually represented the monies relating to the undernoted securitiesbelonging to Bharat Insurance Company Limited.
Face Value 2 1/2% 1961 Rs. 56,00,000 3% 1963 65 Rs. 79,00,000 3% 1966 68 Rs. 60,00,000 Rs. 1,94,00,000 I have now to request you to please arrange at your earliest to pay about Rs. 1,80,00,000 in cash or purchase the a fore said securities (or their equivalent) and deliver the same to Bharat Insurance Company Ltd., 10, Daryaganj, Delhi on my behalf, debiting the amount to the credit standing in the books of the Company 's Bombay Office in the name of M/s Bbagwati Trading Company.
Any debit or credit balance left thereafter in the said account would besettled later on.
I am getting this letter also signed by Vishnuprasad on behalf of Bhagwati Trading Company although he had neither any knowledge of these transactions nor had any connection with these affairs.
Yours faithfully, For: Bbagwati Trading Company Sd/ G. L. Cho khani Sd.
Illegible Vishnuprasad Bairanglal Proprietor.
" We are of opinion that this is a letter written for the purpose of the case and was, as urged for 395 the State,.
ante dated.
There is inherent evidence in this letter to support this view.
The letter makes a reference to Vishnu Prasad 's having no knowledge of the transactions and having no connection with the affairs.
Mention of these facts was quite out of place in a letter which Chokhani was addressing to Gurha in the course of business for his immediately arranging for the payment of Rs. 1,80,00,000 in cash or.
securities to Bharat Insurance Company.
Further, the opening expression in the letter does not necessarily mean that Gurha was being informed for the first time that the temporary loans arranged by him for the Union Agencies Ltd., in the name of 'Bhagwati Trading Company actually represented the moneys belonging to the Bharat Insurance Company.
If it meant so, that must have been done so by design, just as the concluding portion of the letter was, as already mentioned, put in by design to protect Vishnu Prasad 's interest.
The letter is dated September 17, 1955, and thus purports to have been written a few days before the formal complaint was made to the police.
Even if it was written on September 17, it was written at a time when the matter of securities had come to the notice of the authorities and Dalmia was being pressed to satisfactorily explain the position of the securities.
Chokhani could have written a letter of this kind in that setting.
Another fact relied upon by the learned Sessions Judge in considering this letter to be antedated is that it does not refer to one kind of securities which were not in the possession of the Insurance Company even though they had been ostensibly purchased.
It does not mention of the securities worth Rs. 26,25,000 which were really supplied to the Insurance Company on September 23, 1955.
This letter should have included securities of that amount and should have asked Gurha to make up 396 for that amount to the Insurance Company.
This is a clear indication that this letter was written after September 23, 1955.
Mr. Kohli has, however, urged that the contract for the purchase of these securities had taken place on September 16, 1955, and that therefore Chokhani did not include those securities in this letter.
Reference is made to the statement of Jayantilal, P.W. 6, a partner of the Firm Devkaran Nanjee, Brokers in Shares and securities.
He states that Bhagwati Trading Company wanted to purchase for immediate delivery 3% 1966 68 securities of the face value of Rs. 21,25,000 and that a contract about it was entered into.
Securities of this amount were not available in the market.
Securities worth Rs. 1,75,000 were available and were delivered to Chokhani that day.
They had to purchase securities of the face value of Rs. 20,00,000, from the Reserve Bank of India in order to effect delivery and had to sell some other securities of that value.
The result was that the required securities were received by them on September 22, 1955.
Even this statement does not account for not including securities of the value of Rs. 4,50,000 in this letter exhibit P. 956.
It was further urged in the alternative that Chokhani had very extensive powers in all the alleged concerns of Dalmia and so could get anything done due to his influence without divulging secrets.
That was not the position taken by Gurha in his statement.
Ho did not say that he deliberately got false documents prepared due to directions from Chokhani and which he could not disregard.
Even if it be so, that means that Gurha got false documents made deliberately.
Another submission for Gurha is that the case held proved for convicting him is different from the case as sought to be made out in the police chargesheet submitted to the Court under section 173 of the 397 Code of Criminal Procedure.
The charge sheet is hardly a complete or accurate thesis of the prosecution case.
Clause (a ) of sub section
(1) of section 173, Cr. P.C., requires the officer in charge of the police station to forward to the Magistrate empowered to take cognizance of the offence on a police report, the report in the prescribed form setting forth the names of the parties, the nature of the information, and the names of the persons who appear to be acquainted with the circumstances of the case.
Nothing further need be said on this point.
Further, it is submitted that the prosecution case has changed from stage to stage.
This can only mean that facts came on the record which were not known before and therefore the complexion of the allegations against Gurha 's conduct varied.
Even if this is so, he can have no grievance against it unless he bad been unable to meet it in defence.
No such inability has been expressed.
It is however stated that the prosecution based its ultimate case against him on the allegation that the cash statement received from Bombay was suppressed and another false cash statement was prepared at Delhi under the directions of Gurha.
We have already dealt with this matter.
There was no such allegation on the basis of the statement of any prosecution witness.
This way really a suggestion to explain how despite certain entries in the cash statements received from Bombay different entries were made in the advices issued by Lakhotia which advices ought to have been in accordance with the entries in the cash statement.
The suggestion may be correct or may not be correct.
It cannot, however, be said on its basis that there has been such a change in the prosecution case as would make the prosecution case reasonably doubtful.
In the same connection, a grievance has been made that Gurha was not questioned about the 398 allegation that the cash statement had been suppressed and substituted by another fictitious one.
No such question could have been put to him when there was no evidence about it.
An accused is questioned under section 342 Cr. P. C., to explain any circumstances appearing in the evidence against him.
It is not necessary to ask him to explain any inference that a Court may be asked to draw and be prepared to draw from the evidence on record.
Another point stressed for Gurha is that the cash statements would not have mentioned Bhagwati Trading Company when the prosecution case is that Chokhani took deliberate steps to keep the Delhi Office of the Insurance Company in the dark about it.
The fact is that the cash statement sent from Bombay did mention Bhagwati Trading Company.
They were sent to Gurha personally.
In the circumstances the reasonable conclusion can be that they mentioned Bhagwati Trading Company as that represented the true state of affairs and Chokhani had to inform the Delhi Office of the Bharat Union Agencies about the source of the money he was receiving for the Union Agencies to meet its losses.
Chokhani did not disclose the true source, but disclosed a source fictitiously created to conceal the real source.
There was no harm in disclosing Bhagwati Trading Company to the office of the Union Agencies at Delhi.
With the same frankness it could not have been disclosed to the Insurance Company Office at Delhi both because that would required the complicity of the entire staff of the Insurance Company in the conspiracy and because otherwise, it would at once disclose to the Insurance Company and those who had to check its working that its funds were being miscued.
Disclosure of Bhagwati Trading Company to the Union Agencies was necessary and there was no harm in any way in informing Gurha confidentially about it.
After Gurha had got possession of the cash 399 statement it was for him how to direct the necessary entries to be made in the advices prepared by Lakhotia on behalf of the Bombay Office at Delhi and on the basis of which journal vouchers were to be prepared by Dhawan and entries were to be made in the accounts of the Union Agencies at Delhi.
We therefore do not consider that this contention in any way favours the appellent.
The fact that the account of the Asia Udyog Ltd., in the ledger Exhibit P. 2226 is not alleged to be fictitious and records in the column folio ' the letter 'J ' is of no help as the entries in that ledger must have been made on the basis of the journal vouchers issued by Dhawan.
In fact once it is alleged that the advices issued by Lkhotia were fictitious any entry which can be traced to it must also be fictitious.
It is argued that the alleged scheme of making the circuitious entries could not have worked in keeping the source of money concealed as the Income tax Authorities could have detected by following the entries in the Bank records with respect to the source of payment of money (by cheques issued by Bhagwati Trading Company) to the Union Agencies at Bombay.
They could have thus known only about Bhagwati Trading Company and, as already stated, it was not necessary to keep Bhagwati Trading Company secret from the Union Agencies.
What was really to be kept secret was that the money came from the Insurance Company.
The various circuitous entries were not really made to keep Bhagwati Trading Company unknown, but were made to make it difficult to trace that the money really was received from the Insurance Company.
A suggestion has been made by Mr. Kohli that Chokhani might have showed the same amount both in the cash statement and in the journal statement.
No such case, however, seems to have been 400 raised in the Courts below and has been made in the appellant 's statement of case.
It has been contended that an offence under section 477A 1. P. C. has not been established against the accused as it is not proved that he falsified any book, papers, etc., in the possession of his employer with intent to defraud and that the intention to defraud should be to defraud someone in future and should not relate to an attempt to cover up what had already happened.
It is submitted that an intent to defraud connotes an intention to deceive and make the person deceived ,suffer some loss, that the entries made in the journal vouchers did not make anyone suffer and therefore the entries could not be said to have been made with intent to defraud.
The expression intent to defraud ' is not defined in the Penal Code but section 25 defines 'fraudulently ' thus: "A person is said to do a thing fraud.
ulently, if he does that thing with intent to defraud and not otherwise.
" The vouchers were falsified with one intention only and that was to let it go unnoticed that the Union Agencies bad got funds from the Insurance Company.
If they had shown the money received an( paid to Bhagwati Trading Company, it was possible to trace the money back to the Insurance Company through Bhagwati Trading Company which received the money from the Insurance Company through cross cheques as well.
Whoever would have tried to find out the source of the money would have been deceived by the entries.
The Union Agencies mad wrongful gain from the diversion of the Insurance Company 's funds to it through Bhagwati Trading Company and the Insurance Company suffered loss of funds.
The false entries were made to cover 401 up the diversion of funds and were thus to conceal and therefore to further the dishonest act already committed.
We agree with respect with the following observation in Emperor vs Ragho Ram (1) at page 788: "If the intention with which a false document is made is to conceal a fraudulent or dishonest act which had been previously com mitted, we fail to appreciate how that inten tion could be other than an intention to commit fraud.
The concealment of an already committed fraud is a fraud.
" And, again, at page 789: "Where, therefore, there is an intention to obtain an advantage by deceit there is fraud and if a document is fabricated with such intent, it is forgery.
A man who deliberately makes a false document in order to conceal a fraud already committed by him is undoubtedly acting with intent to commit fraud, as by making the false document he intends the party concerned to believe that no fraud had been committed.
It requires no argument to demonstrate that steps taken and devices adopted with a view to prevent persons already defrauded from ascertaining that fraud had been perpetrated on them, and thus to enable the person who practiced the fraud to retain the illicit gain which he secured by the fraud, amount to the commission of a fraud.
An act that is calculated to conceal fraud already committed and to make the party defrauded believe that no fraud had been committed is a fraudulent act and the person responsible for the act acts fraudulently within the meaning, of section 25 of the Code." (1)1933J 1 L. R. 55 All.
783, 788, 789, 402 We agree, with this observation, and repel the contention for the appellant.
It, has then been submitted that the falsification should have been necessarily connected with the commission of the breach of trust.
There is no question of immediate or remote connection with the commission of breach of trust which is sought to be covered up by the falsification, so long as the falsification is to cover that up.
In the present case, introduction of Bhagwati Trading Company in the transactions was the first step to carry out deception about the actual payment of money out of the funds of the Insurance Company to the Union Agencies.
The second step of suppressing the name of Bhagwati Trading Company in the papers of the Union Agencies Delhi, made it more difficult to trace the passing of the money of the Insurance Company to the Union Agencies and therefore the falsification of the journal vouchers related back to the original diversion of the Insurance Companys moneys to the Union Agencies and was with a view to deceive any such person in future who be tracing the source of the money received by the Union Agencies.
A grievance is made of the fact that certain witnesses were not examined by the prosecution.
Of the persons working for the Union Agencies, five were accused at the trial, Kannan, Lakhotia, Gurha, Mittal and Dudani.
Only Gurha among them was convicted.
The others were acquitted. 'The remaining persons were Krishnan, Panohawagh and the clerks O. D. Mathur and Attarshi.
Of the persons connected with Asia Udyog, one R. section Jain of the Accounts Branch was not examined.
Panchawagh who was an Accountant of the Union Agencies and had custody of the cash statements and journal was given up by the prosecution on the ground that 403 he was won over.
We do not consider that it was necessary to examine him for the unfolding of the prosecution case against Gurha.
Similarly it was not necessary to examine the others for that purpose.
A mere consideration that they might have given a further description of how things happened in those offices would not justify the conclusion that the omission to examine them was an oblique motive and could go to benefit the accused.
A grievance was made that the High Court did not deal with the question whether the police tampered with the cash statement and the journal.
It is not clear whether such a point was raised in the High Court.
It was however not mentioned in the grounds of appeal.
The trial Court did deal with the point and held against the appellant Gurha.
In fact, paragraph 22 of the grounds of appeal by Gurba simply said that no value should have been attached to the said cuttings when it was not proved on the record as to who made the said cuttings and when they were not calculated to conceal the true facts or the further interest of the conspiracy.
We are therefore of opinion that Gurha has been rightly held to have been in the conspiracy and to have abetted the making of the false journal vouchers.
In view of the above, we are of opinion that the appellants have been rightly convicted of the offences charged.
It has been urged for Chokhani that his sentence be reduced to the period already undergone as he made no profit for himself out of the impugned transactions, that he is 59 years old and had already been ten days in jail.
We do not consider these to justify the reduction of the sentence when 404 he was the chief person to carry out the main work of the conspiracy.
We also do not consider Dalmia 's sentence, in the circumstances of the case, to be severe.
We therefore dismiss these appeals.
Appeals Dismissed.
| Appellant Dalmia was the Chairman of the Board of Directors and Principal Officer of the Bharat Insurance company and appellant Chokhani its agent in Bombay.
Appellant Vishnu Prasad, nephew of Chokhani, was the nominal owner of Bhagwati Trading Company but its business was entirely conducted by Chokhani.
Gurha, the other appellant, was a Director of Bharat Union Agencies, a company dealing in for ward transactions of speculation in shares, and owned for all practical purposes by Dalmia.
This Company suffered heavy losses in its business during the period August, 1954, to September, 1955.
The prosecution case against the appellants in substance was that in order to provide funds for the payment of those losses in due time, they entered into a conspiracy, along with five others, to divert the funds of the Insurance company to the Union Agencies through the Bhagwati Trading Company and to cover up such unauthorised transfer of funds, the various steps for such transfer and the falsification of accounts of the Insurance Company and the Union Agencies and its allied concern and committed offences under section 120B read with section 409 of the Indian Penal Code.
Dalmia made a confession before Mr. Annadhanam, a Chartered Accountant, who was appointed Investigator under s.33(1) of the , which was as follows: "I have misappropriated securities of the order of Rs. 2,20,00,000 of the Bharat Instirance Company Ltd. I have lost this money in speculation.
" 254 "At any cost, I want to pay full amount by requesting by relatives or myself in the interest of the policy holders".
The prosecution primarily depended upon the evidence of Raghunath Rai, the Secretary cum Accountant of the Insurance Company, and it was contended on behalf of the appellants that he was an accomplice.
The Sessions judge convicted all the appellants under section 120B read with section 409 of the Indian Penal Code, and further convicted Dalmia and Chokhani for substantive offences under section 409, Chokhani under section 477A read with section 110 and Gurha under section 477A of the Indian Penal Code.
He however acquitted the others.
The High Court in substance agreed with the findings of the Sessions judge, except that it did not rely on the confession of Dalmia.
Held, that the Delhi Court had jurisdiction to try Chokhani for the offence under section 409 of the Indian Penal Code, committed beyond its jurisdiction in pursuance of the alleged conspiracy with which he and the other co accused were charged.
Purushottam Das Dalmia vs State of West Bengal, [1962] 2 section C. R. 101, followed.
The charge against Dalmia under section 409 of the Indian Penal Code was not hit by section 233 of the Code of Criminal Procedure.
The charge framed was not for four distinct offences.
It was really with respect to one offence though the mode of committing it was not precisely stated.
Any objection as to the vagueness of the charge on the score could not invalidate the trial since no prejudice had been caused to the accused nor any contention raised to that effect.
The word property used in section 405 of the Indian Penal Code could not be confined to movable property since the section itself did not so qualify it.
The word 'property ' was much wider than the expression In lovable property ' defined in section 22 of the Code.
The question whether a particular offence could be committed in respect of any property depended not on the meaning of the word 'property ' but on whether that property could be subjected to that offence. 'Property ' in a particular section could, therefore, mean only such kind of property with respect to which that offence could be committed, The funds of the Bharat Insurance Company referred to in the charge amounted to property within the meaning of section 405 of the Indian Penal Code.
255 Reg.
Girdhar Dharamdas (1869) 6 Bom.
High Ct.
Rep. (Crown Cases) 33, and Jugdown Sinha vs Queen Empress (1895) 1.
L. R. , disapproved.
Emperor vs Bishan Prasad, All. 128, Ram Chand Gurvala vs King Emperor A. 1.
R. , Manchersha Ardeshir vs Ismail Ibrahim, Bom.
706, Daud Khan vs Emperor A. I. R. 1925 All.
672 and The Delhi Cloth and General Mills Co. Ltd. vs Harnam Singh, , referred to.
The relevant articles and bye laws of the Insurance Company and the resolutions passed by its Board of Directors established that both Dalmia and Chokhani were entrusted with dominion over the funds of the company in the Banks within the meaning of section 409 of the Indian Penal Code.
Peoples Bank vs Harkishan Lal, A. I. R. , G. E, Ry.
Co. vs Turner, L. R. and Re.
Forest of Dean Etc.
Co., L. R. refer red to.
The offence of Criminal breach of trust could be committed by Chokhani even though he alone could not operate the Bank account and could do so jointly with another.
Bindeshwari vs King Emperor Pat.
703, held inapplicable.
Nrigendro Lall Chatterjee vs Okhoy Coomar Shaw, (1874) (Cr.
Rulings) 59 and Emperor vs Jagannath Ragunathdas, , referred to.
The expression 'in the way of business as agent ' occurring in section 409 of the Indian Penal Code meant that the property must have been entrusted to such agent in the ordinary course of his duty or habitual occupation or profession or trade.
He should get the entrustment or dominion in his capacity as agent and the requirements of the section would be satisfied if the person was an agent of another and that person entrusted him with the property or with dominion over the property in the course of his duties as an agent.
A person might be an agent of another for some purpose and if he was entrusted with property not in connection with that purpose but for another purpose, that would not be entrustment within the meaning of section 409 of the Code.
Mahumarakalage Edward Andrew Cooray vs Queen.
[1953] A. C. 407 and Reg.
vs Portugal, , considered.
256 Both Dalmia and Chokhani were agents of the Bharat Insurance Company within the meaning of section 409 of the Code.
Gulab Singh vs Punjab Zamindara Bank, A. I. R. , referred to.
Raghunath Rai was not an accomplice as he did not participate in the commission of tile actual crime charged against the accused.
An accomplice must be a particeps criminal, except where he was a receiver of stolen property or an accomplice in a previous similar offence committed by the accused when evidence of the accused having committed crimes of identical type on other occasions was admissible to prove the system and intent of the accused committing the offence charged.
Davies vs Director of Public Prosecutions, referred to.
Chokhani was a servant of the Insurance Company within the meaning of section 477A of the Indian Penal Code.
He was a paid Agent of the company and as such was its servant even though he was a full time servant of the Bharat Union Agencies.
Each transaction to meet the losses of the United Agencies, was not an independent conspiracy by itself.
There was identity of method in all the transactions and they must be held to originate from the one and same conspiracy.
Since the confession made by Dalmia had not been shown to have been made under any threat or inducement or promise from a person in authority, it could not be anything but voluntary even though it might have been made for the purpose of screening the scheme of the conspiracy and the High Court was in error in holding that it was otherwise.
A person appointed an Investigator under section 33(1) of the did not ipso facto become a public servant within the meaning of section 21, Ninth, of the Indian Penal Code and section 176 of the Indian Penal Code could have no application to an examination held under section 33(3) of the Act.
The confession of Dalmia was not hit by article 20(3) of the Constitution since it was not made by him at a time when he was accused of an offence.
State of Bombay vs Kathi Kalu Oghad, R. ; , referred to.
The expression 'with intent to defraud ' in section 477A of the Indian Penal Code did not mean intention to defraud someone in the future and could relate to an attempt to cover up what had already happened.
257 Emperor vs Ragho Ram, I. L. R. (1933) 55 All.
783, approved,
| The Industrial Tribunal, Ahmedabad, on a dispute referred to it under section 10(2) of the took up for consideration four demands for basic wages and adjustment, dearness allowance, gratuity and retrospectivity of the demands of the workmen.
The Tribunal gave its award on 30th of November 1971 which was published on 20th January, 1972 in the Maharashtra Government Gazette.
The appellant company, feeling aggrieved by the award, filed in the Supreme Court a petition for special leave to appeal under Article 136 of the Constitution.
Pursuant to a notice, the respondent workmen put in appearance and filed a counter affidavit.
After some arguments the appellant Company at its request was permitted to withdraw the leave petition as per the order of the Court dated 21st of August, 1972 which reads: "Upon hearing counsel the Court allowed the special leave petition to be withdrawn".
Four days thereafter the company filed a petition under Article 226 of the Constitution before the High Court challenging the award.
The petition was virtually based on the same facts and grounds as were taken in the special leave petition before the Supreme Court.
The learned single Judge who heard the petition determined the circumstances on the basis of the respective affidavits filed by the parties in which the company unconditionally withdrew its special leave petition and in view of those circumstances equated the withdrawal of the leave petition with the dismissal of the same.
Relying on Vasant Vithal Palse and Ors.
vs The Indian Hume Pipe Co. Ltd. and Anr. , a decision of that court, the learned Judge dismissed the writ petition in limine.
A Letters Patent Appeal against the said order of dismissal also met the same fate.
However, a petition under Article 133 of the Constitution for a certificate of fitness to appeal to the Supreme Court was accepted by the said Division Bench and a certificate was granted and hence the appeal.
Allowing the appeal, the Court ^ HELD: 1. Permission to withdraw a special leave petition cannot be equated with an order of dismissal.
If a non speaking order of dismissal cannot operate as res judicata for entertaining a fresh writ petition on the same facts and grounds taken in the special leave petition, an order permitting the withdrawal of the writ petition for the same reason cannot so operate.
[219B,222C D] 214 Workmen of Cochin Port Trust vs Board of Trustees of Cochin Port Trust and Anr., ; , followed.
Punjab Beverages Pvt. Ltd. vs Suresh Chand and Anr.
, ; ; Hoshnak Singh vs Union of India and Ors., ; ; Daryao and Ors.
vs The State of U.P. and Ors., ; , discussed.
Vasant Vithal Palse and Ors, v The Indian Hume Pipe Co. Ltd. and Anr.
, ; Management of Western India Match Co. Ltd., Madras vs The Industrial Tribunul, Madras and Anr.
A.I.R. 1958 Mad. 398, distinguished.
The order of a court has to be read as it is.
If the Supreme Court intended to dismiss the petition at the threshold.
it could have said so explicitly.
In the absence of any indication in the order itself, it will not be proper to enter into the arena of conjecture and to come to a conclusion on the basis of extraneous evidence that the Supreme Court intended to reject the leave petition.
If the Order of the Supreme Court is read as it is there is not the slightest doubt that the Supreme Court had allowed the company to withdraw the leave petition, in the instant case.
The approach of the High Court in having perused the affidavits filed by the parties to know the circumstances under which the leave petition was withdrawn is not correct.
[217 C D]
| The appellant is a share broker and a member of the Delhi Stock Exchange an exchange recognised by the Central Government under the Securities Contract Regulations) Act, 1956.
The respondent, a non member had dealings in shares and securities with the appellant as principal to principal between 14th July to 27th September, 1960, in respect whereof Contract Notes (ex.
P. 1 to P. 31) in the prescribed form where issued by the appellant and were signed by the respondent.
Each one of the Contracts contained an arbitration clause couched in very wide terms requiring the parties thereto to refer all their disputes or claims to arbitration as provided in the Rules, Regulations and Bye laws of the Exchange.
Under these transactions a sum of Rs. 5923 became due and payable by the respondent to the appellant but since the respondent raised a dispute denying the claim, the said dispute was referred to the arbitration of two arbitrators Mr. Prem Chand and Mr. P.S. Khambete (both members of the Exchange) the former being the nominee of the appellant and the latter being the appointee of the Exchange on the respondent 's failure to nominate his arbitrator when called upon to do so.
The arbitrators held their proceedings in which the respondent participated though he inter alia raised a contention that he was not a party to the reference and would not be bound by the Award that might be made on the basis of such unilateral reference.
The Arbitrators made their Award on 18th April, 1961, allowing the claim of the appellant with costs against the respondent.
In response to the notice of filing the Award in the Court, the respondent filed objections to the Award on several grounds such as denial of the existence of the agreement of reference, that he was not a member of the Exchange, that the Contract Notes had not been signed by him, that the arbitrators had mis conducted themselves and the proceedings, that the Award had been improperly procured etc.
Negativing all the objections, the Sub Judge Delhi recorded the findings that the Contract Notes bore the signatures of the respondent and as such under the arbitration clause contained in each one of them read with the relevant Bye laws there was a valid Agreement for Reference to arbitration made the Award a rule of the Court and passed a decree in favour of the appellant on 7.9.1962.
568 In the first appeal preferred to the High Court, a learned Single Judge of the Delhi High Court entertained a doubt as to whether the respondent could be said to be a party to the actual Reference to arbitration even though each of the Contract Notes containing the arbitration clause was signed by the respondent, since the respondent had not joined in nominating his arbitrator despite service of notice asking him to do so, and whether on that account the Reference could be said to be unilateral, referred the same to a larger Bench on 5.1.1971.
The Full Bench answered the question in favour of the respondent, relying on certain observations made by the Supreme Court in Seth Thawardas Pherumal vs Union of India reported in (1955) 2 SCR P. 48 and took the view that notwithstanding the fact that respondent had signed the Contract Notes and had thereby become consenting party to the arbitration agreement tho actual reference to arbitration of the two arbitrators required the assent of both the parties and since to such reference the respondent had not given his consent it was a unilateral reference to arbitration and as such the resultant Award would not be binding on the respondent.
Hence the appeal by special leave.
Allowing the appeal, the Court ^ HELD: 1.1 The question whether fresh assent of both the parties for the actual reference is necessary or not must depend upon whether arbitration agreement is a bare agreement or it is an arbitration agreement as defined in section 2(a) of the Act.
If it is the latter, then, clearly the actual reference to arbitration would be consensual and not unilateral and no fresh assent of the parties would be necessary nor will resort to section 20 be necessary.
Instead the party desirous of going to arbitration can resort to remedies available to him under Chapter II of the ; and in a case like the instant one he can, as the appellant, did, proceed under the relevant Bye laws.
[582 C E] 1.2 It is true that the defines the two expressions "arbitration agreement" and "reference" separately.
Section 2(a) defines an "arbitration agreement" to mean "a written agreement to submit present or future differences to arbitration, whether an arbitrator is named therein or not '` while section 2(e) defines a "reference" to mean "a reference to arbitration".
The latter expression obviously refers to an actual reference made jointly by the parties after disputes have arisen between them referring the said disputes for adjudication to a named arbitrator or arbitrators, while the former expression is wider as it combines within itself two concepts, (a) a bare agreement between the parties that disputes arising between them should be decided or resolved through arbitration and (b) an actual reference of a particular dispute or disputes for adjudication to a named arbitrator or arbitrators.
If that be so, it stands to reason that only when the arbitration agreement is of the former type, namely, a bare agreement a separate reference to arbitration with fresh assent of both the parties will be necessary and in the absence of such concensual reference resort to section 20 of the will be essential but where the arbitration agreement conforms to the definition given in section 2(a), the party desiring arbitration can straightaway approach the arbitrator or arbitrators and resort to section 20 of is unnecessary because 569 consent to such actual reference to arbitration shall be deemed to be there as the second concept is included in the agreement signed by the parties, and the aspect that differences or disputes actually arose subsequently would be inconsequential because the arbitration agreement as defined in section 2(a) covers not merely present but future differences also In other words, in such a case there will be no question of there being any unilateral reference.
In every case the question will have to be considered as to whether the arbitration agreement is a bare agreement of the type indicated earlier or an arbitration agreement as defined in section 2(a) of the Act.
[574 D A; 575 A C] 2.1 On a plain reading of the arbitration clause contained in the Contract Notes read with relevant Bye laws it is abundantly clear that the arbitration agreement herein is not a bare arbitration agreement but is clearly an arbitration agreement as defined in section 2(a) of the of 1940.
In other words, the assent of the parties to actual reference is already there in the agreement; in addition there is a statutory reference.
Therefore, the reference being consensual (and also statutory) the resultant award would be valid and binding on the parties to the transactions.
This case was not a case of unilateral reference.
Resort to section 20 of the on the part of the appellant before approaching the arbitrators for adjudication was unnecessary and the Award was and is binding on the respondent.
[577 H; 578 A C] 2.2 The arbitration clause contained in the Contract Notes read with relevant Bye laws make two or three things very clear.
In the first place the arbitration clause is couched in a very wide language inasmuch as it makes arbitrable not merely the claims or disputes arising out of the transactions specified in the Contract Note but also "all claims differences and disputes in respect of any dealings, transactions and contracts of a date prior or subsequent to the date of this Contract (including any question whether such dealings, transactions or contracts have been entered into or not)".
Secondly the arbitration clause incorporates a provision that all such claims, differences and disputes shall be submitted to and decided by arbitration" in Delhi as provided in the Rules, Regulations and Bye laws of the Exchange; this is a pointer to consensual submission in the clause.
Thirdly, Bye laws 247(a) which governs these transactions in terms constitutes the actual reference to arbitration and under Bye laws 248(a) and 249(1) the reference is to two arbitrators who would be the nominees of each one of the parties to the disputes and provision is made empowering the Board of Directors or President to appoint arbitrator in case a party fails to nominate his own; in other words once a contract is made subject to Rules, Regulations and Bye laws (framed under the rule making power) there comes into existence a statutory submission or reference to arbitration.
[577 D H] 3.1 The true scope and effect of the observations of the Court in Seth Thawardas Pherumal 's case must be read in the proper perspective and not in a truncated manner or divorced from the context of specific issue which arose for determination before the Court in that case.
It will be clear that these were neither intended to apply generally to all references nor to lay down the wide proposition that there can be no reference to arbitration except through the 570 Court under section 20 unless both parties join in it.
The observations were made in the context of the specific issue that arose before this Court and were not and are not intended to apply generally to all references.
The statement that in the absence of either, agreement by both sides about the terms of reference, or an order of the Court under section 20(4) compelling a reference the arbitrator is not vested with the necessary exclusive jurisdiction ' makes it clear that the observations were confined to the references of specific questions of law.
Ordinarily the Court has jurisdiction to set aside an award if an illegality or an error of law appears on the face of it and it is only when a specific question of law has been referred to the arbitrator for adjudication that his decision thereon falls within his exclusive jurisdiction and cannot be interfered with by the Court howsoever erroneous it might be.
The true effect of these observations is that even in the case of an arbitration agreement which squarely falls within the definition of that expression as given in section 2 and which is not a bare arbitration agreement there would be included in it a consensual actual reference by the parties of all their disputes including questions of law that may arise later but the arbitrator 's award on such questions of law would not be within his exclusive jurisdiction since specific question or questions of law cannot be said to have been referred to him as required by the law of arbitration but though the reference would be valid the award and his decisions on questions of law is erroneous on the face of it would be liable to be set aside by the Court.
This is for from laying down the wide proposition that there can be no reference to arbitration except through the Court under section 20 unless both the parties join afresh in the actual reference.
[579 A C; 581 F H; 582 A C] Seth Thawardas Pherumal vs Union of India [1955] 2 SCR P. 48 discussed and explained.
| An air parcel declared by the consigner to contain rasogollas and other edibles was found to contain Rs. 51,000 worth of Indian currency notes.
The parcel was booked to be sent from Calcutta to Hong Kong.
The consignor 's name as given.
on the parcel was found to be false and on investigation the suspicion of the customs authorities fell on the appellants two of whom were partners in a firm, the third being an employee of the firm.
The office of the firm was searched.
Certain incriminating documents including account slips and cash books of the firm were seized.
In a complaint filed by the Assistant Collector of Customs against the appellants and their firm it was alleged that sending out money in Indian currency was prohibited by section 8(2) of the Foreign Exchange Regulation 7 of 1947 and any attempt to do the same was punishable under section 23B of the Act.
The trial court acquitted the appellants but the High Court in appeal convicted them under section 23(1A).
By special leave appeals were filed in this Court.
Judgment was delivered on August 18, 1970.
Thereafter review petition No. 37 of 1970, was filed.
A further judgment in respect of the contention raised therein as to the interpretation of section 23C(i) was delivered on February 18, 1971.
HELD : (i) The proposition that if an investigating officer conducts a search his evidence cannot be relied on unless it is corroborated is a novel one with no principle or authority to support it.
It all depends on the facts of each case.
In the present case there was the corroborative evidence of P.W. 8 who signed the search document and also the entries themselves in the account books and their tallying with the slips.
[755 G] (ii) There was no substance in the argument that the account slips could not be taken into consideration because they were not evidence.
These were part of the things discovered during search and if the entries therein were carried into the account books there was no reason why they could not be looked at [755 H] (iii) In the context of section 23C(1) a person 'in charge ' must mean that the person should be in over all control of the day to day business of the company or firm.
The inference follows from the wording of section 23C(2).
It mentions director who may be a. party to the policy being followed by 749 a company and yet not be in charge of the business of the company.
Further it mentions manager who usually is in charge of the business not in over all charge.
Similarly the other officers may be in charge of only some part of the business.
[758 G 759 A] State vs section P. Bhadani, A.I.R. 1959 Pat. 9, R. K. Khandelwal vs State and Public Prosecutor vs R. K. Karuppian, A.I.R. 1958 Mad.
183, referred to.
In the present case the appellant G had himself stated that he alone looked after the affairs of the firm.
This meant that he was in charge within the meaning of the section though there may be a manager working under him [760 C D] When a partner in charge of a business proceeds abroad it does not mean that he ceased to be in charge, unless there is evidence that he gave up charge in favour of another person.
Therefore it must be held that the appellant was in charge of the business of the firm within the meaning of section 23C(1).
[760 E F].
In view of the fact that G was abroad at the time of contravention it was possible that the contravention took place without his knowledge or lack of diligence.
He was being vicariously punished.
In such a case a. sentence of imprisonment may not be imposed but a sentence of fine only would meet the ends of justice.
[760 G] (iv) As regards appellant P the prosecution had been unable to prove by any reliable evidence that he took any active part in the conduct of the business of the firm.
He must therefore be given the benefit of doubt and acquitted.
[757 A] (v) The case was fit for review because at the time of arguments the attention of the court was not drawn specifically to sub section 23C(2) and the light it throws on the interpretation of sub s.(1).
[761 A]
| The appellant company was carrying on business in Bombay as commission agents.
In the course of assessment proceedings for the year 1954 55, the Income tax Officer noticed from the ssee 's boo s of account that the assessee had business connections with certain nonresident parties and found that the transactions disclosed that through the assessee those non resident parties were receiving income, profits and gains.
He considered that section 43 of the Indian Income tax Act, 1922, was applicable to the assessee and issued on March 27, 1957, a notice under section 34 of the Act for assessment of the assessee as an agent of the said non resident parties.
The assessee pleaded, inter alia, that the proceedings intiated by the Income tax Officer under section 34 were barred since the notice issued by him was after the expiry of one year from the end of the assessment year 1954 55, but the Income tax Officer rejected the contention relying on the amendment made to the proviso to section 34(l)(b)(iii) by the Finance Act, 1956, under which the period of one year was changed to two years.
The amendment was given retrospective operation upto April 1, 1956, but since the power to issue a notice under the unamended Act had come to an end on March 31, 1956, the question was whether the Income tax Officer could issue a notice of assessment to a person as an agent of a non resident party under the amended provision when the period prescribed for such a notice had before the amended Act came into force expired.
HELD:The proceedings initiated by the Income tax Officer by the notice dated March 27, 1957, were barred; the authority of the Incometax Officer under the Indian Income tax Act before it was amended by the Finance Act of 1956 having come to an end, the amending provision would not entitle him to commence a proceeding even though at the date when he issued the notice it was within the period provided by the amendment.
Notwithstanding the fact that there was no determinable point of time between the expiry of the time provided under the old Act and the commencement of the Amendment Act, in the absence of an express provision or clear implication, the legislature could not be said to have intended to attribute to the Amending provision a greater retros pectivity than was expressly mentioned.
| The first respondent, the then Commissioner of the Corpora tion of Calcutta, was after a protracted trial for an alleged offence under section 497 of the Indian Penal Code discharged by the Magistrate under section 253(1) of the Code of Criminal Procedure.
The Sessions judge, on a petition in revision filed by the complainant, holding that the said respondent had suborned the complainants witnesses, set aside the order of discharge and directed further enquiry by another Magistrate who permitted the complainant to tender further evidence.
The respondent moved the High Court in revision and a Division Bench issued a Rule and stayed further proceedings.
While the matter was thus pending before the High Court, the Corporation of Calcutta by a resolution appointed the three appellants members of a Special Committee which ran as follows : " That a Special Committee consisting of Councillors Shri section K. Gupta, Shri R. N. Majumdar and Shri section K. Roy be set up to enquire into the allegations levelled against certain officials of the, Corporation who are alleged to have been taking advantage of, their high offices in carrying on business in their own names, The Committee will take up only those matters that relate to the Corporation.
" Subsequent to the passing of the said resolution, the Mayor handed over to the Committee certain papers from a Councillor containing certain allegations against the Commissioner.
It was the case of the said respondent that the Special Committee there, upon examined the complainant and another and issued to him a notice along with a questionnaire, the relevant portions of which were as follows: "As you probably know, we have been appointed to make an enquiry into certain allegations relating to the administration of the Corporation of Calcutta and specially into certain steps taken by you in the matter of assessment and appointments and few order matters, we are giving you a synopsis of the cases in which the enquiry is being held and we shall Se glad if you kindly give us some time between 10 a. m. and 11 a. m. tomorrow (the 16th instant) so that we can get the facts from you." * * * 461 " III (a).
It is alleged that between 4th January, 1956, and 20th September, 1957, i.e., at or about the time when the case under section 497, I.P.C., was being tried, you gave appointments to the following persons: (1) Anil Koyal (2) jogendra Nath Mondal (3) Ahi Kanta Choudhury (4) Govinda Banerjee (5) Narendra Nath Naskar, who are related respectively to Palan Koyal, Haradhan (alias Haridhan) Mondal, Tripti Choudhury, Thakur Raj Smriti Tirtha and Upendra Naskar, who were cited as witnesses in the case.
(b)It is alleged that about the same time you gave appoint ments to Tarak Nath Day, Hardhan Day, Pradip Bhaduri, Ardharigsu Mondal etc.
and condoned the punishment previously inflicted on Dhiren Mondal as they were helping you in conducting your defence in the case.
(c) It is alleged that you were instrumental in securing the appointment of another probable prosecution witness Kamakshya Chatterjee through one M. L. Ghose against whom a demolition case was pending.
" Thereupon the first respondent filed a complaint in the High Court charging the appellants with contempt of the High Court as well as the trial court.
The High Court found the appellants guilty and convicted them for contempt of Court.
Hence this appeal.
Held (per Imam and Raghubar Dayal, JJ., Subba Rao, J. dissenting), that the appellants were not guilty of contempt of Court and the appeal must succeed.
It could not be said that the Special Committee had consti tuted itself a court of parallel enquiry with regard to matters in issue either before the trial Magistrate or the High Court.
There can be no comparison between the present case and a trial conducted by a newspaper.
The Special Committee was directed by the Corporation to enquire into malpractices on the part of its employees, necessarily including unworthy appointments, and the ascertainment of the motive could only be incidental to the main purpose of the enquiry and could not lead to the conclusion that the Special Committee was holding a parallel enquiry on matters pending before the Court and thereby intended to interfere with the course of justice.
The record clearly showed that the appellants had at no time intended to interfere with the course of justice, nor had their conduct tended to do so.
They had taken care not to comment on any proceedings pending in I court or the issues arising out of them.
Per Subba Rao, J. The appellants obviously initiated an enquiry which went beyond the scope of the resolution passed by the Corporation.
With the knowledge that criminal proceedings were pending, they examined witnesses and served the 462 questionnaire.
They permitted councillors and others to attend the enquiry which was in no sense confidential.
It is settled law that a person is guilty of contempt of court if the act done by him is intended or calculated or likely to interfere with the course of justice.
Re Read & Huggonson, ; , The Queen V. Payne, , The Queen vs Gray, , R. V. Odham 's Press Ltd., , R. vs Duffy Mohapatra, I.L.R. [1955] Cuttack 305 and Ganesh Shankay Vidyarthi 's case, A.I.R. 1929 All.81, referred to.
It could not be said in the instant case that the enquiry, initiated by the committee to ascertain whether the first respondent had suborned witnesses cited or examined against him, could not have serious repercussions on the proceedings pending in the Magistrate 's court or in the High Court.
Although a strong willed ' Magistrate might not be influenced by the enquiry, it might unconsciously affect a weaker mind and thug obstruct the even course of justice.
Even though a judge of the High Court might withstand the effect of such an enquiry, that would not prevent the public and the parties, especially in a criminal case, from reasonably apprehending that the enquiry or the findings made by the committee might affect a fair hearing of the matter.
The contempt, in the instant case, was not merely of a technical nature but of a serious character calculated to interfere with and obstruct the due course of justice and as such was preeminently one against which the court must take action.
| The appellant and another were prosecuted ' for offences under section 5(2) of the Prevention of Corruption Act, 1947.
The trial commenced before the special judge who heard the evidence but before he could deliver judgment was transferred and was succeeded by another special judge.
The latter did not recall the witnesses and did not hear the evidence over again, but proceeded with the trial without any objection from either side from the stage at which his predecessor had left.
He convicted both the accused.
On appeal, the Punjab High Court held that section 350 Criminal procedure Code applied to the trial before a special judge in view of section 8(1) of the Criminal Law Amendment Act, 1952, and the succeeding special judge was entitled to proceed on the evidence recorded by his predecessor.
The controversy is whether section 330 of the Code of Criminal Procedure is applicable to a special judge under sub s.(1) ,of section 8 of the Criminal Law Amendment Act, 1952, though it is not applicable under sub section
(3) of the Act.
Therefore the question is what is meant by the words "The procedure prescribed by the court. for the trial of warrant cases by magistrate" in sub s.(1) of section 8 of the Act, and whether section 350 of the Code prescribe one of the rules of such procedure.
The Act was since amended and therein it is expressly provided that s.350 of the Code applies to the proceedings before a special judge.
The amendment does not govern the present proceeding as the impugned part of the proceedings was concluded before the amendment.
Held, that the Criminal Law Amendment Act, 1952, did not intend that section 350 of the Criminal Procedure Code would be available as a rule of procedure prescribed for the trials of warrant cases, to a special judge as the special Judge was not a magistrate for the purpose of the Act not did the Act require before the amendment that he was to be deemed to be such.
329 The Act in using the words "procedure prescribed by the Code. for the trial of warrant cases by magistrate" meant only the sections 251 to 259 of the Criminal Procedure Code as expressly referred in the code as containing the procedure St specified for the trials of warrant cases by magistrate and did not contemplate section 350 of the Code as a procedure so prescribed.
Held, further, that where in a case there is want of competency and not a mere irregularity, section 537 of the Code of Criminal Procedure has no application.
It cannot be called in aid to make what was incompetent, competent.
Held, also, that it is the right of an accused person that his case should be decided by a judge who has heard the whole of it and that very clear words would be necessary to take away such an important and well established right.
In the present case the succeeding special judge had no authority under the law to proceed with the trial of the case from the stage at which hi , predecessor in office left it, and the conviction of the appellant cannot be supported as he had not heard the evidence in the case himself.
The proceeding before the succeeding special judge were clearly incompetent.
There has been no proper trial of the case and there should be one.
In re Vaidyanatha Iyer, (1954) 1 M. I,.
cable.
Pulukuri Kotayya vs King Emperor, (1947) L. R. 74 I A. 65 and Kimbray vs Dapper, , referred to In re Fernandez.
(1958) 11 M. L. J. 294, approved,.
| The appellant was appointed as a clerk in the Patiala State in 1948.
On the formation of the new State of Punjab in 1956, the appellant was integrated in the service of the new State of Punjab as permanent Assistant.
The appellant overstayed leave and.
therefore, after holding an enquiry the Financial Commissioner.
Punjab dismissed him from serv ice in October, 1959.
Appellant filed two suits, one for a declaration that his dismissal order was void and illegal second for arrears of salary on the basis that the dismissal was illegal.
The trial Court decreed both the suits.
The High Court in appeal reversed the decrees of the trial Court and dismissed the suits.
In the appeals by certificate the appellant contended that the appellant was confirmed in the State of Patiala by the order of the Raj Pramukh.
Before its integration he was governed by the Patiala and East Punjab States Union Civil Services (Punishment and Appeal) Rules 1953 which were made in exercise of powers conferred by proviso to article 309 of the Constitution.
By a notification of the Punjab Govern ment dated 9 2 1957 the said 1953 Rules were made applicable to the corresponding services from 1st November, 1956 on wards till further orders in the new State of Punjab.
Under the 1953 Rules, the State Government was the appropriate authority for dismissing members of Class Iii and IV.
Under section 2(46) of the Pepsu General Clauses Act, 1953.
State Government means the Rat Pramukh.
The appellant, therefore, contended that he cannot be removed from service by any authority subordinate to the Governor of Punjab and since the Financial Commissioner is an authority subordinate to the Governor.
he was not competent to pass the order of dismissal.
The respondent contended that the appointing authority for the post held by the appellant in the State of Punjab is the Financial Commissioner and, therefore.
he is the appro priate authority under section 116(1 ) of the States Reorganisa tion Act, 1956 to impose the penalty of dismissal.
Second ly, in the present case the Punjab Financial Commissioner 's Office (State Services Class III) Rules.
1957, apply.
Although the said rules are more disadvantageous to the appellant since they have received the approval of the Central Government by the General Circular dated 11 5 1957, the appellant was rightly dismissed by the Financial Commis sioner.
Allowing the appeals.
HELD: 1.
Section 116(1) merely provides that the appel lant shall continue to hold the same post in the new State of Punjab and shall be deemed to have been duly appointed to such post by the Government of Punjab.
The fact that in the new State .of
Punjab the Financial Commissioner is the appropriate authority for appointing Assistants is absolute ly irrelevant.
Under section 115(7) of the States Reorganisation Act the conditions of service applicable to 957 a civil servant immediately before the appointed day cannot be varied to his disadvantage except with the previous approval of the Central Government.
One of the condition of service of the appellant on the appointed day was that since he was appointed by the State Government of Pepsu he could only be dismissed by the State Government of Pepsu if he had continued there.
[961 H, 962 A] 2.
The Memorandum of 11 5 1957 cannot be called in aid as previous approval because the Punjab Financial Commis sioner 's Office Rules 1957 were promulgated on 28 2 1957 before the Circular dated 11 5 1957 was issued.
No approval of the Central Government has been produced.
Therefore, authority subordinate to the Governor of Punjab was not competent to pass an order of dismissed of the appellant.
[962 D E] The Court set aside the judgment and decrees of the High Court and restored those of the trial Court.
[963 E] Takhatray Shivdatray Mankad vs State of Gujarat ; and Bholanath J. Thaker vs The State of Saurashtra AIR 1954 SC 680, followed.
N. Raghavendra Rao vs Deputy Commissioner, South Kamara, Mangalore ; and Mohammad Shujat Ali & Ors. etc.
vs Union of India & Ors. etc.
; , distinguished.
Rajvi Amar Singh vs The State of Rajasthan, , distinguished.
Mysore State and Road Transport Corporation etc.
vs Mirja Khasim Ali Beg & Anr.
C. As.
1601 1609 and 2402 2405 of 1968 dt. 1 12 1976 followed.
|
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